In 140 characters or less (by Markel): "2013 a great year. Doubled insurance business with Alterra acquisition. Rest of Markel (MKL) grew by double digits. Expect more over time."
Book value per share rose 18.2%, the same as Berkshire Hathaway, and putting BPS at $477.16 and the stock at about 1.24x book. 18% isn't bad, but BPS has grown at a 16.5% pace over the last five years, 13% annually over ten years, and 15.3% annually over the last twenty. Pretty impressive against the S&P 500 at 17.95%, 7.41%, and 9.23%, and Berkshire's 13.87%, 10.34%, and 14.6%.
The equity portfolio gains are even more impressive, beating the S&P 500 by 365 basis points per year over 5 years, 499 bps per year over 10, and 236 bps per year over 20.
One shift of note is the company's new emphasis on the 5-year CAGR of book value, rather than book value itself. The reason: While insurance operations and GAAP accounting work well for calculating book value, the increasingly important Markel Ventures operations are better valued by considering cash flow. "[Cash flow] is not measured predominantly by the balance sheet; it is measured predominantly by current and future income and cash flow statements."
And don't forget the Alterra acquisition. After the purchase, Markel's equity portfolio as a percentage of shareholder equity dropped well below 50%. But Tom Gaynor has been busily reallocating and the percentage is back up to 49%; the company expects it to gradually increase to a more normal 80% over time.