Greenwich, CT – W. R. Berkley Corporation (NYSE:WRB) recently reported net income for the first quarter of 2018 of $166 million, or $1.30 per share.
First quarter highlights included:
- We reported annualized pre-tax return on equity of 15.5%, which adjusted for accounting changes for equity securities effective January 1, 2018 would have been 22.5%.
- The combined ratio was 94.6%, inclusive of 0.5 loss ratio points from catastrophes and an additional 0.7 loss ratio points from non-catastrophe weather.
- Total catastrophe losses were $7 million.
- Investment income increased 17.2%. Investment income attributable to the core investment portfolio increased 11.3%1.
- Net realized pre-tax gains and net unrealized pre-tax gains on equity securities of $44 million, net of performance-based compensatory costs2.
The Company commented:
Our performance in the first quarter of 2018 was strong, resulting from our ongoing strategy to minimize volatility in our underwriting results, combined with robust investment income. Our 12.3% annualized ROE is a reflection of our focus on delivering superior risk-adjusted returns to our shareholders.
Net premiums written in the Insurance segment grew by 3.3% in the quarter, with steady price improvement in each month. This growth was partially offset by a decline of 20% in net premiums written in the Reinsurance segment, where the pricing environment remained exceptionally competitive. Similar to others, we experienced a higher level of non-catastrophe weather-related property losses in the quarter. However, the net impact of catastrophe losses was relatively modest, and our accident year loss ratio excluding catastrophe losses was stable. We remain optimistic that slow but steady improvements in pricing, along with growth in the economy benefiting from recent tax reform, will enable our underwriting results to improve.
Net investment income was particularly strong this quarter as investment funds performed notably well. Investment funds have wide variations in income from quarter to quarter, but they continue to provide us with an enhanced overall long-term return. Recurring income from the core portfolio grew primarily due to an increase in invested assets. We realized gains on sales of investments of $142 million, before consideration of the change in accounting for unrealized gains on equity securities.
Our first quarter results have provided a solid start to the year. The market is slowly moving in the right direction, and we anticipate that these trends, and consequently our results, will improve further during the remainder of the year. Changes in the tax code and accounting rules have made it more challenging to compare our current results with prior periods. We remain focused on creating shareholder value over the long-term.
The complete earnings release is available here: W. R. Berkley Corporation First 2018 Quarter Results
1Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.
2Net realized pre-tax gains and net unrealized pre-tax gains on equity securities before performance-based compensatory costs were $48 million.
Source: WR Berkley Corporation