01—Abstract
Summary
Summary of the 8-K filed January 24, 2024. Cited figures are marked; the original filing is the authoritative source.
W.
R. Berkley Corporation furnished an 8-K under Item 2.02 reporting its fourth quarter and full year 2023 results, with the press release dated January 24, 2024 attached as Exhibit 99.1. The company reported fourth-quarter return on equity of 23.6%a and operating return on equity of 23.2%, along with record quarterly and annual pre-tax underwriting income and record net investment income.
Fourth-quarter net income to common stockholders was $397.3 millionb, or $1.47 per diluted share, compared with $382.2 million, or $1.37 per diluted share, a year earlier. For the full year, net income was $1.38 billion, or $5.05 per diluted share, versus $4.94 per diluted share in 2022. Gross premiums written for the full year reached $12.97 billion and net premiums written reached $10.95 billion, up 8.9% and 9.5% respectively.
Net premiums written growth accelerated to 12.0% in the fourth quarter. Net investment income grew 35.1% for the year to a record $1.05 billionc, and operating cash flow rose 14.0% to a record $2.9 billion. The combined GAAP ratio for the full year was 89.7%, compared with 89.3% in 2022, and the company returned $1.0 billion to shareholders in 2023 through share repurchases and dividends.
Book value per share at year-end was $29.06d, up from $25.51. Management described the property and casualty insurance and investment environments as favorable to its business model and said it expects 2024 to be rewarding for shareholders. The filing also includes standard forward-looking statement cautions covering industry cyclicality, catastrophe losses, reserve estimation, investment risk and regulatory developments.
02—Key points
Key Highlights
- Fourth-quarter return on equity of 23.6% and operating return on equity of 23.2%, with record quarterly and annual pre-tax underwriting income and net investment income.
- Full-year 2023 net income to common stockholders of $1.38 billion, or $5.05 per diluted share, versus $4.94 per diluted share in 2022.
- Gross premiums written of $12.97 billion (up 8.9%) and net premiums written of $10.95 billion (up 9.5%) for the full year, both records.
- Net premiums written growth accelerated to 12.0% in the fourth quarter, and average rate increases excluding workers' compensation were approximately 8.0% in the quarter and 8.1% for the year.
- Net investment income grew 35.1% to a record $1.05 billion for 2023; operating cash flow increased 14.0% to a record $2.9 billion.
- Full-year GAAP combined ratio of 89.7%, compared with 89.3% in 2022; book value per share rose to $29.06 from $25.51 at year-end 2022.
- Returned $1.0 billion to shareholders in 2023, consisting of $537.2 million of share repurchases, $390.0 million of special dividends and $111.4 million of regular dividends.
03—Questions
Frequently Asked Questions
How profitable was W. R. Berkley in the fourth quarter and full year of 2023?
Fourth-quarter net income to common stockholders was $397.3 million, or $1.47 per diluted share, with a return on equity of 23.6%. For the full year, net income was $1.38 billion, or $5.05 per diluted share, with a return on equity of 20.5%.
How fast did the company grow its premiums?
Full-year gross premiums written grew 8.9% to $12.97 billion and net premiums written grew 9.5% to $11.0 billion, both records. Net premiums written growth accelerated to 12.0% in the fourth quarter.
How did underwriting results and investment income perform?
The company reported record annual pre-tax underwriting income of $1.1 billion and a full-year GAAP combined ratio of 89.7%. Net investment income grew 35.1% to a record $1.05 billion, driven by the core portfolio and higher reinvestment rates.
How much capital did the company return to shareholders?
In the fourth quarter, the company returned $263.8 million, including $106.7 million of share repurchases, $128.8 million of special dividends and $28.3 million of regular dividends. For the full year 2023, it returned $1.0 billion, including $537.2 million of share repurchases, $390.0 million of special dividends and $111.4 million of regular dividends.
What is management's outlook for 2024?
Management said it views the current property and casualty insurance and investment environments as favorable to its business model and anticipates that 2024 will continue to be rewarding for shareholders. The filing notes that forward-looking statements are subject to risks including cyclicality, catastrophe losses, reserve development and investment risk.
04—Continue