W. R. Berkley Corporation reported third quarter operating income of $42 million, or 81 cents per share, compared with an operating loss of $12 million, or 28 cents per share, a year ago.
For the first nine months of 2002, operating income was $108 million, or $2.06 per share, up from $16 million, or 37 cents per share, a year ago. Per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on July 2, 2002.
Highlights for the 2002 third quarter compared with the prior year quarter include:
*Gross premiums written for continuing business segments grew 58% to $789 million.
*Gross premiums written increased 91% for facultative reinsurance and 81% for treaty reinsurance in the US. In addition, $35 million of new business was written as a result of our quota share reinsurance with Lloyd’s.
*Gross premiums written for specialty insurance grew 62%to $249 million.
*GAAP combined ratio for continuing operations was 94.7% compared with a combined ratio in 2001 of 104.0% (excluding World Trade Center losses).
*GAAP combined ratio for the regional segment improved 13.2 points to 91.8%.
*The continuing operations paid loss ratio decreased to 45.0% in 2002 from 59.8% in 2001, and the paid-to-incurred ratio decreased to 69.4% in 2002 from 85.9% (excluding World Trade Center losses) in 2001.
*Cash flow from operations increased to $303 million compared with $86 million in the third quarter of 2001.
Commenting on the company’s results, William R. Berkley, chairman and CEO, noted, “We are extremely pleased with the continued excellent performance of our business. We are on track to meet or exceed a 15 percent return on stockholders’ equity this year and anticipate achieving at least an 18 percent return next year in spite of the current interest rate environment.
“Our latest financial results are only a partial reflection of the profitability of the 2002 underwriting year. As a result of how earned premiums are reported, each financial year is a blend of underwriting results from the current year and prior years. Our underwriting year results have improved substantially from 2000 through the current period. Therefore, we believe that the next twelve months financial results will show continued improvement over the 2002 period.”
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