W R Berkley Corp Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Rob Cox - Goldman Sachs - Analyst : Just first question on growth, just thinking about the growth potential here. I know it was a tougher quarter with the property pricing deceleration, but just curious if you all still view this as sort of a 10% to 15% growth environment? Or has the last few quarters changed that?

Question: Rob Cox - Goldman Sachs - Analyst : Okay. Got it. That's helpful. And then just curious on the underlying loss ratio. I think last quarter, you all mentioned that the impact of the outward reinsurance program was a business mix related headwind. This quarter, the underlying loss ratio, at least in insurance seems pretty flat. Anything else unusual to call out there? Or is that just normal dynamics? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 21, 2025 / 9:00PM, WRB.N - Q2 2025 W R Berkley Corp Earnings Call

Question: Alex Scott - Barclays - Analyst : You mentioned tariffs and labor costs in your opening remarks. And I just wanted to understand if you're actually seeing anything coming through if that's more of like a forward-looking statement. And obviously, it's the wider range out?

Question: Alex Scott - Barclays - Analyst : That makes sense. Second one I have is on the trajectory of margins from here. I mean pricing still remaining pretty firm. It seems like you guys have been disciplined and still getting pretty good rate in there. But just wanted to understand, is it still about loss cost trend, can margins still improve from here or remain flat? And would you expect sort of mix shift with casualty being the bigger opportunity maybe to affect it one way or the other?

Question: Elyse Greenspan - Wells Fargo - Analyst : My first question is actually on capital. You guys didn't buy back any shares in the quarter. Just wondering what drove that decision?

Question: Elyse Greenspan - Wells Fargo - Analyst : And then my second question, you guys gave the underlying loss ratios right by segment. So back into around, I guess, $6 million adverse insurance and I think just around $8 million favorable in reinsurance. Within that $6 million in insurance, is there anything -- obviously, a large amount of reserves, but anything to call out that particularly moved relative to your reserves in the quarter?

Question: Mike Zaremski - BMO Capital Markets - Analyst : Rob, on the 15% Mitsui stake, any update on the time frame and timeline there?

Question: Mike Zaremski - BMO Capital Markets - Analyst : Understood. But we should see disclosure once it gets -- it's over.

Question: Mike Zaremski - BMO Capital Markets - Analyst : Got it. Understood. Maybe pivoting, Rob, to the medical inflation environment as it pertains to your work comp and I believe, also stop loss portfolio. We are obviously seeing all the headlines that you've been seeing. Any updates that -- I know you mentioned California as well, obviously, earlier. But any kind of updates on the macro level to Berkley's views on medical inflation potentially making their way into the comp and/or A&H arena?

Question: Mike Zaremski - BMO Capital Markets - Analyst : Okay. That's helpful. And lastly, Rich, I believe I heard you talk about the new operating earnings, non-GAAP definition. Any -- just we'll go back and check, but does that change historical by like very low single digits? And any reason we should be aware of and why the change?

Question: Andrew Kligerman - TD Cowen - Analyst : Rob, you mentioned in the write-up rate increases were 7.6% ex workers' comp. And I know that you're kind of writing a more specialized, higher risk line. So I was just kind of curious, how is the workers' comp pricing doing in that arena? And any other color on the workers' comp in addition to your prepared remarks you might call out?

Question: Andrew Kligerman - TD Cowen - Analyst : Got it. And Rob, you mentioned in your remarks some disappointment with commercial auto. As I look at the numbers in your release, net written premium looked up. It looked like it was up roughly 10%. So is that all just raised? And are you feeling confident in the book that you have?

Question: Andrew Kligerman - TD Cowen - Analyst : I see. Okay, thanks a lot.

Question: Mark Hughes - Truist - Analyst : On the other liability line, the growth was just a little bit slower this quarter, you expressed some of kind of continuing optimism about primary and excess. At the same time, you kind of bound back your growth outlook just a little bit. Are you seeing any kind of inflection in that core GL or excess market? Or is that still consistent with prior couple of quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 21, 2025 / 9:00PM, WRB.N - Q2 2025 W R Berkley Corp Earnings Call

Question: Mark Hughes - Truist - Analyst : Yeah. On the MGAs that are knocking on your door, is that always a hard no? Or is that something you might consider if the valuation was right? Or are they just -- their expectations are above and beyond what you'd ever consider paying?

Question: David Motemaden - Evercore ISI - Analyst : Rob, just follow-up question maybe there to Mark's question. You had mentioned the bifurcated property market between large and small or large and middle, maybe we'll call it SMID, do you see that dynamic going in the opposite direction in some of the other markets, like casualty or maybe large accounts are seeing some rate increase acceleration and that's yet to really seep down and play out in the small to middle market or just hoping to get some color there in terms of how you're thinking about the opportunity.

Question: David Motemaden - Evercore ISI - Analyst : Got it. And then maybe just a follow-up here just on the tariffs. At least on the insurance side, didn't really look like there was anything going on in terms of the loss pick reinsurance, the underlying loss ratio did tick up. It doesn't look like you guys have embedded that into your view of loss trend, maybe just how are you thinking about that? And is that something you guys are considering doing?

Question: Wes Carmichael - Autonomous Research - Analyst : On the investment portfolio, I think, Rob, in your prepared remarks, you mentioned some moving pieces in terms of what you may do going forward. And so I heard you had extended duration a little bit, but is there anything else that you might be thinking about in terms of potential repositioning or other actions on the portfolio?

Question: Wes Carmichael - Autonomous Research - Analyst : Got it. Understood. And maybe my follow-up, just to come back to property and Rob, you talked about larger share and layered property being more competitive, but when you kind of look at the market today, obviously, there's a little bit more rate pressure there in property, but any color you can share on your view of rate adequacy of the market at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 21, 2025 / 9:00PM, WRB.N - Q2 2025 W R Berkley Corp Earnings Call

Question: Ryan Tunis - Cantor Fitzgerald - Analyst : I guess just keeping it on the property discussion, Rob, is kind of a broad question, but why are we still seeing better growth in the property lines and the other liability given your assessment of things?

Question: Ryan Tunis - Cantor Fitzgerald - Analyst : Got it. And then just, I guess, a little -- maybe more detailed one, maybe for Rich, but the corporate costs or the -- I don't know what you guys call them other costs and expenses, that ticked up this quarter. Are we in a new type of run rate there? Or were there some new launches? Or just curious what's going on with that?

Question: Josh Shanker - Bank of America - Analyst : So Rob, in your prepared remarks, it was almost like a throwaway. The last thing you mentioned was being really just pleased with the direction of trend in casualty reinsurance markets. And from my perspective, a lot of casualty reinsurance is just quota share that the underlying risk sets the pricing and then you have some question about what's going to be the ceding commission. But obviously, there's so well in some facultative and other types of business that obviously have a set price. Can you go a little into what you meant about being disappointed in the trends on the casualty reinsurance direction?

Question: Josh Shanker - Bank of America - Analyst : And on the ceding commissions that you're talking about to the ceding commissions are too low in your primary book when you're trying to cede or they're too high in the reinsurance, I'm saying.

Question: Josh Shanker - Bank of America - Analyst : Yeah. Okay. That makes sense.

Question: Josh Shanker - Bank of America - Analyst : Yes, I get it. And then trying to -- if I go back three years ago when the 10-year was sub-2%. And now we're at like one where it's trying to get about 5%. And there may be some gripe about where prices are in various markets. But I assume in an efficient market, the price of yield on investments should have some impact on the underwriters' ability to make money on the underwriting. When we say we don't like the direction of pricing, is pricing much worse because it's definitely for the market and certainly you as well, you're making a whole lot more money on the investment income. Is it reflective of just a different investment paradigm?

Question: Brian Meredith - UBS - Analyst : So Rob, I wondered if you could talk a little bit about what the competitive dynamics are like right now in the private client business. Are there more opportunities there because maybe some players are pulling back? Or are we seeing any more competition in that marketplace?

Question: Brian Meredith - UBS - Analyst : Makes sense. Thanks. And then second question, just curious, the underlying combined ratio mentioned in the reinsurance, it looked like it's kind of elevated relative to where it's been the last couple of years. Is there anything unusual going on in the quarter catch up or something that happened?

Question: Meyer Shields - Keefe, Bruyette & Woods, Inc. - Analyst : Two, I think, quick questions. First of all, on your clients, are you seeing increasing demand for higher limits on the various casualty line policies?

Question: Meyer Shields - Keefe, Bruyette & Woods, Inc. - Analyst : I was thinking of the smaller ones.

Question: Meyer Shields - Keefe, Bruyette & Woods, Inc. - Analyst : Okay. Yeah, that's very helpful. I just wanted to get a sense of that. Second question, you talked about the loss cost increase that was approved in California. When you look at California workers' compensation market, is that a good proxy or a leading indicator for this of the country? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 21, 2025 / 9:00PM, WRB.N - Q2 2025 W R Berkley Corp Earnings Call

Question: Andrew Andersen - Jefferies - Analyst : Maybe just on the D&O market, can you remind us, do you guys focus more on the public or the private and I guess where I'm going with this is, does kind of a rebounding M&A and IPO market provide some upside for premium growth here?

Question: Andrew Andersen - Jefferies - Analyst : Fair enough. Okay. And then short tail lines within insurance, I heard your comments on the high net worth homeowners, but would be interested because there's a few other lines in there kind of what you're seeing within A&H or inland marine.

Question: Jamie Inglis - PhiloSmith - Analyst : I was curious about your thoughts about risk-adjusted return. You mentioned it a couple of times, you always do. But the question is, how often and when and how do you change your view about risk as -- by line. And therefore, how does that affect the return? You know what I mean is it a monthly, daily annual thing because the world is changing fairly rapidly today. And therefore, I would assume that the underlying risks are changing as well.