W. R. Berkley Corporation Reports Fourth Quarter and Full Year Results
W. R. Berkley Corporation (NYSE: WRB) reported robust fourth quarter and full year 2020 results, achieving record net income of $312.2 million and a return on equity of 20.6%. Gross premiums written increased by 9.3% to $2.2 billion for the quarter and 7.1% for the year, totaling $8.8 billion. The company maintained a strong operating cash flow, rising 41.3% to over $1.6 billion. Despite challenges from COVID-19 and other catastrophes, the combined ratio was 90.9%, marking the lowest in 13 years. The company expects continued opportunities for margin improvement in 2021.
- Record net income of $312.2 million in Q4 2020.
- Return on equity increased to 20.6%.
- Gross premiums written rose by 9.3% in Q4 and 7.1% for the full year.
- Combined ratio improved to 90.9%, the lowest in 13 years.
- Operating cash flow surged 41.3% to over $1.6 billion.
- Underwriting income increased by 44.2% to $165.4 million.
- COVID-19 related losses contributed 1.5 points to the loss ratio.
- Overall net income for the year decreased from $681.9 million in 2019 to $530.7 million in 2020.
W. R. Berkley Corporation (NYSE: WRB) today reported its fourth quarter and full year 2020 results.
Summary Financial Data (Amounts in thousands, except per share data) |
||||||||||||||||
|
|
Fourth Quarter |
|
Twelve Months |
||||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gross premiums written |
|
$ |
2,221,484 |
|
$ |
2,033,078 |
|
$ |
8,847,647 |
|
$ |
8,262,219 |
||||
Net premiums written |
|
1,797,457 |
|
1,660,528 |
|
7,262,437 |
|
6,863,499 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income to common stockholders |
|
312,150 |
|
119,306 |
|
530,670 |
|
681,944 |
||||||||
Net income per diluted share |
|
1.67 |
|
0.62 |
|
2.81 |
|
3.52 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (1) |
|
173,043 |
|
137,530 |
|
438,253 |
|
589,057 |
||||||||
Operating income per diluted share |
|
0.92 |
|
0.71 |
|
2.32 |
|
3.04 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Return on equity (2) |
|
|
|
|
|
|
|
|
||||||||
(1) Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses) and related expenses.
(2) Return on equity represents net income expressed on an annualized basis as a percentage of beginning of year stockholders’ equity.
Fourth quarter highlights included:
-
All-time record net income of
$312.2 million . -
Return on equity of
20.6% . -
Gross and net premiums written increased
9.3% and8.2% , respectively. -
The reported combined ratio was
90.9% . The accident year combined ratio before catastrophe losses was88.8% . -
Underwriting income increased
44.2% to$165.4 million . - Catastrophes added 2.3 loss ratio points to the reported combined ratio, including 1.5 loss ratio points for COVID-19 related losses.
-
Average rate increases excluding workers' compensation were approximately
15.4% . -
Book value per share grew
6.1% , before share repurchases and dividends.
Full year highlights included:
-
Average rate increases excluding workers’ compensation were approximately
13.6% . -
Paid loss ratio of
51.9% . -
Operating cash flow increased
41.3% to more than$1.6 billion . -
Gross and net premiums written increased
7.1% and5.8% , respectively. -
Book value per share grew
10.5% , before share repurchases and dividends. -
Total capital returned to shareholders was
$430 million , including$346 million of share repurchases and$84 million of dividends.
The Company commented:
By every measure, the Company had an outstanding quarter, with earnings of
Our rate increases continued to accelerate throughout the year in connection with our efforts to stay ahead of current and expected loss trends. The global pandemic, frequent catastrophe losses, social inflation and low interest rates continue to reinforce the industry’s need for disciplined underwriting and additional rate.
Our total return investment strategy delivered strong performance, driven by our alternative investment portfolio. Net investment income grew
The Company again delivered a superior risk-adjusted return, in a challenging environment. We see no signs of rate increases moderating and expect that 2021 will provide opportunities for margin improvement.
Webcast Conference Call
The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on January 26, 2021, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/news-and-events/events-and-presentations/default.aspx. Please log on at least ten minutes early to register and download and install any necessary software. A replay of the webcast will be available on the Company's website approximately two hours after the end of the conference call. Additional financial information can be found on the Company's website at https://ir.berkley.com/investor-relations/financial-information/annual-reports/default.aspx.
About W. R. Berkley Corporation
Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty business: Insurance and Reinsurance & Monoline Excess.
Forward Looking Information
This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2021 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the ongoing COVID-19 pandemic, including the related impact on the U.S. and global economies; the cyclical nature of the property casualty industry; the impact of significant competition, including new alternative entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts, including claims for cybersecurity-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities, epidemics or pandemics, such as COVID-19; the impact of climate change, which may increase the frequency and severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks (including those associated with the United Kingdom's withdrawal from the European Union, or "Brexit") relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; potential difficulties with technology and/or cyber security issues; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause our actual results for the year 2021 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Consolidated Financial Summary (Amounts in thousands, except per share data) |
|||||||||||||||
|
|
Fourth Quarter |
|
Twelve Months |
|||||||||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
Revenues: |
|
|
|
|
|
|
|
|
|||||||
Net premiums written |
|
$ |
1,797,457 |
|
|
$ |
1,660,528 |
|
|
$ |
7,262,437 |
|
|
$ |
6,863,499 |
Change in unearned premiums |
|
16,133 |
|
|
56,253 |
|
|
(331,594) |
|
|
(230,211) |
||||
Net premiums earned |
|
1,813,590 |
|
|
1,716,781 |
|
|
6,930,843 |
|
|
6,633,288 |
||||
Net investment income |
|
180,977 |
|
|
137,334 |
|
|
583,821 |
|
|
645,614 |
||||
Net investment gains (losses): |
|
|
|
|
|
|
|
|
|||||||
Net realized and unrealized gains (losses) on investments |
|
162,918 |
|
|
(22,988) |
|
|
73,514 |
|
|
120,703 |
||||
Change in allowance for credit losses on investments (1) |
|
393 |
|
|
— |
|
{
"@context": "https://schema.org",
"@type": "FAQPage",
"name": "W. R. Berkley Corporation Reports Fourth Quarter and Full Year Results FAQs",
"mainEntity": [
{
"@type": "Question",
"name": "What were W. R. Berkley Corporation's fourth quarter 2020 results?",
"acceptedAnswer": {
"@type": "Answer",
"text": "W. R. Berkley Corporation reported a record net income of $312.2 million for Q4 2020, with gross premiums written increasing by 9.3%."
}
},
{
"@type": "Question",
"name": "What is the return on equity for W. R. Berkley Corporation in 2020?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The return on equity for W. R. Berkley Corporation was 20.6% in Q4 2020."
}
},
{
"@type": "Question",
"name": "How did the gross premiums written for W. R. Berkley Corporation perform in 2020?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Gross premiums written for W. R. Berkley Corporation rose to $8.8 billion in 2020, a 7.1% increase from the previous year."
}
},
{
"@type": "Question",
"name": "What is the significance of the combined ratio for W. R. Berkley Corporation?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The combined ratio of 90.9% reported by W. R. Berkley Corporation is the lowest in 13 years, indicating improved underwriting performance."
}
},
{
"@type": "Question",
"name": "How did W. R. Berkley Corporation's operating cash flow change in 2020?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Operating cash flow for W. R. Berkley Corporation increased by 41.3% to over $1.6 billion in 2020."
}
}
]
}
| ||||||||
