19 slides from W.r. Berkley's conference presentation, Mar 3, 2025
Slide 1: March 3, 2025
March 3, 2025 Proprietary & Confidential Information Not for Further Dissemination
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2025 and beyond, are based upon
Slide 3: Unique Competitive Advantages Drive Sustainable Growth and Profitability
UNIQUE COMPETITIVE ADVANTAGES DRIVE SUSTAINABLE GROWTH AND PROFITABILITY COMPETITIVE ADVANTAGES Industry Knowledge and Expertise Product Geography Close to Customer Specialized Expertise Decentralization Speed in Responding to Changing Market Conditions Cycle Management Focus on Long Term Risk-Adjus
Slide 4: Delivering Best in Class ROEs and Growth in Net Income
DELIVERING BEST IN CLASS ROEs AND GROWTH IN NET INCOME RETURN ON BEGINNING EQUITY NET INCOME 25.00% $2,000 $1,800 20.00% $1,600 $1,400 15.00% $1,200 $1,000 10.00% $800 $600 5.00% $400 $200 0.00% $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Proprietary & Confidential Information 4 Not for Fur
Slide 5: Delivering on Successful Long-Term Strategy as a Decentralized Specialist
DELIVERING ON SUCCESSFUL LONG-TERM STRATEGY AS A DECENTRALIZED SPECIALIST UNDERWRITER NET PREMIUMS WRITTEN UNDERWRITING INCOME $14 $1,200 $12 $1,000 $10 $ Billions $ Millions $800 $8 $600 $6 $400 $4 $200 $2 $0 $0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 2020 2021 20
Slide 6: Managing the Insurance Cycle for Long-Term Success
MANAGING THE INSURANCE CYCLE FOR LONG-TERM SUCCESS WRB: Write as much good business as possible WRB: Accelerate growth as price * Price Increases High Profitability WRB: Slower growth and adequacy returns to various market * more selective underwriting segments Lines of business no * Reduced longer
Slide 7: Decentralization Facilitates Growth in Parts of Business with Best Margin Potential
DECENTRALIZATION FACILITATES GROWTH IN PARTS OF BUSINESS WITH BEST MARGIN POTENTIAL 2020 2024 $7.3B NPW $12.0B NPW 2% 2% 3% 4% 6% 8% 9% 32% 36% 10% 64.8% Growth 12% 13% 15% 18% 10% 20% Other liability Workers' compensation Other liability Workers' compensation Short-tail lines Auto Short-tail lines
Slide 8: E&S and Specialty Markets Continue to Provide Ample Opportunities
E&S AND SPECIALTY MARKETS CONTINUE TO PROVIDE AMPLE OPPORTUNITIES Unprecedented growth in the specialty WRB CUMULATIVE GPW GROWTH insurance segment over the past few years is SINCE 2018 forecast to continue over the next several years 140% 126.8% 120% U.S. SPECIALTY INSURANCE MARKET 84.5% 100% 80% 6
Slide 9: 75% Cumulative Annual Rate Increase Excluding Workers' Compensation Since YE 2017
75% CUMULATIVE ANNUAL RATE INCREASE EXCLUDING WORKERS’ COMPENSATION SINCE YE 2017 QUARTERLY RATE CHANGE CUMULATIVE ANNUAL RATE INCREASE 2018-2024 EXCLUDING WORKERS’ COMPENSATION SINCE 2017 Quarter Rate Increase Quarter Rate Increase 80.0% 74.8% Excluding Workers’ Excluding Workers’ Compensation Comp
Slide 10: Significantly Less Volatility from Catastrophes
SIGNIFICANTLY LESS VOLATILITY FROM CATASTROPHES 18% RATIO OF EVENT LOSS TO SURPLUS FOR LARGEST EVENTS SINCE 1992* 16.2% 16% 13.8% 14% 12% 11.4% 10.9% 10% 9.6% 8% 6.9% 6% 5.4% 5.0% 4.3% 4.3% 3.9% 3.8% 3.6% 4% 3.0% 2.8% 2.4% 1.7% 1.9% 2% 1.4% 1.5% 1.1% 0.9% 0.9% 1.1% 0.8% 0.0% 0% 6/30/1992 12/31/1993
Slide 11: Significantly Less Volatility Overall
SIGNIFICANTLY LESS VOLATILITY OVERALL 2004-2023 0.0 Lower Volatility, Worse Loss Ratio Lower Volatility, Better Loss Ratio WRB Standard Deviation of Loss Ratio over 20 Years 2.0 4.0 6.0 Average 20-year Standard Deviation (In Loss Ratio Points) = 7.6 Loss Ratio 8.0 Points 10.0 12.0 Average 20-year 14
Slide 12: Robust Quarterly Reserve Process Minimizes Volatility
ROBUST QUARTERLY RESERVE PROCESS MINIMIZES VOLATILITY AND POSITIONS BUSINESS FOR FUTURE PROFITABILITY COMPETITIVE ADVANTAGES: QUARTERLY RESERVE REVIEW PROCESS LOWER EARNINGS VOLATILITY ▪ Results in frequent small movements that reduce the likelihood of large periodic adjustments ▪ Reduces systemic r
Slide 13: Managing Social Inflation
MANAGING SOCIAL INFLATION FIRST ISSUE PROACTIVE UNDERWRITING MENTION RECOGNITION MEASURES ACTION First mentioned Began increasing reserves Began adding an “X-factor” In addition to significant rate potentially early signs of for long-tailed liability to observed loss trend for increases in excess of
Slide 14: Improvement in Key Loss Reserve Metrics
IMPROVEMENT IN KEY LOSS RESERVE METRICS PAID LOSS RATIO INITIAL IBNR AS A PERCENT OF NET 60.0% 45.0% PREMIUMS EARNED 55.0% 50.0% 40.0% 45.0% 40.0% 35.0% 35.0% 30.0% 30.0% Calendar Year Accident Year At 12 Months IBNR % OF TOTAL RESERVES IBNR / CASE RESERVES 62.0% 1.70 60.0% 1.60 58.0% 1.50 56.0% 1.4
Slide 15: Reserve Risk Has Declined as Carried Reserve Position Improved to 69th Percentile
RESERVE RISK HAS DECLINED AS CARRIED RESERVE POSITION HAS IMPROVED TO 69TH PERCENTILE OF ACTUARIAL RANGE 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 53% 69% 0 Carried Reserves Carried Reserves @ 12/31/2019 @12/31/2024 $10.76B $17.14B 53rd PERCENTILE 69th PERCENTILE Proprietary & Confidential Infor
Slide 16: Investment Income Continues to Benefit from Increasing Invested Assets and Higher Rates
INVESTMENT INCOME CONTINUES TO BENEFIT FROM INCREASING INVESTED ASSETS AND HIGHER INTEREST RATES ($000) CASH FLOW FROM OPERATIONS ($000) INVESTMENTS IN FIXED MATURITY SECURITIES $4,000 At December 31 $3,500 $23,000 $3,000 $21,000 $2,500 $19,000 $2,000 $17,000 $1,500 $1,000 $15,000 $500 $13,000 $0 $1
Slide 17: Growth in Net Income Sensitivity (%)
GROWTH IN NET INCOME SENSITIVITY (%) $ Millions Growth in Net Premiums Earned 5.0% 7.5% 10.0% 12.5% 15.0% 4.50% 10.4% 12.0% 13.7% 15.4% 17.0% $192 $222 $253 $284 $315 4.75% 11.0% 12.7% 14.4% 16.0% 18.0% New Money Rate $204 $234 $265 $296 $327 5.00% 11.7% 13.4% 15.0% 16.7% 18.4% $215 $246 $278 $309 $
Slide 18: Long-Term Value Creation
LONG-TERM VALUE CREATION OVERALL GAIN IN BOOK VALUE PER SHARE WITH DIVIDENDS COMPOUNDED RELATIVE STOCK PRICE PERFORMANCE W. R. Berkley Corporation vs. S&P 500® W. R. Berkley Corporation vs. S&P 500® 125,000% 122,151% W. R. Berkley Corporation Cumulative Growth: 65,735% 100,000% 75,000% 50,000% 25,00
Slide 19: Always do right - Mark Twain
“Always do right. This will gratify some people, and astonish the rest.” - Mark Twain - Karen Horvath 203-629-3040 khorvath@wrberkley.com www.berkley.com