WR Berkley grows but its ROE drops
US insurer WR Berkley enjoyed solid growth in 2013 and also posted an increase in its operating income per share for last year although its net income and return on equity dropped slightly.
The company’s net written premiums increased to $5.5 billion, up from $4.9 billion the year before, while its operating income per share was 3.06 per share compared with 2.61 the year before.
Its net income, however dropped slightly to $499.9 million compared with $510.5 million in 2012 and its return on equity dropped to 11.6 percent down from 12.9 percent a year earlier.
“We remain focused on raising prices in order to maintain current margins and regain targeted profitability in some currently lagging lines of business,” said William Berkley, chairman and chief executive officer. “The challenge that our industry faces is the threat of inflation, which impacts pricing as well as adequate reserving.”
He continued: “Looking ahead, we expect profitability to improve further without giving consideration to unusual catastrophe activity over the next several years. And while there is new competition, a similar number of players have disappeared from the marketplace.
“Ultimately, the insurance business is rational over the long run, and the trends we currently see cause us to be optimistic as more rational players enter the industry. These investors search for good risk adjusted returns. We are confident that 2014 will be an excellent year.”
