W.R. Berkley’s Reinsurance Combined Ratio Worsens; Q4 Net Income Dips

W.R. Berkley Corp. ended 2018 with a decline in net income and worsening reinsurance combined ratio, thanks to higher catastrophe loss expenses. At the same time, insurance premiums and investment income grew at a healthy clip.

The Connecticut-based insurer and reinsurer booked more than $132.3 million in net income during the 2018 fourth quarter, or $1.03 per diluted share, down from $154.6 million, or $1.21 per diluted share in the 2017 fourth quarter.

Catastrophe losses reached $45.5 million in Q4 2018, up from $17.7 million over the same period last year. The overall combined ratio for Q4 2018 was 95.9 compared to 94.9 a year ago. While Berkley’s insurance arm did well, its reinsurance division struggled.

Consolidated gross premiums written surpassed $1.8 billion for the quarter, up from $1.78 billion over the same period a year ago. Net premiums written were $1.5 billion compared to nearly $1.48 billion in Q4 2017.

Net investment income surpassed $159.8 million, up from $149.2 million over the same year-ago period.

Here are result highlights for the quarter and year, by segment:

• The insurance combined ratio was 94.7 versus 94.4 over the same period last year. Gross premiums written were $1.7 billion in Q4 compared to $1.6 billion in the 2017 fourth quarter. Net premiums written were just under $1.4 billion versus $1.35 billion a year ago.
• Reinsurance produced a 109.3 combined ratio, up from 100.2 in Q4 2017. Gross premiums written were essentially flat, approximately $143 million in both Q4 2018 and 2017. Net premiums written grew to $128 million, up from $127 million in Q4 2017.
• The company returned $97 million to shareholders in Q4, including $79 million of ordinary and special dividends and $18 million of share repurchases.
• For all of 2018, W.R. Berkley reported $640.7 million in net income, or $5 per diluted share, up from $549 million in net income, or $4.26 million per diluted share in 2017.
• Gross premiums written for 2018 surpassed $7.7 billion for the year versus $7.47 billion in 2017. Net premiums written for the year were above $6.4 billion, up from $6.26 billion in 2017.

Source: W.R. Berkley