WR Berkley Corp (WRB, Financial) released its third-quarter earnings report on October 23, 2023, revealing a significant increase in net income and a record net investment income. The company's strong performance was driven by robust underwriting profits and a substantial increase in its core portfolio.
Financial Highlights
WRB's net income for Q3 2023 surged by 45.7% to $334 million, compared to $228.9 million in the same period last year. The company's operating return on equity was 21.7%, and the return on equity was 19.8%. The company's net investment income reached a record $271 million, driven by a 59.3% increase in the core portfolio.
WRB's gross premiums written for the third quarter amounted to $3.35 billion, up from $3.08 billion in Q3 2022. Net premiums written also saw a significant increase, growing by 10.5% to $2.8 billion. The company's underwriting income and net income grew by 34.7% and 45.7% to $258.7 million and $333.6 million, respectively.
Company Commentary
Strong underwriting profits and record quarterly net investment income drove the Company’s exceptional annualized operating return on equity of 21.7% in the third quarter of 2023. Net premiums written grew 10.5% in the quarter. Market segments, territories and lines of business continue to move independently of one another. Accordingly, we are expanding in areas that are likely to provide attractive risk-adjusted profitability. Overall rate increases excluding workers’ compensation remained strong at 8.5%.
Looking Ahead
The company remains optimistic about the remainder of 2023 and the foreseeable future, citing its focus on total risk-adjusted return, decentralized operations, and entrepreneurial culture as key factors in its continued success. The higher interest rate environment is expected to contribute to a meaningful year-over-year increase in investment income, and the company anticipates this trend will continue as it benefits from record operating cash flows and reinvests at higher interest rates.
Summary
In summary, WR Berkley Corp (WRB, Financial) reported strong Q3 2023 results, with significant increases in net income and net investment income. The company's robust performance was driven by strong underwriting profits and a substantial increase in its core portfolio. Looking ahead, WRB remains optimistic about its future performance and is well-positioned for continued success.
