AM Best has assigned a Long-Term Issue Credit Rating of “bbb+” to $600 million of 3.45% senior unsecured notes due 2052 issued by Markel Corporation (Markel) (Glen Allen, Virginia) [NYSE: MKL]. The outlook assigned to this Credit Rating (rating) is stable. The debt ranks pari passu with the company’s outstanding senior unsecured notes.

The proceeds will be used to prefund the scheduled retirement of Markel’s $350 million of senior unsecured notes due July 2022, and for general corporate purposes. The rating assignment considers the rating profile of Markel’s principal insurance subsidiary units, as well as the parent company’s financial leverage, coverage and overall debt servicing profile, and the application of appropriate notching to reflect structural subordination of the holding company’s senior debt.

Markel’s financial leverage, as calculated by AM Best, was in the low-to-mid 20% range at year-end 2020, and will remain in the mid-to-upper 20% range following the new debt offering, prior to consideration of proceeds held to pre-fund the retirement of maturing debt in mid-2022. Earnings before interest, preferred dividends and taxes interest coverage has been strong, averaging 3.9 times over the past three years, albeit declining to 2.9 times in 2020. AM Best expects Markel’s coverage ratio to remain within guidance. The company’s 2020 net operating earnings results were affected by net claim losses associated with natural catastrophes, pandemic-related event cancellation and business interruption claims, and other losses sustained by its international and U.S. insurance and reinsurance operations.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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