Horses for courses: Markel a leader in horse insurance

“Our more specialist areas include horses and livestock,” said Andrew McMellin (pictured above). “It’s a pretty small market globally, to be honest.”

McMellin is Markel’s London-based managing director of international wholesale. According to its website, the diverse Markel Group includes an insurance arm but also building supply and bakery equipment businesses. The US-headquartered company has about 20,000 employees worldwide.

The firm has reported gross premium volumes of over $10 billion for 2023, so equine and livestock insurance is not a big part of the operation.

“It’s probably our smallest area with about $60 million worth of business,” McMellin said.

Owners of racehorses, horse farms and zoos

However, Markel’s offering in this sector still has an international footprint. Racehorse owners, stud farms and zoos in England, Europe, USA, Canada, New Zealand and Australia are some of the firm’s clients and not just for insurance coverage.

“We do blood drives and it can be anything from Arabian thoroughbreds to your pony clubs,” McMellin said. “We have a livestock business in the U.S. that is looking at, for example, cattle and chicken farms and bringing in animal pharmaceuticals and trying to sell directly to farmers.”

Equine and Livestock Mortality Risk Covers

The insurance business asked what coverages a horse owner needed.

“It could be for mortality risk, so if the horse dies,” McMellin said. “Hone farms can also get cover for their risks, so stud farms will obviously cover foals.”

He said there is also an element of liability insurance in these proposals.

“If you run a pony club and you have patrons who come to ride the ponies, they can get kicked by the pony and get hurt, so that provides liability coverage,” McMellin said.

He estimated that Markel had a horse market share focused on thoroughbreds and a mortality risk of about 30%.

Chicken and Hurricane Farms

Livestock insurance offers, he said, also cover animal mortality.

“For example, if they get diseases on chicken farms or if a chicken farm gets hit by hurricanes or storms, things like that,” he said.

Expensive horses have rich owners

One challenge, he said, could be convincing horse owners to buy insurance.

“Many horse owners don’t buy the cover because they don’t perceive it [mortality] poses a particular risk,” McMellin said.

Other thoroughbred owners, he said, are so rich they don’t see the need.

“When you get up to the Arabian thoroughbreds, they’re so rich they don’t need a cover, to be honest,” McMellin said.

Markel also invested in some very expensive horses.

“We subscribe to some of the most valuable horses,” he said. “We have a small stake in a horse that is worth, I think, $50 to $60 million.”

APAC expansion plans

McMellin said his firm has big plans to expand in the Asia Pacific (APAC) region. Business in the region, he said, is currently worth about US$140 million to Markel. The aim is to turn this into US$500 million over the next five years.

“This is by growing all of our key locations in Asia,” McMellin said. “For us it starts in Dubai, goes through Mumbai in India, goes through Kuala Lumpur in Malaysia, Hong Kong, Shanghai, Singapore and now we’ve added Melbourne, Sydney and Brisbane.”

Taking a long-term view

In September, Markel’s real presence in Australia began to gain strength with the opening of offices in Sydney, Melbourne and Brisbane.

Earlier this month, the firm launched a professional indemnity (PI) offering for Australia. According to a media release, coverage focuses on occupational and financial risks in areas such as renewable energy.

Rory Morrison, the new managing director of Markel International in Australia, said his firm had a very long-term view.

“Firstly, we wanted to show intent because one of the big questions being asked is ‘are you serious about this or not?'” Melbourne-based Morrison said. “We also wanted to be crystal clear: ‘yes, we’re here for the long haul.’

“The long horizon that Markel as a business looks to for success is to be a forever company,” he said.

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