Markel Taps California's Workers' Compensation Market With Midwest

Markel Group MKL is expanding its workers' compensation business in California through a collaboration with Midwest General Insurance Agency, a subsidiary of Acrisure.

The partnership will focus on small-business workers' compensation coverage. Midwest brings more than 20 years of experience in the California market and offers online quoting capabilities, which could help Markel access smaller accounts more efficiently.

The move could support Markel's insurance business by expanding its addressable market in one of the largest and most competitive workers' compensation markets in the United States. Midwest already has capabilities spanning marketing, underwriting, policy issuance, claims and loss control. This established platform could allow Markel to broaden its reach without having to develop an entirely new distribution infrastructure.

However, California's workers' compensation market is facing rising cost pressures. The state adopted an average advisory pure premium rate that is 6.6% higher than the 2025 level, effective Sept. 1, 2026.  This makes disciplined underwriting particularly important for Markel as it expands its business in the state.

Midwest's data-driven approach to account selection could benefit Markel. Better risk selection and appropriate pricing for rising medical and claims costs can help the insurer grow premiums while maintaining underwriting discipline.

The collaboration gives Markel an efficient avenue to expand its small-business workers' compensation portfolio in California and could support premium growth over the long term.

What About Its Peers?

The Travelers Companies, Inc. TRV has expanded its digital small-business quoting capabilities, making workers’ compensation available through its platform in more than 30 states. Its use of data and analytics can help improve risk selection and streamline policy issuance.

Berkshire Hathaway Inc. BRK.B, through its GUARD business, has also been expanding its workers’ compensation business through partnerships. In 2025, GUARD partnered with London Underwriters to allow agencies to quote and bind its workers’ compensation policies through the LU One digital platform. GUARD also works with hundreds of payroll-service partners to distribute its workers’ compensation products.

MKL’s Price Performance

Shares of MKL have lost 5.3% in the past year against the industry’s growth of 8.8%.

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MKL’s Undervaluation

The stock is undervalued compared with its industry. Its forward price-to-book value of 1.19X is lower than the industry average of 2.70X. It carries a Value Score of B.

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Estimate Movement for MKL

The Zacks Consensus Estimate for Markel’s 2026 earnings per share (EPS) indicates a year-over-year increase of 13.5%.

The consensus estimate for revenues is pegged at $15.9 billion, implying a year-over-year improvement of 3.9%.

The consensus estimate for 2027 EPS and revenues indicates an increase of 9.9% and 1.2%, respectively, from the corresponding 2026 estimates.

The Zacks Consensus Estimate for 2026 and 2027 earnings have moved 0.7% and 1% south, respectively, over the last 30 days.

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MKL stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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