Re/insurance holding company W. R. Berkley’s first quarter results have included a $65 million preliminary provision for COVID-19 related claims activity.
The company said it is continually monitoring the rapidly evolving legal and regulatory environment and the potential impact it will have on the re/insurance industry.
Q1 also saw net premiums written increase 8%, the largest growth in five years.
Average rate increases excluding workers’ compensation were approximately 12%.
“Further rate increases were necessary to recognize loss cost trends that have come into focus over the last several quarters,” the company said in a statement.
The accident year combined ratio excluding catastrophe losses was 91.9%. The reported combined ratio was 96.9%.
The company’s net income slumped to a $4 million loss, compared to a $229 million profit in the prior year quarter.
“While unrealized losses had an adverse impact on first-quarter profits, investment income from the fixed-maturity investment portfolio was in line with our expectations.
“With an average duration of less than three years, this portfolio’s high-quality AA- average rating should continue to hold us in good stead even in these tumultuous times.
“Income from investment funds was strong as results are reported on a quarter lag. Our cash flow from operations remained healthy and we maintain significant liquidity.
“The balance of 2020 will have many challenges, yet our commitments to honoring our contractual obligations to our customers and delivering superior long-term risk-adjusted returns to our shareholders remain unwavering.
“Although the financial markets remain turbulent and the economy will take some time to restart, our Company is well positioned from the perspectives of risk and cycle management as well as financial strength and flexibility.”
