W R Berkley Corp at Bank of America Financial Services Conference Summary

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

Question: Joshua Shanker - BofA Global Research (US) - Analyst : <_ALACRA_META_ABSTRACT>Look, I think that it's -- you've been very fulsome over time with information to direct investors how to think about the company and how to think about the industry. Sometimes, maybe you have too much information. And one of the --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Recently, some investors would argue that you gave guidance about growth for the company of 10% to 15%, and you have not been meeting that guidance recently. And there's some talk, is that long-term guidance, short-term guidance? If it's real-time guidance, what's preventing Berkley from growing? There's a lot of places here, but how should we think about growth of the company and where we are and I guess cycle in Berkley's opportunities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, WRB.N - W R Berkley Corp at Bank of America Financial Services Conference

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And look, there's not one market, of course. The -- have things turned out better from a margin perspective than you thought a year ago that's put a dampener on the prospect for raising prices to some extent for the industry?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : I guess this quick pivot. Although we had some nice price increases in 2020, 2021, 2022, the last real, I mean, cycle turn was really over 20 years ago, back in the 2001, 2002 period. And you had a lot of startups and a lot of people pushing into property lines. They REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, WRB.N - W R Berkley Corp at Bank of America Financial Services Conference abandoned confidence in liability after for so many losses mounting from '96 to '01. And nobody wants to take tail risk. Berkley who had a lot of experience in that category remained true to liability. Of course, you do write property also, but it's always been a smaller part of the book. Over the past few years, though, the mix has been changing at Berkley and you're increasing exposure to property. How big can property get us part of Berkley's pie? Consistently and certainly in the first quarter '25, we'll see Berkley's exposure to catastrophe events has been a source of stability in the numbers compared to a lot of other companies that have more volatility because they do write a lot of property. What is the process for Berkley as a property and liability company versus a liability company that has a few irons in the fire, I guess, in the property space?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, I got to pivot to one particular property line, which maybe gets more attention sort of given its size, it's one of the fastest-growing parts of the W. R. Berkley business model, I guess, maybe in '17, you've pivoted into -- or '16 -- into high net worth homeowners. It's been growing at very fast pace. Wouldn't you say from the outset, you don't write homeowners in California?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : But what was necessary at Berkley in terms of capabilities to actually enter that market? And I guess, partially the circumstances with the ACE, Chubb merger made it a fortuitous time, not just you entered that market, but also Cincinnati Financial, Pure, Safeco, there was an opportunity for a number of companies who wanted a piece of that market. Is that market is going to continue to grow as, I guess, appetite for that sort of risk needs to be shouldered by a more fragmented space? And will Berkley be much bigger in high net worth homeowners in the future? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, WRB.N - W R Berkley Corp at Bank of America Financial Services Conference

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Was there anything -- I mean, anything is a very broad statement, but was most of it had to be acquired in terms of talent? Or were there skill sets already at W. R. Berkley that were able to be applicable to this unique niche?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : We put out a fairly large report about a month ago, and we're looking at performance of different homeowners businesses, particularly in the face of catastrophe. And one of the surprises, I guess, we found the high net worth homeowners businesses have done particularly well in the face of coastal hurricane risk. I think that you can pick and choose the quality of the houses that you insure, and they've done less well in the face of wildfire and England hurricane, is, I guess, what I would call it, the places that aren't supposed to get that -- those losses. Is the high net worth business a good business for, I guess, catastrophe-exposed locales?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And in terms of the California market, I just -- I know you're not there certainly on homeowners, but you are there in other lines of business. Will the regulatory overhang in California, you think, lessen as the state needs more insurers to offer capacity? Or are we still in early days figuring out how the regulator will respond to a lot of these issues?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Switching gears a little bit. Let's talk about reserving. I think that people associate the aphorism, the pig through the python, with you. You say it quite often. And I think -- when we talk about that pig, it's really the 2016 to 2019 pig, I guess, that people had focused on. There was some indigestion around it. And over time, you worked through it. But now the question isn't so much about '16 to '19. There's still some issues there, but obviously, the reemergence from the pandemic, the reopening, the inflation that occurred, it's created a lot of questions around '22 and '23, which is more recent and hasn't quite seasoned to the same degree. Do you have thoughts about how Berkley thought about the loss picking of those years? What's been happening in those years and more maybe some broad industry thoughts around how long the industry is going to be fighting and figuring out what happened in those post-pandemic years?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And particularly in auto, is that a frequency issue or a severity issue with nuclear verdicts and whatnot?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : I just want to remind everyone that if you want to ask Rob a question, you can signal me and I'll call on you. But let's go to another corner, and that's not significant in the Berkley portfolio for a lot of questions over the past few months or maybe a little longer than that, Voya, Everest Re, Cigna have all announced adverse experience in medical stop loss, which Berkley is a participant in that market. Can you talk a little about what's going on and what your experience has been and why you think some are having problems and some may not be?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, all those companies I mentioned have said that they either are exiting or have raised prices significantly in the -- entering the 2025 year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, WRB.N - W R Berkley Corp at Bank of America Financial Services Conference

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Will this be an opportunity for Berkley to take some share of that market? And do you want more of it?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : So away from the underwriting, let's move to investing. Obviously, I would call W. R. Berkley something -- I don't know, maybe you call it that, but I feel, for myself, total return company. That it's not just seeking --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Focused on total return. And as that's the case, you shake the investment portfolio differently than some other companies. One of the things that is notable is that Berkley has a much shorter duration of its portfolio. In fact, even though it's probably a pejorative, sort of the mismatch between the liability duration at Berkley and the asset duration is wider probably than any other company I cover, which is obviously facilitated less mark-to-market losses for the company, but interest rates are going up and the curve is steepening. How does the posture feel in a higher interest rate environment? And how long would Berkley consider going in duration under the right circumstances?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And in terms of the move, I guess, from 2.4 to 2.6, that's putting -- its new money being put at a higher point on the curve than in the previous cash flows. Are you taking some gains and redeploying them? What's the math?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And additionally, in terms of differences with some of your peer companies, I mean Berkley over time allocated a much larger proportion of its portfolio to alternative strategies, which have paid off over time in book value growth, both from mark-to-markets and through realized gains over time. You said as interest rates went higher, your appetite for some alternative strategies might be less because you're making so much money on the traditional bond yields. Has the market changed that? I mean, we're in quite a bullish market for equities right now. Has -- is there an opportunity out there for deploying more cash into alternative strategies?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And there's obviously legacy deployments, not that's been by any means terrible, but the performance of the alternative portfolio is weaker than the long-term history, especially relative to the market in 2024. Where are the investments generally concentrated that have had less response to what's been a pretty good tape for risk-taking investors?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, we'll get to that. I want to touch just upon the arbitrage portfolio for a second. So in terms of the alternatives, the broad categories, investment funds, arbitrage.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And given (technical difficulty) but the IPO market seems to be maybe unfreezing and the interest rates are higher. Is that a better marketplace for the type of investing that the internal arbitrage or so team does?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : So let's talk about the understated economics of the portfolio and mark-to-market. I mean, your Chairman, certainly, this was, I think, a hobby horse for him -- the balance sheet does not reflect our economic value. I think he said that many, many times.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Not just -- I've heard it too. The -- in terms of thinking about the -- obviously, there was a very large real estate transaction done a few years ago where Berkley was a sizable gain. That doesn't have to be the only one, but is the scale of the misvaluing because of the conventional accounting similar to what it's been in the past? If it was understated 10 years ago, is it understated to the same degree now? Or have there been enough transactions where the magnitude of that mixed pricing of that accounting for the book is different than -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, WRB.N - W R Berkley Corp at Bank of America Financial Services Conference

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And largely, these mismarks will be real estate transactions, I feel, which are difficult to mark unless you have actual price in the marketplace. What is Berkley's appetite for deploying more capital into illiquid real estate currently?

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Someone comes to you or you find a unique investment opportunity to say we prefer to delopy into that.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Let me just say like just a transaction comes that looks particularly attractive and say, well, this is unique. Let's put some --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Let's talk about capital deployment. Obviously, Berkley has been a regular dividend or special dividends into a regular quarterly dividend. Also, the company buys back a lot of stock. Sometimes just both at the same time. I've asked this question before. I've never completely been satisfied to understand the capital model --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : But -- that might be the case, but in terms of -- what are the things that this should be a time for buyback, this should be a time for special dividends? How are you -- how do you evaluate those two things? Obviously, the stock trades where it does, but some people argue it's expensive. Some people would say, look, the long-term return justifies it.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Some would say, it's a bargain, too.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, there's actually a fourth lever. There's M&A, which Berkley has (multiple speakers) very, very --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Right. That makes sense. But at the same time, also when you want to start new businesses, you start them. You acquire talent rather than acquiring businesses.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, not that I do this on a regular basis, but if I go to your website and I go to look at the Berkley businesses, there's always about 50 or 60 Berkley businesses at any given time, and you're always starting new businesses, but the number stays around like 50 or 60 businesses. Do -- are the businesses being sort of glom together or something you just decide it wasn't the right thing and we --

Question: Joshua Shanker - BofA Global Research (US) - Analyst : And in terms of those 59, how many are in the greenfield sort of category where, you as an incubator of talent and ideas, it's early stages, and you'll see where it goes.

Question: Joshua Shanker - BofA Global Research (US) - Analyst : Well, I'm going to take it that to me, the crowd, because nobody seem to have a question, was riveted the whole time, but it would be the last chance, if anyone has a question. I think that we're going to call here then. Thank you, Rob.