US insurer WR Berkley posted strong growth and a big jump in profits in its results for the first quarter of 2014 boosted partly by substantially better investment returns. Its chief executive also said he believes price increases are possible on most lines of business.
The insurer, which is one of the largest commercial lines writers in the US, posted gross written premiums of $1.8 billion in the quarter, an 11.1 percent increase on the $1.63 billion it wrote in the same period the year before. It made a net profit of $169.6 million, a 45 percent improvement on the $116.6 million it made in the first quarter of 2013. Its combined ratio for the year was 93.9 percent and its return on equity 15.7 percent.
The company said its improved performance was partly attributable to better pricing and margins and partly much improved investment income. William Berkley, the company’s chairman and chief executive officer, also said that he believed better pricing was still achievable in many areas of the business.
“We had an excellent first quarter. Underwriting results showed substantial improvement as almost every area of the domestic business produced improved margins. We expect these improvements to be maintained over the balance of the year as the efforts to improve pricing and control costs are reflected in our financial statements,” Berkley said.
“Investment income grew substantially and realised gains added to our profitability. We benefited significantly from improved investment returns from various partnership interests. We expect our gains to continue, although they may vary from quarter to quarter.
“Price increases are still obtainable in most lines of business. Customers value service and reliability and realize insurance is about getting claims paid in a prompt and fair manner. With our after-tax return at our target level of 15% for the quarter, we are optimistic that the balance of the year will prove rewarding.”
WR Berkley, First Quarter 2014 Results, William Berkley, North America