Greenwich, CT – W. R. Berkley Corporation (NYSE: WRB) recently reported net income for the second quarter of 2018 of $180 million, or $1.40 per share.
Second quarter highlights included:
- Reported annualized pre-tax return on equity of 16.9%. (Excluding the accounting change for equity securities that became effective January 1, 2018, the annualized pre-tax return on equity would have been 20.9%.)
- Insurance net premiums written increased 5.2%.
- Investment income increased 13.7%. Investment income attributable to the core investment portfolio increased 9.8%1.
- The combined ratio was 94.9%.
- Total catastrophe losses were $14 million; non-catastrophe weather-related losses were $15 million.
- Net realized pre-tax gains and net unrealized pre-tax gains on equity securities of $66 million, net of performance-based compensatory costs2.
- Total capital returned to shareholders was $79 million, including $61 million of special dividends.
The Company commented:
“We were pleased with our 13.3% annualized return on equity in the second quarter of 2018, which reflected healthy performance in all areas of the business.
Our net premiums written grew due to a combination of increased market penetration, rate improvements and a strengthening economy. Growth in the Insurance segment of 5.2% was partially offset by a decline in the Reinsurance segment, where we chose to reduce our business in light of the competitive environment. Overall, our underwriting performance was favorable, with a combined ratio that was relatively stable year-over-year. Our ability to manage volatility was again demonstrated in our results, as the impact of severe convective storm activity in the quarter was very modest.
Net investment income grew nearly 14% over the prior year due to an increase in the yield on fixed maturity securities and a higher base of invested assets. We continue to be rewarded from our earlier strategic decision to shorten the duration while maintaining the quality of our portfolio. We realized gains on sales of investments of $124 million, before consideration of the change in accounting for unrealized gains on equity securities.
We remain focused on creating value for our shareholders over the long-term and are confident that we will be able to deliver strong results throughout the remainder of the year.
The complete results release is available here: W.R. Berkley Corporation Second Quarter 2018 Results
1ore 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 $70 million.