Property and casualty insurer
W.R. Berkley Corp.
) reported third-quarter core operating earnings of 77 cents per
share, 5 cents ahead of the Zacks Consensus Estimate. Earnings
were also up by 26.2% year over year.
W.R. Berkley's earnings beat came on the back of higher
premium written, pricing gains and a lower share count.
On a GAAP basis, W.R. Berkley's net income increased 36.6%
year over year to 97 cents per share.
Revenue in the quarter, came in at $1.63 billion, up 15.0%
year over year. The year-over-year increase was attributable to
higher premiums earned, higher income from wholly owned investees
and increased investment income.
W.R. Berkley's net written premium for the quarter was
approximately $1.42 billion, an increase of 11.6% year over year.
The company saw broad-based growth with each of its operating
segments reporting higher premium.
W.R. Berkley's total expenses also increased 11.6% year over
year to $1.44 billion, due to an increase in loss and loss
expenses, other operating cost and expenses from wholly-owned
investees partly offset by lower interest expenses.
Consolidated combined ratio improved 190 basis points year
over year to 93.9%.
Net premiums written in W.R. Berkley's Domestic Insurance
segment increased 10.7% year over year to $1.05 billion. Combined
ratio improved 220 basis points to 92.5% in the quarter.
Net premiums written in the International Insurance segment
climbed 18.2% year over year to $166.1 million. Combined ratio
improved 170 basis points year-over-year to 97.4%.
The Global Reinsurance segment reported a 10.9% increase in
net premiums written to $203.1 million in the quarter. Combined
ratio improved 80 basis points year-over-year to 97.5%.
W.R. Berkley's return on equity increased to 12.7% from 10.2%
in the year ago quarter.
Book value per share as of Sep 30, 2013 increased to $32.32
from $31.66 as of Dec 31, 2012.
During the reported quarter, W.R. Berkley repurchased 194,838
shares at an aggregate cost of $8 million.
W.R. Berkley has been reporting ahead of the expectations for
the past several quarters. The company has maintained its trend
of beating earnings estimates in the reported quarter as well. We
expect the trend to continue going forward.
The company has positioned itself well to take advantage of
hardening in the insurance market by forming several new units
over the past few years. Premiums written for its core business
have increased and the new units are accruing to earnings.
Average renewal rates are on the rise and so is the price
W.R. Berkley's balance sheet, which is adequately capitalized,
is another major company's strength. The company has maintained
its practice of increasing yearly dividends. In our view, the
company is well poised to return value to its shareholders over
the long term.
W.R. Berkley retains a Zacks Rank #3 (Hold).
The Chubb Corp.
), with a Zacks Rank #1 (Strong Buy), is slated to release their
third-quarter earnings on Oct 23, also
) with Zacks Rank #2 (Buy) will release its results on the
same day. Another player
Everest Re Group Ltd.
) with Zacks Rank #2 (Buy) is scheduled to report its
third-quarter earnings on Oct 24.
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