Back to top

Analyst Blog

After witnessing high cataclysmic conditions for the first two quarters of the year, property and casualty insurer W. R. Berkley Corporation ((WRB - Analyst Report)) announced that it expects pre-tax catastrophe losses, as a result of hurricane Irene and a slew of other catastrophes, in the range of $50 to $60 million for the third quarter 2011.

During the second quarter, adverse weather dented Berkley’s earnings by $63 million, which was also more than double of cat losses of $30 million incurred in the preceding quarter. 

Other property and casualty insurers who suffered from bad weather during the third quarter include Assurant Inc. ((AIZ - Analyst Report)), which has forecasted a pre-tax cat loss of $80 million to $85 million, and The Chubb Corp. ([url=]CB[/url]), which sees a significantly high catastrophe loss of $400 million to $475 million pre-tax.

According to the Insurance Information Institute property and casualty industry turned in a weak performance in the first half of the year, as profitability suffered amid high cat losses. In the third quarter, hurricane Irene along with other catastrophes is estimated to have caused insured losses of $3 billion to $4 billion to the industry.

Year-to-date weather related losses for the industry are expected to trend above $25 billion up $14.1 billion compared with the direct insured losses caused by catastrophes striking the United States in first-half 2010 and about three times the $7.7 billion average for first-half catastrophe losses during the past ten years.

Berkley will expectedly relate all the details on catastrophe losses in its third quarter earnings report, which is scheduled to be released on October 26, 2011, after market-close. The Zacks Consensus estimates Berkley’s third quarter earnings at 57 cents per share, which would translate into an expected earnings growth of 11.33% year over year.

Despite cat losses in the second quarter, Berkley’s results were positive, coming ahead of the Zacks Consensus estimate on the back of higher net premium written, coupled with high net investment income.

However, our outlook for the third quarter remains cautious given continued high cat losses, soft property and casualty market conditions and uncertainty in the investment markets. Berkley currently carries an Underperform recommendation. We may revisit our recommendation after the third quarter earnings release.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%