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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 | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 62.14 | 2 | 09:31:04 |
From Sep 2024 to Nov 2024
Return on Equity of 19.6% and Operating Return on Equity of 20.0%; Record Third Quarter Net Income Increased to $366 Million
W. R. Berkley Corporation (NYSE: WRB) today reported its third quarter 2024 results.
Summary Financial Data
(Amounts in thousands, except per share data)
Third Quarter
Nine Months
2024
2023
2024
2023
Gross premiums written
$
3,633,278
$
3,353,205
$
10,713,806
$
9,739,296
Net premiums written
3,057,276
2,848,459
9,035,346
8,234,799
Net income to common stockholders
365,634
333,586
1,180,014
984,020
Net income per diluted share (1)
0.91
0.82
2.92
2.39
Operating income (2)
373,677
366,608
1,215,022
952,868
Operating income per diluted share (1)
0.93
0.90
3.01
2.32
Return on equity (3)
19.6
%
19.8
%
21.1
%
19.4
%
Operating return on equity (2) (3)
20.0
%
21.7
%
21.7
%
18.8
%
(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.
Third quarter highlights included:
The Company commented:
The Company reported record third quarter net income in 2024. Continued strong underwriting margins and increasing investment income drove our 19.6% annualized return on beginning of year common stockholders’ equity.
We continue to grow thoughtfully by focusing on business we expect to achieve or exceed our targeted risk-adjusted return, being ever mindful of rate adequacy, loss trend, and exposure management. Our 90.9% calendar year combined ratio again demonstrated below average volatility, with a modest 3.3 loss ratio points of catastrophe losses, despite the frequency of severe market-wide events.
Net investment income increased 19.5% over the prior year third quarter, driven by an increase in fixed-maturity income. We anticipate that the Company’s new money rate will remain above the current yield of our U.S. fixed-maturity securities, notwithstanding the recent and expected decreases in short-term rates. Coupled with increases in invested assets from continuing record cash flow, we remain well-positioned for further investment income growth.
Our success in navigating a wide variety of underwriting and investment environments has resulted in best-in-class returns on equity and below-average volatility that has generated significant shareholder value over many years. Fueled by knowledge and expertise, our decentralized structure allows us to take a flexible, proactive, and innovative approach to whatever risks and opportunities the market may present. We expect to continue to deliver outstanding risk-adjusted 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 October 21, 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)
Third Quarter
Nine Months
2024
2023
2024
2023
Revenues:
Net premiums written
$
3,057,276
$
2,848,459
$
9,035,346
$
8,234,799
Change in unearned premiums
(130,453
)
(206,545
)
(497,761
)
(548,726
)
Net premiums earned
2,926,823
2,641,914
8,537,585
7,686,073
Net investment income
323,756
270,944
1,015,723
739,494
Net investment (losses) gains:
Net realized and unrealized (losses) gains on investments
(23,362
)
(40,855
)
(72,165
)
50,403
Change in allowance for credit losses on investments
15,276
(1,571
)
31,347
(11,164
)
Net investment (losses) gains
(8,086
)
(42,426
)
(40,818
)
39,239
Revenues from non-insurance businesses
128,610
137,116
375,307
375,225
Insurance service fees
28,666
22,962
81,583
81,290
Other income
610
128
1,804
235
Total Revenues
3,400,379
3,030,638
9,971,184
8,921,556
Expenses:
Loss and loss expenses
1,825,960
1,636,193
5,270,334
4,744,602
Other operating costs and expenses
943,365
808,669
2,704,890
2,457,925
Expenses from non-insurance businesses
124,885
133,939
364,612
370,244
Interest expense
31,720
31,888
95,156
95,580
Total expenses
2,925,930
2,610,689
8,434,992
7,668,351
Income before income tax
474,449
419,949
1,536,192
1,253,205
Income tax expense
(109,135
)
(86,519
)
(356,958
)
(268,322
)
Net Income before noncontrolling interests
365,314
333,430
1,179,234
984,883
Noncontrolling interest
320
156
780
(863
)
Net income to common stockholders
$
365,634
$
333,586
$
1,180,014
$
984,020
Net income per share (1):
Basic
$
0.92
$
0.83
$
2.95
$
2.41
Diluted
$
0.91
$
0.82
$
2.92
$
2.39
Average shares outstanding (1) (2):
Basic
398,338
403,787
400,302
407,484
Diluted
401,817
407,158
404,053
411,219
(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)
Third Quarter
Nine Months
2024
2023
2024
2023
Insurance:
Gross premiums written
$
3,219,128
$
2,965,787
$
9,501,027
$
8,586,193
Net premiums written
2,673,275
2,484,626
7,929,439
7,175,904
Net premiums earned
2,564,490
2,291,917
7,447,828
6,650,027
Pre-tax income
469,421
410,909
1,437,623
1,149,886
Loss ratio
63.1
%
62.8
%
63.0
%
62.8
%
Expense ratio
28.4
%
28.2
%
28.4
%
28.2
%
GAAP Combined ratio
91.5
%
91.0
%
91.4
%
91.0
%
Reinsurance & Monoline Excess:
Gross premiums written
$
414,150
$
387,418
$
1,212,779
$
1,153,103
Net premiums written
384,001
363,833
1,105,907
1,058,895
Net premiums earned
362,333
349,997
1,089,757
1,036,046
Pre-tax income
105,225
110,442
357,299
317,146
Loss ratio
57.0
%
56.5
%
53.2
%
54.8
%
Expense ratio
29.7
%
28.8
%
29.5
%
29.6
%
GAAP Combined ratio
86.7
%
85.3
%
82.7
%
84.4
%
Corporate and Eliminations:
Net investment (losses) gains
$
(8,086
)
$
(42,426
)
$
(40,818
)
$
39,239
Interest expense
(31,720
)
(31,888
)
(95,156
)
(95,580
)
Other expenses
(60,391
)
(27,088
)
(122,756
)
(157,486
)
Pre-tax loss
(100,197
)
(101,402
)
(258,730
)
(213,827
)
Consolidated:
Gross premiums written
$
3,633,278
$
3,353,205
$
10,713,806
$
9,739,296
Net premiums written
3,057,276
2,848,459
9,035,346
8,234,799
Net premiums earned
2,926,823
2,641,914
8,537,585
7,686,073
Pre-tax income
474,449
419,949
1,536,192
1,253,205
Loss ratio
62.4
%
61.9
%
61.7
%
61.7
%
Expense ratio
28.5
%
28.3
%
28.6
%
28.4
%
GAAP Combined ratio
90.9
%
90.2
%
90.3
%
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)
Third Quarter
Nine Months
2024
2023
2024
2023
Net premiums written:
Other liability
$
1,066,005
$
978,193
$
3,213,296
$
2,867,172
Short-tail lines (1)
592,913
534,567
1,768,355
1,519,345
Auto
413,260
383,730
1,170,020
1,030,172
Workers' compensation
302,179
302,701
939,243
937,854
Professional liability
298,918
285,435
838,525
821,361
Total Insurance
2,673,275
2,484,626
7,929,439
7,175,904
Casualty (2)
189,386
188,445
567,522
589,706
Property (2)
106,106
92,171
306,925
256,350
Monoline excess
88,509
83,217
231,460
212,839
Total Reinsurance & Monoline Excess
384,001
363,833
1,105,907
1,058,895
Total
$
3,057,276
$
2,848,459
$
9,035,346
$
8,234,799
Current accident year losses from catastrophes:
Insurance
$
76,848
$
46,160
$
190,931
$
139,409
Reinsurance & Monoline Excess
20,970
15,369
27,073
23,536
Total
$
97,818
$
61,529
$
218,004
$
162,945
Net Investment income:
Core portfolio (3)
$
301,146
$
248,618
$
962,293
$
680,883
Investment funds
4,741
4,450
868
5,443
Arbitrage trading account
17,869
17,876
52,562
53,168
Total
$
323,756
$
270,944
$
1,015,723
$
739,494
Net realized and unrealized (losses) gains on investments:
Net realized (losses) gains on investments
$
(21,825
)
$
(21,796
)
$
(29,723
)
$
4,798
Change in unrealized (losses) gains on equity securities
(1,537
)
(19,059
)
(42,442
)
45,605
Total
$
(23,362
)
$
(40,855
)
$
(72,165
)
$
50,403
Other operating costs and expenses:
Policy acquisition and insurance operating expenses
$
835,376
$
747,007
$
2,438,905
$
2,183,517
Insurance service expenses
21,786
21,225
66,309
70,336
Net foreign currency losses (gains)
24,619
(22,498
)
1,324
(1,777
)
Other costs and expenses
61,584
62,935
198,352
205,849
Total
$
943,365
$
808,669
$
2,704,890
$
2,457,925
Cash flow from operations
$
1,240,770
$
1,077,093
$
2,868,335
$
2,231,162
Reconciliation of net income to operating income:
Net income
$
365,634
$
333,586
$
1,180,014
$
984,020
Pre-tax investment losses (gains), net of related expenses
8,086
42,426
40,818
(39,170
)
Income tax (benefit) expense
(43
)
(9,404
)
(5,810
)
8,018
Operating income after-tax (4)
$
373,677
$
366,608
$
1,215,022
$
952,868
(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)
September 30, 2024
December 31,
2023
Net invested assets (1)
$
29,689,477
$
26,973,703
Total assets
40,359,298
37,111,830
Reserves for losses and loss expenses
20,155,310
18,739,652
Senior notes and other debt
1,827,788
1,827,951
Subordinated debentures
1,009,629
1,009,090
Common stockholders' equity (2)
8,426,264
7,455,431
Common stock outstanding (3) (4)
381,190
384,817
Book value per share (4) (5)
22.11
19.37
Tangible book value per share (4) (5)
21.47
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 September 30, 2024, reflected in common stockholders' equity are after-tax unrealized investment losses of $289 million and unrealized currency translation losses of $314 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 nine months ended September 30, 2024, the Company repurchased 4,537,130 shares of its common stock for $236.2 million. During the three months ended September 30, 2024, the Company repurchased 238,620 shares of its common stock for $12.5 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
September 30, 2024
(Amounts in thousands, except percentages)
Carrying Value
Percent of Total
Fixed maturity securities:
United States government and government agencies
$
2,070,985
7.0
%
State and municipal:
Special revenue
1,689,758
5.7
%
State general obligation
311,953
1.0
%
Local general obligation
304,114
1.0
%
Corporate backed
165,155
0.6
%
Pre-refunded
86,853
0.3
%
Total state and municipal
2,557,833
8.6
%
Mortgage-backed securities:
Agency
2,424,228
8.2
%
Commercial
600,881
2.0
%
Residential - Prime
212,909
0.7
%
Residential - Alt A
2,352
0.0
%
Total mortgage-backed securities
3,240,370
10.9
%
Asset-backed securities
4,107,321
13.8
%
Corporate:
Industrial
3,954,408
13.3
%
Financial
3,348,562
11.3
%
Utilities
774,398
2.6
%
Other
775,396
2.6
%
Total corporate
8,852,764
29.8
%
Foreign government
1,834,605
6.2
%
Total fixed maturity securities (1)
22,663,878
76.3
%
Equity securities available for sale:
Common stocks
701,667
2.3
%
Preferred stocks
346,459
1.2
%
Total equity securities available for sale
1,048,126
3.5
%
Cash and cash equivalents (2)
1,861,981
6.3
%
Investment funds
1,607,381
5.4
%
Real estate
1,297,314
4.4
%
Arbitrage trading account
820,928
2.8
%
Loans receivable
389,869
1.3
%
Net invested assets
$
29,689,477
100.0
%
(1)
Total fixed maturity securities had an average rating of AA- and an average duration of 2.4 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/20241021586786/en/
Karen A. Horvath Vice President - External Financial Communications (203) 629-3000
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