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W.R. Berkley (WRB) Q2 Earnings Top on Solid Underwriting Show
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W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2021 operating income of $1.17 per share beat the Zacks Consensus Estimate by 21.9%. The bottom line increased nearly twenty-fold year over year.
The company benefited from high premiums and investment income as well as lower catastrophe loss and improving combined ratio.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
Operating revenues of nearly $2.2 billion were up 21.4% year over year due to higher net premiums earned and net investment income. The top line surpassed the Zacks Consensus Estimate by 0.2%.
W.R. Berkley’s net premiums written were $2.2 billion, up 27.2% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income increased 96.9% year over year to $168.2 million, driven by solid performance at its alternative investment portfolio.
Total expenses moved up 9% to about $2 billion, primarily on higher losses and loss expenses, expenses from non-insurance businesses and other operating costs and expenses.
Catastrophe loss totaled about $44 million in the quarter, narrower than $145.9 million incurred in the year-ago quarter.
Underwriting income was a record $202.2 million.
Consolidated combined ratio (a measure of underwriting profitability) was 89.7, improving 900 basis points (bps) year over year.
Segmental Details
Net premiums written at the Insurance segment grew 29% year over year to about $2 billion in the quarter, driven by higher premiums at short-tail lines, workers' compensation, commercial automobile, professional liability as well as other liability. Combined ratio improved 780 bps year over year to 89.9
Net premiums written in the Reinsurance & Monoline Excess segment increased 10.8% year over year to about $218 million driven by higher premiums at casualty reinsurance, Monoline excess as well as property reinsurance. Combined ratio improved 1650 bps year over year to 88.6
Financial Update
W.R. Berkley exited the second quarter with total assets worth $30.3 billion, up 6% from the 2020-end figure.
Book value per share increased 4.5% from the level at 2020 end to $37.08 as of Jun 30, 2021.
Cash flow from operations totaled $384.8 million in the quarter, down 9.9% year over year.
In the quarter under review, the company’s return on equity (ROE) of 15% compared favorably with the prior-year quarter’s figure of 4.7%.
Dividend Update
In the second quarter, W.R. Berkley paid out $112 million in dividends, consisting of $89 million of special dividends and $23 million of regular dividends.
Among other insurers that have already reported their second-quarter results, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies’ (TRV - Free Report) and RLI Corp (RLI - Free Report) beat the respective Zacks Consensus Estimate.
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W.R. Berkley (WRB) Q2 Earnings Top on Solid Underwriting Show
W.R. Berkley Corporation’s (WRB - Free Report) second-quarter 2021 operating income of $1.17 per share beat the Zacks Consensus Estimate by 21.9%. The bottom line increased nearly twenty-fold year over year.
The company benefited from high premiums and investment income as well as lower catastrophe loss and improving combined 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
Operating revenues of nearly $2.2 billion were up 21.4% year over year due to higher net premiums earned and net investment income. The top line surpassed the Zacks Consensus Estimate by 0.2%.
W.R. Berkley’s net premiums written were $2.2 billion, up 27.2% year over year. Higher premiums written at both the Insurance and Reinsurance & Monoline Excess segments contributed to this upside.
Net investment income increased 96.9% year over year to $168.2 million, driven by solid performance at its alternative investment portfolio.
Total expenses moved up 9% to about $2 billion, primarily on higher losses and loss expenses, expenses from non-insurance businesses and other operating costs and expenses.
Catastrophe loss totaled about $44 million in the quarter, narrower than $145.9 million incurred in the year-ago quarter.
Underwriting income was a record $202.2 million.
Consolidated combined ratio (a measure of underwriting profitability) was 89.7, improving 900 basis points (bps) year over year.
Segmental Details
Net premiums written at the Insurance segment grew 29% year over year to about $2 billion in the quarter, driven by higher premiums at short-tail lines, workers' compensation, commercial automobile, professional liability as well as other liability. Combined ratio improved 780 bps year over year to 89.9
Net premiums written in the Reinsurance & Monoline Excess segment increased 10.8% year over year to about $218 million driven by higher premiums at casualty reinsurance, Monoline excess as well as property reinsurance. Combined ratio improved 1650 bps year over year to 88.6
Financial Update
W.R. Berkley exited the second quarter with total assets worth $30.3 billion, up 6% from the 2020-end figure.
Book value per share increased 4.5% from the level at 2020 end to $37.08 as of Jun 30, 2021.
Cash flow from operations totaled $384.8 million in the quarter, down 9.9% year over year.
In the quarter under review, the company’s return on equity (ROE) of 15% compared favorably with the prior-year quarter’s figure of 4.7%.
Dividend Update
In the second quarter, W.R. Berkley paid out $112 million in dividends, consisting of $89 million of special dividends and $23 million of regular dividends.
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 Insurers
Among other insurers that have already reported their second-quarter results, the bottom line at The Progressive Corporation (PGR - Free Report) , The Travelers Companies’ (TRV - Free Report) and RLI Corp (RLI - Free Report) beat the respective Zacks Consensus Estimate.