W R Berkley Corp Q4 2024 Earnings Call Transcript

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

Question: Alex Scott - Barclays - Analyst : Hi, good afternoon. First one I had for you all is just how we should think through balancing growth. It sounded like you're not willing to budge on on the margins you're seeing in potential improvement even just given the landscape, I mean, particularly for reinsurance, but even in insurance is what's going on with property. Do you think we're going to go through a period where we have to potentially be lower than where you all would like to be on growth over the medium to long term? And how does that get balanced out with potential capital return and just how we should think about where you run your leverage through periods like that.

Question: Alex Scott - Barclays - Analyst : Got it. That's all very helpful. Maybe focusing a little more on the primary side. I guess we heard from one of the other smaller specialty companies that property, they're seeing a lot of competition. I think they flagged MGAs, I think others flagged the Lloyd's market. How is price adequacy in property within the insurance business? And is that still a place that you can grow to your targeted profitability?

Question: Alex Scott - Barclays - Analyst : Got it. Thank you.

Question: Elyse Beth Greenspan - Wells Fargo Securities, LLC - Analyst : Good afternoon. Hi, thanks. Good evening. My first question, you guys in the last couple of calls, right, you have been willing to kind of provide the reserve breakdown right by segment? I was hoping you could give us tonight and then just provide any color you might have seen within insurance or reinsurance that stands out with short or long tail reserves in the quarter?

Question: Elyse Beth Greenspan - Wells Fargo Securities, LLC - Analyst : Thanks and it sounds like from your comments, right, you guys are pretty cautious right on the casualty reinsurance market. So as you think about how that market, I guess, could play out in '25 as well as, right other markets, be that other long or short tail lines. Do you think you get back, Rob, to 10% to 15%, I know, right, it's less top line to grow you don't want to grow in areas right that aren't offering good opportunities. How do you see growth from a top line perspective playing out in 2025?

Question: Elyse Beth Greenspan - Wells Fargo Securities, LLC - Analyst : And then one last one. Was there anything it looked like the insurance underlying loss ratio maybe picked up a little bit in the quarter from where it had been running. Was there anything.

Question: Elyse Beth Greenspan - Wells Fargo Securities, LLC - Analyst : Okay. Thank you.

Question: Andrew Kligerman - TD Securities - Analyst : Thanks a lot. Good evening. Looking at the other liability net written premium, it was up a solid 9.5%. And if I remember correctly, Rob, you had expressed a fair amount of optimism around pricing in the insurance casualty line in October, and you felt pretty good that it might see some pickup. Could you kind of elaborate on where that is now in January?

Question: Andrew Kligerman - TD Securities - Analyst : Okay. So what Rob, what's the disconnect between your concerns about the reinsurance casualty pricing? How do you reconcile the reinsurance pricing coming off. And I think you said down 15%?

Question: Andrew Kligerman - TD Securities - Analyst : For casualty. And yet you seem to like it on the primary level. Could you maybe reconcile the two and why you're far less favorably disposed on reinsurance casualty?

Question: Andrew Kligerman - TD Securities - Analyst : Interesting. And then maybe one last quick one. International, not a lot of color on that, but kind of curious because your insurance officer and Asia, Latin America, UK, Europe. Any color that you could share with us on what's going on abroad, and how you're seeing those markets for your business?

Question: Andrew Kligerman - TD Securities - Analyst : Thanks a lot.

Question: Mark Douglas Hughes - Truist Securities, Inc - Analyst : Yeah, thank you. Good. Afternoon. Hi, Mark, good afternoon. Rob, any comments on the mix between E&S and admitted. Is there still strong movement into E&S? How do you see that now?

Question: Mark Douglas Hughes - Truist Securities, Inc - Analyst : And then you expressed a lot of confidence that the underwriting profitability wouldn't be deteriorating or would be likely improving and definitely not deteriorating. Pricing is still up nicely. What should we think about the inflation and loss costs? Are you seeing a step down in loss inflation? I know you've talked about the social inflation in those drivers, but it seems like you have a little more optimism about the spread on a go-forward basis? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 27, 2025 / 10:00PM, WRB.N - Q4 2024 W R Berkley Corp Earnings Call

Question: Mark Douglas Hughes - Truist Securities, Inc - Analyst : Thank you.

Question: Michael Zaremsk - EMO Capital Markets - Analyst : Hi, Mike. Good evening.

Question: Michael Zaremsk - EMO Capital Markets - Analyst : First question. Coming back to I'm going to assume we don't know that you don't, you don't have the answer to the reserve changes this quarter, but based on kind of the year-to-date nine months, it looks like workers' comp was definitely a big good guy in terms of reserve releases. So I'm just trying to kind of curious. One of the tough question, tougher questions we get is, why is rob bearish on kind of workers' comp if profitxs are are so good and it still continues to to release a lot of reserves. So just kind of curious if you're your views on camp or are improving potentially or just kind of talking through the dynamics there.

Question: Michael Zaremsk - EMO Capital Markets - Analyst : Got it. Okay. I appreciate the candidness there. Switching gears, if we reflect on the past year or whatever amount of time you would like to reflect on, is it fair to assume that given you're growing faster in E&S than in scanner commercial, that's having kind of a positive impact on the overall company's combined ratio? Or is that not a fair assessment?

Question: Michael Zaremsk - EMO Capital Markets - Analyst : Got it. And maybe just lastly, sticking on the E&S marketplace. And a lot and clear about your growth outlook kind of direction remains the same as last quarter. But specifically in the E&S marketplace, given how I guess, good returns are for most companies. Just we're hearing some companies talk about some pricing deceleration in the E&S casualty marketplace. Are you seeing that at all?

Question: Michael Zaremsk - EMO Capital Markets - Analyst : Thank you, Rob.

Question: Bob Jian Huang - Morgan Stanley - Analyst : Good. Evening. So quick question on -- like I'm curious your view on social inflation really. So it does feel like plaintiff bar is more active in the Northeast and West Coast. In fact, something like California's Commissioner also touched on when it comes to LA wildfire. Are there any particular geography in the US where you feel it could be represented like a higher risk area for social inflation? Like is there a way to think about the Northeast, West Coast, Midwest, Curious your way to think about it. Is it shifting away from Florida and Georgia?

Question: Bob Jian Huang - Morgan Stanley - Analyst : Got it. Okay. I guess my follow-up is just so that like I'm clear. Then in that case, is it fair to say that some of the commercial casualty lines could potentially behave more similar to personal line in the sense where geography and region is more important than the business mix? Like is that a fair statement down the road?I'm just curious as to if that is the direction?

Question: Bob Jian Huang - Morgan Stanley - Analyst : Yeah, yeah. Just to see if that makes sense on your side.

Question: Bob Jian Huang - Morgan Stanley - Analyst : Okay. Got it. I really appreciate it. Thank you.

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : Hey, good evening.

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : So, Rob, you spoke, you spoke a little bit about some of the competitiveness in the casualty reinsurance market and commend you guys for stepping back a little bit from that market. I guess has that made you reevaluate at all your outward program, one of your peers purchased a little bit more coverage. Has that entered your thought process at all here as we or did that enter your thought process at all at the 1/1 renewal?

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : Got it. That's helpful. And then it was good to see the commercial auto growth tick up a little bit as well as the other liability growth in the quarter. I guess are rates in those lines? Are they at levels that are, I guess, good enough for you guys to continue to lean in as we head into 2025?

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : Got it. That's helpful. And then I know you guys didn't get the reserve development by segment. So I'll follow up with Ken. I guess. I'm just wondering.

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : Yeah, will do. I guess there's obviously a lot more focus on the more recent accident years. I'm sure you guys are also laser-focused on that as well. And we can see it in the pit. Any sort of incremental color that you can provide on that would be helpful.

Question: David Kenneth Motemaden - Evercore ISI Institutional Equities - Analyst : Yeah, understood. Thanks for that color.

Question: Meyer Shields - KBW - Analyst : Good afternoon or evening.

Question: Meyer Shields - KBW - Analyst : Good evening. I guess -- so we spend some time talking about like these examples where bodily injury to individuals is exacerbating social inflation. How is the loss trend in those situations, is that getting worse? Or is it just something that you're talking about now that you've been seeing internally for long. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 27, 2025 / 10:00PM, WRB.N - Q4 2024 W R Berkley Corp Earnings Call

Question: Meyer Shields - KBW - Analyst : Fair enough. Okay. When you talk about, I guess, the various court jurisdictions. So the one that stands out to the concern is older ones getting, I'm sorry, better ones historically getting worse. How should we think about that in the context of longer tail or medium tail lines reserves.

Question: Meyer Shields - KBW - Analyst : Okay. Understood. And then final quick question. You talked about a mix change impacting the ex cat accident year loss ratio in the Insurance segment. How is it impacting the expense ratio? That mix change?

Question: Meyer Shields - KBW - Analyst : Okay, Fantastic. Thanks so much.

Question: Brian Meredith - UBS - Analyst : Thanks. Hey, how you doing? A couple of questions here for you. The first one big picture. So a number of the standard commercial carriers have talked about grant still small growing in the E&S market, right, how the operations and are growing there. I'm just curious kind of what your thoughts are there. Is that at all impeding on some of maybe your opportunities in the marketplace? Are you seeing that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 27, 2025 / 10:00PM, WRB.N - Q4 2024 W R Berkley Corp Earnings Call

Question: Brian Meredith - UBS - Analyst : Good. That's helpful. And then I guess the other one, I'm curious about is maybe you can kind of flesh out a little bit what's going on with Berkley One. I know that's been a good operation growing kind of expectations here for 2025, homeowner insurance is still a pretty hard market. Maybe give us some view on kind of opportunity there?

Question: Andrew Kligerman - TD Securities - Analyst : Thanks, Brian. Have a good evening.

Question: Joshua Shanker - Bank of America - Analyst : Yeah. Thank you very much. Hi there, everybody. I just wanted to maybe ask a little more specific question on Brian, hopefully one. Obviously, you don't write homeowners in California. There's certainly about that market that are unattractive to you. I'm wondering what kind of reforms you could see in that state's insurance regime that would make that market more attractive for Berkley One? And are there other states that you have a probits writing until some things change about those states?

Question: Joshua Shanker - Bank of America - Analyst : And I want us to go an investment question. Over the long term, the shareholders have been rewarded very well. through some of the alternative investments that Berkley, you have made over many years. It's not been really the case in 2024 in a year which has enjoyed very significant market appreciation for public equities. Can you talk a little bit about what you see for '25? Is the positioning of the portfolio potentially improve? Obviously, you're not going to make foolish investments overall. But what's been preventing Berkley from realizing the potential of that part of its strategy and what can we see in the future?

Question: Joshua Shanker - Bank of America - Analyst : Thank you. I will see the evening to you, gentlemen. Thank you very much.