Return on Equity of 21.1%; Quarterly Net
Income Doubles to $356 Million
W. R. Berkley Corporation (NYSE: WRB) today reported its
second quarter 2023 results.
Summary Financial Data
(Amounts in thousands, except per
share data)
Second Quarter
Six Months
2023
2022
2023
2022
Gross premiums written
$
3,336,773
$
3,052,401
$
6,386,091
$
5,912,237
Net premiums written
2,811,515
2,585,635
5,386,339
4,998,889
Net income to common stockholders
356,308
179,322
650,434
769,960
Net income per diluted share
1.30
0.64
2.36
2.76
Operating income (1)
310,862
313,359
586,531
619,827
Operating income per diluted share
1.14
1.12
2.13
2.22
Return on equity (2)
21.1
%
10.8
%
19.3
%
23.1
%
Operating return on equity (1) (2)
18.4
%
18.8
%
17.4
%
18.6
%
(1)
Operating income is a non-GAAP financial measure defined by the
Company as net income excluding after-tax net investment gains
(losses) and related expenses.
(2)
Return on equity and operating return on equity represent net
income and operating income, respectively, expressed on an
annualized basis as a percentage of beginning of year common
stockholders’ equity.
Second quarter highlights included:
- Return on equity and operating return on equity of 21.1% and
18.4%, respectively.
- Net income doubles to $356.3 million.
- Record net investment income of $245.2 million driven by core
portfolio increase of 71.6%.
- Average rate increases excluding workers' compensation were
approximately 8.2%.
- The current accident year combined ratio before catastrophe
losses of 2.1 loss ratio points was 87.6%.
- The reported combined ratio was 89.6%, including current
accident year catastrophe losses of $53.5 million.
- Record gross and net premiums written grew 9.3% and 8.7% to
$3.3 billion and $2.8 billion, respectively.
- Total capital returned to shareholders was $320.8 million,
consisting of $292.5 million of share repurchases and $28.3 million
of regular dividends.
The Company commented:
The Company reported excellent results for the second quarter of
2023, with an annualized return on equity of 21.1%.
As anticipated, growth in premiums written accelerated compared
to the first quarter of 2023, setting premium on pace for another
record year. We continue to selectively expand in areas that we
anticipate will meet or exceed our targeted risk-adjusted return,
as distinct market segments and lines of business move
independently. We maintained our rate momentum and reported a
strong combined ratio, though the industry experienced another
quarter of elevated natural catastrophe losses.
Net investment income grew 42.9% during the quarter as an
increasingly greater portion of our fixed-maturity portfolio was
(re)invested at higher interest rates. The short duration and high
quality of our fixed-maturity portfolio has enabled us to
simultaneously benefit from improved yields and grow book value as
interest rates have risen. In addition, during the quarter, our
investment results continued to benefit from our total return
approach.
The Company’s focus on risk-adjusted return in all aspects of
our business continues to generate superior results for our
shareholders. Having a decentralized model allows us to navigate
risks and embrace opportunities in a wide range of economic and
operating environments. We have positive momentum as we head into
the second half of the year and are very optimistic about the
remainder of 2023 and beyond.
Webcast Conference Call
The Company will hold its quarterly conference call with
analysts and investors to discuss its earnings and other
information on July 20, 2023, at 5:00 p.m. eastern time. The
conference call will be webcast live on the Company's website at
https://ir.berkley.com/events-and-presentations/default.aspx.
Please log on early to register. A replay of the webcast will be
available on the Company's website approximately two hours after
the end of the conference call. Additional financial information
can be found on the Company's website at
https://ir.berkley.com/investor-relations/financial-information/quarterly-results/default.aspx.
About W. R. Berkley Corporation
Founded in 1967, W. R. Berkley Corporation is an insurance
holding company that is among the largest commercial lines writers
in the United States and operates worldwide in two segments of the
property casualty business: Insurance and Reinsurance &
Monoline Excess.
Forward Looking Information
This is a “Safe Harbor” Statement under the Private Securities
Litigation Reform Act of 1995. Any forward-looking statements
contained herein, including statements related to our outlook for
the industry and for our performance for the year 2023 and beyond,
are based upon the Company’s historical performance and on current
plans, estimates and expectations. The inclusion of this
forward-looking information should not be regarded as a
representation by us or any other person that the future plans,
estimates or expectations contemplated by us will be achieved. They
are subject to various risks and uncertainties, including but not
limited to: the cyclical nature of the property casualty industry;
the impact of significant competition, including new entrants to
the industry; the long-tail and potentially volatile nature of the
insurance and reinsurance business; product demand and pricing;
claims development and the process of estimating reserves;
investment risks, including those of our portfolio of fixed
maturity securities and investments in equity securities, including
investments in financial institutions, municipal bonds,
mortgage-backed securities, loans receivable, investment funds,
including real estate, merger arbitrage, energy related and private
equity investments; the effects of emerging claim and coverage
issues; the uncertain nature of damage theories and loss amounts,
including claims for cybersecurity-related risks; natural and
man-made catastrophic losses, including as a result of terrorist
activities; the ongoing effects of the COVID-19 pandemic; the
impact of climate change, which may alter the frequency and
increase the severity of catastrophe events; general economic and
market activities, including inflation, interest rates, and
volatility in the credit and capital markets; the impact of the
conditions in the financial markets and the global economy, and the
potential effect of legislative, regulatory, accounting or other
initiatives taken in response, on our results and financial
condition; foreign currency and political risks (including those
associated with the United Kingdom's withdrawal from the European
Union, or "Brexit") relating to our international operations; our
ability to attract and retain key personnel and qualified
employees; continued availability of capital and financing; the
success of our new ventures or acquisitions and the availability of
other opportunities; the availability of reinsurance; our retention
under the Terrorism Risk Insurance Program Reauthorization Act of
2019; the ability or willingness of our reinsurers to pay
reinsurance recoverables owed to us; other legislative and
regulatory developments, including those related to business
practices in the insurance industry; credit risk related to our
policyholders, independent agents and brokers; changes in the
ratings assigned to us or our insurance company subsidiaries by
rating agencies; the availability of dividends from our insurance
company subsidiaries; potential difficulties with technology and/or
cyber security issues; the effectiveness of our controls to ensure
compliance with guidelines, policies and legal and regulatory
standards; and other risks detailed from time to time in the
Company’s filings with the Securities and Exchange Commission.
These risks and uncertainties could cause our actual results for
the year 2023 and beyond to differ materially from those expressed
in any forward-looking statement we make. Any projections of growth
in our revenues would not necessarily result in commensurate levels
of earnings. Forward-looking statements speak only as of the date
on which they are made, and the Company undertakes no obligation to
update publicly or revise any forward-looking statement, whether as
a result of new information, future developments or otherwise.
Consolidated Financial
Summary
(Amounts in thousands, except per
share data)
Second Quarter
Six Months
2023
2022
2023
2022
Revenues:
Net premiums written
$
2,811,515
$
2,585,635
$
5,386,339
$
4,998,889
Change in unearned premiums
(258,788
)
(228,477
)
(342,180
)
(392,645
)
Net premiums earned
2,552,727
2,357,158
5,044,159
4,606,244
Net investment income
245,152
171,574
468,551
345,086
Net investment gains (losses):
Net realized and unrealized gains (losses)
on investments
68,647
(163,935
)
91,258
205,947
Change in allowance for credit losses on
investments
(9,993
)
(7,620
)
(9,594
)
(11,237
)
Net investment gains (losses)
58,654
(171,555
)
81,664
194,710
Revenues from non-insurance businesses
113,910
128,421
238,110
226,197
Insurance service fees
25,471
26,393
58,328
54,344
Other Income
—
896
106
1,716
Total Revenues
2,995,914
2,512,887
5,890,918
5,428,297
Expenses:
Loss and loss expenses
1,569,654
1,435,817
3,108,409
2,775,069
Other operating costs and expenses
823,682
699,819
1,649,255
1,413,718
Expenses from non-insurance businesses
113,538
122,966
236,306
217,822
Interest expense
31,856
31,723
63,692
66,693
Total expenses
2,538,730
2,290,325
5,057,662
4,473,302
Income before income tax
457,184
222,562
833,256
954,995
Income tax expense
(101,460
)
(43,095
)
(181,803
)
(182,499
)
Net Income before noncontrolling
interests
355,724
179,467
651,453
772,496
Noncontrolling interest
584
(145
)
(1,019
)
(2,536
)
Net income to common stockholders
$
356,308
$
179,322
$
650,434
$
769,960
Net income per share:
Basic
$
1.32
$
0.65
$
2.38
$
2.78
Diluted
$
1.30
$
0.64
$
2.36
$
2.76
Average shares outstanding (1):
Basic
270,864
276,815
272,909
276,794
Diluted
273,095
279,525
275,213
279,327
(1)
Basic shares outstanding consist of the weighted average number of
common shares outstanding during the period (including shares held
in a grantor trust). Diluted shares outstanding consist of the
weighted average number of basic and common equivalent shares
outstanding during the period.
Business Segment Operating
Results
(Amounts in thousands, except
ratios) (1)
Second Quarter
Six Months
2023
2022
2023
2022
Insurance:
Gross premiums written
$
3,016,024
$
2,771,665
$
5,668,259
$
5,256,464
Net premiums written
2,527,198
2,326,125
4,738,033
4,399,416
Net premiums earned
2,246,394
2,070,157
4,428,269
4,032,991
Pre-tax income
386,264
347,461
738,463
729,873
Loss ratio
63.1
%
61.0
%
62.9
%
60.3
%
Expense ratio
28.0
%
27.7
%
28.4
%
27.9
%
GAAP Combined ratio
91.1
%
88.7
%
91.3
%
88.2
%
Reinsurance & Monoline
Excess:
Gross premiums written
$
320,749
$
280,736
$
717,832
$
655,773
Net premiums written
284,317
259,510
648,306
599,473
Net premiums earned
306,333
287,001
615,890
573,253
Pre-tax income
105,506
92,177
207,218
149,805
Loss ratio
49.7
%
60.4
%
52.1
%
60.2
%
Expense ratio
29.0
%
27.4
%
29.2
%
28.4
%
GAAP Combined ratio
78.7
%
87.8
%
81.3
%
88.6
%
Corporate and Eliminations:
Net investment gains (losses)
$
58,654
$
(171,555
)
$
81,664
$
194,710
Interest expense
(31,856
)
(31,723
)
(63,692
)
(66,693
)
Other expenses
(61,384
)
(13,798
)
(130,397
)
(52,700
)
Pre-tax (loss) income
(34,586
)
(217,076
)
(112,425
)
75,317
Consolidated:
Gross premiums written
$
3,336,773
$
3,052,401
$
6,386,091
$
5,912,237
Net premiums written
2,811,515
2,585,635
5,386,339
4,998,889
Net premiums earned
2,552,727
2,357,158
5,044,159
4,606,244
Pre-tax income
457,184
222,562
833,256
954,995
Loss ratio
61.5
%
60.9
%
61.6
%
60.2
%
Expense ratio
28.1
%
27.7
%
28.5
%
28.0
%
GAAP Combined ratio
89.6
%
88.6
%
90.1
%
88.2
%
(1)
Loss ratio is losses and loss expenses incurred expressed as a
percentage of premiums earned. Expense ratio is underwriting
expenses expressed as a percentage of premiums earned. GAAP
combined ratio is the sum of the loss ratio and the expense ratio.
Supplemental
Information
(Amounts in thousands)
Second Quarter
Six Months
2023
2022
2023
2022
Net premiums written:
Other liability
$
988,393
$
878,120
$
1,890,272
$
1,708,187
Short-tail lines (1)
575,050
484,849
1,019,162
878,767
Workers' compensation
325,170
330,721
635,154
634,141
Commercial automobile
356,293
335,451
657,519
614,978
Professional liability
282,292
296,984
535,926
563,343
Total Insurance
2,527,198
2,326,125
4,738,033
4,399,416
Casualty reinsurance
185,554
189,983
388,891
388,138
Monoline excess
25,104
24,228
129,621
116,764
Property reinsurance
73,659
45,299
129,794
94,571
Total Reinsurance & Monoline
Excess
284,317
259,510
648,306
599,473
Total
$
2,811,515
$
2,585,635
$
5,386,339
$
4,998,889
Current accident year losses from
catastrophes (including COVID-19 related losses):
Insurance
$
48,007
$
39,891
$
93,249
$
50,658
Reinsurance & Monoline Excess
5,540
18,000
8,167
36,065
Total
$
53,547
$
57,891
$
101,416
$
86,723
Net Investment income:
Core portfolio (2)
$
229,302
$
133,587
$
432,265
$
245,899
Investment funds
(1,187
)
33,861
993
85,874
Arbitrage trading account
17,037
4,126
35,293
13,313
Total
$
245,152
$
171,574
$
468,551
$
345,086
Net realized and unrealized gains
(losses) on investments:
Net realized gains (losses) on
investments
$
47,387
$
(32,405
)
$
26,594
$
244,264
Change in unrealized gains (losses) on
equity securities
21,260
(131,530
)
64,664
(38,317
)
Total
$
68,647
$
(163,935
)
$
91,258
$
205,947
Other operating costs and
expenses:
Policy acquisition and insurance operating
expenses
$
718,234
$
653,093
$
1,436,510
$
1,288,547
Insurance service expenses
23,931
23,890
49,111
46,356
Net foreign currency losses (gains)
11,226
(39,827
)
20,721
(43,995
)
Other costs and expenses
70,291
62,663
142,913
122,810
Total
$
823,682
$
699,819
$
1,649,255
$
1,413,718
Cash flow from operations
$
708,745
$
527,971
$
1,154,069
$
1,005,653
Reconciliation of net income to
operating income:
Net income
$
356,308
$
179,322
$
650,434
$
769,960
Pre-tax investment (gains) losses, net of
related expenses
(57,862
)
171,555
(81,250
)
(190,056
)
Income tax expense (benefit)
12,416
(37,518
)
17,347
39,923
Operating income after-tax (3)
$
310,862
$
313,359
$
586,531
$
619,827
(1)
Short-tail lines include commercial multi-peril (non-liability),
inland marine, accident and health, fidelity and surety, boiler and
machinery and other lines.
(2)
Core portfolio includes fixed maturity securities, equity
securities, cash and cash equivalents, real estate and loans
receivable.
(3)
Operating income is a non-GAAP financial measure defined by the
Company as net income excluding after-tax net investment gains. Net
investment gains are computed net of related expenses, including
performance-based compensatory costs associated with realized
investment gains. Management believes this measurement provides a
useful indicator of trends in the Company’s underlying operations.
Selected Balance Sheet
Information
(Amounts in thousands, except per
share data)
June 30, 2023
December 31, 2022
Net invested assets (1)
$
25,293,717
$
24,545,672
Total assets
35,308,694
33,815,103
Reserves for losses and loss expenses
17,919,996
17,011,223
Senior notes and other debt
1,827,080
1,828,823
Subordinated debentures
1,008,730
1,008,371
Common stockholders' equity (2)
6,887,185
6,748,332
Common stock outstanding (3)
257,517
264,546
Book value per share (4)
26.74
25.51
Tangible book value per share (4)
25.85
24.58
(1)
Net invested assets include investments, cash and cash equivalents,
trading accounts receivable from brokers and clearing
organizations, trading account securities sold but not yet
purchased and unsettled purchases, net of related liabilities.
(2)
As of June 30, 2023, reflected in common stockholders' equity are
after-tax unrealized investment losses of $825 million and
unrealized currency translation losses of $356 million. As of
December 31, 2022, after-tax unrealized investment losses were $893
million and unrealized currency translation losses were $372
million.
(3)
During the six months ended June 30, 2023, the Company repurchased
7,098,959 shares of its common stock for $427.6 million. During the
three months ended June 30, 2023, the Company repurchased 5,060,568
shares of its common stock for $292.5 million. The number of shares
of common stock outstanding excludes shares held in a grantor
trust.
(4)
Book value per share is total common stockholders’ equity divided
by the number of common shares outstanding. Tangible book value per
share is total common stockholders’ equity excluding the after-tax
value of goodwill and other intangible assets divided by the number
of common shares outstanding.
Investment Portfolio
June 30, 2023
(Amounts in thousands, except
percentages)
Carrying Value
Percent of Total
Fixed maturity securities:
United States government and government
agencies
$
1,238,117
4.9%
State and municipal:
Special revenue
1,641,909
6.5%
Local general obligation
412,160
1.6%
State general obligation
402,251
1.6%
Corporate backed
188,741
0.7%
Pre-refunded
107,086
0.4%
Total state and municipal
2,752,147
10.8%
Mortgage-backed securities:
Agency
1,081,894
4.3%
Commercial
604,096
2.4%
Residential - Prime
217,690
0.9%
Residential - Alt A
3,200
0.0%
Total mortgage-backed securities
1,906,880
7.6%
Asset-backed securities
3,743,803
14.8%
Corporate:
Industrial
3,299,928
13.0%
Financial
2,618,100
10.4%
Utilities
621,425
2.5%
Other
467,615
1.8%
Total corporate
7,007,068
27.7%
Foreign government
1,407,608
5.6%
Total fixed maturity securities (1)
18,055,623
71.4%
Equity securities available for
sale:
Common stocks
1,014,820
4.0%
Preferred stocks
224,892
0.9%
Total equity securities available for
sale
1,239,712
4.9%
Cash and cash equivalents (2)
2,207,220
8.7%
Investment funds (3)
1,593,433
6.3%
Real estate
1,292,200
5.1%
Arbitrage trading account
723,967
2.9%
Loans receivable
181,562
0.7%
Net invested assets
$
25,293,717
100.0%
(1)
Total fixed maturity securities had an average rating of AA- and an
average duration of 2.3 years, including cash and cash equivalents.
(2)
Cash and cash equivalents includes trading accounts receivable from
brokers and clearing organizations, trading account securities sold
but not yet purchased and unsettled purchases.
(3)
Investment funds are net of related liabilities of $0.8 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230720580757/en/
Karen A. Horvath Vice President - External Financial
Communications (203) 629-3000
WR Berkley (NYSE:WRB)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
WR Berkley (NYSE:WRB)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024