W.R. Berkley Corporation’s WRB fourth-quarter 2021 operating income of $1.53 per share beat the Zacks Consensus Estimate of $1.21 by 26.5%. The bottom-line improved 66.3% year over year.
The insurer benefited from higher premiums driven by strong rate increases in nearly all lines of business and exposure growth, and reduction in the 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 $2.3 billion, up 26.6% year over year, primarily driven by strong rate increases in nearly all lines of business and exposure growth.
Operating revenues came in at $2.6 billion, up 19.4% year over year, on the back of higher net premiums earned. The top line beat the consensus estimate by 9.2%
Investment income decreased 8.8% year over year to $165 million.
Total expenses increased 16.2% to $2.2 billion, primarily due to higher losses and loss expenses, other operating costs and expenses, interest expense and expenses from non-insurance businesses.
Catastrophe losses of $48.5 million in the quarter widened from $42.4 million incurred in the year-ago quarter.
Underwriting income was a record $260.9 million. The consolidated combined ratio (a measure of underwriting profitability) was 88.2, improving 270 basis points (bps) year over year.
Segment Details
Net premiums written at the Insurance segment increased 25.8% year over year to $2 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 improved 480 bps to 88.1
Net premiums written in the Reinsurance & Monoline Excess segment increased 33% year over year to $273 million on higher premiums at casualty reinsurance, property reinsurance and monoline excess. The combined ratio deteriorated 1060 bps to 88.4.
Full-Year Highlights
Operating income of $5.10 per share beat the Zacks Consensus Estimate of $4.78. The bottom line more than doubled year over year.
Operating revenues came in at $9.4 billion, up 14.3% year over year and beat the consensus estimate of $8.8 billion.
The consolidated combined ratio was 89.6, improving 530 bps year over year.
Financial Update
W.R. Berkley exited 2021 with total assets worth $32.1 billion, up 12.2% from year-end 2020. Debt increased 19.9% to $3.3 billion at 2021 end.
Book value per share increased 6% from 2020 end to $37.63 as of Dec 31, 2021.
Cash flow from operations was $2.2 billion in 2021, up 35.1% year over year.
Return on equity in 2021 expanded 750 bps to 16.2%.
W.R. Berkley returned $478.1 million in capital to shareholders in 2021, including $265.3 million of special dividends, $90.4 million of regular dividends and $122.4 million of share repurchases.
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
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies TRV, RenaissanceRe Holdings Ltd. RNR and The Progressive Corporation PGR beat the Zacks Consensus Estimate for earnings.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.
Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from a year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.
RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.
Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.
Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.
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