A new order at Markel
Specialty insurer reorganizes its companies into five regions
- November 23, 2009
Three years ago, Anthony Markel cut back his work schedule as vice chairman of the Markel Corp., a Glen Allen-based insurance company founded by his family. But his days of semi-retirement are now on hold. He recently stepped into a full-time role to help the company work through a re-organization.
Markel Corp., which has approximately 2,000 employees worldwide, offers a variety of niche insurance products, including coverage for snowmobiles and the effects of earthquakes. It expects revenue of about $2.2 billion this year, excluding gains or losses from investments.
The reorganization, in the planning stages for two years, is a result of a series of acquisitions that have fueled Markel’s growth during the past 20 years.
Each acquired company operated as a separate profit center. “We created [several] profit centers that were independent and ran their own show under the control of Markel Corp.,” Anthony Markel explains. “With the breadth of acquisitions and product offerings, we started to get overlaps.”
The subsidiaries were operating nationwide, but not every product they were selling was available to all of Markel’s clients. The parent company realized it had to create continuity.
“All of that added up to an absolutely well-timed and agreed-upon strategy to take those units and break them down and restructure them as one Markel office in each of five regions,” Markel says.
Regional offices now are located in Richmond; Red Bank, N.J.; Dallas; Chicago; and Los Angeles and Scottsdale, Ariz. (which serve the same region). “We put all the products into one package and made it available to agents in each of those regional territories,” Markel says. The task was a herculean effort. “Our associates did a wonderful job. Change of that magnitude is never easy.”
Markel admits the changeover created some issues for employees. Some were transferred, others saw their duties change, but no one was laid off. Any staff reductions were the result of attrition. “We lost staff but not because of downsizing,” Markel says. “We just repositioned everybody. The new structure is great for employees because we think it enhances upward mobility.”
Even though the experience was “gut wrenching,” Markel believes the company is now much stronger and more nimble. “It was the right thing to do,” he says. “It will pay tremendous dividends in the future.”
Markel is not sure how long his detour from semi-retirement will last. In October, he also assumed the responsibilities of President and Chief Operating Officer Paul Springman, who took a leave of absence.
The reorganization is still a work in progress. “It’s getting better and better and ultimately will dramatically enhance our value to our agency partners and their clients,” Markel says.
Meanwhile, Markel Corp. keeps growing. In late October, the company announced its Markel Ventures subsidiary had acquired Panel Specialists Inc., a privately held company based in Temple, Texas, that manufactures panels, wall systems, casework, furniture, and countertops and other stone-related products. Terms of the transaction were not disclosed. Markel Ventures owns and manages Markel Corp.‘s affiliated investment activities.