W.R. Berkley Corporation’s WRB fourth-quarter 2024 operating income of $1.13 per share beat the Zacks Consensus Estimate by 20.2%. The bottom line improved 17.7% year over year.
The insurer benefited from higher premiums and improved net investment income, partially offset by wider catastrophe losses and escalated expenses.
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W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley Corporation Price, Consensus and EPS Surprise
W.R. Berkley’s net premiums written were $2.9 billion, up 8% year over year. The figure was lower than our estimate of $3 billion.
Operating revenues came in at $3.5 billion, up 9.2% year over year, on the back of higher net premiums earned as well as improved net investment income, higher insurance service fees and other income. The top line beat the consensus estimate by 4.2%.
Net investment income grew 1.3% to $317.4 million, driven by strong contributions to total return from net unrealized gains on the equity portfolio. The figure was lower than our estimate of $399.5 million. The Zacks Consensus Estimate was pegged at $342 million.
Total expenses increased 8% to $2.9 billion due to higher losses and loss expenses. Our estimate was $3 billion.
The loss ratio deteriorated 180 basis points (bps) to 61.8, while the expense ratio remained unchanged year over year at 28.4.
Catastrophe losses of $79.6 million in the quarter were wider than the $32 million incurred in the year-ago quarter.
The consolidated combined ratio (a measure of underwriting profitability) deteriorated 180 bps year over year to 90.2. The Zacks Consensus Estimate was 91.
Segment Details
Net premiums written at the Insurance segment increased 9.8% year over year to $2.6 billion in the quarter, primarily due to higher premiums from other liability, short-tail lines, auto, workers' compensation and professional liability. The figure was lower than our estimate of $2.7 billion.
The combined ratio deteriorated 110 bps to 90.5, which matched the Zacks Consensus Estimate. Our estimate was 91.2.
Net premiums written in the Reinsurance & Monoline Excess segment decreased 5.5% year over year to $316 million due to lower premiums at Casualty. The figure was lower than our estimate of $323.3 million.
The combined ratio deteriorated 690 bps to 88.4, which matched the Zacks Consensus Estimate. Our estimate was 90.1.
Full-Year Highlights
Operating income of $4.14 per share beat the Zacks Consensus Estimate by 4.8%. The bottom line improved 26.2% year over year.
Operating revenues came in at $13.52 billion, up 11.7% year over year, on the back of higher net premiums earned as well as improved net investment income and increased insurance service fees and other income. The top line came in line with the consensus estimate.
Net investment income grew 26.6% year over year to a record of $1.3 billion. W.R. Berkley’s net premiums written were $12 billion, up 9.3% year over year. The figure matched our estimate.
Pre-tax underwriting income was $1.1 billion. The consolidated combined ratio was 90.3, which deteriorated 60 bps year over year.
Financial Update
W.R. Berkley exited 2024 with total assets worth $40.6 billion, up 9% from year-end 2023. Senior notes and other debt increased 0.1% from 2023 end levels to $1.8 billion. Book value per share increased 14% from 2023 end levels to $22.09 as of Dec. 31, 2024.
Cash flow from operations was $3.7 billion in 2024, up 25.6% year over year. Operating return on equity expanded 110 bps to 24.3%.
Capital Deployment
WRB returned $287.8 million, consisting of $67.4 million in share repurchases, $190 million in special dividends and $30.4 million in regular dividends.
WRB’s Zacks Rank
W.R. Berkley 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 a fourth-quarter 2024 core income of $9.15 per share, which beat the Zacks Consensus Estimate by 39.3% and improved 30.5% year over year. Travelers’ total revenues increased 10.4% from the year-ago quarter to $11.9 billion. The top-line figure beat the Zacks Consensus Estimate by 1%.
Net written premiums increased 7% year over year to a record $10.7 billion, driven by strong growth across all three segments. Our estimate was $10.8 billion. Net investment income increased 26% year over year to $955 million. The figure was higher than our estimate of $884.9 million. The Zacks Consensus Estimate was pegged at $926 million. Catastrophe loss was $175 million, pre-tax, wider than a loss of $125 million, pre-tax, incurred in the year-ago quarter. Travelers witnessed an underwriting gain of $1.4 billion, up 30.5% year over year.
RLI Corp. RLI reported fourth-quarter 2024 operating earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 14.5%. The bottom line decreased 46.8% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 15.3% year over year, driven by higher net premiums earned and net investment income. The top line matched the Zacks Consensus Estimate. Gross premiums written increased 9% year over year to $473.2 million. Our estimate was $550 million.
Net investment income increased 19% year over year to $38.8 million. The Zacks Consensus Estimate and our estimate for the metric were both pegged at $38.1 million. The investment portfolio’s total return was negative 1.1% in the quarter. Underwriting income of $22.2 million decreased 62.8% year over year. The combined ratio deteriorated 1,170 basis points (bps) year over year to 94.4. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 102.
Brown & Brown, Inc.’s BRO fourth-quarter 2024 adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 48.3% year over year.
Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 6.4%. The top line improved 15.4% year over year. Adjusted EBITDAC was $390 million, up 22.6% year over year. EBITDAC margin expanded 190 basis points (bps) year over year to 32.9%. Our estimate for adjusted EBITDAC was $366.3 million.
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