W.R. Berkley Corporation has reported operating income of $121.1 million for the third-quarter of 2020 and a combined ratio of 93.7%, despite the impacts of catastrophe events in the period.
Operating income fell slightly from the $163.7 million reported for the third-quarter of 2019, while the insurer’s net income also fell from $165.2 million last year, to $151.7 million in Q3 2020.
W.R. Berkley highlights the impacts of catastrophe losses in the period, which added 4.2 loss ratio points to the reported combined ratio, with no change in previously reported COVID-19-related losses. Before cat losses, the accident year combined ratio was 89.8%.
Year-on-year, gross premiums written increased by 8.1% to roughly $2.3 billion, while net premiums written spiked by 7.4% to roughly $1.9 billion in Q3 2020.
“Rate increases continued to accelerate in response to rising loss costs and the extremely low interest rate environment. Growth and efficiency initiatives have helped drive our expense ratio to its lowest level in many years,” explains the company.
Overall, says the firm, average rate increases, excluding workers’ compensation, were approximately 14.5%.
“The industry’s need for disciplined underwriting and additional rate has been reinforced by, among other factors, the global pandemic, the continued increase in the frequency of catastrophe losses, the ongoing impacts of social inflation and the low interest rate environment.
“We remain focused on profitable underwriting with low volatility, growth in attractive areas of the market, and total risk-adjusted returns in our investment portfolio,” says W.R. Berkley.
Regarding its investment portfolio, W.R. Berkley notes that it continues to actively manage market exposure by raising its allocation to high-quality short-term assets. The firm intends to maintain this defensive position until the uncertainty in the financial markets and the economy starts to subside and the entry point is deemed more attractive.
