Yahoo Finance W.R. Berkley (WRB) Q1 Earnings, Revenues Top, Premiums Rise Y/Y
W.R. Berkley Corporation’s WRB first-quarter 2024 operating income of $1.56 per share beat the Zacks Consensus Estimate of $1.46 by 6.9%. The bottom line improved 56% year over year.
The insurer benefited from higher premiums, a rise in the core portfolio, increased underwriting income and an improvement in the loss ratio.
Shares gained 0.6% in the pre-market trading session to reflect the outperformance.
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation price-consensus-eps-surprise-chart | W.R. Berkley Corporation Quote
Behind the Headlines
W.R. Berkley’s net premiums written were a record $2.9 billion, up 10.7% year over year. The figure was higher than our estimate of $2.8 billion.
Operating revenues came in at $3.2 billion, up 11.6% year over year, on the back of higher net premiums earned as well as improved net investment income. The top line beat the consensus estimate by 0.2%.
Net investment income surged 43.2% to a record $319.8 million, driven by a 63.2% increase in the core portfolio. The figure was higher than our estimate of $302 million.
Total expenses increased 6.5% to $2.7 billion, primarily due to higher losses and loss expenses and other operating costs and expenses. The figure matched our estimate.
The loss ratio improved 160 basis points (bps) to 6.2, while the expense ratio improved 20 bps year over year to 28.6.
Catastrophe losses of $30.5 million in the quarter were narrower than $47.9 million incurred in the year-ago quarter.
Pre-tax underwriting income increased 31.8% to $309 million. The consolidated combined ratio (a measure of underwriting profitability) improved 180 basis points year over year to 88.8.
Segment Details
Net premiums written at the Insurance segment increased 11.9% year over year to $2.4 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, workers' compensation and auto. The figure was lower than our estimate of $2.5 billion.
The combined ratio improved 100 bps to 90.2.
Net premiums written in the Reinsurance & Monoline Excess segment increased 4.2% year over year to $405.6 million on higher premiums at property reinsurance and monoline excess. The figure was higher than our estimate of $400.8 million.
The combined ratio improved 700 bps to 79.6.
Financial Update
W.R. Berkley exited the first quarter of 2023 with total assets worth $37.9 billion, up 2% from year-end 2023. Senior notes and other debt remained almost flat at $1.8 billion.
Book value per share increased 2.5% from 2023 end levels to $30.34 as of Mar 31, 2024.
Cash flow from operations was $746.2 million in the first quarter of 2023, up 67.6% year over year.
Operating return on equity expanded 630 bps to 22.7%.
Zacks Rank
WRB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
The Travelers Companies TRV reported first-quarter 2024 core income of $4.69 per share, which missed the Zacks Consensus Estimate of $4.75 on higher-than-expected catastrophe loss. The bottom line increased 14.1% year over year, driven by higher underlying underwriting gain and higher net investment income, partially offset by higher catastrophe losses. Travelers’ total revenues increased 15.3% from the year-ago quarter to $11.2 billion, primarily driven by higher premiums. The top-line figure beat the Zacks Consensus Estimate by 0.1%.
Net written premiums increased 8% year over year to about $10.2 billion, driven by strong growth across all three segments. The figure was higher than our estimate of $9.9 billion. Travelers witnessed an underwriting gain of $1.4 billion, up 57.3% year over year, driven by higher business volumes.
Consolidated underlying combined ratio of 87.7 improved 290 bps year over year. The combined ratio improved 150 bps year over year to 93.9 due to an improvement in the underlying combined ratio, partially offset by higher catastrophe losses and lower net favorable prior-year reserve development. The Zacks Consensus Estimate was pegged at 94.
Progressive Corporation’s PGR first-quarter 2024 earnings per share of $3.83 beat the Zacks Consensus Estimate of $3.20. The bottom line improved nearly eight times year over year. Operating revenues of $17.1 billion beat the Zacks Consensus Estimate by 2.4% and increased 20.1% year over year.
Net premiums earned grew 19% to $16 billion and beat our estimate of $14.4 billion. Combined ratio — the percentage of premiums paid out as claims and expenses — improved 1290 bps from the prior-year quarter’s level to 86.1.
RLI Corp. RLI reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. The quarterly results reflect continued premium growth across all product segments. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.
Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety segments (up 12.1%). Our estimate was $511 million. Underwriting income of $77.7 million increased 16%. Combined ratio deteriorated 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.
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