W.R. Berkley Reports Underwriting Income Up, Catastrophe Losses Down

January 31, 2020

W.R. Berkley Corp. reported that its gross premiums written grew by more than 10 percent in the 2019 fourth quarter, thanks in part to accelerated rate increases.

But net income dipped compared to the same period a year ago, due in part to a plunge in income from alternative investments.

Gross premiums written surpassed $2 billion during Q4, versus $1.85 billion in Q4 2018 and amounting to a 10.1 percent increase. Net premiums written were nearly $1.67 billion, up from $1.52 billion or 9.3 percent the year before.

Net income came in at $119.3 million, or $0.62 per diluted share, down from $132.5 million, or $0.69 per diluted share in the 2018 fourth quarter.

The company noted that the rate increases accelerated as part of the natural process of a hardening market, averaging nine percent excluding workers’ compensation.

The insurer said it sustained a ding on its alternative investment portfolio, but the company insisted “they will continue to produce above-average long-term returns and remain a core part of our investment strategy.”

Net investment income, meanwhile, dipped to $137.3 million, down from nearly $160 million in the same, year-ago period. Investment funds, contained in that category, lost $8 million, down from a $15.3 million gain the year before.

Here are additional Q4 result highlights:

  • The combined ratio was 93, down from 95.9 in Q4 2018.
  • Underwriting income grew by 71 percent in to $114.7 million.
  • Catastrophe losses during the quarter landed at $20.5 million, down from $45.5 million in the 2018 fourth quarter.

Full year 2019 result highlights:

  • Gross written premiums for the year reached approximately $8.3 billion, compared to $7.7 billion in 2018.
  • Net premiums written nearly hit $6.9 billion, compared to $6.4 billion the year before.
  • Net income was close to $682 million, or $3.52 per diluted share, compared to $640.7 million, or $3.33 per diluted share in 2018.
  • The combined ratio for 2019 was 93.5, improved over 95.1 from 2018

Source: W.R. Berkley Corp.

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