W. R. Berkley Corp. reported net income for the first quarter of 2007 of $188 million, or 93 cents per share, a 17% increase from $162 million, or 80 cents per share, for the first quarter of 2006.
Net operating income for the first quarter of 2007 increased 15% to $184 million, or 91 cents per share, compared with $160 million, or 79 cents per share, for the corresponding quarter of 2006. Net operating income is a non-GAAP financial measure defined by the company as net income excluding realized investment gains and losses.
Return on equity was 22.6% on an annualized basis.
GAAP combined ratio improved to 87.5% from 88.2% in the prior year period.
Net investment income grew 26% to $165 million.
Paid loss ratio was 41.7%.
According to William R. Berkley, chairman and chief executive officer, the first quarter performance was generally in line with expectations.
“We are pleased that our return on equity was over 22 percent in spite of the substantial increase in our capital base as a result of last year’s earnings. In the current environment, we have not been able to fully leverage our capital as rapidly as it is currently being generated. We remain cognizant of the desirability of maintaining only the ‘right’ amount of capital. However, we continue to explore opportunities that we believe may represent attractive investments in our business,” he maintained.
Berkley said that the decrease in premium volume reflects continuing competition and modestly declining rates.
“Nevertheless, we believe new business is being written at attractive underwriting margins. We remain cautious in establishing our loss reserves and believe that returns in excess of 20 percent are likely to continue through the rest of the year and into next year,” Berkley concluded.
The company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on April 24, 2007 at 9:00 a.m. eastern time. The conference call will be webcast live on the company’s website at www.wrberkley.com.
Source: W. R. Berkley
Topics Profit Loss
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