WR Berkley sees GWP increase but cat losses affect profits
WR Berkley, a property/casualty insurer, has experienced an increase in its gross written premiums (GWP) in its second quarter 2016 results but catastrophe losses have adversely affected its net income and combined ratio.
WR Berkley reported its GWP increasing by 7 percent to $1.9 billion for the period ending June 30 2016, compared to $1.8 billion for the same period in 2015.
WR Berkley's pre-tax profit for this period decreased by 11 percent to $108.9 million from $123 million, the result from the second quarter of 2015.
The profitability of WR Berkley's underwriting declined slightly, which the company attributes to cat losses, comparing a combined ratio of 92.3 percent for this year to 94.9 percent for the same period last year.
In a statement WR Berkley commented: "We are pleased with our results for the second quarter, especially in light of significant industry-wide catastrophe activity as well as global uncertainty that contributed to volatility in the financial markets. Although the environment remains competitive, net premiums written continued to grow as we target areas of the market that offer attractive margins.
“We continue to find opportunities to attract talented individuals with the knowledge and expertise to build new specialty businesses and strengthen our franchise. During the quarter, we announced the creation of a high net worth personal lines business and the formation of Berkley Insurance Asia. We expect to announce other new ventures during the balance of the year.
“As we previously stated, we expect to report a pre-tax gain of approximately $130 million from the sale of an investment in our alternative portfolio in the third quarter. Investing for total return remains an important part of our strategy to build long-term shareholder value in a low interest rate environment. These gains cause variability in our quarterly results, but we expect them to enhance our overall returns.
“Our company is well positioned for the current environment and has the strength and flexibility to respond to changes as they occur. Accordingly, we remain optimistic about the second half of 2016.”
