W.R. Berkley Reports Q4 Net Income of $116M

February 14, 2005

W. R. Berkley Corp. reported net income for the fourth quarter of 2004 of $116 million, or $1.31 per share, a 25% increase from $93 million, or $1.07 per share, a year ago.

Fourth quarter 2004 net operating income increased 43% to $114 million, or $1.29 per share, compared with $79 million, or $0.91 per share, for the fourth quarter of 2003.

Fourth quarter highlights are as follows:

— Net premiums written rose to $1.1 billion, an increase of 15% from the comparable quarter of 2003.

— The GAAP combined ratio was 89.9% compared with 90.5% in the prior year period.

— The paid loss ratio decreased to 35.6% from 35.9% in the prior year quarter.

— Investment income increased 46% to $82 million.

— Cash flow from operations increased 15% to $487 million compared with $424 million in the year-earlier period.

Commenting on the company’s performance, William Berkley, chairman and CEO, noted, “We are very pleased with the fourth quarter and full year results. The business continued its robust performance, generating an after-tax return on equity of over 27% for the fourth quarter. Each segment of the business reported underwriting profits in 2004. At the same time, we had cash flow for the year of over $1.6 billion. As a result of the cash flow and an upturn in investment yields, investment income reached $82 million in the fourth quarter. For the year, investment income grew 39% to over $291 million.

“We continue to be optimistic about the environment and expect relative price stability in most parts of our marketplace. There is pressure on prices in some areas, but the overall business continues to look excellent. We expect to continue to enjoy moderate growth and we are confident that 2005 will result in after tax returns exceeding 20%.”

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