WR Berkley profits shrink; CEO remains optimistic
The chief executive officer of US insurer WR Berkley is looking forward to a strong 2015, despite posting a fall in profits for the first quarter.
The insurer’s profits fell to $118.3 million in the first quarter of 2015, compared with $169.7 million in the first quarter of 2014. However, its gross written premiums increased to $1.9 billion in the quarter, compared with $1.8 billion in the same period of the prior year.
William Berkley, chairman and chief executive officer of WR Berkley, is optimistic for the year ahead.
“We will maintain our capital account in line with our liabilities and premium volume. If we are unable to find opportunities to use capital within our business, we may elect to pay special dividends or repurchase our own securities. We believe we will continue to deliver outstanding returns,” he said.
Its operating income fell slightly to $105.9 million in the first quarter of 2015, compared with $135.5 million in the prior year quarter.
Berkley added: "Our company continued to perform well this quarter. We were able to increase overall rates at a level that exceeded loss cost trends, although in some areas competitive challenges became more visible. However, there are still niche opportunities within the insurance marketplace that exist for limited periods of time. Our flexible structure uniquely positions us to capitalise on them.
"We anticipate continued domestic growth and modestly improving margins for the balance of the year. Our international business improved substantially, which is more apparent if adjusted for currency effects. Our reinsurance segment is currently the most competitive part of our business. We have maintained our pricing discipline with continued profitability at a reduced volume.
"Our core investment portfolio performed well and most of our alternative investments delivered excellent returns. The most consequential impact on net income for the quarter was a loss from our energy funds, compared to a gain in the first quarter of 2014. Earnings from the energy funds declined by over $30 million year over year,” he added.
