W.R. Berkley Corp. Reports 4Q Loss

February 18, 2002

W.R. Berkley Corporation reported an operating loss for the fourth quarter ended Dec. 31, 2001 of $15 million, or 49 cents per share, compared with operating income of $14 million, or 52 cents per share, for the same period in 2000.

As previously announced, operating results for the fourth quarter of 2001 reflect an after tax charge of $21 million, or 68 cents per share, for an increase in treaty reinsurance loss reserves and an after tax charge of $12 million, or 38 cents per share, for potential losses from the Enron bankruptcy. Operating income or loss excludes net income or loss from discontinued businesses, realized gains or losses on investment sales and restructuring charges.

For full year 2001, the company reported breakeven operating results compared with operating income of $38 million, or $1.48 per share, for 2000. In addition to the fourth quarter charges referred to above, operating results for 2001 reflect an after tax charge in the third quarter of $23 million, or 78 cents per share, for potential losses related to the World Trade Center attack.

Net premiums written for continuing business segments increased 46 percent to $477 million for the fourth quarter of 2001 from $327 million for the fourth quarter of 2000. During this period the increased volume was due entirely to price increases. The premium growth was led by the company’s specialty and alternative markets segments, which reported increases in net premiums written of 107 percent and 93 percent, respectively, over the fourth quarter of 2000. For full year 2001, net premiums written for continuing business segments increased 30 percent to $1,664 million.

Net investment income decreased by $10 million to $47 million for the fourth quarter of 2001 due to lower returns from merger arbitrage investments. For full year 2001, net investment income was $195 million compared with $210 million for the year-earlier period.

The company reported a net loss of $64 million, or $2.04 per share, for the fourth quarter of 2001 compared with net income of $18 million, or 68 cents per share, for the year-earlier period. For full year 2001, the net loss was $92 million, or $3.14 per share, compared with net income of $36 million, or $1.39 per share, for 2000. The net loss for 2001 reflects a net loss from discontinued businesses of $36 million for the fourth quarter of 2001 and $87 million for the full year 2001. The net loss from discontinued businesses includes increases in loss reserves for the alternative markets reinsurance business of $34 million, after tax, in the fourth quarter and $67 million, after tax, for the full year 2001.

William R. Berkley, chairman and CEO, commented that the results for the fourth quarter and full year of 2001 were both disappointing and exciting. Disappointing due to the fact that results for previous years, primarily of the reinsurance business, required substantial additional reserves in order to maintain the integrity of the company’s balance sheet. The results also proved exciting because pricing levels for new and renewal business have continued showing substantial increases.

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