Delaware | 1-15202 | 22-1867895 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation or organization) | File Number) | Identification No.) |
475 Steamboat Road, Greenwich, CT | 06830 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant's telephone number, including area code: | (203) 629-3000 |
99.1 | Press Release dated April 23, 2013 |
99.2 | Supplementary Financial Information |
NEWS RELEASE | ||||||
W. R. Berkley Corporation 475 Steamboat Road Greenwich, Connecticut 06830 (203) 629-3000 | ||||||
FOR IMMEDIATE RELEASE | CONTACT: | Karen A. Horvath | ||||
Vice President - External | ||||||
Financial Communications | ||||||
(203) 629-3000 |
First Quarter | |||||||||
2013 | 2012 | ||||||||
Gross premiums written | $ | 1,631,621 | $ | 1,401,526 | |||||
Net premiums written | 1,376,966 | 1,203,526 | |||||||
Net income | 116,615 | 135,318 | |||||||
Net income per diluted share | 0.83 | 0.94 | |||||||
Operating income (1) | 103,635 | 104,236 | |||||||
Operating income per diluted share | 0.74 | 0.73 | |||||||
Return on equity (2) | 10.8 | % | 13.7 | % |
(1) | Operating income is a non-GAAP financial measure defined by the Company as net income excluding net investment gains and losses. |
(2) | Return on equity represents net income expressed on an annualized basis as a percentage of beginning of year stockholders’ equity. |
• | Average rates on renewed policies increased 7.3%. |
• | Net premiums written increased 14.4%. |
• | GAAP combined ratio was 94.7%. |
• | Return on equity of 10.8%. |
First Quarter | |||||||||
2013 | 2012 | ||||||||
Revenues: | |||||||||
Net premiums written | $ | 1,376,966 | $ | 1,203,526 | |||||
Change in unearned premiums | (144,847 | ) | (103,875 | ) | |||||
Net premiums earned | 1,232,119 | 1,099,651 | |||||||
Investment income | 135,929 | 157,619 | |||||||
Insurance service fees | 26,736 | 23,877 | |||||||
Net investment gains | 19,969 | 43,477 | |||||||
Change in investment valuation allowance, net of other than temporary impairments | — | 4,014 | |||||||
Revenues from wholly-owned investees | 91,735 | 49,675 | |||||||
Other income | 281 | 392 | |||||||
Total revenues | 1,506,769 | 1,378,705 | |||||||
Expenses: | |||||||||
Losses and loss expenses | 744,679 | 679,472 | |||||||
Other operating costs and expenses | 481,604 | 431,779 | |||||||
Expenses from wholly-owned investees | 89,152 | 51,330 | |||||||
Interest expense | 31,111 | 28,821 | |||||||
Total expenses | 1,346,546 | 1,191,402 | |||||||
Income before income taxes | 160,223 | 187,303 | |||||||
Income tax expense | (43,625 | ) | (52,071 | ) | |||||
Net income before noncontrolling interests | 116,598 | 135,232 | |||||||
Noncontrolling interests | 17 | 86 | |||||||
Net income to common stockholders | $ | 116,615 | $ | 135,318 | |||||
Net income per share: | |||||||||
Basic | $ | 0.86 | $ | 0.98 | |||||
Diluted | $ | 0.83 | $ | 0.94 | |||||
Average shares outstanding: | |||||||||
Basic | 136,025 | 137,814 | |||||||
Diluted | 141,223 | 143,411 |
First Quarter | ||||||||
2013 | 2012 | |||||||
Insurance-Domestic: | ||||||||
Gross premiums written | $ | 1,179,722 | $ | 1,038,434 | ||||
Net premiums written | 986,180 | 882,943 | ||||||
Premiums earned | 884,378 | 810,069 | ||||||
Pre-tax income | 141,350 | 147,735 | ||||||
Loss ratio | 62.4 | % | 62.9 | % | ||||
Expense ratio | 33.1 | % | 33.2 | % | ||||
GAAP combined ratio | 95.5 | % | 96.1 | % | ||||
Insurance-International: | ||||||||
Gross premiums written | $ | 251,575 | $ | 200,504 | ||||
Net premiums written | 205,135 | 167,994 | ||||||
Premiums earned | 171,119 | 143,885 | ||||||
Pre-tax income | 22,382 | 15,699 | ||||||
Loss ratio | 55.8 | % | 57.3 | % | ||||
Expense ratio | 38.0 | % | 40.3 | % | ||||
GAAP combined ratio | 93.8 | % | 97.6 | % | ||||
Reinsurance-Global: | ||||||||
Gross premiums written | $ | 200,324 | $ | 162,588 | ||||
Net premiums written | 185,651 | 152,589 | ||||||
Premiums earned | 176,622 | 145,697 | ||||||
Pre-tax income | 37,941 | 31,638 | ||||||
Loss ratio | 55.0 | % | 60.2 | % | ||||
Expense ratio | 36.3 | % | 37.6 | % | ||||
GAAP combined ratio | 91.3 | % | 97.8 | % | ||||
Corporate and Eliminations: | ||||||||
Net realized investment gains | $ | 19,969 | $ | 47,791 | ||||
Interest expense | (31,111 | ) | (28,821 | ) | ||||
Other revenues and expenses | (30,308 | ) | (26,439 | ) | ||||
Pre-tax loss | (41,450 | ) | (7,769 | ) | ||||
Consolidated: | ||||||||
Gross premiums written | $ | 1,631,621 | $ | 1,401,526 | ||||
Net premiums written | 1,376,966 | 1,203,526 | ||||||
Premiums earned | 1,232,119 | 1,099,651 | ||||||
Pre-tax income | 160,223 | 187,303 | ||||||
Loss ratio | 60.4 | % | 61.8 | % | ||||
Expense ratio | 34.3 | % | 34.7 | % | ||||
GAAP combined ratio | 94.7 | % | 96.5 | % |
First Quarter | |||||||||
2013 | 2012 | ||||||||
Insurance-Domestic net premiums written by line: | |||||||||
Workers' compensation | $ | 298,177 | $ | 244,441 | |||||
Other liability | 323,556 | 292,059 | |||||||
Short-tail lines (1) | 179,799 | 169,129 | |||||||
Commercial automobile | 123,586 | 120,811 | |||||||
Professional liability | 61,062 | 56,503 | |||||||
Total | $ | 986,180 | $ | 882,943 | |||||
Losses from catastrophes: | |||||||||
Insurance-Domestic | $ | 3,660 | 4,378 | ||||||
Insurance-International | 233 | — | |||||||
Reinsurance-Global | 1,120 | 28 | |||||||
Total | $ | 5,013 | 4,406 | ||||||
Investment income: | |||||||||
Core portfolio (2) | $ | 121,212 | $ | 123,515 | |||||
Investment funds | 10,934 | 27,623 | |||||||
Arbitrage trading account | 3,783 | 6,481 | |||||||
Total | $ | 135,929 | $ | 157,619 | |||||
Other operating costs and expenses: | |||||||||
Underwriting expenses | $ | 422,213 | $ | 382,023 | |||||
Service expenses | 22,305 | 19,592 | |||||||
Net foreign currency losses (gains) | 1,947 | (1,434 | ) | ||||||
Other costs and expenses | 35,139 | 31,598 | |||||||
Total | $ | 481,604 | $ | 431,779 | |||||
Cash flow from operations | $ | 75,070 | $ | 73,762 | |||||
Reconciliation of operating income to net income: | |||||||||
Operating income (3) | $ | 103,635 | $ | 104,236 | |||||
After-tax investment gains | 12,980 | 31,082 | |||||||
Net income | $ | 116,615 | $ | 135,318 |
March 31, 2013 | December 31, 2012 | |||||||
Net invested assets (1) | $ | 15,438,868 | $ | 15,681,803 | ||||
Total assets | 20,120,634 | 20,155,896 | ||||||
Reserves for losses and loss expenses | 9,809,843 | 9,751,086 | ||||||
Senior notes and other debt | 1,693,279 | 1,871,535 | ||||||
Junior subordinated debentures | 243,258 | 243,206 | ||||||
Common stockholders’ equity (2) | 4,378,541 | 4,306,217 | ||||||
Common stock outstanding | 136,028 | 136,018 | ||||||
Book value per share (3) | 32.19 | 31.66 | ||||||
Tangible book value per share (3) | 31.18 | 30.95 |
(1) | Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities. |
(2) | After-tax unrealized investment gains were $525 million and $518 million as of March 31, 2013 and December 31, 2012, respectively. Unrealized currency translation losses were $83 million and $37 million as of March 31, 2013 and December 31, 2012, respectively. |
(3) | Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding. |
Carrying Value | Percent of Total | ||||||
Fixed maturity securities: | |||||||
United States government and government agencies | $ | 875,712 | 5.7 | % | |||
State and municipal: | |||||||
Special revenue | 2,018,194 | 13.1 | % | ||||
State general obligation | 859,481 | 5.6 | % | ||||
Pre-refunded | 853,418 | 5.5 | % | ||||
Local general obligation | 374,158 | 2.4 | % | ||||
Corporate backed | 370,490 | 2.4 | % | ||||
Total state and municipal | 4,475,741 | 29.0 | % | ||||
Mortgage-backed securities: | |||||||
Agency | 1,057,039 | 6.8 | % | ||||
Residential — Prime | 209,938 | 1.4 | % | ||||
Commercial | 209,366 | 1.4 | % | ||||
Residential — Alt A | 99,751 | 0.6 | % | ||||
Total mortgage-backed securities | 1,576,094 | 10.2 | % | ||||
Corporate: | |||||||
Industrial | 1,548,214 | 10.0 | % | ||||
Financial | 859,566 | 5.6 | % | ||||
Asset-backed | 822,825 | 5.3 | % | ||||
Utilities | 219,618 | 1.4 | % | ||||
Other | 125,853 | 0.8 | % | ||||
Total corporate | 3,576,076 | 23.1 | % | ||||
Foreign | 1,161,494 | 7.5 | % | ||||
Total fixed maturity securities (1) | 11,665,117 | 75.5 | % | ||||
Equity securities available for sale: | |||||||
Common stocks | 295,031 | 1.9 | % | ||||
Preferred stocks | 104,355 | 0.7 | % | ||||
Total equity securities available for sale | 399,386 | 2.6 | % | ||||
Cash and cash equivalents (2) | 862,129 | 5.6 | % | ||||
Investment funds (3) | 765,703 | 5.0 | % | ||||
Arbitrage trading account | 701,223 | 4.5 | % | ||||
Real estate | 588,777 | 3.8 | % | ||||
Loans receivable | 456,533 | 3.0 | % | ||||
Net invested assets | $ | 15,438,868 | 100.0 | % |
(1) | Total fixed maturity securities had an average rating of AA- and an average duration of 3.3 years. |
(2) | Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases. |
(3) | Investment funds are net of related liabilities of $28 million. |
Government | Corporate | Total | ||||||||||
Australia | $ | 243,737 | $ | 139,062 | $ | 382,799 | ||||||
Canada | 136,247 | 49,419 | 185,666 | |||||||||
United Kingdom | 111,644 | 58,200 | 169,844 | |||||||||
Argentina | 133,466 | 29,511 | 162,977 | |||||||||
Germany | 72,055 | — | 72,055 | |||||||||
Norway | 64,936 | — | 64,936 | |||||||||
Brazil | 49,550 | — | 49,550 | |||||||||
Supranational (1) | 38,672 | — | 38,672 | |||||||||
Netherlands | — | 13,057 | 13,057 | |||||||||
Switzerland | — | 11,279 | 11,279 | |||||||||
Singapore | 6,840 | — | 6,840 | |||||||||
Uruguay | 3,400 | — | 3,400 | |||||||||
New Zealand | 419 | — | 419 | |||||||||
Total | $ | 860,966 | $ | 300,528 | $ | 1,161,494 |
(1) | Supranational represents investments in the North American Development Bank, European Investment Bank and Inter-American Development Bank. |
2012 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | |||||||||||||||
Insurance-Domestic: | |||||||||||||||||||
Gross premiums written | $ | 1,038,434 | $ | 1,051,138 | $ | 1,127,578 | $ | 1,044,015 | $ | 4,261,165 | |||||||||
Net premiums written | 882,943 | 869,319 | 952,332 | 865,289 | 3,569,883 | ||||||||||||||
Premiums earned | 810,069 | 846,734 | 873,835 | 886,384 | 3,417,022 | ||||||||||||||
Pre-tax income | 147,735 | 144,640 | 132,498 | 153,627 | 578,500 | ||||||||||||||
Loss ratio | 62.9 | % | 65.1 | % | 62.9 | % | 63.1 | % | 63.5 | % | |||||||||
Expense ratio | 33.2 | % | 32.7 | % | 31.8 | % | 32.5 | % | 32.5 | % | |||||||||
GAAP combined ratio | 96.1 | % | 97.8 | % | 94.7 | % | 95.6 | % | 96.0 | % | |||||||||
Insurance-International: | |||||||||||||||||||
Gross premiums written | $ | 200,504 | $ | 217,062 | $ | 170,037 | $ | 214,454 | $ | 802,057 | |||||||||
Net premiums written | 167,994 | 174,976 | 140,444 | 181,045 | 664,459 | ||||||||||||||
Premiums earned | 143,885 | 154,501 | 157,773 | 175,682 | 631,841 | ||||||||||||||
Pre-tax income | 15,699 | 13,782 | 13,806 | 8,352 | 51,639 | ||||||||||||||
Loss ratio | 57.3 | % | 58.3 | % | 57.8 | % | 64.7 | % | 59.7 | % | |||||||||
Expense ratio | 40.3 | % | 40.5 | % | 41.3 | % | 38.7 | % | 40.2 | % | |||||||||
GAAP combined ratio | 97.6 | % | 98.8 | % | 99.1 | % | 103.4 | % | 99.9 | % | |||||||||
Reinsurance-Global: | |||||||||||||||||||
Gross premiums written | $ | 162,588 | $ | 162,720 | $ | 197,109 | $ | 194,240 | $ | 716,657 | |||||||||
Net premiums written | 152,589 | 146,696 | 183,111 | 181,801 | 664,197 | ||||||||||||||
Premiums earned | 145,697 | 146,122 | 154,925 | 177,909 | 624,653 | ||||||||||||||
Pre-tax income | 31,638 | 27,454 | 23,048 | 21,550 | 103,690 | ||||||||||||||
Loss ratio | 60.2 | % | 61.6 | % | 61.9 | % | 72.1 | % | 64.3 | % | |||||||||
Expense ratio | 37.6 | % | 38.6 | % | 36.4 | % | 33.2 | % | 36.3 | % | |||||||||
GAAP combined ratio | 97.8 | % | 100.2 | % | 98.3 | % | 105.3 | % | 100.6 | % | |||||||||
Consolidated: | |||||||||||||||||||
Gross premiums written | $ | 1,401,526 | $ | 1,430,920 | $ | 1,494,724 | $ | 1,452,709 | $ | 5,779,879 | |||||||||
Net premiums written | 1,203,526 | 1,190,991 | 1,275,887 | 1,228,135 | 4,898,539 | ||||||||||||||
Premiums earned | 1,099,651 | 1,147,357 | 1,186,533 | 1,239,975 | 4,673,516 | ||||||||||||||
Loss ratio | 61.8 | % | 63.7 | % | 62.1 | % | 64.6 | % | 63.1 | % | |||||||||
Expense ratio | 34.7 | % | 34.5 | % | 33.7 | % | 33.5 | % | 34.1 | % | |||||||||
GAAP combined ratio | 96.5 | % | 98.2 | % | 95.8 | % | 98.1 | % | 97.2 | % | |||||||||
Losses from catastrophes: | |||||||||||||||||||
Insurance-Domestic | $ | 4,378 | $ | 25,713 | $ | 5,909 | $ | 7,217 | $ | 43,217 | |||||||||
Insurance-International | — | 54 | 735 | 13,163 | 13,952 | ||||||||||||||
Reinsurance-Global | 28 | 458 | 2,109 | 20,434 | 23,029 | ||||||||||||||
Total | $ | 4,406 | $ | 26,225 | $ | 8,753 | $ | 40,814 | $ | 80,198 |
2011 | 2010 | 2009 | |||||||||||
Insurance-Domestic: | |||||||||||||
Gross premiums written | $ | 3,794,862 | $ | 3,388,709 | $ | 3,358,740 | |||||||
Net premiums written | 3,238,120 | 2,938,223 | 2,931,188 | ||||||||||
Premiums earned | 3,121,281 | 2,963,486 | 3,069,158 | ||||||||||
Pre-tax income | 467,126 | 589,138 | 487,835 | ||||||||||
Loss ratio | 64.9 | % | 61.1 | % | 62.0 | % | |||||||
Expense ratio | 32.6 | % | 32.5 | % | 31.2 | % | |||||||
GAAP combined ratio | 97.5 | % | 93.6 | % | 93.2 | % | |||||||
Insurance-International: | |||||||||||||
Gross premiums written | $ | 681,424 | $ | 508,350 | $ | 360,511 | |||||||
Net premiums written | 551,910 | 430,252 | 302,594 | ||||||||||
Premiums earned | 508,509 | 378,693 | 268,726 | ||||||||||
Pre-tax income | 36,912 | 15,172 | 20,691 | ||||||||||
Loss ratio | 57.4 | % | 59.2 | % | 56.8 | % | |||||||
Expense ratio | 42.7 | % | 43.6 | % | 43.8 | % | |||||||
GAAP combined ratio | 100.1 | % | 102.8 | % | 100.6 | % | |||||||
Reinsurance-Global: | |||||||||||||
Gross premiums written | $ | 601,027 | $ | 519,018 | $ | 534,188 | |||||||
Net premiums written | 567,338 | 482,451 | 496,313 | ||||||||||
Premiums earned | 531,077 | 493,403 | 467,965 | ||||||||||
Pre-tax income | 85,271 | 134,996 | 88,058 | ||||||||||
Loss ratio | 64.3 | % | 55.9 | % | 59.9 | % | |||||||
Expense ratio | 38.0 | % | 38.6 | % | 37.3 | % | |||||||
GAAP combined ratio | 102.3 | % | 94.5 | % | 97.2 | % | |||||||
Consolidated: | |||||||||||||
Gross premiums written | $ | 5,077,313 | $ | 4,416,077 | $ | 4,253,439 | |||||||
Net premiums written | 4,357,368 | 3,850,926 | 3,730,095 | ||||||||||
Premiums earned | 4,160,867 | 3,835,582 | 3,805,849 | ||||||||||
Loss ratio | 63.9 | % | 60.2 | % | 61.4 | % | |||||||
Expense ratio | 34.6 | % | 34.4 | % | 32.9 | % | |||||||
GAAP combined ratio | 98.5 | % | 94.6 | % | 94.3 | % | |||||||
Losses from catastrophes: | |||||||||||||
Insurance-Domestic | $ | 104,306 | $ | 73,487 | $ | 62,815 | |||||||
Insurance-International | 13,840 | 4,000 | — | ||||||||||
Reinsurance-Global | 35,219 | 4,000 | — | ||||||||||
Total | $ | 153,365 | $ | 81,487 | $ | 62,815 |