W.R. Berkley Corporation (NYSE:WRB) Q1 2019 Earnings Conference Call Transcript

Apr 23, 2019 • 05:00 pm ET


W.R. Berkley Corporation (NYSE:WRB) Q1 2019 Earnings Conference Call Transcript


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Good day, and welcome to W.R. Berkley Corporation's First Quarter 2019 Earnings Conference Call. Today's conference call is being recorded.

The speakers' remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words including, without limitation, beliefs, expects or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will, in fact, be achieved.

Please refer to our annual report on Form 10-K for the year ended December 31, 2018, and our other filings made with the SEC for a description of the businesses environment in which we operate and the important factors that may materially affect our results.

W. R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.

William Robert Berkley

Thank you very much, Jimmy and good afternoon, all again. And thank you for joining us. So with me on this end, we also have Bill Berkley, our Executive Chairman; and Rich Baio, our EVP, CFO, CPA and probably a bunch of other acronyms as well.

So we are going to change the agenda around a little bit from what we've followed in the past and we're going to start off with Rich walking us through the quarter, hitting some of the highlights and framing it for you a bit, and then I will follow on his comments with a few brief thoughts and we will quickly make our way over to Q&A.

So, Rich, if you would, please.

Richard Mark Baio

Thanks, Rob. To begin with, our results are adjusted to reflect a 3-for-2 stock split. We reported an increase in net income of approximately 9% to $181 million or $0.94 per share. This compares with $166 million or $0.87 per share for the prior year's quarter. Our return on equity for the quarter on an annualized basis improved 1.0% to 13.3%.

Pre-tax underwriting income improved in the quarter along with net investment income from our core investment portfolio, net investment gains and foreign currency gains. Offsetting these improvements is lower net investment income from investment funds and higher non-recurring other costs and expenses for performance based compensation.

Pre-tax cat losses in the quarter were $12.7 million or 0.8 loss ratio points. We did experience slightly elevated non-cat weather-related losses due to winter storm events. The total non-cat weather-related losses amounted to 0.9 loss ratio points. Both cat and non-cat weather-related losses were in-line with expectations and within a reasonable range of our reported results over the past several years.

Prior year loss reserves developed favorably by $7 million or 0.4 loss points, compared with $12 million or 0.8 loss points for the same period last year. Accordingly, the current accident year loss ratio before cat of 61.6% was