Summary of W. R. Berkley Conference Call Company Overview - **Company**: W. R. Berkley (NYSE: WRB) - **Industry**: Specialty Insurance Key Points Stake Acquisition by MSI - MSI, a large Japanese insurance company, is acquiring a 12.5% stake in Berkley, previously announced as a 15% stake [3][4] - The relationship between Berkley and MSI has lasted over a decade, with MSI seeking increased exposure to the U.S. insurance market [3][4] - No new shares were sold by Berkley or its executives in this transaction [4][5] Business Strategy and Market Position - Berkley has maintained a consistent focus on the specialty insurance industry for 55 years, managing 60 different businesses in niche markets [6][7] - The company aims to create value for shareholders through expertise in these niches rather than broad market coverage [6] Insurance Cycle Insights - The current insurance cycle shows a decoupling of product lines, with some markets softening (e.g., commercial property) while others are firming (e.g., commercial auto) [8][9] - The cycle is driven by human emotions of fear and greed, affecting underwriting discipline [8] Claim Cost Trends - The industry has faced challenges from economic and social inflation, leading to increased loss trends [10][11] - Berkley is making progress in adjusting rates in response to these trends, although rates may not continue to rise as steeply [11] E&S Market Outlook - The Excess and Surplus (E&S) market is expected to continue gaining market share due to challenges faced by the standard market [12][14] - Berkley’s E&S portfolio is heavily weighted towards liability lines, which are expected to see continued opportunities [14][15] Growth and Profitability - Berkley aims for high single-digit growth, focusing on profitability rather than just issuing policies [16][17] - The company is prepared to wait for favorable market conditions to pursue growth opportunities [17][18] Property Cat and Reinsurance - Property Cat rates are expected to decrease by 10-20%, with Berkley evaluating its participation based on risk-adjusted returns [19][20] - The company is cautious about becoming a significant property Cat writer [34] Expense Management - Berkley aims to keep its expense ratio under 30% while investing in data and analytics for efficiency [24] Artificial Intelligence Initiatives - Berkley is exploring AI tools for underwriting and claims processing, with early positive results [25][26] MGA Risks - The presence of Managing General Agents (MGAs) is highest in competitive markets, leading to potential conflicts of interest [30][31] Berkley One Growth - Berkley One, focused on high-net-worth personal lines, is on track to become a billion-dollar business [32][33] International Expansion - Berkley has opened operations in India, focusing on the liability space with a specialty approach [39] Capital Return Strategy - The company plans to return capital to shareholders through share repurchases and special dividends, while being cautious about M&A [40][41] Investment Income and ROE - Berkley expects to maintain high teens return on equity (ROE) due to strong underwriting health and investment portfolio performance [42][43] Additional Insights - The company is cautious about the sustainability of current medical trends in workers' compensation, which may not be favorable long-term [37][38]

This presentation has been prepared by Bowhead Specialty Holdings Inc. ("we," "us," "our," "Bowhead" or the "Company") on a confidential basis for the exclusive use of the party to whom Bowhead delivers this presentation. Investor Presentation November 2025 Forward Looking Statements This presentation has been prepared by Bowhead for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by ...

Financial Data and Key Metrics Changes - Gross written premiums increased by 32% year-over-year to a record $232 million in Q2 2025 [5][11] - Adjusted net income rose by 62% to $12.8 million, with diluted adjusted earnings per share increasing by 32% [5][11] - The loss ratio for the quarter was 66.2%, a 0.7 percentage point increase from 65.5% year-over-year [14] - The expense ratio decreased by 3.2 percentage points to 30.6% compared to 33.8% year-over-year [14] Business Line Data and Key Metrics Changes - The casualty division saw a 32% increase in premiums to $151 million, driven by the excess casualty book [6][7] - Professional liability premiums increased by 23% to $55 million, with commercial public D&O driving more than half of the growth [7][8] - Health care liability premiums grew by 39% to $24 million, with growth across all departments [8] - Baleen generated $3.4 million in premiums during its fourth full quarter of operations, showing steady month-over-month growth [9] Market Data and Key Metrics Changes - The excess casualty segment is experiencing a modest uptick in competition, but favorable underwriting and pricing conditions persist [18][19] - In the E&S construction project sector, there is a deceleration of new construction projects due to tariffs and labor availability concerns [19] - The professional liability market remains challenging, particularly for financial institutions and large cyber liability accounts [20][21] Company Strategy and Development Direction - The company emphasizes disciplined underwriting as a core strategy for enduring success and cross-cycle profitability [22] - Bowhead is expanding its craft and flow platforms to capitalize on market opportunities while maintaining a disciplined approach to underwriting [22] Management's Comments on Operating Environment and Future Outlook - Management noted that while competition is increasing, the overall discipline in limit deployment and rates in the excess casualty segment remains [18] - There are signs of market stabilization in public D&O, with brokers anticipating flat or rising rates [20] - The company is leveraging technology to underwrite small and middle market accounts effectively [21] Other Important Information - Net investment income increased by 56% year-over-year to $13.7 million, driven by higher average balances and yields on invested assets [16] - Total equity reached $408 million, resulting in a diluted book value per share of $12.04, a 9% increase from year-end [17] Q&A Session Summary Question: Comment on capacity available for financial institutions - Management indicated that the significant capacity is currently restricted to financial institutions and has not leaked into other professional liability products [25][26] Question: Update on social inflation in professional liability - Management noted that social inflation is more pronounced on the casualty side, with claims settlements increasing significantly [27][28] Question: Investment income outlook and reserve mix - Management expects investment income to grow due to increased balances being invested, with a focus on growing the portfolio size [32][35] Question: Update on Baleen's performance - Management expressed a positive outlook for Baleen, highlighting successful technology development and the ability to scale the business [40][42] Question: Expense ratio outlook - Management is optimistic about reducing the expense ratio below 30% in the near future, despite some headwinds from increased fees [48][50] Question: Timing of annual assumption review and reserve assumptions - Management confirmed that the annual review occurs in Q4, with ongoing internal assessments each quarter [54][55] Question: Opportunities to boost new money yield - Management is actively seeking opportunities to enhance yield but remains cautious about chasing high-risk investments [58][60]

Financial Data and Key Metrics Changes - Net income per diluted share increased by 8.7% year-over-year to $1 per share, with an annualized return on beginning of year equity of 19.1% [11] - Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20% [11] - Stockholders' equity increased by more than $380 million or 4.3% to a record $9.3 billion [15] Business Line Data and Key Metrics Changes - The Insurance segment's accident year loss ratio excluding catastrophes was relatively flat year-over-year at 60.7%, with a combined ratio before catastrophes of 89% [13] - The Reinsurance and Monoline Excess segment's accident year loss ratio excluding catastrophes increased to 54.1%, with a strong combined ratio before catastrophes of 83.8% [13] - Net premiums earned reached a record of $3.1 billion, while net premiums written increased to a record $3.4 billion, showing growth across all lines of business [13] Market Data and Key Metrics Changes - The property market is becoming more competitive, particularly for larger accounts, while smaller accounts face less competition [19][20] - The commercial transportation market continues to see activity from Managing General Agents (MGAs), pushing for rate increases [20] - The professional liability market is mixed, with public Directors and Officers (D&O) insurance beginning to stabilize, while private and non-profit D&O remains competitive [21] Company Strategy and Development Direction - The company is focused on achieving appropriate risk-adjusted returns and is optimistic about growth opportunities in the liability market over the next 12 to 36 months [32] - The company is maintaining a defensive posture in certain areas while leaning into higher hazard, more specialized lines of business [70] - The company is cautious about the competitive dynamics in the reinsurance market, particularly regarding ceding commissions and discipline in casualty lines [25][114] Management's Comments on Operating Environment and Future Outlook - Management highlighted concerns about economic inflation, labor market dynamics, and the resilience of U.S. consumer spending as macroeconomic factors impacting the business [7][9] - The company is optimistic about its ability to manage through potential challenges related to tariffs and labor costs, while also focusing on pricing strategies [45][88] - Management expressed confidence in the investment portfolio's positioning and the potential for improved investment income [31][94] Other Important Information - The company paid ordinary and special dividends totaling $224 million in the quarter, contributing to a growth in book value per share of 6.8% for the quarter and 14.3% year-to-date [16] - The effective tax rate for the quarter was 23.2%, exceeding the U.S. statutory rate due to taxes on foreign earnings and state income taxes [15] Q&A Session Summary Question: Growth potential in the current environment - Management adjusted growth expectations to a range of 8% to 12% from the previous 10% to 15% due to recent market conditions [38] Question: Underlying loss ratio dynamics - The underlying loss ratio remains primarily influenced by business mix, with no unusual factors noted [39] Question: Impact of tariffs and labor costs - Management indicated that current loss activity does not reflect significant impacts from tariffs or labor costs, but they are monitoring the situation closely [45] Question: Trajectory of margins - Management believes that current rates are positioning the company well for future improvements, but cautioned against premature conclusions [47] Question: Capital management and share buybacks - The decision not to repurchase shares was based on maintaining surplus capital for future opportunities, with a focus on special dividends as a more efficient return method [52] Question: Medical inflation and its impact - Management is closely monitoring medical inflation and its potential effects on workers' compensation and stop-loss portfolios, with sensitivity analyses conducted [65] Question: Competitive dynamics in the private client business - The company is experiencing traction in the private client space due to its expertise and value proposition, despite not being the cheapest option [126]

Financial Data and Key Metrics Changes - Net income per diluted share increased by 8.7% year-over-year to $1 per share, with an annualized return on beginning of year equity of 19.1% [9] - Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20% [10] - Stockholders' equity increased by more than $380 million or 4.3% over the year to a record $9.3 billion [13] Business Line Data and Key Metrics Changes - The Insurance segment's accident year loss ratio excluding catastrophes was relatively flat year-over-year at 60.7%, with a combined ratio before catastrophes of 89% [11] - The Reinsurance and Monoline Excess segment's accident year loss ratio excluding catastrophes increased to 54.1%, with a strong combined ratio before catastrophes of 83.8% [11] - Net premiums earned reached a record of $3.1 billion, while net premiums written increased to a record $3.4 billion in the quarter [11] Market Data and Key Metrics Changes - The property market is becoming more competitive, particularly for larger accounts, while smaller accounts face less competition [16][17] - The commercial transportation market is experiencing significant activity from Managing General Agents (MGAs), pushing for rate increases [18] - The professional liability market shows mixed results, with public Directors and Officers (D&O) insurance beginning to stabilize [20] Company Strategy and Development Direction - The company is focused on achieving appropriate risk-adjusted returns and is optimistic about growth opportunities in the liability market over the next 12 to 36 months [30] - The company is maintaining a selective approach to underwriting in the competitive property market, ensuring pricing adequacy [93] - The company is evaluating opportunities in the MGA space but remains cautious about valuations [75] Management's Comments on Operating Environment and Future Outlook - Management highlighted concerns about macroeconomic factors such as inflation, labor market dynamics, and consumer spending, which could impact underwriting and investment strategies [6][7] - The company is optimistic about its ability to manage through potential challenges related to tariffs and labor costs, while also focusing on maintaining strong cash flow [42][60] - Management expressed disappointment with the discipline in the casualty reinsurance market, particularly regarding ceding commissions [108] Other Important Information - The effective tax rate for the quarter was 23.2%, exceeding the U.S. statutory rate due to taxes on foreign earnings and state income taxes [13] - The company paid ordinary and special dividends totaling $224 million in the quarter, contributing to a growth in book value per share of 6.8% for the quarter [14] Q&A Session Summary Question: Growth potential in a tougher quarter - Management revised growth expectations to a range of 8% to 12% instead of the previously stated 10% to 15% [34] Question: Underlying loss ratio dynamics - The underlying loss ratio remains primarily affected by business mix dynamics [36] Question: Impact of tariffs and labor costs - Management indicated that current loss activity is not significantly impacted, but they are monitoring future implications [42] Question: Trajectory of margins - Management believes that current rates are positioning the company well for future improvements, but cautioned against premature conclusions [44] Question: Capital management and share buybacks - Management clarified that the decision not to buy back shares was based on maintaining surplus capital for future opportunities [47] Question: Updates on the Mitsui stake - Management indicated no new information on the Mitsui stake and compliance with SEC regulations will be followed [56] Question: Medical inflation impact - Management is closely monitoring medical inflation and its potential effects on workers' compensation and stop-loss portfolios [60] Question: Competitive dynamics in private client business - Management noted that they are gaining traction in the private client space due to their expertise and value proposition [118]