Third quarter highlights included:
- Net premiums written increased 2%.
- GAAP combined ratio was 95.4%.
- Operating return on equity was 11.4%.
- Book value per share increased 6% to $26.36.
- Repurchased 3.3 million shares of common stock at an average cost of $26.41 per share and an aggregate cost of $88 million.
Commenting on the Company's performance, William R. Berkley, chairman and chief executive officer, said: "We are satisfied with our third quarter results. In spite of substantial weather-related losses, our combined ratio was in line with our expectations. We continue to record the current accident year on a cautious basis. Given the duration of our loss reserves, we believe the long-term threat of inflation requires a cautious approach to establishing casualty reserves.
"Our latest price monitor shows no overall change in year over year price levels, and, in fact, prices are increasing in some lines of business. We believe the industry is currently running at an operating loss with an accident year combined ratio of approximately 110%. Current behavior needs to change, and it will when declining investment returns and underwriting losses can no longer be ignored.
"We have been able to maintain our investment returns in spite of the decline in interest rates. Our overall investment income improved from the previous quarter in large part due to the improvement in our merger arbitrage account. Our focus continues to be on maintaining the quality of the portfolio and optimizing our after-tax return. We have kept our portfolio duration between 3.5 and 3.6 years. We have been able to find high quality securities with attractive returns that do not fit in portfolios of other investors who have a greater need for short-term liquidity.
"Overall, business is more than satisfactory. Our start-up companies continue to gain traction, and we expect to grow modestly in 2010 and more significantly next year. We anticipate an improving return from this point forward, and we