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W.R. Berkley Corp. late Tuesday reported net income of $166.4 million for the first quarter of 2018, up 34.8% from the prior-year quarter on higher underwriting and investment yields.
The Greenwich, Connecticut-based insurer also posted net premiums written of $1.67 billion, up 1.1% from a year ago, while revenue was up 1.1% at $1.89 billion for the quarter.
Investment income increased 17.2% to $174.5 million. “Net investment income was particularly strong this quarter as investment funds performed notably well,” Berkley said in its earnings report.
The combined ratio was 94.6%, improving over last year’s figure of 95.7%. This year’s total included a 0.5 loss ratio points from catastrophes and an additional 0.7 loss ratio points from noncatastrophe weather. Total catastrophe losses were $7 million, Berkley said in its report.
During a conference call with analysts, President and CEO W. Robert Berkley Jr. said the company had experience “a very solid quarter.” Mr. Berkley also said that “inflation, from our perspective, is clearly the topic of the day.”
“I think it is the topic of the day across many industries, and the insurance industry is certainly included in that,” he said. I think for some it is a moment that people have been speculating or waiting for some extended period of time, and it is upon us. Some of the obvious questions are how much? How quickly is it going to get here and how long will it stay? Obviously from our perspective … the impact that will come along with it is a rising interest rate environment.”
Richard Baio, CFO and treasurer, told analysts that “the improvement over the year-ago quarter is primarily attributable to higher underwriting profit and net investment income."
"In addition, our overall income tax expense decreased significantly due to the reduced U.S. tax rate of 21% versus 35% in the prior year," Mr. Baio said.
“I think there’s a better-than-average chance as we make our way through 2018, there will be more growth coming out of the insurance segment,” Mr. Berkley said.
“Looking forward,” he said, “we see quite a bit of opportunity. Obviously, we can’t control the market, but we can control what we do, and there are many of the parts of the market that we have a meaningful presence and we think are providing significant opportunity.”
W.R. Berkley Corp. has named Michael A. Lex president of Continental Western Group, succeeding Michael G. Connor, who was named president of Berkley FinSecure, effective immediately.