WR Berkley profits fall; CEO remains optimistic
US insurer WR Berkley posted a fall in profits for the second quarter of 2015, although the chairman of the insurer remains optimistic about the future.
The insurers’ profits fell to $123 million in the second quarter of 2015, compared with $180 million in the same period of the prior year.
Its gross written premiums (GWP) grew slightly to $1.8 billion in the second quarter of 2015, compared with $1.77 billion in the second quarter of 2014, while the insurer’s combined ratio improved slightly to 94.2 percent in the quarter, compared with 94.4 percent in the same period of the prior year.
The increase in profits was driven by growth within WR Berkley’s domestic insurance segment.
William Berkley, chairman and chief executive officer, explained that the environment is becoming more competitive, so the insurer is continuing to emphasise parts of the business that offer the best profit potential while simultaneously pursuing new business opportunities.
He said: “In the insurance business, risk is a constant concern. For that reason, we choose cautiously in selecting our reserving assumptions to guard against potential inflation. We also maintain the duration of our investment portfolio shorter than the duration of our liabilities in anticipation of the risk of rising interest rates.
"We believe that the nature and availability of capital within our industry is changing. Our objective is to optimise risk-adjusted return; thus, managing our balance sheet requires a constant examination of our capital structure. As owners, our management team is committed to maximising long-term shareholder value creation.
"We are well positioned with a strong track record of capitalising upon opportunities in the market as they arise. We continue to target a return of 15 percent or better over the long run.”
