WR Berkley saw its third quarter 2021 operating income more than double year on year as underwriting profit soared despite the impact of catastrophe losses with the company ultimately reporting results that comfortably beat analysts’ estimates.
- Operating income increases 103.6% YoY to $246.7mn in Q3 2021
- Q3 2021 combined ratio of 90.4%, down 3.3 points YoY
- NPW up 24% YoY to $2.33bn in Q3 2021
- Professional liability leads Q3 2021 NPW increases
- NPW growth in all lines bar property reinsurance
The Greenwich, Connecticut-based business posted Q3 2021 operating income of $246.7mn, up from $121.1mn in the prior year period.
Operating income per diluted share stood at $1.32 for the three months to 30 September 2021, ahead of the $0.94 that was the average estimate of analysts as compiled by S&P Capital IQ.
In 2020’s third quarter, WR Berkley’s operating income per diluted share was $0.65.
The carrier’s third quarter 2021 reported combined ratio was 90.4 percent, a result that included $73.8mn of catastrophe losses. In the same period last year, WR Berkley posted a combined ratio of 93.7 percent.
WR Berkley’s underwriting income increased by 80 percent year on year to $200mn, the company said.
Net premiums written (NPW) across its operations soared by 24 percent year on year to $2.33bn in Q3 2021.
NPW growth was recorded across each of WR Berkley’s insurance businesses. Insurance NPW totalled $2.01bn for the three months to 30 September 2021, up 23.3 percent year on year.
Professional liability led the insurance growth with a 58.7 percent increase in NPW year on year. Commercial auto saw its NPW increase by 28.1 percent year on year, other liability went up 25.3 percent, short tail lines grew 8.6 percent and workers’ compensation expanded 7.7 percent.
Reinsurance and monoline excess NPW increased 26.7 percent year on year to $317.9mn. Casualty reinsurance NPW went up by 36 percent year on year, monoline excess grew 27.4 percent, while property reinsurance saw a slight 1.4 decrease.
WR Berkley reported net investment income of $179.9mn in Q3 2021, up from $142.7mn in the prior year period.
In a statement, WR Berkley said overall rate increases remained robust in nearly all lines of business and the expectation is these trends will continue for the foreseeable future.
“We see expanding opportunities to write business at attractive underwriting margins, given the strong commercial property and casualty pricing environment.
“The increasing focus that distribution partners and clients are placing on stable markets with balance sheet strength and expertise, particularly in specialty and E&S lines, is also contributing to growth,” the insurer said.
In the statement, WR Berkley said it predicts exposure growth and compounding rate increases will contribute to additional underwriting profits as premiums are fully earned.
“Opportunities like the current environment are infrequent in the property casualty insurance market, and we are striving to make the most of it,” the insurer added.