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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| WR Berkley Corp | NYSE:WRB | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.60 | 0.99% | 60.95 | 109 | 12:00:01 |
From Feb 2024 to Feb 2025
Return on Equity of 20.0% and Operating Return on Equity of 22.4%; Record Quarterly Net Investment Income of $372 Million
W. R. Berkley Corporation (NYSE: WRB) today reported its second quarter 2024 results.
Summary Financial Data
(Amounts in thousands, except per share data)
Second Quarter
Six Months
2024
2023
2024
2023
Gross premiums written
$
3,717,772
$
3,336,773
$
7,080,528
$
6,386,091
Net premiums written
3,126,779
2,811,515
5,978,070
5,386,339
Net income to common stockholders
371,909
356,308
814,380
650,434
Net income per diluted share (1)
0.92
0.87
2.01
1.58
Operating income (2)
418,114
310,862
841,344
586,531
Operating income per diluted share (1)
1.04
0.76
2.08
1.42
Return on equity (3)
20.0
%
21.1
%
21.8
%
19.3
%
Operating return on equity (2) (3)
22.4
%
18.4
%
22.6
%
17.4
%
(1)
The 2024 per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on July 10, 2024, and the 2023 per share amounts were restated for comparative purposes to reflect such common stock split.
(2)
Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses) and related expenses.
(3)
Return on equity and operating return on equity represent net income and operating income, respectively, expressed on an annualized basis as a percentage of beginning of year common stockholders’ equity.
Second quarter highlights included:
The Company commented:
Continued strong underwriting and investment income drove our 20.0% annualized return on beginning of year common stockholders’ equity in the second quarter.
Market conditions remained favorable in many areas of our business, fueling growth in net premiums written of 11.2%. Our combined ratio was 91.1% inclusive of 3.2 loss ratio points of catastrophe losses.
Net investment income increased 51.8% over the prior year second quarter, driven by an increase in fixed-maturity income from a growing portfolio with higher yields. We anticipate that the Company’s new money rate will remain higher than the current yield of our fixed-maturity securities for the foreseeable future. Coupled with our increasing investment portfolio from continuing record cash flow, we remain well-positioned for further investment income growth.
Our decentralized structure and consistent focus on long-term risk-adjusted return allow us to effectively operate in a rapidly-changing environment. We continue to believe that expertise matters in both underwriting and investing. The Company expects to continue to deliver outstanding returns to our shareholders for the remainder of 2024 and beyond.
Webcast Conference Call
The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on July 22, 2024, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/events-and-presentations/default.aspx. Please log on early to register. A replay of the webcast will be available on the Company's website approximately two hours after the end of the conference call. Additional financial information can be found on the Company's website at https://ir.berkley.com/investor-relations/financial-information/quarterly-results/default.aspx.
About W. R. Berkley Corporation
Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty business: Insurance and Reinsurance & Monoline Excess.
Forward Looking Information
This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2024 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition, including new entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts, including claims for cyber security-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities; the ongoing effects of the COVID-19 pandemic, or other epidemics and pandemics; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response to such conditions, on our results and financial condition; foreign currency and political risks relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; cyber security breaches of our information technology systems and the information technology systems of our vendors and other third parties, or related processes and systems; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause our actual results for the year 2024 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Consolidated Financial Summary
(Amounts in thousands, except per share data)
Second Quarter
Six Months
2024
2023
2024
2023
Revenues:
Net premiums written
$
3,126,779
$
2,811,515
$
5,978,070
$
5,386,339
Change in unearned premiums
(280,364
)
(258,788
)
(367,308
)
(342,180
)
Net premiums earned
2,846,415
2,552,727
5,610,762
5,044,159
Net investment income
372,129
245,152
691,967
468,551
Net investment (losses) gains:
Net realized and unrealized (losses) gains on investments
(60,306
)
68,647
(48,803
)
91,258
Change in allowance for credit losses on investments
1,794
(9,993
)
16,070
(9,594
)
Net investment (losses) gains
(58,512
)
58,654
(32,733
)
81,664
Revenues from non-insurance businesses
125,705
113,910
246,696
238,110
Insurance service fees
27,597
25,471
52,917
58,328
Other income
698
—
1,196
106
Total Revenues
3,314,032
2,995,914
6,570,805
5,890,918
Expenses:
Loss and loss expenses
1,780,596
1,569,654
3,444,374
3,108,409
Other operating costs and expenses
892,935
823,682
1,761,524
1,649,255
Expenses from non-insurance businesses
121,120
113,538
239,727
236,306
Interest expense
31,708
31,856
63,436
63,692
Total expenses
2,826,359
2,538,730
5,509,061
5,057,662
Income before income tax
487,673
457,184
1,061,744
833,256
Income tax expense
(115,788
)
(101,460
)
(247,824
)
(181,803
)
Net Income before noncontrolling interests
371,885
355,724
813,920
651,453
Noncontrolling interest
24
584
460
(1,019
)
Net income to common stockholders
$
371,909
$
356,308
$
814,380
$
650,434
Net income per share (1):
Basic
$
0.93
$
0.88
$
2.03
$
1.59
Diluted
$
0.92
$
0.87
$
2.01
$
1.58
Average shares outstanding (1) (2):
Basic
400,273
406,296
401,295
409,364
Diluted
403,737
409,643
404,679
412,819
(1)
The 2024 per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on July 10, 2024, and the 2023 per share amounts were restated for comparative purposes to reflect such common stock split.
(2)
Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.
Business Segment Operating Results
(Amounts in thousands, except ratios) (1) (2)
Second Quarter
Six Months
2024
2023
2024
2023
Insurance:
Gross premiums written
$
3,360,850
$
2,994,059
$
6,281,900
$
5,620,406
Net premiums written
2,810,448
2,505,856
5,256,163
4,691,277
Net premiums earned
2,484,569
2,215,186
4,883,338
4,358,110
Pre-tax income
490,053
386,350
968,202
738,977
Loss ratio
64.0
%
63.1
%
62.9
%
62.8
%
Expense ratio
28.4
%
27.8
%
28.4
%
28.3
%
GAAP Combined ratio
92.4
%
90.9
%
91.3
%
91.1
%
Reinsurance & Monoline Excess:
Gross premiums written
$
356,922
$
342,714
$
798,628
$
765,685
Net premiums written
316,331
305,659
721,907
695,062
Net premiums earned
361,846
337,541
727,424
686,049
Pre-tax income
124,449
105,420
252,074
206,704
Loss ratio
52.8
%
51.2
%
51.3
%
53.9
%
Expense ratio
29.0
%
30.1
%
29.4
%
30.1
%
GAAP Combined ratio
81.8
%
81.3
%
80.7
%
84.0
%
Corporate and Eliminations:
Net investment (losses) gains
$
(58,512
)
$
58,654
$
(32,733
)
$
81,664
Interest expense
(31,708
)
(31,856
)
(63,436
)
(63,692
)
Other expenses
(36,609
)
(61,384
)
(62,363
)
(130,397
)
Pre-tax loss
(126,829
)
(34,586
)
(158,532
)
(112,425
)
Consolidated:
Gross premiums written
$
3,717,772
$
3,336,773
$
7,080,528
$
6,386,091
Net premiums written
3,126,779
2,811,515
5,978,070
5,386,339
Net premiums earned
2,846,415
2,552,727
5,610,762
5,044,159
Pre-tax income
487,673
457,184
1,061,744
833,256
Loss ratio
62.6
%
61.5
%
61.4
%
61.6
%
Expense ratio
28.5
%
28.1
%
28.6
%
28.5
%
GAAP Combined ratio
91.1
%
89.6
%
90.0
%
90.1
%
(1)
Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.
(2)
Commencing with the first quarter of 2024, the Company reclassified a program management business from the Insurance segment to the Reinsurance & Monoline Excess segment. The reclassified business is a program management business offering support on a nationwide basis for commercial casualty and property program administrators. Reclassifications have been made to the Company's 2023 financial information to conform with this presentation.
Supplemental Information
(Amounts in thousands)
Second Quarter
Six Months
2024
2023
2024
2023
Net premiums written:
Other liability
$
1,131,676
$
987,687
$
2,147,291
$
1,888,978
Short-tail lines (1)
643,101
558,123
1,175,442
984,777
Auto
408,178
352,584
756,760
646,442
Workers' compensation
332,432
325,170
637,064
635,154
Professional liability
295,061
282,292
539,606
535,926
Total Insurance
2,810,448
2,505,856
5,256,163
4,691,277
Casualty (2)
188,117
189,970
378,136
401,261
Property (2)
102,158
90,585
200,820
164,179
Monoline excess
26,056
25,104
142,951
129,622
Total Reinsurance & Monoline Excess
316,331
305,659
721,907
695,062
Total
$
3,126,779
$
2,811,515
$
5,978,070
$
5,386,339
Current accident year losses from catastrophes:
Insurance
$
86,632
$
48,007
$
114,082
$
93,249
Reinsurance & Monoline Excess
3,047
5,540
6,103
8,167
Total
$
89,679
$
53,547
$
120,185
$
101,416
Net Investment income:
Core portfolio (3)
$
329,971
$
229,302
$
661,147
$
432,265
Investment funds
25,476
(1,187
)
(3,873
)
993
Arbitrage trading account
16,682
17,037
34,693
35,293
Total
$
372,129
$
245,152
$
691,967
$
468,551
Net realized and unrealized (losses) gains on investments:
Net realized gains (losses) on investments
$
6,411
$
47,387
$
(7,898
)
$
26,594
Change in unrealized (losses) gains on equity securities
(66,717
)
21,260
(40,905
)
64,664
Total
$
(60,306
)
$
68,647
$
(48,803
)
$
91,258
Other operating costs and expenses:
Policy acquisition and insurance operating expenses
$
811,997
$
718,234
$
1,603,529
$
1,436,510
Insurance service expenses
23,084
23,931
44,523
49,111
Net foreign currency (gains) losses
(10,118
)
11,226
(23,295
)
20,721
Other costs and expenses
67,972
70,291
136,767
142,913
Total
$
892,935
$
823,682
$
1,761,524
$
1,649,255
Cash flow from operations
$
881,330
$
708,745
$
1,627,565
$
1,154,069
Reconciliation of net income to operating income:
Net income
$
371,909
$
356,308
$
814,380
$
650,434
Pre-tax investment losses (gains), net of related expenses
58,631
(57,862
)
32,733
(81,250
)
Income tax (benefit) expense
(12,426
)
12,416
(5,769
)
17,347
Operating income after-tax (4)
$
418,114
$
310,862
$
841,344
$
586,531
(1)
Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
(2)
Includes reinsurance casualty and property and certain program management business.
(3)
Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.
(4)
Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.
Selected Balance Sheet Information
(Amounts in thousands, except per share data)
June 30, 2024
December 31, 2023
Net invested assets (1)
$
28,011,519
$
26,973,703
Total assets
38,909,919
37,111,830
Reserves for losses and loss expenses
19,567,190
18,739,652
Senior notes and other debt
1,828,422
1,827,951
Subordinated debentures
1,009,449
1,009,090
Common stockholders' equity (2)
7,773,782
7,455,431
Common stock outstanding (3) (4)
380,647
384,817
Book value per share (4) (5)
20.42
19.37
Tangible book value per share (4) (5)
19.78
18.72
(1)
Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities.
(2)
As of June 30, 2024, reflected in common stockholders' equity are after-tax unrealized investment losses of $670 million and unrealized currency translation losses of $364 million. As of December 31, 2023, reflected in common stockholders' equity are after-tax unrealized investment losses of $586 million and unrealized currency translation losses of $340 million.
(3)
During the six months ended and three months ended June 30, 2024, the Company repurchased 4,298,510 shares of its common stock for $223.8 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.
(4)
The 2024 per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on July 10, 2024, and the 2023 per share amounts were restated for comparative purposes to reflect such common stock split.
(5)
Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding.
Investment Portfolio
June 30, 2024
(Amounts in thousands, except percentages)
Carrying Value
Percent of Total
Fixed maturity securities:
United States government and government agencies
$
1,822,376
6.5
%
State and municipal:
Special revenue
1,508,209
5.4
%
State general obligation
443,673
1.6
%
Local general obligation
379,024
1.4
%
Corporate backed
161,332
0.6
%
Pre-refunded
87,978
0.3
%
Total state and municipal
2,580,216
9.3
%
Mortgage-backed securities:
Agency
1,855,209
6.6
%
Commercial
558,051
2.0
%
Residential - Prime
179,841
0.6
%
Residential - Alt A
2,508
0.0
%
Total mortgage-backed securities
2,595,609
9.2
%
Asset-backed securities
4,014,446
14.3
%
Corporate:
Industrial
3,893,745
13.9
%
Financial
3,196,583
11.4
%
Utilities
711,967
2.5
%
Other
610,125
2.2
%
Total corporate
8,412,420
30.0
%
Foreign government
1,657,609
5.9
%
Total fixed maturity securities (1)
21,082,676
75.2
%
Equity securities available for sale:
Common stocks
696,555
2.5
%
Preferred stocks
381,537
1.4
%
Total equity securities available for sale
1,078,092
3.9
%
Investment funds
1,589,119
5.7
%
Cash and cash equivalents (2)
1,411,140
5.0
%
Real estate
1,279,306
4.6
%
Arbitrage trading account
1,221,861
4.4
%
Loans receivable
349,325
1.2
%
Net invested assets
$
28,011,519
100.0
%
(1)
Total fixed maturity securities had an average rating of AA- and an average duration of 2.5 years, including cash and cash equivalents.
(2)
Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240722013182/en/
Karen A. Horvath Vice President - External Financial Communications (203) 629-3000
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