W R Berkley Corp Q3 2024 Earnings Call Transcript

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

Question: Elyse Greenspan - Wells Fargo Securities, LLC - Analyst : My first question, just on the reserves, I think the movement was negligible in the quarter. Was there any movement within insurance versus reinsurance in terms of prior-year reserve development?

Question: Elyse Greenspan - Wells Fargo Securities, LLC - Analyst : Okay, thanks. And then the premium growth did slow within insurance in the quarter. I believe it went from ex workers' comp around 13% to 14% to 9%. So it looks like the implied impact from exposure went from something in the range of 5% to 6% to flat given that you gave us that 8.4% ex comp pricing. Just looking to just get some color on the exposure piece or just what went on within the premiums within insurance ex comp in the quarter.

Question: Elyse Greenspan - Wells Fargo Securities, LLC - Analyst : So given that comment, Rob, would you expect -- I guess, you've kind of steered us in the direction of expecting 10% to 15% top-line growth based on how you see October as well as your view for next year, or would you expect to be back in the Q4 and then in 2025?

Question: Robert Cox - Goldman Sachs - Analyst : Hey, good afternoon. So I was hoping to dive into loss trend a little bit. I think looking back a few years ago, you guys might have noted that -- or implied that it was in sort of the 5% to 6% range. So I was just curious, any thoughts or any color you could provide on the loss trend in insurance today? And is financial inflation coming down a reason to maybe loosen the loss trend assumptions in some places 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. OCTOBER 21, 2024 / 9:00PM, WRB.N - Q3 2024 W R Berkley Corp Earnings Call

Question: Robert Cox - Goldman Sachs - Analyst : Very helpful and very comprehensive. Thank you, Rob. Maybe just as a follow-up on the hurricanes this quarter and into 4Q, clearly some really unfortunate losses there in a number of levels from the recent storms. Do you have a sense of how the market might react from a pricing perspective across admitted E&S and reinsurance? And any impacts outside of the Southeast?

Question: Andrew Kligerman - TD Cowen - Analyst : So back on the net written premium element. So overall, you came in, I think, close to 8% in insurance, a little shy of the 10% to 15%. But as you

Question: Andrew Kligerman - TD Cowen - Analyst : I meant short tail, I'm sorry. So short tail was up low double digit. And my sense there is you're seeing a fair amount of PIF growth, where in contrast, other liability, auto, professional liability, with those lines being up in the low single digits premium-wise, net written premium, it would strike me that PIF is going backwards. Am I reading that properly? (multiple speakers)

Question: Andrew Kligerman - TD Cowen - Analyst : Got it. And just rounding that out, Rob, it sounds like you like the short tail lines that's a PIF grower. And then the other liability and professional are kind of dipping a little bit in line with auto with the discipline you're showing. Is that fair? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 21, 2024 / 9:00PM, WRB.N - Q3 2024 W R Berkley Corp Earnings Call

Question: Andrew Kligerman - TD Cowen - Analyst : Got it. And then just lastly on prior-year developments. Anything of note in the 2020 to '23 accident years?

Question: Andrew Kligerman - TD Cowen - Analyst : Key focus, meaning that you had maybe a bump or an unfavorable? Or just pretty steady?

Question: Michael Zaremski - BMO Capital Markets - Analyst : My first question, Rob, when you talk about the non-admitted market, E&S, are you speaking specifically to the kind of the statutory US definition? We can kind of track on a yearly basis, what you're -- how much US stamped, I guess, E&S you have? Or do you also includes the way you guys think about it non-US that might not be able to [date or run] or see on paper?

Question: Michael Zaremski - BMO Capital Markets - Analyst : Okay, got it. That's right. And just -- I don't know if we don't have -- this has to be that educational. But is the Lloyd's business, is it very different than the US E&S business that makes up the majority of what you do? Is it on a large account versus a small account or anything notable there?

Question: Michael Zaremski - BMO Capital Markets - Analyst : Okay, got it. And I think it was clear, your answers to kind of your view of revenue growth going forward. But just curious, Marsh McLennan, for example, releases an index of pricing by line of business and excess casualty/umbrella has accelerated meaningfully quarter over quarter to maybe plus 20% levels. Maybe that's more of a large account phenomenon, which you don't play in as much. But I just kind of get -- trying to understand whether you feel like there's more potential to play offense, specifically in social inflationary lines to the extent you do continue to see pricing move north.

Question: Mark Hughes - Truist Securities - Analyst : I think you had mentioned that the improvement in the current accident year was business mix. I wanted to make sure that I heard that properly. And then Rob, I thought you might have said that with the rates exceeding the loss trend, the underwriting margin should continue to improve. How should I think about those statements?

Question: Mark Hughes - Truist Securities - Analyst : And then the tax rate for next year, what should we think about that?

Question: Joshua Shanker - BofA Global Research - Analyst : Rich may have said it, where is the new money yield on purchases going on right now for the portfolio?

Question: Joshua Shanker - BofA Global Research - Analyst : And is that being purchased at a different duration than that (multiple speakers)

Question: Joshua Shanker - BofA Global Research - Analyst : Okay. Is the duration -- is there a lengthening going on given the changes in the yield curve behavior?

Question: Joshua Shanker - BofA Global Research - Analyst : That's exactly what I mean. What would we need to see for you to say that longer is better?

Question: Joshua Shanker - BofA Global Research - Analyst : And if credit at all is concern -- I mean, it's always a concern, but given outlook for things, are you incrementally more concerned or less concerned about credit compared to where you were a year ago?

Question: David Motemaden - EVERCORE ISI - Analyst : Rob, I had a question just on the insurance business. So the 60.2% accident year loss ratio ex cat improved 50 basis points year over year. It sounds like all of that was mix and some of the progress you guys have been making on some of those fire losses from a bit ago. I guess I just wanted to see if there's anything unsustainable in the result as well that might be flattering things from maybe like a light non-cap property perspective or anything else that you'd highlight.

Question: David Motemaden - EVERCORE ISI - Analyst : And then I guess, is that something that -- I mean, is that like fully in the numbers now? Or is that something like we should continue to see that improvement going forward specifically on that attritional property book? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 21, 2024 / 9:00PM, WRB.N - Q3 2024 W R Berkley Corp Earnings Call

Question: David Motemaden - EVERCORE ISI - Analyst : And then maybe -- I saw this in the 10-Q in the first quarter and the second quarter. It looked like there was some adverse that you guys -- adverse PYD that you guys have taken on the other liability line of business for accident year '21. And I guess I'm just wondering if that continued here in the third quarter and also just how accident year '22 and 2023 are holding up.

Question: David Motemaden - EVERCORE ISI - Analyst : Okay. Sounds good. Thank you.

Question: Ryan Tunis - Autonomous Research US LP - Analyst : I guess just the first question, thinking about the 10% to 15% growth and trying to figure out if I'm thinking about this right. So is it what you're really saying is you think that Berkeley is a 10% to 15% grower but you flagged some risk reduction or remediation or what have you commercial auto over the next few quarters? And perhaps while you're doing that, it might be more of a challenge to do 10% to 15%. I'm just trying to understand, am I thinking about that right that the 10% to 15% is sort of a longer-term view?

Question: Ryan Tunis - Autonomous Research US LP - Analyst : Got it. Then just a follow-up, just a couple of quick ones on cat. First of all, I'd be curious what your loss was from Helene. And then second of all, I know you don't want to give a number for Milton. But if I look back to the Ian quarter a couple of years ago, about $100 million of cats. Can you say directionally like could it be that big again given the growth or probably from a [dollar] standpoint (multiple speakers)

Question: Alex Scott - Barclays - Analyst : So I wanted to ask you a question about capital. You guys have been growing a little bit less as you're doing some work on some different lines. And externally, it's always hard to sort of judge how much dry powder a company may have in capacity to sort of lean in opportunities as they arise, you have. And so I would just be interested, how do you think about that? And then maybe if you could just refresh us on sort of pecking order at this point with pricing getting better and some good signs but not putting it into growth as much right now. How do you approach share buybacks and special dividends and so forth?

Question: Alex Scott - Barclays - Analyst : As a follow-up, I wanted to ask about reserves. I mean, it's no secret that some external folks struggle with looking at the disclosures on more recent accident years and myself included in that. And it's hard from the outside. So I wanted to ask you, like what are the some of the nuances to it? What are some of the things when you all look at the more recent accident years? And maybe it's an update on the paid loss ratios you're seeing, I don't know. But what are some of the things that give you more confidence than I've had?

Question: Brian Meredith - UBS Equities - Analyst : Two questions for you. First one, Rich, Rob, you talked about some of these businesses that are kind of new and incubating right now, but should help the expense ratio as they come online and you put them into your results. Is there any way you can give us some quantification about how much premium is sitting in these businesses and what benefit they could potentially have from a premium perspective looking over the next 12 months?

Question: Brian Meredith - UBS Equities - Analyst : So that was the benefit in the quarter. Got you.

Question: Brian Meredith - UBS Equities - Analyst : And then my second question, I think you may have talked about this in previous calls, but your investment funds, they've been -- for the last, I would say, at least 18 months, trending below what your historical returns on those funds have been over time. Is that something we should expect going forward lower returns there? Or is there something unusual going on right now? Should that snap back here at some point?