WR Berkley Corp (WRB) Q2 2025 Earnings Call Highlights: Record Premiums and Investment Income ...

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Net Income per Diluted Share: Increased 8.7% to $1 per share or $401 million.
Annualized Return on Equity: 19.1%.
Operating Earnings: $420 million or $1.05 per share, with a 20% annualized return on equity.
Combined Ratio: Current accident year combined ratio before cat losses was 88.4%; calendar year combined ratio was 91.6%.
Underwriting Income: $261 million.
Catastrophe Losses: $99 million in Q2 2025.
Net Premiums Earned: Record $3.1 billion.
Net Premiums Written: Record $3.4 billion.
Net Investment Income: Record $379 million.
Investment Income from Fixed Maturity Securities: Improved 16.5% year over year.
Effective Tax Rate: 23.2%.
Stockholders' Equity: Increased by $380 million to $9.3 billion.
Cash and Cash Equivalents: More than $2 billion.
Financial Leverage: 23.4%.
Growth in Book Value per Share: 6.8% in the quarter and 14.3% year-to-date.
Release Date: July 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
WR Berkley Corp (NYSE:WRB) reported a strong performance in both underwriting income and net investment income for the second quarter of 2025.
Net income per diluted share increased by 8.7% over the prior year, reaching $1 per share, with an annualized return on beginning of year equity of 19.1%.
Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20%.
Net premiums written increased to a record $3.4 billion in the quarter, with growth in all lines of business in both segments.
Record net investment income of $379 million was achieved, benefiting from ongoing growth in invested assets and favorable new money rates on fixed maturity securities.
Negative Points
Catastrophe losses were $99 million in the second quarter of 2025, slightly higher than the $90 million reported in the prior year's quarter.
The property insurance market is becoming more competitive, particularly for larger accounts, which may impact future growth.
Foreign currency losses amounted to $55 million in the quarter due to the weakening US dollar relative to other currencies.
The effective tax rate was 23.2%, exceeding the US statutory rate due to taxes on foreign earnings at higher rates and state income taxes.
The reinsurance marketplace is showing signs of eroding discipline, particularly in casualty lines, which could affect future profitability.
Q & A Highlights
Q: Just first question on growth, just thinking about the growth potential here. I know it was a tougher quarter with the property pricing deceleration, but just curious if you all still view this as sort of a 10% to 15% growth environment? Or has the last few quarters changed that? A: Look, I think we had come out with that band if you will, probably, I don't know, call it, 18 months ago, maybe 24 months ago, if you're asking my best guesstimate at this stage in spite of the number that we saw in this quarter, my view is that it's probably somewhere between 8% and 12% would be my guess as opposed to 10% to 15%. - W. Robert Berkley, Jr., President, CEO & Director
Q: You mentioned tariffs and labor costs in your opening remarks. And I just wanted to understand if you're actually seeing anything coming through if that's more of like a forward-looking statement. And obviously, it's the wider range out? A: It is a forward-looking statement. We are not seeing it in any noteworthy way in our loss activity right now. At the same time, we are conscious of the fact that, that concept of timing that I referenced in conjunction with the point that you're flagging. And we want to make sure that we're not caught flat-footed. - W. Robert Berkley, Jr., President, CEO & Director
Q: My first question is actually on capital. You guys didn't buy back any shares in the quarter. Just wondering what drove that decision? A: Look, ultimately, Elyse, when the day is all done, as we've shared with you and others in the past, we have a view as to how much capital we have and what type of surplus we have at any moment in time. We have a view as to what we see is opportunities potentially before us and want to make sure that we have a surplus of gas in the tank. - W. Robert Berkley, Jr., President, CEO & Director
Q: Rob, on the 15% Mitsui stake, any update on the time frame and timeline there? A: I know no more than anybody else or at least anybody else who bothered to read the SEC filings. Again, I think as I don't know if we share it or not, if we didn't, I said that we, by design, have not been privy to sort of where they stand in their process because in no way, shape or form, perhaps back to one of Elyse's points, we don't want to be encumbered or restricted in any way and our ability to repurchase stock. - W. Robert Berkley, Jr., President, CEO & Director
Q: Rob, you mentioned in the write-up rate increases were 7.6% ex workers' comp. And I know that you're kind of writing a more specialized, higher risk line. So I was just kind of curious, how is the workers' comp pricing doing in that arena? A: Well, thanks for the question, Andrew. The answer is that I think what you perhaps are referring to is some of the higher hazard stuff where we see growth opportunities from time to time, we saw, particularly in the first quarter. It was still there in the second quarter, but perhaps not to the same degree. - W. Robert Berkley, Jr., President, CEO & Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.