BERKLEY W R CORP - FORM 8-K - EX-99.1 - UNAUDITED FINANCIAL INFORMATION RELATING TO THE COMPANY - April 25, 2013

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8-K - FORM 8-K DATED APRIL 25, 2013 - BERKLEY W R CORPwrb425138k.htm
W. R. Berkley Corporation     1

Consolidated Financial Summary
(Amounts in thousands, except per share data)

 
 
First Quarter
 
 
 
2013
 
2012
 
Revenues:
 
 
 
 
 
Net premiums written
 
$
1,376,966

 
$
1,203,526

 
Change in unearned premiums
 
(144,847
)
 
(103,875
)
 
Net premiums earned
 
1,232,119

 
1,099,651

 
Investment income
 
135,929

 
157,619

 
Insurance service fees
 
26,736

 
23,877

 
  Net investment gains
 
19,969

 
43,477

 
Change in investment valuation allowance, net of other than temporary impairments
 
—

 
4,014

 
Revenues from wholly-owned investees
 
91,735

 
49,675

 
Other income
 
281

 
392

 
Total revenues
 
1,506,769

 
1,378,705

 
Expenses:
 
 
 
 
 
Losses and loss expenses
 
744,679

 
679,472

 
Other operating costs and expenses
 
481,604

 
431,779

 
Expenses from wholly-owned investees
 
89,152

 
51,330

 
Interest expense
 
31,111

 
28,821

 
Total expenses
 
1,346,546

 
1,191,402

 
Income before income taxes
 
160,223

 
187,303

 
Income tax expense
 
(43,625
)
 
(52,071
)
 
Net income before noncontrolling interests
 
116,598

 
135,232

 
Noncontrolling interests
 
17

 
86

 
Net income to common stockholders
 
$
116,615

 
$
135,318

 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
Basic
 
$
0.86

 
$
0.98

 
Diluted
 
$
0.83

 
$
0.94

 
 
 
 
 
 
 
Average shares outstanding:
 
 
 
 
 
Basic
 
136,025

 
137,814

 
Diluted
 
141,223

 
143,411

 


W. R. Berkley Corporation     2

Business Segment Operating Results
(Amounts in thousands, except ratios) (1) (2)

 
 
First Quarter
 
 
2013
 
2012
Insurance-Domestic:
 
 
 
 
Gross premiums written
 
$
1,179,722

 
$
1,038,434

Net premiums written
 
986,180

 
882,943

Premiums earned
 
884,378

 
810,069

Pre-tax income
 
141,350

 
147,735

Loss ratio
 
62.4
%
 
62.9
%
Expense ratio
 
33.1
%
 
33.2
%
GAAP combined ratio
 
95.5
%
 
96.1
%
 
 
 
 
 
Insurance-International:
 
 
 
 
Gross premiums written
 
$
251,575

 
$
200,504

Net premiums written
 
205,135

 
167,994

Premiums earned
 
171,119

 
143,885

Pre-tax income
 
22,382

 
15,699

Loss ratio
 
55.8
%
 
57.3
%
Expense ratio
 
38.0
%
 
40.3
%
GAAP combined ratio
 
93.8
%
 
97.6
%
 
 
 
 
 
Reinsurance-Global:
 
 
 
 
Gross premiums written
 
$
200,324

 
$
162,588

Net premiums written
 
185,651

 
152,589

Premiums earned
 
176,622

 
145,697

Pre-tax income
 
37,941

 
31,638

Loss ratio
 
55.0
%
 
60.2
%
Expense ratio
 
36.3
%
 
37.6
%
GAAP combined ratio
 
91.3
%
 
97.8
%
 
 
 
 
 
Corporate and Eliminations:
 
 
 
 
  Net realized investment gains
 
$
19,969

 
$
47,791

  Interest expense
 
(31,111
)
 
(28,821
)
  Other revenues and expenses
 
(30,308
)
 
(26,439
)
  Pre-tax loss
 
(41,450
)
 
(7,769
)
 
 
 
 
 
Consolidated:
 
 
 
 
  Gross premiums written
 
$
1,631,621

 
$
1,401,526

  Net premiums written
 
1,376,966

 
1,203,526

  Premiums earned
 
1,232,119

 
1,099,651

  Pre-tax income
 
160,223

 
187,303

  Loss ratio
 
60.4
%
 
61.8
%
  Expense ratio
 
34.3
%
 
34.7
%
  GAAP combined ratio
 
94.7
%
 
96.5
%

(1) Commencing with the first quarter of 2013, the Company will report its results in three segments – Insurance-Domestic (formerly, Specialty, Regional and Alternative Markets), Insurance-International and Reinsurance-Global. Reclassifications have been made to the Company’s 2012 financial information to conform with this presentation.

(2) Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.

W. R. Berkley Corporation     3

Supplemental Information
(Amounts in thousands, except ratios)
    
 
 
First Quarter
 
 
 
2013
 
2012
 
Insurance-Domestic net premiums written by line:
 
 
 
 
 
  Workers' compensation
 
$
298,177

 
$
244,441

 
  Other liability
 
323,556

 
292,059

 
  Short-tail lines (1)
 
179,799

 
169,129

 
  Commercial automobile
 
123,586

 
120,811

 
  Professional liability
 
61,062

 
56,503

 
  Total
 
$
986,180

 
$
882,943

 
 
 
 
 
 
 
Losses from catastrophes:
 
 
 
 
 
  Insurance-Domestic
 
$
3,660

 
$
4,378

 
  Insurance-International
 
233

 
—

 
  Reinsurance-Global
 
1,120

 
28

 
  Total

$
5,013


$
4,406

 
 
 
 
 
 
 
Investment income:
 
 
 
 
 
  Core portfolio (2)
 
$
121,212

 
$
123,515

 
  Investment funds
 
10,934

 
27,623

 
  Arbitrage trading account
 
3,783

 
6,481

 
  Total
 
$
135,929

 
$
157,619

 
 
 
 
 
 
 
Other operating costs and expenses:
 
  
 
 
 
  Underwriting expenses
 
$
422,213

 
$
382,023

 
  Service expenses
 
22,305

 
19,592

 
  Net foreign currency losses (gains)
 
1,947

 
(1,434
)
 
  Other costs and expenses
 
35,139

 
31,598

 
  Total
 
$
481,604

 
$
431,779

 
 
 
 
 
 
 
Cash flow from operations
 
$
75,070

 
$
73,762

 
 
 
 
 
 
 
Reconciliation of operating income to net income:
 
 
 
 
 
  Operating income (3)
 
$
103,635

 
$
104,236

 
  After-tax investment gains
 
12,980

 
31,082

 
  Net income
 
$
116,615

 
$
135,318

 

(1) Short-tail lines includes commercial multi-peril (non-liability), inland and ocean marine, accident and health, fidelity and surety, boiler and machinery and other lines.

(2) Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.

(3) Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net realized investment gains (losses). Management believes that excluding net realized investment gains (losses), which are often discretionary and frequently relate to economic factors, provides a useful indicator of trends in the Company’s underlying operations.


W. R. Berkley Corporation     4

Selected Balance Sheet Information
(Amounts in thousands, except per share data)

 
 
March 31, 2013
 
December 31, 2012
 
 
 
 
 
Net invested assets (1)
 
$
15,438,868

 
$
15,681,803

Total assets
 
20,120,634

 
20,155,896

Reserves for losses and loss expenses
 
9,809,843

 
9,751,086

Senior notes and other debt
 
1,693,279

 
1,871,535

Junior subordinated debentures
 
243,258

 
243,206

Common stockholders’ equity (2)
 
4,378,541

 
4,306,217

Common stock outstanding
 
136,028

 
136,018

Book value per share (3)
 
32.19

 
31.66

Tangible book value per share (3)
 
31.18

 
30.95


(1)
Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities.
(2)
After-tax unrealized investment gains were $525 million and $518 million as of March 31, 2013 and December 31, 2012, respectively. Unrealized currency translation losses were $83 million and $37 million as of March 31, 2013 and December 31, 2012, respectively.
(3)
Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding.




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