W.R. Berkley Corporation (NYSE:WRB) Q3 2018 Earnings Conference Call Transcript
Oct 23, 2018 • 05:00 pm ET
Good day, and welcome to W. R. Berkley Corporation's Third Quarter 2018 Earnings Conference Call. Today's conference call is being recorded.
(Forward-Looking Cautionary Statements)
I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.
Thank you, Armani, and good afternoon all. Thank you for joining us on our third quarter call. On this end you also have Bill Berkley, our Executive Chairman; and Rich Baio, our CFO.
Let me give you a quick sense of the agenda which is similar to what we've done in the past. I'm going to start off with a few comments or thoughts on what's going on at a macro level on the industry, offer a few sound bites on the quarter, and then I will in short order hand it off to Rich who will walk you through the quarter in greater detail.
Before we jump into the agenda, let me just offer a comment on behalf of my colleagues and myself that is somewhat of a more personal nature. The cat activity in the third quarter of this year, while not quite in some ways as severe as what we saw last year was still very significant and obviously we're seeing cat activity in the fourth quarter as well.
It's easy for this activity and this industry to turn into something that's thought of as ratios and numbers, but people should not lose sight of the fact that these are people's lives. And from our perspective, we would just like to extend our thoughts and prayers to all those that are affected. And hopefully this does provide an opportunity for the industry to demonstrate the value it brings to society and helping it get back on its feet in affected areas.
Turning to the business of today. A couple of topics that I will refer to here and our topics that we have discussed in the past. And I would suggest they could fall under the category of how much data or perhaps how much pain is required for there to be a change in behavior. Maybe starting with the property market, particularly cat-exposed property. Yet another quarter has gone by with frequency of severity. And for all we can tell, there is not a significant change or appetite for a change in behavior in the marketplace.
Yes, you may be seeing incremental change, but it does seem as though the concept of risk-adjusted return, the idea that the dollars lost are real, and that this capital is entitled to return does continue to be lost on many market participants. And this idea again continues to be a puzzle to us of just backing out cat losses as if they don't count really has never and continues to make no sense to us.
The other area that we and others have talked about more recently; I think we started to talk about it 18, maybe 24 months ago is inflation. And as we have discussed with people