Form 8-K - Current report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 24, 2024


Commission File Number			1-15202

W. R. BERKLEY CORPORATION
(Exact name of registrant as specified in its charter)

Delaware

22-1867895

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

475 Steamboat Road

Greenwich

Connecticut

06830

(Address of principal executive offices)

(Zip Code)


(203)			629-3000

(Registrant’s telephone number, including area code)


			None
Former name, former address and former fiscal year, if changed since last report.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of Each Class

Trading Symbol

Name of Each Exchange
on Which Registered

Common Stock, par value $.20 per share

WRB

New York Stock Exchange

5.700% Subordinated Debentures due 2058

WRB-PE

New York Stock Exchange

5.100% Subordinated Debentures due 2059

WRB-PF

New York Stock Exchange

4.250% Subordinated Debentures due 2060

WRB-PG

New York Stock Exchange

4.125% Subordinated Debentures due 2061

WRB-PH

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐

W. R. Berkley Corporation 2

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

W. R. Berkley Corporation 3

Item 2.02 Results of Operations and Financial Condition.

Reference is made to the press release of W. R. Berkley Corporation (the “Company”) relating to the announcement of the Company’s results of operations for the fourth quarter of 2023. The press release was issued on January 24, 2024. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

W. R. Berkley Corporation 4

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release dated January 24, 2024

W. R. Berkley Corporation 5

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

W. R. BERKLEY CORPORATION


By:	/s/ Richard M. Baio
	Name:	Richard M. Baio
	Title:	Executive Vice President -
		Chief Financial Officer

Date: January 24, 2024

W. R. Berkley Corporation 6

EXHIBIT INDEX

Exhibit:

99.1 Press Release dated January 24, 2024


						NEWS RELEASE
W. R. Berkley Corporation 475 Steamboat Road Greenwich, Connecticut 06830 (203) 629-3000

FOR IMMEDIATE RELEASE CONTACT: Karen A. Horvath

Vice President - External

Financial Communications

(203) 629-3000

W. R. Berkley Corporation Reports Fourth Quarter and Full Year 2023 Results

Fourth Quarter Return on Equity of 23.6% and Operating Return on Equity of 23.2%;

Record Quarterly and Annual Pre-Tax Underwriting Income and Net Investment Income

Greenwich, CT, January 24, 2024 - W. R. Berkley Corporation (NYSE: WRB) today reported its fourth quarter and full year 2023 results.

Summary Financial Data

(Amounts in thousands, except per share data)


	Fourth Quarter						Twelve Months
	2023			2022			2023			2022

Gross premiums written	$	3,232,710		$	2,914,877		$	12,972,006		$	11,909,052
Net premiums written	2,719,668			2,427,907			10,954,467			10,004,070

Net income to common stockholders	397,340			382,223			1,381,359			1,381,062
Net income per diluted share	1.47			1.37			5.05			4.94

Operating income (1)	391,753			323,329			1,344,567			1,223,934
Operating income per diluted share	1.45			1.16			4.92			4.38

Return on equity (2)	23.6		%	23.0		%	20.5		%	20.8		%
Operating return on equity (1) (2)	23.2		%	19.4		%	19.9		%	18.4		%

(1)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains and related expenses.

(2)Return on equity and operating return on equity represent net income and operating income, respectively, expressed on an annualized basis as a percentage of beginning of year common stockholders’ equity.

W. R. Berkley Corporation 2

Fourth quarter highlights included:

•Return on equity of 23.6%.

•Book value per share grew 11.6%, before dividends and share repurchases.

•Record net investment income of $313.3 million driven by 52.9% increase in the core portfolio.

•Net premiums written growth increased to 12.0%.

•The current accident year combined ratio before catastrophe losses of 1.2 loss ratio points was 87.2%.

•The reported combined ratio was 88.4%, including current accident year catastrophe losses of $32.0 million.

•Record pre-tax underwriting income grew 8.2% to $315.9 million.

•Average rate increases excluding workers' compensation were approximately 8.0%.

•Total capital returned to shareholders was $263.8 million, consisting of $106.7 million of share repurchases, $128.8 million of special dividends and $28.3 million of regular dividends.

Full year highlights included:

•Return on equity of 20.5%.

•Book value per share grew 25.5%, before dividends and share repurchases.

•Record annual pre-tax underwriting income of $1.1 billion.

•Gross and net premiums written grew 8.9% and 9.5% to records of $13.0 billion and $11.0 billion, respectively.

•Average rate increases excluding workers' compensation were approximately 8.1%.

•Net investment income grew 35.1% to a record $1.1 billion.

•Operating cash flow increased 14.0% to a record of $2.9 billion.

•Total capital returned to shareholders was $1.0 billion, consisting of $537.2 million of share repurchases, $390.0 million of special dividends and $111.4 million of regular dividends.

The Company commented:

Our Company completed another record-setting year in 2023, achieving a 23.6% annualized return on beginning equity in the fourth quarter. Our quarter and full year results were characterized by growth in net premiums written, along with record underwriting performance and net investment income. Book value per share grew 11.6% during the fourth quarter, before the return of $264 million of capital to shareholders through special and ordinary dividends and share repurchases.

Growth in net premiums written accelerated to 12% in the fourth quarter, as we deployed capital in areas of the business that we expect to achieve or exceed our targeted risk-adjusted return on equity. In a market where lines of business increasingly move independently from each other, our decentralized structure provides us with a competitive advantage that allows us to better navigate risks and embrace opportunities.

Net investment income from our fixed-maturity portfolio increased more than 50% during the quarter and 60% for the year as our portfolio grew and we (re)invested at higher interest rates. The current rates at which we can reinvest remains higher than our annual book yield, and record operating cash flow positions us well for future investment income growth.

Our Company performed exceptionally well during 2023, and we anticipate 2024 will continue to be rewarding for our shareholders. We view the current property and casualty insurance and investment environments as favorable to our business model. We are confident that we will continue to deliver superior long-term risk-adjusted returns and increase value to shareholders in 2024 and beyond.

W. R. Berkley Corporation 3

Webcast Conference Call

The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on January 24, 2024, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/events-and-presentations/default.aspx. Please log on early to register. A replay of the webcast will be available on the Company's website approximately two hours after the end of the conference call. Additional financial information can be found on the Company's website at https://ir.berkley.com/investor-relations/financial-information/quarterly-results/default.aspx.

About W. R. Berkley Corporation

Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty business: Insurance and Reinsurance & Monoline Excess.

W. R. Berkley Corporation 4

Forward Looking Information

This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2024 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition, including new entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts, including claims for cyber security-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities; the ongoing effects of the COVID-19 pandemic, or other epidemics and pandemics; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response to such conditions, on our results and financial condition; foreign currency and political risks relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; cyber security breaches of our information technology systems and the information technology systems of our vendors and other third parties, or related processes and systems; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause our actual results for the year 2024 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

# # #

W. R. Berkley Corporation 5

Consolidated Financial Summary

(Amounts in thousands, except per share data)




	Fourth Quarter				Twelve Months
	2023		2022		2023		2022
Revenues:
Net premiums written	$	2,719,668	$	2,427,907	$	10,954,467	$	10,004,070
Change in unearned premiums	(5,054)		85,317		(553,780)		(442,641)
Net premiums earned	2,714,614		2,513,224		10,400,687		9,561,429
Net investment income	313,341		231,283		1,052,835		779,185
Net investment gains:
Net realized and unrealized (losses) gains on investments	(2,862)		77,647		47,540		217,311
Change in allowance for credit losses on investments	10,666		(2,549)		(498)		(14,914)
Net investment gains	7,804		75,098		47,042		202,397
Revenues from non-insurance businesses	160,283		164,338		535,508		509,548
Insurance service fees	25,194		28,260		106,485		110,544
Other Income	146		1,599		381		3,396

Total Revenues	3,221,382		3,013,802		12,142,938		11,166,499
Expenses:
Loss and loss expenses	1,627,540		1,522,104		6,372,142		5,861,750




Other operating costs and expenses	906,011		822,248		3,363,936		2,961,505
Expenses from non-insurance businesses	154,754		159,127		524,998		493,189
Interest expense	31,879		31,902		127,459		130,374
Total expenses	2,720,184		2,535,381		10,388,535		9,446,818
Income before income tax	501,198		478,421		1,754,403		1,719,681
Income tax expense	(102,234)		(96,437)		(370,557)		(334,727)



Net Income before noncontrolling interests	398,964		381,984		1,383,846		1,384,954

Noncontrolling interest	(1,624)		239		(2,487)		(3,892)
Net income to common stockholders	$	397,340	$	382,223	$	1,381,359	$	1,381,062


Net income per share:
Basic	$	1.48	$	1.38	$	5.10	$	4.99
Diluted	$	1.47	$	1.37	$	5.05	$	4.94

Average shares outstanding (1):
Basic	269,053		276,625		271,000		276,852
Diluted	271,015		278,888		273,298		279,461

(1)Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.

W. R. Berkley Corporation 6

Business Segment Operating Results

(Amounts in thousands, except ratios) (1)


	Fourth Quarter						Twelve Months
	2023			2022			2023			2022
Insurance:
Gross premiums written	$	2,902,010		$	2,607,497		$	11,561,138		$	10,583,785
Net premiums written	2,410,348			2,147,121			9,657,121			8,784,146
Net premiums earned	2,382,621			2,207,057			9,130,324			8,369,062
Pre-tax income	486,697			403,473			1,640,438			1,455,658
Loss ratio	60.8		%	61.4		%	62.3		%	61.3		%
Expense ratio	28.6		%	27.8		%	28.4		%	27.9		%
GAAP Combined ratio	89.4		%	89.2		%	90.7		%	89.2		%

Reinsurance & Monoline Excess:
Gross premiums written	$	330,700		$	307,380		$	1,410,868		$	1,325,267
Net premiums written	309,320			280,786			1,297,346			1,219,924
Net premiums earned	331,993			306,167			1,270,363			1,192,367
Pre-tax income	125,474			107,161			438,765			316,527
Loss ratio	53.8		%	54.2		%	53.8		%	61.3		%
Expense ratio	27.4		%	28.6		%	28.3		%	28.4		%
GAAP Combined ratio	81.2		%	82.8		%	82.1		%	89.7		%

Corporate and Eliminations:
Net investment gains	$	7,804		$	75,098		$	47,042		$	202,397
Interest expense	(31,879)			(31,902)			(127,459)			(130,374)
Other expenses	(86,898)			(75,409)			(244,383)			(124,527)
Pre-tax loss	(110,973)			(32,213)			(324,800)			(52,504)

Consolidated:
Gross premiums written	$	3,232,710		$	2,914,877		$	12,972,006		$	11,909,052
Net premiums written	2,719,668			2,427,907			10,954,467			10,004,070
Net premiums earned	2,714,614			2,513,224			10,400,687			9,561,429
Pre-tax income	501,198			478,421			1,754,403			1,719,681
Loss ratio	60.0		%	60.6		%	61.3		%	61.3		%
Expense ratio	28.4		%	27.8		%	28.4		%	28.0		%
GAAP Combined ratio	88.4		%	88.4		%	89.7		%	89.3		%

(1)Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.

W. R. Berkley Corporation 7

Supplemental Information

(Amounts in thousands)


	Fourth Quarter				Twelve Months
	2023		2022		2023		2022
Net premiums written:
Other liability	$	971,611	$	838,516	$	3,840,908	$	3,408,254
Short-tail lines (1)	527,074		431,528		2,099,684		1,749,926
Auto	351,934		308,746		1,397,585		1,257,659
Workers' compensation	290,203		281,070		1,228,058		1,221,804
Professional liability	269,526		287,261		1,090,886		1,146,503
Total Insurance	2,410,348		2,147,121		9,657,121		8,784,146



Casualty reinsurance	197,059		201,851		769,161		785,631
Property reinsurance	76,975		49,137		280,060		211,772
Monoline excess	35,286		29,798		248,125		222,521
Total Reinsurance & Monoline Excess	309,320		280,786		1,297,346		1,219,924
Total	$	2,719,668	$	2,427,907	$	10,954,467	$	10,004,070

Current accident year losses from catastrophes (including COVID-19 related losses):
Insurance	$	20,488	$	24,592	$	159,897	$	126,393
Reinsurance & Monoline Excess	11,529		6,253		35,065		85,317
Total	$	32,017	$	30,845	$	194,962	$	211,710

Net Investment income:
Core portfolio (2)	$	285,841	$	186,897	$	966,723	$	588,873
Investment funds	11,300		23,180		16,743		145,099
Arbitrage trading account	16,200		21,206		69,369		45,213
Total	$	313,341	$	231,283	$	1,052,835	$	779,185

Net realized and unrealized (losses) gains on investments:
Net realized (losses) gains on investments	$	(27,705)	$	(10,422)	$	(22,908)	$	217,943
Change in unrealized gains (losses) on equity securities	24,843		88,069		70,448		(632)
Total	$	(2,862)	$	77,647	$	47,540	$	217,311

Other operating costs and expenses:
Policy acquisition and insurance operating expenses	$	771,170	$	699,227	$	2,954,686	$	2,673,903
Insurance service expenses	21,379		25,071		91,714		96,419
Net foreign currency losses (gains)	33,577		34,130		31,799		(50,930)

Other costs and expenses	79,885		63,820		285,737		242,113
Total	$	906,011	$	822,248	$	3,363,936	$	2,961,505

Cash flow from operations	$	698,076	$	795,301	$	2,929,238	$	2,568,604

Reconciliation of net income to operating income:
Net income	$	397,340	$	382,223	$	1,381,359	$	1,381,062
Pre-tax investment gains, net of related expenses	(7,804)		(75,098)		(47,042)		(199,087)
Income tax expense	2,217		16,204		10,250		41,959
Operating income after-tax (3)	$	391,753	$	323,329	$	1,344,567	$	1,223,934

(1)Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.

(2)Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.

(3)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.

W. R. Berkley Corporation 8

Selected Balance Sheet Information

(Amounts in thousands, except per share data)


	December 31, 2023		December 31, 2022








Net invested assets (1)	$	26,973,703	$	24,545,672





Total assets	37,202,015		33,861,099
Reserves for losses and loss expenses	18,739,652		17,011,223
Senior notes and other debt	1,827,951		1,828,823
Subordinated debentures	1,009,090		1,008,371
Common stockholders' equity (2)	7,455,431		6,748,332
Common stock outstanding (3)	256,545		264,546
Book value per share (4)	29.06		25.51
Tangible book value per share (4)	28.08		24.58

(1)Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities.

(2)As of December 31, 2023, reflected in common stockholders' equity are after-tax unrealized investment losses of $586 million and unrealized currency translation losses of $340 million. As of December 31, 2022, after-tax unrealized investment losses were $893 million and unrealized currency translation losses were $372 million.

(3)During the twelve months ended December 31, 2023, the Company repurchased 8,707,676 shares of its common stock for $537.2 million. During the three months ended December 31, 2023, the Company repurchased 1,560,701 shares of its common stock for $106.7 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.

(4)Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding.

W. R. Berkley Corporation 9

Investment Portfolio

December 31, 2023

(Amounts in thousands, except percentages)



	Carrying Value		Percent of Total
Fixed maturity securities:
United States government and government agencies	$	1,716,731	6.4	%
State and municipal:
Special revenue	1,606,195		6.0	%
State general obligation	432,078		1.6	%
Local general obligation	387,336		1.4	%
Corporate backed	154,839		0.6	%
Pre-refunded	104,478		0.4	%
Total state and municipal	2,684,926		10.0	%
Mortgage-backed securities:
Agency	1,429,956		5.3	%
Commercial	644,313		2.4	%
Residential - Prime	192,193		0.7	%
Residential - Alt A	2,861		0.0	%
Total mortgage-backed securities	2,269,323		8.4	%
Asset-backed securities	4,187,040		15.5	%
Corporate:
Industrial	3,559,555		13.2	%
Financial	2,779,234		10.3	%
Utilities	684,924		2.5	%
Other	630,346		2.3	%
Total corporate	7,654,059		28.3	%
Foreign government	1,666,229		6.2	%
Total fixed maturity securities (1)	20,178,308		74.8	%
Equity securities available for sale:
Common stocks	838,054		3.1	%
Preferred stocks	252,293		0.9	%
Total equity securities available for sale	1,090,347		4.0	%

Cash and cash equivalents (2)	1,694,199		6.3	%
Investment funds	1,621,655		6.0	%
Real estate	1,249,874		4.6	%
Arbitrage trading account	938,049		3.5	%
Loans receivable	201,271		0.8	%
Net invested assets	$	26,973,703	100.0	%

(1)Total fixed maturity securities had an average rating of AA- and an average duration of 2.4 years, including cash and cash equivalents.

(2)Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchase.

Cover Page	Jan. 24, 2024
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Jan. 24, 2024
Entity File Number	1-15202
Entity Registrant Name	W. R. BERKLEY CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	22-1867895
Entity Address, Address Line One	475 Steamboat Road
Entity Address, City or Town	Greenwich
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06830
City Area Code	(203)
Local Phone Number	629-3000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.20 per share
Trading Symbol	WRB
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000011544
Amendment Flag	false
5.700% Subordinated Debentures due 2058
Entity Information [Line Items]
Title of 12(b) Security	5.700% Subordinated Debentures due 2058
Trading Symbol	WRB-PE
Security Exchange Name	NYSE
5.100% Subordinated Debentures due 2059
Entity Information [Line Items]
Title of 12(b) Security	5.100% Subordinated Debentures due 2059
Trading Symbol	WRB-PF
Security Exchange Name	NYSE
4.250% Subordinated Debentures due 2060
Entity Information [Line Items]
Title of 12(b) Security	4.250% Subordinated Debentures due 2060
Trading Symbol	WRB-PG
Security Exchange Name	NYSE
4.125% Subordinated Debentures due 2061
Entity Information [Line Items]
Title of 12(b) Security	4.125% Subordinated Debentures due 2061
Trading Symbol	WRB-PH
Security Exchange Name	NYSE