Greenwich, CT – W. R. Berkley Corporation (NYSE:WRB) recently reported net income for the fourth quarter of 2016 of $153 million, or $1.20 per share.
Fourth quarter highlights included:
- The combined ratio was 94.9%, inclusive of 2.3 loss ratio points from catastrophes.
- We established two new businesses – Berkley Cyber Risk Solutions and Berkley Transactional.
- Investment income increased 24.8%.
- The sale of a portion of our investment in HealthEquity, Inc. (HQY) resulted in a realized pre-tax gain of $68 million and a pre-tax unrealized gain, recognized in equity, of $351 million on our remaining shares.
Full year highlights included:
- Total capital returned to shareholders was $316 million, including $132 million of share repurchases and $184 million of special and ordinary dividends.
- Book value per share grew 11.6% to $41.65. Before share repurchases and dividends, book value per share grew 16.3%.
The Company commented:
We were pleased with our fourth quarter and full year returns. Although our underwriting results were impacted by above-average catastrophe activity, including Hurricane Matthew and the Tennessee wildfires, related losses were within our expectation for such events. Our underlying loss ratio remained stable and investment results were strong. We continued to find opportunities to form new businesses and to grow in many areas of the market that deliver attractive combined ratios.
Realized gains were substantial in 2016, including $68 million in the fourth quarter from another sale in our private equity portfolio. Our total return strategy is expected to continue to generate significant yet variable gains that make a meaningful contribution to our long-term return and shareholder value creation.
The relatively short duration of our high-quality bond portfolio tempered the impact of rising interest rates, and we reported strong growth in book value, even after returning a significant amount of capital to shareholders.
In these challenging and volatile times we continue to work on our goal of optimizing our risk-adjusted return. Our financial flexibility and ability to adjust to the underwriting cycle, combined with potential tailwinds from rising interest rates, regulatory reform and tax changes, give us confidence that we can deliver outstanding returns in 2017 and beyond.
The complete results release is available here: W.R. Berkley Corporation Fourth Quarter 2016 Results