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W.R. Berkley's Net Income Up 32%, Net Premiums Written Up 13.3% for 3Q

Posted on 23 Oct 2012 by Neilson

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W.R. BerkleyW. R. Berkley Corporation today reported net income for the third quarter of 2012 of $101 million, or 71 cents per share, compared with $76 million, or 53 cents per share, for the third quarter of 2011.

Third quarter highlights included:

• Book value per share increased $1.13, representing a 15% increase on an annualized basis.
• Average rates on renewed policies increased 7.0%.
• GAAP combined ratio was 95.8%.
• Net premiums written increased 13.3%.
• The Company repurchased 2 million shares of its common stock at an average cost of $37.05 per share and an aggregate cost of $73 million.

Commenting on the company's performance, William R. Berkley, chairman and chief executive officer, said: "We were very pleased with our third quarter results. Significant rate increases were a part of our substantial growth in the quarter, and we continue to see positive trends in most lines of business.

"It is clear, as we enter the second year of significant rate increases, that the cyclical change is no longer hypothetical. Rate increases continue to be available for disciplined companies that recognize the need for adequate returns. The consequence of declining fixed income yields has increased the need for meaningful improvement in underwriting margin. We anticipate continued price increases over the next twelve months.

"Although our current yields were virtually unchanged from a year ago, investment returns still represent the most serious obstacle to achieving adequate returns. With ten-year treasury yields hovering around 2%, it is a challenge to maintain our current portfolio yield. Our shift in focus toward investing more for capital gains has rewarded us as we achieved significant income in the first three quarters and anticipate gains in excess of $75 million in the fourth quarter.

"We remain confident that we will be able to grow and raise prices for the foreseeable future. We continue to believe that we will be able to deliver outstanding returns to our shareholders," Mr. Berkley concluded.