Yahoo Finance W.R. Berkley (WRB) Q4 Earnings Top on Solid Underwriting
W.R. Berkley Corporation’s WRB fourth-quarter 2022 operating income of $1.16 per share beat the Zacks Consensus Estimate of $1.07 by 8.4%. The bottom line improved 12.4% year over year.
The insurer benefited from higher premiums, driven by strong rate increases in nearly all lines of business, exposure growth and an improvement in expense ratio.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
Behind the Headlines
W.R. Berkley’s net premiums written were a record $2.4 billion, up 6.7% year over year, as market conditions remained favorable for most lines of business.
Operating revenues came in at $2.9 billion, up 14.4% year over year, on the back of higher net premiums earned as well as higher net investment income. The top line beat the consensus estimate by 0.6%
Net investment income surged 40.2% to a record $231.3 million. Core net investment income increased 75% year over year, benefiting from higher yields.
Total expenses increased 14% to $2.5 billion, primarily due to higher losses and loss expenses and other operating costs and expenses.
The loss ratio deteriorated 20 basis points (bps) to 60.6, while the expense ratio remained flat year over year at 27.8.
Catastrophe losses of $30.8 million in the quarter narrowed from about $48.5 million incurred in the year-ago quarter.
Pre-tax underwriting income was $291.9 million. The consolidated combined ratio (a measure of underwriting profitability) was 88.4, down 20 bps year over year.
Segment Details
Net premiums written at the Insurance segment increased 7.2% year over year to $2.1 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile, and professional liability. The combined ratio deteriorated 110 bps to 89.2.
Net premiums written in the Reinsurance & Monoline Excess segment increased 2.9% year over year to $280.9 million on higher premiums at casualty reinsurance, property reinsurance and monoline excess. The combined ratio deteriorated 560 bps to 82.8.
Full-Year Highlights
Operating income of $4.38 per share beat the Zacks Consensus Estimate of $4.30. The bottom line improved 28.8% year over year.
Operating revenues came in at $11 billion, up 17.1% year over year on the back of higher net premiums earned as well as higher net investment income. The top line almost came in line with the consensus estimate.
W.R. Berkley’s net premiums written were $10 billion, up 12.9% year over year.
Pre-tax underwriting income was $1 billion. The consolidated combined ratio was 89.3, up 30 bps year over year.
Financial Update
W.R. Berkley exited 2022 with total assets worth $33.9 billion, up 5.5% from year-end 2021. Senior notes and other debt decreased 19.1% from 2021 end to $1.8 billion.
Book value per share increased 1.8% from 2021 end to $25.51 as of Dec 31, 2022.
Cash flow from operations was $2.6 million in 2022, up 17.6% year over year.
Operating return on equity expanded 460 bps to 20.8%.
WRB repurchased shares worth 94.1 million in 2022.
Zacks Rank
W.R. Berkley currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Some Other P&C Insurers
The Travelers Companies, Inc. TRV reported fourth-quarter 2022 core income of $3.40 per share, which matched the Zacks Consensus Estimate. The bottom line decreased 35% year over year. Total revenues increased 7.5% from the year-ago quarter to about $9.6 billion, primarily driven by higher premiums and fee income. The top-line figure beat the Zacks Consensus Estimate by 0.2%.
Net written premiums increased 10% year over year to $8.8 billion. The figure was higher than our estimate of $8.6 billion. Catastrophe losses totaled $459 million pre-tax, wider than $36 million pre-tax in the prior-year quarter. Travelers witnessed an underwriting gain of $449 million, down 51.5% year over year. The combined ratio deteriorated 650 bps year over year to 94.5.
The Progressive Corporation’s PGR fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion. The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 bps from the prior-year quarter’s level to 93.9.
RLI Corp. RLI reported fourth-quarter 2022 operating earnings of $1.53 per share, beating the Zacks Consensus Estimate by 41.7%. The bottom line improved 26.4% from the prior-year quarter. Operating revenues for the reported quarter were $329.5 million, up 19.4% year over year. The top line beat the Zacks Consensus Estimate by 0.4%.
Gross premiums written increased 14% year over year to $383.8 million. Underwriting income of $54 million increased 8.7%, primarily due to higher profitability at its Property segment. The combined ratio deteriorated 140 bps year over year to 82.1.
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