W. R. Berkley achieved over 7% rate increases across all lines excluding workers’ compensation in the third quarter of 2019, a trend the re/insurance holding company expects to persist for the foreseeable future.
The firm cites growing opportunities presented by current market conditions, including accelerating rate increases, as having helped drive gross and net premiums written by 8.6% and 7.7%, respectively.
This sentiment regarding positive rate movement echoes the firm’s comments on its Q2 results, when a 5% increase was reported across all lines excluding workers’ comp, which President & Chief Executive Officer, William Robert Berkley Jr. at the time noted was the one major product line moving in the other direction.
“We continue to focus on lines of business that have the potential to meet or exceed our targeted risk-adjusted return and have been carefully monitoring the rising trends in loss costs for an extended period of time,” said Berkley in today’s Q3 statement.
Elsewhere, underwriting income increased 61.1% to $107 million and the accident year combined ratio excluding catastrophe losses was 91.9%.
The firm also reported that CR was 93.6%, inclusive of 1.9 loss ratio points from catastrophes.
“The (re)insurance market is in the early stages of a meaningful transition. Historically, this type of market dislocation has provided the Company with meaningful opportunities and, once again, we expect our results will benefit from them,” said Berkley.
Annualized after-tax return on equity for Q3 was 12.2% (pre-tax of 14.9%).
“The investment portfolio performed as anticipated despite a challenging interest rate environment that remains volatile and difficult to predict,” added Berkley.
“Overall net investment income was impacted as investment fund performance returned to an average level compared to the notably strong earnings in the prior year.
“While our total return approach to portfolio management has resulted in some variability from quarter to quarter, it has benefited our overall long-term returns.”
