Third quarter net income at W.R. Berkley Corp. increased nearly 46% compared to the same period last year to about $334 million.
The Greenwich, Connecticut-based insurer’s consolidated combined ratio for the quarter improved to 90.2 from 92.1 a year ago as “record” net premiums grew about 10.5% to $2.8 billion. Underwriting income during Q3 grew 34.7% to $258.7 million.
Catastrophe losses for Q3 were $61.5 million.
“Market segments, territories and lines of business continue to move independently of one another,” W.R. Berkley said in a statement. “Accordingly, we are expanding in areas that are likely to provide attractive risk-adjusted profitability. Overall rate increases excluding workers’ compensation remained strong at 8.5%.”
During its call on earnings, Chief Financial Officer Richard Baio said the insurance business grew by about 17.5% in other liability, short tail lines, and commercial automobile through rate and exposure. Decreases in workers’ compensation and certain professional lines tempered overall the growth in net premiums written, bringing total segment growth to 12.1%.
W. Robert Berkley, Jr., president and chief executive officer, said during the call that the marketplace has been focused on property for some time but close attention needs to paid to auto liability.
“When it comes to social inflation, auto liability has the biggest bullseye on its chest,” he said during the call with analysts. “And by extension, that clearly spills over to excess as well as umbrella. Just in general, social inflation continues to burn and we do not see that abating anytime soon.”
The CEO said rate increases achieved by the company put it “in a comfortable position to be able to more likely than not absorb whatever that inflation trend is sending our way.” In commercial auto, Berkley said the insurer is “pushing very hard on the rate and we’re getting it.”
“We are not going to write it if we don’t think we can get the rate that is required to achieve our targeted return,” he added.
On the reinsurance side, Berkley said he’s heard some providers talk about litigation funding as if they’ve just discovered it. He said the talk “makes you scratch your head and wonder where they’ve been for the past decade.”
“These are not new phenomenon,” he added. “There’s nothing new there. I think it’s great that they’re focused on it. Maybe they’ll bring more discipline to the marketplace.”
The company also saw record net investment income of $270.9 million in the third quarter, driven by the high interest rate environment. W.R. Berkley said in its statement that it expects the trend will continue “as we benefit from record operating cash flows and reinvest at higher interest rates.”
As of September 30, W.R. Berkley recorded net income of about $984 million compared to about $999 million after nine months in 2022.
Topics Profit Loss
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