WR Berkley's reinsurance unit posts underwriting loss in Q1
Commercial lines insurer WR Berkley Corporation has reported an underwriting loss for the first quarter of 2017 in its reinsurance operations.
The combined ratio in the reinsurance segment jumped to 112.9 percent in the first quarter of 2017 compared to 97.6 percent in the same period a year ago.
Gross premiums written in reinsurance dropped to $166.8 million from $203.7 million over the period. Pre-tax income fell to $4.6 million from $28.1 million while the loss ratio increased to 75.9 percent from 59.2 percent.
“The first quarter reflected the competitive climate in the re/insurance industry,” the company commented in a press release. “While market conditions remain challenging, particularly in the reinsurance segment, we were able to grow in select areas where margins remain attractive while gaining traction in some of our new ventures.”
Overall, the company’s net income to common stockholders was $123.4 million in the first quarter of 2017, up from $119.5 million.
“Favourable results in our alternative investment portfolio resulted in strong investment income for the quarter,” the company commented in the statement. “In addition, with net realized investment gains of $52 million in the quarter, we believe that we are on track to exceed our annual expectation of $100 million of gains in 2017.”
The company increased loss reserves by $30 million, pre-tax, to reflect the change in the Ogden discount rate in the UK, which principally impacted the reinsurance segment. Net written premiums were $1.65 billion in the first quarter of 2017 compared to $1.66 billion.
In the primary insurance segment, pre-tax income remained unchanged at $200.0 million over the period. The loss ratio remained stable at 60.9 percent in the first quarter of 2017 compared to 60.5 percent in the same period a year ago. Similarly, the combined ratio in the insurance business barely changed to 93.8 percent compared to 93.0 percent.
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