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

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8-K - FORM 8K - BERKLEY W R CORP	w40549848a.htm

Exhibit 99.1

Unaudited financial information relating to the Company

Consolidated Financial Summary

(Amounts in thousands, except per share data)

	Fourth Quarter				Twelve Months
	2020		2019		2020		2019
Revenues:
Net premiums written	$	1,797,457	$	1,660,528	$	7,262,437	$	6,863,499
Change in unearned premiums	16,133		56,253		(331,594)		(230,211)
Net premiums earned	1,813,590		1,716,781		6,930,843		6,633,288
Net investment income	180,977		137,334		583,821		645,614
Net investment gains (losses):
Net realized and unrealized gains (losses) on investments	162,918		(22,988)		73,514		120,703

Change in allowance for credit losses on investments (1)	393		-		29,486		-
Net investment gains (losses)	163,311		(22,988)		103,000		120,703
Revenues from non-insurance businesses	132,923		123,537		389,888		406,541
Insurance service fees	21,521		21,240		88,777		92,680
Other income	149		170		2,596		3,370
Total revenues	2,312,471		1,976,074		8,098,925		7,902,196
Expenses:
Losses and loss expenses	1,111,695		1,072,166		4,468,706		4,131,116
Other operating costs and expenses	637,250		601,121		2,390,392		2,362,082
Expenses from non-insurance businesses	128,457		122,527		384,488		402,669
Interest expense	35,663		33,496		150,537		153,409
Total expenses	1,913,065		1,829,310		7,394,123		7,049,276
Income before income taxes	399,406		146,764		704,802		852,920
Income tax expense	(86,917)		(26,970)		(171,817)		(168,935)
Net income before noncontrolling interests	312,489		119,794		532,985		683,985
Noncontrolling interests	(339)		(488)		(2,315)		(2,041)
Net income to common stockholders	$	312,150	$	119,306	$	530,670	$	681,944

Net income per share:
Basic	$	1.68	$	0.62	$	2.84	$	3.58
Diluted	$	1.67	$	0.62	$	2.81	$	3.52

Average shares outstanding (2):
Basic	185,693		191,106		186,924		190,722
Diluted	187,180		193,280		188,763		193,521

(1) The inclusion of the allowance for credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13.

(2) Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.

Business Segment Operating Results

(Amounts in thousands, except ratios) (1)

	Fourth Quarter				Twelve Months
	2020		2019		2020		2019
Insurance:
Gross premiums written	$	1,996,169	$	1,832,711	$	7,837,496	$	7,398,573
Net premiums written	1,592,311		1,484,932		6,347,101		6,086,009
Premiums earned	1,586,578		1,523,748		6,067,669		5,919,819
Pre-tax income	236,548		202,085		668,012		814,862
Loss ratio	63.4%		62.6%		64.9%		62.4%
Expense ratio	29.4%		30.4%		30.3%		31.1%
GAAP combined ratio	92.8%		93.0%		95.2%		93.5%

Reinsurance & Monoline Excess:
Gross premiums written	$	225,315	$	200,367	$	1,010,151	$	863,646
Net premiums written	205,146		175,596		915,336		777,490
Premiums earned	227,012		193,033		863,174		713,469
Pre-tax income	94,975		44,837		205,587		189,188
Loss ratio	46.7%		61.1%		61.3%		61.5%
Expense ratio	31.1%		34.4%		31.8%		35.0%
GAAP combined ratio	77.8%		95.5%		93.1%		96.5%

Corporate and Eliminations:
Net investment gains (losses)	$	163,311	$	(22,988)	$	103,000	$	120,703

Interest expense	(35,663)		(33,496)		(150,537)		(153,409)
Other revenues and expenses	(59,765)		(43,674)		(121,260)		(118,424)
Pre-tax gain (loss)	67,883		(100,158)		(168,797)		(151,130)

Consolidated:
Gross premiums written	$	2,221,484	$	2,033,078	$	8,847,647	$	8,262,219
Net premiums written	1,797,457		1,660,528		7,262,437		6,863,499
Premiums earned	1,813,590		1,716,781		6,930,843		6,633,288
Pre-tax income	399,406		146,764		704,802		852,920
Loss ratio	61.3%		62.4%		64.5%		62.3%
Expense ratio	29.6%		30.9%		30.4%		31.5%
GAAP combined ratio	90.9%		93.3%		94.9%		93.8%

(1) 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.

Supplemental Information

(Amounts in thousands)

	Fourth Quarter				Twelve Months
	2020		2019		2020		2019
Net premiums written:
Other liability	$	594,546	$	537,674	$	2,342,884	$	2,145,287
Short-tail lines (1)	325,809		319,423		1,300,750		1,254,180
Workers' compensation	241,935		282,840		1,099,886		1,280,573
Commercial automobile	227,190		188,459		876,031		796,993
Professional liability	202,831		156,536		727,550		608,976
Total Insurance	1,592,311		1,484,932		6,347,101		6,086,009
Casualty reinsurance	141,481		116,698		560,717		460,239
Property reinsurance	41,174		37,673		178,023		154,455
Monoline excess	22,491		21,225		176,596		162,796
Total Reinsurance & Monoline Excess	205,146		175,596		915,336		777,490
Total	$	1,797,457	$	1,660,528	$	7,262,437	$	6,863,499

Losses from catastrophes (including COVID-19 related losses):
Insurance	$	62,380	$	14,744	$	307,037	$	68,187
Reinsurance & Monoline Excess	(19,934)		5,736			32,799	21,914
Total	$	42,446	$	20,480	$	339,836	$	90,101

Net investment income:
Core portfolio (2)	$	102,039	$	137,022	$	451,637	$	541,834
Investment funds	52,992		(8,090)		54,253		69,194
Arbitrage trading account	25,946		8,402		77,931		34,586
Total	$	180,977	$	137,334	$	583,821	$	645,614

Net realized and unrealized gains (losses) on investments:
Net realized gains on investments	$	126,927	$	7,442	$	99,382	$	35,411
Change in unrealized gains (losses) on equity securities	35,991		(30,430)		(25,868)		85,292
Total	$	162,918	$	(22,988)	$	73,514	$	120,703

Other operating costs and expenses:
Policy acquisition and insurance operating expenses	$	536,507	$	529,951	$	2,111,013	$	2,090,301
Insurance service expenses	21,694		23,804		85,724		101,317
Net foreign currency losses (gains)	24,207		(1,631)		363		(30,715)
Debt extinguishment costs	8,440		-		8,440		-
Other costs and expenses	46,402		48,997		184,852		201,179
Total	$	637,250	$	601,121	$	2,390,392	$	2,362,082

Cash flow from operations	$	479,740	$	348,749	$	1,616,686	$	1,143,793

Reconciliation of net income to operating income:
Net income	$	312,150	$	119,306	$	530,670	$	681,944
Pre-tax investment (gains) losses, net of related expenses	(162,337)		23,066		(102,027)		(117,730)
Income tax expense (benefit)	23,230		(4,842)		9,610		24,843
Operating income after-tax (3)	$	173,043	$	137,530	$	438,253	$	589,057

(1) Short-tail lines include commercial multi-peril (non-liability), inland 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 investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.

Selected Balance Sheet Information

(Amounts in thousands, except per share data)

	December 31, 2020		December 31, 2019

Net invested assets (1)	$	21,370,503	$	19,856,776
Total assets	28,606,913		26,662,144
Reserves for losses and loss expenses	13,784,430		12,583,249
Senior notes and other debt	1,623,025		1,427,575
Subordinated debentures	1,102,309		1,198,704
Common stockholders’ equity (2)	6,310,802		6,074,939
Common stock outstanding (3)	177,825		183,412
Book value per share (4)	35.49		33.12
Tangible book value per share (4)	34.22		31.87

(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)As of December 31, 2020, reflected in common stockholders' equity are after-tax unrealized investment gains of $290 million and unrealized currency translation losses of $352 million. As of December 31, 2019, after-tax unrealized investment gains were $125 million and unrealized currency translation losses were $382 million.

(3)During the three months ended December 31, 2020, the Company repurchased 542,434 shares of its common stock for $34 million. During the twelve months ended December 31, 2020, the Company repurchased 6,363,301 shares of its common stock for $346 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.

(4)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.

BERKLEY W R CORP - FORM 8-K - EX-99.1 - UNAUDITED FINANCIAL INFORMATION RELATING TO THE COMPANY - February 3, 2021

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BERKLEY W R CORP Reports