Q3 2023 W R Berkley Corp Earnings Call

Speaker 1: goodday everyone and welcome to W? R Berkeley Corporation's third quarter 2023 earnings conference call.

Good day, everyone and welcome to the W. R. Berkley Corporation's third quarter 2023 earnings conference call.

Speaker 1: Today's conference call is being recorded. 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.

This conference call is being recorded 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 beliefs expects or estimates.

Speaker 1: 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.

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 well in fact be achieved.

Speaker 1: Please refer to our annual port Form 10-K for the year in December 30 first 20 20, two and our other filings made with the se C per description of the business environment in which we operate in the important factors that may materially affect our results.

Please refer to our annual report and Form 10-K for the year end December 31st 2022, 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.

Speaker 1: R 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, fut triments or otherwise.

W. R. Berkley 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.

Speaker 1: I would now like to turn the call over to MR Rob Berkeley. Please go ahead, sir.

I would now like to turn the call over to Mr. Rob Berkley. Please go ahead Sir.

Speaker 2: At leasta. Thank you very much and good afternoon at all in the, I guess. A second welcome to our Q3 call. We appreciate you dialing in and your time and your interest today joining me. The call lease on this end is Bill Berkeley, Executive Chair, as well as Rich Bao E B P and Chief Financial.

Alicia Thank you very much and good afternoon, all and I guess the second welcome to our Q3 call. We appreciate you dialing in and your time and your interest today joining.

Joining me on the call at least on this and as Bill Berkley Executive chair as well as rich Dale EVP and Chief Financial Officer.

Speaker 2: We're to follow our typical agenda where moment apparently I'll be handing it over to Rich. She's going to give us a bit of an overview and flag some highlights from the quarter.

To follow our typical agenda, where momentarily I'll be handing it over to rich he is going to give us a bit of an overview and flag. Some highlights from the quarter I will follow with a few comments of my own and then we will be pleased to open it up for Q&A.

Speaker 2: I will follow with a few comments of my own, and then we'll be pleased to open it up for QA.

Speaker 2: Before I do hand it to Rich. I just wanted to make a couple of quick observations, and really one macro, one in particular, and that is on the results of the quarter.

Before I do hand, it to rich I just wanted to make a couple of quick observations and really one macro one in particular and that is on the results for the quarter.

Speaker 2: I think, by any measure, color a 20% return is really an outstanding result. The fact is there were no one time this or one time not in there. That is truly when you stripped it down to its fundamentals. That is how the business is performance.

I think by any measure a call. It a 20% return is really an outstanding result.

As there were no one time this <unk> one plan that in there that is truly when you strip it down to its fundamental that is how the business is performing.

Speaker 2: And these great results are really have reflection of a team. This is a team sport, not an individual sport, So my congratulations to all of our colleagues throughout the organization on a job very well done. I have a good fortune of being their mouthpiece in these types of settings, but again, this achievement was a team achief.

And these great results are really a reflection of 18.

As a team sport not an individual sport. So my congratulations to all of our colleagues throughout the organization on a job very well done I have the good fortune of being their mouthpiece and these types of settings, but again. This achievement was our team achievement.

Speaker 2: To that end. Obviously, it was a quarter where the organization was able to dev, it was able to demonstrate- excuse me, our by value proposition to capital the idea of less risk for more return. We've talked to you all in the past about our we are preoccupied with the concept that we referred to as risk adjusted return.

To that end.

Obviously.

It was a quarter, where the organization was able to divert it was able to demonstrate excuse me our value proposition to capital.

You have less risk for more return.

We've talked to you all in the past about how we are preoccupied with the concept that we referred to as risk adjusted return.

Speaker 2: You can see it in moments like these that we just saw in Q3 very clearly when as our Chairman says the tide goes out you get to see who's wherear and.

You can see it in moments like these that we just saw in Q3 very clearly.

And as our Chairman says the tide goes out you get to see who's wearing what.

Speaker 2: You could see it in both aspects of our business activities, one being underwriting, the other one being investing. Our underwriting results of a combined of a 90 during a period that had meaningful cat activity is really exception.

You can see it in both aspects of our business activities, one being underwriting the other one being investing our underwriting results of our combined over 90 during a period that had meaningful cat activity is really sectional.

Speaker 2: Additionally on the investing activity.

Additionally on the <unk>.

Investing activity.

Speaker 2: Clearly a book yield of four and a half percent while maintaining a quality of double a minus and additionally a new money rate of approximately 6%. That is no accident either.

Nearly a book yield of four 5%, while maintaining our quality of double a minus and additionally, our new money rate of approximately 6%.

That is no accident either.

Speaker 2: These results. These achievements are a result of our colleagues, their focus, their discipline and their expertise.

These results. These achievements are a result of our colleagues their focus their discipline and their expertise.

Speaker 2: This call certainly is about reviewing what happened in the third quarter, but I would suggest even more than that: it is about how the table is set, not just for the coming quarters but the next several years.

This call certainly is about reviewing what happened in the third quarter, but I would suggest even more than that it is about how the table is set not just for the coming quarters, but the next several years.

Speaker 2: So I think we are very well positioned. I think there is a fair amount of visibility. We will be getting into that in a bit more detail later in the call, but at this moment let me hand it over to Rich and he's going to walk us through some numbers. Rich, if you were Please.

So I think we are very well positioned I think there is a fair amount of visibility we will be getting into that in a bit more detail later in the call, but at this moment, let me hand, it over to rich and he is going to walk us through some numbers rich if you would please.

Of course, thanks, Rob appreciate it.

Speaker 3: Net income increased 46% to $334 million, or a dollar 23 per share, with a return on equity of 20%.

Net income increased 45, 7% to $334 million or $1 23 per share with a return on equity of 19, 8%.

Speaker 3: Operating income increased 30% to $367 million, or a dollar 35 per share, with an operating return on equity of 22%.

Operating income increased 31% to $367 million or $1 35 per share with an operating return on equity of 21, 7% comp.

Unknown Attendee: Good day everyone and welcome to W. R. Berkley Corporation's third quarter 2023 earnings conference call. Today's conference call is being recorded. The speakers 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 estimate. We caution you that such forward looking statements should not be regarded as a representation by us, but the future plans estimates or expectations contemplated by us.

Speaker 3: A company's strong performance was driven by another quarter of significant underwriting profits, bring the nine months year to-day to a record, despite consecutive quarters of outsized, industry-wide catastrophe law.

The company's strong performance was driven by another quarter of significant underwriting profits, bringing the nine months year to date to a record <unk>.

By consecutive quarters of outsized industry wide catastrophe losses.

Speaker 3: In addition, net investment income accelerated throughout the year to yet another quarterly req.

In addition, net investment income accelerated throughout the year to yet another quarterly record.

Speaker 3: Drilling further into the underwriting results, net premiums written grew 10% to a record of more than $2.8 billion. We significantly grew the insurance business by approximately 17 and a half percent in other liability short tail lines in commercial automobile through rate and exposed.

Drilling further into the underwriting results net premiums written grew 10, 5% to a record of more than $2 $8 billion. We significantly grew the insurance business by approximately 17, 5% and other liability short tail lines and commercial automobile through rate and exposure.

Unknown Attendee: We'll in fact be achieved. Please refer to our annual Port and Form 10K for the year in December 31st 2022 and our other filings made with the SEC for description of a business environment in which we operate in the important factors that may materially affect our results. W. R. Berkley 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.

Speaker 3: Decreases in workers compensation and certain professional line certainly tempered the growth in that premium's. Written bring the overall insurance segment growth to 12.1 per.

<unk> and workers' compensation and certain professional lines certainly tempered the growth in net premiums written bringing the overall insurance segment grows to 12, 1%.

Speaker 3: The reinsurance in monolline access segment was flat quarter over quarter, with continued growth in monolline access and property reinsure.

The reinsurance <unk> Monoline excess segment was flat quarter over quarter with continued growth in mono line access and property reinsurance.

Unknown Attendee: I would now like to turn the call over to Mr. Rob Berkley. Please go ahead sir.

Rob Berkley: Lisa, thank you very much and good afternoon and all and I guess a second welcome to our Q3 call. We appreciate you dialing in and your time and your interest today. Joining me on the call at least on this end is Bill Berkley, Executive Chair as well as Rich Bayo, EVP and Chief Financial Officer. We're going to follow our typical agenda where momentarily I'll be handing it over to Rich. She's going to give us a bit of an overview and flag some highlights from the quarter.

Speaker 3: Pretax underwriting income was $259 million, with the calendar year combined ratio of a 90%.

Pretax underwriting income was $259 million with the calendar year combined ratio of 92%.

Speaker 3: Current accident, your combined ratio, excluding catastrophe losses, was eighty seven point nine.

The current accident year combined ratio, excluding catastrophe losses was 87, 9%.

Speaker 3: Current accident year catastrophe losses in the quarter where $62 million or two point three loss ratio points, compared with $94 million in the prior year quarter where three point nine loss ratio.

Current accident year catastrophe losses in the quarter with $62 million or two three loss ratio points compared with $94 million in the prior year quarter with three nine loss ratio points to.

Speaker 3: Prior year favorable development with approximately $1 million.

Prior year favorable development was approximately $1 million in the current accident year loss ratio ex cats was 59, 6%.

Speaker 3: And the current accident year loss ratio X cats was 60%.

Rob Berkley: I will follow with a few comments of my own and then we'll be pleased to open it up for Q&A. Before I do hand it to Rich, I just wanted to make a couple of quick observations and really one macro one in particular and that is on the results of the quarter. I think by any measure, I call it a 20% return is really an outstanding result. The fact is there were no one time this or one time that in there that is truly when you strip it down to its fundamentals.

Speaker 3: The expense ratio increased zero, zero point three points to twenty eight 0% from the prior year and remains in line with our nine months here.

The expense ratio increased 0.3 points to 28, 3% from the prior year and remains in line with our nine months year to date.

Speaker 3: Small increase is attributable to the same items we've communicated during the past couple quarters, that being, the change in outward reinsurance structures impacting seedating commissions and increased compensation costs, along with startup operating unit expense.

The small increase is attributable to the same items, we've communicated in the past couple of quarters that being the change in outward reinsurance structures impacting ceding commissions and increased compensation costs, along with startup operating unit expenses.

Rob Berkley: That is how the business is performing. And these great results are really a reflection of a team. This is a team sport, not an individual sport. So my congratulations to all of our colleagues throughout the organization on a job very well done. I have the good fortune of being their mouthpiece in these types of settings. But again, this achievement was a team achievement. To that end, obviously it was a quarter where the organization was able to demonstrate, excuse me, our value proposition to capital.

Speaker 3: We also continue to invest in technology in areas to drive operational efficiials.

We also continue to invest in technology in areas to drive operational efficiencies.

Speaker 3: Record quarterly net investment income of $271 million grew by 34%, with the core investment portfolio increasing by fifty nine point.

Record quarterly net investment income of $271 million grew by 33, 6% with the core investment portfolio, increasing by 59, 3% there.

Speaker 3: There were two main drivers for the significant increase in the core portfolio, including the rising interest rate environment benefiting the reinvestment of fixed maturity securities as they mature or redeemed, and second, the increase in the size of the portfolio due to continuous record levels of operating cash flows. In the third quarter, we reported another record level of operating cash flow of almost $1.1 billion.

There were two main drivers for the significant increase in the core portfolio, including the rising interest rate environment benefiting the reinvestment of fixed maturity securities as they mature or are redeemed and second the increase in the size of the portfolio due to continuous record levels of operating cash flows in the third quarter we.

Rob Berkley: The idea of less risk for more return. We've talked to you all in the past about our preoccupied with a concept that we refer to as risk adjusted return. You can see it in moments like these that we just saw in Q3 very clearly. When as our chairman says the tide goes out, you get to see who's where and what. You could see it in both aspects of our business activities, one being underwriting the other one being investing.

Reported another record level of operating cash flow of almost $1 $1 billion.

Speaker 3: Put some context around this point, the book deal is grown from 4% in the first quarter of 2023 to 4% in the second quarter, to 4% in the current quarter. On fixed maturity secuure.

To put some context around this point.

Book yield has grown from three 8% in the first quarter of 2023 to four 2% in the second quarter to four 5% in the current quarter on fixed maturity securities.

Speaker 3: Current nine month year-to-date book yield of 4% compares to 3% for the prior year period.

The current nine month year to date book yield of four 2% compares to two 6% for the prior year period.

Speaker 3: It's also worth noting that almost 81% of our net invested assets are in fixed maturity securities, cash and cash.

Rob Berkley: Our underrunning results of a combined of a 90 during a period that had meaningful cat activity is really exceptional. Additionally, on the investing activity, clearly a book yield of 4.5 percent while maintaining a quality of AA-minus and additionally a new money rate of approximately 6 percent, that is no accident either. These results, these achievements are a result of our colleagues, their focus, their discipline, and their expertise.

It's also worth noting that almost 81% of our net invested assets are in fixed maturity securities cash and cash equivalents.

Speaker 3: Credit quality of the six maturity securities remain strong at double a minus, and the durations ticked up to two point four years from the consecutive quarter of two point three.

Credit quality of the fixed maturity securities remains strong at double a minus and the durations ticked up to 2.4 years from the consecutive quarter of two three years.

Speaker 3: Partially offsetting the increase in the core portfolio is net investment income from investment.

Partially offsetting the increase in the core portfolio is net investment income from investment funds.

Speaker 3: You may recall, this asset class is generally reported on a one quarter lag and will more closely correlate with the broader equity Mark.

May recall this asset classes generally reported on a one quarter lag and more closely correlate with the broader equity markets. Accordingly reported net investment income from investment funds was approximately $4 million, representing a marginal improvement from the first half of 2023.

Speaker 3: Accordingly reported net investment income from investment funds was approximately $4 million representing a marginal improvement from the first half of 2020 three.

Rob Berkley: This call certainly is about reviewing what happened in the third quarter, but I would suggest even more than that is about how the table is set not just for the coming quarters, but the next several years. So, I think we are very well positioned. I think there is a fair amount of visibility.

Speaker 3: We continue to proactively manage our capital position. As you saw our announcement of the 50 cent special dividend per share late in third quarter, in addition to our regular quarterly to.

We continue to proactively manage our capital position as you saw our announcement of the 50 <unk> special dividend per share late in the third quarter. In addition to our regular quarterly dividend.

Speaker 3: This brings total capital return to investors on a year to date basis to approximately $775 billion, with stockholders equity increasing to more than $6.9 billion.

This brings total capital returned to investors on a year to date basis to approximately $775 million with stockholders equity increasing to more than $6 9 billion.

Richard Baio: We will be getting into that in a bit more detail later in the call, but at this moment, let me hand it over to Rich, and he's going to walk us through some numbers. Rich, if you would please. Of course, thanks Rob, appreciate it. Net income increased 45.7 percent to $334 million, or $1.23 per share with a return on equity of 19.8 percent. Operating income increased 30.1 percent to $367 million, or $1.35 per share with an operating return on equity of 21.7 percent.

Speaker 3: Book value per share before dividends and share repurchases on a year to date basis has increased three point 14% excuse me and with the.

Book value per share before dividends and share repurchases on a year to date basis has increased three point 13, 7% excuse me and with that I'll turn it back to you Rob.

Speaker 2: Mitch. Thanks you very much. That was great. So I'm just going to offer a couple of other quick observations on on the quarter and how we see things unfolding from here, and then again we'll we'll move on to the Q and a.

Rich thanks, very much that was great. So I'm just can offer a couple of other quick observations on the quarter and how we see things unfolding from here and then again, we will move on to the Q&A.

Speaker 2: Rich touched on the top line, obviously building momentum again as promised. This is a reminder to some.

Rich touched on the topline obviously building momentum again as promised.

Richard Baio: The company's strong performance was driven by another quarter of significant underwriting profits bringing the nine months year-to-day to a record despite consecutive quarters of outsized industry-wide catastrophe losses. In addition, net investment income accelerated throughout the year to yet another quarterly record. Drilling further into the underwriting results, net premiums written grew 10.5 percent to a record of more than $2.8 billion. We significantly grew the insurance business by approximately 17.5 percent in other liability, short tail lines, and commercial automobile through rate and exposure.

Reminder to us.

Speaker 2: Some number of quarters ago, we agreed to disagree with a couple of partners as to what we thought was an adequate rate.

Some number of quarters ago, we agreed to disagree.

With a couple of partners as to what we thought was.

Adequate rate they did not think we needed that much rate and again, we decided to part ways.

Speaker 2: They did not think that we needed that much rate and again we decided to part ways that had a meaningful impact to the negative. On our top line, that pigs making its way through the Python to the extent and it's an interest that was in the auto line. So we wish them well and we'll see how that unfold.

A meaningful impact to the negative on our topline that pigs, making its way through the Python to the extent that it's of interest that was in the auto lines. So we wish them well and.

We'll see how that unfolds.

Speaker 2: Speak of a different product.

Speaking of different products.

Speaker 2: Obviously the marketplace for the past 12 18, 24 months or so has been very focused on property, and with good reason. I would suggest you, as we've commented in past quarters, auto liability is one that people need to continue to pay close attention to, I think. As far as product lines.

Richard Baio: Decreases in workers' compensation and certain professional lines certainly tempered the growth in net premiums written, bringing the overall insurance segment growth to 12.1 percent. The reinsurance in monoline access segment was flat quarter over quarter, with continued growth in monoline access and property reinsurance. Pre-tax underwriting income was $259 million with the calendar year combined ratio of a 90.2 percent. The current accident year combined ratio, excluding catastrophe losses was 87.9 percent. Current accident year catastrophe losses in the quarter, with $62 million or $2.3 loss ratio points, compared with $94 million in the prior year quarter, or $3.9 loss ratio points.

Obviously the marketplace for the past 12, 18, 24 months or so has been very focused on property and with good reason I would suggest you as we've commented in past quarters.

Auto liability is one that people need to continue to pay close attention to I think as far as product line.

Speaker 2: When it comes to social inflation, auto liability has the biggest bulleye on its chest and, by extension, that clearly spills over to excess and as well as umbrella.

When it comes to social inflation auto liability has the biggest bull's eye on its Jeff and by extension that clearly spills over to excess and as well as umbrella.

That having been said.

Speaker 2: Just in general, social inflation continues to burn and we do not see that abating anytime soon.

Just in general social inflation continues to burn and we do not see that abating anytime soon quick comment on workers comp I know we've touched on this in the past.

Speaker 2: Quick comment on workers comp. I know we've touched on this in the past. We continue to be of the view that one needs to be very mindful of medical cost trend. We went to through a period of time where it was pretty benign. We think that is shifting very quickly. We've touched on it in the past. We think it's going to become more and more into focus for a broader audience over the coming quarters.

We continue to be of the view that one needs to be very mindful of medical cost trend. We went through a period of time, where it was pretty benign. We think that is shifting very quickly we've touched on it in the past, we think it could become more and more into focus for a broader audience over the coming quarters. In addition to that the benefit.

Richard Baio: The prior year favorable development was approximately $1 million. And the current accident year loss ratio, XCATS, was 59.6 percent. The expense ratio increased 0.3 points to 28.3 percent from the prior year, and remains in line with our nine months year to date. The small increase is attributable to the same items we've communicated during the past couple quarters, that being the change in outward re-insurance structures impacting seeding commissions and increase compensation costs along with startup operating unit expense.

Speaker 2: In addition to that, the benefit that comp was getting, both as it relates to COVID-19 and frequency, and then, on the heels of COVID-19, the tight labor market and wage inflation. I think those benefits have run their course and clearly wage inflation is slowing.

That comp was getting both as it relates to Covid and frequency and then on the heels of Covid, a tight labor market and wage inflation I think those benefits have run their course, and clearly wage inflation is slowing.

Richard Baio: Services. We also continue to invest in technology and areas to drive operational efficiencies. Record quarterly net investment income of $271 million grew by 33.6 percent with the core investment portfolio increasing by 59.3 percent. There are two main drivers for the significant increase in the core portfolio, including the rising interest rate environment, benefiting the reinvestment of fixed maturity securities as they mature or are redeemed. And second, the increase in the size of the portfolio due to continuous record levels of operating cash flows.

Speaker 2: I've mentioned a moment ago the topic of social inflation. We are very focused on it. You can see it in our rate increases X comt coming in eight point a half percent. We have every intention of continuing to stay on top of it. We think the market is accepting our rate increases and you can see that in part, demonstrated by a renewal, retention ratio continues to be at approximately a steady 80%.

I mentioned, a moment ago, the topic of social inflation, we are very focused on it you can see it in our rate increases ex comp coming in at eight 5%.

We have every intention of continuing to stay on top of it. We think the market is accepting our rate increases and you can see that in part demonstrated by our renewal retention ratio continues to be at approximately a steady 80%.

Speaker 2: Another number that I find usethful- perhaps others do as well- is the paid loss ratio. This is a number that we flag for you all in the past, again coming in at a very healthy 48% for the quarter which obviously, given where we are booking the business, would leave one to believe that the strength of our I B N? R speaks for itself and would encourage people to look at our I B N? R relative to case and I B N? R relative to total reserves, to the extent you're interested.

Another number that I find useful perhaps others do as well as the paid loss ratio. This is a number that we flagged for you all in the past again coming in at a very healthy 47, 9% for the quarter, which obviously given where we are booking the business would lead one to believe that these.

Richard Baio: In the third quarter, we reported another record level of operating cash flow of almost $1.1 billion. To put some context around this point, the yield is grown from 3.8 percent in the first quarter of 2023 to 4.2 percent in the second quarter to 4.5 percent in the current quarter on fixed maturity securities. The current nine-month year-to-date book yield of 4.2 percent compares to 2.6 percent for the prior year period. It's also worth noting that almost 81 percent of our net invested assets are in fixed maturity securities, cash, and cash equivalents.

Strength of our IBM <unk> speaks for itself and we would encourage people to look at our IV NR relative to case and IBM relative to total reserves to the extent you're interested in the topic.

Speaker 2: As far as the investment portfolio goes again, rich went into some detail on this. I touched on it earlier- But without a doubt it's not just about the four and a half percent that we're getting on the bookyield. I think the bigger story is the new money rate today of give or take 6%.

As far as the investment portfolio goes again rich.

Went into some detail on this I've touched on it earlier, but without a doubt it's not just about the four 5% that we're getting on the book yield I think the bigger story is the new money rate today of give or take 6% yeah.

Richard Baio: The credit quality of fixed maturity securities remain strong at AA- and the durations ticked up to 2.4 years from the consecutive quarter of 2.3 years. Partially offsetting the increase in the core portfolio is net investment income from investment funds. You may recall the Thasic class is generally reported on a one-quarter lag and will more closely correlate with the broader equity markets. Accordingly, reported net investment income from investment funds was approximately $4 million, representing a marginal improvement from the first half of 2023.

Speaker 2: Compound that with the strength of the cash flow that the business is experiencing, I think it's again setting a table for a very encouraging future. The duration we did bump out from 2, three to 2- four I think it's more likely than not over time you're going to continue to see that push out. But the fact is, having kept it short the way we have has given us greater flexibility to take advantage of the higher rates in a more immediate, over a shorter period of time.

Compound that with the strength of the cash flow that the business is experiencing I think is again setting the table for a very encouraging future. The duration. We did bump up from Q3 to Q4, I think it's more likely than not over time youre going to continue to see that pushed out but the fact is having kept it short the way we have it has given us.

Greater flexibility to take advantage of the higher rates and a more immediate over a shorter period of time.

Richard Baio: We continue to proactively manage our capital position, as you saw our announcement of a $0.50 special dividend per share late in third quarter in addition to our regular quarterly dividend. This brings total capital return to investors on a year-to-date basis to approximately $775 million, with stockholders' equity increasing to more than $6.9 billion.

Speaker 2: yeahfinally, and perhaps a little bit on the forward looking and picking up on the comments about the investment portfolio.

Finally, and perhaps a little bit on the forward looking at picking up on the comments about the investment portfolio.

Speaker 2: Nobody knows what certainty what tomorrow will bring and there certainly is the potential for volatility to be around the corner that.

Nobody knows with certainty what tomorrow will bring and there certainly is the potential for volatility to be around the corner.

That having been said.

Speaker 2: You can see the business' ability to weather a choppy time as far as cat activity. You can see the rate increases that we are getting and you can see how.

You can see the businesses ability to weather a choppy time as far as cat activity you can see the rate increases that we're getting.

Richard Baio: Book value per share before dividends and share repurchases on a year-to-date basis has increased 3.13.7 percent, excuse me.

And you can see how quite frankly.

Rob Berkley: With that, I'll turn it back to you, Rob. Rich, thanks very much. That was great.

Speaker 2: Yeah I should say we can see where the book yield is going. So that, all having been said, I think it's very clear where, how the the business is positioned for the coming quarters, in the coming years, and the earnings power of the business is likely to be accelerating from here.

I should say, we can see where the book yield is going so that all having been said I think it's very clear.

Rob Berkley: I'm just going to offer a couple of other quick observations on the quarter and how we see things unfolding from here. We'll move on to the Q&A. Rich touched on the top line, obviously, building momentum again as promised. This is a reminder to some number of quarters ago. We agreed to disagree with a couple of partners as to what we thought was an adequate rate. They did not think that we needed that much rate, and again, we decided to part ways that had a meaningful impact to the negative on our top line.

The business is positioned for the coming quarters in the coming years and the earnings power of the business is likely to be accelerating from here.

Speaker 2: I'm going to pause there and we go a and open it up for QA.

Lisa I'm going to pause there and why don't we go ahead and open it up for Q&A.

Speaker 1: Thank you. If you would like to ask a question on the phone L today, please press star one on your telephone he pad. If you would like to remove yourself from the queue, that is Star one again.

Thank you if you would like to ask a question on the phone lines. Today. Please press star one on your telephone keypad, if you would like to remove yourself from the queue that is star one again.

Speaker 1: We'll take our first question from Mike zerinsky with B ML. Please go ahead allikeke. Good afternoon.

We'll take our first question from Mike Zaremski with BMO. Please go ahead.

Mike Good afternoon.

Speaker 4: agood afternoon maybe I tear comments and about the table being's and kind of a bit more visibility you know is it I just want to want to just make sure that you know this visibility is increasingly coming from the.

Rob Berkley: That takes making its way through the Python to the extent that it's of interest. That was in the auto line, so we wish them well, and we'll see how that unfolds. Speaking of different products, obviously the marketplace for the past 12, 18, 24 months or so has been very focused on property and with good reason. I would suggest you, as we've commented in past quarters, auto liability is one that people need to continue to pay close attention to.

Hey, good afternoon.

Maybe.

To your comments.

About.

The table being set and kind of a bit more visibility is it and I just wanted to I wanted.

Just make sure that this disabilities is increasingly coming from D.

Speaker 5: The investment income whereas kind of you you do talk about. You know they're being still continued uncertainty on social inflation and and you know medical cost trends etc. Just you know. Curious to the lter comments you has: has Berkeley changed its kind of view at all materially over thelast? You know a couple of months or afew months lost costs trends, I think social inflation contin to.

The investment income.

Whereas kind of view you do talk about.

Theyre being still continued uncertainty.

Social inflation and.

Medical cost trends.

Et cetera, just curious as to the latter comments.

Rob Berkley: I think as far as product lines, when it comes to social inflation, auto liability has the biggest bullseye on its chest. By extension, that clearly spills over to access, as well as umbrella. That's having been said just in general social inflation continues to burn and we do not see that abating anytime soon.

As Berkeley changed its kind of view it at all materially over the last couple of months or a few months on loss cost trends.

I think social inflation continues to be a challenge.

Speaker 2: But if you look at the rate increases that we are achieving- ex comppleight- a half percent- I think that we're in a comfortable position to be able to, more likely than not, absorb whatever that inflation trend is sending our way.

If you look at the rate increases that we're achieving ex comp of eight 5% I think that we are in a comfortable position to be able to more likely than not absorb whatever that inflation trend is sending our way.

Rob Berkley: Quick comment on workers comp. I know we've touched on this in the past. We continue to be of the view that one needs to be very mindful of medical cost trend. We went through a period of time where it was pretty benign. We think that is shifting very quickly. We've touched on it in the past. We think it could become more and more into focus for a broader audience over the coming quarters.

Speaker 2: So do I think there's opportunity for the underwriting result to show improvement over time. Yes, I do that. Having been said, when we're generating a 20% return, there is no need to push the envelope. I think if you look at the paid loss ratio and how it's been running for some number of quarters, that should be a pretty good leading indicator.

So do I think there is opportunity for the underwriting result.

<unk> improvement overtime, yes, I do.

Do that having been said.

One we're generating.

20% return.

There is no need to push the envelope I think if you look at the paid loss ratio and how it's been running or some number of quarters that should be a pretty good leading indicator.

Rob Berkley: In addition to that, the benefit that comp was getting both as it relates to COVID and frequency and then on the heels of COVID a tight labor market and wage inflation. I think those benefits have run their course and clearly wage inflation is slowing. I mentioned a moment ago the topic of social inflation. We are very focused on it. You can see it in our rate increases, ex comp coming in at eight and a half percent.

Speaker 2: Far as the investment portfolio goes to the point that you raised my Ke, I think it's pretty straightforward. You know, you can see what the new money rate is, you know what the duration is and you can this. It's not that hard to calculate the upside from here and, as you know, time goes by. We're just locking in every day higher and higher rates and pushing that duration out.

As far as the investment portfolio goes to the point that you raised.

It's pretty straightforward.

You can see what the new money rate is you know what the duration is.

And you can do that.

Hard to calculate the upside from here and as you know.

Time goes by we're just locking in everyday higher and higher rates and pushing that duration out.

Speaker 2: sofrom from my perspective, certainly there's a lot of upside on the investment portfolio, but I would encourage people not to discount the opportunity on the underwriting side either.

So.

Rob Berkley: We have every intention of continuing to stay on top of it. We think the market is accepting our rate increases and you can see that in part demonstrated by our renewal retention ratio continues to be at approximately a steady 80 percent. Another number that I find useful perhaps others do as well is the paid loss ratio. This is a number that we flagged for you all in the past again coming in at a very healthy 47.9 percent for the quarter, which obviously given where we are booking the business would leave one to believe that the strength of our IBNR speaks for itself and would encourage people to look at our IBNR relative to case and IBNR relative to total reserve.

From my perspective, certainly there is a lot of upside on the investment portfolio, but I would encourage people not to discount the opportunity on the underwriting side either.

Speaker 4: Okay I understood and maybe as a follow up on the top line growth and you mentioned, there were some partners you you, you know- part away with that might have led to some of the, the D, So I don't know if it was last year, but you know this year- were seeing.

Okay understood and maybe as a follow up on the topline growth and you mentioned there were some partners U.

Hugh part away with that might have led to some of the diesel I don't know if it was last year, but this year.

Seeing.

Speaker 4: Some momentum in the top line at P W, just like a pricing, let's say being flattish, any story underlying that you? You'd like to share a trend line.

Some momentum in.

On the topline MPW.

Yes, My Cup pricing, let's say big flattish.

Any story underlying that you'd like to share a trend line.

Speaker 2: I think it's just at least where I was trying to articulate to make a long story short.

I think its just at least what I was trying to articulate to make a long story short.

Rob Berkley: To the extent you're interested in the topic. As far as the investment portfolio goes, again, Rich went into some detail on this I touched on it earlier but without a doubt it's not just about the four and a half percent that we're getting on the book yield. I think the bigger story is the new money rate today of give or take 6 percent. You compound that with the strength of the cash flow that the business is experiencing.

Speaker 2: The momentum is returning on the top line because those relationships that we're in the process of parting ways with are getting towards the tail end and the impact on the top line is diminishing with every passing quarter. As a result of that, its impacting the overall left and left.

The momentum is returning on the top line because those relationships that we are in the process of parting ways with are getting towards the tail end and the impact on the topline is diminishing with every passing quarter. As a result of that is impacting the overall less and less in <unk>.

Speaker 2: In addition to that, you know, the other piece that I should mention is: and there are parts of the professional liability market that are really, really competitive and we're just not going to follow things down the drain. If we doesn't make sense, we're not going to do it. It's a similar stored workers comp. Fortunately, there's lots of opportunities and other parts of the marketplace and you know we are going after those and that's what it's driving the growth that you see and I think you', Re like, more likely than not to see more that.

The other piece that I should mention is there are parts of the professional liability market better and really really competitive and we're just not going to follow things down the drain if.

Rob Berkley: I think it's again setting a table for a very encouraging future. The duration we did bump out from two three to two four I think it's more likely than not over time. You're going to continue to see that push out but the fact is having kept it short the way we have has given us greater flexibility to take advantage over the higher rates in a more immediate or over a shorter period of time.

It doesn't make sense, we're not going to do it and it's a similar story with workers comp. Fortunately there is lots of opportunities in other parts of the marketplace.

We are going after those and that's what's driving the growth that you see and I think you're more likely than not to see more of that.

Speaker 5: Sure is the rate increase. The component of it Yeah, but it's certainly not the whole story. Thank you.

Sure is the rate increase that component of it yes.

Yeah.

It's certainly not the whole story.

Rob Berkley: Yeah, finally and perhaps a little bit on the forward looking and taking up on the comments about the invest in portfolio. Nobody knows what certainty what tomorrow will bring and there certainly is the potential for volatility to be around the corner. That having been said, you can see the business's ability to weather a choppy time as far as cat activity. You can see the rate increases that we are getting and you can see how quite frankly I should say we can see where the book yield is going.

Thank you.

Yes.

Yeah.

We will take our next question from Elyse Greenspan with Wells Fargo.

Speaker 6: I thank good evening. My first question is, I guess you know, building upon the world conversation know, as you guys that alluded to write, growth within the insurance book did pick up in the quarter, obviously pushes impolls across the different business lines. Rob, just based off a your overall outlook, you know how would you expect, I guess, premium growth within that book to trend not only in the fourth quarter but no, also in 2024 as well.

Hi, Thanks, Good evening My first question.

I guess.

Building upon the growth conversation.

Now as you guys had alluded to by growth within the insurance book did pick up.

And in the quarter, obviously pushes and pulls across the different business lines, Rob just based off of your overall outlook.

How would you expect I guess premium growth within that book to trend not only in the fourth quarter, but now also in 2024 as well.

Rob Berkley: So that all having been said I think it's very clear where the how the business is positioned for the coming quarters and the coming years and the earnings power of the business is likely to be accelerating from here.

Speaker 2: Obviously at least nobody knows exactly what tomorrow will bring but, as you would see, over the past several quarters there's been momentum, this building, and there's nothing that I see today that's going to take the winind out of that sale.

Obviously at least nobody knows exactly what tomorrow will bring but as you would see over the past several quarters. There has been momentum. That's building there is nothing that I see today, that's going to take the wind out of that sale.

Lisa: Lisa, I'm going to pause there and why don't we go ahead and open it up for Q and A. Thank you.

Speaker 6: ok and then in terms of the prior year development, So one million overall favorable. Was there any noise N in either insurance or reinsurance within that one million or any noise within you know different accident years that you want to call out? I know you typically wait for the 10-Q , but anything worth flagging tonight.

Okay, and then in terms of.

Unknown Attendee: If you would like to ask a question on the phone lines today, please press star one on your telephone keypad.

The prior year development, So 1 million overall favorable was there any noise in either insurance or reinsurance within that $1 million any noise.

Unknown Attendee: If you would like to remove yourself from the queue, that is star one again.

Michael Zaremski: We'll take our first question from Mike Zaremski with BMO. Please go ahead. I'm Mike. Good afternoon. [inaudible] And, you know, medical cost trends, etc.

Within different accident years that you want to call out I know you typically wait for the 10-Q, but.

<unk> worth flagging Tonight.

Speaker 2: Yeah I don't think there was anything particularly noteworthy rich. Did you have anything that he wanted to flag on the call?

Yes, I don't think there was anything particularly noteworthy.

Rich did you have anything that you wanted to flag on the call.

Speaker 7: I would agree with your comment, Rob. I don't think there is much you know in terms of from a segment perspective. Pretty benign, you know, in you to the segments. So I think that's all I would comment before the queue. ok, Thank you.

I would agree with your comment Rob I don't think theres much.

In terms of from a segment perspective pretty benign.

In each of the segments.

I think.

That's all I would comment though for the Q.

Okay. Okay. Thank you.

Rob Berkley: Just, you know, carry us up to the letter comments, you know, has, has Berkley changed it to kind of view it all materially over last, you know, a couple months or a few months on lost cost trends. I think social inflation continues to be a challenge. But if you look at the rate increases that we're achieving ex-comp of eight and a half percent. I think that we're in a comfortable position to be able to more likely than not absorb whatever that inflation trend is sending our way.

Thanks Louise.

We'll take our next question from Mark Hughes with Truest.

Hi, Mark good afternoon, yeah. Thank you.

Good afternoon, Rob Hello, Rick.

Speaker 8: General liability had another acceleration this quarter.

General liability you had another acceleration this quarter.

Speaker 8: Anything going on there? You think some sort of rehardening perhaps in the G?

Anything going on there are you seeing some sort of a re hardening perhaps neil.

Speaker 2: I think that it's a combination of things. one is rate and 2- certainly our E? N's businesses in particular are benefiting from that as well, and our specialty businesses. Overall, I think there's a recognition two things 1: there's disciplined people are taking the rate, and 2: I think that there's a growing percentage of the audience that is looking to do business.

Okay.

I think that it's a combination of things one is right.

Two certainly our E&S businesses in particular are benefiting from that as well.

Rob Berkley: So do I think there's opportunity for the underwriting result to show improvement over time? Yes, I do. That having been said when we're generating a 20% return, there is no need to push the envelope. I think if you look at the paid loss ratio and how it's been running for some number of quarters, that should be a pretty good leading indicator. As far as the investment portfolio goes to the point that you raised Mike, I think it's pretty straightforward.

Our specialty businesses overall I think there's a recognition two things one there is disciplined people or are taking the right and two I think that there is a growing percentage of the audience that is looking to do business with carriers that they can have confidence in and that's not just about ratings and in the eyes.

Speaker 2: With carriers that they can have confidence in, and that's not just about ratings and in the eyes of the insured, I think it's also distribution partners, where they are trying to narrow the number of relationships they have and have those relationships be more important and really focusing on partners that they know will be there tomorrow in a predictable and consistent manner.

<unk> of the insured I think it is also distribution partners, where they are trying to narrow the number of relationships they have and have those relationships even more important.

Rob Berkley: You can see what the new money rate is. You know what the duration is. And you can just stop that hard to calculate the upside from here. And as you know, time goes by, we're just locking in every day higher and higher rates and pushing that duration out. So from my perspective, certainly there's a lot of upside on the investment portfolio, but I would encourage people not to discount the opportunity on the underwriting side either. Okay, understood.

Really focusing on partners that they know will be there tomorrow, and a predictable and consistent manner.

Speaker 5: There's still. How about the property reinsurance market had to LO slower growth this quarter compared to the last couple of quarters? What do you see happening there? Yeah, I wouldn't read too much into that. There's just a fair amount of seasonality, if you will, to how that business is.

Understood how about the property reinsurance market.

The little slower growth this quarter compared to the last couple of quarters, what do you see happening there, yes, I wouldn't read too much into that as just a fair amount of seasonality. If you will to how that business is written.

Rob Berkley: And maybe it's a follow-up on the top line growth. And you mentioned there were some partners you, you know, part of way with that might have led to some of the diesel. I don't know if that was last year, but you know, this year we're seeing some momentum in the top line on PW. Just like pricing, let's say being flatish, any any story underlying that you would like to share a trend line.

Speaker 5: There's still a good opportunity there in our colleagues, I think are very focused.

There is still a good opportunity there and our colleagues I think are.

<unk> focused on it.

I appreciate it thank you.

Speaker 1: Look'll at your next question from Alex Scot with Goldman sex.

We will take our next question from Alex Scott with Goldman Sachs.

Okay.

Okay.

Speaker 9: Good afternoon. So I wanted to ask you about the paid loss ratios. I mean, you know, I think Q1 was 48%. It sounds like it's around that level now still.

Good afternoon.

So I wanted to ask you about the paid loss ratios I mean, I think in <unk> was 48% and it sounds like it's around that level now so can.

Rob Berkley: I think it's just at least what I was trying to articulate to make a long story short. The momentum is returning on the top line because those relationships that we're in the process of parting ways with are getting towards the tail end. And the impact on the top line is diminishing with every passing quarter as a result of that it's impacting the overall less and less. In addition to that, you know, the other piece that I should mention is there are parts of the professional liability market that are really, really competitive and we're just not going to follow things down the drain if we, you know, doesn't make sense.

Speaker 9: Can you help us think through like how much is that benefiting from the growth in the business? Just was insure values and so forth going up, you know?

Can you help us think through how much is that benefiting from the growth in the business with insured values and so forth going up.

Speaker 9: How does I compare over like a longer period of time, X? You know sort of those items I'm just trying to think through. I mean it seems like that's an important part of why you're So optimistic on the futureto. And you know, as you all know, there's a fair amount of you know criticm of some of the older ACS and you're I'm just trying to to think through you know order of magnitude, you know that that dynamic and sort of how season the older stuff is. I mean, you way we can tell me. Think through all that.

No.

How does that compare over a longer period of time ex sort of those items I'm just trying to think through I mean, it seems like that's an important part of why are you. So optimistic on the future and as you. All know there is a fair amount of criticism of some of the older accident years. So I'm just trying to think through.

Order of magnitude.

Rob Berkley: We're not going to do it. And it's a similar storage workers comp. Fortunately, there's lots of opportunities and other parts of the marketplace and, you know, we are going after those. And that's what's driving the growth that you see. And I think you're more likely than not to see more of that. Sure, is the rate increase the component of it? Yeah, but it's certainly not the whole story. Thank you.

That dynamic and sort of how seasoned the older stuff is I mean any way you can help me think through all that.

Speaker 2: Sure So maybe a couple of comments. First off, as far as the growth and the benefit of the growth, I would encourage you to go back to look at how much growth has occurred because of exposure, if you will, versus how much is the growth has come because we're just charging more for each unit of exposure and I would tell you, a lot of it is driven by that. In addition to that, as far as reserves and how they develop out, the average ration of our loss reserves is give or take three and a half year.

Sure. So maybe a couple of comments first off as far as the growth and the benefit of the growth I would encourage you to go back and look at how much growth has occurred because of exposure. If you will versus how much is the.

The growth has come because we're just charging more for each unit of exposure and I would tell you a lot of it is driven by that in addition to that as far as reserves and how they develop out the average duration of our loss reserves is give or take three and a half years.

Elyse Greenspan: We'll take our next question from Elyse Greenspan with Wells Fargo. Hi, thanks.

Rob Berkley: Good evening. My first question is I guess, you know, building upon the growth conversation knows you guys that alluded to right growth within the insurance book did pick up in in the quarter obviously pushes and pulls across the different business lines. Rob, just based off of your overall outlook, you know, how would you expect, I guess, premium growth within that book to trend not only in the fourth quarter, but also in 2024 as well?

Speaker 2: And that that's paid. So what my point is is that the years that perhaps are viewed as more challenging, I think you should have some level of comfort and sense of where those are coming out at this ST.

And thats it.

So what my point is is that the year is that perhaps are viewed as more challenging I think you should have some level of comfort in the sense of where those are coming out at this stage.

Speaker 9: That's help ful. Second question iahad, for you is, you know I guess, on general liability, of the liability and maybe the preference between primary verse reinsurance. You know I'm just notice in the casualty reinsurance you know has been declining a bit and you know we've heard some more cautious commentary from some of the global reinrs. I'm just want understand what you're seeing there is causing to favor the primary vers reinsurance exposure.

Got it Thats helpful.

Second question I had for you is I guess on general liability other liability and maybe the preference between primary versus reinsurance.

Rob Berkley: Obviously, Elyse, nobody knows exactly what tomorrow will bring, but as you would see over the past several quarters, there's been momentum that's building and there's nothing that I see today that's going to take the wind out of that sale. Okay, and then in terms of the prior year development, so 1 million overall favorable was there any noise in either insurance or re insurance within that 1 million or any noise within, you know, different accident years that you want to call out.

Just noticed in the casualty reinsurance, it's been declining a bit.

We've heard some more cautious commentary from some of the global reinsurers. So I'm just trying to understand what are you seeing there that's causing them to favor the primary Bruce reinsurance exposure.

Speaker 5: Well I said there are a couple of things. First off, a lot of it is not necessarily that the underlying business is less attractive than maybe about the seating commission that they're able to command and at some point in mid who would think theunderlying business is okay.

I think there are a couple of things first off.

A lot of it is not necessarily that the underlying business is less attractive than maybe about the ceding commissions.

They are able to command and at some point, maybe we think the underlying business is okay, but the ceding commissions at our competitors are willing to play on the reinsurance side.

Speaker 5: But the seating commissions that our competitors are willing to play on the reinsurance flo, that they don't make sense to us.

Rob Berkley: I know you typically wait for the 10 queue, but anything worth flagging tonight. Yeah, I don't think there was anything particularly noteworthy. Rich, did you have anything that you wanted to flag on the call? I would agree with your comment, Rob. I don't think there's much, you know, in terms of from a segment perspective, pretty benign, you know, in each of the segments. So I think that's all I would comment before the queue. Okay, thank you.

Don't make sense to us in particular I would call out some of the professional liability space, but I'm not going to get into more detail than that as far as on the liability side on the director insurance fronts.

Speaker 5: In particular, I would call out some of the professional liability space, but I'm not going to get into to more detail that.

Unknown Attendee: Thanks, Liz.

Speaker 2: As far as on the the liability side on, on the Director insurance front, you know, it's just where we see opportunity.

It's just where we see opportunities.

Speaker 5: And we like what we see in much of the marketplace, particularly specialty and, if you want to get even more granular, much of the N's market and, as you and others are aware, we're one of the largest players in the E? N's space and in particular in the liability.

And we like what we see in much of the marketplace, particularly specialty.

And if you wanted to get even more granular much of the E&S market and as you and others are aware, we're one of the largest players in the E&S space and in particular in the liability lines. So this is just a good moment and again, what's going on with the reinsurance isn't necessarily that we just think that the.

Mark Hughes: We'll take our next question from Mark Hughes with truest. Mark, an afternoon. Yeah, thank you. Anthony and Rob, a little rich. A general liability, you had another acceleration, this quarter, anything going on there, you seeing some sort of a rehardening perhaps in a drill. I think that it's a combination of things. One is rate and two, certainly our EMS businesses in particular are benefiting from that as well and our specialty businesses overall.

Speaker 5: So this is just a good moment. And again, what's going on with the reinsurance isn't necessarily that we just think that the market has gone to howll. As far as the primary, we just may not agree with what some others are viewing is an appropriate seat.

Market has gone to how as far as the primary we just may not agree with what some others are viewing as an appropriate fee.

Speaker 2: You know, I have heard as of late from some reinsurers commenting on social inflation and all of a sudden they've discovered this thing called litigation funding and you know, kind of makes you scratch your head and wonder where they've been for the past decade, because these are not new phenomenon. These are things that.

<unk>.

Have heard as of late from some reinsurers comp.

Commenting on social inflation and all of a sudden.

Discovered this thing called litigation funding.

Mark Hughes: I think there's a recognition to things. One, there's discipline. People are taking the rate and two, I think that there's a growing percentage of the audience that is looking to do business. With carriers that they can have confidence in and that's not just about ratings and in the eyes of the insured. I think it's also distribution partners where they are trying to narrow the number of relationships they have and have those relationships be more important and really focusing on partners that they know will be there tomorrow in a predictable and consistent manner.

Kind of makes you scratch your head and wonder where they've been for the past decade. Because these are not new phenomenon. These are things that.

Speaker 5: Those of us that are in the marketplace, at least in the weeds. We've been not just talking about the dealing with for an extended period of time.

Those of us that are in the marketplace at least in the weeds, we've been not just talking about the dealing with for an extended period of time.

Speaker 10: So there's nothing new there. I think it's a great that they're focused on it. Maybe they'll ll bring more discipline to the marketplace. Thank you.

So there's nothing new there I think it's great that they're focused on it maybe they'll have bring more discipline to the marketplace.

Got it thank you.

Yes.

Our next question comes from Josh Shanker with Bank of America.

Good afternoon.

Speaker 11: Good afternoon and thank you for taking my call. However, everyone-' well, we talk a little bit. You know short tailed lines, a lot of growth there. I met you know that SES to me there's property in there, but short tails of a pretty big catch up for a lot of things. A lot of growth. Interested what you're finding there and what the opportunities are.

Good afternoon. Thank you for taking my call.

Rob Berkley: There's still, how about the property re-insurance markets? Had the blue floor growth this quarter compared to the last couple of quarters? What do you see happening there? Yeah, I wouldn't read too much into that. There's just a fair amount of seasonality, if you will, to how that business is written. There's still a good opportunity there and our colleagues, I think are very focused on it. Thank you.

Hope everyone's well.

Can we talk a little bit short tailed lines a lot of growth there.

For me there is property in there, but short tails.

Big catch all for a lot of things a lot of growth.

Interested what you're finding there and what the opportunities are.

Speaker 5: lineion's share of it's a property. there'sa a little bit of autophysical damage in there and you know on both fronts, particularly in the property. I think you know the story as well as we do. There's a need for rate, there's an opportunity for rate and we are trying to make the most of it.

Lions share of its property.

Uh huh.

Little bit of a auto physical damage in their end.

On both fronts, particularly in the property I think you know the story as well as we do.

Alex Scott: We'll take our next question from Alex Scott with Goldman Sachs. Good afternoon. So I wanted to ask you about the paid loss ratios. I mean, I think in one queue was 48% that sounds like it's around that level now. Can you help us think through how much is that benefiting from the growth in the business? This was insured values and so forth going up. How does that compare over a longer period of time X sort of those items?

There is a need for rate there is an opportunity for rate and we are trying to make the most of it.

Speaker 11: And do you have to. Obviously your reinsurance costs are up a little bit. You're not a huge buyer of reinsurance. Are you able to take on some of that increased price vend or shareholders or some that can passed off the reinsurance Mark?

And do you have obviously your reinsurance costs are up a little bit youre not you.

Huge buyer of reinsurance or are you able to.

Hey, John some of that increased prices benefit shareholders or some of that gets passed off to the reinsurance market.

Okay.

Speaker 5: The short answer is the just that we are trying to ensure that the additional cost to that capacity that we rent is being passed on to the client, and I think we're doing that reasonably well. Not a perfect indicator, but you can see that in the difference between of growth in the net and part.

The short answer is just that we are trying to ensure that the additional cost of that capacity that we rent is being passed onto the client and I think we're doing that reasonably well not a perfect indicator, but you can see that in the difference between the growth and the net in part.

Alex Scott: I'm just trying to think through. I mean, it seems like that's an important part of why you're so optimistic on the future. And as you all know, there's a fair amount of criticism of some of the older acts in the years. I'm just trying to think through order of magnitude. That dynamic and sort of how season the older stuff is.

Speaker 11: I then look at it's down a lot from where it wasn't three Q2 2, but the cat loss in the reinsurance segment was somewhat high. I don't think your big Hawaiian writer, maybe there's some homes in Ha I writer.

And then look at because it's down a lot from where it was in <unk> 'twenty two but the cat loss in the reinsurance segment was somewhat high I don't think your big off Hawaii, and Ryder, but maybe theres some homes in Hawaii a writer.

Rob Berkley: I mean, you can help me think through all that. Sure, so maybe a couple of comments. First off, as far as the growth and the benefit of the growth, I would encourage you to go back and look at how much growth has occurred because of exposure, if you will, versus how much is the growth has come because we're just charging more for each unit of exposure. And I would tell you a lot of it is driven by that.

Speaker 11: The elbow in in the Panhandle in Florida just doesn't seem like that would have been a big area for you. Can you talk about the cat loss a little bit in the reangementsegment?

Although in.

In the Panhandle, Florida, just doesn't seem like that would have been a big area for you can you talk about the cat loss a little bit in the reinsurance segment, yes.

Speaker 5: Yeah the long story short. Did we have a modest exposure to the things that you're talking about, or that he flagg? Yes, and then there was also some's C's exposure in there too.

Long story short did we have modest exposure to the things that you were talking about or that you flagged. Yes, and then there was also some SCS exposure in there too.

Speaker 11: okand if I can get one more in in terms of: you know, I know you guys give a the rate, not really lost trend. You talk a lot about commercial and where it can be. What is the lost trend commercial auto and what are you reserving to giving your concerns about social inflation? Is there a variance between where you think the loss trends currently and where you're booking it? You know you try to be conservative, But as something of this being prepared for in how you're pricing and what not.

Okay, and if I can get one more in.

Rob Berkley: In addition to that, as far as reserves and how they develop out, the average duration of our loss reserves is give or take three and a half years. And that's paid. So what my point is is that the years that perhaps are viewed as more challenging. I think you should have some level of comfort and sense of where those are coming out at this stage.

In terms of I know you guys give a the right not really loss trend you talked a lot about commercial and where it can be what is the loss trend in commercial auto and what are you reserving to giving your concerns about social inflation is there a variance between where you think the loss runs currently and where you are booking at <unk>.

Try and be conservative, but is there something that is being prepared for in how you are pricing and whatnot.

Rob Berkley: That's helpful.

Rob Berkley: Second question I had for you is, you know, I guess on general library, other library and maybe the preference between primary versus reinsurance. You know, I'm just noticing the casualty reinsurance. It's been declining a bit and you know, we've heard some more cautious commentary from some of the global reinsurance. I'm just more to understand what were you seeing there that's causing you to favor the primary versus reinsurance exposure. Well, I think there are a couple of things.

Speaker 2: The short answer is and it depends on the part of the portfolio, but generally speaking we are looking to build in a risk margin beyond what the actuarial answer was.

The short answer is and it depends on the part of the portfolio, but generally speaking we are looking to build in a risk margin beyond what the actuarial answer would be.

Speaker 5: Well Thank you and have a good evening. Thank you dsh, you toobe.

Okay, well, thank you and have a good evening. Thank you Josh you too.

Okay.

Speaker 1: Our next question comes from davated moto maen with Evercore ISI.

Our next question comes from David <unk> with Evercore ISI.

Hey, David Good afternoon.

Rob Berkley: First off, a lot of it is not necessarily that the underlying business is less attractive. It may be about the seating commissions that they're able to command. And at some point, maybe we think the underlying business is okay. But the seating commissions that are competitors are willing to play on the reinsurance side that they don't make sense to us.

Speaker 12: arob, good afternoon. Just had a question on the commercial auto premium growth and y.

Hey, Rob good afternoon.

Just had a question on the commercial auto premium growth then.

Speaker 12: I guess I hear your commentary loud and clear on social inflation impacting that line, So I was a little surprised that the growth accelerated there. Was that more a function of this partner that you parted ways with, resulting in, I guess, an easier comp? Or have you seen something changed there on the pricing side this quarter that makes you want to lean into the commercial auto market a little bit more?

I guess I <unk>.

Here your commentary loud and clear on social inflation impacting that line. So I was a little surprised that the growth accelerated there was that more a function of.

Rob Berkley: In particular, I would call out some of the professional liability space, but I'm not going to get into more detail than that. As far as on the liability side on the director insurance front, you know, it's just where we see opportunities. And we like what we see in much of the marketplace, particularly specialty. And if you want to get even more granular, much of the ENS market. And as you and others are aware, we're one of the largest players in the ENS space and in particular in the liability lines.

This partner that you parted ways with.

Resulting an I guess, an easier comp or have you seen something changed there on the pricing side. This quarter that makes you want to lean into the commercial auto market a little bit more.

Speaker 2: So a couple of things that's worth building. Yeah, part of it has to do is a bit of runoff, as you alluded to, but the bigger story from my perspective is the rate that we are achieving, and we are pushing very hard on the rate and we're getting.

So a couple of things.

Yes, part of it has to do with a bit of run off as you alluded to but the bigger story from my perspective is the.

The rate that we're achieving.

Rob Berkley: So this is just a good moment. And again, what's going on with the reinsurance isn't necessarily that we distinct that the market has gone to hell as far as the primary. We just may not agree with what some others are viewing as an appropriate seat. You know, I have heard as of late from some reinsurance commenting on social inflation and all of a sudden they've discovered this thing called litigation funding. And kind of makes you scratch your head and wonder where they've been for the past decade, because these are not new phenomenon.

We are pushing very hard on the rate and we're getting it.

Speaker 5: And ultimately we have a view as to how much we need for rate. It's the extent that we're getting it, then we don't have a problem writing.

And ultimately we have a view as to how much we need for rate and to the extent that we're getting it then we don't have a problem writing the business.

Speaker 5: But we are not going to write it if we don't think we can get the rate. Bed is required plus to achieve our targeted return.

We are not going to write it if we don't think we can get the rate that is required plus.

To achieve our targeted returns.

Got it thanks, that's encouraging.

Speaker 12: And then maybe you know- and I know you guys have been vocal on just workers comp, medical cost inflation and staying on top of those trends- I'm wondering if you're actually starting to see that come through, been manifest in your claims data, just in terms of the medical cost inflation starting to impact your pain.

And then maybe and I know you guys had been vocal on just workers' comp medical cost inflation and staying on top of those trends.

Rob Berkley: These are things that those of us that are in the marketplace, at least in the weeds, we've been not just talking about but dealing with for an extended period of time. So, there's nothing new there. I think it's great that they're focused on it. Maybe I'll bring more discipline to the marketplace.

I'm wondering if you're actually starting to see that come through.

And manifest in your claims data just in terms of the medical cost.

Rob Berkley: Thank you.

Inflation starting to impact your payments.

Speaker 2: We certainly are seeing early signs of it and we've been seeing it for a little while, which is really been one of the catalyst.

We certainly are seeing early signs of it and we've been seeing it for a little while which is.

Joshua Shanker: Yeah. Our next question comes from Josh Shanker with Think of America. Good afternoon. Thank you for taking my call. Hope everyone's well. Can we talk a little bit, you know, short tailed lines. A lot of growth there. I met, you know, if that says me, there's property in there, but short tails of pretty big catch all for a lot of things. A lot of growth. Interested what you're finding there and what the opportunities are.

It's really been one of the catalysts for the caution.

Speaker 2: I think we've been talking about for some time how the providers if you will their economic model is not sustainable they many of them particularly the large health systems are destroying huge amounts of capital and something's going to have to give and ultimately.

<unk> been talking about for some time.

The providers if you will their economic model is not sustainable they.

Many of them, particularly the large health systems are destroying huge amounts of capital and something is going to have to give and ultimately.

Speaker 2: Part of how that Riddle is going to get solved is through the payers workers' compensation is not going to be insulated from that the story is not just about pharma it's about other components of medical costs and.

Part of how that <unk> going to get solved is through the Payors workers' compensation is not going to be insulated from that the story is not just about pharma, it's about other components of medical costs.

Joshua Shanker: Lion's share of its property. There's a little bit of a autophysical damage in there. And, you know, on both fronts, particularly in the property. I think you know the story as well as we do. There's a need for rate. There's an opportunity for rate. And we are trying to make the most of it. And you have to obviously your reinsurance costs are up a little bit. You're not a huge buyer of reinsurance.

Speaker 2: youknow, I think you're putting the the com component aside for a moment. If you talk to large payers, the United, the signals, etc. And you talk about the type of trend that they are seeing, and then you extrapolate from that, what does it mean for workers, compps- who, by the way, we probably don't? Actually, we definitely don't have the same negotiating leverage that someone like the United would have. I think that's pretty instruct.

Thank you for putting the comp component aside for a moment, if you talk to large payers.

The United Cigna et cetera, and you talk about the type of trend that they are seeing and then you extrapolate from that what does it mean for workers comp who by the way, we probably don't actually we definitely don't have the same negotiating leverage that someone like the United would have I think thats pretty instructive.

Joshua Shanker: Are you able to take on some of that increased price event for shareholders or some that can pass off the reinsurance market? The short answer is just that we are trying to ensure that the additional cost of that capacity that we rent is being passed on to the client. And I think we're doing that reasonably well. Not a perfect indicator, but you can see that in the difference between the growth and the net and part.

Speaker 12: Got it understood and then maybe, if I can sneak one more in, just a quick one you know, I didn't hear you talk at all about the fire losses and I think is it that fair to assume that that's pretty much doneyou know you guys have Re under writt in that book and that's no longer impacting results, or did that have some smallest impact this quarter as well?

Got it understood and then maybe if I can sneak one more in just a quick one.

I didn't hear you talk at all about the fire losses, and I think as is that fair to assume that that's pretty much.

Don.

Have re underwritten that book and that's no longer impacting results or did that have some smallish impact this quarter as well.

Joshua Shanker: And then look, it's down a lot from where it wasn't 3Q22, but the cat loss and the reinsurance segment was somewhat high. I don't think you're big hawaiian writer, but maybe there's some homes in Hawaii, your writer, the elbow in the panhandle in Florida. It just doesn't seem like that would have been a big area for you. Can you talk about the cat loss a little bit in the return segment? Yeah, the long story short, did we have modest exposure to the things that you're talking about are that you flag yes, and then there was also some SDS exposure in their tip.

Speaker 13: Good answer is that it wasn't overly noteworthy in the quarter. I'm not inclined to very declare victory because that it always comes back to buite it up.

The answer is that it wasn't overly noteworthy in the quarter.

I'm not inclined to.

Declare a victory because then it always comes back to us.

Speaker 13: But I think we're making progress on that front.

But I think we're making progress on that front.

Speaker 2: That having been said, as far as the lost picks go, you know per our conversation around the environment, we're just not in a rush. To do anything would be thoughtful and measured. The fact is, the business is generating, by any measure, great returns and we don't see that changing. So there's there's no reason.

That having been said as far as the loss picks.

For our conversation around the environment we're in.

Just not in a rush to do anything but be thoughtful and measured.

The fact is the business is generating by any measure great returns and we don't see that changing so theres no reason.

Joshua Shanker: Okay. And if I can get one more in terms of, you know, I know you guys give a rate, not really loss trend, you talk about commercial and where can be. What is the loss trend commercial auto and what are you reserving to giving your concerns about social inflation? Is there a variance between where you think the loss trends currently and where you're booking it? I know you try and be conservative.

To push better for us just to make sure that it is thoughtful and well controlled and if we're going to err, we're comfortable erring on the side of caution.

Speaker 13: Better for us just to make sure that it is thoughtful and well controlled and if we're going to airr, we're comfortable airring on the side of.

Speaker 12: Got it understood. Thank you, extra culture.

Got it understood. Thank you. Thanks.

Thanks for the question.

Speaker 1: We'll take our next question from Ryan tuniswhat Autonomous Re?

We will take our next question from Ryan Tunis with Autonomous research.

Joshua Shanker: But is there something that's been prepared for in how you're pricing and whatnot? The short answer is and it depends on the part of the portfolio, but generally speaking, we are looking to build in a risk margin beyond what the actuarial answer would be. Okay. Well, thank you and have a good evening. Thank you, Josh. You too.

Speaker 14: iran's a going first question, just on shre tail lines. Obviously there's been some mixed shift in that direction. I think that that would have somewhat of a lower underlying loss ratio. Is that the right?

Hey, Rob How's it going.

First question just on short tail lines.

Obviously theres been some mix shift in that direction I think that would have some.

One of our lower underlying loss ratio.

Is that the right way to think about it.

Speaker 13: Scratching. I think it potentially does, but with a lot of those lines you got to remember. We carry a cat load So we are not going to release the catload prematurely So that could spill over. That benefit may not be realized. If you will, we may carry that through into a future period.

I think I think it potentially does but with a lot of those lines you've got to remember we carry a cat load.

David Motemaden: Our next question comes from David. Automate me with Evercore ISI. Hey, David.

Rob Berkley: Good afternoon. Hey, Rob. Good afternoon. Just had a question on the commercial auto premium growth and, you know, I guess I, you know, hear your commentary loud and clear on social inflation impacting that line. So I was, you know, a little surprised that the growth accelerated there. Was that more a function of this partner that you parted ways with, you know, resulting in, I guess, an easier comp. Or have you seen something change there on the pricing side, this quarter that makes you want to lean into the commercial auto market a little bit more.

So we are not going to release the cat load prematurely, so that could spill over.

That benefit may not be realized if you will we may carry that through into future periods.

Speaker 2: But yes to your point. Does it have a lower loss ratio? Oftentimes.

But yes to your point, we did have a lower <unk>.

Loss ratio oftentimes, yes.

Speaker 14: And then I guess's bigger picture with commercial auto. It seems like it's been like almost an impossible line underright over the past decade.

And then I guess, just bigger picture with commercial auto it seems like it's been like almost an impossible aligned to underwrite over the past decade.

Speaker 14: umjust curious like for a business like Berkeley.

Just curious like business like Berkeley.

Speaker 14: Why does that line need to be such a large component of what you underwrite? Is it that it's bundled with with other stuff, or you think you can ultimately get it right? I'm just curious, why structure?

Why does that line needs to be such a large component of what you underwrite as it did it's bundled with other stuff or.

Rob Berkley: So, a couple of things that's worth doing. Yeah, part of it has to do with a bit of runoff as you're alluded to, but the bigger story from my perspective is the rate that we are achieving, and we are pushing very hard on the rate and we're getting it. And ultimately we have a view as to how much we need for rate and to the extent that we're getting it, then we don't have a problem writing the business. But we are not going to write it if we don't think we can get the rate that is required plus to achieve our target of return.

You think you can ultimately get it right.

David Motemaden: Got it. Thanks. That's encouraging.

I'm just curious why structurally that has to be such a large part of your mix.

Speaker 13: Yeah So I think we need to dissect that a little bit in apologies in advance that this proves to be more of an answer than then you're looking for. But know, as far as commercial auto goes, you know- I would draw the analogy perhaps to your point- that it's sort of the industry's version of wackamol.

So I think we need to dissect that a little bit and apologies in advance if this proves to be more of an answer than youre looking for.

As far as commercial auto goes.

Draw the analogy, perhaps to your point that it's sort of the industry's version of whack a mole.

Speaker 2: As far as our book goes, we write it both standalone and we also write it as part of a pack.

As far as our book grows we write at both stand alone and we also write it as part of a package is.

Speaker 13: Is it relevant to how you write a package? Yes, it is, but that doesn't mean you should write it in an undisciplined man.

Relevant to how you write a package yes. It is but that doesn't mean you should write it.

Rob Berkley: And then maybe, you know, and I know you guys have been vocal on just workers, medical costs inflation and staying on top of those trends. I'm wondering if you're actually starting to see that come through and manifest in your claims data, just in terms of the medical costs, inflation, starting to impact your payments. We certainly are seeing early signs of it, and we've been seeing it for a little while, which has really been one of the catalysts for the caution.

In an undisciplined manner I think as far as the mono line goes we play when we think we're making a buck and quite frankly, a lot of our mono line guys. We think over the past few years.

Speaker 2: Think as far as the monolline goes we play when we think we're making a buck and quite frankly a lot of our monolline guides we think over the past few years have done very well So you know we'll see over time but.

Have done very well.

No.

We will see over time, but I think we just have some reservation and concerns about where the marketplace is going that having been said it has caused us into Justin from time to time.

Speaker 2: I think we just have some reservation and concerns about where the marketplace is going.

Speaker 2: That havingven't been said, you know it has calledused us in suigestion from time to time. I think we've, as of late, have more consistently done better where we're writing at monol line because we are very focused on it. I think there are some examples where we've written as part of a package where we've probably haven't been as focused and didn't have is strong an expertise being brought to bear, and that is something that we are working at changeing.

I think we've.

As of late have more consistently done better where we're writing mono line because we are very focused on it.

Rob Berkley: I think we've been talking about for some time how the providers, if you will, their economic model is not sustainable. Many of them, particularly the large health systems are destroying huge amounts of capital and something's going to have to give. And ultimately part of how that riddle is going to get solved is through the payers. Workers' compensation is not going to be insulated from that. The story is not just about pharma, it's about other components of medical costs.

I think there are some examples where we've written this part of a package, where we probably haven't been as focused and didn't have as strong an expertise being brought to bear and that is something that we are working at changing.

Speaker 15: But Yeah, are. There are moments in the plan where I look at it and I say: how does this make sense that, having' been said, there are many parts of this organization where they are doing it consistently well, part think. Thank to a question.

But yes, there are moments in time, where I look at it and I say how does this makes sense that having been said there are many parts of this organization, where theyre doing it consistently well.

Fair enough thanks, Rob.

Rob Berkley: And I think you're putting the component aside for a moment, if you talk to large payers, the United, the Cygnus, etc. And you talk about the type of trend that they are seeing, and then you extrapolate from that. What does it mean for workers' costs? Who by the way, we probably don't actually, we definitely don't have the same negotiating leverage that someone like a United would have. I think that's pretty instructive.

Thanks for the question.

We'll take our next question from Brian Meredith with UBS.

Speaker 5: Happen on to you. I just curious any green shoots at all in the professional liability you know line and maybe even related to cyber, and we've seen some big losses come through in the cyber area of late. Is that causing an kind of upper pressure on rates and maybe some opportunity that around that line? I guess my answer be not.

Hey, Brian good afternoon.

Afternoon to you.

Rob just curious any green shoots at all in the professional liability line and maybe even related to cyber and we've seen some big losses come through on a cyber war.

David Motemaden: Got it understood.

Area of late and is that causing any kind of upward pressure on rates and maybe some opportunity there around that line.

I guess my answer would be not yet.

Speaker 5: Well we'll have to see what comes about, particularly as far as cyber goes. It's going to be interesting to see what type of pressure the reinsurance marketplace brings to bear on the underlying or the insurance marketplace. So as D L goes, it continues to be.

We'll have to see what comes about particularly as far as cyber goes it's going to be interesting to see what type of pressure the reinsurance marketplace brings to bear on the underlying or the insurance marketplace as far as D&O goes it continues to be.

Rob Berkley: And then maybe if I can sneak one more and just a quick one, you know, I didn't hear you talk at all about the fire losses. And I think is that fair to assume that that's pretty much done. You guys have re-underwritten that book and that's no longer impacting results or did that have some. Smallish impact this quarter as well. The answer is that it wasn't overly noteworthy in the quarter. I'm not inclined to declare victory because then it always comes back to bite us. But I think we're making progress on that front.

Speaker 2: Very very competitive. Other parts of professional liability: I would tell you that to a nearing degree.

Very very competitive other parts of professional liability I would tell you that to a varying degree.

Speaker 5: Pretty challenging out here. So again, I think that you can still make a buck in a bunch of pockets, but you need to be.

Pretty challenging out here. So again I think that you can still make a buck and a bunch of pockets, but you need to be.

Rob Berkley: That having been said as far as the lost picks go, you know, for our conversation around the environment. We're just not in a rush to do anything but be thoughtful and measured. The fact is the business is generating by any measure, great returns. And we don't see that changing so there's no reason to push better for us just to make sure that it is thoughtful and well controlled. And if we're going to air, we're comfortable airing on the side of caution.

Careful.

Speaker 4: Got makes sense. And then RO just remind me you know that that business going through the pith on, is it big impact on your underlying or your loss pxs? So you just having to set a little more conservnedly as that book, the earn kind of runs off here.

Got you makes sense and then Rob just remind me.

That that business going through the Python is it a big impact on your underlying your loss picks so you're just having to set up a lot more considerably as that book the earned kind of runs off here.

Speaker 13: The answer is as it we saw what was going on with it we pushed the picks up and we think what we're carrying makes sense and won't be an issue but.

The answer is as we saw what was going on with it.

We pushed the picks up and we think what we're carrying makes sense.

And it won't be an issue but.

Speaker 16: You know, quite honestly, we we wish them well, but we're not going to miss him.

Quite honestly, we we wish them well, but we're not going to miss him.

Rob Berkley: Thank you. Got it, understood. Thank you. Thanks for the question.

Great. Thanks.

Speaker 17: We'll take our next question from myer Shield, with T B W and mar Re going to have Hi. How are you?

Ryan Tunis: We'll take our next question from Ryan Tunis with Autonomous Research. Hey Rob, how's it going? First question, just on short tail lines. Obviously, there's been some mixed shift in that direction. I think that that would have somewhat of a lower underlying loss ratio. Is that the right way to think about it? I think if I think it potentially does, but with a lot of those lines, you've got to remember we carry a cat load.

We will take our next question from Meyer Shields with TCW.

Hey, Margaret.

Hi, good afternoon, how are you.

Good how are you.

Speaker 8: Good Thank you. I would wanted to drill down a little bit more, maybe into City commissions on casualty reinsurance because, reading a lot if you said maybe European reinsurers and nervous about social inflation, I'm wondering: is it too early or are in your current session, show it, say 1: one casualty reinsurance renewals there are? Are there any indications of C commissions?

Good. Thank you I wanted to drill down a little bit more maybe into seeding commissions on casualty reinsurance.

Because if you are reading a lot. If you said, maybe European reinsurers getting nervous about social inflation and I'm wondering is it too early or are in your current discussions so let's say one one.

Ryan Tunis: So we are not going to release the cat load prematurely, so that could spill over. That benefit may not be realized, if you will, we may carry that through into a future period. But yes, to your point, could it have a lower loss ratio oftentimes? Yes.

<unk> reinsurance renewals there.

Are there any indications of ceding Commission.

Improving.

Speaker 16: They they don't invite me to their pricing meetings. So I don't know that, I don't know. I think, given the chatter you know, I think they they're thin about.

Yeah.

They invite me to their pricing meeting so I don't know.

That hasn't happened.

Given the chatter I think they're thinking about it.

Speaker 13: But you know, we'll have to see whether the dialogue and the commentary of materializes.

But we'll have to see.

Rob Berkley: And then I guess his bigger picture with commercial auto. It seems like it's been like almost an impossible line to underwrite over the past decade. Just curious, like for a business like Berkley, why does that line need to be such a large component of what you underwrite? Is it that it's bundled with other stuff, or you think you can ultimately get it right? I'm just curious why structurally that has to be such a large part of your mix.

The dialogue and the commentary materializes in action.

Speaker 8: Okay fair, not. I want to think that back because you talked about Berkeley's willingness to write more property in the current environment and I'm wondering about Mat were Re nine months through the year, how the growth that you've seen compares with the expectations of you had and the opportunity to use Spy. Go back to December last year.

Okay.

Fair enough I wanted to just get back to you.

You talked about Brooklyn willingness to write more property in the current environment and I'm wondering about now that we're nine months through the year.

Now the growth that you've seen compares with the expectations you had the opportunity to use op. You go back to December of last year.

I think the.

Speaker 13: We feel quite good about what has been accomplished by our colleagues, and I understand that you know many of you. The only barometer you have is how much premium that we're writing, but what may not always come through is clearly is: maybe we're collecting the same amount of premium but we reduced the exposure by a third, or maybe were.

We feel quite good about what has been accomplished by our colleagues.

Rob Berkley: Yes, so I think we need to dissect that a little bit. And apologies in advance if this proves to be more of an answer than you're looking for. But as far as commercial auto goes, I would draw the analogy perhaps to your point that it's sort of the industry's version of whack-a-mole. As far as our book goes, we write it both standalone and we also write it as part of a package.

And I understand that many of you are the only barometer you have is how much premium that we're writing, but what maybe not always come through as clearly maybe we're collecting the same amount of premium, but we've reduced the exposure by a third.

Or maybe we're collecting.

Speaker 15: 30% more premium, but we've reduced the exposure considerably. So it's not just a matter of how much you're right, it's a matter of how much you're going to make obviously, and I think our colleagues both domestically as well as outside of the U's have done a nice job navigating the channel and continue to. ok, Don. Thank you very much.

30% more premium, but we've reduced the exposure considerably.

Rob Berkley: Is it relevant to how you write a package? Yes, it is. But that doesn't mean you should write it in an undisciplined manner. I think as far as the monolongues, we play when we think we're making a buck. And quite frankly, a lot of our monolongues, we think over the past few years, have done very well. So, you know, we'll see over time, but I think we just have some reservation and concerns about where the marketplace is going.

So it's not just about how much youre right. Its a matter of how much youre going to make obviously and I think our colleagues.

Both domestically as well as outside of the U S have done a nice job navigating the channel and continue to.

Okay. That's helpful. Thank you very much.

For the question.

Our next question comes from Mark Hughes with Truest.

Rob Berkley: That, having been said, you know, it has caused us into gestion from time to time. I think we, as of late, have more consistently done better where we're writing at monolong because we are very focused on it. I think there are some examples where we've written this part of a package where we've probably haven't been as focused and didn't have as strong an expertise being brought to bear. And that is something that we are working at changing.

Speaker 8: Yes I already just wanted to ask about the flu. Again want to ask about the.

Yeah, Hey, Mark just wanted to ask about.

Hello, again, I wanted to ask about the.

Speaker 8: Expense ratio, particularly in the reinsurance segment. It was a pretty low this quarter. Just that a general thoughts about expense ratio overall.

Expense ratio, particularly in the reinsurance segment. It was a pretty low this quarter, just any general thoughts about expense ratio.

Overall.

Okay.

Speaker 2: Look me, I think the as we've suggested to people in the past hour.

I think as we've suggested to people in the past hour.

Speaker 2: View is that we're going to be able to keep the expense ratio, more likely than not, comfortably below thirty.

View is that we're going to be able to keep the expense ratio more likely than not comfortably below 30.

Rob Berkley: But yeah, there are moments of time where I look at it and I say, how does this make sense? That, having been said, there are many parts of this organization where they are doing it consistently well.

Rob Berkley: Thanks, Ron. Thanks for the questions.

Speaker 2: That can obviously be impacted, as your familiar Mark and others are as well. Our oftentimes preferred an approach for growth is through genovo or starting new businesses.

That can obviously be impacted us.

You are familiar mark and others are as well.

Oftentimes preferred approach for growth is through de Novo or are starting new businesses. When you start a new business and it's in its infancy and it doesn't have scale not a lot of earned premium that has a negative impact on their expense ratio that having been said, we think it's a much more controlled model.

Brian Meredith: We'll take our next question from Brian Meredith with UBS.

Speaker 2: When you start a new business and it's in its infancy and doesn't have scale.

Rob Berkley: Good afternoon to you. Rob, just curious. Any green shoots all on the professional liability line and maybe even related to cyber and we've seen some big losses come through in the cyber area of late. Is that causing any kind of upward pressure on rates and maybe some opportunity there around that line? I guess my answer would be not yet. Well, we'll have to see what comes about, particularly as far as cyber goes, it's going to be interesting to see what type of pressure the reinsurance marketplace brings to bear on the underlying or the insurance marketplace.

Speaker 2: Not a lot of earned premium that has a negative impact on your expense ratio that having MIS said we think it's a much more controlled model to growing the business so.

Growing the business. So again does it tick up a little bit it could go up it can go down.

Speaker 2: Again it doesn't pick up a little bit can go up, I can go down, but probably the biggest driver around that is.

But probably the biggest driver around that is businesses that we start and the timing for them to get to scale, but I think.

Speaker 2: Businesses that we start and the timing for them to get to scale, but I think we remain convinced that we should be able to keep it starting with a two.

We remain.

Vince that we should be able to keep it.

Starting with it too.

And so nothing unusual this quarter in the reinsurance and mono line exit.

Speaker 8: To nothing unusual this quarter in the reinsurance and monolline exit.

Rob Berkley: As far as DNO goes, it continues to be very, very competitive. Other parts of professional liability, I would tell you that to a varying degree, it's pretty challenging out here. So, again, I think that you can still make a bunch of pockets, but you need to be careful. Gotcha, makes sense. And then, Rob, just remind me, you know, that that business going through the place on, is it a big impact on your underlying or your loss, actually just having to settle one more conservatively, is that book kind of earned kind of runs off here?

Richie is there anything that you can take us.

Speaker 1: Now I think it's for the same reasons that we've been talking about that you alluded to robthankyou. Remind everyone, that is Star one.

No I think it's for the same reasons that we've been talking about and that you alluded to.

Okay.

Excellent. Thank you.

I'll remind everyone that is star one to ask a question.

Yes.

We'll take our next question from your own <unk> with Jefferies.

Thank you good afternoon.

Speaker 14: My my, my first question, and I may be paraphrasing what I I think I heard from you, but I think you're not taking the foot off the pedal in terms of rate. At the same time you are achieving a ROE of about 20%. New money rates would suggest upside there.

Okay.

My first question.

Maybe paraphrasing, what I think I heard from you, but I think youre not taking the foot off the pedal in terms of rate.

Rob Berkley: The answer is that we saw what was going on with it. We pushed the picks off, we think what we're carrying makes sense and won't be an issue, but, you know, quite honestly, we wish them well, but we're not going to miss them.

At the same time, you are achieving that.

Rob Berkley: Thanks.

We have about 20% new money rates, which suggests upside there. So why is there a need to continue to aggressively push rate here is it that youre worried about medical inflation social inflation.

Speaker 14: So why is there a need to continue to aggressively push rate here is it that you're worry about medical inflation social inflation and.

Speaker 2: And they rear their head BAB y quickly paact margins. Well, I don't think it's once they rear their heads. I think their head is fully reared at at this stage- and the the neck this keeps growing.

We are there had quickly impact margins.

I don't think it's once they rear their heads I think their head is fully reared at this stage in the neck. This keeps growing.

Meyer Shields: We'll take our next question from Meyer Shields with KBW. Hi, good afternoon, how are you? Good, thank you.

Speaker 2: So from my perspective, it is exactly what you suggested. It is law Co trend.

So from my perspective, it is exactly what you suggested it is loss cost trend.

Rob Berkley: I wanted to drill down a little bit more, maybe, into feeding commissions on casualty reinsurance, because we're reading a lot, if you said of maybe European reinsurance, getting nervous about social inflation. I'm wondering, is it too early, or are in your current discussion, so let's say, one, one, casualty reinsurance renewal, are there, are there any indications of feeding commissions improvement? They don't invite me to their pricing meeting, so I don't know. That I've been giving the chatter, you know, I think they're thinking about it, but, you know, we'll have to see whether the dialogue and the commentary materializes in action.

Speaker 2: And while perhaps there's some evidence that financial or economic inflation is slowing those still elevated relative to what it's been in the recent past, there is no evidence that social inflation is abating at all.

While perhaps there is some evidence that.

Financial or economic inflation is slowing though still elevated relative to what it's been in the recent past there is no evidence that social inflation is abating at all.

Rob Berkley: Okay, fair enough.

Speaker 13: And you know, as a result of that, we're just going to keep pushing and, at a minimum, we need to keep up with that.

As a result of that we're just going to keep pushing and at a minimum we need to keep up with that.

Speaker 18: And then we haven't heard. And while about the international book, can you maybe give us a quick update there? Is it margin accretive dilutive for the quarter for year to date? Our growth patterns developing that?

Got it.

And then we haven't heard in a while about the international book can you maybe give us a quick update there is it margin accretive dilutive for the quarter for year to date.

Our growth patterns developing there.

Speaker 16: It's accretive. We have some terrific businesses outside of the United States.

It's accretive we have some terrific businesses outside of the United States run by some outstanding people with a shared set of values that we have in other parts of the business very focused on a lot of the things that we've talked about particularly risk adjusted return and it is certainly not dilutive.

Speaker 13: Run by some outstanding people with a shared set of values that we have in other parts of the business, very focused on a lot of the things that we talked about. Particularly risk adjusted return and it is certainly not dilutive to the, to the franchise overall.

Rob Berkley: I wanted to set back, because you talked about Berkeley's willingness to write more property in the current environment, and I'm wondering about now that we're nine months through the year. How the growth that you've seen compares with the expectations you had and the opportunity to use coffee, go back to December of last year. I think that we feel quite good about what has been accomplished by our colleagues, and I understand that, you know, many of you, the only barometer you have is how much premium that we're writing, but what may not always come through is clearly is maybe we're collecting the same amount of premium, but we've reduced the exposure by a third.

To the franchise overall.

Speaker 18: Got it. If I could see one last 1, if I may, on the property we in the lawss picks there. I would assume those develop a bit faster than you see in the casualty line. So how long before you start updating those? Is it mostly frequency driven and we could see those start to move according to the actual frequency within a couple of quarters, or it does it take longer?

Rob Berkley: Or maybe we're collecting 30% more premium, but we've reduced the exposure considerably. So it's not just a matter of how much you're right, it's a matter of how much you're going to make, obviously, and I think our colleagues both domestically, as well as outside of the US, have done a nice job navigating the channel. And continue.

Got it if I could sneak one last one if I may.

On the property market and the loss picks there.

I would assume those develop a bit faster than you see in the casualty lines. So how long before you start updating those is it mostly frequency driven and then we could see those start to move according to the actual frequency.

Within a couple of quarters or does it take longer.

Speaker 13: It takes a little bit of time. We look at it every 90 days or so and don't want to get ahead of ourselves.

It takes a little bit of time, we look at it.

90 days or so and don't want to get ahead of ourselves I think theres two pieces to it one is how do we think about our attritional or if you will the risk book versus how do we think about the cat exposure. The cat piece is a little bit of a different story.

Speaker 13: I think there's two pieces to it. one is: how do we think about attritional or, if you will, the risk book?

Speaker 2: Versus how do we think about the cat exposure? The cat piece is a little bit of a different story, as I was we trying to suggest earlieryou know we have a cat load that we build in and we're not going to release that prematurely. We'll have that rollover from quarter to quarter as far as the attritional.

We've tried to suggest earlier.

A cat load that we build and we're not going to re lease that prematurely, we will have that rollover from quarter to quarter as far as the attrition will go.

Rob Berkley: Okay, thank you very much. Thanks for the question.

Speaker 13: You know, we just want to give it a little bit of time to see how it plays out.

We just wanted to give it a little bit of time to see how it plays out.

Mark Hughes: Our next question comes from Mark Hughes with truest. Yes, I wanted to ask about the, slow again, I want to ask about the expense ratio particularly in the re-insurance segments who's a pretty low this quarter, just that any general thought about expense ratio overall. Look, I think as we suggested to people in the past, our view is that we're going to be able to keep the expense ratio more likely than not comfortably below 30.

Speaker 5: But Yeah back, it shouldn't be measured in years and the years ok, Thank you very much.

But yes.

Shouldn't be measured in years and years.

Okay. Thank you very much.

Yes.

Speaker 1: And that concludes the question and answer session. I'd like to turn the call back over to Robert ley for any additional or closingremarks.

And that concludes the question and answer session I would like to turn the call back over to Rob Berkley for any additional or closing remarks.

Speaker 2: ok Lisa, Thank you very much for hosting us. Thank you to our colleagues for participating in the call, I think. Just going back to some of the earlier comments, the table is set and it's pretty visible how it's set.

Okay. Lisa Thank you very much for hosting us. Thank you to our colleagues for participating in the call.

I think just going back to some of the earlier comments.

The table is set and its pretty visible how it set I think the earnings power of the business is just going to be growing for the foreseeable future more likely than not we're going to get the double benefit of both of our core activities, both the underwriting and the investing.

Speaker 2: I think the earnings power of the business is just going to be growing. For the foreseeable future, more likely than not, we're going to get the double benefit of both of our core activities, both the underwriting and the investing.

Mark Hughes: That can obviously be impacted as your familiar Mark and others are as well. Our oftentimes prefer the approach for growth is through de novo or starting new businesses. When you start a new business and it's in its infancy and doesn't have scale, not a lot of earn premium that has a negative impact on your expense ratio. That having been said, we think it's a much more controlled model to growing the business.

Speaker 2: And the momentum should continue. So thank you again and we will look forward to speaking with you early next year. Have a good night.

And the momentum should continue.

Again, and we will look forward to speaking with you early next year have a good night.

Speaker 1: Concludes today's presentation. Thank you for your participation, and you may now disconnect.

Concludes today's presentation. Thank you for your participation and you may now disconnect.

Yeah.

Mark Hughes: So again, it doesn't pick up a little bit, it can go up, it can go down, but probably the biggest driver around that is businesses that we start and the timing for them to get to scale, but I think we remain convinced that we should be able to keep it starting with a two. So nothing unusual this quarter and re-insurance and model line access. Richie, is there anything that you can take us? No, I think it's for the same reasons that we've been talking about and that you alluded to up. Excellent. Thank you.

Yeah.

This concludes today's presentation. Thank you for your participation.

Unknown Attendee: Those are my drove everyone, that is star one to ask a question.

Yaron Kinar: We'll take our next question from your own canar with jeffries.

Rob Berkley: Thank you all, good afternoon. My first question, I may be paraphrasing what I think I heard from you, but I think you're not taking the foot off the pedal in terms of rate. At the same time, you are achieving a ROE of about 20% new money rates would suggest upside there. So why is there a need to continue to aggressively push rate here? Is it that you're worried about medical inflation, social inflation, because once they rear their head, they quickly impact margins?

Rob Berkley: Well, I don't think it's once they rear their heads. I think their head is fully reared at this stage and the neck just keeps growing. So from my perspective, it is exactly what you suggested. It is law cost trend. And while perhaps there's some evidence that financial or economic inflation is slowing, though still elevated relative to what it's been in the recent past, there is no evidence that social inflation is abating at all. And as a result of that, we're just going to keep pushing. And at a minimum, we need to keep up with that. Got it.

Rob Berkley: And then, we haven't heard in a while about the international book. Can you maybe give us a quick update there? Is it margin accretive, dilutive, for the quarter of a year to date, how gross patterns are developing there?

Rob Berkley: It's an accretive. We have some terrific businesses outside of the United States, run by some outstanding people with a shared set of values that we have in other parts of the business. Very focused on a lot of the things that we talked about, particularly risk adjusted return. And it is certainly not dilutive to the franchise overall. Got it.

Rob Berkley: If I could seek one last one, if I may. On the property, look in the law specs there. I would assume those develop a bit faster than EC and the casualty line.

Rob Berkley: So how long before you start updating those, is it mostly frequency driven and we could see those start to move according to the actual frequency within a couple of quarters or does it take longer? It takes a little bit of time. We look at it every nine minutes. I think there's two pieces to it. One is, how do we think about a traditional or if you will, the risk book versus how do we think about the cat exposure?

Rob Berkley: The cat piece is a little bit of a different story as I was at least trying to suggest earlier. You know, we have a cat load that we build in and we're not going to release that prematurely. We'll have that roll over from quarter to quarter as far as the attritional goes. You know, we just want to give it a little bit of time to see how it plays out.

Rob Berkley: But yeah, it shouldn't be measured in years and years. Okay.

Rob Berkley: Thank you very much.

Unknown Attendee: And that concludes the question and answer session.

Rob Berkley: I'd like to turn the call back over to Rob Berkley for any additional closing remarks. Okay. Lisa, thank you very much for hosting us. Thank you to our colleagues for participating in the call. I think just going back to some of the earlier comments, the table is set and it's pretty visible how it's set. I think the earnings power of the business is just going to be growing for the foreseeable future.

Rob Berkley: More likely than not, we're going to get the double benefit of both of our core activities, both the underwriting and the investing and the momentum should continue. So thank you again and we will look forward to speaking with you early next year. Have a good night.

Unknown Attendee: Concludes today's presentation. Thank you for your participation and you may now disconnect.

Unknown Attendee: Concludes today's presentation.

Unknown Attendee: Thank you for your participation.