According to Reuters, W.R. Berkley Corp. reported Feb. 5 that it will claim a loss in the fourth quarter as it takes charges to add reserves related to loss-making contracts, along with its exposure to both Enron Corp. and problems in Argentina. The company is planning on a fourth-quarter net loss of approximately $2.05 per share. Not counting discontinued businesses, realized investment losses and restructuring charges, the company anticipates an operating loss of around 50 cents per share.
Plans call for increasing reserves by $34 million following tax for its discontinued alternative markets reinsurance business – mainly reinsuring companies that self-insured their workers’ compensation. The company also plans to increase its reserves by $21 million related to its treaty reinsurance business.
Berkley reiterated its plans to take an after-tax charge of $12 million for anticipated losses on surety bonds related to Enron’s bankruptcy. It is also planning for a charge of $7 million to write down the value of investments that are held by an Argentine subsidiary.
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