W.R. Berkley Corporation’s third-quarter 2021 operating income of $1.32 per share beat the Zacks Consensus Estimate of 94 cents by 40.4%. The bottom-line doubled year over year.
The company benefited from high premiums and investment income as well as improving combined ratio.
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
W.R. Berkley’s net premiums written for the quarter under review were $2.3 billion, up 23.7% year over year, primarily due to higher premiums written at the Insurance and Reinsurance & Monoline Excess segment.
Operating revenues came in at $2.4 billion, up 20.2% year over year, on the back of higher net premiums earned and net investment income.
Investment income increased 26.1% year over year to $179.8 million.
Total expenses increased 14.1% to $2.1 billion, primarily due to higher losses and loss expenses, other operating costs and expenses, and expenses from non-insurance businesses.
Catastrophe losses of $73.8 million in the quarter widened from $72.7 million incurred in the year-ago quarter.
Underwriting income increased 80% in the quarter. The consolidated combined ratio (a measure of underwriting profitability) was 90.4%, improving 330 basis points (bps) year over year.
Net premiums written at the Insurance segment increased 23.3% year over year to $2 billion in the quarter, primarily due to higher other liability, short-tail lines, workers' compensation, commercial automobile, and professional liability. Combined ratio improved 480 bps to 89.3%.
Net premiums written in the Reinsurance & Monoline Excess segment increased 27% year over year to $318 million on higher casualty reinsurance and monoline excess. The combined ratio deteriorated 810 bps to 98.4%.
W.R. Berkley exited the third quarter with total assets worth $31.5 billion, up 10.4% from year-end 2020.
Tangible book value per share increased 6.3% from 2020 end to $36.39 as of Sep 30, 2021.
Cash flow from operations was $828 million in the third quarter of 2021, up 48.7% year over year.
The company’s return on equity expanded 660 bps to 16.6%.