Berkley Net Income Off 4%

Greenwich, Conn.-based insurer W.R. Berkley Corp. reported its third-quarter net income dropped 4 percent, primarily due to weather-related losses.

Berkley reported net income for the third quarter dropped by $4 million to $94 million, with a net income per share of 61 cents. Net premium written rose for the period by $31 million to $331 million. The company reported a combined ratio of 95.4, up 0.4 points.

For the first nine months of the year, the company said net income increased 84 percent, or $148 million, over last year to $322 million. The combined ratio for the first three months remained unchanged from last year at 94.7.

William R. Berkley, chairman and chief executive officer, said in a statement, "We are satisfied with our third-quarter results. In spite of substantial weather-related losses, our combined ratio was in line with our expectations. We continue to record the current accident year on a cautious basis. Given the duration of our loss reserves, we believe the long-term threat of inflation requires a cautious approach to establishing casualty reserves."

Reflecting on pricing, Mr. Berkley said, "Our latest price monitor shows no overall change in year-over-year price levels and, in fact, prices are increasing in some lines of business. We believe the industry is currently running at an operating loss with an accident year combined ratio of approximately 110 percent. Current behavior needs to change, and it will when declining investment returns and underwriting losses can no longer be ignored."

He noted that investment returns have seen improvement. The company reported third-quarter net investment gains rose more than $1 million to $4 million. For the first nine months of the year, net investments have swung from a loss of $59 million last year to a gain of $23 million.

"Overall, business is more than satisfactory," Mr. Berkley said. "Our start-up companies continue to gain traction, and we expect to grow modestly in 2010 and more significantly next year. We anticipate an improving return from this point forward, and we remain optimistic about the direction of our business for the foreseeable future."