8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 21, 2020

Commission File Number 1-15202

     W. R. BERKLEY CORPORATION      
(Exact name of registrant as specified in its charter)

Delaware			22-1867895
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
475 Steamboat Road	Greenwich	Connecticut	06830
(Address of principal executive offices)			(Zip Code)

(203) 629-3000

(Registrant’s telephone number, including area code)

	None
Former name, former address and former fiscal year, if changed since last report.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $.20 per share	WRB	New York Stock Exchange
5.625% Subordinated Debentures due 2053	WRB-PB	New York Stock Exchange
5.90% Subordinated Debentures due 2056	WRB-PC	New York Stock Exchange
5.75% Subordinated Debentures due 2056	WRB-PD	New York Stock Exchange
5.70% Subordinated Debentures due 2058	WRB-PE	New York Stock Exchange
5.10% Subordinated Debentures due 2059	WRB-PF	New York Stock Exchange

W. R. Berkley Corporation   2

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company  ☐ 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 

W. R. Berkley Corporation   3

Item 2.02 Results of Operations and Financial Condition.

Reference is made to the press release of W. R. Berkley Corporation (the “Company”) relating to the announcement of the Company’s results of operations for the second quarter of 2020. The press release was issued on July 21, 2020. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

W. R. Berkley Corporation   4

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release dated July 21, 2020

W. R. Berkley Corporation   5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

W. R. BERKLEY CORPORATION

By:	/s/ Richard M. Baio
	Name:	Richard M. Baio
	Title:	Executive Vice President
		Chief Financial Officer and Treasurer

Date: July 21, 2020

W. R. Berkley Corporation   6

EXHIBIT INDEX

Exhibit:

99.1   Press Release dated July 21, 2020

EX-99.1

	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

W. R. BERKLEY CORPORATION REPORTS SECOND QUARTER RESULTS

Gross Premiums Written Grew to $2.132 Billion; Book Value Per Share Grew 7.7%, Before Dividends and Share Repurchases

Greenwich, CT, July 21, 2020 - W. R. Berkley Corporation (NYSE: WRB) today reported its second quarter 2020 results.

Summary Financial Data

(Amounts in thousands, except per share data)

	Second Quarter						Six Months
	2020			2019			2020			2019
Gross premiums written	$	2,132,246		$	2,089,861		$	4,363,618		$	4,136,090
Net premiums written	1,739,818			1,743,464			3,585,664			3,453,065
Net income to common stockholders	71,260			216,709			66,842			397,431
Net income per diluted share	0.38			1.12			0.35			2.06
Operating income (1)	11,552			158,798			144,064			287,773
Operating income per diluted share	0.06			0.82			0.76			1.49
Return on equity (2)	4.7		%	15.9		%	2.2		%	14.6		%

(1)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses) and related expenses.

(2)Return on equity represents net income expressed on an annualized basis as a percentage of beginning of year stockholders’ equity.

W. R. Berkley Corporation  2

Second quarter highlights included:

•Average rate increases excluding workers' compensation were approximately 13.0%.

•The accident year combined ratio before catastrophe losses was 90.2%. The reported combined ratio was 98.7%.

•Catastrophes added 8.7 loss ratio points to the reported combined ratio, including 5.1 loss ratio points for COVID-19 related losses.

•Book value per share grew 7.7%, before dividends and share repurchases.

•Total capital returned to stockholders was $117 million, including $96 million of share repurchases and $21 million of ordinary dividends.

•Cash and liquid investments of more than $1.5 billion at the holding company.

The Company commented:

The second quarter of 2020 was most notably characterized by the COVID-19 pandemic and its impact on the U.S. and global economies. As previously announced, the Company incurred $85 million of net COVID-19 related losses during the period. The losses reflect newly available information and legal and regulatory developments that arose during the quarter. The total represents our best estimate of ultimate losses based on currently available information. Total catastrophe losses also included $20 million for losses related to civil unrest and $40 million primarily attributable to severe weather-related events in the U.S. Notwithstanding, inclusive of all these events, the Company reported a 98.7% combined ratio.

In spite of the current challenges, positive rate momentum persisted. The primary impetus for this continued momentum is the growing industry concern over the low interest rate environment and social inflation, which has shown no signs of abating. We believe that the current environment has heightened risk awareness and further reinforced this trend. Average rate increases excluding workers' compensation in the second quarter of 2020 of approximately 13% mitigated the top-line impact of the shrinking economy. Consequently, gross premiums written grew despite the current economic environment. While re-opening the global economy is unlikely to be a smooth process, we anticipate that it will have a meaningful favorable impact on our future growth.

Net investment income was adversely impacted by a $58 million loss from investment funds, which are reported on a one-quarter lag. The loss was driven by the first quarter downturn in the financial markets resulting from the COVID-19 related economic shutdown. We continue to manage our portfolio for total return in light of low interest rates and maintain a conservative fixed-maturity portfolio with an average rating of AA- and a duration of 2.4 years. Given the uncertainty in the financial markets and the economy, we have taken a defensive position to enhance our liquidity by investing in high-quality shorter-term assets, including cash and cash equivalents.

The first half of 2020 has been highly unusual in many regards. Our Company has performed relatively well and our people have demonstrated tremendous resiliency. Much remains unknown as we move into the second half of the year, yet often the best opportunities for the market to correct itself and provide an appropriate risk-adjusted return arise from periods of the greatest uncertainty. We see this as one of those moments, and we are well positioned to realize these opportunities as the economy improves.

W. R. Berkley Corporation  3

Webcast Conference Call

        The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on July 21, 2020, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/news-and-events/events-and-presentations/default.aspx. Please log on at least ten minutes early to register and download and install any necessary software. A replay of the webcast will be available on the Company's website approximately two hours after the end of the conference call. Additional financial information can be found on the Company's website at https://ir.berkley.com/investor-relations/financial-information/annual-reports/default.aspx.

About W. R. Berkley Corporation

        Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty business: Insurance and Reinsurance & Monoline Excess.

W. R. Berkley Corporation  4

Forward Looking Information

This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2020 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the ongoing COVID-19 pandemic, including the related impact on the U.S. and global economies; the cyclical nature of the property casualty industry; the impact of significant competition, including new alternative entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts; natural and man-made catastrophic losses, including as a result of terrorist activities, epidemics or pandemics, such as COVID-19; the impact of climate change, which may increase the frequency and severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks (including those associated with the United Kingdom's withdrawal from the European Union, or "Brexit") relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2015; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; potential difficulties with technology and/or cyber security issues; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause our actual results for the year 2020 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

# # #

W. R. Berkley Corporation  5

Consolidated Financial Summary

(Amounts in thousands, except per share data)

	Second Quarter				Six Months
	2020		2019		2020		2019
Revenues:
Net premiums written	$	1,739,818	$	1,743,464	$	3,585,664	$	3,453,065
Change in unearned premiums	(62,903)		(96,623)		(217,331)		(213,368)
Net premiums earned	1,676,915		1,646,841		3,368,333		3,239,697
Net investment income	85,431		188,333		260,194		346,587
Net investment gains (losses):
Net realized and unrealized gains (losses) on investments	61,653		73,574		(81,632)		142,226
Change in allowance for credit losses on investments (1)	16,232		—		(17,657)		—
Net investment gains (losses)	77,885		73,574		(99,289)		142,226
Revenues from non-insurance businesses	75,742		89,297		169,471		181,124
Insurance service fees	19,870		22,446		45,621		47,759
Other income	183		2,893		2,305		3,013
Total revenues	1,936,026		2,023,384		3,746,635		3,960,406
Expenses:
Losses and loss expenses	1,135,126		1,028,830		2,242,379		2,017,479
Other operating costs and expenses	580,840		591,828		1,159,173		1,179,916
Expenses from non-insurance businesses	76,238		88,272		170,996		178,397
Interest expense	38,373		40,718		75,105		81,439
Total expenses	1,830,577		1,749,648		3,647,653		3,457,231
Income before income taxes	105,449		273,736		98,982		503,175
Income tax expense	(33,793)		(56,309)		(30,852)		(104,134)
Net income before noncontrolling interests	71,656		217,427		68,130		399,041
Noncontrolling interests	(396)		(718)		(1,288)		(1,610)
Net income to common stockholders	$	71,260	$	216,709	$	66,842	$	397,431
Net income per share:
Basic	$	0.38	$	1.14	$	0.36	$	2.09
Diluted	$	0.38	$	1.12	$	0.35	$	2.06
Average shares outstanding (2):
Basic	185,979		190,512		188,133		190,456
Diluted	187,862		193,059		190,078		192,804

(1)The inclusion of the allowance for credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13.

(2)Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.

W. R. Berkley Corporation  6

Business Segment Operating Results

(Amounts in thousands, except ratios) (1)

	Second Quarter						Six Months
	2020			2019			2020			2019
Insurance:
Gross premiums written	$	1,917,702		$	1,905,367		$	3,859,511		$	3,715,850
Net premiums written	1,543,157			1,574,585			3,126,475			3,071,964
Premiums earned	1,465,044			1,475,184			2,949,999			2,902,218
Pre-tax income	76,546			225,871			252,493			410,387
Loss ratio	67.0		%	62.9		%	66.1		%	62.5		%
Expense ratio	30.7		%	30.9		%	31.0		%	31.4		%
GAAP combined ratio	97.7		%	93.8		%	97.1		%	93.9		%
Reinsurance & Monoline Excess:
Gross premiums written	$	214,544		$	184,494		$	504,107		$	420,240
Net premiums written	196,661			168,879			459,189			381,101
Premiums earned	211,871			171,657			418,334			337,479
Pre-tax income	12,566			52,635			49,080			97,490
Loss ratio	72.2		%	59.2		%	70.3		%	60.0		%
Expense ratio	32.9		%	36.0		%	32.6		%	36.0		%
GAAP combined ratio	105.1		%	95.2		%	102.9		%	96.0		%
Corporate and Eliminations:
Net investment gains (losses)	$	77,885		$	73,574		$	(99,289)		$	142,226
Interest expense	(38,373)			(40,718)			(75,105)			(81,439)
Other revenues and expenses	(23,175)			(37,626)			(28,197)			(65,489)
Pre-tax income (loss)	16,337			(4,770)			(202,591)			(4,702)
Consolidated:
Gross premiums written	$	2,132,246		$	2,089,861		$	4,363,618		$	4,136,090
Net premiums written	1,739,818			1,743,464			3,585,664			3,453,065
Premiums earned	1,676,915			1,646,841			3,368,333			3,239,697
Pre-tax income	105,449			273,736			98,982			503,175
Loss ratio	67.7		%	62.4		%	66.6		%	62.2		%
Expense ratio	31.0		%	31.5		%	31.2		%	31.9		%
GAAP combined ratio	98.7		%	93.9		%	97.8		%	94.1		%

(1)Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.

W. R. Berkley Corporation  7

Supplemental Information

(Amounts in thousands)

	Second Quarter				Six Months
	2020		2019		2020		2019
Net premiums written:
Other liability	$	559,727	$	546,861	$	1,141,371	$	1,053,811
Short-tail lines (1)	323,164		337,611		631,053		616,447
Workers' compensation	273,036		340,430		600,322		694,617
Commercial automobile	213,063		198,728		418,490		411,683
Professional liability	174,167		150,955		335,239		295,406
Total Insurance	1,543,157		1,574,585		3,126,475		3,071,964
Casualty reinsurance	132,927		106,690		276,388		211,206
Monoline excess	19,571		23,929		94,838		91,721
Property reinsurance	44,163		38,260		87,963		78,174
Total Reinsurance & Monoline Excess	196,661		168,879		459,189		381,101
Total	$	1,739,818	$	1,743,464	$	3,585,664	$	3,453,065
Losses from catastrophes (including COVID-19 related losses):
Insurance	$	114,038	$	25,446	$	170,619	$	38,064
Reinsurance & Monoline Excess	31,822		57		54,015		99
Total	$	145,860	$	25,503	$	224,634	$	38,163
Net investment income:
Core portfolio (2)	$	111,679	$	134,294	$	244,727	$	270,552
Investment funds	(57,552)		46,840		(16,975)		58,251
Arbitrage trading account	31,304		7,199		32,442		17,784
Total	$	85,431	$	188,333	$	260,194	$	346,587
Net realized and unrealized gains (losses) on investments:
Net realized (losses) gains on investments	$	(261)	$	4,156	$	10,921	$	30,730
Change in unrealized gains (losses) on equity securities	61,914		69,418		(92,553)		111,496
Total	$	61,653	$	73,574	$	(81,632)	$	142,226
Other operating costs and expenses:
Policy acquisition and insurance operating expenses	$	519,234	$	518,160	$	1,051,158	$	1,031,951
Insurance service expenses	20,423		25,386		42,995		51,343
Net foreign currency (gains) losses	(7,382)		470		(28,923)		(6,494)
Other costs and expenses	48,565		47,812		93,943		103,116
Total	$	580,840	$	591,828	$	1,159,173	$	1,179,916
Cash flow from operations	$	427,282	$	324,316	$	579,851	$	402,646
Reconciliation of net income to operating income:
Net income	$	71,260	$	216,709	$	66,842	$	397,431
Pre-tax investment (gains) losses, net of related expenses	(77,785)		(73,375)		99,807		(139,245)
Income tax expense (benefit)	18,077		15,464		(22,585)		29,587
Operating income after-tax (3)	$	11,552	$	158,798	$	144,064	$	287,773

(1)Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines.

(2)Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.

(3)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.

W. R. Berkley Corporation  8

Selected Balance Sheet Information

(Amounts in thousands, except per share data)

	June 30, 2020		December 31, 2019
Net invested assets (1)	$	20,202,785	$	19,856,776
Total assets	27,322,349		26,630,030
Reserves for losses and loss expenses	13,088,904		12,583,249
Senior notes and other debt	1,725,449		1,427,575
Subordinated debentures	1,199,198		1,198,704
Common stockholders’ equity (2)	5,801,116		6,074,939
Common stock outstanding (3)	177,931		183,412
Book value per share (4)	32.60		33.12
Tangible book value per share (4)	31.33		31.87

(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)As of June 30, 2020, reflected in common stockholders' equity are after-tax unrealized investment gains of $209 million and unrealized currency translation losses of $459 million. As of December 31, 2019, after-tax unrealized investment gains were $125 million and unrealized currency translation losses were $382 million.

(3)During the three months ended June 30, 2020, the Company repurchased 1,953,344 shares of its common stock for $96 million. During the six months ended June 30, 2020, the Company repurchased 5,604,103 shares of its common stock for $299 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.

(4)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.

W. R. Berkley Corporation  9

Investment Portfolio

June 30, 2020

(Amounts in thousands)

	Carrying Value		Percent of Total
Fixed maturity securities:
United States government and government agencies	$	693,767	3.4	%
State and municipal:
Special revenue	$	2,253,542	11.2	%
Local general obligation	441,919		2.2	%
State general obligation	421,765		2.1	%
Pre-refunded	325,431		1.6	%
Corporate backed	232,730		1.2	%
Total state and municipal	3,675,387		18.2	%
Mortgage-backed securities:
Agency	622,965		3.1	%
Residential - Prime	319,371		1.6	%
Commercial	217,558		1.1	%
Residential - Alt A	9,336		—	%
Total mortgage-backed securities	1,169,230		5.8	%
Asset-backed securities	3,098,198		15.3	%
Corporate:
Industrial	1,999,122		9.9	%
Financial	1,431,704		7.1	%
Utilities	322,715		1.6	%
Other	19,040		0.1	%
Total corporate	3,772,581		18.7	%
Foreign government	871,922		4.3	%
Total fixed maturity securities (1)	13,281,085		65.7	%
Equity securities available for sale:
Preferred stocks	245,297		1.2	%
Common stocks	116,968		0.6	%
Total equity securities available for sale	362,265		1.8	%
Cash and cash equivalents (2)	2,665,235		13.2	%
Real estate	2,072,772		10.3	%
Investment funds (3)	1,158,344		5.7	%
Arbitrage trading account	580,950		2.9	%
Loans receivable	82,134		0.4	%
Net invested assets	$	20,202,785	100.0	%

(1)Total fixed maturity securities had an average rating of AA- and an average duration of 2.4 years, including cash and cash equivalents.

(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 $0.9 million.

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Cover Page	Jul. 21, 2020
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Jul. 21, 2020
Entity Registrant Name	W. R. BERKLEY CORP
Entity File Number	1-15202
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-1867895
Entity Address, Address Line One	475 Steamboat Road
Entity Address, City or Town	Greenwich
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06830
City Area Code	(203)
Local Phone Number	629-3000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.20 per share
Trading Symbol	WRB
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000011544
Amendment Flag	false
5.625% Subordinated Debentures due 2053
Entity Information [Line Items]
Title of 12(b) Security	5.625% Subordinated Debentures due 2053
Trading Symbol	WRB-PB
Security Exchange Name	NYSE
5.90% Subordinated Debentures due 2056
Entity Information [Line Items]
Title of 12(b) Security	5.90% Subordinated Debentures due 2056
Trading Symbol	WRB-PC
Security Exchange Name	NYSE
5.75% Subordinated Debentures due 2056
Entity Information [Line Items]
Title of 12(b) Security	5.75% Subordinated Debentures due 2056
Trading Symbol	WRB-PD
Security Exchange Name	NYSE
5.70% Subordinated Debentures due 2058
Entity Information [Line Items]
Title of 12(b) Security	5.70% Subordinated Debentures due 2058
Trading Symbol	WRB-PE
Security Exchange Name	NYSE
5.10% Subordinated Debentures Due 2059
Entity Information [Line Items]
Title of 12(b) Security	5.10% Subordinated Debentures due 2059
Trading Symbol	WRB-PF
Security Exchange Name	NYSE