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Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ☐ ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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| ☒ | | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | | Smaller reporting company | |
| | | Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements
of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant
to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No ☒
The aggregate market value of the registrant's common stock held by non-affiliates as of June 30, 2024, the last business day of the registrant’s most recently completed second fiscal quarter, was $.
Number of shares of common stock, $.20 par value, outstanding as of February 13, 2025:
DOCUMENTS INCORPORATED BY REFERENCE
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| PART I | |
| ITEM | 1. | | |
| ITEM | 1A. | | |
| ITEM | 1B. | | |
| ITEM | 1C. | | |
| ITEM | 2. | | |
| ITEM | 3. | | |
| ITEM | 4. | | |
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| PART II |
| ITEM | 5. | | |
| ITEM | 6. | RESERVED | |
| ITEM | 7. | | |
| ITEM | 7A. | | |
| ITEM | 8. | | |
| ITEM | 9. | | |
| ITEM | 9A. | | |
| ITEM | 9B. | | |
| ITEM | 9C. | | |
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| PART III | |
| ITEM | 10. | | |
| ITEM | 11. | | |
| ITEM | 12. | | |
| ITEM | 13. | | |
| ITEM | 14. | | |
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| PART IV | |
| ITEM | 15. | | |
| ITEM | 16. | | |
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| EX-19.1 | | | |
| EX-21 | | | |
| EX-23 | | | |
| EX-31.1 | | | |
| EX-31.2 | | | |
| EX-32.1 | | | |
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| EX-101 | | INSTANCE DOCUMENT | |
| EX-101 | | SCHEMA DOCUMENT | |
| EX-101 | | CALCULATION LINKBASE DOCUMENT | |
| EX-101 | | LABELS LINKBASE DOCUMENT | |
| EX-101 | | PRESENTATION LINKBASE DOCUMENT | |
| EX-101 | | DEFINITION LINKBASE DOCUMENT | |
SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report including statements related to our outlook for the industry and for our performance for the year 2025 and beyond, are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to:
•the cyclical nature of the property casualty industry;
•the impact of significant competition, including new entrants to the industry;
•the long-tail and potentially volatile nature of the insurance and reinsurance business;
•product demand and pricing;
•claims development and the process of estimating reserves;
•investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy-related and private equity investments;
•the effects of emerging claim and coverage issues;
•the uncertain nature of damage theories and loss amounts, including claims for cyber security-related risks;
•natural and man-made catastrophic losses, including as a result of terrorist activities;
•the impact of climate change, which may alter the frequency and increase the severity of catastrophe events;
•general economic and market activities, including inflation, interest rates and volatility in the credit and capital markets;
•the impact of conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response to it, on our results and financial condition;
•cyber security breaches of our information technology systems and the information technology systems of our vendors and other third parties;
•the use of artificial intelligence technologies by us or third-parties on which we rely could expose us to technological, security, legal, and other risks;
•the risk of future pandemics, as well as continuing effects of the COVID-19 pandemic;
•foreign currency and political risks relating to our international operations;
•our ability to attract and retain key personnel and qualified employees;
•continued availability of capital and financing;
•the success of our new ventures or acquisitions and the availability of other opportunities;
•the availability of reinsurance;
•our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019 ("TRIPRA");
•the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us;
•other legislative and regulatory developments, including those related to business practices in the insurance industry;
•credit risk relating to our policyholders, independent agents and brokers;
•changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies;
•the availability of dividends from our insurance company subsidiaries;
•the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and
•other risks detailed in this Form 10-K and from time to time in our other filings with the Securities and Exchange Commission (“SEC”).
We describe these risks and uncertainties in greater detail in Item 1A, Risk Factors. These risks and uncertainties could cause our actual results for the year 2025 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Our future financial performance is dependent upon factors discussed elsewhere in this Form 10-K and our other SEC filings. Forward-looking statements speak only as of the date on which they are made.
PART I
ITEM 1. BUSINESS
W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty insurance business:
•Insurance - Our Insurance businesses underwrite predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom.
•Reinsurance & Monoline Excess - Our Reinsurance businesses provide facultative and treaty reinsurance in the United States, the Asia Pacific region, Australia, Continental Europe, South Africa and the United Kingdom, as well as operations that solely retain risk on an excess basis and certain program management business.
Our two reporting segments are each composed of individual businesses that serve a market defined by geography, products, services or industry served. Each of our businesses is positioned close to its customer base and participates in a niche market requiring specialized knowledge. This strategy of decentralized operations allows each of our businesses to identify and respond quickly and effectively to changing market conditions and specific customer needs, while capitalizing on the benefits of centralized capital, investment and reinsurance management, and corporate actuarial, financial, enterprise risk management and compliance support.
Our business approach is focused on meeting the needs of our customers, maintaining a high quality balance sheet, and allocating capital to our best opportunities. New businesses are started when opportunities are identified and when the right talent and expertise are found to lead a business. Of our 58 businesses, 51 have been organized and developed internally and seven have been added through acquisition.
Net premiums written, as reported based on United States generally accepted accounting principles (“GAAP”), for each of our reporting segments for each of the past three years were as follows:
| | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| (In thousands) | 2024 | | 2023 | | 2022 | | | |
| Net premiums written: | | | | | | | | |
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| Insurance | $ | 10,549,550 | | | $ | 9,560,533 | | | $ | 8,609,028 | | | | |
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| Reinsurance & Monoline Excess | 1,422,546 | | | 1,393,934 | | | 1,395,042 | | | | |
| Total | $ | 11,972,096 | | | $ | 10,954,467 | | | $ | 10,004,070 | | | | |
| | | | | | | | |
| Percentage of net premiums written: | | | | | | | | |
| Insurance | 88.1 | % | | 87.3 | % | | 86.1 | % | | | |
| Reinsurance & Monoline Excess | 11.9 | | | 12.7 | | | 13.9 | | | | |
| Total | 100.0 | % | | 100.0 | % | | 100.0 | % | | | |
Thirty-three of our insurance company subsidiaries are rated by A.M. Best Company, Inc. ("A.M. Best") and have financial strength ratings of A+ (Superior) (the second highest rating out of 15 possible ratings). A.M. Best's ratings are based upon factors of concern to policyholders, insurance agents and brokers and are not directed toward the protection of investors. A.M. Best states: “A Best's Financial Strength Rating (FSR) is an independent opinion of an insurer's financial strength and ability to meet its ongoing insurance policy and contract obligations. An FSR is not assigned to specific insurance policies or contracts and does not address any other risk.” A.M. Best reviews its ratings on a periodic basis, and its ratings of the Company's subsidiaries are therefore subject to change.
Our twenty-three insurance company subsidiaries rated by Standard & Poor's (“S&P”) have financial strength ratings of A+ (the fifth highest rating out of twenty-seven possible ratings).
Our Moody's financial strength ratings are A1 for Berkley Insurance Company, Berkley Regional Insurance Company and Admiral Insurance Company (the fifth highest rating out of twenty-one possible ratings).
Our twenty-five insurance company subsidiaries rated by Fitch Ratings ("Fitch") have insurer financial strength ratings of AA- (the fourth highest rating out of twenty-seven possible ratings).
The following sections describe our reporting segments and their businesses in greater detail. These businesses underwrite on behalf of one or more affiliated insurance companies within the group. The businesses are identified for descriptive purposes only and are not legal entities, but for marketing purposes may sometimes be referred to individually as "a Berkley company" or collectively as "Berkley companies." Unless otherwise indicated, all references in this Form 10-K to “Berkley,” “we,” “us,” “our,” the “Company” or similar terms refer to W. R. Berkley Corporation together with its subsidiaries and businesses. W. R. Berkley Corporation is a Delaware corporation formed in 1970.
Insurance
Our Insurance businesses underwrite predominantly commercial and specialty personal lines insurance business primarily throughout the United States. Many units offer coverage globally, while others specialize in specific international markets. The Insurance businesses focus on the following general areas:
Excess & Surplus Lines: A number of our businesses are dedicated to the U.S. excess and surplus lines market. They serve a diverse group of customers that often have complex risk or unique exposures that typically fall outside the underwriting guidelines of the standard insurance market. Lines of business underwritten by our excess and surplus lines businesses include premises operations, auto, property, products liability, general liability and professional liability lines. Products are generally distributed through wholesale agents and brokers.
Industry Specialty: Certain other businesses focus on providing specialty coverages to customers within a particular industry that are best served by underwriters and claims professionals with specialized knowledge of that industry. They offer multiple lines of business with policies tailored to address the unique exposures of these industries, often with the flexibility of providing coverages on either an admitted or a non-admitted basis in the U.S., as well as internationally. Each business delivers its products through one or more distribution channels, including retail and wholesale agents, brokers, and managing general agents (MGAs), depending on the customer and the particular risks insured.
Product Specialty: Other businesses specialize in providing specific lines of insurance coverage, such as workers’ compensation or professional liability, to a wide range of customers. They offer insurance products, analytical tools and risk management services such as loss control and claims management that enable clients to manage their risk appropriately. Business is typically written on an admitted basis, although some businesses may offer non-admitted products in the U.S. and offer products internationally. Independent agents and brokers are the primary means of distribution.
Regional: Certain businesses offer standard insurance products and services focused on meeting the specific needs of a geographically differentiated customer base. Key clients are small-to-midsized businesses. These regionally focused businesses provide a broad array of commercial insurance products to customers primarily in 45 states and the District of Columbia and have developed expertise in niches that reflect local economies. They are organized geographically in order to provide them with the flexibility to adapt quickly to local market conditions and customer needs.
In addition, through our non-U.S. insurance businesses, we have the capability to write business in 87 countries worldwide, with branches or offices in 40 cities outside the United States, in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom. In each geographic region in which we operate, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our businesses are managed by teams of professionals with expertise in local markets and knowledge of regional environments.
In addition to providing insurance products, certain businesses also provide a wide variety of fee-based services, including claims, administrative and consulting services.
Businesses comprising the Insurance segment are as follows:
Acadia Insurance is a Northeast regional property casualty underwriter offering a broad portfolio of products exclusively through local independent agents in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. In addition to its general offerings, Acadia has specialized expertise in insuring regional industries such as construction, service contractors, lumber, and transportation.
Admiral Insurance provides excess and surplus lines coverage for commercial risks that generally consist of hard-to- place, specialized risks that involve moderate to high degrees of hazard. In both general liability and professional lines, Admiral has a broad line of products to meet the needs of existing as well as emerging opportunities. The distribution of products is limited solely to wholesale brokers.
Berkley Accident and Health underwrites accident and health insurance and reinsurance products in four primary areas: medical stop loss, managed care, special risk and group captive. It has a diversified product and service portfolio serving a range of clients from small employers, health care organizations, and membership groups to Fortune 500 companies.
Berkley Agribusiness offers insurance for larger commercial risks across the United States involved in the supply, storage, handling, processing and distribution of commodities related to the agriculture and food industries.
Berkley Alliance Managers offers tailored insurance coverages and comprehensive risk management solutions designed to enhance profitability and reduce susceptibility to loss in four target markets - Design Professionals, Construction Professionals, Accounting Professionals and miscellaneous non-medical Service Professionals.
Berkley Aspire provides excess and surplus lines coverage on a national basis to small to medium-sized insureds with low to moderate insurance risk. Its product lines include general liability, excess liability and some property and inland marine coverage. It serves a limited distribution channel, including select agents.
Berkley Asset Protection provides specialized insurance coverages for fine arts and jewelry exposures to commercial and individual clients.
Berkley Canada underwrites specialty, casualty and surety lines of business on behalf of the Canadian branch of Berkley Insurance Company. It specializes in commercial casualty and professional liability, and offers a broad portfolio of risk products that include commercial general liability, umbrella, professional liability, directors and officers, commercial property and surety, in addition to niche products for specific industries such as technology, life sciences and travel.
Berkley Construction Solutions provides excess liability coverage to residential and commercial contractors on a project or practice basis.
Berkley Custom Insurance focuses on the excess casualty insurance market and offers umbrella and excess liability coverages to clients from the small/middle market to Fortune 1000 companies in target classes of business including construction, manufacturing, retail/wholesale trade, finance, real estate, public entities and oil & gas.
Berkley Cyber Risk Solutions focuses on insurance and risk management products that respond to the changing cyber security vulnerabilities of organizations around the world. It offers specialty commercial cyber insurance coverages on a worldwide basis to clients of all sizes.
Berkley Enterprise Risk Solutions provides custom workers' compensation programs to large employers operating in a broad range of industries. Loss sensitive and/or guaranteed cost programs are offered to employers with exposure predominately in California.
Berkley Entertainment underwrites property casualty insurance products, both on an admitted and non-admitted basis, for clients in the entertainment industry and sports-related organizations.
Berkley Environmental underwrites casualty and specialty environmental products for environmental customers including contractors, consultants, property owners and facilities operators.
Berkley Financial Specialists serves the insurance needs of companies predominantly in the financial services sector. Its Berkley Crime division provides crime and fidelity related insurance products for commercial organizations, financial sector businesses and governmental entities on a primary and excess basis. Its Financial Services segment provides management liability and fidelity products to financial institutions, insurance companies and asset management firms.
Berkley Fire & Marine offers a broad range of preferred inland marine and related property risks and services to customers throughout the United States. Products are distributed through independent agents and brokers.
Berkley Healthcare underwrites customized, comprehensive insurance solutions for the full spectrum of healthcare providers. Through Berkley Healthcare Medical Professional, it offers a wide range of medical professional coverages. Through Berkley Healthcare Financial Lines, it offers a comprehensive suite of financial lines coverages.
Berkley Human Services provides property casualty insurance coverages to human services organizations, including nonprofit and for-profit organizations. Its product offerings include traditional primary and excess coverages.
Berkley Industrial Comp specializes in writing workers' compensation insurance for diverse high hazard industries in select states. Its products are distributed by a select group of independent retail agents and wholesale brokers.
Berkley Insurance Asia underwrites specialty commercial insurance coverages to clients in North Asia and Southeast Asia through offices in Hong Kong, India, Shanghai and Singapore.
Berkley Insurance Australia underwrites general insurance business in Australia, including professional indemnity insurance for companies of all sizes.
Berkley Latinoamérica provides property, casualty, auto, surety, group life and workers' compensation products and services in Argentina, Brazil, the Caribbean, Colombia, Mexico and Uruguay.
Berkley Life Sciences offers a comprehensive spectrum of property casualty products to the life sciences industry on a global basis, including both primary and excess product liability coverages. It serves pharmaceutical and biotech companies, medical device companies, dietary supplement companies, medical and research related software developers, contract research and manufacturing organizations, research institutions and organizations, and other related businesses.
Berkley Luxury Group provides both admitted and non-admitted commercial package insurance solutions for premium real estate business including high-end cooperatives and condominiums, office buildings and upscale restaurants across major metropolitan markets throughout the continental U.S. It also offers non-admitted excess property coverage for high-value properties on a shared and layered basis across the U.S.
Berkley Management Protection offers a modular suite of management liability products for small and middle market companies through a bespoke and easy to use platform tailored to independent agents. The management liability coverages they provide include directors and officers, employment practices, fiduciary, cyber, crime and miscellaneous professional liability.
Berkley Mid-Atlantic Group provides commercial property casualty coverages to a wide variety of businesses in Delaware, the District of Columbia, Maryland, Ohio, Pennsylvania, and Virginia. Focusing on small and middle market accounts, it complements its standard writings with specialized products in areas such as construction.
Berkley Net Underwriters focuses on small and medium-sized commercial risks, using a web-based system to allow producers to quote, bind and service workers' compensation insurance products on behalf of Berkley member insurance companies.
Berkley North Pacific offers preferred insurance products and services to a broad range of small to medium size commercial entities. It operates through independent agents in Idaho, Montana, Oregon, Utah and Washington.
Berkley Offshore Underwriting Managers is a specialist global underwriter of energy and marine risks. Its three divisions provide specialty insurance products in the energy upstream, energy liability and marine sectors.
Berkley Oil & Gas provides property casualty products and risk services to the United States energy sector. Its customer base includes risks that work in the oil patch, including operators, drillers, geophysical contractors, well-servicing contractors, and manufacturers/distributors of oil field products, as well as those in the renewable energy sector.
Berkley One provides a customizable suite of personal lines insurance solutions including home, condo/co-op, auto, fine art and collectibles, liability, collector vehicle and recreational marine. Berkley One targets high net worth individuals and families with sophisticated risk management needs.
Berkley Product Protection offers a broad product suite, including product liability and product recall and contamination, to assist clients in the manufacturing, wholesale and import space with their risk management and insurance needs.
Berkley Professional Liability specializes in professional liability insurance for publicly-traded and private entities on a worldwide basis. Its liability coverages include directors and officers, errors and omissions, fiduciary, employment practices, and sponsored insurance agents' errors and omissions. Berkley Transactional, a division of Berkley Professional Liability, underwrites a full suite of transactional insurance products, including representations and warranties insurance, and tax opinion insurance.
Berkley Public Entity specializes in providing excess coverage and services to individual governmental and scholastic entities and intergovernmental risk sharing groups. Products include general liability, auto liability, law enforcement liability, public officials and educator's legal liability, employment practices liability, incidental medical, property and crime.
Berkley Risk provides at-risk and alternative risk insurance program management services for a broad range of groups and individuals including public entity pools, professional associations, and self-insured clients. As a third party administrator, it manages workers’ compensation, liability and property claims nationwide.
Berkley Select specializes in underwriting professional liability insurance for law firms and accounting firms, as well as other professional firms and their practices. It also offers executive liability products, including directors and officers liability, employment practices and fiduciary liability, to small to middle market privately held and not-for-profit customers. Berkley Select provides these insurance products on both an admitted and surplus lines basis.
Berkley Small Business Solutions offers commercial insurance products for small businesses through a modern technology platform that leverages data and analytics. Its initial product offering focuses on preferred risks in the non-fleet transportation market.
Berkley Southeast offers a wide array of commercial lines products in six southeastern states: Alabama, Georgia, Mississippi, North Carolina, South Carolina and Tennessee, specializing in small to mid-sized accounts.
Berkley Southwest offers preferred commercial property and casualty insurance products and services to a wide range of small to medium size commercial entities with a focus on the construction, farm/ranch, retail and service industries. It operates through independent agents in Arizona, Arkansas, New Mexico, Oklahoma and Texas.
Berkley Specialty Excess provides excess and surplus lines coverages for hard-to-place risks involved in moderate to high degrees of hazard. It focuses on highly specialized risk exposures within specific industry verticals such as the environmental and energy industries. Its predominate focus is on providing excess insurance; however, in some cases it provides highly specialized environmental primary products tailored to the individual risk. Products are distributed through a minimal number of insurance brokers and agents that specialize in these industry verticals.
Berkley Surety provides a full spectrum of surety bonds for construction, environmental and commercial surety accounts in the U.S. and Canada, through an independent agency and broker platform across seven field locations.
Berkley Technology Underwriters provides technology error & omission (TE&O) and first party cyber coverage along with traditional package, umbrella and worker's compensation products. TE&O and cyber products provide industry specialization for both domestic and foreign technology, government contracting, telecommunications, digital media, manufacturing and private equity firms.
Carolina Casualty is a national provider of primary commercial insurance products and services to the transportation industry. It underwrites on an admitted basis in all 50 states and the District of Columbia. Its Berkley Prime Transportation business provides primary auto liability, auto physical damage and general liability to a broad array of trucking operations.
Continental Western Group is a Midwest regional property and casualty insurance operation providing underwriting and risk management services to a broad array of regional businesses in thirteen Midwest states. In addition to its generalist portfolio, Continental Western offers specialty underwriting solutions for diversified agriculture, construction, light manufacturing, transportation, volunteer fire departments, rural utilities and public entities.
Gemini Transportation is a national provider of excess liability insurance for various domestic surface transportation businesses, including the railroad industry as well as the trucking, busing and other industries that use rubber-wheeled vehicles for over-the-road use.
Intrepid Direct provides commercial insurance coverages through a direct distribution model focused on the franchise market, with specialties including the restaurant, garage and fitness industries.
Key Risk specializes in writing workers' compensation insurance for diverse industries including healthcare, human services, transportation, temporary staffing, professional employer organizations and contractors requiring coverage under the United States Longshore and Harbor Workers' Compensation Act (USL&H). Its products are distributed by a select group of independent retail agents and wholesale brokers located throughout the United States.
Nautilus Insurance Group insures excess and surplus lines risks for small to medium-sized commercial risks with low to moderate susceptibility to loss. It writes commercial excess and surplus lines business nationwide and admitted lines commercial business in a limited number of states. A substantial portion of Nautilus' business is written through its close, long-standing network of general agents, who are chosen on a highly selective basis.
Preferred Employers Insurance focuses exclusively on workers' compensation products and services for businesses based in California. It serves a broad spectrum of industries throughout the state.
Vela Insurance Services specializes in commercial casualty insurance on an excess and surplus lines basis. Its primary focus is on general liability insurance for construction, manufacturing and general casualty clients as well as products liability and miscellaneous professional liability coverages distributed through wholesale insurance brokers.
Verus Specialty Insurance offers tailored casualty, professional liability, and garage coverages, specializing in the excess and surplus lines market. It primarily serves the construction, manufacturing, garage service and professional sectors through a selective wholesale broker network.
W R B Europe is comprised of specialist businesses offering a focused range of insurance products to markets in Continental Europe.
W / R / B Underwriting provides a broad range of insurance products to the Lloyd's marketplace, with a concentration in specialist classes of business including property, professional indemnity and financial lines.
The following table sets forth the percentage of gross premiums written by each Insurance business: | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| Acadia Insurance | 5.4% | | 5.4% | | 5.3% | | | |
| Admiral Insurance | 7.3 | | 7.0 | | 6.3 | | | |
| Berkley Accident and Health | 5.9 | | 5.4 | | 5.2 | | | |
| Berkley Agribusiness | 0.6 | | 0.8 | | 0.8 | | | |
| Berkley Alliance Managers | 2.3 | | 2.4 | | 2.8 | | | |
| Berkley Aspire | 1.3 | | 1.2 | | 1.0 | | | |
| Berkley Asset Protection | 0.9 | | 0.9 | | 1.0 | | | |
| Berkley Canada | 1.0 | | 1.0 | | 1.2 | | | |
| Berkley Construction Solutions | 0.7 | | 0.6 | | 0.4 | | | |
| Berkley Custom Insurance | 2.9 | | 2.9 | | 3.2 | | | |
| Berkley Cyber Risk Solutions | 0.7 | | 0.8 | | 0.9 | | | |
| | | | | | | | |
| Berkley Enterprise Risk Solutions | 0.2 | | 0.1 | | — | | | |
| Berkley Entertainment | 1.6 | | 1.7 | | 1.9 | | | |
| Berkley Environmental | 7.3 | | 6.7 | | 5.7 | | | |
| Berkley Financial Specialists | 0.6 | | 0.6 | | 0.6 | | | |
| Berkley Fire & Marine | 0.8 | | 0.9 | | 0.8 | | | |
| Berkley Healthcare | 1.2 | | 1.5 | | 1.8 | | | |
| Berkley Human Services | 1.4 | | 1.3 | | 1.1 | | | |
| Berkley Industrial Comp | 0.8 | | 0.7 | | 0.7 | | | |
| Berkley Insurance Asia | 0.7 | | 0.8 | | 0.8 | | | |
| Berkley Insurance Australia | 1.4 | | 1.6 | | 1.7 | | | |
| Berkley Latinoamérica | 3.3 | | 3.2 | | 3.0 | | | |
| Berkley Life Sciences | 0.5 | | 0.5 | | 0.5 | | | |
| Berkley Luxury Group | 0.7 | | 0.7 | | 0.8 | | | |
| Berkley Management Protection | 0.3 | | 0.2 | | 0.1 | | | |
| Berkley Mid-Atlantic Group | 0.7 | | 0.9 | | 1.0 | | | |
| Berkley Net Underwriters | 1.9 | | 2.0 | | 2.3 | | | |
| Berkley North Pacific | 0.8 | | 0.7 | | 0.7 | | | |
| Berkley Offshore Underwriting Managers | 1.4 | | 1.5 | | 1.5 | | | |
| Berkley Oil & Gas | 1.8 | | 3.0 | | 3.5 | | | |
| Berkley One | 3.7 | | 2.6 | | 1.8 | | | |
| Berkley Product Protection | 0.4 | | 0.3 | | 0.3 | | | |
| Berkley Professional Liability | 2.7 | | 3.8 | | 5.9 | | | |
| Berkley Public Entity | 0.6 | | 0.7 | | 0.7 | | | |
| Berkley Risk | 0.3 | | 0.3 | | 0.3 | | | |
| Berkley Select | 1.8 | | 1.9 | | 1.8 | | | |
| Berkley Small Business Solutions | 0.3 | | 0.2 | | — | | | |
| Berkley Southeast | 2.2 | | 2.3 | | 2.2 | | | |
| Berkley Southwest | 1.1 | | 1.3 | | 1.5 | | | |
| Berkley Specialty Excess | 0.6 | | 0.2 | | — | | | |
| Berkley Surety | 1.1 | | 1.1 | | 1.1 | | | |
| Berkley Technology Underwriters | 0.6 | | 0.6 | | 0.6 | | | |
| Carolina Casualty | 2.0 | | 2.2 | | 2.1 | | | |
| Continental Western Group | 2.8 | | 2.6 | | 2.4 | | | |
| Gemini Transportation | 2.8 | | 3.0 | | 3.1 | | | |
| Intrepid Direct | 1.4 | | 1.5 | | 1.2 | | | |
| Key Risk | 1.9 | | 2.1 | | 2.2 | | | |
| Nautilus Insurance Group | 5.2 | | 4.8 | | 4.8 | | | |
| Preferred Employers Insurance | 0.9 | | 1.0 | | 1.3 | | | |
| Vela Insurance Services | 2.5 | | 2.7 | | 2.6 | | | |
| Verus Specialty Insurance | 1.1 | | 1.0 | | 0.8 | | | |
| W R B Europe | 1.2 | | 1.1 | | 1.1 | | | |
| W/R/B Underwriting | 4.1 | | 3.9 | | 3.7 | | | |
| Other | 2.3 | | 1.8 | | 1.9 | | | |
| Total | 100.0% | | 100.0% | | 100.0% | | | |
The following table sets forth percentages of gross premiums written, by line, by our Insurance operations:
| | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2024 | | 2023 | | 2022 | | | |
| Other liability | 39.0% | | 38.7% | | 37.5% | | | |
| Short-tail lines (1) | 26.1 | | 24.7 | | 22.8 | | | |
| Auto | 12.9 | | 12.7 | | 12.0 | | | |
| Professional liability | 12.0 | | 13.1 | | 15.8 | | | |
| Workers' compensation | 10.0 | | 10.8 | | 11.9 | | | |
| Total | 100.0% | | 100.0% | | 100.0% | | | |
___________________
(1)Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
Reinsurance & Monoline Excess
We provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance as well as certain program management businesses. Our monoline excess operations solely retain risk on an excess basis.
Businesses comprising the Reinsurance & Monoline Excess segment are as follows:
Berkley Integrated Solutions offers specialized solutions to clients through facultative reinsurance, turnkey offerings and program management through the following units: Berkley Re Solutions offers casualty facultative reinsurance products including automatic, semi-automatic and individual risk assumed to clients on a direct basis through a nationwide network of regional offices. It also provides its customers with turnkey products such as cyber, employment practices liability insurance, liquor liability insurance and violent events coverage to help enhance its clients' product offerings, along with underwriting, claims, and actuarial consultation services. Berkley Program Specialists is a program management business offering both admitted and non-admitted insurance support on a nationwide basis for commercial casualty and property program administrators with specialized insurance expertise.
Berkley Re America provides treaty and facultative reinsurance solutions on a variety of product lines through reinsurance brokers to companies whose primary operations are within the United States and Canada.
Berkley Re Asia Pacific provides property and casualty reinsurance to the Asia Pacific marketplace. With offices in Brisbane, Sydney, Beijing and Singapore, each branch focuses on excess of loss reinsurance, targeting both property and casualty treaty and facultative contracts, through multiple distribution channels.
Berkley Re UK writes international property casualty treaty and property facultative accounts. Its territorial scope includes reinsured clients domiciled in the United Kingdom, Europe, Africa, the Middle East and the Caribbean.
Lloyd's Syndicate 2791 Participation represents the Company's minority participation in a Lloyd's syndicate that writes a broad range of mainly short-tail classes of business.
Midwest Employers Casualty offers tailored excess workers' compensation insurance coverage nationwide, as well as customized captive insurance coverage to U.S. domiciled and offshore captives. It distributes its products through retail and wholesale agencies.
The following table sets forth the percentages of gross premiums written by each Reinsurance & Monoline Excess business:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| Berkley Integrated Solutions | 14.1% | | 16.2% | | 22.5% | | | |
| Berkley Re America | 34.4 | | 31.5 | | 30.9 | | | |
| Berkley Re Asia Pacific | 13.8 | | 14.9 | | 13.7 | | | |
| Berkley Re UK | 9.9 | | 10.6 | | 11.3 | | | |
| Lloyd's Syndicate 2791 Participation | 8.6 | | 8.8 | | 5.4 | | | |
| Midwest Employers Casualty | 19.2 | | 18.0 | | 16.2 | | | |
| | | | | | | | |
| Total | 100.0% | | 100.0% | | 100.0% | | | |
The following table sets forth the percentages of gross premiums written, by line, by our Reinsurance & Monoline Excess operations:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| Casualty | 49.1% | | 54.1% | | 61.1% | | | |
| Property | 31.6 | | 27.9 | | 22.7 | | | |
| Monoline Excess | 19.3 | | 18.0 | | 16.2 | | | |
| Total | 100.0% | | 100.0% | | 100.0% | | | |
Results by Segment
Summary financial information about our segments is presented on a GAAP basis in the following table:
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
(In thousands) | 2024 | | 2023 | | 2022 | |
| Insurance | | | | | | |
| Revenue | $ | 11,181,501 | | | $ | 9,827,866 | | | $ | 8,749,019 | | |
| Income before income taxes | 1,942,083 | | | 1,629,918 | | | 1,445,745 | | |
| Reinsurance & Monoline Excess | | | | | | |
| Revenue | 1,696,905 | | | 1,615,277 | | | 1,590,113 | | |
| Income before income taxes | 466,595 | | | 449,285 | | | 326,440 | | |
| Other (1) | | | | | | |
| Revenue | 760,346 | | | 699,795 | | | 827,367 | | |
| Loss before income taxes | (144,185) | | | (324,800) | | | (52,504) | | |
| Total | | | | | | |
| Revenue | $ | 13,638,752 | | | $ | 12,142,938 | | | $ | 11,166,499 | | |
| Income before income taxes | $ | 2,264,493 | | | $ | 1,754,403 | | | $ | 1,719,681 | | |
_______________________________________
(1)Represents corporate revenues and expenses, net investment gains and losses, and revenues and expenses from non-insurance businesses that are consolidated for financial reporting purposes.
The table below represents summary underwriting ratios on a GAAP basis for our segments. Loss ratio is losses and loss expenses incurred expressed as a percentage of net premiums earned. Expense ratio is policy acquisition and insurance operating expenses expressed as a percentage of net premiums earned. Policy acquisition and insurance operating expenses do not include expenses related to insurance services or unallocated corporate expenses. Combined ratio is the sum of the loss ratio and the expense ratio. The combined ratio represents a measure of underwriting profitability, excluding investment income. A number in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| Insurance | | | | | | | | |
| Loss ratio | 62.8 | % | | 62.3 | % | | 61.4 | % | | | |
| Expense ratio | 28.4 | | | 28.3 | | | 27.7 | | | | |
| Combined ratio | 91.2 | % | | 90.6 | % | | 89.1 | % | | | |
| Reinsurance & Monoline Excess | | | | | | | | |
| Loss ratio | 54.7 | % | | 54.3 | % | | 61.0 | % | | | |
| Expense ratio | 29.4 | | | 29.4 | | | 29.2 | | | | |
| Combined ratio | 84.1 | % | | 83.7 | % | | 90.2 | % | | | |
| Total | | | | | | | | |
| Loss ratio | 61.8 | % | | 61.3 | % | | 61.3 | % | | | |
| Expense ratio | 28.5 | | | 28.4 | | | 28.0 | | | | |
| Combined ratio | 90.3 | % | | 89.7 | % | | 89.3 | % | | | |
Investments
Investment results, before income taxes, were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands) | 2024 | | 2023 | | 2022 | | | |
| Average investments, at cost (1) | $ | 28,942,819 | | | $ | 26,444,111 | | | $ | 24,438,112 | | | | |
| Net investment income (1) | $ | 1,333,161 | | | $ | 1,052,835 | | | $ | 779,185 | | | | |
| Percent earned on average investments (1) | 4.6 | % | | 3.9 | % | | 3.2 | % | | | |
| Net investment gains | $ | 117,708 | | | $ | 47,042 | | | $ | 202,397 | | | | |
| Change in unrealized investment gains (losses) (2) | $ | 84,474 | | | $ | 392,903 | | | $ | (1,248,128) | | | | |
_______________________________________
(1)Includes investments, cash and cash equivalents, trading accounts receivable (payable) from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
(2)Represents the pre-tax change in unrealized investment gains (losses) for available for sale securities recognized in stockholders' equity.
For comparison, the following are the coupon returns for the Barclays U.S. Aggregate Bond Index and the dividend returns for the S&P 500® Index:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| Barclays U.S. Aggregate Bond Index | 3.4 | % | | 3.3 | % | | 2.7 | % | | | |
S&P 500® Index | 1.7 | | | 2.0 | | | 1.3 | | | | |
The percentages of the fixed maturity portfolio categorized by contractual maturity, based on fair value, on the dates indicated, are set forth below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay certain obligations.
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2024 | | 2023 | | 2022 | | | |
| 1 year or less | 7.7% | | 9.2% | | 8.7% | | | |
| Over 1 year through 5 years | 40.5 | | 46.2 | | 47.2 | | | |
| Over 5 years through 10 years | 17.4 | | 21.2 | | 23.4 | | | |
| Over 10 years | 17.6 | | 12.2 | | 11.2 | | | |
| Mortgage-backed securities | 16.8 | | 11.2 | | 9.5 | | | |
| Total | 100.0% | | 100.0% | | 100.0% | | | |
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| 3,557,695 | |
(1)S&P rating, or if not rated by S&P, A.M. Best rating.
(2)Secured by letters of credit or other forms of collateral.
(3)Many states require licensed insurers that provide workers' compensation insurance to participate in programs that provide workers' compensation to employers that cannot procure coverage from an insurer on a voluntary basis. Insurers can fulfill this residual market obligation by participating in pools where results are shared by the participating companies. The Company acts as a servicing carrier for workers' compensation pools in certain states. As a servicing carrier, the Company writes residual market business directly and then cedes 100% of this business to the respective pool. As a servicing carrier, the Company receives fee income for its services. The Company does not retain underwriting risk, and credit risk is limited as ceded balances are jointly shared by all the pool members.
Off-Balance Sheet Arrangements
An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that engages in leasing, hedging or research and development arrangements with the Company. The Company has no arrangements of these types that management believes may have a material current or future effect on our financial condition, liquidity or results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest rates. The Company uses various models and stress test scenarios to monitor and manage interest rate risk. The Company attempts to manage its interest rate risk by maintaining an appropriate relationship between the effective duration of the investment portfolio and the average number of years held for its liabilities (i.e., policy claims and debt obligations). The effective duration for the fixed maturity portfolio (including cash and cash equivalents) was 2.6 years and 2.4 years at December 31, 2024 and 2023, respectively.
In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.
The following table outlines the groups of fixed maturity securities and their effective duration at December 31, 2024:
| | | | | | | | | | | |
| Effective | | |
| Duration | | |
| ($ in thousands) | (Years) | | Fair Value |
|
| Mortgage-backed securities | 4.3 | | $ | 3,767,851 | |
| U.S. government and government agencies | 3.7 | | 2,235,341 | |
| State and municipal | 2.7 | | 2,338,256 | |
| Foreign government | 2.7 | | 1,755,325 | |
| Corporate | 2.6 | | 8,417,641 | |
| Loans receivable | 2.4 | | 405,248 | |
| Asset-backed securities | 1.4 | | 3,885,012 | |
| Cash and cash equivalents | 0.0 | | 1,404,931 | |
| Total | 2.6 | | $ | 24,209,605 | |
Duration is a common measure of the price sensitivity of fixed maturity securities to changes in interest rates. The Company determines the estimated change in fair value of the fixed maturity securities, assuming parallel shifts in the yield curve for treasury securities while keeping spreads between individual securities and treasury securities static. The estimated fair value at specified levels at December 31, 2024 would be as follows:
| | | | | | | | | | | |
| (In thousands) | Estimated Fair Value | | Change in Fair Value |
| Change in interest rates: |
| 300 basis point rise | $ | 22,258,604 | | | $ | (1,951,001) | |
| 200 basis point rise | 22,898,254 | | | (1,311,351) | |
| 100 basis point rise | 23,555,609 | | | (653,996) | |
| Base scenario | 24,209,605 | | | — | |
| 100 basis point decline | 24,827,143 | | | 617,538 | |
| 200 basis point decline | 25,393,892 | | | 1,184,287 | |
| 300 basis point decline | 25,928,699 | | | 1,719,094 | |
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Arbitrage investing differs from other types of investments in that its focus is on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company believes that this makes arbitrage investments less vulnerable to changes in general stock market conditions. Potential changes in market conditions are also mitigated by the implementation of hedging strategies, including short sales.
Additionally, the arbitrage positions are generally hedged against market declines by purchasing put options, selling call options or entering into swap contracts. The Company's merger arbitrage securities are primarily exposed to the risk of completion of announced deals, which are subject to regulatory as well as transactional and other risks.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
W. R. Berkley Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of W. R. Berkley Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2024, and the related notes and financial statement schedules II to VI (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 24, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Reserves for losses and loss expenses
As discussed in Notes 1 and 13 to the consolidated financial statements, the Company estimates the reserves for losses and loss expenses (reserves) using a variety of actuarial techniques and methods. The key assumptions used to arrive at the best estimate of recorded reserves are expected loss ratios, rate of loss cost inflation, reported and paid loss emergence patterns, loss frequency and severity, and the loss reporting lag. Such amounts are adjusted for certain qualitative factors. The reserves as of December 31, 2024 were $20.4 billion.
We identified the assessment of the estimate of reserves as a critical audit matter because it involved significant measurement uncertainty, which required complex auditor judgement. Specialized actuarial skills and knowledge were required to evaluate the actuarial method or methods and assumptions used. Assumptions included loss development
factors; the weighting of actuarial methods when more than one was used; the impact of qualitative factors; and whether payments are fixed and reliably determinable for certain reserves subject to discounting.
The following are the primary procedures we performed to address the critical audit matter. With the assistance of actuarial professionals, when appropriate, we evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s reserving process. This included controls over the Company’s process to develop the Company’s best estimate of reserves based on actuarial methodologies and assumptions employed by the Company’s actuaries. We involved actuarial professionals with specialized skills and knowledge, who assisted in:
•examining the Company’s actuarial methodologies for compliance with Actuarial Standards of Practice
•evaluating the Company’s ability to discount certain reserves by comparing the expected payout pattern of claims paid to actual claims paid
•evaluating the Company’s actuarial point estimate by performing independent actuarial analyses for certain of the larger, more complex businesses
•evaluating the Company’s actuarial point estimate by examining the Company actuaries’ process, and key assumptions for certain of the remaining businesses
•developing an independent range of reserves based on actuarial methodologies and assumptions and comparing to the Company’s recorded reserves
•evaluating the Company’s recorded reserves and year-over-year movements of the Company’s reserves relative to, and within, the independently developed range of reserves.
/S/
We have served as the Company’s auditor since 1972.
February 24, 2025
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands, except per share data) | 2024 | | 2023 | | 2022 |
| REVENUES: | | | | | |
| Net premiums written | $ | | | | $ | | | | $ | | |
| Change in net unearned premiums | () | | | () | | | () | |
| Net premiums earned | | | | | | | | |
| Net investment income | | | | | | | | |
| Net investment gains: | | | | | |
| Net realized and unrealized gains on investments | | | | | | | | |
| Change in allowance for expected credit losses on investments | | | | () | | | () | |
| Net investment gains | | | | | | | | |
| Revenues from non-insurance businesses | | | | | | | | |
| Insurance service fees | | | | | | | | |
| Other income | | | | | | | | |
| Total revenues | | | | | | | | |
| OPERATING COSTS AND EXPENSES: | | | | | |
| Losses and loss expenses | | | | | | | | |
| Other operating costs and expenses | | | | | | | | |
| Expenses from non-insurance businesses | | | | | | | | |
| Interest expense | | | | | | | | |
| Total operating costs and expenses | | | | | | | | |
| Income before income taxes | | | | | | | | |
| Income tax expense | () | | | () | | | () | |
| Net income before noncontrolling interests | | | | | | | | |
| Noncontrolling interests | | | | () | | | () | |
| Net income to common stockholders | $ | | | | $ | | | | $ | | |
| NET INCOME PER SHARE: | | | | | |
| Basic | $ | | | | $ | | | | $ | | |
| Diluted | $ | | | | $ | | | | $ | | |
See accompanying notes to consolidated financial statements.
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands) | 2024 | | 2023 | | 2022 |
| Net income before noncontrolling interests | $ | | | | $ | | | | $ | | |
| Other comprehensive (loss) gain: | | | | | |
| Change in unrealized translation adjustments | () | | | | | | | |
| Change in unrealized investment gains (losses), net of taxes | | | | | | | () | |
| | |
| Other comprehensive (loss) gain | () | | | | | | () | |
| Comprehensive income | | | | | | | | |
| Noncontrolling interests | | | | () | | | () | |
| Comprehensive income to common stockholders | $ | | | | $ | | | | $ | | |
See accompanying notes to consolidated financial statements.
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | |
| | December 31, |
| (In thousands, except share data) | 2024 | | 2023 |
| Assets | | | |
| Investments: | | | |
Fixed maturity securities (amortized cost of $ and $; allowance for expected credit losses of $ and $ at December 31, 2024 and 2023) | $ | | | | $ | | |
| Investment funds | | | | | |
Real estate | | | | | |
| Arbitrage trading account | | | | | |
| Equity securities | | | | | |
Loans receivable (net of allowance for expected credit losses of $ and $ at December 31, 2024 and 2023) | | | | | |
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| Total investments | | | | | |
| Cash and cash equivalents | | | | | |
Premiums and fees receivable (net of allowance for expected credit losses of $ and $ at December 31, 2024 and 2023) | | | | | |
Due from reinsurers (net of allowance for expected credit losses of $ and $ at December 31, 2024 and 2023) | | | | | |
| Deferred policy acquisition costs | | | | | |
| Prepaid reinsurance premiums | | | | | |
| Trading account receivable from brokers and clearing organizations | | | | | |
| Property, furniture and equipment | | | | | |
| Goodwill | | | | | |
| Accrued investment income | | | | | |
| Current federal and foreign income taxes | | | | | |
| Deferred federal and foreign income taxes | | | | | |
| Other assets | | | | | |
| Total assets | $ | | | | $ | | |
| Liabilities and Equity | | | |
| Liabilities: | | | |
| Reserves for losses and loss expenses | $ | | | | $ | | |
| Unearned premiums | | | | | |
| Due to reinsurers | | | | | |
| Trading account securities sold but not yet purchased | | | | | |
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| | | | $ | | | | $ | | |
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)| () | | | $ | () | | | $ | | |
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)))) | | () | | | () | |
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| | | | | | |
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)) | | () | | | | |
) | | | | $ | | | | $ | | |
See accompanying notes to consolidated financial statements.
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (In thousands) | 2024 | | 2023 | | 2022 |
| CASH FROM OPERATING ACTIVITIES: | | | | | |
| Net income to common stockholders | $ | | | | $ | | | | $ | | |
| Adjustments to reconcile net income to net cash from operating activities: | | | | | |
| Net investment gains | () | | | () | | | () | |
| Depreciation and (accretion) amortization | () | | | () | | | | |
| Noncontrolling interests | () | | | | | | | |
| Investment funds | | | | () | | | () | |
| Stock incentive plans | | | | | | | | |
| Change in: | | | | | |
| Arbitrage trading account | | | | () | | | () | |
| Premiums and fees receivable | () | | | () | | | () | |
| Reinsurance accounts | () | | | () | | | () | |
| Deferred policy acquisition costs | () | | | () | | | () | |
| Current income taxes | () | | | | | | () | |
| Deferred income taxes | | | | () | | | () | |
| Reserves for losses and loss expenses | | | | | | | | |
| Unearned premiums | | | | | | | | |
| Other | | | | | | | | |
| Net cash from operating activities | | | | | | | | |
| CASH FLOWS USED IN INVESTING ACTIVITIES: | | | | | |
| Proceeds from sale of fixed maturity securities | | | | | | | | |
| Proceeds from sale of equity securities | | | | | | | | |
| Distributions from (contributions to) investment funds | | | | () | | | | |
| Proceeds from maturities and prepayments of fixed maturity securities | | | | | | | | |
| Purchase of fixed maturity securities | () | | | () | | | () | |
| Purchase of equity securities | () | | | () | | | () | |
| Real estate purchased | () | | | () | | | () | |
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| Change in loans receivable | () | | | () | | | () | |
| Net additions to property, furniture and equipment | () | | | () | | | () | |
| Change in balances due from security brokers | | | | () | | | | |
| Cash received in connection with business disposition | | | | | | | | |
| Payment for business purchased, net of cash acquired | | | | () | | | () | |
| Net cash used in investing activities | () | | | () | | | () | |
| CASH FLOWS USED IN FINANCING ACTIVITIES: | | | | | |
| Net proceeds from issuance of debt | | | | | | | | |
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| | $ | () | | | $ | | | | $ | | | | $ | | | | $ | | | | Residential mortgage-backed | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| Total held to maturity | | | | () | | | | | | | | | | | | | |
| Available for sale: | | | | | | | | | | | |
| U.S. government and government agency | | | | | | | | | | () | | | | | | | |
| State and municipal: | | | | | | | | | | | |
| Special revenue | | | | | | | | | | () | | | | | | | |
| State general obligation | | | | | | | | | | () | | | | | | | |
| Pre-refunded | | | | | | | | | | () | | | | | | | |
| Corporate backed | | | | () | | | | | | () | | | | | | | |
| Local general obligation | | | | | | | | | | () | | | | | | | |
| Total state and municipal | | | | () | | | | | | () | | | | | | | |
| Mortgage-backed securities: | | | | | | | | | | | |
| Residential | | | | | | | | | | () | | | | | | | |
| Commercial | | | | () | | | | | | () | | | | | | | |
| Total mortgage-backed securities | | | | () | | | | | | () | | | | | | | |
| Asset-backed securities | | | | () | | | | | | () | | | | | | | |
| Corporate: | | | | | | | | | | | |
| Industrial | | | | () | | | | | | () | | | | | | | |
| Financial | | | | () | | | | | | () | | | | | | | |
| Utilities | | | | | | | | | | () | | | | | | | |
| Other | | | | | | | | | | () | | | | | | | |
| Total corporate | | | | () | | | | | | () | | | | | | | |
| Foreign government | | | | () | | | | | | () | | | | | | | |
| Total available for sale | | | | () | | | | | | () | | | | | | | |
| Total investments in fixed maturity securities | $ | | | | $ | () | | | $ | | | | $ | () | | | $ | | | | $ | | |
——————————
(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.
| | $ | | | |
| Change in allowance for expected credit losses | () | | | () | |
| Allowance for expected credit losses, end of period | $ | | | | $ | | |
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | | | | | | | | | | | | | | | | | | | | |
| Change on securities for which credit losses were not previously recorded | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Change on securities for which credit losses were previously recorded | () | | | () | | | () | | | () | | | () | | | () | | | () | | | () | | | () | | | () | | | () | | | () | |
| Reduction due to disposals | () | | | | | | () | | | | | | | | | () | | | | | | () | | | () | | | | | | | | | () | |
| Balance, end of period | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
During the year ended December 31, 2024, the Company decreased the allowance for expected credit losses for available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to improved pricing associated with foreign government securities and corporate securities. During the year ended December 31, 2023, the Company decreased the allowance for expected credit losses for available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model due to a reduction in unrealized losses primarily associated with foreign government securities.
| | $ | | | | Due after one year through five years | | | | | |
| Due after five years through ten years | | | | | |
| Due after ten years | | | | | |
| Mortgage-backed securities | | | | | |
| Total | $ | | | | $ | | |
________________
thousand related to held to maturity securities.
At December 31, 2024 and 2023, there were no investments, other than investments in United States government and government agency securities, which exceeded 10% of common stockholders’ equity. At December 31, 2024, investments with a carrying value of $ million were on deposit in custodial or trust accounts, of which $ million was on deposit with insurance regulators, $ million was on deposit in support of the Company’s underwriting activities at Lloyd’s, $ million was on deposit as security for reinsurance clients and $ million was on deposit as security for letters of credit issued in support of the Company’s reinsurance operations.
(4)
| | $ | | | | $ | () | | | $ | | | | $ | | | | Preferred stocks | | | | | | | () | | | | | | | |
| Total | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
| | | | | | | | | |
| December 31, 2023 | | | | | | | | | |
| Common stocks | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
| Preferred stocks | | | | | | | () | | | | | | | |
| Total | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
(5)
million and $ million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company uses put options and call options in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options are reported at fair value. As of December 31, 2024, the fair value of long option contracts outstanding was $ million (notional amount of $ million) and the fair value of short option contracts outstanding was $ million (notional amount of $ million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.
(6)
| | $ | | | | $ | | | | Arbitrage trading account (1) | | | | | | | | |
| Equity securities | | | | | | | | |
| Investment funds | () | | | | | | | |
Real estate | () | | | () | | | () | |
| Gross investment income | | | | | | | | |
| Investment expense | () | | | () | | | () | |
| Net investment income | $ | | | | $ | | | | $ | | |
(1) Net investment income includes earnings from trading account receivables from brokers and clearing organizations.
(7)
million as of December 31, 2024. | | $ | | | | $ | () | | | $ | () | | | $ | | | | Transportation | | | | | | | | | | | | | | |
| Real estate | | | | | | | | | | () | | | | |
| Infrastructure | | | | | | | | | | | | | | |
| Energy | | | | | | | | | | | | | | |
| Other funds | | | | | | | () | | | () | | | | |
| Total | $ | | | | $ | | | | $ | () | | | $ | | | | $ | | |
The Company's share of the earnings or losses of investment funds is primarily reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.
Financial services investment funds include the Company’s minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1, 2021, Lifson Re participated on a fully collateralized basis in a majority of the Company’s reinsurance placements for a % share of placed amounts. The share was increased to 30% on July 1, 2022 and was increased to 32.5% effective January 1, 2025. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there is more than one open market reinsurer participating. For the years ended December 31, 2024 and 2023, the Company ceded approximately $ million and $ million, respectively, of written premiums to Lifson Re.
Other funds include deferred compensation trust assets of $ million and $ million in 2024 and 2023, respectively. These assets support other liabilities reflected in the balance sheet of an equal amount for employees who have elected to defer a portion of their compensation. The change in the net asset value of the trust is recorded in other funds within net investment income with an offsetting equal amount within corporate expenses.
(8)
| | $ | | | | Properties under development | | | | | |
| Total | $ | | | | $ | | |
In 2024, properties in operation primarily included a long-term ground lease in Washington, D.C., an office complex in New York City and the completed portion of a mixed-use project in Washington D.C. Properties in operation are net of
and $ as of December 31, 2024 and 2023, respectively. Related depreciation expense was $ and $ for the years ended December 31, 2024 and 2023, respectively. Future minimum rental income expected on operating leases relating to properties in operation is $ in 2025, $ in 2026, $ in 2027, $ in 2028, $ in 2029 and $ thereafter.A mixed-use project in Washington, D.C. had been under development in 2024 and 2023, with the completed portion as noted above reported in properties in operation as of December 31, 2024.
The Company had commitments to invest up to $ million in certain real estate investment projects as of December 31, 2024.
(9)
| | $ | | | | Commercial loans | | | | | |
| Total | $ | | | | $ | | |
| | | |
| Fair value: | | | |
| Real estate loans | $ | | | | $ | | |
| Commercial loans | | | | | |
| Total | $ | | | | $ | | |
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| The real estate loans are secured by commercial and residential real estate primarily located in the U.K. and New York. These loans generally earn interest at fixed or stepped interest rates and have maturities through 2028. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans primarily earn interest on a fixed basis and have varying maturities generally not exceeding years.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Reduction due to write-offs | | | | | | | | | | | | | () | | | () | |
| Change in allowance for expected credit losses | () | | | | | | () | | | | | | () | | | | |
| Allowance for expected credit losses, end of period | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
During the year ended December 31, 2024, the Company decreased the allowance for expected credit losses due to a decrease in the weighted average life of the loan portfolio. During the year ended December 31, 2023, the Company increased the allowance for expected credit losses due to changes in economic assumptions utilized in its credit loss model.
The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions.
(10)
| | $ | | | | $ | | | | Losses | () | | | () | | | () | |
| Equity securities (1): | | | | | |
| Net realized gains (losses) on investment sales (2) | | | | | | | () | |
| Change in unrealized gains (losses) | | | | | | | () | |
| Investment funds | | | | () | | | | |
| Real estate (3) (4) | () | | | () | | | | |
| Loans receivable | | | | () | | | () | |
| Other (5) | () | | | () | | | () | |
| Net realized and unrealized gains on investments in earnings before allowance for expected credit losses | | | | | | | | |
| Change in allowance for expected credit losses on investments: | | | | | |
| Fixed maturity securities | | | | | | | () | |
| Loans receivable | | | | () | | | () | |
| Change in allowance for expected credit losses on investments | | | | () | | | () | |
| Net investment gains | | | | | | | | |
| Income tax expense | () | | | () | | | () | |
| After-tax net investment gains | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | |
| Change in unrealized investment gains (losses): | | | | | |
| Fixed maturity securities without allowance for expected credit losses | $ | | | | $ | | | | $ | () | |
| Fixed maturity securities with allowance for expected credit losses | | | | | | | () | |
| | |
| Investment funds | () | | | | | | () | |
| Other | () | | | () | | | () | |
| Total change in unrealized investment gains (losses) | | | | | | | () | |
| Income tax (expense) benefit | () | | | () | | | | |
| Noncontrolling interests | | | | () | | | () | |
| After-tax change in unrealized investment gains (losses) | $ | | | | $ | | | | $ | () | |
____________________
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains (losses) consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.
(2) In 2023, the Company completed a sale of the property and casualty insurance services division of Breckenridge IS, Inc. and recognized a pre-tax net realized gain on investment of $ million on the sale (proceeds from the sale is presented on the business disposition line within the Consolidated Statements of Cash Flows).
(3) The Company recognized impairments on real estate of $ million in 2023.
(4) In 2022, the Company realized a gain on the sale of a real estate investment in London, U.K. of $ million, net of transaction expenses and the foreign currency impact, including the reversal of the currency translation adjustment (proceeds from the real estate and related entity are presented on the business disposition line within the Consolidated Statements of Cash Flows).
(5) Primarily relates to realized foreign currency losses upon the disposition of fixed maturity securities.
(11)
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | State and municipal | | | | | | | | | | | | | | | | | |
| Mortgage-backed securities | | | | | | | | | | | | | | | | | |
| Asset-backed securities | | | | | | | | | | | | | | | | | |
| Corporate | | | | | | | | | | | | | | | | | |
| Foreign government | | | | | | | | | | | | | | | | | |
| Fixed maturity securities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
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| | | | | | | | | | | |
| December 31, 2023 | | | | | | | | | | | |
| U.S. government and government agency | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| State and municipal | | | | | | | | | | | | | | | | | |
| Mortgage-backed securities | | | | | | | | | | | | | | | | | |
| Asset-backed securities | | | | | | | | | | | | | | | | | |
| Corporate | | | | | | | | | | | | | | | | | |
| Foreign government | | | | | | | | | | | | | | | | | |
| Fixed maturity securities | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | |
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| | | | | | | | | Substantially all of the securities in an unrealized loss position are rated investment grade, except for the securities in the foreign government classification. A significant amount of the unrealized loss on foreign government securities is the result of changes in currency exchange rates.
Fixed Maturity Securities —
| | $ | | | | $ | | |
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| Corporate | | | | | | | | |
| State and municipal | | | | | | | | |
| Mortgage-backed securities | | | | | | | | |
| Asset-backed securities | | | | | | | | |
| Total | | | | $ | | | | $ | | |
For fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other comprehensive income.
(12)
| | $ | | | | $ | | | | $ | | | | State and municipal | | | | | | | | | | | |
| Mortgage-backed securities | | | | | | | | | | | |
| Asset-backed securities | | | | | | | | | | | |
| Corporate | | | | | | | | | | | |
| Foreign government | | | | | | | | | | | |
| Total fixed maturity securities available for sale | | | | | | | | | | | |
| Equity securities: | | | | | | | |
| Common stocks | | | | | | | | | | | |
| Preferred stocks | | | | | | | | | | | |
| Total equity securities | | | | | | | | | | | |
| Arbitrage trading account | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | For the year ended December 31, 2024, one corporate security was transferred into level 3 from level 2 given there were no quoted prices or observable inputs available. For the years ended December 31, 2024 and 2023, one security in each year within the arbitrage trading account portfolio that no longer had a publicly traded price was transferred into Level 3.
(13)
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | |
| 2016 | | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| | Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| | Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| | Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| | Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| | Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | | $ | | | | 2016 | | | | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance |
| For the Year Ended December 31, |
| Unaudited | |
| Accident Year | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| 2015 | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | |
| 2016 | | | | | | | | | | | | | | | | | | | |
| 2017 | | | | | | | | | | | | | | | | | | |
| 2018 | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | | | | | | | | | | | |
| 2020 | | | | | | | | | | | | | | | |
| 2021 | | | | | | | | | | | | | | |
| 2022 | | | | | | | | | | | | | |
| 2023 | | | | | | | | | | | | |
| 2024 | | | | | | | | | | | |
| Total | | | | | | | | | | $ | | |
| Reserves for loss and loss adjustment expenses before 2015, net of reinsurance | | |
| Reserves for loss and loss adjustment expenses, net of reinsurance | $ | | |
| | | Workers' compensation | | |
| | Professional liability | | |
| | Auto | | |
| | Short-tail lines | | |
| | Other | | |
| | Insurance | | |
| | Casualty | | |
| | Monoline excess | | |
| | Property | | |
| | Reinsurance & Monoline Excess | | |
| Total undiscounted reserves for loss and loss expenses, net of reinsurance | $ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | December 31, 2024 |
| Due from reinsurers on unpaid claims: | |
| | Other liability | $ | | |
| | Workers' compensation | | |
| | Professional liability | | |
| | Auto | | |
| | Short-tail lines | | |
| | Other | | |
| | Insurance | | |
| | Casualty | | |
| | Monoline excess | | |
| | Property | | |
| | Reinsurance & Monoline Excess | | |
| Total due from reinsurers on unpaid claims | $ | | |
| | | Workers' compensation | () | |
| | Professional liability | | |
| | Auto | | |
| | Short-tail lines | | |
| | Other | | |
| | Insurance | () | |
| | Casualty | () | |
| | Monoline excess | () | |
| | Property | | |
| | Reinsurance & Monoline Excess | () | |
| Total loss reserve discount | $ | () | |
| Total gross reserves for loss and loss expenses | $ | | |
% | | % | | % | | % | | % | | % | | % | | % | | % | | % | | Workers' compensation | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| Professional liability | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| Auto | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| Short-tail lines | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| | | | | | | | | | |
| Reinsurance & Monoline Excess | | | | | | | | |
| Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | |
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Casualty | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| Monoline excess | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| Property | | % | | % | | % | | % | | % | | % | | % | | % | | % | | % |
| | $ | | | | $ | | | | | |
| | |
| Net provision for losses and loss expenses: | | | | | |
| Claims occurring during the current year (1) | | | | | | | | |
| Increase in estimates for claims occurring in prior years (2) | | | | | | | | |
| Loss reserve discount accretion | | | | | | | | |
| Total | | | | | | | | |
| Net payments for claims: | | | | | |
| Current year | | | | | | | | |
| Prior year | | | | | | | | |
| Total | | | | | | | | |
| Foreign currency translation | () | | | | | | () | |
| Net reserves at end of year | | | | | | | | |
| Ceded reserve at end of year | | | | | | | | |
| Gross reserves at end of year | $ | | | | $ | | | | $ | | |
| | | | | |
| Net change in premiums and losses occurring in prior years: | | | | | |
| Increase in estimates for claims occurring in prior years (2) | $ | () | | | $ | () | | | $ | () | |
| Retrospective premium adjustments for claims occurring in prior years (3) | | | | | | | | |
| Net premium and reserve development on prior years | $ | | | | $ | () | | | $ | () | |
_______________________________________
(1)Claims occurring during the current year are net of loss reserve discounts of $ million, $ million and $ million in 2024, 2023, and 2022, respectively.
(2)The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years increased by $ million in 2024, decreased by $ million in 2023, and increased by $ million in 2022.
The ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of December 31, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $ million, of which $ million relates to the Insurance segment and $ million relates to the Reinsurance & Monoline Excess segment. Such $ million of COVID-19-related losses included $ million of reported losses and $ million of IBNR.
Favorable prior year development (net of additional and return premiums) was $ million in 2024.
Insurance – Reserves for the Insurance segment developed unfavorably by $ million in 2024 (net of additional and return premiums). The adverse development was driven by the commercial auto liability and other liability occurrence lines of business, and was largely offset by favorable development for workers’ compensation, professional liability, products liability, and commercial property lines of business.
The adverse commercial auto liability development was concentrated in accident years 2021 through 2023, while the adverse other liability occurrence development was focused across accident years 2015 through 2022. The majority of the other liability occurrence development was driven by umbrella and excess liability claims, of which a significant portion related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.
The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2016 through 2023, with accident years 2020 through 2023 contributing the most. For workers’ compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. The
million in 2024 (net of additional and return premiums). The favorable development was driven mainly by excess workers’ compensation business, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2015 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects. Unfavorable prior year development (net of additional and return premiums) was $ million in 2023.
Insurance – Reserves for the Insurance segment developed unfavorably by $ million in 2023 (net of additional and return premiums). The unfavorable development for the segment was concentrated in the early part of the year. A key driver of the unfavorable development early in 2023 was property catastrophe losses related to 2022 events which were still being adjusted and settled during the early part of 2023. In particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant contributor to the development, as information gathering and evaluation of many of these claims were still ongoing into the new year.
In addition to the property prior year development discussed above, during 2023 the Insurance segment also experienced adverse prior year development on casualty lines of business for the 2016 through 2019 accident years, which was offset by favorable prior year development on casualty lines of business for the 2020 through 2022 accident years. The unfavorable development on the 2016 through 2019 accident years was concentrated in the general liability and commercial auto liability lines of business. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.
The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to elevated uncertainty regarding incurred loss frequency and severity as a result of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company has begun to react to this favorable emergence as the accident years mature beyond the age of twelve months. It should also be noted that commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years, which partially offset the favorable development discussed above; the adverse development was driven by a larger than expected number of large losses reported.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $ million in 2023 (net of additional and return premiums). The overall favorable prior year development for the segment was driven mainly by favorable development in excess workers’ compensation, substantially offset by unfavorable development in the non-proportional reinsurance assumed liability, excess general liability (including umbrella), and commercial auto liability lines of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The unfavorable development for non-proportional reinsurance assumed liability and excess general liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020. The unfavorable development for commercial auto liability was concentrated in the 2022 accident year and related to commercial auto program business.
Unfavorable prior year development (net of additional and return premiums) was $ million in 2022.
million in 2022 (net of additional and return premiums). The unfavorable development in the segment primarily related to COVID-19 losses at two businesses. These businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by losses directly caused by the COVID-19 pandemic. Most of this COVID-19 related unfavorable development emerged during the third quarter as a result of settlements of claims at values higher than our expectations. However, the Company believes thatas a result of these settlements the remaining level of uncertainty around the ultimate value of its known COVID-19 claims has been significantly reduced.
The unfavorable development mentioned above also includes favorable prior year development for the Insurance segment primarily attributable to the 2020 and 2021 accident years and unfavorable development on the 2015 through 2019 accident years. The favorable development on the 2020 and 2021 accident years was concentrated in certain casualty lines of business including general liability, professional liability, and workers’ compensation. The Company experienced lower reported claim frequency in these lines of business during 2020 and 2021 relative to historical averages, and continued to experience lower reported incurred losses relative to its expectations for these accident years as they developed during 2022. These trends began in 2020 and we believe were caused by the impacts of the COVID-19 pandemic, including for example, lockdowns, reduced driving/traffic and increased work from home. Due to the uncertainty regarding the ultimate impacts of the pandemic on accident years 2020 and 2021 incurred losses, the Company was cautious in reacting to these lower trends in setting and updating its loss ratio estimates for these years. As these accident years have continued to mature, the Company has continued to recognize some of the favorable reported experience in its ultimate loss estimates made during 2022.
The unfavorable development on the 2015 through 2019 accident years was concentrated in the general liability and professional liability, including medical professional, lines of business, as well as auto liability. The development was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $ million in 2022 (net of additional and return premiums). The overall favorable development for the segment was driven mainly by favorable development in excess workers compensation, substantially offset by unfavorable development in the professional liability, non-proportional reinsurance assumed liability, and commercial auto liability lines of business. The favorable excess workers’ compensation development was spread across most prior accident years, including 2012 and prior years, and was driven by a review of the Company’s claim reporting patterns as well as a number of favorable claim settlements relative to expectations. The unfavorable professional liability and non-proportional reinsurance assumed liability development was concentrated mainly in accident years 2016 through 2018 and was associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional liability exposures. The unfavorable development for commercial auto liability was concentrated in the 2021 accident year and related to commercial auto program business.
Environmental and Asbestos — To date, known environmental and asbestos claims have not had a material impact on the Company’s operations, because its subsidiaries generally did not insure large industrial companies that are subject to significant environmental or asbestos exposures prior to 1986 when an absolute exclusion was incorporated into standard policy language.
The Company’s net reserves for losses and loss expenses relating to asbestos and environmental claims on policies written before adoption of the absolute exclusion was $ million and $ million at December 31, 2024 and 2023, respectively. The estimation of these liabilities is subject to significantly greater than normal variation and uncertainty because it is difficult to make an actuarial estimate of these liabilities due to the absence of a generally accepted actuarial methodology for these exposures and the potential effect of significant unresolved legal matters, including coverage issues, as well as the cost of litigating the legal issues. Additionally, the determination of ultimate damages and the final allocation of such damages to financially responsible parties are highly uncertain.
Discounting — The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $ million and $ million at December 31, 2024 and 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $ million and $ million at December 31, 2024 and 2023, respectively. At December 31, 2024, discount rates by year ranged from % to %, with a weighted average discount rate of %.
Substantially all discounted workers’ compensation reserves (% of total discounted reserves at December 31, 2024) are excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount
% of total discounted reserves at December 31, 2024), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates prescribed or permitted by the Department of Insurance of the State of Delaware.
(14)
| | $ | | | | $ | | | | Assumed | | | | | | | | |
| Ceded | () | | | () | | | () | |
| Total net written premiums | $ | | | | $ | | | | $ | | |
| | | | | |
| Earned premiums: | | | | | |
| Direct | $ | | | | $ | | | | $ | | |
| Assumed | | | | | | | | |
| Ceded | () | | | () | | | () | |
| Total net earned premiums | $ | | | | $ | | | | $ | | |
| | | | | |
| Ceded losses and loss expenses incurred | $ | | | | $ | | | | $ | | |
| Ceded commission earned | $ | | | | $ | | | | $ | | |
| | $ | | | |
| Change in allowance for expected credit losses | | | | | |
| Allowance for expected credit losses, end of period | $ | | | | $ | | |
| | $ | | | |
| Change in allowance for expected credit losses | () | | | | |
| Allowance for expected credit losses, end of period | $ | | | | $ | | |
| | Lloyd’s of London | | |
| Partner Re | | |
| Munich Re | | |
| Berkshire Hathaway | | |
| Hannover Re Group | | |
| Renaissance Re | | |
| Swiss Re | | |
| Liberty Mutual | | |
| Everest Re | | |
| Axis Capital | | |
| Arch Capital Group | | |
| Sompo Holdings Group | | |
| Fairfax Financial | | |
| Nationwide Group | | |
| Korean Re | | |
| Axa Insurance | | |
| TOA RE | | |
| Markel Corp Group | | |
| MS & AD Insurance Group | | |
| Helvetia Holdings Group | | |
| Chubb Group | | |
| Other reinsurers less than $20,000 | | |
| Subtotal | | |
| Residual market pools (1) | | |
| Allowance for expected credit losses | () | |
| Total | $ | | |
(15)
% | $ | | | | $ | | | | $ | | | | August 1, 2044 | % | | | | | | | | | |
| May 12, 2050 | % | | | | | | | | | |
| March 30, 2052 | % | | | | | | | | | |
| September 30, 2061 | % | | | | | | | | | |
| | | | |
| Subsidiary debt and other (1) | Various | | | | | | | | | |
| Total senior notes and other debt | | | $ | | | | $ | | | | $ | | |
| Subordinated debentures due on: | | | | | | | |
| | | | |
| | | | |
| | | | |
| March 30, 2058 | % | | $ | | | | $ | | | | $ | | |
| December 30, 2059 | % | | | | | | | | | |
| September 30, 2060 | % | | | | | | | | | |
| March 30, 2061 | % | | | | | | | | | |
| Total subordinated debentures | | | $ | | | | $ | | | | $ | | |
________________
million is due in 2025, partially offset by the unamortized cost of $0.4 million due to entering into the $300 million senior unsecured revolving credit facility.
On April 1, 2022, the Company entered into a senior unsecured revolving credit facility that provides for revolving, unsecured borrowings up to an aggregate of $ million with a $ million sublimit for letters of credit. The Company may increase the amount available under the facility to a maximum of $ million subject to obtaining lender commitments for the increase and other customary conditions. Borrowings under the facility may be used for working capital and other general corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of credit outstanding on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the facility is conditioned on the satisfaction of representations, warranties and covenants that are customary for facilities of this type. As of December 31, 2024, there were no borrowings outstanding under the facility.
(16)
| | $ | | | | $ | | | | Foreign | | | | | | | | |
| Total expense | $ | | | | $ | | | | $ | | |
| | | | | |
| December 31, 2023 | | | | | |
| Domestic | $ | | | | $ | () | | | $ | | |
| Foreign | | | | | | | | |
| Total expense (benefit) | $ | | | | $ | () | | | $ | | |
| | | | | |
| December 31, 2022 | | | | | |
| Domestic | $ | | | | $ | () | | | $ | | |
| Foreign | | | | | | | | |
| Total expense (benefit) | $ | | | | $ | () | | | $ | | |
Income before income taxes from domestic operations was $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively. Income before income taxes from foreign operations was $ million, $ million and $ million for the years ended December 31, 2024, 2023 and 2022, respectively.
| | $ | | | | $ | | | | Tax-exempt investment income | () | | | () | | | () | |
| Change in valuation allowance | () | | | () | | | () | |
| Impact of foreign operations and related tax rates | | | | () | | | () | |
| State and local taxes, net of federal benefit | | | | | | | | |
| | |
| Other, net | | | | | | | | |
| Total expense | $ | | | | $ | | | | $ | | |
| | $ | | | | Unearned premiums | | | | | |
| Unrealized investment losses | | | | | |
| Net operating losses & foreign tax credits | | | | | |
| Other-than-temporary impairments | | | | | |
| Employee compensation plans | | | | | |
| Other | | | | | |
| Gross deferred tax asset | | | | | |
| Less valuation allowance | () | | | () | |
| Deferred tax asset | | | | | |
| Deferred tax liability: | | | |
| Amortization of intangibles | | | | | |
| Loss reserve discounting - transition rule | | | | | |
| Deferred policy acquisition costs | | | | | |
|
|
| | | | $ | | |
| | $ | | | | Lease liabilities | $ | | | | $ | | |
| Weighted-average remaining lease term | years | | years |
| Weighted-average discount rate | | % | | | % |
| | 2026 | | |
| 2027 | | |
| 2028 | | |
| 2029 | | |
| Thereafter | | |
| Total undiscounted future minimum lease payments | | |
| Less: Discount impact | | |
| Total lease liability | $ | | |
(22)
from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. | | | | | | |
| Granted | | | | | | | | |
| Vested | () | | | () | | | () | |
| Canceled | () | | | () | | | () | |
| RSUs granted and unvested at end of period: | | | | | | | | |
Upon vesting, shares of the Company’s common stock equal to the number of vested RSUs are issued or deferred to a later date, depending on the terms of the specific award agreement. As of December 31, 2024, RSUs had been deferred. RSUs that have not yet vested and vested RSUs that have been deferred are not considered to be issued and outstanding shares.
| | $ | | | | $ | | | | RSUs granted, net of cancellations | | | | | | | | |
| RSUs expensed | () | | | () | | | () | |
| RSUs forfeitures | () | | | () | | | () | |
| Unearned compensation at end of year | $ | | | | $ | | | | $ | | |
(23)
% of eligible compensation; contributions above the minimum are discretionary and vary with each participating businesses's profitability. Employees become eligible to participate in the plan on the first day of the calendar quarter following the first full calendar quarter after the employee's date of hire provided the employee has completed hours of service during the calendar quarter. The plans provide that % of the contributions vest immediately and that the remaining % vest at varying percentages based upon years of service. Profit sharing expense was $ million, $ million and $ million in 2024, 2023 and 2022, respectively. The Company has a long-term incentive compensation plan ("LTIP") that provides for compensation to key executives based on the growth in the Company's book value per share over a five year period.
| $ | | | $ | | | | 2021 grant | | | | | | |
| 2022 grant | | | | | | |
| 2023 grant | | | | | | |
| 2024 grant | | | | | | |
| | $ | () | | | $ | | | | 2019 grant | | | | | | | | |
| 2020 grant | | | | | | | | |
| 2021 grant | | | | | | | | |
| 2022 grant | | | | | | | | |
| 2023 grant | | | | | | | | |
| 2024 grant | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | |
(24)
| | $ | | | | $ | | | | Insurance operating expenses | | | | | | | | |
| Insurance service expenses | | | | | | | | |
| Net foreign currency (gains) losses | () | | | | | | () | |
| | |
| Other costs and expenses | | | | | | | | |
| Total | $ | | | | $ | | | | $ | | |
(25)
business segments, plus a corporate segment:•Insurance - predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom.
•Reinsurance & Monoline Excess - reinsurance business on a facultative and treaty basis, primarily in the United States, United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa, as well as operations that solely retain risk on an excess basis and certain program management business.
The Company's chief operating decision maker ("CODM") is the President and Chief Executive Officer. The CODM assesses performance, makes decisions and allocates resources for each of the three reportable segments based on their contribution towards the Company's profitability and balance sheet strength. Certain key metrics such as combined ratio and return on allocated capital for the Insurance and Reinsurance & Monoline Excess segments, as well as Corporate segment expenditures, are examples of key components of the assessment, decision-making and resource-allocation process.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company’s overall effective tax rate.
| | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | Reinsurance & Monoline Excess | | | | | | | | | | | | | | | | | | | — | | | | | | | | | | |
| Corporate, other and eliminations (3) | — | | | | | | | | | | | | — | | | — | | | | | | | | | () | | | () | |
| Net investment gains | — | | | — | | | | | | | | | — | | | — | | | — | | | — | | | | | | | |
| Consolidated | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2023 | | | | | | | | | | | | | | | | | | | |
| Insurance | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Reinsurance & Monoline Excess | | | | | | | | | | | | | | | | | | | — | | | | | | | | | | |
| Corporate, other and eliminations (3) | — | | | | | | | | | | | | — | | | — | | | | | | | | | () | | | () | |
| Net investment gains | — | | | — | | | | | | | | | — | | | — | | | — | | | — | | | | | | | |
| Consolidated | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | | | | | | | | | | | | | | | | | | |
| Year ended December 31, 2022 | | | | | | | | | | | | | | | | | | | |
| Insurance | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| Reinsurance & Monoline Excess | | | | | | | | | | | | | | | | | | | — | | | | | | | | | | |
| Corporate, other and eliminations (3) | — | | | | | | | | | | | | — | | | — | | | | | | | | | () | | | () | |
| Net investment gains | — | | | — | | | | | | | | | — | | | — | | | — | | | — | | | | | | | |
| Consolidated | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | | | $ | | |
| | $ | | | | Reinsurance & Monoline Excess | | | | | |
| Corporate, other and eliminations (3) | | | | | |
| Consolidated | $ | | | | $ | | |
_______________________________________
(1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions.
(2) Revenues for Insurance includes $ million, $ million, and $ million in 2024, 2023 and 2022, respectively, from foreign countries. Revenues for Reinsurance & Monoline Excess includes $ million, $ million, and $ million in 2024, 2023 and 2022, respectively, from foreign countries.
(3) Corporate, other and eliminations represent corporate revenues and expenses and certain other items that are not allocated to business segments.
| | $ | | | | $ | | | | Short-tail lines (1) | | | | | | | | | |
| Auto | | | | | | | | | |
| Workers' compensation | | | | | | | | | |
| Professional liability | | | | | | | | | |
| Total Insurance | | | | | | | | | |
| Reinsurance & Monoline Excess | | | | | | |
| Casualty (2) | | | | | | | | | |
| Property (2) | | | | | | | | | |
| Monoline Excess (3) | | | | | | | | | |
| Total Reinsurance & Monoline Excess | | | | | | | | | |
| Total | | $ | | | | $ | | | | $ | | |
(1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
(2) Includes reinsurance casualty and property and certain program management business.
(3) Monoline excess includes operations that solely retain risk on an excess basis.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Company's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this annual report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company has in place effective controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.
During the quarter ended December 31, 2024, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Management's Report On Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
W. R. Berkley Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited W. R. Berkley Corporation and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedules II to VI (collectively, the consolidated financial statements), and our report dated February 24, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/S/ KPMG LLP
New York, New York
February 24, 2025
ITEM 9B. OTHER INFORMATION
.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
(a) Security ownership of certain beneficial owners
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
(b) Security ownership of management
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
(c) Changes in control
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
(d) Equity compensation plan information
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, New York, NY, Auditor Firm ID: .
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2024, and which is incorporated herein by reference.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Index to Financial Statements
The schedules to the consolidated financial statements listed below should be read in conjunction with the consolidated financial statements included in this Annual Report on Form 10-K. Financial statement schedules not included in this Annual Report on Form 10-K have been omitted because they are not applicable or required information is shown in the financial statements or notes thereto.
| | | | | | | | |
| Index to Financial Statement Schedules | Page |
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| | |
| | |
| | |
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(b) Exhibits
EXHIBITS
| | | | | |
| Number | |
| |
| The Company’s Restated Certificate of Incorporation, as amended through May 10, 2004 (incorporated by reference to Exhibits 3.1 and 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003). |
| |
| Amendment, dated May 11, 2004, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 5, 2004). |
| |
| Amendment, dated May 16, 2006, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 17, 2006). |
| |
| Amendment, dated June 12, 2020, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on June 16, 2020). |
| |
| Amendment, dated June 15, 2022, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on June 16, 2022). |
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| Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on March 1, 2023). |
| |
| Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on February 24, 2023). |
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| Indenture, dated as of February 14, 2003, between the Company and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 31, 2003). |
| |
| Fifth Supplemental Indenture, dated as of February 9, 2007, between the Company and The Bank of New York, as Trustee, relating to $250,000,000 principal amount of the Company’s 6.250% Senior Notes due 2037, including the form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 1, 2007). |
|
|
| |
| Ninth Supplemental Indenture, dated as of August 6, 2014, between the Company and The Bank of New York Mellon, as Trustee, relating to $350,000,000 principal amount of the Company’s 4.750% Senior Notes due 2044, including the form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on August 6, 2014). |
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| Indenture, dated as of May 12, 2020, between the Company and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 12, 2020). |
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| First Supplemental Indenture, dated as of May 12, 2020, between the Company and The Bank of New York Mellon, as Trustee, relating to $470,000,000 principal amount of the Company’s 4.000% Senior Notes due 2050, including the form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 12, 2020). |
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|
|
|
|
| Second Supplemental Indenture, dated as of March 16, 2021, between the Company and The Bank of New York Mellon, as Trustee, relating to $400,000,000 principal amount of the Company’s 3.550% Senior Notes due 2052, including the form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on March 16, 2021). |
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| Third Supplemental Indenture, dated as of September 15, 2021, between the Company and The Bank of New York Mellon, as Trustee, relating to $350,000,000 principal amount of the Company’s 3.150% Senior Notes due 2061, including the form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on September 15, 2021). |
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| Subordinated Indenture, dated as of March 26, 2018, between the Company and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on March 26, 2018). |
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| First Supplemental Indenture, dated as of March 26, 2018, between the Company and The Bank of New York Mellon, as Trustee, relating to $185,000,000 principal amount of the Company’s 5.700% Subordinated Debentures due 2058, including the form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on March 26, 2018). |
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| Second Supplemental Indenture, dated as of December 16, 2019, between the Company and the Bank of New York Mellon, as Trustee, relating to $300,000,000 principal amount of the Company's 5.100% Subordinated Debentures due 2059, including the form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on December 16, 2019). |
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| Third Supplemental Indenture, dated as of September 21, 2020, between the Company and The Bank of New York Mellon, as Trustee, relating to $250,000,000 principal amount of the Company’s 4.250% Subordinated Debentures due 2060, including the form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on September 21, 2020). |
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| Fourth Supplemental Indenture, dated as of February 10, 2021, between the Company and The Bank of New York Mellon, as Trustee, relating to $300,000,000 principal amount of the Company’s 4.125% Subordinated Debentures due 2061, including the form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on February 10, 2021). |
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| (4.14) | The instruments defining the rights of holders of the other long term debt securities of the Company are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company agrees to furnish supplementally copies of these instruments to the Commission upon request. |
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| Credit Agreement, dated as of April 1, 2022, by and among W. R. Berkley Corporation, as borrower, each lender from time to time party thereto, Credit Suisse AG, New York Branch, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc. as Syndication Agents, and Bank of America, N.A., as Administrative Agent, Several L/C Agent and Fronting L/C Issuer (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on April 4, 2022). |
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| W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Annex B of the Company’s 2018 Proxy Statement (File No. 1-15202) filed with the Commission on April 19, 2018). |
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| Form of Restricted Stock Unit Agreement for grant of April 4, 2003 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003). |
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| Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2005). |
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| Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2010). |
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| Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 8, 2012). |
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| Form of 2014 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 7, 2014). |
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| Form of 2015 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 9, 2015). |
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| Form of 2017 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 8, 2017). |
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| Form of 2018 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 7, 2018). |
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| Form of 2020 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 5, 2020). |
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| Form of 2023 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on February 23, 2024). |
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| Form of 2024 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 4, 2024). |
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| W. R. Berkley Corporation Deferred Compensation Plan for Officers as amended and restated effective December 1, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on November 12, 2021). |
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| W. R. Berkley Corporation Deferred Compensation Plan for Directors as amended and restated effective December 1, 2021 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on November 12, 2021). |
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| W. R. Berkley Corporation Amended and Restated Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on February 25, 2019). |
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| W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company's current Report on Form 8-K (File No. 1-15202) filed with the Commission on February 25, 2019). |
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|
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| Form of 2021 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 4, 2021). |
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| Form of 2022 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2022). |
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| Form of 2023 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 4, 2023). |
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| Form of 2024 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2024). |
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| W. R. Berkley Corporation 2009 Directors Stock Plan (incorporated by reference to Annex B of the Company’s 2021 Proxy Statement (File No. 1-15202) filed with the Commission on April 27, 2021). |
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| Supplemental Benefits Agreement between William R. Berkley and the Company as amended and restated as of December 21, 2011 (incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on February 28, 2012). |
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| Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March 14, 2005). |
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| Insider Trading Policy |
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| List of the Company’s subsidiaries. |
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| Consent of Independent Registered Public Accounting Firm. |
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| Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a). |
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| Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a). |
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| Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| |
| W. R. Berkley Corporation Clawback Policy (incorporated by reference to Exhibit 97 of the Company's Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on February 23, 2024). |
ITEM 16. FORM 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
W. R. BERKLEY CORPORATION
| | | | | | | | |
| | By | /s/ W. Robert Berkley, Jr. |
| | W. Robert Berkley, Jr. President and Chief Executive Officer |
February 24, 2025
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | | |
| /s/ William R. Berkley | | Executive Chairman | | February 24, 2025 |
| William R. Berkley | | of the Board of Directors | | |
| | | | | |
| /s/ W. Robert Berkley, Jr. | | President | | February 24, 2025 |
| W. Robert Berkley, Jr. | | Chief Executive Officer and Director | | |
| | (Principal executive officer) | | |
| | | | | |
| /s/ Christopher L. Augostini | | Director | | February 24, 2025 |
| Christopher L. Augostini | | | | |
| | | | |
| /s/ Ronald E. Blaylock | | Director | | February 24, 2025 |
| Ronald E. Blaylock | | | | |
| | | | | |
| |
| |
| |
| /s/ Mary C. Farrell | | Director | | February 24, 2025 |
| Mary C. Farrell | | | | |
| | | | | |
| /s/ María Luisa Ferré | | Director | | February 24, 2025 |
| María Luisa Ferré | | | | |
| | | | |
| /s/ Marie A. Mattson | | Director | | February 24, 2025 |
| Marie A. Mattson | | | | |
| | | | |
| /s/ Daniel L. Mosley | | Director | | February 24, 2025 |
| Daniel L. Mosley | | | | |
| | | | |
| |
| |
| |
| /s/ Mark L. Shapiro | | Director | | February 24, 2025 |
| Mark L. Shapiro | | | | |
| | | | |
| /s/ Jonathan Talisman | | Director | | February 24, 2025 |
| Jonathan Talisman | | | | |
| | | | |
| /s/ Richard M. Baio | | Executive Vice President | | February 24, 2025 |
| Richard M. Baio | | and Chief Financial Officer | | |
| | (Principal financial officer
and principal accounting officer) | | |
| | | | |
| | | | |
| | | | |
| | $ | | | Fixed maturity securities available for sale at fair value (cost $ and $ at December 31, 2024 and 2023, respectively) | | | | | |
Loans receivable (net of allowance for expected credit losses of $ and $ at December 31, 2024 and 2023, respectively) | | | | | |
Equity securities, at fair value (cost $ at both December 31, 2024 and 2023) | | | | | |
| Investment in subsidiaries | | | | | |
| Current federal income taxes | | | | | |
| Deferred federal income taxes | | | | | |
| Property, furniture and equipment at cost, less accumulated depreciation | | | | | |
| Other assets | | | | | |
| Total assets | $ | | | | $ | | |
| Liabilities and stockholders’ equity: | | | |
| Liabilities: | | | |
| Due to subsidiaries | $ | | | | $ | | |
| Other liabilities | | | | | |
| Current federal income taxes | | | | | |
|
| Subordinated debentures | | | | | |
| Senior notes | | | | | |
| Total liabilities | | | | | |
| Stockholders’ equity: | | | |
| Preferred stock | | | | | |
| Common stock | | | | | |
| Additional paid-in capital | | | | | |
Retained earnings (including accumulated undistributed net income of subsidiaries of $ and $ at December 31, 2024 and 2023, respectively) | | | | | |
| Accumulated other comprehensive loss | () | | | () | |
| Treasury stock, at cost | () | | | () | |
| Total stockholders’ equity | | | | | |
| Total liabilities and stockholders’ equity | $ | | | | $ | | |
________________
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
, $, and $ for the years ended December 31, 2024, 2023 and 2022, respectively$ | | | | $ | | | | $ | | | | Net investment gains (losses) | | | | () | | | | |
| Other income | | | | | | | | |
| Total revenues | | | | | | | | |
| Operating costs and expense | | | | | | | | |
| Interest expense | | | | | | | | |
| Income (loss) before federal income taxes | | | | | | | () | |
| Federal income taxes: | | | | | |
| Federal income taxes provided by subsidiaries on a separate return basis | | | | | | | | |
| Federal income tax expense on a consolidated return basis | () | | | () | | | () | |
| Net federal income tax benefit (expense) | | | | () | | | | |
| Income (loss) before undistributed equity in net income of subsidiaries | | | | | | | () | |
| Equity in undistributed net income of subsidiaries | | | | | | | | |
| Net income | $ | | | | $ | | | | $ | | |
________________
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
| | $ | | | | $ | | | | Adjustments to reconcile net income to net cash from operating activities: | | | | | |
| Net investment (gains) losses | () | | | | | | () | |
| Depreciation and (accretion) amortization | () | | | () | | | | |
| Equity in undistributed earnings of subsidiaries | () | | | () | | | () | |
| Tax payments received from subsidiaries | | | | | | | | |
| Federal income taxes provided by subsidiaries on a separate return basis | () | | | () | | | () | |
| Stock incentive plans | | | | | | | | |
| Change in: | | | | | |
| Federal income taxes | () | | | () | | | () | |
| Equity in undistributed earnings of other investments | () | | | | | | | |
| Other assets | () | | | () | | | | |
| Other liabilities | | | | () | | | | |
| Accrued investment income | () | | | | | | | |
| Net cash from (used in) operating activities | | | | | | | () | |
| Cash (used in) from investing activities: | | | | | |
| Proceeds from sales of fixed maturity securities | | | | | | | | |
| Proceeds from maturities and prepayments of fixed maturity securities | | | | | | | | |
| | |
| Cost of purchases of fixed maturity securities | () | | | () | | | () | |
| | |
| Change in loans receivable | | | | | | | () | |
| | |
| Investments in and advances to subsidiaries, net | () | | | | | | () | |
| Change in balance due to security broker | () | | | () | | | () | |
| Net additions to real estate, furniture & equipment | () | | | () | | | () | |
| Other, net | | | | | | | | |
| Net cash (used in) from investing activities | () | | | | | | | |
| Cash used in financing activities: | | | | | |
| Net proceeds from issuance of senior notes | | | | | | | () | |
| | |
|
|
| | | | $ | () | | | $ | | |
_______________________
See Report of Independent Registered Public Accounting Firm.
| | $ | | | | $ | | | | Reserves for losses and loss expenses | | | | | | | | |
| Unearned premiums | | | | | | | | |
| Net premiums earned | | | | | | | | |
| Net investment income | | | | | | | | |
| Losses and loss expenses incurred: | | | | | |
| Current year | | | | | | | | |
| Prior years | | | | | | | | |
| Loss reserve discount accretion | | | | | | | | |
| Amortization of deferred policy acquisition costs | | | | | | | | |
| Paid losses and loss expenses | | | | | | | | |
| Net premiums written | | | | | | | | |
___________________
See Report of Independent Registered Public Accounting Firm.
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