W.R. Berkley Corporation (NYSE:WRB) Q2 2020 Earnings Conference Call - Final Transcript

Jul 21, 2020 • 05:00 pm ET


W.R. Berkley Corporation (NYSE:WRB) Q2 2020 Earnings Conference Call - Final Transcript


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Good day and welcome to W. R. Berkley Corporation's Second Quarter 2020 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, believes, expects and 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 31st, 2019 and our other filings made with the SEC for a description of the business 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'd now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.

W. Robert Berkley

Thank you, Shantel, and good afternoon all. Thank you joining us for our Q2 call. We have on the phone, in addition to myself, Bill Berkley, Executive Chairman; and Rich Baio, Executive Vice President and Chief Financial Officer. We're going to follow a similar format to what we've done in the past. Rich is going to lead us through a summary around the numbers and the performance in the quarter. I am then going to offer a couple of thoughts on the heels of this comments. And then we'll be opening it up for questions.

So with that, Rich, if you want to get us started please.

Richard M. Baio

Absolutely. Thanks, Rob. Starting with our premium production. Gross premiums written grew 2% to more than $2.1 billion, despite a shrinking economy arising from the global pandemic. The growth was driven by an overall rate improvement and a comparable historic premium renewal retention ratio that Rob will be discussing shortly. Offsetting this improvement is a decline in exposures from the economic downturn as well as the strengthening of the US dollar against certain foreign currencies. Net premiums written of approximately $1.7 billion was relatively unchanged from the prior year's quarter.

The Insurance segment decreased 2% to approximately $1.5 billion, primarily due to reduced exposure and rate decline in workers' compensation as well as higher reinsurance reinstatement premiums. The Reinsurance & Monoline Excess segment grew 16.5% to about $200 million in the quarter relating to improving markets.

Pre-tax underwriting income of $23 million was adversely impacted in the quarter due to approximately $86 million of COVID-19-related losses. This compares with $100 million for the prior year underwriting income. In addition, we reported approximately $20 million of catastrophe losses for civil unrest and $40 million for severe weather-related losses. This brought our total catastrophe losses to approximately $146 million in the quarter or 8.7 loss ratio points.

COVID-19-related losses represented 5.1 of these loss ratio points. The reported loss ratio was