W.R. Berkley Corp. achieved average rate increases of 6.5 percent on renewed policies during the second quarter and its CEO says nothing stands in the way of more increases throughout the rest of 2013.

“We don't think pricing momentum has changed or gone down,” says William R. Berkley (pictured), chairman and CEO, during a quarterly conference call on earnings. “We don't see any changing in pricing momentum at this point in time.”

W.R. Berkley reports second-quarter income of about $166 million compared to about $109 million a year ago. The corporation's combined ratio for the period was 96.6, compared to 98.2 in 2012.

Second-quarter gross premiums were up 13 percent to about $1.6 billion, partly due to rate increases.

Berkley says brokers are “trying to push prices down” out of self-interest, but even though they are “pounding the table” and declaring rates have risen enough, they are “just not looking at the real cost of capital and what's happening to returns for their property casualty companies that they do business with.” He says 7 or 8 percent rate increases are possible by the end of the year.

W. Robert Berkley, COO, tells analysts “at a minimum, rate increases will remain or increase from here.” He says accounts are leaving the standard market, finding homes in the specialty and E&S markets. This movement “provides further evidence that there is more tightening going on.”

When pressed to add color to his statement, the younger Berkley could not provide numbers but adds, “We are seeing signs of a growing number of submissions coming our way.”

Looking to specific lines, the COO says primary workers' compensation rate continue to move up and excess workers' comp “has touch bottom and is showing early signs of improvement.” Primary public and private D&O rates are up but it depends on an insurer's place in the risk tower. Excess rates in these spaces are more flat to slightly up.

Rate increases in the property market are pacing slower, which W. Robert Berkley says is somewhat surprising considering Superstorm Sandy late last year and an active storm season in the Midwest—plus losses from floods in Europe and Canada.

Special Reports /

Berkley: Despite Brokers' Drum Beat to Muffle Increases, More Rate to Come

Related Stories

Recommended For You