W. R. Berkley achieved 5% rate increases, excluding workers’ compensation, in the second quarter of 2019, with catastrophe-exposed property “clearly out in front.”
President & Chief Executive Officer, William Robert Berkley Jr., noted in an earnings call yesterday that the company is seeing rate increases across the board except for workers’ comp, which he described as the one major product line moving in the other direction.
Commenting further on rates, Berkley noted, “Property that is not cat-exposed is probably a pace behind the property risk market; Commercial auto is a close second.”
This rates trend was described by Berkley as “accelerating”, and a broad continuation of its Q1 results, when the company reported 6.4% increases across all lines excluding workers’ comp, with much of the property market experiencing some of the most meaningful increases.
Elsewhere, the firm recorded a net income of $217 million, up 20% from Q2 2018, as well as gross written premiums of $2.1 billion, up from $1.9 billion in Q2 2018. Net written premium expanded to $1.7 billion.
The accident year combined ratio excluding catastrophe losses was 92.8%. The reported combined ratio was 93.9%, inclusive of 1.5 loss ratio points from catastrophes.
The company also reported 15.9% annualised after-tax return on equity, while overall investment income grew nearly 23%.
“Our second quarter results demonstrated the growing momentum in our economic model,” explained the company in an accompanying statement.
“The pursuit of rate adequacy is taking hold in much of the commercial lines (re)insurance market, and we anticipate that these market conditions will persist for the foreseeable future.”
“We remain focused on our risk-adjusted total return strategy as we deliver on our commitment to create long-term shareholder value.”
Berkley’s reinsurance segment recorded $184 million of GWP, up from $150 million in Q2 2018, while net premium written also jumping by over $30 million to $168 million. CR slid to 95.2% from 91.4%.
