MARKEL GROUP INC.

Markel Group is a holding company that owns independently operated businesses across a range of industries, with its cornerstone business, Markel Insurance, providing specialized insurance products not typically available through the standard insurance market. The company operates in diverse end markets, from industrial bakery equipment to ornamental plants to precast concrete, and also owns shares in publicly traded companies, primarily within its insurance operations. The company's architecture is intentionally designed to promote long-term decision making, with diverse cash flows across Markel Group providing financial strength, low levels of debt reducing outside pressures, and decentralized leadership allowing each business to adapt quickly. The company's culture, known as The Markel Style, is built on simple ideas: treat people fairly, act with integrity, and commit to winning over the long term.

The specialty insurance market in which Markel Insurance competes differs significantly from the standard market, with competition focusing less on price and more on service, distribution, expertise, capacity, product innovation, coverage limits, and financial strength ratings. In 2024, the E&S market represented $129.8 billion ¹, or 12% ², of the $1.1 trillion ³ U.S. property and casualty industry, and in 2024, Markel Insurance was the fifth largest E&S writer in the U.S. as measured by direct premium writings. The U.S. Wholesale and Specialty division primarily competes with large, global specialty insurance carriers operating in the U.S. E&S market, while the London market operations compete globally with London and U.S. based specialty insurance carriers and other Lloyds syndicates. In 2025, the top five independent brokers accounted for 37% ⁴ of the company's underwriting gross premiums written.

Markel Group generates revenue through three primary streams: insurance underwriting and investment activities within Markel Insurance, product sales and services across its Industrial, Financial, and Consumer and Other segments, and investment management fees from its Nephila insurance-linked securities operations. The company's core business model is built on owning businesses that generate positive cash flows and redeploying those cash flows for additional growth through reinvesting in existing businesses, acquiring majority-owned businesses, investing in publicly traded companies, and repurchasing Markel Group shares. The company applies a four-part test for new investments: good returns on capital while using modest amounts of debt, management teams with equal parts talent and integrity, meaningful opportunities for reinvestment and/or disciplined capital management, and a fair price.

Markel Insurance, headquartered in Richmond, Virginia, is a specialty insurance business that generated operating revenues of $9,352,891 thousand ⁵ in 2025 and produced a combined ratio of 95% ⁶ in 2025, making it the eighteenth year in the last 20 years that the company earned an underwriting profit. The segment is comprised of four divisions: U.S. Wholesale and Specialty, which offers specialty insurance in the U.S. on a regional basis through wholesale and retail channels; Programs and Solutions, which offers highly specialized insurance products in the U.S. and from its Bermuda platform; International, which offers specialty insurance products outside of the U.S. and Bermuda, operating in 15 countries across the globe; and Global Reinsurance, which previously offered casualty and specialty reinsurance products but sold its renewal rights in August 2025 and entered into run-off. In 2025, 71% ⁷ of gross written premium was placed through wholesale brokers and 26% ⁸ was distributed through retail agents and brokers. The segment's gross premium volume in 2025 was $12.5 billion ⁹, which included $10.6 billion ¹⁰ of underwriting premiums and $1.9 billion ¹¹ of fronting premiums. Major product lines include general liability, professional liability, personal lines, marine and energy, property, specialty programs, workers' compensation, and credit and surety.

The Industrial segment, with operating revenues of $3,928,249 thousand ¹² in 2025, includes businesses such as Lansing Building Products, a distributor of exterior building products operating 113 branches ¹³ across 35 states ¹⁴; Metromont, a producer of precast concrete operating seven plants ¹⁵ across five states; VSC Fire & Security, a provider of fire protection and life safety solutions operating 38 locations ¹⁶ across 15 states ¹⁷; Cottrell, a manufacturer of over-the-road car-hauling equipment; AMF Bakery Systems, a manufacturer of industrial bakery equipment; Buckner HeavyLift Cranes, a provider of heavylift crawler cranes; Havco, a manufacturer of laminated oak and composite flooring for dry van trailers; and other businesses including Reading Bakery Systems, Valor Environmental, Ellicott Dredges, Weldship, and Panel Specialists. The Financial segment, with operating revenues of $736,964 thousand ¹⁸ in 2025, includes State National, which provides fronting services and automobile collateral protection coverage through its seven U.S.-domiciled insurance subsidiaries ¹⁹; Nephila, which provides insurance-linked securities investment and insurance management services; Rosemont Investment Group; a minority investment in Velocity Holdco LLC; and the run-off operations of LodgePine Capital Investment Management, Markel CATCo Investment Management Ltd., and Markel CATCo Re Ltd. The Consumer and Other segment, with operating revenues of $1,382,912 thousand ²⁰ in 2025, includes Costa Farms, ranked #1 ²¹ on Greenhouse Grower's Top 100 Growers list for 2025; CapTech, an information technology consulting firm; Eagle Construction of Virginia, a homebuilder; Brahmin, a designer of leather handbags and accessories; and other businesses including Parkland Ventures, Educational Partners International, RDSolutions, and PartnerMD.

In August 2025, Markel Insurance sold the renewal rights for contracts written through its Global Reinsurance division, and the division entered into run-off; the Global Reinsurance division's gross premium volume in 2025 and 2024 was $1.0 billion ²² and $1.2 billion ²³, respectively. In May 2024, the company issued $600 million ²⁴ of 6% unsecured senior notes due May 16, 2054, and in 2025, these proceeds were used to redeem in full the company's outstanding preferred shares for $600.0 million ²⁵. The Board of Directors approved the repurchase of up to $2 billion ²⁶ of common shares pursuant to a share repurchase program publicly announced in November 2024, and as of December 31, 2025, $1,497,527 thousand ²⁷ remained available for repurchases under the program. In 2025, the company acquired Educational Partners International (EPI) and recorded $349.9 million ²⁸ of goodwill and intangible assets in connection with acquisitions. Beginning on January 1, 2026, the U.S. classic car business, written on behalf of Hagerty, Inc., transitioned from being an underwriting product to a fronting arrangement.

In 2025, total operating revenues were $15,513,233 thousand ²⁹, compared to $14,813,544 thousand ³⁰ in 2024 and $14,279,576 thousand ³¹ in 2023. Operating income was $3,194,852 thousand ³² in 2025, compared to $3,712,562 thousand ³³ in 2024 and $2,928,828 thousand ³⁴ in 2023. Net income to common shareholders was $2,080,901 thousand ³⁵ in 2025, compared to $2,711,022 thousand ³⁶ in 2024 and $1,960,060 thousand ³⁷ in 2023. Diluted net income per share was $169 ³⁸ in 2025, compared to $199 ³⁹ in 2024 and $147 ⁴⁰ in 2023. Adjusted operating income, a non-GAAP measure, was $2,303,778 thousand ⁴¹ in 2025, compared to $2,086,815 thousand ⁴² in 2024 and $1,585,388 thousand ⁴³ in 2023. Net cash provided by operating activities was $2,761 million ⁴⁴ in 2025, compared to $2,594 million ⁴⁵ in 2024 and $2,787 million ⁴⁶ in 2023. The five-year compound annual growth rate in closing stock price was 16% ⁴⁷ and in intrinsic value per share was 15% ⁴⁸.

Within Markel Insurance, the company is pursuing growth in its personal lines and programs product lines, where rate increases and overall profitability are being achieved, and is increasing premium writings in these lines. The International division is growing in the E.U., the U.K., Canada, and Asia Pacific, with a strategy of empowering local leaders who have extensive knowledge of those markets and products. The company is also expanding its fronting operations, with fronting gross premium volume growing 42% ⁴⁹ in 2025 driven by growth of property catastrophe programs with Nephila. The company believes the increasing need for tailored solutions in a more complex risk environment will continue to provide significant tailwinds for the E&S market.

Within the Industrial segment, the company is pursuing organic growth through increased demand for equipment leasing services within the wind energy market and higher prices and sales volume in commercial and residential construction markets. The Financial segment is growing through higher premium volume within program services and lender services offerings, as well as performance fees and a higher effective management fee rate for insurance-linked securities investment management services. The Consumer and Other segment is growing through increased sales of ornamental plants driven by higher demand and prices, and through acquisitions such as Educational Partners International.

The Markel Insurance segment's expense ratio increased in 2025 compared to 2024, primarily attributable to higher personnel costs, including increased severance costs related to recent organizational changes, higher professional fees, and changes in mix of business. The expense ratio also reflects costs associated with growth and expansion efforts in targeted markets. The company's consolidated debt to capital ratio was 19% ⁵⁰ at December 31, 2025, within the range of its target capital structure.

The company's insurance subsidiaries require capital to support premium writings, and the company remains committed to maintaining adequate capital and surplus at each of its insurance subsidiaries. At December 31, 2025, the capital and surplus of each of the company's insurance subsidiaries significantly exceeded the amount of statutory capital and surplus necessary to satisfy regulatory requirements. The company's domestic insurance subsidiaries and Markel Bermuda Limited could pay ordinary dividends of $1.4 billion ⁵¹ during the following twelve months under applicable laws.

The company has a share repurchase program authorized by the Board of Directors that provides for the repurchase of up to $2 billion ⁵² of common stock, and as of December 31, 2025, $1,497,527 thousand ⁵³ remained available for repurchases. The company maintains a corporate revolving credit facility which provides up to $300 million ⁵⁴ of capacity, with up to $200 million ⁵⁵ of the total capacity available for letters of credit, and the facility expires in June 2028. As of December 31, 2025, there were no borrowings outstanding under this revolving credit facility. The company may seek to prepay, retire, or repurchase its outstanding senior notes through open market purchases, privately negotiated transactions, or otherwise.

The company faces headwinds from the cyclical nature of the property and casualty insurance industry, which has historically been characterized by periods of intense price competition due to excessive underwriting capacity, and from the potential for increased frequency and/or severity of weather-related catastrophes due to the impacts of climate change. The company also faces headwinds from rising costs, litigation funding, social inflation, including new or expanded theories of liability, higher adverse verdicts, and legislative changes, which may result in higher and more frequent claims over a longer reporting period than originally expected.

The company faces constraints from regulatory requirements, including extensive U.S. state and federal, as well as international, regulation and supervision in the jurisdictions in which it does business. The company's insurance subsidiaries are subject to supervision and regulation by regulatory authorities in various jurisdictions, including foreign and U.S. state insurance regulators, with broad regulatory, supervisory, and administrative powers relating to data protection, cybersecurity, solvency standards, licensing, coverage requirements, product terms and conditions, policy rates and forms, business and claims practices, and disclosures to consumers.

The company invests a significant portion of shareholders' equity in equity securities, which were 70% ⁵⁶ of shareholders' equity at December 31, 2025, and the equity portfolio is concentrated, with the ten largest equity holdings representing $5.9 billion ⁵⁷, or 45% ⁵⁸, of the equity portfolio, which may result in significant variability in results and net income. Loss reserves for the company's underwriting operations were $16.7 billion ⁵⁹ at December 31, 2025, and the actuarially established low and high ends of a range of reasonable net reserve estimates were $13.6 billion ⁶⁰ and $17.8 billion ⁶¹, respectively, with actual losses potentially differing materially from estimates due to factors such as social inflation, economic inflation, and emerging claim and coverage issues. The company's reinsurance recoverables were $14.6 billion ⁶² at December 31, 2025, collateralized by letters of credit, trust accounts, and funds withheld in the aggregate amount of $7.1 billion ⁶³, and the failure of a reinsurer to meet its obligations could have a material adverse effect. Goodwill and intangible assets totaled $4.4 billion ⁶⁴ at December 31, 2025, representing 23% ⁶⁵ of shareholders' equity, and an impairment could have a material adverse effect on operating results and financial condition. The company's top five independent brokers represented 37% ⁶⁶ of the gross premiums written by underwriting operations in 2025, and the loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect.

Management's message emphasizes the company's long-term orientation, rooted in The Markel Style, and its unique company design and set of shared values that have enabled the company to compound shareholder capital at attractive rates over many decades. Management believes this compounding is best exhibited by the five-year compound annual growth rate in the company's closing stock price and intrinsic value per share, which were 16% ⁶⁷ and 15% ⁶⁸, respectively. The key strategic priorities emphasized for the period ahead include: (i) owning businesses that generate positive cash flows and redeploying those cash flows for additional growth through reinvesting in existing businesses, acquiring majority-owned businesses, investing in publicly traded companies, and repurchasing Markel Group shares; (ii) applying the same four-part test for new investments regardless of where capital is deployed, looking for businesses with good returns on capital while using modest amounts of debt, management teams with equal parts talent and integrity, meaningful opportunities for reinvestment and/or disciplined capital management, and a fair price; and (iii) empowering leaders of each business to make the best long-term decisions for their businesses, supported by a small team of associates at the holding company that support businesses and leaders in key areas: significant capital decisions, cultural stewardship, leadership support and decisions, and performing responsibilities consistent with sound governance.