W.R. Berkley Corp. reported on Tuesday $116.62 million net income for its 2013 first quarter, representing a 13.6 percent decline compared to $135.32 million income reported during the first quarter of 2012.
Net premiums written and the combined ratio both improved compared to the same period one year ago — but on the other hand, net investment gains fell compared to last year.
The commercial lines property/casualty insurer reported that net premiums written for the first quarter came in at $1.377 billion, up 14.4 percent compared to $1.204 billion reported during the 2012 first quarter.
The consolidated GAAP combined ratio for the quarter was 94.7 percent, improving from 96.5 percent one year ago.
But net investment gains were down 54 percent to $19.97 million, compared to $43.48 million one year ago. Investment income for the latest quarter was $135.93 million, down 13.8 percent compared to $157.62 million during the 2012 first quarter.
On pricing, W. R. Berkley said improved rates are now showing up in the financial results. The company said average rates on renewed policies increased 7.3 percent in the first quarter.
Commenting on the company’s performance, CEO William R. Berkley said: “We had a good quarter, setting the foundation for an excellent year. Our business is showing continued signs of improvement, and we are well positioned to take advantage of the positive rate environment.”
He said the benefits of improved pricing are slowly being reflected in financial results: “We see new opportunities created by the current underwriting environment as prices continue to increase faster than loss costs. Our management team recognizes that to achieve adequate returns in the current low interest rate environment, increased underwriting margins are required. We believe this is attainable.”
The core fixed income investment portfolio continues to perform well, with investment yields that remain above current market rates, CEO Berkley said.
“Short-term fears of inflation seem to have abated, making us less eager to further reduce the duration of our portfolio. We continue to search the range of investment offerings for yield as well as capital gains, but we will not sacrifice quality nor do we intend to extend duration,” he said.
“We are optimistic that our business will continue to improve, and 2013 will be an excellent year.”
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