BERKLEY W R CORP Q4 FY2024 earnings call

• Underwriting performance: Current accident year combined ratio before cat losses 87.7%, calendar year combined ratio 90.2% with $294 million underwriting income in Q4, full year 2024 underwriting income over $1.1 billion. Cat losses increased due to Hurricane Milton. Expense ratio 28.4% flat to prior year. • Investments: Core portfolio up 9.4% to $313 million, net investment gains from common and preferred equity. • Tax rate: Effective tax rate 21% in Q4, full year 2024 effective tax rate 22.5%, expected 23% plus or minus in 2025. • Capital: Stockholders' equity increased 12.6% to $8.4 billion, book value per share before repurchases and dividends grew 23.5% for full year.

The Insurance segment's net premiums written increased 9.9% to more than $2.6 billion in the fourth quarter, with growth in all lines of business. The Reinsurance & Monoline Excess segment grew in property and monoline excess but had a decrease in casualty due to the competitive pricing environment. The core investment portfolio increased 9.4% to $313 million. The full year 2024 had gross and net premiums written growing 9.6% and 9.3% respectively. The current accident year combined ratio before cat losses was 87.7%, calendar year combined ratio was 90.2% with $294 million underwriting income for the quarter, and over $1.1 billion for the full year.

• 2025 is expected to have an expense ratio comfortably below 30%. • Full year effective tax rate expected to be 23% plus or minus. • The core portfolio is expected to continue to grow due to higher new money rates compared with the roll-off book yield and growth in the size of the investment portfolio. • The underwriting margin is likely to improve from here over time and will not be deteriorating. • The investable assets continue to grow at a healthy pace with an opportunity to put money to work at a healthy spread above the current book yield.

• Social inflation in the liability market, with some lines like auto liability and med mal being more affected. • Slow response of the reinsurance market to social inflation challenges, leading to lack of discipline in the casualty reinsurance market. • Impact of California fires on the property insurance and reinsurance market, with property reinsurance and retro markets facing headwinds at 1/1 renewal. • Concerns about medical cost and medical trend in workers' compensation potentially affecting the market in the long term.

Q: How should we think through balancing growth given the landscape, particularly for reinsurance and insurance?

A: We are in business to make good risk-adjusted returns, will write business when margin is there and be defensive when not. We have demonstrated this by reducing casualty reinsurance when margin not there. We can grow in areas with good margin and are in a good place with great colleagues.

Q: How to think about price adequacy in property within the insurance business?

A: There is still an opportunity in property, but tailwind is diminished from before. California fires may impact appetite, but not a headwind yet like reinsurance.

Q: Can you give reserve breakdown by segment and color on short or long tail reserves?

A: Don't have it in front of me, but we're paying close attention to auto liability, access, umbrella, and how auto liability feeds into it. Workers' compensation is good, and some lines are encouraging.

Q: Comments on mix between E&S and admitted?

A: Submission flow into E&S is robust, less momentum on property side of E&S, more on casualty. E&S business growing faster than admitted.

Q: View on social inflation and geography?

A: Certain territories/states/counties are more challenging. States changing legal environment quickly are a concern. Georgia and some Texas counties are examples. We consider territory at granular level in underwriting.

Q: View on reinsurance program and catastrophe loss budget?

A: Property cat reinsurance risk-adjusted was down 15%-ish, similar for retro. Can get details from Karen.

Q: View on workers' comp growth and sustainability?

A: Specialty comp space has momentum not going away soon, likely some opportunity in 2025.

Q: View on alternative investments and '25 positioning?

A: Public securities had unrealized gains, private equity had a bump but behind us. Focus on long-term risk-adjusted return, alternative portfolio has lumpy returns but focus on total return remains.