Delaware | 1-15202 | 22-1867895 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
475 Steamboat Road, Greenwich, CT | 06830 | |
(Address of principal executive offices) | (Zip Code) | |
Registrants telephone number, including area code: | (203) 629-3000 | |
99.1 | Press Release dated April 25, 2011 |
W. R. BERKLEY CORPORATION |
||||
By: | /s/ Eugene G. Ballard | |||
Name: | Eugene G. Ballard | |||
Title: | Senior Vice President - Chief Financial Officer | |||
Exhibit: | ||
99.1
|
Press Release dated April 25, 2011 |
W. R. Berkley Corporation 475 Steamboat Road Greenwich, Connecticut 06830 (203) 629-3000 |
NEWS RELEASE |
FOR IMMEDIATE RELEASE
|
CONTACT: | Karen A. Horvath Vice President External Financial Communications (203) 629-3000 |
First Quarter | ||||||||
2011 | 2010 | |||||||
Gross premiums written |
$ | 1,269,858 | $ | 1,126,120 | ||||
Net premiums written |
1,083,303 | 983,950 | ||||||
Net income |
116,487 | 118,610 | ||||||
Net income per diluted share |
0.79 | 0.74 | ||||||
Operating income (1) |
97,697 | 114,767 | ||||||
Operating income per diluted share |
0.66 | 0.72 |
(1) | Operating income is a non-GAAP financial measure defined by the Company as net income excluding net investment gains and losses. |
W. R. Berkley Corporation | Page 2 |
| Net premiums written increased 10%. | ||
| GAAP combined ratio was 96.3%. | ||
| Return on equity was 12.6%. | ||
| Book value per share was $26.78. |
W. R. Berkley Corporation | Page 3 |
W. R. Berkley Corporation | Page 4 |
First Quarter | ||||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Net premiums written |
$ | 1,083,303 | $ | 983,950 | ||||
Change in unearned premiums |
(100,806 | ) | (53,389 | ) | ||||
Net premiums earned |
982,497 | 930,561 | ||||||
Net investment income |
131,619 | 138,843 | ||||||
Income from investment funds |
14,507 | 4,718 | ||||||
Insurance service fees |
22,173 | 21,485 | ||||||
Net investment gains: |
||||||||
Net realized gains on investment sales |
29,284 | 8,494 | ||||||
Other-than-temporary impairments |
| (2,582 | ) | |||||
Net investment gains |
29,284 | 5,912 | ||||||
Revenues from wholly-owned investees |
53,887 | 51,576 | ||||||
Other income |
384 | 452 | ||||||
Total revenues |
1,234,351 | 1,153,547 | ||||||
Expenses: |
||||||||
Losses and loss expenses |
607,095 | 549,973 | ||||||
Other operating costs and expenses |
384,831 | 367,967 | ||||||
Expenses from wholly-owned investees |
53,816 | 48,974 | ||||||
Interest expense |
28,117 | 26,041 | ||||||
Total expenses |
1,073,859 | 992,955 | ||||||
Income before income taxes |
160,492 | 160,592 | ||||||
Income tax expense |
(44,000 | ) | (41,811 | ) | ||||
Net income before
noncontrolling interests |
116,492 | 118,781 | ||||||
Noncontrolling interests |
(5 | ) | (171 | ) | ||||
Net income to common stockholders |
$ | 116,487 | $ | 118,610 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.83 | $ | 0.77 | ||||
Diluted |
$ | 0.79 | $ | 0.74 | ||||
Average shares outstanding: |
||||||||
Basic |
141,177 | 153,445 | ||||||
Diluted |
147,425 | 159,771 |
W. R. Berkley Corporation | Page 5 |
First Quarter | ||||||||
2011 | 2010 | |||||||
Specialty: |
||||||||
Gross premiums written |
$ | 415,730 | $ | 342,932 | ||||
Net premiums written |
358,117 | 301,928 | ||||||
Premiums earned |
330,207 | 312,953 | ||||||
Pre-tax income |
90,369 | 75,670 | ||||||
Loss ratio |
54.2 | % | 57.9 | % | ||||
Expense ratio |
33.6 | % | 33.6 | % | ||||
GAAP combined ratio |
87.8 | % | 91.5 | % | ||||
Regional:(2) |
||||||||
Gross premiums written |
$ | 298,841 | $ | 302,641 | ||||
Net premiums written |
279,624 | 272,032 | ||||||
Premiums earned |
261,517 | 263,669 | ||||||
Pre-tax income |
24,898 | 41,964 | ||||||
Loss ratio |
62.4 | % | 57.2 | % | ||||
Expense ratio |
36.1 | % | 35.5 | % | ||||
GAAP combined ratio |
98.5 | % | 92.7 | % | ||||
Alternative Markets: |
||||||||
Gross premiums written |
$ | 254,847 | $ | 241,351 | ||||
Net premiums written |
200,554 | 210,405 | ||||||
Premiums earned |
148,337 | 154,785 | ||||||
Pre-tax income |
41,630 | 50,985 | ||||||
Loss ratio |
72.6 | % | 64.6 | % | ||||
Expense ratio |
26.1 | % | 25.5 | % | ||||
GAAP combined ratio |
98.7 | % | 90.1 | % | ||||
Reinsurance:(2) |
||||||||
Gross premiums written |
$ | 112,564 | $ | 106,369 | ||||
Net premiums written |
106,354 | 98,771 | ||||||
Premiums earned |
105,478 | 99,558 | ||||||
Pre-tax income |
25,362 | 34,420 | ||||||
Loss ratio |
62.6 | % | 50.4 | % | ||||
Expense ratio |
39.2 | % | 43.8 | % | ||||
GAAP combined ratio |
101.8 | % | 94.2 | % | ||||
International:(2) |
||||||||
Gross premiums written |
$ | 187,876 | $ | 132,827 | ||||
Net premiums written |
138,654 | 100,814 | ||||||
Premiums earned |
136,958 | 99,596 | ||||||
Pre-tax income |
2,515 | 373 | ||||||
Loss ratio |
66.5 | % | 67.9 | % | ||||
Expense ratio |
39.1 | % | 43.6 | % | ||||
GAAP combined ratio |
105.6 | % | 111.5 | % |
W. R. Berkley Corporation | Page 6 |
First Quarter | ||||||||
2011 | 2010 | |||||||
Corporate and Eliminations: |
||||||||
Net investment gains |
$ | 29,284 | $ | 5,912 | ||||
Interest expense |
(28,117 | ) | (26,041 | ) | ||||
Other revenues and expenses (3) |
(25,449 | ) | (22,691 | ) | ||||
Pre-tax loss |
(24,282 | ) | (42,820 | ) | ||||
Consolidated: |
||||||||
Gross premiums written |
$ | 1,269,858 | $ | 1,126,120 | ||||
Net premiums written |
1,083,303 | 983,950 | ||||||
Premiums earned |
982,497 | 930,561 | ||||||
Pre-tax income |
160,492 | 160,592 | ||||||
Loss ratio |
61.8 | % | 59.1 | % | ||||
Expense ratio |
34.5 | % | 35.0 | % | ||||
GAAP combined ratio |
96.3 | % | 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. Underwriting expenses do not include expenses related to insurance services or unallocated corporate expenses. GAAP combined ratio is the sum of the loss ratio and the expense ratio. | |
(2) | For the first quarter of 2011, catastrophe and weather-related losses were $24 million, including $15 million related to earthquakes in Japan and New Zealand and floods in Australia. For the first quarter of 2010, weather-related losses were $23 million. | |
(3) | Other revenues and expenses include corporate investment income, expenses not allocated to the business segments and revenues and expenses from investments in wholly-owned, non-insurance subsidiaries that are consolidated for financial reporting purposes. |
W. R. Berkley Corporation | Page 7 |
March 31, 2011 | December 31, 2010 | |||||||
Net invested assets (1) |
$ | 13,983,378 | $ | 13,918,768 | ||||
Total assets |
17,983,511 | 17,528,547 | ||||||
Reserves for losses and loss expenses |
9,172,680 | 9,016,549 | ||||||
Senior notes and other debt |
1,497,095 | 1,500,419 | ||||||
Junior subordinated debentures |
242,841 | 242,784 | ||||||
Common stockholders equity (2) |
3,791,784 | 3,702,876 | ||||||
Common stock outstanding |
141,599 | 141,010 | ||||||
Common stockholders equity per share |
26.78 | 26.26 |
(1) | Net invested assets include investments, cash investments and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases. | |
(2) | After-tax unrealized investment gains were $310 million and $335 million as of March 31, 2011 and December 31, 2010, respectively. Unrealized currency translation losses were $32 million and $42 million as of March 31, 2011 and December 31, 2010, respectively. |
W. R. Berkley Corporation | Page 8 |
First Quarter | ||||||||
2011 | 2010 | |||||||
Reconciliation of operating income
to net income: |
||||||||
Operating income (1) |
$ | 97,697 | $ | 114,767 | ||||
Investment gains, net of tax |
18,790 | 3,843 | ||||||
Net income |
$ | 116,487 | $ | 118,610 | ||||
Return on equity (2) |
12.6 | % | 13.2 | % | ||||
Cash flow from operations |
$ | 51,771 | $ | 57,159 | ||||
Other operating costs and expenses: |
||||||||
Underwriting expenses |
$ | 339,185 | $ | 325,603 | ||||
Service expenses |
17,329 | 18,544 | ||||||
Net foreign currency (gains) losses |
520 | (5,027 | ) | |||||
Other costs and expenses |
27,797 | 28,847 | ||||||
Total |
$ | 384,831 | $ | 367,967 | ||||
(1) | Operating income is a non-GAAP financial measure defined by the Company as net income excluding net investment gains and losses. The Company modified its definition of operating income to include income and losses from investment funds, which had previously been excluded. Management believes that excluding net investment gains and losses, which are often discretionary and frequently relate to economic factors, provides a useful indicator of trends in the Companys underlying operations. | |
(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 | Page 9 |
Carrying | Percent | |||||||
Value | of Total | |||||||
Fixed maturity securities: |
||||||||
United States government and government agencies |
$ | 1,295,559 | 9.3 | % | ||||
State and municipal: |
||||||||
Special revenue |
2,129,061 | 15.2 | % | |||||
Pre-refunded |
1,461,295 | 10.5 | % | |||||
State general obligation |
1,012,535 | 7.2 | % | |||||
Local general obligation |
427,260 | 3.1 | % | |||||
Corporate backed |
449,398 | 3.2 | % | |||||
Total state and municipal (1) |
5,479,549 | 39.2 | % | |||||
Mortgage-backed securities: |
||||||||
Agency |
1,052,388 | 7.5 | % | |||||
Residential Prime |
267,365 | 1.9 | % | |||||
Residential Alt A |
54,490 | 0.4 | % | |||||
Commercial |
57,999 | 0.4 | % | |||||
Total mortgage-backed securities |
1,432,242 | 10.2 | % | |||||
Corporate: |
||||||||
Industrial |
1,192,670 | 8.5 | % | |||||
Financial |
722,808 | 5.2 | % | |||||
Utilities |
197,053 | 1.4 | % | |||||
Asset-backed |
273,692 | 2.0 | % | |||||
Other |
122,702 | 0.9 | % | |||||
Total corporate |
2,508,925 | 18.0 | % | |||||
Foreign government and foreign government agencies |
535,343 | 3.8 | % | |||||
Total fixed maturity securities (1) |
11,251,618 | 80.5 | % | |||||
Equity securities available for sale: |
||||||||
Common stocks |
315,297 | 2.3 | % | |||||
Preferred stocks |
||||||||
Financial |
96,981 | 0.7 | % | |||||
Real estate |
48,604 | 0.3 | % | |||||
Utilities |
49,248 | 0.4 | % | |||||
Total equity securities available for sale |
510,130 | 3.7 | % | |||||
Cash and cash equivalents (2) |
741,012 | 5.3 | % | |||||
Arbitrage trading account |
488,202 | 3.5 | % | |||||
Investment in arbitrage funds |
62,541 | 0.4 | % | |||||
Investment funds |
548,327 | 3.9 | % | |||||
Loans receivable |
348,773 | 2.5 | % | |||||
Real estate |
32,775 | 0.2 | % | |||||
Net invested assets |
$ | 13,983,378 | 100.0 | % | ||||
(1) | For state and municipal securities, the average rating was AA and the average duration was 4.0 years. For total fixed maturity securities, the average rating was AA and the average duration was 3.6 years. | |
(2) | Includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases. |