Greenwich, Conn.-based W.R. Berkley Corp. reported yesterday that first quarter net income was virtually unchanged, but thanks to a share repurchase, net income per share increased to $1.03 from 93 cents per share in last year's first quarter.
Actual net income was virtually unchanged at $188 million.
First-quarter operating income dropped by $31 million to $153 million, or 83 cents per share, compared with $184 million, or 91 cents per share, last year.
Operating income is a non-GAAP financial measure defined by the company as net income excluding realized investment gains and losses.
Net written premiums declined by $97 million to $1.16 billion.
The combined ratio for the quarter was 90.2.
In a statement released with the report, William R. Berkley, company chairman and chief executive officer, said: "We were generally pleased with our overall performance for the quarter. Our underwriting results were in line with our expectations."
He attributed a $20 million decline in investment income to $144 million to lower returns on the company's alternative investment portfolio, principally from reduced profits from arbitrage accounts.
In addition, he said, investment income was impacted by the $750 million utilized over the past twelve months to repurchase stock.
"Our operating units continue to perform well and are maintaining the appropriate level of underwriting discipline. We remain risk averse investors, constantly adjusting our portfolio mix to reflect the current economic climate," Mr. Berkley said.
He added that the company has invested a somewhat larger portion of its portfolio with a focus on achieving capital gains as well as ordinary investment income.
"We believe this will give us a better total return in the current environment," he said. "We are optimistic that our return-on- equity after tax in the current year will continue to comfortably exceed our long-term targeted return."
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