W. R. Berkley Corporation reported first quarter net income of $72 million, or $1.25 per share, up from $34 million, or 66 cents per share, a year ago.
Net operating income for the first quarter of 2003 was $63 million, or $1.10 per share, compared with $31 million, or 60 cents per share, for the first quarter of 2002. Net operating income is a non-GAAP financial measure defined by the company as net income excluding gains and losses on investments, foreign currencies and discontinued business.
First quarter highlights include:
*Net operating return on equity was 18.8 percent annualized, or 4.7 percent for the quarter;
*Net premiums written grew 41 percent to $892 million;
*Net premiums written for specialty insurance and facultative reinsurance grew by 49 percent and 118 percent, respectively;
*GAAP combined ratio improved by 4.3 percentage points to 91.8 percent;
*Cash flow from operations increased to $276 million;
The paid loss ratio decreased to 39 percent in the first quarter from 59 percent in the prior year quarter.
Commenting on the company’s performance, William Berkley, chairman and CEO, noted, “The results for the first quarter continue the positive trends we’ve seen the past twelve months. All units of the property casualty business generated underwriting profits except for treaty reinsurance, where we are still seeing loss development from prior years. Our cash flow from operations was over $275 million for the quarter. Investment income also increased substantially, reflecting increased cash flow and greater invested assets. The Company’s portfolio duration declined slightly during the period.
“Our accident year results continue to be exceptional. Prices are still moving up, although the pace of those increases has moderated somewhat. Increases this year were over 12 percent for regional business, more than 25 percent for specialty business and in excess of 30 percent for reinsurance business. We expect continued improvement in underwriting profitability.
“Our expectation for ongoing growth and improved profitability has not changed. We remain confident and enthusiastic about our opportunities for increased profits and growth for the next several years,” Berkley concluded.