W.R. Berkley Corp. said fourth-quarter commercial rates improved by 6.5%, rising for the eighth quarter in a row.
"It's been many years since we as an organization have been so encouraged by the market," W. Robert Berkley Jr., president and chief operating officer, said during the company's fourth-quarter earnings conference call.
The company posted net income of $165.5 million, up 41% over the previous year. Net premiums written rose 12.6% to $1.23 billion. "We are especially pleased with the direction everything seems to be moving," said William R. Berkley, chairman and chief operating officer.
He said pricing has to rise to keep up with both the low interest rate environment and a decline in pricing from several years ago.
Years ago, a combined ratio of 95 would bring a company a "good result. Today, you've got to get down to 90," William R. Berkley said.
The company's combined ratio rose to 98.1 from 97. About 3.2 points on the combined ratio were due from Hurricane Sandy losses.
The company recently launched Berkley Southeast Insurance Group, which will underwrite products in six Southeastern states for W.R. Berkley member companies. Atlanta-based Berkley Southeast will provide standard commercial lines insurance services and expertise to a wide range of businesses in Mississippi, Alabama, Georgia, Tennessee, North Carolina and South Carolina. Products will be distributed through the independent agency system.
During the conference call, William R. Berkley said the company looks to "keep units small, and keep them close to the customer. The guy who is making all the decisions is in that marketplace."
In July, W.R. Berkley Corp. launched a managing general underwriter, Berkley Custom Insurance Managers LLC, to focus on the excess casualty insurance market and underwrite on behalf of W.R. Berkley member insurance companies. At that time, the company said it had 48 operating units, including insurance companies and general underwriters that write business for the insurance companies.