W. R. Berkley(WRB) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Earnings Overview W. R. Berkley Corporation reported strong third quarter 2025 results, with net income increasing significantly and robust returns on equity Key Financial Highlights The company achieved significant net income growth, strong returns on equity, increased premiums, and a favorable combined ratio in Q3 2025 - Net income increased 39.8% to $511.0 million in Q3 2025[2][9] - Return on equity was 24.3% and operating return on equity was 21.0% for Q3 2025[2][9] - Gross premiums written grew to $3.8 billion and net premiums written to $3.2 billion in Q3 2025[9] - The reported combined ratio was 90.9%, including current accident year catastrophe losses of $78.5 million[9] - Book value per share grew 5.8% before dividends and share repurchases, reaching a record common stockholders' equity of $9.8 billion[5][9] Management's Perspective Management attributes strong performance to decentralized structure, specialty niche focus, disciplined underwriting, and growing investment income - The company's decentralized structure and focus on specialty niche markets are key differentiators, enabling growth while maintaining rate adequacy and underwriting discipline[6] - Fixed-maturity investment income increased 9.8% over the corresponding period of 2024, with the new money rate exceeding the book yield of fixed-maturity securities[7] - Strong operating cash flow continues to grow investable assets, positively contributing to investment income[7] - Disciplined underwriting, focused on long-term risk-adjusted return, drives superior performance and positions the company to create exceptional shareholder value[8] Company Information W. R. Berkley Corporation is a global insurance holding company specializing in property casualty business through two main segments About W. R. Berkley Corporation W. R. Berkley Corporation, founded in 1967, is a global insurance holding company operating in two property casualty segments - Founded in 1967, W. R. Berkley Corporation is an insurance holding company[11] - It is among the largest commercial lines writers in the United States and operates worldwide[11] - The company operates in two property casualty business segments: Insurance and Reinsurance & Monoline Excess[11] Investor Relations and Webcast The company provides access to quarterly conference calls via webcast and additional financial information on its investor relations website - A quarterly conference call for analysts and investors was scheduled for October 20, 2025, at 5:00 p.m. eastern time[10] - The conference call is webcast live on the company's website at https://ir.berkley.com/events-and-presentations/default.aspx, with a replay available approximately two hours after the call[10] - Additional financial information can be found on the company's investor relations website[10] Consolidated Financial Performance This section details the company's overall financial results, including income statements and reconciliation of key performance metrics Summary Financial Data Summary financial data shows significant increases in net income and premiums written for both the third quarter and nine months ended September 30, 2025 Summary Financial Data (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :----------------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Gross premiums written | 3,836,256 | 3,633,278 | 11,497,964 | 10,713,806 | | Net premiums written | 3,226,930 | 3,057,276 | 9,711,672 | 9,035,346 | | Net income to common stockholders | 511,032 | 365,634 | 1,329,892 | 1,180,014 | | Net income per diluted share | 1.28 | 0.91 | 3.32 | 2.92 | | Operating income (1) | 440,198 | 393,003 | 1,280,364 | 1,216,061 | | Operating income per diluted share (1) | 1.10 | 0.98 | 3.20 | 3.01 | | Return on equity (2) | 24.3 % | 19.6 % | 21.1 % | 21.1 % | | Operating return on equity (1)(2) | 21.0 % | 21.1 % | 20.3 % | 21.7 % | Detailed Consolidated Income Statement The consolidated income statement reveals robust total revenue growth, driven by higher net premiums earned and a positive swing in net investment gains Consolidated Financial Summary (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Revenues: | | | | | | Net premiums earned | 3,156,382 | 2,926,823 | 9,266,948 | 8,537,585 | | Net investment income | 351,238 | 323,756 | 1,090,833 | 1,015,723 | | Net investment gains (losses) | 78,960 | (8,086) | 126,288 | (40,818) | | Total Revenues | 3,768,236 | 3,400,379 | 10,986,443 | 9,971,184 | | Expenses: | | | | | | Loss and loss expenses | 1,968,857 | 1,825,960 | 5,825,073 | 5,270,334 | | Total expenses | 3,120,126 | 2,925,930 | 9,277,864 | 8,434,992 | | Income before income tax | 648,110 | 474,449 | 1,708,579 | 1,536,192 | | Net income to common stockholders | 511,032 | 365,634 | 1,329,892 | 1,180,014 | | Diluted EPS | 1.28 | 0.91 | 3.32 | 2.92 | Reconciliation of Net Income to Operating Income Operating income, a non-GAAP measure, is presented by excluding after-tax net investment and foreign currency gains/losses from net income Reconciliation of Net Income to Operating Income (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :------------------------------------------ | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Net income | 511,032 | 365,634 | 1,329,892 | 1,180,014 | | Pre-tax investment (gains) losses, net of related expenses | (78,305) | 8,086 | (125,985) | 40,818 | | Pre-tax net foreign currency (gains) losses | (12,009) | 24,619 | 62,765 | 1,324 | | Income tax expense (benefit) | 19,480 | (5,336) | 13,692 | (6,095) | | Operating income after-tax | 440,198 | 393,003 | 1,280,364 | 1,216,061 | - 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)[19] - The company restated 2024 financial information from Q2 2025 onwards to conform with the new presentation of operating income, excluding after-tax net foreign currency gains (losses)[4][19] Business Segment Results This section provides a detailed breakdown of the financial performance for the Insurance and Reinsurance & Monoline Excess segments Insurance Segment Performance The Insurance segment showed premium and pre-tax income growth, with a slight increase in its GAAP combined ratio in Q3 2025 Insurance Segment Operating Results (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :-------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Gross premiums written | 3,393,023 | 3,219,128 | 10,216,863 | 9,501,027 | | Net premiums written | 2,809,743 | 2,673,275 | 8,517,901 | 7,929,439 | | Net premiums earned | 2,773,009 | 2,564,490 | 8,144,300 | 7,447,828 | | Pre-tax income | 474,538 | 469,421 | 1,496,715 | 1,437,623 | | Loss ratio | 63.9 % | 63.1 % | 63.9 % | 63.0 % | | Expense ratio | 28.4 % | 28.4 % | 28.1 % | 28.4 % | | GAAP Combined ratio | 92.3 % | 91.5 % | 92.0 % | 91.4 % | Reinsurance & Monoline Excess Segment Performance The Reinsurance & Monoline Excess segment significantly improved pre-tax income and reduced its GAAP combined ratio in Q3 2025 Reinsurance & Monoline Excess Segment Operating Results (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :-------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Gross premiums written | 443,233 | 414,150 | 1,281,101 | 1,212,779 | | Net premiums written | 417,187 | 384,001 | 1,193,771 | 1,105,907 | | Net premiums earned | 383,373 | 362,333 | 1,122,648 | 1,089,757 | | Pre-tax income | 144,008 | 105,225 | 391,687 | 357,299 | | Loss ratio | 51.3 % | 57.0 % | 55.5 % | 53.2 % | | Expense ratio | 29.8 % | 29.7 % | 29.1 % | 29.5 % | | GAAP Combined ratio | 81.1 % | 86.7 % | 84.6 % | 82.7 % | Corporate and Eliminations Impact Corporate and Eliminations significantly improved its pre-tax income (loss) position in Q3 2025 due to a positive swing in net investment gains Corporate and Eliminations Operating Results (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Net investment gains (losses) | 78,960 | (8,086) | 126,288 | (40,818) | | Interest expense | (31,760) | (31,720) | (95,265) | (95,156) | | Other expenses | (17,636) | (60,391) | (210,846) | (122,756) | | Pre-tax income (loss) | 29,564 | (100,197) | (179,823) | (258,730) | Consolidated Segment Ratios The consolidated GAAP combined ratio remained stable at 90.9% in Q3 2025, reflecting consistent underwriting performance across segments Consolidated Segment Ratios (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 | Q3 2024 | 9 Months 2025 | 9 Months 2024 | | :------------------ | :------ | :------ | :------------ | :------------ | | Loss ratio | 62.4 % | 62.4 % | 62.9 % | 61.7 % | | Expense ratio | 28.5 % | 28.5 % | 28.2 % | 28.6 % | | GAAP Combined ratio | 90.9 % | 90.9 % | 91.1 % | 90.3 % | Supplemental Financial Data This section provides additional financial details, including premiums by line, catastrophe losses, investment income, and cash flow Net Premiums Written by Line Net premiums written grew across most lines of business for both the third quarter and nine months ended September 30, 2025 Net Premiums Written by Line (Q3 and Nine Months Ended Sep 30) | Line of Business | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :----------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Other liability | 1,092,550 | 1,066,005 | 3,419,802 | 3,213,296 | | Short-tail lines (1) | 663,017 | 592,913 | 1,969,507 | 1,768,355 | | Auto | 416,956 | 413,260 | 1,254,788 | 1,170,020 | | Workers' compensation | 330,181 | 302,179 | 1,011,679 | 939,243 | | Professional liability | 307,039 | 298,918 | 862,125 | 838,525 | | Total Insurance | 2,809,743 | 2,673,275 | 8,517,901 | 7,929,439 | | Casualty (2) | 192,694 | 189,386 | 568,412 | 567,522 | | Property (2) | 119,671 | 106,106 | 367,755 | 306,925 | | Monoline excess | 104,822 | 88,509 | 257,604 | 231,460 | | Total Reinsurance & Monoline Excess | 417,187 | 384,001 | 1,193,771 | 1,105,907 | | Total | 3,226,930 | 3,057,276 | 9,711,672 | 9,035,346 | Catastrophe Losses Total current accident year catastrophe losses decreased in Q3 2025, primarily due to lower losses in the Reinsurance & Monoline Excess segment Current Accident Year Losses from Catastrophes (Q3 and Nine Months Ended Sep 30) | Segment | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Insurance | 69,826 | 76,848 | 218,073 | 190,931 | | Reinsurance & Monoline Excess | 8,691 | 20,970 | 70,785 | 27,073 | | Total | 78,517 | 97,818 | 288,858 | 218,004 | Investment Income and Gains (Losses) Net investment income saw a healthy increase, primarily from the core portfolio, while net realized and unrealized investment gains showed a significant positive swing in Q3 2025 compared to losses in the prior year Net Investment Income (Q3 and Nine Months Ended Sep 30) | Source | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :------------------ | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Core portfolio (3) | 329,508 | 301,146 | 974,811 | 962,293 | | Investment funds | 5,421 | 4,741 | 59,713 | 868 | | Arbitrage trading account | 16,309 | 17,869 | 56,309 | 52,562 | | Total | 351,238 | 323,756 | 1,090,833 | 1,015,723 | Net Realized and Unrealized Gains (Losses) on Investments (Q3 and Nine Months Ended Sep 30) | Type | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :---------------------------------------- | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Net realized gains (losses) on investments | 69,210 | (21,825) | 31,877 | (29,723) | | Change in unrealized gains (losses) on equity securities | 9,590 | (1,537) | 93,167 | (42,442) | | Total | 78,800 | (23,362) | 125,044 | (72,165) | Other Operating Costs and Expenses Other operating costs and expenses increased, primarily driven by higher policy acquisition and insurance operating expenses, partially offset by net foreign currency gains in Q3 2025 Other Operating Costs and Expenses (Q3 and Nine Months Ended Sep 30) | Expense Type | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :------------------------------------ | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Policy acquisition and insurance operating expenses | 900,312 | 835,376 | 2,620,657 | 2,438,905 | | Insurance service expenses | 22,711 | 21,786 | 70,245 | 66,309 | | Net foreign currency (gains) losses | (12,009) | 24,619 | 62,765 | 1,324 | | Other costs and expenses | 64,319 | 61,584 | 210,883 | 198,352 | | Total | 975,333 | 943,365 | 2,964,550 | 2,704,890 | Cash Flow from Operations Cash flow from operations experienced a decrease in Q3 2025 and for the nine months ended September 30, 2025, compared to the prior year periods Cash Flow from Operations (Q3 and Nine Months Ended Sep 30) | Metric | Q3 2025 ($ thousands) | Q3 2024 ($ thousands) | 9 Months 2025 ($ thousands) | 9 Months 2024 ($ thousands) | | :------------------------ | :-------------------- | :-------------------- | :-------------------------- | :-------------------------- | | Cash flow from operations | 1,139,860 | 1,240,770 | 2,587,484 | 2,868,335 | Financial Position This section outlines the company's balance sheet, including assets, liabilities, equity, and details of its investment portfolio Balance Sheet Information As of September 30, 2025, W. R. Berkley Corporation reported growth in total assets, net invested assets, and common stockholders' equity Selected Balance Sheet Information (As of Sep 30, 2025 and Dec 31, 2024) | Metric | Sep 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :-------------------------- | :------------------------- | :------------------------- | | Net invested assets (1) | 32,815,947 | 29,780,638 | | Total assets | 43,715,217 | 40,448,635 | | Reserves for losses and loss expenses | 21,757,035 | 20,368,030 | | Senior notes and other debt | 1,829,511 | 1,831,158 | | Subordinated debentures | 1,010,347 | 1,009,808 | | Common stockholders' equity (2) | 9,798,892 | 8,395,111 | | Common stock outstanding (3) | 379,877 | 380,066 | | Book value per share (4) | 25.79 | 22.09 | | Tangible book value per share (4) | 25.18 | 21.46 | - Common stockholders' equity as of September 30, 2025, included after-tax unrealized investment losses of $177 million and unrealized currency translation losses of $329 million[21] - During the nine months ended September 30, 2025, the Company repurchased 1,200,000 shares of its common stock for $73.8 million[21] Investment Portfolio Details The investment portfolio is predominantly composed of fixed maturity securities, which have an average rating of AA- and an average duration of 2.9 years, alongside allocations to equity securities, cash, investment funds, real estate, and other assets Investment Portfolio Composition (As of Sep 30, 2025) | Asset Type | Carrying Value ($ thousands) | Percent of Total | | :------------------------------------ | :--------------------------- | :--------------- | | Fixed maturity securities: | | | | United States government and government agencies | 3,478,237 | 10.6 % | | Total state and municipal | 2,002,503 | 6.1 % | | Total mortgage-backed securities | 4,971,399 | 15.1 % | | Asset-backed securities | 3,831,174 | 11.7 % | | Total corporate | 8,740,772 | 26.6 % | | Foreign government | 1,923,864 | 5.9 % | | Total fixed maturity securities (1) | 24,947,949 | 76.0 % | | Equity securities available for sale: | | | | Common stocks | 721,950 | 2.2 % | | Preferred stocks | 660,482 | 2.0 % | | Total equity securities available for sale | 1,382,432 | 4.2 % | | Cash and cash equivalents (2) | 2,352,117 | 7.1 % | | Investment funds | 1,430,991 | 4.4 % | | Real estate | 1,305,299 | 4.0 % | | Arbitrage trading account | 1,070,304 | 3.3 % | | Loans receivable | 326,855 | 1.0 % | | Net invested assets | 32,815,947 | 100.0 % | - Total fixed maturity securities had an average rating of AA- and an average duration of 2.9 years, including cash and cash equivalents[23] Forward-Looking Information This section addresses forward-looking statements and the inherent risks and uncertainties that could impact future results Forward-Looking Statements and Risk Factors The report includes forward-looking statements based on historical performance and current expectations, which are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on historical performance and current plans, estimates, and expectations, and are not guarantees of future achievement[12] - Key risks and uncertainties include the cyclical nature of the property casualty industry, significant competition, claims development, investment risks, catastrophic losses (natural and man-made), climate change impact, general economic and market activities, cybersecurity breaches, use of artificial intelligence, future pandemics, foreign currency and political risks, and regulatory developments[12] - The company undertakes no obligation to update or revise any forward-looking statement[12]