Q2 2024 W R Berkley Corp Earnings Call Transcript
Key Points
- WR Berkley Corp (WRB) achieved a 20% annualized return on beginning of year equity on a net income basis and 22.4% on an operating earnings basis.
- Operating income increased by approximately 35% to $418 million, driven by strong underwriting and investment income.
- Net premiums written grew by 11.2% to a record $3.1 billion, marking the first time exceeding $3 billion in a quarter.
- Record pretax net investment income increased by almost 52% to $372 million, driven by fixed maturity securities and investment funds.
- The company returned $381 million in total capital to shareholders, including share repurchases and dividends, while stockholders' equity increased by 4.2% from the beginning of the year.
- The expense ratio increased by 40 basis points to 28.5%, primarily due to higher commissions from business mix.
- Catastrophe losses amounted to $90 million, contributing to a 3.2 loss ratio points, with heightened catastrophe events during the quarter.
- The effective tax rate was 23.7%, higher than the US statutory rate of 21%, due to foreign earnings taxed at greater rates.
- Social inflation continues to be a significant concern, particularly impacting auto liability and umbrella lines.
- Challenges in obtaining necessary rate filings from insurance departments are creating opportunities in specialty lines but also indicate regulatory resistance.
Good day, and welcome to W.R. Berkley Corporation's second-quarter 2024 earnings conference call. Today's conference call is being recorded. The speaker's remarks may contain forward-looking statements, some of which forward-looking statements can be identified by the use of forward-looking words, including, without limitation, believes, expects or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will, in fact, be achieved.
Please refer to our annual report on Form 10-K for the year ending December 31, 2023, and our other filings made within the SEC for a description at a business environment in which we operate and the important factors that may materially affect our results. W.R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.
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