Increased competition in its insurance markets and turbulence in the financial sector were blamed for Richmond, Va.-based specialty insurer Markel Corporation reporting a 66 percent decline in net income in the first quarter.

The company said first quarter net income came in at $34 million compared to $99 million in 2007.

In a conference call, Richard R. Whitt III, senior vice president and chief financial officer of Markel, said that net written premiums declined to $510 million, about a 7 percent decrease from the first quarter of 2007. However, he noted that retentions were higher at 89 percent in the quarter compared to 87 percent in 2007.

The company's combined ratio climbed to 92 compared to 87 for the first quarter of 2007. Mr. Whitt said the increase was due to a higher current accident year loss ratio caused by price decreases and some adverse property losses experienced in several business units.

Markel reported investment income of $76 million in the quarter compared to $77 million in 2007. Mr. Whitt attributed the decline to an unrealized loss of approximately $4 million on a credit default swap.

Additionally, Mr. Whitt said the company experienced $56 million in realized losses "primarily comprised of a $72 million write down for other than temporary declines in the fair value of 10 equity securities and one fixed maturity."

The most significant write down for the quarter was $36.7 million on an investment in Citigroup, he said.

In a statement, Alan I. Kirshner, chairman and chief executive officer of Markel, said, "Our first quarter financial results have been impacted by both increased competition in the specialty insurance market and volatility in the financial markets. While our performance for the quarter suffered as a result, our underwriting profitability was in--line with expectations and our commitment to a long-term investment philosophy remains unchanged."

Markel also announced that Anthony F. Markel was elected vice chairman of the company, and Paul W. Springman is now president and chief operating officer.

Mr. Markel has been with the company for over 40 years, serving as president and chief operating officer since 1992.

Mr. Springman has served as executive vice president with the company since 2002 and joined Markel in 1984.