No bad stock

W. R. Berkley Corporation
CEO : Mr. William Robert Berkley Jr.

Quarterly earnings growth(YoY,%)

Robert Berkley says,

Highlights from the quarter

• The company is preparing for another quarter with significant cat losses in the industry.
• There seems to be a tendency in the industry to back out cat losses as if they are not real money, which is a concern for the company.
• The company believes that recognizing the exposure and not pretending it doesn’t exist is important for making good risk-adjusted returns.
• The company is focused on capital management and risk-adjusted returns, and cat losses are counted in their measurements.
• The company acknowledges that they might be an exception in the industry, but they view cat losses as an economic reality.

William Berkley says,

Stock Buybacks and Share Value

• The company’s decision on stock buybacks and its allocation of capital is based on the opportunity to invest in the business opportunistically.
• The management aims to generate extra capital and assess the share values and expected returns for shareholders.
• The decision to repurchase shares is not based on an absolute rule but on a judgment made when there is excess capital for a foreseeable period.
• The stock price is evaluated in relation to the intrinsic value of the company, and this assessment is made by looking ahead and considering the stability of leverage, long-term debt, and uncertainties.

Q & A sessions,

Marketplace Challenges

• Struggling to strike a balance between rate need and loss cost trend
• Desire to grow while achieving a certain loss ratio
• Pricing erosion in public D&O within the professional line space
• Challenges in liability lines, particularly in auto and umbrella
• Evidence of extended tail in certain product lines

Property Market

• Additional rate required for non-cat or risk property account
• Increasing focus on Tier 2 cat events like severe convective storm and wildfire

Workers’ Compensation

• Recovery in workers’ compensation frequency but expecting increased medical inflation
• Over 50% of claims dollar associated with workers’ compensation stems from medical

Opportunity in Specialty Market

• Bifurcation between standard market and specialty market, creating opportunity in the E&S space
• Robust submission flow and positive early returns in July

Financial Performance

• Quarterly ex-comp rate increase of 8.2%
• Demonstrated strategy around managing exposure and balancing portfolio
• Focused on managing expenses below 30%
• Rewarded for duration positioning in investment portfolio