W. R. Berkley(WRB) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview W. R. Berkley Corporation achieved strong Q2 2025 financial results, marked by record net premiums written and investment income, alongside robust returns on equity and positive management commentary Summary Financial Data W. R. Berkley Corporation reported strong second quarter 2025 results, with net premiums written increasing to a record $3.35 billion and a return on equity of 19.1%, while operating return on equity stood at 20.0% | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Gross premiums written | $3,977,769 | $3,717,772 | $7,661,708 | $7,080,528 | | Net premiums written | $3,351,439 | $3,126,779 | $6,484,742 | $5,978,070 | | Net income to common stockholders | $401,288 | $371,909 | $818,860 | $814,380 | | Net income per diluted share ($) | $1.00 | $0.92 | $2.05 | $2.01 | | Operating income (1) (in thousands) | $420,486 | $410,171 | $840,442 | $823,058 | | Operating income per diluted share (1) ($) | $1.05 | $1.02 | $2.10 | $2.03 | | Return on equity (2) (%) | 19.1 % | 20.0 % | 19.5 % | 21.8 % | | Operating return on equity (1) (2) (%) | 20.0 % | 22.0 % | 20.0 % | 22.1 % | Second Quarter Highlights and Management Commentary The company achieved strong Q2 2025 performance, marked by a 19.1% annualized return on equity, record net premiums written of $3.4 billion, and increased net investment income, with book value per share growing 6.8% before significant capital returns to shareholders - Strong performance continued into Q2 2025, with an annualized return on beginning-of-year common stockholders' equity of 19.1%[6] - Net income grew year-over-year, driven by higher underwriting gains and improved investment income, despite above-average industry catastrophe losses[6] - Record quarterly net premiums written reached $3.4 billion, a result of focusing on business with the highest margin potential[7] - Net investment income rose year-over-year and sequentially to a quarterly record of $379.3 million, fueled by higher yields on the expanding domestic fixed-maturity portfolio[7][9] | Metric | Q2 2025 Performance | | :--- | :--- | | Return on equity (%) | 19.1% | | Operating return on equity (%) | 20.0% | | Record net premiums written ($) | $3.4 billion | | Current accident year combined ratio (before catastrophe losses) (%) | 88.4% | | Reported combined ratio (%) | 91.6% | | Current accident year catastrophe losses ($) | $99.2 million | | Average rate increases (excluding workers' compensation) (%) | ~7.6% | | Record net investment income ($) | $379.3 million | | Book value per share growth (before dividends) (%) | 6.8% | | Total capital returned to shareholders ($) | $223.8 million | | Special dividends ($) | $189.7 million | | Ordinary dividends ($) | $34.1 million | | Record common stockholders' equity ($) | $9.3 billion | Company Information & Disclosures This section provides details on the company's webcast conference call, its corporate profile, and important forward-looking statements regarding potential risks and uncertainties Webcast Conference Call The company will host a webcast conference call on July 21, 2025, at 5:00 p.m. eastern time to discuss its earnings, with replay and additional financial information available on its investor relations website - A quarterly conference call with analysts and investors will be held on July 21, 2025, at 5:00 p.m. eastern time, webcast live on the Company's website[10] - A replay of the webcast and additional financial information will be available on the Company's investor relations website[10] About W. R. Berkley Corporation W. R. Berkley Corporation, founded in 1967, is a major insurance holding company operating globally in two property casualty segments: Insurance and Reinsurance & Monoline Excess - W. R. Berkley Corporation is an insurance holding company, founded in 1967, and is among the largest commercial lines writers in the United States[11] - The company operates worldwide in two property casualty business segments: Insurance and Reinsurance & Monoline Excess[11] Forward Looking Information This section serves as a 'Safe Harbor' statement, cautioning that forward-looking statements are subject to various risks and uncertainties, including industry cyclicality, competition, investment risks, catastrophic losses, climate change, economic volatility, cybersecurity breaches, and the use of artificial intelligence, which could cause actual results to differ materially - Forward-looking statements are based on historical performance, current plans, estimates, and expectations, and are subject to various risks and uncertainties[12] - Key risks include the cyclical nature of the property casualty industry, significant competition, investment risks, emerging claim issues, natural and man-made catastrophic losses (including climate change impacts), general economic and market activities, cybersecurity breaches, and risks associated with artificial intelligence technologies[12] - The company undertakes no obligation to update or revise any forward-looking statement[12] Consolidated Financial Performance The company's consolidated financial performance in Q2 2025 showed increased total revenues and net income, driven by higher net premiums earned and positive investment gains Consolidated Financial Summary The consolidated financial summary for Q2 2025 shows total revenues increased to $3.67 billion, driven by higher net premiums earned and a positive shift in net investment gains, with net income to common stockholders rising to $401.3 million | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenues: | | | | | | Net premiums written | $3,351,439 | $3,126,779 | $6,484,742 | $5,978,070 | | Net premiums earned | $3,098,185 | $2,846,415 | $6,110,566 | $5,610,762 | | Net investment income | $379,303 | $372,129 | $739,595 | $691,967 | | Net investment gains (losses) | $30,973 | $(58,512) | $47,328 | $(32,733) | | Total Revenues | $3,670,808 | $3,314,032 | $7,218,207 | $6,570,805 | | Expenses: | | | | | | Loss and loss expenses | $1,955,424 | $1,780,596 | $3,856,216 | $3,444,374 | | Other operating costs and expenses | $1,039,307 | $892,935 | $1,989,217 | $1,761,524 | | Total expenses | $3,148,945 | $2,826,359 | $6,157,738 | $5,509,061 | | Income before income tax | $521,863 | $487,673 | $1,060,469 | $1,061,744 | | Net income to common stockholders | $401,288 | $371,909 | $818,860 | $814,380 | | Diluted EPS ($) | $1.00 | $0.92 | $2.05 | $2.01 | Business Segment Operating Results The Insurance segment showed solid growth and improved combined ratio, while Reinsurance & Monoline Excess also grew but experienced a higher combined ratio, contributing to overall consolidated growth Insurance Segment The Insurance segment demonstrated solid growth in Q2 2025, with gross premiums written increasing by 7.3% and net premiums earned by 9.8% year-over-year, pre-tax income also rose, and the GAAP combined ratio improved slightly to 92.1% | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Gross premiums written | $3,606,887 | $3,360,850 | $6,823,840 | $6,281,900 | | Net premiums written | $3,013,703 | $2,810,448 | $5,708,158 | $5,256,163 | | Net premiums earned | $2,728,784 | $2,484,569 | $5,371,291 | $4,883,338 | | Pre-tax income | $512,672 | $490,053 | $1,022,177 | $968,202 | | Loss ratio (%) | 63.8 % | 64.0 % | 63.9 % | 62.9 % | | Expense ratio (%) | 28.3 % | 28.4 % | 28.0 % | 28.4 % | | GAAP Combined ratio (%) | 92.1 % | 92.4 % | 91.9 % | 91.3 % | Reinsurance & Monoline Excess Segment The Reinsurance & Monoline Excess segment saw an increase in gross premiums written by 3.9% and net premiums earned by 2.1% in Q2 2025, pre-tax income grew, but the GAAP combined ratio deteriorated to 87.4% from 81.8% year-over-year, primarily due to a higher loss ratio | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Gross premiums written | $370,882 | $356,922 | $837,868 | $798,628 | | Net premiums written | $337,736 | $316,331 | $776,584 | $721,907 | | Net premiums earned | $369,401 | $361,846 | $739,275 | $727,424 | | Pre-tax income | $127,299 | $124,449 | $247,679 | $252,074 | | Loss ratio (%) | 57.7 % | 52.8 % | 57.7 % | 51.3 % | | Expense ratio (%) | 29.7 % | 29.0 % | 28.7 % | 29.4 % | | GAAP Combined ratio (%) | 87.4 % | 81.8 % | 86.4 % | 80.7 % | Corporate and Eliminations The Corporate and Eliminations segment reported a pre-tax loss of $118.1 million in Q2 2025, an improvement from the prior year's loss, primarily driven by a positive shift in net investment gains compared to losses in Q2 2024 | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net investment gains (losses) | $30,973 | $(58,512) | $47,328 | $(32,733) | | Interest expense | $(31,777) | $(31,708) | $(63,504) | $(63,436) | | Other expenses | $(117,304) | $(36,609) | $(193,211) | $(62,363) | | Pre-tax loss | $(118,108) | $(126,829) | $(209,387) | $(158,532) | Consolidated Segment Ratios On a consolidated basis, gross premiums written increased by 7.0% in Q2 2025, and net premiums earned grew by 8.8%, with the GAAP combined ratio slightly increasing to 91.6% from 91.1% in the prior year quarter, mainly due to a higher loss ratio | Metric | Second Quarter 2025 (in thousands) | Second Quarter 2024 (in thousands) | Six Months 2025 (in thousands) | Six Months 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Gross premiums written | $3,977,769 | $3,717,772 | $7,661,708 | $7,080,528 | | Net premiums written | $3,351,439 | $3,126,779 | $6,484,742 | $5,978,070 | | Net premiums earned | $3,098,185 | $2,846,415 | $6,110,566 | $5,610,762 | | Pre-tax income | $521,863 | $487,673 | $1,060,469 | $1,061,744 | | Loss ratio (%) | 63.1 % | 62.6 % | 63.1 % | 61.4 % | | Expense ratio (%) | 28.5 % | 28.5 % | 28.2 % | 28.6 % | | GAAP Combined ratio (%) | 91.6 % | 91.1 % | 91.3 % | 90.0 % | Supplemental Financial Information This section provides detailed breakdowns of net premiums written, catastrophe losses, investment income, realized/unrealized gains, operating expenses, cash flow, and a reconciliation of net income to operating income Net Premiums Written by Line of Business Net premiums written showed growth across most lines of business in Q2 2025, with 'Other liability' and 'Short-tail lines' being the largest contributors to the increase in the Insurance segment, and 'Property' showing strong growth in Reinsurance & Monoline Excess | Line of Business | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total Insurance | $3,013,703 | $2,810,448 | $5,708,158 | $5,256,163 | | Other liability | $1,218,988 | $1,131,676 | $2,327,253 | $2,147,291 | | Short-tail lines (1) | $706,298 | $643,101 | $1,306,490 | $1,175,442 | | Auto | $448,678 | $408,178 | $837,832 | $756,760 | | Workers' compensation | $340,891 | $332,432 | $681,498 | $637,064 | | Professional liability | $298,848 | $295,061 | $555,085 | $539,606 | | Total Reinsurance & Monoline Excess | $337,736 | $316,331 | $776,584 | $721,907 | | Casualty (2) | $188,929 | $188,117 | $375,718 | $378,136 | | Property (2) | $115,926 | $102,158 | $248,084 | $200,820 | | Monoline excess | $32,881 | $26,056 | $152,782 | $142,951 | | Total Consolidated | $3,351,439 | $3,126,779 | $6,484,742 | $5,978,070 | Current Accident Year Catastrophe Losses Total current accident year catastrophe losses increased significantly in Q2 2025 to $99.2 million, up from $89.7 million in Q2 2024, primarily driven by a substantial rise in losses within the Reinsurance & Monoline Excess segment | Segment | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Insurance | $77,631 | $86,632 | $148,248 | $114,082 | | Reinsurance & Monoline Excess | $21,603 | $3,047 | $62,094 | $6,103 | | Total | $99,234 | $89,679 | $210,342 | $120,185 | Net Investment Income Breakdown Net investment income increased to $379.3 million in Q2 2025, with notable growth from investment funds and arbitrage trading accounts offsetting a slight decrease in the core portfolio | Source | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Core portfolio (3) | $328,363 | $329,971 | $645,303 | $661,147 | | Investment funds | $27,268 | $25,476 | $54,291 | $(3,873) | | Arbitrage trading account | $23,672 | $16,682 | $40,001 | $34,693 | | Total | $379,303 | $372,129 | $739,595 | $691,967 | Net Realized and Unrealized Gains (Losses) on Investments The company reported net realized and unrealized gains on investments of $30.5 million in Q2 2025, a significant positive reversal from the $60.3 million loss in Q2 2024, primarily driven by a strong change in unrealized gains on equity securities | Component | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net realized (losses) gains on investments | $(33,097) | $6,411 | $(37,333) | $(7,898) | | Change in unrealized gains (losses) on equity securities | $63,630 | $(66,717) | $83,577 | $(40,905) | | Total | $30,533 | $(60,306) | $46,244 | $(48,803) | Other Operating Costs and Expenses Breakdown Total other operating costs and expenses increased to $1.04 billion in Q2 2025, largely due to higher policy acquisition and insurance operating expenses, and a significant shift from net foreign currency gains to losses | Component | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Policy acquisition and insurance operating expenses | $882,099 | $811,997 | $1,720,345 | $1,603,529 | | Insurance service expenses | $24,287 | $23,084 | $47,534 | $44,523 | | Net foreign currency losses (gains) | $55,396 | $(10,118) | $74,774 | $(23,295) | | Other costs and expenses | $77,525 | $67,972 | $146,564 | $136,767 | | Total | $1,039,307 | $892,935 | $1,989,217 | $1,761,524 | Cash Flow from Operations Cash flow from operations decreased in Q2 2025 to $703.8 million from $881.3 million in Q2 2024, and similarly for the six-month period | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Cash flow from operations | $703,806 | $881,330 | $1,447,624 | $1,627,565 | Reconciliation of Net Income to Operating Income Operating income, a non-GAAP measure, increased to $420.5 million in Q2 2025, reflecting adjustments for net investment gains/losses and foreign currency gains/losses from net income - Operating income is a non-GAAP financial measure defined as net income excluding after-tax net investment gains (losses) and after-tax net foreign currency gains (losses)[21] | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net income | $401,288 | $371,909 | $818,860 | $814,380 | | Pre-tax investment (gains) losses, net of related expenses | $(30,973) | $58,631 | $(47,328) | $32,733 | | Pre-tax net foreign currency losses (gains) | $55,396 | $(10,118) | $74,774 | $(23,295) | | Income tax benefit | $(5,225) | $(10,251) | $(5,864) | $(760) | | Operating income after-tax | $420,486 | $410,171 | $840,442 | $823,058 | Balance Sheet and Investment Portfolio The balance sheet reflects increased total assets and common stockholders' equity, with the investment portfolio primarily composed of fixed maturity securities and a strong average rating Selected Balance Sheet Information As of June 30, 2025, total assets increased to $42.66 billion, and common stockholders' equity grew to $9.29 billion, resulting in a book value per share of $24.50, with the company repurchasing 850,000 shares for $49.2 million during the first six months of 2025 | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Net invested assets (1) | $31,577,384 | $29,780,638 | | Total assets | $42,658,057 | $40,448,635 | | Reserves for losses and loss expenses | $21,496,123 | $20,368,030 | | Common stockholders' equity (2) | $9,294,537 | $8,395,111 | | Common stock outstanding (3) (in thousands of shares) | 379,385 | 380,066 | | Book value per share (4) ($) | $24.50 | $22.09 | | Tangible book value per share (4) ($) | $23.88 | $21.46 | - Common stockholders' equity as of June 30, 2025, included after-tax unrealized investment losses of $249 million and unrealized currency translation losses of $324 million[23] - During the six months ended June 30, 2025, the Company repurchased 850,000 shares of its common stock for $49.2 million[23] Investment Portfolio Composition The investment portfolio as of June 30, 2025, totaled $31.58 billion, predominantly composed of fixed maturity securities (76.3%), which had an average rating of AA- and an average duration of 2.8 years, with equity securities, cash, investment funds, and real estate making up the remaining significant portions | Investment Type | Carrying Value (in thousands) | Percent of Total (%) | | :--- | :--- | :--- | | Fixed maturity securities | $24,093,156 | 76.3 % | | Equity securities available for sale | $1,262,192 | 4.0 % | | Cash and cash equivalents | $2,076,351 | 6.6 % | | Investment funds | $1,492,258 | 4.7 % | | Real estate | $1,294,505 | 4.1 % | | Arbitrage trading account | $1,034,557 | 3.3 % | | Loans receivable | $324,365 | 1.0 % | | Net invested assets | $31,577,384 | 100.0 % | - Total fixed maturity securities had an average rating of AA- and an average duration of 2.8 years, including cash and cash equivalents[25]