W.R. Berkley Sees 4Q Net Soar By 233%

NU Online News Service, Feb. 16, 11:32 a.m. EST

W.R. Berkley has reported fourth-quarter net income at the Greenwich, Conn.-based insurance carrier rose 233 percent on the strength of its improved investment portfolio.

The company said net income for the 2009 fourth quarter rose $94 million to $134 million, or 81 cents per share, compared with $40 million, or 24 cents per share, for the fourth quarter of 2008. Revenues rose 9 percent, or $97 million to $1.18 billion.

The result was despite a drop in net premium written of 7 percent, or $60 million, to $828 million. Net investment gains stood at $20.4 million compared to net loss of $109 million in 2008.

For the year, net income rose 10 percent, or $28 million, to $309 million or $1.86 a share. Revenues were down 6 percent, or $28 million, to $4.43 billion. Net premiums decreased for the year by 8 percent, or $304 million, to $3.73 billion.

The company's combined ratio remained flat in the quarter at 92.6, but increased 1.1 points on the year to 94.2.

W.R. Berkley said it produced return on equity of 17.6 percent and the operating return on equity was 15.5 percent.

The insurer also announced that it has increased its share repurchase authorization by 10 million shares, to 11.5 million shares. The increased authorization represents approximately 7 percent of the company's shares outstanding as of Dec. 31, the company said.

William R. Berkley, chairman and chief executive officer, commented in a statement, "We are pleased with our results for the quarter. Underwriting performance was in line with our expectations and investment returns are approaching their historic levels. Operating return on equity of 15.5 percent reached our target even as we continued to invest in new operating units that will better position us for the future.

"As we maintain disciplined pricing, our existing book of business continues to modestly shrink. It is still hard to find new business that is attractively priced in the current marketplace. However, we are beginning to see improving price trends in selected lines of business.

"Our investment portfolio continues to perform well with the fixed income portion having an average rating of 'AA' and a duration that is slightly shorter than the duration of our liabilities. We feel comfortable with our existing investment portfolio and remain optimistic about its longer-term performance."

He added that the company sees signs of "a cyclical change" and it is well positioned to take advantage of the market turn.