W.R. Berkley Corp. reported $108.8 million for its second-quarter net profit, a 32.4 percent increase compared to the same period one year ago.
The Greenwich, Conn.-headquartered insurer also said its profit for the first half of 2012 was $244.2 million, a 23.5% increase compared to last year.
CEO William R. Berkley said premiums grew in excess of 12 percent, while average renewal rate increases were approximately 6 percent.
He said the pace of the rate increases is not as robust as once expected — but he still thinks pricing momentum will continue throughout the rest of the year.
Average Rates on Renewed Policies Up 6%
“The economy is not as robust as we had anticipated; thus, the pace of price increases is not accelerating as fast as we had expected,” the CEO observed.
“We still see pricing momentum throughout the balance of the year. Many companies are beginning to recognize their weakening loss reserve position, which will continue to put further upward pressure on the current pricing environment.”
CEO Berkley also noted that investment income was substantially higher in the second quarter, primarily as a result of the strong performance of the insurer’s investment funds.
“In spite of the more difficult environment, our overall investment returns have proved to be satisfactory, and we have continued to benefit from substantial realized gains from our non-fixed income portfolio. This is in part a result of our continuing ability to find small opportunities offering attractive returns.”
“Overall, we have been able to deliver satisfactory after-tax returns on our capital, both because of our improving underwriting results and our stable investment income,” he said.
The company said its net premiums written for the second quarter were $1.19 billion, up 12.6 percent from $1.06 billion reported during the same period one year ago. For the first half of the year, net premiums written were $2.39 billion, up 11.7 percent from $2.14 billion one year ago.
GAAP combined ratio for the second quarter was 98.2 percent, improving from 101.2 percent one year ago. The combined ratio for the first six months of the year was 97.4 percent, compared to 98.9 percent during the same period last year.
Net investment gains for the second quarter improved to $24.29 million, up 6 percent from $22.89 million one year ago. The six-month net investment gains were $71.78 million, up 37.5 percent from one year ago.
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