W. R. Berkley Corporation Q4 FY2025 earnings call

Gratitude

• Expressed gratitude to approximately 7,600 employees for their efforts in delivering a great outcome in 2025.

Macro Observations

• The world is changing rapidly, and the insurance industry struggles to keep up. Technology, particularly AI, is a key driver of change. Distribution is evolving with customers seeking convenience and self-serve models.

Marketplace Comments

• Auto liability remains a challenge with no bottom seen yet; large account property in a feeding frenzy, especially in London/Lloyd's; property reinsurance rate decrease (19% risk-adjusted rate decrease) indicates market challenges; casualty market has opportunities in smaller excess/umbrella and E&S, while medical stop loss is attractive.

Financial Results

• Record quarterly operating earnings of $450 million or $1.13 per share, growing 9.5% over prior year. Pretax underwriting income was $338 million. Strong operating cash flows of nearly $1 billion for the quarter and $3.6 billion for the full year. Invested assets grew 11.4% in 2025 to $33.2 billion.

The Insurance segment had a current accident year loss ratio ex cat improved to 6.6%, remaining relatively flat to full year 2024 and 2025 results. The Reinsurance & Monoline Excess segment had a loss ratio of 53.9%, resulting in a strong current accident year combined ratio ex cat of 83%. Net premiums written were $15.1 billion, net premiums earned $12.7 billion. Underwriting income was $1.2 billion, net investment income was $1.4 billion, operating income was $1.7 billion, and net income was $1.8 billion.

• Expense ratio expected to be comfortably below 30% in 2026 barring meaningful market change.
• Insurance and excess lines likely to have better growth in 2026 than Q4 2025.
• Continues to manage capital thoughtfully and look to return excess capital to shareholders.

• Auto liability market remains challenging with no bottom seen soon.
• Competitive property cat market spilling over into casualty lines.
• Regulatory concerns in certain lines like homeowners, including excess profit discussions in New York.
• Volatility in workers' comp market, especially in California.

Q: In terms of premium growth, how is it translating into growth with expectation '26 is better than Q4 '25?

A: W. Berkley thinks insurance and excess lines likely better than Q4, reinsurance marketplace may repeat history but is disciplined.

Q: On expense ratio, size of nonrecurring benefit for commission-related accruals?

A: Richard Baio says about 30 basis points impact on the expense ratio.

Q: Your comments on workers' comp, any update on California and medical inflation?

A: Medical costs and claims activity in workers' comp have been artificially suppressed, growth in Q4 was primarily exposure based.

Q: On technology investments, how does AI apply across 50+ operating units?

A: W. Berkley states they can aggregate and use data across businesses despite having many operating units.