Markel Group's 2023 letter to business partners

About this letter

Thomas S. Gayner, chief executive officer of Markel Group, wrote this letter to the company's business partners at the front of its 2023 annual report. He warns at the outset that the 2023 letter will be longer than usual, borrowing Dickens to call the year the best of times and the worst of times.

The letter is framed by the Markel Style, the creed the company wrote in 1986, and by its definition of success as building one of the world's great companies. It reports on each of what Markel calls its three engines: insurance, where the company fell short of its goals; Markel Ventures, the majority-owned non-insurance businesses it began acquiring in 2005; and investments. It closes with the four basic choices for allocating the capital the group generates and with how management estimates intrinsic value per share.

What to notice

1. 1

   The Orange and Blue method: Orange is investments and cash less debt, per share; Blue is normalised operating earnings after interest and tax, times a conservative and consistent multiple, per share. Added together they give Markel's sense of intrinsic value.

“We would wither away if we didn’t embrace change.”