BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Berkley profit down on depressed investments

Berkley profit down on depressed investments

Disappointing investment results helped push W.R. Berkley Corp.'s fourth-quarter 2014 net income down 15.1% from the same period a year earlier to $110.7 million, the company reported.

Net written premiums grew 5.8% to $1.46 billion, and the combined ratio improved to 93.3% during the quarter from the corresponding 2013 period's 95.7%, Berkley said Tuesday in a statement. But investment income dropped 19.9% to $111.3 million in the fourth quarter of 2014. The drop included a $3.65 million loss in investment funds.

During a Tuesday earnings conference call, chairman and CEO William R. Berkley Sr. called income from the funds “the biggest disappointment.” He said “the worst part of it was our oil-related investments as well as one particular common stock fund.”

Mr. Berkley added that one of Berkley's oil-related funds “will likely” have an adverse impact in the first quarter of 2015 compared with the same quarter a year earlier.

But he said the Greenwich, Connecticut-based insurer's core underwriting business continues to do well, calling its performance “excellent.”

For 2014 as a whole, Berkley's net income rose 29.8% to $648.8 million. Net written premiums rose 9.1% to $6 billion, with investment income rising 10.4% to $600.8 million. The insurer's combined ratio improved to 93.8% from 95.1% in 2013.

Berkley President and Chief Operating Officer W. Robert Berkley Jr. said during the conference call that rate increases for Berkley's domestic business were about 3.1%. He added that the company's renewal retention rate stood at about 80%.

He pointed to the fourth-quarter loss ratio of 60.8%, noting that it was an improvement from the same period last year “in spite of the challenges that our international segments faced.” Mr. Berkley said that Berkley's international business did have a “difficult quarter, and it certainly wasn't a great year.”

“From an earnings standpoint, you have to look at the segment level,” said Vincent DeAugustino, a vice president at Keefe, Bruyette & Woods Inc. in Baltimore. “From a domestic unit standpoint, you have some of the better returns and rate increases; you should expect the core loss ratio results continue to improve. When you start getting into some of the other segments — international and reinsurance — the environment gets more difficult.”

He also said he expects the investment fund losses to continue in the first quarter of this year. “By second half 2015 we would expect more normal results going forward,” he said.

Read Next