Schedule II

W. R. Berkley Corporation

Condensed Financial Information of Registrant

Balance Sheets (Parent Company)

(Amounts in thousands)



	December 31,
	2011			2010
Assets:
Cash and cash equivalents	$	270,637		$	29,476
Fixed maturity securities available for sale at fair value (cost $244,921 and $244,804 at December 31, 2011 and 2010, respectively)	247,537			246,275
Equity securities available for sale, at fair value (cost $0 in 2011 and 2010)	81,811			109,748
Investment in subsidiaries	5,389,531			5,261,686
Deferred Federal income taxes	—			80,861
Current Federal income taxes	15,137			19,163
Property, furniture and equipment at cost, less accumulated depreciation	6,595			6,431
Other assets	6,951			7,969
Total assets	$	6,018,199		$	5,761,609
Liabilities and stockholders’ equity
Liabilities:
Due to subsidiaries	$	141,492		$	189,499
Other liabilities	146,823			161,666
Deferred Federal income taxes	12,283			—
Junior subordinated debentures	242,997			242,784
Senior notes	1,466,178			1,464,784
Total liabilities	2,009,773			2,058,733
Stockholders’ equity:
Preferred stock	—			—
Common stock	47,024			47,024
Additional paid-in capital	941,109			935,099
Retained earnings (including accumulated undistributed net income of subsidiaries of $3,384,149 and $3,309,411 at December 31, 2011 and 2010, respectively)	4,546,232			4,194,684
Accumulated other comprehensive income	354,851			276,563
Treasury stock, at cost	(1,880,790		)	(1,750,494		)
Total stockholders’ equity	4,008,426			3,702,876
Total liabilities and stockholders’ equity	$	6,018,199		$	5,761,609

________________

See accompanying Report of Independent Registered Public Accounting Firm and note to condensed financial statements.

Schedule II, Continued

W. R. Berkley Corporation

Condensed Financial Information of Registrant, Continued

Statements of Income (Parent Company)

(Amounts in thousands)



	Years Ended December 31,
	2011			2010			2009
Management fees and investment income including dividends from subsidiaries of $502,327, $405,917 and $150,545 for the years ended December 31, 2011, 2010 and 2009, respectively	$	514,057		$	411,623		$	159,361
Net investment gains (losses)	45,962			(1,891		)	20,961
Other income	96			158			206
Total revenues	560,115			409,890			180,528
Operating costs and expense	118,922			117,658			88,276
Interest expense	111,184			105,510			87,054
Income before federal income taxes	330,009			186,722			5,198
Federal income taxes:
Federal income taxes provided by subsidiaries on a separate return basis	79,200			28,377			117,133
Federal income tax expense on a consolidated return basis	(89,144		)	(138,389		)	(58,644		)
Net benefit (expense)	(9,944		)	(110,012		)	58,489
Income before undistributed equity in net income of subsidiaries	320,065			76,710			63,687
Equity in undistributed net income of subsidiaries	74,738			372,577			245,370
Net income	$	394,803		$	449,287		$	309,057

________________

See accompanying Report of Independent Registered Public Accounting Firm and note to condensed financial statements.

Schedule II, Continued

W. R. Berkley Corporation

Condensed Financial Information of Registrant, Continued

Statements of Cash Flows (Parent Company)

(Amounts in thousands)



	Years Ended December 31,
	2011			2010			2009
Cash flows from operating activities:
Net income	$	394,803		$	449,287		$	309,057
Adjustments to reconcile net income to net cash from operating activities:
Net investment (gains) losses	(45,962		)	1,891			(20,961		)
Depreciation and amortization	4,905			3,963			2,279
Equity in undistributed earnings of subsidiaries	(74,738		)	(372,577		)	(245,370		)
Tax payments received from subsidiaries	139,011			106,284			103,356
Federal income taxes provided by subsidiaries on a separate return basis	(79,200		)	(28,377		)	(117,133		)
Stock incentive plans	27,176			26,318			24,078
Change in:
Federal income taxes	56,542			29,332			62,753
Other assets	(542		)	16,430			(381		)
Other liabilities	(6,747		)	11,467			11,661
Accrued investment income	1,559			(2,776		)	(137		)
Other, net	277			—			(603		)
Net cash from operating activities	417,084			241,242			128,599
Cash from (used in) investing activities:
Proceeds from sales of fixed maturity securities	70,665			164,920			29,355
Proceeds from maturities and prepayments of fixed maturity securities	165,158			85,695			47,133
Proceeds from sales of equity securities	47,735			3			17,897
Cost of purchases of fixed maturity securities	(240,536		)	(195,646		)	(353,944		)
Investment in funds	—			—			5,204
Investments in and advances to subsidiaries, net	(3,867		)	(18,685		)	(29,179		)
Change in balance due to security broker	(5,983		)	(8,500		)	14,483
Net additions to real estate, furniture & equipment	(643		)	(1,212		)	(224		)
Other, net	—			—			1
Net cash from (used in) investing activities	32,529			26,575			(269,274		)
Cash from (used in) financing activities:
Net proceeds from issuance of senior notes	—			296,636			297,461
Net proceeds from stock options exercised	21,966			17,730			5,426
Repayment of senior notes	—			(150,000		)	—
Purchase of common treasury shares	(187,163		)	(471,007		)	(147,144		)
Cash dividends to common stockholders	(43,255		)	(49,348		)	(28,843		)
Other, net	—			—			—
Net cash from (used in) financing activities	(208,452		)	(355,989		)	126,900
Net decrease in cash and cash equivalents	241,161			(88,172		)	(13,775		)
Cash and cash equivalents at beginning of year	29,476			117,648			131,423
Cash and cash equivalents at end of year	$	270,637		$	29,476		$	117,648

________________

See accompanying Report of Independent Registered Public Accounting Firm and note to condensed financial statements.

W. R. Berkley Corporation

Condensed Financial Information of Registrant,Continued

December 31, 2011

Note to Condensed Financial Statements (Parent Company)

The accompanying condensed financial statements should be read in conjunction with the notes to consolidated financial statements included elsewhere herein. Reclassifications have been made in the 2010 and 2009 financial statements as originally reported to conform them to the presentation of the 2011 financial statements.

The Company files a consolidated federal tax return with the results of its domestic insurance subsidiaries included on a statutory basis. Under present Company policy, federal income taxes payable by subsidiary companies on a separate-return basis are paid to W. R. Berkley Corporation, and the Company pays the tax due on a consolidated return basis.