W.R. Berkley Corporation

Ladies and gentlemen, thank you for joining us and welcome to the W.R. Berkeley Corporation third quarter 2025 earnings call. This conference call is being recorded. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star nine to raise your hand and star six to unmute. The speaker's remarks may contain forward looking statements. Some of the forward looking statements can be identified by the use of forward looking words, including without limitation, believes, expects or estimates. We caution you that such forward looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will in fact be achieved. Please refer to our annual report on Form 10-K for the year ended December 31, 2024 and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. WR Berkeley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. I would now like to turn the call over to Mr. Rob Berkeley. Please go ahead, sir.

Nicole, thank you very much, and let me echo your warm welcome to our Q3 calls. So in addition to myself on this end of the phone, we also have Executive Chairman William Berkeley as well as Chief Financial Officer Rich Bayham. We're going to follow our typical agenda where momentarily I'll be handing it over to Rich. He's going to run through some highlights of the quarter. I may follow with a couple of sound bites of my own, and then you will have the three of us at your disposal to try and answer any questions or engage in any discussion that participants would like to engage in. But before I hand it over to Rich, let me just, as oftentimes I do, state the obvious. And that is, I think the past 90 days is just a continuation of clear evidence that the insurance industry is still a cyclical industry. And for whatever the reason may be, some would say fear and greed are the industry continues to seemingly make an art out of self-sabotage when it comes to its own success. That having been said, we as an organization are not completely insulated from that, but we are able to mitigate that quite effectively because of what parts of the market, I should say, we focus on, particularly specialty and furthermore, small accounts, which a lot of the challenges that continues to percolate and seems to be building momentum, again, we are somewhat protected from. So let me leave it there. I'm going to hand it over to Rich. He'll run through some thoughts, and then I will come back and offer a few more of mine.

Rich, please. Great. Thanks, Rob. Appreciate it. Good evening, everyone. Third quarter results were excellent with a return on beginning of year equity of 24.3%, reflecting an increase over the prior year's quarter of almost 40% in net income, $511 million or $1.28 per share. Operating income increased 12% over the same period to $440 million or $1.10 per share with a return on beginning of year equity of 21%. Further growth in underwriting and net investment income drove the strong performance combined with net investment gains. Pre-tax quarterly underwriting income increased 8.2% to $287 million. Calendar year combined ratio was 90.9% and the current accident year combined ratio ex-CATS was 88.4%. CAT losses represented 2.5 loss ratio points or $79 million compared with the prior year of 3.3 loss ratio points, or $98 million. Current accident year loss ratio x caps for the current quarter was 59.9%, reflecting an increase over the prior year attributable to business mix, however comparable to the second quarter of 2025. Drilling down further, the insurance segment's quarterly accident year loss ratio x caps was relatively consistent with the first half of 2025, at 60.9%, bringing the accident year combined ratio before caps to 89.3%. Reinsurance and monoline excess segments, accident year loss ratio ex caps was 52.6%, with a strong accident year combined ratio before caps of 82.4%. Moving to our top line, quarterly net premiums earned continue to benefit from written growth, reaching another record of more than $3.2 billion. Growth in net premiums written were $3.8 billion and $3.2 billion, respectively. Net premiums written grew in all lines of business in both segments. The comparable third quarter expense ratios were 28.5%. In addition to benefits from the growing net premiums earned on our expense ratio, several of our recent startup operating units are gaining scale and contributing favorably to the expense ratio. Technology enhancements are also contributing to operational efficiencies. Our pre-tax quarterly net investment income grew to $351 million, driven by an increase in our core portfolio of 9.4%. As a reminder, 2024 did benefit from heightened Argentine inflation-linked income, and excluding such income from both periods would increase the core portfolio growth to 14.6% quarter over quarter. The fixed maturity portfolio had a book yield of 4.8%. We do expect investment income from our fixed maturity portfolio to grow in the foreseeable future due to strong operating cash flow of almost $2.6 billion on a year-to-date basis and new money rates comfortably above the roll-off of existing securities. The duration of our fixed maturity portfolio, including cash and cash equivalents, increased to 2.9 years in the third quarter, while strengthening our AA minus credit quality of our portfolio. Stockholders' equity reached a record of $9.8 billion, increasing 16.7% from the beginning of the year, driven by strong earnings, an improvement of $428 million in our after-tax unrealized investment losses and currency translation losses, as well as capital returned of $362 million through ordinary and special dividends and share repurchases. As of September 30th, our after-tax unrealized investment losses, including stockholders' equity, decreased to $177 million, and our financial leverage has improved to historic low levels of 22 and a half percent. We've continued to generate significant capital. Company proactively refinanced its debt when interest rates were historically low, resulting in a low cost of capital and adding permanence to our capital structure with our nearest schedule maturity in 2037. Our liquidity remained strong with almost $2.4 billion of cash and cash equivalents to invest. Book value per share before dividends and share repurchases grew 20.7% year to date, 5.8% on a quarter-to-date basis. Rob, with that, I'll turn it back to you.