NU Online News Service, July 26, 12:47 p.m.EDT

W.R. Berkley Corp. says second-quarter net income fell about 25percent as catastrophes during the period more than doubledcompared to last year.

Net income for the 2011 second quarter was about $83.1 millioncompared to $110.2 million during the same time in 2010.

Catastrophe losses, driven by weather events in the U.S. inApril and May, were $63 million after reinsurance andreinstatements. Cat losses were $30 million during the 2010 secondquarter.

The Greenwich, Conn.-based specialty insurer’s combined ratiofor the second quarter was 101.1, “tolerable in light of the levelof catastrophes,” says W. Robert Berkley, president and chiefoperating officer, during a conference call.

Chairman and CEO William R. Berkley says the company’sexpectations for improving rates in the commercial market “arecoming about,” albeit “slower than anticipated.”

The chief executive says that while rate increases arepositive—though they vary by line and geography—loss costs are alsoincreasing, which leads him to “anticipate accelerating rateincreases as the year progresses.”

Loss costs “directionally have turned from a long-term declineto upward slightly—not a lot, but there is a change,” the elderBerkley explains. Loss costs are “moving in ways we can’t predictat the moment,” he adds, which is why W.R. Berkley is cautious inreserving and pricing.

Year-to-year net-premiums written increased 10 percent to about$1.06 billion. Growth was driven mainly by the company’s newersubsidiaries, but W. Robert Berkley says the company is seeing“improving contributions from our more mature companies.”

The primary workers’ compensation market is showing someencouraging signs of improvement, but excess workers’ compensationis not revealing any “noteworthy discipline,” he says. This segmentof the market shows no signs of turning, he adds.