Berkley pleased with Q3 underwriting result despite net income dip

US insurer WR Berkley has reported lower third quarter earnings, as higher catastrophe losses partially dented its results.

Net income for the three months to September fell to $US228.9 million ($362 million) from $US261.3 million ($413 million) a year earlier.

Gross written premium (GWP) improved to a record $US3.08 billion ($4.9 billion) from $US2.8 billion ($4.4 billion). Insurance GWP grew 11.5% to $US2.2 billion ($3.4 billion) while Reinsurance & Monoline Excess increased 6.8% to $US340 million ($526 million).

However current accident year catastrophe losses including covid-related claims reached $US94.14 million ($149 million), up from $US73.79 million ($116.8 million) and the combined ratio worsened to 92.1% from 90.4%.

But the insurer is pleased with the third quarter results, citing its “strong” pre-tax-underwriting income of $US192 million ($303 million) and higher net investment income of $US202.8 million ($320 million) from $179.8 million ($285 million) a year earlier.

“The company reported strong underwriting income in spite of the industry-wide catastrophe events,” CFO and Executive VP Richard Baio said in an earnings call.

“In addition, the record quarterly net investment income and foreign currency gains resulting from the strong US dollar contributed to our excellent quarterly results.”

He says the underwriting results demonstrate the resiliency of Berkley’s underwriting portfolio in an environment facing many challenges, including social and economic inflation as well as frequency and severity of natural catastrophes.

CEO William Berkley says the marketplace overall remains “very interesting” for the business, citing a number of segments that remain extremely attractive and others that are “surprising” due to the level of competition.

“One of the observations that we have shared in the past and we continue to see very much a reality is how the market is still as cyclical as ever,” he said.

“That having been said, different product lines are marching not in lockstep but very much to the beat of their own drum, which translates to, they are at different points in the cycle at any moment in time.”