W. R. Berkley Corporation Reports First Quarter Results

W. R. Berkley Corporation (NYSE: WRB) today reported net income for the first quarter of 2019 of $181 million, or $0.94 per share.

First quarter highlights included:

• Annualized return on equity of 13.3%.
• Average rate increases excluding workers' compensation were more than 6%.
• For the quarter, book value per share grew 6.2%, before dividends.
• The accident year combined ratio excluding catastrophe losses was 93.9%. The reported combined ratio was 94.3%, inclusive of 0.8 loss ratio points from catastrophes and an additional 0.9 loss ratio points from non-catastrophe weather.
• Investment income attributable to the core investment portfolio increased 5.6%⁽¹⁾.
• Net realized pre-tax gains and net unrealized pre-tax gains on equity securities of $66 million, net of performance-based compensation costs⁽²⁾.

The Company commented:

We are pleased with the performance of the business in the first quarter of 2019, with solid performance in both underwriting and investments and an annualized return on equity of 13.3%.

Further rate improvement contributed to steady net premium growth. We believe our rate increases are currently outpacing loss cost trend in many lines of business. Given the potential for claims inflation, we believe this is appropriate and that for several lines of business it will persist for the foreseeable future. We continue to focus on improving our combined ratio by seeking additional rate and managing both volatility and expenses. As we see the potential for additional margin improvement, we expect this will lead to greater opportunities for further growth. We remain focused on underwriting profitability and will continue to emphasize areas of the business that offer better margins.

Growth in income from the core portfolio partially offset a reduction in investment fund income. Our $27 million of realized gains on sales of investments and $42 million of change in unrealized gains on equity securities reflect our focus on total return.

Our first quarter results are a solid start to the year. The industry appears to be grappling with the reality that rate adequacy is of paramount importance. Signs of rate movement and returning discipline may be early indicators that the moment the industry has been waiting for is coming to many parts of the business. We anticipate that these trends, and consequently our results, will further improve during the balance of the year.

Webcast Conference Call

The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on April 23, 2019, 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 2019 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 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; natural and man-made catastrophic losses, including as a result of terrorist activities; 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 2015; 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 2019 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.