Edgar Filing: MARKEL CORP

Form 11-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 11-K

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003

¨	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-15811

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

(Full title of the plan and the address of the plan, if different from that of the issuer named below)

MARKEL CORPORATION

4521 Highwoods Parkway

Glen Allen, Virginia 23060

(Name of issuer of the securities held pursuant to the plan and the address of its principal executive office)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Financial Statements and Supplemental Schedules

December 31, 2003 and 2002

(With Report of Independent Registered Public Accounting Firm Thereon)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Table of Contents


		Page



Report of Independent Registered Public Accounting Firm		1

Statements of Assets Available for Benefits – December 31, 2003 and 2002		2

Statements of Changes in Assets Available for Benefits – Years ended December 31, 2003 and 2002		3

Notes to Financial Statements		4

Schedules

Schedule H, Line 4i – Schedule of Assets (Held at End of Year) – December 31, 2003		10

Schedule H, Line 4j – Schedule of Reportable Transactions – Year ended December 31, 2003		11

Report of Independent Registered Public Accounting Firm

The Board of Directors

Markel Corporation

The Administrative Committee

Markel Corporation Retirement Savings Plan:

We have audited the accompanying statements of assets available for benefits of the Markel Corporation Retirement Savings Plan (the Plan) as of December 31, 2003 and 2002, and the related statements of changes in assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Markel Corporation Retirement Savings Plan as of December 31, 2003 and 2002, and the changes in assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets (held at end of year) (Schedule 1) and reportable transactions (Schedule 2) are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

LOGO

Richmond, VA

June 9, 2004

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Statements of Assets Available for Benefits

December 31, 2003 and 2002


	2003		2002
Investments, at fair value (note 3):
Mutual funds	$	68,851,790	51,909,955
Markel Corporation common stock		40,279,216	30,350,904
Participant loans		1,419,574	1,417,057

Total investments		110,550,580	83,677,916

Receivables:
Employer’s contribution		392,413	332,364
Participants’ contributions		311,176	267,675

Total receivables		703,589	600,039

Assets available for benefits	$	111,254,169	84,277,955

See accompanying notes to financial statements.

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Statements of Changes in Assets Available for Benefits

Years ended December 31, 2003 and 2002


	2003			2002
Additions to (deductions from) assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in fair value of investments (note 3)	$	17,310,785		(4,866,591	)
Interest on participant loans		97,505		110,683
Interest and dividends		1,408,790		909,567

		18,817,080		(3,846,341	)

Contributions:
Employer’s		4,935,832		4,141,348
Participants’		6,405,511		4,711,810

		11,341,343		8,853,158

Total additions		30,158,423		5,006,817

Deductions from assets attributed to participant distributions and withdrawals		(3,182,209	)	(5,617,579	)

Net increase (decrease)		26,976,214		(610,762	)
Assets available for benefits:
Beginning of year		84,277,955		84,888,717

End of year	$	111,254,169		84,277,955

See accompanying notes to financial statements.

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

(1)

Summary of Significant Accounting Policies

The following are the significant accounting policies followed by the Markel Corporation Retirement Savings Plan (the Plan).

(a)

Basis of Presentation

The accompanying financial statements, which present the assets of the Plan, and changes in those assets, have been prepared on the accrual basis of accounting. Accordingly, contributions to the Plan and interest and dividend income are recognized as earned; plan benefits and withdrawals are recorded when paid and net appreciation and depreciation of investments are recognized as they occur. Participant loans receivable represent loans to participants made against their vested balances as permitted by the Plan.

(b)

Use of Estimates

Accounting principles generally accepted in the United States of America require the plan administrator to make estimates and assumptions when preparing financial statements. Actual results could differ from those estimates.

(c)

Investments

The Plan’s investments are stated at fair value. The fair value of Markel Corporation common stock is based upon the quoted market price of the stock as of the end of each year.

Investments in shares of mutual funds are valued according to the net asset values of the funds on the basis of fair values of the assets and liabilities thereof. Participant loans are valued at the principal amount outstanding, which approximates fair value.

The change in the difference between the fair value and the cost of investments held at the beginning and end of each year, adjusted for realized gains, or losses, on investments sold during the year, is reflected in the statements of changes in assets available for benefits as appreciation/depreciation in the fair value of investments.

The cost of investments sold is determined on the basis of average cost. Purchases and sales of investments are recorded on a settlement date basis. The recording of these transactions on a trade date basis would not have had a material impact on the accompanying financial statements.

(d)

Income Taxes

The Plan is in receipt of a favorable determination letter dated August 12, 2002, which states that the Plan complies in form with the series of tax law changes collectively referred to as GUST. The plan administrator believes the Plan operated in compliance with the plan document and current law for the years under audit. Accordingly, participants have not been taxed on their salary reduction contributions, or investment earnings related to these contributions when received by the trustee under the Plan. Ordinarily, participants are subject to tax on these amounts when they receive distributions from the Plan.

(Continued)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

Under normal circumstances, the Plan will not be taxed on its dividend, and interest income, or any capital gains realized by it or any unrealized appreciation on investments.

(2)

Summary of Significant Provisions of the Plan

The following description of the Plan provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions.

(a)

General

The Plan is a defined contribution plan covering all North American employees of Markel Corporation and its wholly owned domestic subsidiaries (the Company). Employees, age 18 or older, are eligible for Plan participation upon date of employment, with matching Company contributions commencing after one year of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), and is administered by an administrative committee appointed by the chief executive officer of the Company. The assets of the Plan are held in trust under an agreement with Fidelity Management Trust Company (the Trustee), with administrative services provided by Fidelity Institutional Retirement Services Company, a division of Fidelity Investment Institutional Services Company, Inc.

(b)

Contributions

Each year, the Company is obligated to contribute to the Plan, subject to service requirements, an amount equal to 6% of each participant’s compensation. The Company also contributes under the matching provision of the Plan an amount equal to 100% of the first 2% and 50% of the next 2% of compensation contributed by a participant, not to exceed 3% of the participant’s compensation for any such year. Participants may contribute, in whole percentage increments, up to 50% of their annual compensation, excluding bonuses, on a pre-tax basis up to a limit of $12,000 in 2003. In addition, participants that reach age 50 before the close of the plan year can elect to make a “catch-up contribution” to the Plan for the plan year. The amount of the catch-up contribution is limited to $2,000 for 2003. The allocation of both employer and participant contributions to the various funds is based upon the individual participant’s election. One-third of the Company’s contribution, representing up to 3% of a participant’s annual compensation, will be allocated to a company stock fund; however, once the funds are invested in the company stock fund, the participant has the ability to redirect these funds at their discretion.

Participant contributions, as shown in the accompanying statements of changes in assets available for benefits, include amounts rolled over into the Plan from other qualified plans totaling $1,326,166 and $390,866 for the years ended December 31,2003 and 2002, respectively.

(c)

Participant Accounts

Each participant’s account is credited with the participant’s and Company’s contributions and earnings of the Plan. The posting of earnings is made on a daily basis.


		5		(Continued)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

(d)

Vesting and Plan Termination

Participants are immediately vested in their own contributions plus earnings thereon. Vesting in the Company’s contributions is based on years of service as follows:


Years of vesting service	Vested percentage
Years of vesting service	Vested percentage
Less than two years of service	0	%
Two years of service	20	%
Three years of service	50	%
Four or more years of service	100	%

In accordance with the provisions of the Plan, any portion of the Company’s contributions that has not vested at the time of a participant’s withdrawal shall be forfeited by the participant, and applied to reduce future Company contributions. For the years ended December 31, 2003 and 2002, forfeited amounts totaled $98,021 and $133,338, respectively.

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.

(e)

Payment of Benefits

Upon termination of service, participants may receive a lump sum amount equal to the value of their vested account within 60 days of the quarter end in which termination occurred or their account will continue to be held in the trust fund until the participant reaches age 65 or dies, whichever occurs first.

(f)

Participant Loans

The Plan contains a provision for loans to participants. Under the terms of the Plan, participants may borrow from their accounts a minimum of $1,000 up to the lesser of $30,000 or 30% of the vested value of the participant’s account or under certain conditions, with the plan administrator’s consent, up to a maximum of the lesser of $50,000 or 50%. Loans bear interest at a market rate and are repayable in accordance with terms established by the Plan.

(g)

Investment Options

The Plan offers 16 investment fund options – Markel Corporation Common Stock, the Fidelity Magellan Fund, the Fidelity Puritan Fund, the Fidelity Equity Income Fund, the Fidelity Retirement Money Market Portfolio, the Fidelity Stock Selector Fund, the Fidelity Intermediate Bond Fund, the Fidelity Contrafund, the Fidelity Overseas Fund, the Fidelity Small Capital Independence Fund, the Fidelity Freedom 2010 Fund, the Fidelity Freedom 2020 Fund, the Fidelity Freedom 2030 Fund, the Fidelity Freedom 2040 Fund, the Fidelity Freedom Income Fund, and the Fidelity Freedom 2000 Fund. Participants in the Plan are able to direct into which fund contributions are invested as discussed in note 2(b). Participants are allowed to change investment options daily.


		6		(Continued)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

(3)

Investments

The Plan’s investments are held by a trustee-administered trust fund. The following tables present the fair values of investments at December 31, 2003 and 2002 representing 5% or more of the Plan’s assets at the end of the respective years:


	December 31, 2003
	Number of shares or units	Fair value
Markel Corporation common stock	158,886	$	40,279,216

Mutual funds:
Fidelity Contrafund	121,758		6,008,759
Fidelity Equity Income Fund	215,453		10,718,801
Fidelity Intermediate Bond Fund	567,857		6,053,354
Fidelity Magellan Fund	156,721		15,317,910
Fidelity Puritan Fund	661,285		12,213,936
Fidelity Retirement Money Market Portfolio	7,567,495		7,567,495
Fidelity Stock Selector Fund	300,812		6,314,044


	December 31, 2002
	Number of shares or units	Fair value
Markel Corporation common stock	147,693	$	30,350,904

Mutual funds:
Fidelity Equity Income Fund	189,794		7,529,144
Fidelity Intermediate Bond Fund	492,018		5,279,358
Fidelity Magellan Fund	145,332		11,475,446
Fidelity Puritan Fund	569,705		8,995,646
Fidelity Retirement Money Market Portfolio	7,800,104		7,800,104
Fidelity Stock Selector Fund	272,652		4,520,562


		7		(Continued)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

During 2003 and 2002, the Plan’s investments (including investments bought, sold, and held during the year) appreciated (depreciated) in fair value by $17,310,785 and ($4,866,591), respectively, as follows:


	Year ended December 31,
	2003			2002
Markel Corporation common stock	$	7,262,490		3,704,199

Mutual funds:
Fidelity Contrafund		1,202,878		(401,110	)
Fidelity Equity Income Fund		2,062,115		(1,742,586	)
Fidelity Freedom 2000 Fund		3,330		(1,334	)
Fidelity Freedom 2010 Fund		60,261		(29,467	)
Fidelity Freedom 2020 Fund		61,470		(29,020	)
Fidelity Freedom 2030 Fund		60,159		(42,470	)
Fidelity Freedom 2040 Fund		36,636		(21,955	)
Fidelity Freedom Income Fund		3,614		(1,002	)
Fidelity Intermediate Bond Fund		(50,058	)	191,792
Fidelity Magellan Fund		2,865,457		(3,759,653	)
Fidelity Overseas Fund		591,369		(278,794	)
Fidelity Puritan Fund		1,669,848		(1,015,350	)
Fidelity Small Capital Independence Fund		205,143		(141,680	)
Fidelity Stock Selector Fund		1,276,073		(1,298,161	)

Net appreciation (depreciation) in fair value	$	17,310,785		(4,866,591	)

(4)

Administrative Expenses

The administrative expenses of the Plan have been paid by the Company to the Trustee. Expenses paid by the Company totaled approximately $53,832 and $33,404 for the years ended December 31, 2003 and 2002, respectively.

(5)

Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of assets available for benefits per the financial statements to the Form 5500:


	December 31,
	2003		2002
Assets available for benefits per the financial statements	$	111,254,169	84,277,955
Amounts allocated to withdrawing participants		—	(2,233	)

Assets available for benefits per the Form 5500	$	111,254,169	84,275,722


		8		(Continued)

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Notes to Financial Statements

December 31, 2003 and 2002

The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:


	Year ended December 31,
	2003			2002
Benefits paid to participants per the financial statements	$	3,182,209		5,617,579
Add amounts allocated to withdrawing participants at the end of the year		—		2,233
Less amounts allocated to withdrawing participants at the end of the prior year		(2,233	)	(409,133	)

Benefits paid to participants per the Form 5500	$	3,179,976		5,210,679

Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date.

(6)

Related Party Transactions

The Plan owned 158,886 shares of Markel Corporation common stock as of December 31, 2003, which had a cost basis of $18,612,085 and a fair value of $40,279,216. During the year, 18,303 shares of Markel Corporation common stock were purchased at a total cost of $4,416,183 and 7,110 shares, with a cost basis of $991,599, were sold for $1,750,362.

Certain Plan investments are shares of mutual funds with Fidelity Investments Institutional Services Company, Inc., an affiliate of the Plan’s trustee, a party-in-interest.


		9

Schedule 1

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

December 31, 2003


Identity of issue, borrower, lessor, or similar party	Description of investment including maturity date, rate of interest, collateral, par, or maturity value	Current value
Markel Corporation*	158,886 shares of Markel Corporation common stock, cost of $18,612,085	$	40,279,216

Mutual funds:
Fidelity Investments*	156,721 shares of Fidelity Magellan Fund		15,317,910
Fidelity Investments*	661,285 shares of Fidelity Puritan Fund		12,213,936
Fidelity Investments*	215,453 shares of Fidelity Equity Income Fund		10,718,801
Fidelity Investments*	7,567,495 shares of Fidelity Retirement Money Market Portfolio		7,567,495
Fidelity Investments*	300,812 shares of Fidelity Stock Selector Fund		6,314,044
Fidelity Investments*	567,857 shares of Fidelity Intermediate Bond Fund		6,053,354
Fidelity Investments*	121,758 shares of Fidelity Contrafund		6,008,759
Fidelity Investments*	67,322 shares of Fidelity Overseas Fund		2,115,916
Fidelity Investments*	50,608 shares of Fidelity Small Capital Independence Fund		907,913
Fidelity Investments*	38,448 shares of Fidelity Freedom 2020 Fund		500,599
Fidelity Investments*	31,479 shares of Fidelity Freedom 2030 Fund		407,655
Fidelity Investments*	29,178 shares of Fidelity Freedom 2010 Fund		379,899
Fidelity Investments*	23,179 shares of Fidelity Freedom 2040 Fund		175,233
Fidelity Investments*	10,822 shares of Fidelity Freedom Income Fund		120,018
Fidelity Investments*	4,266 shares of Fidelity Freedom 2000 Fund		50,258

	Total mutual funds		68,851,790

Participant loans*	$1,419,574 in loan receivables from participants with interest rates of prime + 1% or 2%		1,419,574

	Total investments	$	110,550,580

*	Party-in-interest.

See accompanying report of independent registered public accounting firm.

Schedule 2

MARKEL CORPORATION RETIREMENT SAVINGS PLAN

Schedule H, Line 4j – Schedule of Reportable Transactions

Year ended December 31, 2003

Identity of

party involved

Description of assets

Purchase

price

Selling

price

Lease

rental

Expense

incurred

with

transaction

Cost of

asset

Current

value

of asset on

transaction

date

Net

gain

None

See accompanying report of independent registered public accounting firm.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the administrative committee members have duly caused this annual report to be signed on behalf by the undersigned hereunto duly authorized.


MARKEL CORPORATION RETIREMENT SAVINGS PLAN

By:		/s/ PAMELA J. PERROTT
		Administrative Committee Member

Date: June 24, 2004

Exhibit Index


Number		Description

23		Consent of Independent Registered Public Accounting Firm