A.M. Best Assigns Ratings to Markel Corporation's Shelf Registration.

Business Editors

OLDWICK, N.J.--(BUSINESS WIRE)--Jan. 3, 2001

A.M. Best Co. has assigned indicative ratings of "bbb" for senior debt, "bbb-" for subordinated debt and "bb+" for preferred securities to Markel Corporation's (NYSE - MKL) recently filed $475 million shelf registration.

A.M. Best has affirmed the current debt and preferred stock ratings of Markel, while the financial strength ratings of the insurance subsidiaries remain unaffected. A.M. Best expects that any securities issued under the shelf registration will be used to reduce debt, refinance existing debt and for general corporate purposes.

The ratings reflect the historically strong operating performance and capitalization of Markel's U.S. operations. The ratings also consider Markel's high level of financial leverage, the weakened financial condition of Markel International (formerly known as Terra Nova Insurance (UK) Holdings plc.), and the increased dependence upon Markel's U.S. operations to service the debt obligations of the holding company over the near-term. Finally, the ratings take into account management's commitment and A.M. Best's expectation that financial leverage will be reduced significantly over the near-term, favorably impacting interest coverage and reducing the burden on the North American operations to service the obligations of Markel Corp.

During 1999 and 2000, the capital position of Markel International declined significantly due to adverse loss reserve development, a high level of severe weather related losses, charges associated with discontinued operations and a write-down of deferred acquisition costs. A.M. Best expects that, over the near-term, Markel International will continue to be challenged by the inadequate pricing and weak underwriting controls that existed under the former management team, which have impacted both the continuing and discontinued operations.

The corrective actions recently taken by management are expected to bring Markel International's balance sheet strength and operating performance more in-line with that of its core operations over the longer-term. These actions include re-underwriting the continuing programs, eliminating programs that are unable to generate adequate margins and implementing strong underwriting controls and standards.

The ratings are also supported by the U.S. operation's strong level of capitalization, solid position within the specialty lines market and consistently strong operating results. The U.S. operations have benefited from management's conservative underwriting and reserving philosophy coupled with strong risk management techniques, which have produced consistently strong operating results. Additionally, the statutory capital position of the U.S. operations is enhanced by significant economic value embedded within its loss reserves, which have been amassed through consistently conservative reserving practices.

Markel Corp., based in Glen Allen, Va., markets and underwrites specialty insurance products and programs to a variety of niche markets on both an admitted and excess & surplus lines basis. These products and programs are marketed through affiliated as well as unaffiliated agents and brokers. As of September 30, 2000, Markel Corp. reported total assets of $5.3 billion and equity of $690.8 million. The following indicative ratings have been assigned to Markel's shelf registration:

- Markel Corporation:

senior debt of "bbb";

subordinated debt of "bbb-";

preferred securities of "bb+".

The following debt and preferred stock ratings have been affirmed:

- Markel Corporation: senior debt rating of "bbb";

- Markel International plc: senior debt ratings of "bbb";

- Markel Capital Trust I: preferred securities rating of "bb+".

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.