Q1 2024 W R Berkley Corp Earnings Call

Operator: Good day, and welcome to W. R. Berkley Corporation's first quarter 2024 earnings conference call. Today's conference call is being recorded.

Okay.

Good day and welcome to W. R. Berkley Corporation's first quarter 2024 earnings Conference call. 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.

Operator: The speaker's remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, believes, expects, or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will, in fact, be achieved. Please refer to our annual report on Form 10-K for the year ended December 31, 2023 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.

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We caution you that such forward looking statements should not be regarded as a representation by us that the future plans estimates or expectations contemplated by us will in fact be achieved please.

Please refer to our annual report on Form 10-K for the year ended December 31, 2023, 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.

Operator: W. R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statement, whether as a result of new information, future events, or otherwise. I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.

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.

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

William Robert Berkley: Audra, thank you very much, and let me echo your words earlier with a warm welcome to all that are participating in the call today. We appreciate your time and look forward to discussing our 2124 results with you. In addition to myself, we also have Bill Berkley on the call, Executive Chairman, and Rich Baio, Chief Financial Officer, and we are going to follow our typical agenda where I'm going to be handing it over to Rich shortly. He will be running through some highlights once he's completed his comments, and I'll follow along with a few additional thoughts, and then we will be pleased to open it up for questions, comments, and discussion.

William Robert Berkley: Thank you very much and let me Echo your words earlier.

William Robert Berkley: Warm welcome to all of that are participating in our call. Today. We appreciate your time and look forward to discussing with you our two $1 24 results.

William Robert Berkley: In addition to myself, we also have bill Berkley on the call executive Chairman and rich Baio.

William Robert Berkley: Chief Financial Officer, and we are going to follow our typical agenda, where I'm going to be handing it over to rich shortly <unk> will be running at three with some highlights.

William Robert Berkley: <unk> completed his comments I will follow along with a few additional thoughts and then we'll be pleased to open it up.

William Robert Berkley: Four questions comments discussion.

William Robert Berkley: But before I do hand it over to Rich, I think anyone who's had an opportunity to flip through the earnings release would understand already, but I'll say it regardless, that we had a very strong and solid quarter, a great way to start the year. And when you really look at the results and unpack them a little bit, as we'll be doing over the next hour or so, it's pretty clear that the business is firing on many cylinders, or essentially on all cylinders, at this stage.

William Robert Berkley: But before I do hand, it over to rich I think anyone who has had an opportunity to flip through the earnings release would understand already but I'll say it regardless.

Richard Mark Baio: We had a very strong and solid quarter, great way to start the year and when you really looked at the results and unpack it a little bit as we'll be doing over the next hour or so it's pretty clear that the business is firing on many cylinders are essentially all cylinders.

William Robert Berkley: Rich will get into some details, and while there are a couple of moving pieces in the investment portfolio that merit some conversation or discussion, I think the overall story is that, whether it's on the investment side or on the underwriting side, the business continues to benefit from the foundation that was poured yesterday. We continue to pour in it today and position the business for continued success. This is really a result of the whole team.

This stage.

Richard Mark Baio: Rich again, we'll get into some details and while there are a couple of moving pieces in the investment portfolio that merit.

Richard Mark Baio: Conversation or discussion I think the overall story is that whether it's on the investment side or on the underwriting side.

Richard Mark Baio: <unk> continues to benefit from the foundation that was poured yesterday.

Richard Mark Baio: We continued to pour today and position the business for continued success.

Richard Mark Baio: This is really a result of the whole team and in particular I think it's worth noting that the level of expertise to focus and as important as anything the discipline that exists on both the underwriting part of the business as well as the investment part of the business. So.

William Robert Berkley: And in particular, I think it's worth noting the level of expertise, the focus, and, as important as anything, the discipline that exists on both the underwriting part of the business, as well as the investment part of the business. So, for us, we're pleased with the quarter. Rich is going to give you some more detail on that. In addition to that, we're probably even more enthusiastic because of how we see the business unfolding, not just for the balance of this year, but with every passing day, you know, we are laying the groundwork for what 25 and beyond will look like as well. So with that, let me hand it to Rich, and he will share with us some of his thoughts on the quarter. Rich, good morning.

Richard Mark Baio: For us.

Richard Mark Baio: Pleased with the quarter rich is going to give you some more detail on it.

Richard Mark Baio: In addition to that we're probably even more enthusiastic because of how we see the business unfolding not just for the balance of this year, but with every passing day, we are laying the groundwork for what 25 and beyond will look like as well so with that let me hand, it to rich and he will.

Richard Mark Baio: Share with us some of his thoughts on the quarter rich good morning.

Richard Mark Baio: Thanks, Rob. I appreciate it. As you mentioned, we're off to a terrific start in 2024 with record quarterly operating income driven by record net investment income and our best first quarter underwriting income. Operating income increased 53.4% to $423 million, or $1.56 per share, with an annualized operating return on beginning of year equity of 22.7%. Net income increased 50.4% to $442 million, or $1.64 per share, with an annualized return on beginning of year equity of 23.7%.

Richard Mark Baio: Thanks, Rob appreciate it.

Richard Mark Baio: As you mentioned, we're off to a terrific start in 2024 with record quarterly operating income driven by record net investment income and our best first quarter underwriting income.

Richard Mark Baio: Operating income increased 53, 4% to $423 million or $1 56 per share with an annualized operating return on beginning of your equity of 22, 7%.

Richard Mark Baio: Net income increased 54% to $442 million or $1 64 per share with an annualized return on beginning of your equity of 23, 7%.

Richard Mark Baio: Our growth and net premiums written accelerated to 10.7% to a record of almost $2.9 billion. Rate improvement and exposure growth continue to contribute to the increase in our top line. Before discussing the segment results, we reclassified a program management business from the insurance segment to the reinsurance and monoline excess segment. This reclassified business has similar characteristics to one of our reinsurance operations already in the reinsurance and model line access segment and has common management for both operations.

Richard Mark Baio: Both the net premiums written accelerated to 10, 7% to a record of almost $2 $9 billion.

Richard Mark Baio: Improvement in exposure growth continue to contribute to the increase in our top line.

Richard Mark Baio: Before discussing the segment results, we reclassified a program management business from the insurance segment to the reinsurance <unk> Monoline excess segment.

Richard Mark Baio: Reclassified business has similar characteristics to one of our reinsurance operations already in the reinsurance <unk> Monoline excess segment.

Richard Mark Baio: And it has common management for both operations.

Richard Mark Baio: And accordingly, reclassifications have been made to the company's 2023 financial information to conform to this presentation. Having said that, the insurance segment increased net premiums written by 11.9% to more than $2.4 billion. And the reinsurance and monoline excess segment increased 4.2% to more than $400 million. Pre-tax underwriting income increased 31.8% to $309 million. And our calendar year combined ratio improved 1.8 points from the prior year to 88.8%. However, the current accident year combined ratio, ex-CATS, was flat year-over-year at 87.7%.

Richard Mark Baio: And accordingly, Reclassifications have been made to the company's 2023 financial information to conform this presentation.

Richard Mark Baio: Having said that the insurance segment increased net premiums written by 11, 9% to more than $2 $4 billion and.

Richard Mark Baio: In the reinsurance <unk> Monoline excess segment increased four 2% to more than $400 million.

Richard Mark Baio: Pre tax underwriting income increased 31, 8% to $309 million.

Richard Mark Baio: Calendar year combined ratio improved one eight points from the prior year to 88, 8%.

Richard Mark Baio: The current accident year combined ratio ex cats was flat year over year at 87, 7%.

Richard Mark Baio: A reduction in the current accident year catastrophe losses has contributed to a benefit of 80 basis points to the calendar year loss ratio of 60.2%. Catastrophe losses were $31 million or 1.1 loss ratio points in the current quarter versus $48 million or 1.9 loss ratio points in the first quarter of 2023. Combining this improvement along with the prior year favorable development of approximately $1 million brings our first quarter 2024 accident year loss ratio X caps to 59.1%.

Richard Mark Baio: Reduction in the current accident year catastrophe losses contributed to a benefit of 80 basis points to the calendar year loss ratio of 62% cat.

Richard Mark Baio: Cat losses were $31 million or one one loss ratio points in the current quarter versus $48 million or $1 nine loss ratio points in the first quarter of 2023.

Richard Mark Baio: Combining this improvement along with the prior year favorable development of approximately $1 million brings our first quarter 2024 accident year loss ratio ex cat to 59, 1%.

Richard Mark Baio: Slight uptick in the ratio from the prior year is due to business. The expense ratio improved 20 basis points to 28.6% due to a non-recurring benefit associated with compensation. We remain confident that our 2024 full-year expense ratio should be comfortably below 30% even with the previously announced new startup operating unit expenses. Pre-tax net investment income grew 43.2% to a record $320 million in the current quarter. Our core portfolio increased more than 63 percent, which was influenced by Argentine inflation-linked securities.

Richard Mark Baio: Slight uptick in the ratio from the prior year is due to business mix.

Richard Mark Baio: The expense ratio improved 20 basis points to 28, 6% due to a nonrecurring benefit associated with compensation.

Richard Mark Baio: We remain confident that our 2020 for full year expense ratio should be comfortably below 30%, even with the previously announced new startup operating unit expenses.

Richard Mark Baio: Pre tax net investment income grew 43, 2% to a record $320 million in the current quarter.

Richard Mark Baio: Core portfolio increased more than 63%, which was influenced by Argentine inflation linked securities.

Richard Mark Baio: We don't expect the remainder of 2024 to benefit us significantly from much of these securities, which matured in the first quarter. Partially offsetting this benefit is a loss of 29Million dollars from investment funds. As you may recall, we report investment funds on a one-quarter lag, and since our first quarter represents the fourth quarter of the year for investment funds, we believe their mark-to-market process is more rigorous due to financial statement audits. Two primary fund strategies for the current quarter's loss were transportation and financial services. It synthesizes down for the second quarter of 2024.

Richard Mark Baio: We don't expect the remainder of 2020 for the benefit of significantly from much of these securities which have matured in the first quarter.

Richard Mark Baio: Partially offsetting this benefit is a loss of $29 million from investment funds as.

Richard Mark Baio: As you May recall, we report investment funds on a one quarter lag and since our first quarter represents the fourth quarter of the year for investment funds. We believe they're mark to market process is more rigorous due to financial statement audits.

Richard Mark Baio: Two primary fund strategies for the current quarters loss, where transportation and financial services.

Richard Mark Baio: Synthesizes down for the second quarter of 2024, we expect investment funds will have less impact from mark to market and perform more like they did in the fourth quarter of 2023.

Richard Mark Baio: We expect investment funds will have less impact from mark to market and perform more like they did in the fourth quarter of 2023, as we expect the Argentine inflation linkers to do as well. We had a very strong operating cash flow of $746 million in the first quarter, an increase of almost 68% compared with last year. With the combination of new money rates above the roll-off yield on our fixed maturity portfolio and an increasing investable asset base, the company is well positioned for future investment income growth. In addition, the credit quality of the portfolio remains at double A minus.

Richard Mark Baio: We expect the Argentine inflation linker is to do as well.

Richard Mark Baio: We had very strong operating cash flow of $746 million in the first quarter, an increase of almost 68% compared with last year.

Richard Mark Baio: The combination of new money rate above the roll off yield on our fixed maturity portfolio and increasing investable asset base. The company is well positioned for a future investment income growth.

Richard Mark Baio: In addition credit quality of the portfolio remains at a double a minus.

Richard Mark Baio: <unk> increased from $2 four years to two five years in the first quarter.

Richard Mark Baio: The effective tax rate increased to 23% in the first quarter and we expect this to remain elevated throughout 2024, when compared to the prior year the.

Richard Mark Baio: The duration increased from 2.4 years to 2.5 years in the first quarter. The effective tax rate increased to 23% in the first quarter, and we expect this to remain elevated throughout 2024 when compared to the prior year. The amount of foreign income and its contribution to the global earnings of the company at tax rates greater than the 21 percent statutory rate in the U.S. will likely result in a higher annual expected effective tax rate.

Richard Mark Baio: The amount of foreign income and its contribution to the global earnings of the company at tax rates greater than 21% statutory rate in the U S will likely result in a higher annual expected effective tax rate.

Richard Mark Baio: Our stockholders' equity remains very strong at a record $7 $8 billion. Despite an increase in unrealized losses and currency translation losses of $98 million in the quarter.

Richard Mark Baio: Book value per share was $30 34 at quarter end.

Richard Mark Baio: An increase of four 4% from year end and 14, 7% over the prior year quarter.

Richard Mark Baio: With that Rob I'll turn it back to you.

Rob: Rich thank you.

Rob: So let me start with a few.

Richard Mark Baio: Our stockholder's equity remains very strong at a record $7.8 billion despite an increase in unrealized losses and currency translation losses of $98 million in the quarter. Book value per share was $30.34 at quarter end, an increase of 4.4% from year-end and 14.7% over the prior year quarter. With that, Rob, I'll turn it back to you.

Comments on the marketplace and then ill offer a few further observations on our quarter.

Rob: So perhaps a place to begin would be bifurcated between insurance versus reinsurance, which obviously the markets are related but they're not willing to say and starting with insurance, maybe calling out E&S.

Rob: Part of the market I think there's been some commentary around perhaps E&S is losing some momentum and I would suggest that one needs to use at least through myeloma somewhat of a finer brush as far as we can see the momentum for the liability lines of is continues to be strong.

William Robert Berkley: Okay, Rich, thank you. Let me start with a few comments on the marketplace, and then I'll offer a few further observations on our quarter. So perhaps a place to begin would be bifurcating between insurance versus reinsurance, which obviously the markets are related, but they're not one in the same, and starting with insurance, maybe calling out E&S as a part of the market. I think there's been some commentary around perhaps E&S is losing some momentum, and I would suggest that one needs to use, at least through my lens, somewhat of a finer brush. As far as we can see, the momentum for the liability lines continues to be as strong as ever. To the extent you're seeing any slowing in the momentum of E&S, it's likely to be property-related.

Rob: As ever to the extent you are seeing any slowing in the momentum.

Rob: <unk>.

Rob: <unk> to be property related.

Rob: As far as the property market in general when it comes to insurance, we think that it still does have some momentum, but it probably does not have the level of momentum that it had last year, we're still seeing rates moving up and we expect they will continue to move up for the immediate future.

Having been said I'd say part of what Youre seeing is the insurance marketplace catching up to what the reinsurance marketplace.

Rob: <unk> taken action around in their cost of the capacity they rent has gone up.

William Robert Berkley: As far as the property market in general, when it comes to insurance, we think that it still does have some momentum, but it probably does not have the level of momentum that it had last year. We're still seeing rates moving up, and we expect they will continue to move up for the immediate future. Having said that, I think part of what you're seeing is the insurance marketplace catching up to what the reinsurance marketplace has taken action on, and their costs of the capacity they rent have gone up.

Rob: As far as the GL again from our perspective, it remains very robust both admitted and non admitted and no surprise, it's the social inflation continuing to persist that is driving that.

Just on the topic of social inflation auto, which as I think I've commented in the past continues to be very much in the crosshairs of social inflation. We think that that is part of the market youre going to see.

Rob: Considerable additional firming going on specifically in commercial auto excess and umbrella, particularly to the extent that it relates to the commercial auto market you were going to see additional firming there as well workers' compensation, we have offered our more defensive view around that.

William Robert Berkley: As far as GL is concerned, again, from our perspective, it remains very robust, both admitted and non-admitted. And no surprise, it's the social inflation continuing to persist that is driving that. On the topic of social inflation, auto, which, as I think I've commented on in the past, continues to be very much in the crosshairs of social inflation.

Rob: And of course as far as professional liability goes.

Rob: You have called out D&O, where obviously some number of years. It spike more recently it has been dropping at somewhat of a precipitous rate and at this stage.

William Robert Berkley: We think that that is part of the market where you're going to see considerable additional firming going on, specifically in commercial auto. Excess and umbrella, particularly to the extent that it relates to the commercial auto market, you are going to see additional firming there as well. Workers' compensation, we have offered our more defensive view around that.

Rob: His view that it is not bottomed, but it is closing in on the bottom.

Rob: Pivoting to reinsurance.

Rob: Barring what mother nature May do tomorrow, it would seem as though the property cat cycle has run a bit of its course.

Rob: From our perspective rates were off for property cat reinsurance at one one.

William Robert Berkley: And of course, as far as professional liability goes, we have called out D&O, where obviously, for some number of years, it spiked. More recently, it has been dropping at somewhat of a precipitous rate. And at this stage, we view that it is not bottomed, but it is closing in on the bottom.

Rob: 5% or more risk adjusted.

Rob: We'll have to see how that unfolds that having been said we are seeing.

Rob: Some potential green shoots of discipline, returning to the liability market within under the umbrella of reinsurance.

William Robert Berkley: Pivoting to reinsurance, you know, barring what Mother Nature may do tomorrow, it would seem as though the property tax cycle has run a bit of its course from our perspective; rates were off for property tax reinsurance at 1.1 by 5% or more, risk adjusted, and, you know, we'll have to see how that unfolds. That having been said, we are seeing some potential green shoots of discipline returning to the liability market under the umbrella of reinsurance. We have been reasonably outspoken about our concerns around discipline over the past couple of years within the liability, and reinsurance liability market, and we will see what comes of that. I turn it to our quarter.

Rob: I've been reasonably outspoken about our concerns around discipline over the past couple of years within the liability or the reinsurance liability market.

Rob: We will you will see what comes of that.

Rob: Turning to our quarter topline just shy of 11%.

Rob: You would have noted in the release, we are pleased with the rate increase that we got out of the seven eight which in our opinion is comfortably outpacing trend in the aggregate and the renewal retention ratio continues to be at approximately 80%, which is what we would expect.

Rob: The strength.

Rob: And the insurance growth.

William Robert Berkley: Top line, just shy of 11%. As you would have noted in the release, we were pleased with the rate increase that we got at 7.8, which, in our opinion, is comfortably outpacing the trend in the aggregate. And the renewal retention ratio continues to be at approximately 80%, which is what we would expect. The strength in insurance growth, as Rich referenced, is shy of 13%, is quite strong. Property in particular was a contributor as we took advantage of that market opportunity. And again, in keeping with my comments about market conditions on the reinsurance front, you would have seen us continuing to exercise discipline when it comes to the casualty or liability loan.

Rob: Rich referenced just shy of 13%.

Rob: Quite strong property in particular was a contributor as we take advantage of that market opportunity and again in keeping with my comments about market conditions on the reinsurance front.

Rob: You'll see us continuing to exercise discipline when it comes to the casualty or liability lines.

Rob: As far as our loss ratio goes.

Rob: Clearly a good performance in the quarter and we believe the stage is set for a good balance of the year as well as increasingly what we should be expecting for 'twenty five.

Speaker Change: Just as a data point that I share from time to time.

Speaker Change: Think it's a helpful indicator or certainly a truth that we can all hang our hat on.

William Robert Berkley: As far as our loss ratio goes, clearly a good performance in the quarter, and we believe that the stage is set for a good balance of the year, as well as increasingly what we should be expecting for 25 and beyond. Just as a data point that I share from time to time, because I think it's a helpful indicator or, certainly, a truth that we can all hang our hat on, during the quarter, our paid loss ratio was 45.8, which is the second lowest it's been in the past eight years, and the only time it was lower, it was lower by 50 basis points, so we are in a very comfortable place on that front.

Speaker Change: The quarter, our paid loss ratio was 45, eight which is the second lowest it's been in the past eight years and the only final. It was lower it was lower by 50 basis points. So we are in a very comfortable place on that front.

Speaker Change: Just on the topic of losses may be spending a few moments on the topic of loss reserves and I think there is a shared appreciation for the challenges that stem from just to put a stake in the ground 19.

Speaker Change: At Pryor.

Speaker Change: And what that May mean.

Speaker Change: From our perspective I think we are.

Speaker Change: Are well on our way as I suggested to some to having that behind us the average life.

William Robert Berkley: Just on the topic of losses, maybe spending a few moments on the topic of loss reserves, and I think there's a shared appreciation for the challenges that stem from, just to put a stake in the ground, 19 and prior, and and what that may mean. From our perspective, I think that we are well on our way, as I suggested to some, to having that behind us. The average life of our reserves is just inside of four years. So, at this stage, that period is getting very much towards the tail end. Is there perhaps a little bit out there still?

Speaker Change: Life of our reserves is just inside of four years. So at this stage that period is getting very much towards the detail and is there perhaps a little bit out there. So we'll see with time, it's possible, but certainly our expectation is that much of it has been processed.

Speaker Change: Well.

Speaker Change: I think a few other data points that are worth noting at least we find them to be helpful. As leading indicators when it comes to strength of reserves and putting aside the comment about paid losses, we would encourage people to consider having a look at IV NR as a percent of total reserves.

William Robert Berkley: We'll see what time is possible, but certainly our expectation is that much of it has been processed, if you will. I think a few other data points that are worth noting, at least we find them to be helpful as leading indicators when it comes to strength of reserves, and putting aside the comment about paid losses, we would encourage people to consider having a look at IB&R as a percent of total reserves, the ratio of IB&R to case reserves, and while some people may look at those two data points and say, well, you know, they could be impacted by the growth in the business, and certainly there would be that reality to a certain extent, though I would suggest that people should look more carefully at how much of our growth was coming from rates.

Speaker Change: The ratio of IBM <unk> to case reserves and while some people may look at those two data points and say well they could be impacted by the growth in the business and certainly there would be that reality to a certain extent, though I would suggest that people should look more carefully at how much of our growth was coming from rate that will have.

Speaker Change: <unk> been said there is another data point that we look to and we would encourage others to consider as well and that is initial <unk> as a percent of net premium earned I think all of these data points that I.

Speaker Change: Drawn your attention to our worth your consideration.

Speaker Change: And I think with.

Speaker Change: Would suggest.

Speaker Change: Our reserves are in <unk>.

Speaker Change: <unk>, a good place and more likely than not continuing to improve and we will see that mature over time.

Speaker Change: As far as the expenses go rich walk through that.

William Robert Berkley: That all having been said, there is another data point that we look to and we would encourage others to consider as well, and that is initial IB&R as a percent of net premium earned. That would suggest that our reserves are in a good place and, more likely than not, continuing to improve, and we will see that mature over time. As far as the expenses go, Rich walked through that.

Speaker Change: In particular, I would just call out that we had for businesses that had been in their infancy in the first quarter of this year is the first time, we pulled them into the expense ratio.

Speaker Change: And we're pleased to see how they are developing and maturing.

Speaker Change: On the investment portfolio Richard walked you through this as well, but a couple of highlights from my perspective, you referenced the double a minus and it happens to be a very strong double a minus so there could be a lot of credit activity and we would still be in.

William Robert Berkley: In particular, I would just call out that we had four businesses that were in their infancy, and in the first quarter of this year, the first time we pulled them into the expense ratio, and we're pleased to see how they are developing and maturing. On the investment portfolio, Rich had walked you through this as well, but a couple of highlights from my perspective. He referenced the AA-minus, and it happens to be a very strong AA-minus, so there could be a lot of credit activity, and we would still be in a very comfortable place. As Rich flagged, the duration nudged out from 2-4 to 2-5. Do we continue to look for opportunities to nudge it out? Yes, absolutely. Do we feel any pressure that we need to do that overnight?

Speaker Change: A very comfortable place as rich flagged the duration nudged out.

Speaker Change: From Q4 to two five do we continue to look for opportunities to nudge. It out yes, absolutely do we feel any pressure that we need to do that over night absolutely not.

Speaker Change: The book yield as.

Speaker Change: Rich referenced are.

Speaker Change: Or maybe you didnt I'll be referencing now.

Speaker Change: It was.

Speaker Change: Five 9%, but if you back out the Argentine component in the book yield is actually four 2%.

Speaker Change: I think that's relevant because when we've talked about how we're sort of.

The ground for the future here or what one should expect going forward with our sort of core domestic portfolio, which is the lion's share of what we have at four 2% and a new money rate, that's somewhere between five and a quarter and $5 50, I think that combined with the <unk>.

William Robert Berkley: Absolutely not. The book yield as Rich referenced, or maybe he didn't, I'll be referencing now, was 5.9%, but if you back out the Argentine component, the book yield is actually 4.2%. I think that's relevant because when we talk about how we're sort of laying the ground for the future here or what one should expect going forward with our sort of core domestic portfolio, which is the lion's share of what we have at 4.2%, and a new money rate that's somewhere between 5.25% and 5.50%, I think that combined with the strength of our cash flow should give you a sense as to the earnings power of the business and the contribution that we will be receiving from the investment portfolio, which, again, I think there's considerable upside from here.

Speaker Change: Strength of our cash flow should give you a sense as to the earnings power of the business and the contribution that we will be receiving from the investment portfolio, which again I think there is considerable upside from here again with the domestic core fixed income portfolio.

Speaker Change: That's 100 basis points plus upside from here.

Speaker Change: So when you put it all together.

Speaker Change: I think we have been thoughtful and <unk>.

Speaker Change: Prudent on the underwriting side, we responded as to the data and pushed rate and adjusted terms conditions and appetite mix of business.

Speaker Change: We are seeing the benefits of that but we don't want to quite frankly, as we have shared with you in the past declaring victory prematurely and but more likely in my opinion than what we'll see with time good news to come on that front. In addition to that as I just suggested as it relates to.

William Robert Berkley: Again, with the domestic core fixed income portfolio, that's 100 basis points plus upside from here. So, when you put it all together, I think that we have been thoughtful and prudent on the underwriting side. We responded to the data and pushed rates and adjusted terms, conditions, and appetite, and mix of business, and we are seeing the benefits of that, but we don't want to, quite frankly, as we've shared with you in the past, declare victory prematurely. But more likely, in my opinion, than not, but we'll see with time, good news to come on that front.

Speaker Change: The other part of our economic model our investment portfolio.

Speaker Change: Very well positioned benefiting from the focus and the discipline.

Speaker Change: The opportunity to take advantage of a new money rate.

Speaker Change: Is 100 basis points above where our book yield of our core portfolio will prove to be.

Speaker Change: Very advantageous.

Speaker Change: So with that I will pause there and.

Speaker Change: Arthur if we could please open it up for questions.

William Robert Berkley: In addition to that, as I just suggested, as it relates to the other part of our economic model, our investment portfolio, very well positioned, benefiting from the focus and the discipline and the opportunity to take advantage of a new money rate that is 100 basis points above where our book yield on our core portfolio will prove to be very advantageous. So with that, I will pause there and, Audrey, if we could please open it up for questions.

Arthur: Thank you we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one on your telephone keypad you raise your hand and join the queue. If you would like to withdraw your question simply press Star one again.

Arthur: Our first question from Mike Zaremski at BMO.

Michael David Zaremski: Good morning, Mike.

Michael David Zaremski: Good morning.

Michael David Zaremski: Thanks for the data point on the Pedro incurred and the color on the reserves just curious.

Michael David Zaremski: We did see in the stat statements to that.

Michael David Zaremski: The reserves right.

Michael David Zaremski: <unk> does appear to be getting better just curious you guys make any material changes or maybe.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. We'll take our first question from Mike Zaremski at BMO.

Michael David Zaremski: Top off a little bit.

Michael David Zaremski: Three vintage as well.

Michael David Zaremski: When you say top off.

Michael David Zaremski: Yes.

Curious if you made any changes to kind of your view on the on the more on the 23 vintages as well if we couldnt see.

Michael David Zaremski: Any changes there on the staff data, we won't see that until next year.

Michael David Zaremski: Nothing particularly material.

Michael David Zaremski: Thanks for the data point on the pay-to-incurred and the color on the reserves. Just curious, you know, we did see in the staff statements too that the reserve ratios appear to be getting better. Just curious, did you guys make any material changes or maybe top off a little bit to the

Michael David Zaremski: At this stage again, we think that the.

Michael David Zaremski: Look we're constantly looking at our loss picks and trying to tweak and refine so it's not like we've come up with these pics and then their frozen indefinitely that having been said there was nothing material or consequential to the portfolio overall as far as changes during 2003.

William Robert Berkley: When you say top-off, what is your... Just curious if you made any changes to kind of your view on the 23 vintage as well, but we couldn't see any changes there on the staff data. We won't see that until next year. Nothing particularly material at this stage. Again, we think that the... Look, we're constantly looking at our lost picks and trying to tweak and refine, so it's not like we come up with these picks and then they're frozen indefinitely. That having been said, there was nothing material or consequential to the portfolio overall as far as changes were concerned during 2020.

Speaker Change: Okay got it.

In your prepared remarks, Rob in the beginning it sounded like you are.

Speaker Change: Justice optimistic it might be more optimistic.

Speaker Change: <unk>.

Speaker Change: How the portfolio is coming together than you were last quarter I guess.

Speaker Change: Pricing power I know, it's just a.

Speaker Change: A quarter doesn't make a trend looks like it's kind of flattish.

Speaker Change: Are you are we still kind of.

Speaker Change: On the view that topline growth is likely to be in.

Speaker Change: So low double digits for the year or do you think things could play out.

Get better, especially if pricing on casualty side for the industry starts to move a bit north.

Michael David Zaremski: Okay, got it. You know, in your prepared remarks, Rob, at the beginning, it sounded like, you know, you're just as optimistic about how the portfolio is coming together than you were last quarter. I guess, you know, pricing power, you know, I know, it's just a quarter doesn't make a trend look like it's kind of flattish. [inaudible] R. Berkley Corp. R. Berkley Corp. R. Berkley Corp. One of the things, again, as I think we've discussed in the past, is that once upon a time, these product lines marched in lockstep. At this stage, they seem to be decoupling more and more every day.

Speaker Change: Hello, Mike.

Michael David Zaremski: My best Guesstimate at this stage.

Michael David Zaremski: That's with a capital G is that we should be able to grow the business.

Michael David Zaremski: Given what I see between 10 and 15% as Mike I know you are aware of and we all presumably have a shared appreciation.

Michael David Zaremski: We have 60 different business is all focused on different niches within the marketplace.

Michael David Zaremski: And at any moment in time, there are parts of the market that we participate in that are improving and there are parts of the market that are facing more of a headwind.

Michael David Zaremski: One of the things again as I think we've discussed in the past is that once upon a time these product lines marched in lockstep at this stage they have seemed to be decoupling more and more every day. So there'll be some puts and there'll be some takes but overall I think that.

William Robert Berkley: So there'll be some puts, and there'll be some takes, but overall, I think that there's a better than average chance that we can grow between 10 and 15% for the foreseeable future. Could there be a quarter that we come in shy of that? Yes. Could there be a quarter that we exceed that? Yes. But that's sort of the channel markers I would offer.

Michael David Zaremski: There is a.

Michael David Zaremski: Better than average chance that we can grow between 10 and 15% for the foreseeable future could there be a quarter that we come in shy of that yes could there be a quarter that we exceed that yes.

Michael David Zaremski: That's sort of the channel markers I would offer you.

William Robert Berkley: Okay, and just lastly, on property, I feel like there are a couple of comments made. You said that maybe that's an area that could lose a bit of pricing momentum in the U.S. marketplace given that it's, you know, my words, a little bit more commoditized line in terms of the ability for people to come in and out. But then you also said, you know, you're, you know, you think you've been growing on at the property a bit over time.

Speaker Change: Okay, and just lastly.

Speaker Change: On.

Speaker Change: Property I feel like there is a couple of comments made you said that maybe thats an area that I could lose a bit of pricing momentum in the E&S marketplace given us.

Speaker Change: Mark.

Speaker Change: <unk> Global most Commoditized line in terms of building for people to come in and out. But then you also said you were.

Speaker Change: We'll continue growing at the property a bit over time, so just just wanted to be.

William Robert Berkley: So just, just want to be clear. Do you still feel like property is an area that, over the course of the year, you know, returns are good enough that Berkley, which is underweight, can play more offense? Okay, so let's maybe just have a bifurcated discussion.

Speaker Change: <unk> do you still feel like properties.

Area that over the course of the year.

Speaker Change: Returns are good.

Speaker Change: Brooklyn, which is underway can play more offense.

Speaker Change: Okay.

William Robert Berkley: So maybe just to bifurcate it a little bit between insurance and reinsurance. First off, I think that one needs to understand just because pricing is peaked, that doesn't mean that there's not still a good margin to have. So, if you look at our reinsurance business and the opportunity that we still see in property, we view it as still a healthy line. That having been said, barring the unforeseen event, we think that property tax specifically has perhaps seen its peak. We'll see in time.

Speaker Change: Maybe just a bifurcated a little bit between insurance and reinsurance. So first off I think one needs to understand this because pricing has peaked that doesn't mean, there's not still good margin to have.

Speaker Change: So if you look at our reinsurance business and the opportunity that we still see them property, we view it as still a healthy line that having been said barring the unforeseen event, we think that property cat specifically is perhaps seen the peak, we'll see with time, obviously the <unk>.

William Robert Berkley: Obviously, the reinsurance marketplace has an impact on the insurance market. When reinsurance costs are up, then obviously, there is a trickle-through or a waterfall effect for the insurance market, and there is a little bit of a delay in that. So, the reinsurance market, which forced the firming, I think is in front. I think there's still margin to be had there. I think the impact that it's had on the insurance market is still very real, as the insurance market is still coming to grips with that higher cost of capacity that they rent from the reinsurance marketplace.

Speaker Change: <unk> marketplace.

Speaker Change: The impact on the insurance market when reinsurance costs are up then obviously that there is a trickle through or.

Speaker Change: Our waterfall effect for the insurance market and there is a little bit of a delay in that so the reinsurance market, which forced affirming I think is out ahead. I think there is still margin to be had there I think the impact that it's had on the insurance market is still very real is the insurance market is still coming to grip.

With that higher cost of capacity that they rent from the reinsurance marketplace.

William Robert Berkley: But I don't think that there is the same level of pressure or urgency in the insurance marketplace, in particular E&S, that we saw or felt a year ago. That doesn't mean there's not still opportunity, though. That doesn't mean we don't still like the margin and don't still want to have a second helping of whatever the market can offer. We have a view as to what an adequate rate is in order to achieve the risk-adjusted return that we think is appropriate.

Speaker Change: But I don't think that there is the same level of pressure in or urgency in the insurance marketplace. In particular, E&S that we saw or felt a year ago that doesn't mean, there's not still opportunity that doesn't mean, we don't feel like the margin and don't still want to have a second helping.

Speaker Change: Whatever the market can offer we have a view as to what accurate rate is in order to achieve the risk adjusted return that we think is appropriate right. Now we think that opportunity generally speaking still exists and property how quickly that will dissipate I don't know, but we play close attention to it and we will.

William Robert Berkley: Right now, we think that opportunity, generally speaking, still exists in property. How quickly that will dissipate, I don't know, but we pay close attention to it, and we will not have an issue shutting off the spigot if we don't think it is a good use of capital going forward.

Speaker Change: Not having issue shutting off the spigot, if we don't think it is a good use of capital going forward.

Speaker Change: Helpful. Thank you.

Speaker Change: Thank you.

Speaker Change: Okay.

Joshua David Shanker: We'll take our next question from Josh Shanker at Bank of America.

Speaker Change: We will take our next question from Josh Shanker at Bank of America.

Joshua David Shanker: Yeah, good morning, everybody. Thank you.

Joshua David Shanker: Yes, good morning, everybody.

Joshua David Shanker: Good job.

Joshua David Shanker: I was interested in just getting a little bit of past perspective and maybe future perspective on the impact of the Argentine component of the investment portfolio in the traditional NII. How has it impacted the past? This quarter, and how should we think about it in the future as a one-off line item?

Joshua David Shanker: Thank you I was interested in just getting a little bit of past perspective, maybe future perspective on the impact of the Argentine component of the investment portfolio in the traditional.

Joshua David Shanker: NII how has it impacted the past this quarter and how should we think about it in the future as well.

Speaker Change: One offline either.

William Robert Berkley: Okay, so it's what I would describe as somewhat of a recent phenomenon that is a reflection of the shift in the political environment as far as data points go. Richie, you alluded to what we saw in the, I guess it would have been, fourth quarter of last year, which was really one of the first meaningful contributions or impacts that we saw. We saw an even greater impact in the fourth quarter, and we'll see how it unfolds from here. But Rich, do you want to just spend a moment maybe sharing with Josh and others that may be interested in what has transpired with these linked securities in Argentina?

Speaker Change: So what.

Speaker Change: What I would describe as somewhat.

Speaker Change: A recent phenomenon that is a reflection of the shift in the political environment as far as data points go Richie I know that in your comments you alluded to what we saw.

Richie: I guess it would have been the fourth quarter of last year, which was the really the I think one of the first meaningful contributions or impacts that we saw and we saw.

Richie: Even greater impact in the fourth quarter, and we'll see how it unfolds from here the rich do you want to spend a moment maybe.

Richard Mark Baio: Sharing with Josh and others that may be interested in what has transpired with these linked securities in Argentina.

Richard Mark Baio: Sure, I'll be happy to do that, Rob. So Rob had alluded earlier to the impact of excluding Latin America in terms of our book yield being 4.2%. If we were to look to the prior period a year earlier, if you will, just to show an appreciation for the increase in the domestic portfolio, that would have been around 3.6%, so we certainly saw some pickup there in regards to our overall yield. We did have a majority of our Argentine positions mature in the first quarter, and so for that reason, that's why we're saying that we would not anticipate the same level of investment income that we saw in the first quarter of this year but would anticipate that we would get back down to a more leveled basis as it relates to the Latin American portfolio in the second quarter, and it will continue to decrease as the remainder of those inflation linkers mature throughout

Richard Mark Baio: Sure happy to do that Rob Thank you.

Speaker Change: Robert alluded to earlier.

Speaker Change: Impact excluding Latin America.

Speaker Change: In terms of our book yield being four 2%. If we were to look to the prior period a year earlier, if you will just to show an appreciation for the increase in.

Speaker Change: Domestic portfolio that would have been around three 6%. So certainly saw some pickup there in regards to our overall yield.

Speaker Change: We did have a majority of our Argentine positions mature in the first quarter and so for that reason.

Speaker Change: Why were saying that we would not anticipate the same level of investment income that we saw in the first quarter of this year, but would anticipate that we would get back down to <unk>.

Speaker Change: Leveled basis.

Speaker Change: As it relates to the Latin American portfolio in the second quarter and it will continue to decrease as the remainder of the lease.

Speaker Change: Inflation linkage mature throughout the remainder of this year.

Joshua David Shanker: So given that sort of situation, if we think about the amount of the portfolio that matured this year or was preempted by a sale of investments, it was no different than in prior quarters. We can look at the sort of trajectory of where investment income has gone, excluding 1Q, and think about that might be a way to think about as we head to a 5.5% yield on the overall portfolio, that it will continue along that path.

Speaker Change: So given that sort of situation. If we think about the amount of portfolio that matured this year.

Speaker Change: Was.

Speaker Change: Preempted by a sale of investments.

Speaker Change: No different than in prior quarters. So we can look at the sort of the trajectory where investment income was gone excluding <unk> and think about that might be a way to think about as we head to a five 5% yield.

Speaker Change: Yield on the overall portfolio that that will continue along the trajectory towards that path.

William Robert Berkley: I think that's a fairly reasonable approach, Josh. Yeah.

Speaker Change: I think thats a fairly reasonable.

Speaker Change: Approach Josh yes.

Joshua David Shanker: Okay and.

Joshua David Shanker: On reserve releases, historically, you tend to be pretty conservative in your portfolio, not releasing a lot of reserves. Sometimes there are one-off quarters where it happens. What happened in this quarter that made you feel that there was a reason to throw away some reserves?

Joshua David Shanker: Just on the reserve releases.

Joshua David Shanker: <unk>.

Joshua David Shanker: You tend to be pretty conservative in your portfolio that releasing a lot of reserves, sometimes theres one off quarters work happen.

Joshua David Shanker: What happened in this quarter that made you feel that there was a reason to throw off some reserves here.

William Robert Berkley: Josh, as I think we've discussed in the past, we look at our reserves in a variety of different ways by each one of the operations that make up the group by product line at a very granular level. We also look at it at the aggregate as well, at the group level, and we assess where we are and what we need and what tweaking needs to happen. I think there tend to be some folks that We tend to maybe not try and tweak as regularly as we do, but we are constantly looking at it and trying to make sure that we're not getting the porch too hot or too cold. So at any moment in time, there are 60 different moving pieces, but we feel as though things are in a good place.

Joshua David Shanker: Josh.

Joshua David Shanker: I think we've discussed in the past we look at our reserves.

Joshua David Shanker: Variety of different ways by each one of the operations.

Joshua David Shanker: That makes up the group byproduct line at a very granular level. We also look at it at the aggregate as well.

Joshua David Shanker: The group level, and we assess where we are and what we need and we're tweaking needs to happen.

Joshua David Shanker: I think they are tend to be some folks that.

Joshua David Shanker: 10 to maybe not try and tweak as regularly as we do but we are constantly looking at it and trying to make sure that we're not getting the ports too hot or too cold.

At any moment in time are theirs.

Joshua David Shanker: 60.

Joshua David Shanker: 60 different moving pieces.

Joshua David Shanker: We feel as though that things are in a good place.

Joshua David Shanker: All right, I'll come up with some harder questions and go off line, but I appreciate the disclosure. Thank you.

Speaker Change: Alright, I'll I'll come up with some harder questions come offline, but I appreciate the disclosure. Thank you.

Joshua David Shanker: Thanks for the questions, Jeff.

Speaker Change: Thanks for the questions Josh.

David Kenneth Motemaden: We'll go next to David Motemaden at Evercore ISI.

Speaker Change: We will go next to David Mono Madden at Evercore ISI.

Speaker Change: Okay.

David Kenneth Motemaden: Hi, thanks. Good morning. Good morning.

Speaker Change: Hi, Thanks, Good morning, Hey, Dave.

Speaker Change: Just had a.

Good morning.

David Kenneth Motemaden: Just had a question. If you could just let us know, you know, understand it's about a million dollars of favorable PYD. How much of that was coming from the insurance segment versus the reinsurance segment? And maybe just a little color in terms of the movement between lines and accidents here.

Speaker Change: Just had a question if you could just.

Speaker Change: Let us know.

Speaker Change: Yes, I understand it's about $1 million of favorable <unk>, how much of that was coming from the insurance segment.

Speaker Change: Versus the reinsurance segment and.

Speaker Change: Maybe just a little color in terms of the movement.

Speaker Change: Tween lines and accident years.

Speaker Change: So David to make a long story short.

William Robert Berkley: So, David, to make a long story short, the amount of movement from each one of the two segments was what I would define relative to the overall reserve position of each segment, let alone the aggregate, one could say is immaterial. And as far as the development goes, if you would mind catching up with Karen on those details, but there wasn't anything out of the ordinary. R. Berkley Corp. And just as a reminder, our life of our reserves is just inside of four years, and the incurred tail is inside of three years.

David Madden: The amount of movement from each one of the two segments was what I would define relative to the overall reserve position of each segment, let alone the aggregate one could say it's immaterial.

David Madden: And as far as the development goes if you wouldn't mind, just catching up with Karen on those details but.

David Madden: There wasn't anything out of the ordinary.

David Madden:

David Madden: From based on what I have had the sheet that I have in front of me, but one has to catch up with Karen and she can try and give you a little bit more detail on that but if your question is are we taking lots of reserves out of the current year or the more recent year no. The answer is we're not.

Speaker Change: And understood.

Speaker Change: Right.

Karen: Our life of our reserves is just inside of four years and the incurred tail is inside of three years.

David Kenneth Motemaden: Got it. That's, that's helpful. And then, you know, just following up on that just looking at the accident year loss ratio x CAD and the insurance business. Assuming negligible PYD to sort of back into that, it looks like it deteriorated around 100 basis points year on year. I'm wondering, was there any change that you guys made to the loss trend or, you know, anything on the mix side that you would just call out as sort of pushing that up?

Speaker Change: Got it that's that's helpful.

Speaker Change: And then.

Speaker Change: Just following up on that just looking at the accident year loss ratio ex cat in the insurance business.

Speaker Change: Assuming negligible PID.

Speaker Change: Back into that it looks like it deteriorated around 100 basis points year on year.

Speaker Change: I'm wondering was there any change that you guys made to loss trend or.

Speaker Change: Anything on the mix side.

Speaker Change: That you would just call out is sort of pushing that up.

Richard Mark Baio: Richie, is there anything that you recall?

Speaker Change: Gucci is there anything that you recall.

William Robert Berkley: I think certainly with social inflation, some of our loss picks maybe are slightly higher than where they had been the year before, but it really is just a mix of the business. Yeah, probably right there.

Gucci: I think certainly with social inflation some of our loss picks may be slightly higher than where they had been a year earlier, but it really is just the mix of the business.

Gucci: Right.

David Kenneth Motemaden: Yeah, and probably the areas, well, not probably, the areas that we are looking hardest at the PICS would be around commercial auto, and it's less that we have concerns about prior years, more that we just have concerns about the environment and where it seems to be today and where we expect it to go tomorrow, and we've got to keep up with that. Thank you. Commercial auto and, quite frankly, the sum of the excess and umbrella as well. Yeah,

Gucci: Yes, probably the areas will not probably the areas that we are looking hardest at the fix would be around commercial auto.

Less that we have concerns about prior year its more that we just have concerns about the environment and where it seems to be today, and where we expect it's going tomorrow and we got to keep up with that.

Speaker Change: Understood. Thank you for commercial auto and quite frankly the.

Speaker Change: Some of the excess and umbrella as well.

David Kenneth Motemaden: Yeah, that makes sense. I understand. I appreciate it. Thank you.

Speaker Change: Yes that makes sense understood I appreciate it thank.

Speaker Change: Thank you.

Elyse Beth Greenspan: We'll move next to Elyse Greenspan at Wells Fargo.

Speaker Change: We'll move next to Elyse Greenspan at Wells Fargo.

Elyse Beth Greenspan: Good morning. Sorry. Thank you. My first question is, you know, just in terms of the flow of business you guys are seeing in the E&S market. We saw some stamping capacity out of, you know, three of the largest E&S states turn negative in March, which I recognize is only one month of data, but just curious about what you're seeing with the flow to the E&S market and any color you have on what we saw in those three states in March.

Elyse Beth Greenspan: Good morning, sorry. Thank you my first question.

Elyse Beth Greenspan: It's just.

Elyse Beth Greenspan: Just in terms of the flow of business you guys are seeing the E&S market. We saw some staffing capacity out of three of the largest E&S states.

Elyse Beth Greenspan: Turn negative in March, which I recognize is only one month of data, but just curious what youre seeing with the fall in the E&S market.

Elyse Beth Greenspan: And any color you have just of what we saw in those three states in March.

William Robert Berkley: So, I'm not familiar with the data, Elyse, that perhaps you have in front of you, but speaking from our experience, we continue to see very robust activity on the E&S front, particularly on the casualty or liability side in general property. There continues to be an opportunity, but again, I think it's probably not what it was a year ago, and I think that's just the reality and the cycle. So we are more of a liability shop than a property shop, though we do participate in property. I expect that we'll try and make some more hay and profits before we call it a day.

Speaker Change: So I am not familiar with the data.

Speaker Change: Is that perhaps you have in front of you, but speaking to our experience. We continue to see during the first quarter very robust activity on the E&S front, particularly on the casualty or liability in general.

Property, there continues to be an opportunity, but again I think it's probably that.

Not what it was a year ago and I think that's just the reality of things.

Speaker Change: And the cycle. So we are more of a liability shop than a property shop, though we do participate in property I expect that we will try and make some more hay and property before we call. It a day.

William Robert Berkley: But it is possible that that may have not peaked, but property is peaking. On the liability front, there is nothing that leads me to believe that the momentum is going to be subsiding anytime soon. I think the reality is that social inflation, the legal environment, the social environment persists, and that continues to drive loss costs. And I think that there's some reasonable chance that the reinsurance marketplace is becoming more acutely aware of this social inflation issue.

Speaker Change: But it is possible that that may have not peaked but property is peaking on the liability front.

Speaker Change: There is nothing that leads me to believe that the momentum is going to be subsiding anytime soon.

Speaker Change: Thank the reality is.

Speaker Change: The social inflation, the legal environment, the social environment persists and that continues to drive loss costs.

Speaker Change: And I think that there is some reasonable chance that the reinsurance marketplace is becoming more acutely aware of this social inflation issue.

William Robert Berkley: And you're going to see them look for opportunities to try and put pressure on the insurance marketplace when it comes to casualty and liability lines like they did on the property. As it relates to us, we are less exposed or susceptible to that because we are a small limits player. Approximately 90 percent of our policies that are legally allowed to have a limit have a limit of $2 million or less. So we are not as exposed to the whims of the reinsurance market, but we look forward to the reinsurance market embracing greater discipline on the casualty.

Speaker Change: And youre going to see them look for opportunity to try and put pressure on the insurance marketplace. When it comes to lie casualty and liability lines like they did on the property front.

Speaker Change: As it relates to us.

Speaker Change: We are less exposed are susceptible to that because we are a small limits player approximately 90% of our policies that are legally allowed to have a limit or a limit of $2 million or less so we're not as exposed to the wins of the reinsurance market, but we look forward to.

The reinsurance market embracing greater discipline on the casualty lines.

Speaker Change: Okay.

William Robert Berkley: And then going back to one of the prior questions on the loss ratio, I guess, you know, within insurance. I know you guys mentioned mixed driving that up, and it sounds like there's nothing else going on there except, you know, some prudence you pointed out within the picks around commercial auto. So, given that you guys have these designed loss ratios, would you expect, like, the underlying loss ratio over the balance of the year in insurance to be pretty consistent with what we saw in the first quarter?

Speaker Change: And then going back to one of the prior questions on the loss ratio I guess with that insurance.

Speaker Change: I know you guys mentioned mix driving that and it sounds like there's nothing else going on there.

Some pretense you pointed to within the text around commercial auto so given that you guys have these designed loss ratios would you expect like the underlying loss ratio over the balance of the year and insurance to be pretty consistent with what we saw in the first quarter.

William Robert Berkley: I think that we will continue to look at the business and the data and how we think things are performing. And, at least, as you would expect, we will respond accordingly. So, okay, that's the best I can do. Sorry if it's not good enough.

Speaker Change: I think that we will continue to look at the business in the data and how we think things are performing in Elisa hopefully you would expect we will respond accordingly.

Speaker Change: So okay.

Speaker Change: That's the best I can do sorry, if it's not good enough.

Elyse Beth Greenspan: So that is good enough. And one last one on workers' comp. Anything that you're seeing there, I know at times you kind of called for a floor and a turn. And obviously, that's been, you know, you know, good opportunities for folks for a while. And I know that business for you guys, you know, we did see, you know, a little bit of a decline in Q1. But how are you thinking about the comp market, not only in 24, but also going into 2025 as well?

Speaker Change: So that is good enough and one last one on workers comp.

Speaker Change: Anything.

Speaker Change: Is that Youre seeing there I know at times, you kind of called for a floor and a turn and obviously thats been.

Speaker Change: Good opportunities for folks for a while and I know that business for you guys. We did see a little bit of a decline in the Q1, but how are you thinking about the market not only in 'twenty four.

Speaker Change: But also going into 2025 as well.

Unknown Attendee: Unknown Attendee

Speaker Change: My colleagues and I, we continue to have a view that frequency remains the industry's friend and we along with others have benefited from that.

William Robert Berkley: My colleagues and I continue to have a view that frequency remains the industry's friend, and we, along with others, have benefited from that. But are sensitive to, or maybe I would take a step further and suggest, concerns about medical costs and where they are likely going. And there's a delay between them. So are we at the bottom? It would seem as though my calling was the bottom. I was just, some might say early.

Speaker Change: Are sensitive to or maybe I would take a step further and suggest concerned about medical costs and where they are likely going there's a delay there. So are we at the bottom it would seem as though my calling the bottom I was just.

Speaker Change: Some might say early others might say wrong.

William Robert Berkley: Others might just be wrong. That having been said, I think we are seeing more signs of California bottoming out, and the rest of the country, or much of the rest of the country, is probably a pace or two behind.

Speaker Change: That having been said alright.

Speaker Change: We are seeing more signs of California bottoming out in the rest of the country or much of the rest of the country is probably a pace or two behind.

Speaker Change: Thank you.

Speaker Change: Thanks for the questions have a good day.

Speaker Change: Okay.

Elyse Beth Greenspan: Thank you. Thanks for the questions. Have a good day.

Speaker Change: We'll move next to Ryan Tunis with autonomous research.

Ryan James Tunis: Good morning, Ryan.

Ryan James Tunis: Hey, good morning, Rob.

Ryan James Tunis: Yeah, so just on this ENS point, if we get into an environment where business starts to flow from ENS back to admitted, can you just talk about, I guess, the capability of your business to be able to write it on admitted paper as well? And I would guess you'd have a better capability to do that on the casualty side. I'm not sure about that. But I'm just curious, like, I know, in the past, you've kind of been a quote, standard, not an admitted player; you kind of live between. So yeah, just curious about your thoughts.

Ryan James Tunis: Yeah, So just I guess on the CNS.

Ryan James Tunis: If we can get into an environment, where business starts to flow from E&S back to admitted can you just talk about.

Ryan James Tunis: I guess.

Ryan James Tunis: Yes.

Ryan James Tunis: To be able to write it on admitted paper as well.

Ryan James Tunis: I guess, you would have better capability to do that on the casualty side.

Ryan James Tunis: And the property side, but.

Ryan James Tunis: I'm not sure about that but im just curious I know in the past you've kind of been a quote standard.

Ryan James Tunis: Admitted play or are you kind of live between.

Speaker Change: So just curious on your thoughts.

William Robert Berkley: Ryan, thanks for the question. Long story short, obviously, we have both the tools and the expertise to write both non-admitted and admitted. I mean, ultimately, what it really boils down to is when some of those exposures make their way back into the standard market, is that something that we think is a sensible use of our capital? And when the standard market, if it were to become more competitive, at that time, you know, do we still think that it's a good use of capital? So do we have the ability to do it? Yes.

Speaker Change: Ryan Thanks for the question.

Speaker Change: Long story short, obviously, we have both the tools and the expertise to write both non admitted an admitted I mean ultimately what it really boils down to is when some of those exposures make their way back into the standard market is that something that we think is a sensible use of our capital when the.

Speaker Change: Standard market, if it were to become more competitive.

Speaker Change: At that time.

Speaker Change: Do we still think that it's a good use of capital. So do we have the ability to do it yes, but we will need to look at the pricing the terms and conditions.

Ryan James Tunis: But, you know, we'll need to look at the pricing, the terms, and conditions, and my colleagues will have to reach a conclusion as to whether they think it's sensible or not. So the tools and the capabilities, yes, but they will have to decide whether it makes sense.

Speaker Change: My colleagues will have to reach a conclusion as to whether the zika sensible or not.

Speaker Change: So the tools and the capabilities yes.

Speaker Change: Colleagues will have to decide whether it makes sense or not.

William Robert Berkley: Got it. And then 15 years, I guess, the expense ratio. I guess, just looking at the model this morning, this cycle, there's been more underlying combined ratio improvement on the expense ratio than there's been on the loss ratio, which is a good thing, assuming it's sticky. You've obviously talked about a sub-30 combined, but you didn't used to have that. So, I'm just wanting to clarify, like, is that short-term guidance or... is this type of expense ratio level, plus or minus a point, what you think you can do to serve in perpetuity?

Speaker Change: Got it and then.

Speaker Change: Shifting gears I guess.

Speaker Change: On the expense ratio I guess, just looking at the model. This morning. This cycle there has been more.

Speaker Change: Underlying combined ratio improvement on the expense ratio and there has been on the loss ratio, which is a good thing assuming it's sticky.

You've obviously talked about a sub 30 combined.

Speaker Change: You didn't use to have that.

Speaker Change: Just wanted to clarify that because that short term guidance or.

Speaker Change: As like this type of expense ratio level, plus or minus a point, where you think you can do sort of in perpetuity.

Ryan James Tunis: Our expectation is that it's going to start with a 2 indefinitely. Is it possible there could be some extraordinary something or other that could change that? Yeah, of course. But at this stage, you know, we feel that we are in a good place and that this is very sustainable.

Speaker Change: Our expectation is that it is going to start with the two indefinitely.

Speaker Change: Is it possible there could be some extraordinary something or other that could change that yes of course.

Speaker Change: But at this stage, we feel that we are in a good place and that this is very sustainable.

William Robert Berkley: Thank you. Thank you.

Speaker Change: Thank you.

Mark Douglas Hughes: We'll go next to Mark Hughes at Truist.

Speaker Change: Thank you.

Speaker Change: We'll go next to Mark Hughes at true.

Mark Douglas Hughes: Yeah, thank you. Good morning. Well, he's expressed more enthusiasm about the other liability than commercial auto, but commercial auto accelerated a bit, or outgrew other liability, which decelerated a little bit in terms of net premiums written. Anything to read into that?

Speaker Change: Yeah.

Mark Douglas Hughes: Yes. Thank you good morning.

Mark Douglas Hughes: Good morning Bret.

Mark Douglas Hughes: A more enthusiasm about the other liability than commercial auto, but commercial auto accelerated the bed.

Mark Douglas Hughes: Kind of outgrew other liability, which decelerated a little bit in terms of net premiums written.

Speaker Change: Anything to read into that.

William Robert Berkley: I think the takeaway should be how hard we are pushing on the commercial auto rate and the markets are accepting it to a great extent.

Speaker Change: I think the takeaway should be how hard we are pushing on the commercial auto rate and the market's excepting it to a great extent.

Mark Douglas Hughes: What do you see in terms of pricing in the liability line? You've obviously given us kind of your consolidated non-workers comp number, but anything specifically about the other liability?

Mark Douglas Hughes: What do you see in terms of pricing and the and the liability line.

Mark Douglas Hughes: Obviously, given us the kind of your consolidated non workers comp number, but anything specifically about the other liability.

William Robert Berkley: Rich, my recollection is that we don't break out our ratings by product line, is that correct? That's correct. Yeah, so, Mark, what I would offer you for your consideration is that we feel comfortable that we are comfortably outpacing our view on trend or, certainly, without a doubt, keeping up with it and likely outpacing it.

Mark Douglas Hughes: Okay.

Mark Douglas Hughes: Rich my recollection is that we don't breakdown our.

Richard Mark Baio: Our ratings versus byproduct line is that correct.

Richard Mark Baio: That's correct Rob.

Speaker Change: So mark what I would I would.

For your for your consideration is that we feel comfortable that we're outpacing comfortably our view on trend or certainly without a doubt keeping up with it and like rehab pacing it.

Mark Douglas Hughes: Very good. And then final question, the cash from operations is quite strong. If I touched on that earlier, I apologize, but what was the big driver of the year over year?

Speaker Change: Very good and then final question.

Speaker Change: Cash from operations was quite strong.

Speaker Change: Touched on that earlier I apologize, but what was the big driver of that year over year increase.

Richard Mark Baio: Ritchie Meyer, Rector. Go ahead, Ritchie. It's really driven by the underwriting performance, so we had very strong cash collections on a net premiums basis, and then our paid losses, as Rob alluded to earlier from the paid loss ratio perspective, were very low as well, and so the combination of those two items was really the biggest driver.

Speaker Change: Richard My Rectal go ahead rich.

Richard: It's really driven by the underwriting performance. So we had very strong cash collections on a net premium basis, and then paid losses as Rob alluded to earlier from the paid loss ratio.

Richard: Perspective.

Richard: Very low as well and so the combination of those two items was really the biggest driver.

Speaker Change: Thank you very much.

Speaker Change: Okay.

Brian Robert Meredith: We'll go next to Brian Meredith at UBS. Unknown Attendee: "Yeah, thanks."

Speaker Change: We'll go next to Brian Meredith at UBS.

Brian Robert Meredith: Good morning.

Brian Robert Meredith: Hey, good morning. Two questions. Richard, I'm just curious. Could you just give us the actual income that you generated from the Argentina inflation bonds in the quarter so I don't have to do the math?

Brian Robert Meredith: Hey, good morning, two questions Rich I'm, just curious could you just give us the actual income that you generated from the Argentina inflation bonds in the quarter.

Brian Robert Meredith: I don't have to do the math.

Brian Robert Meredith: Rob I'm not sure we've done generally given that level of detail I am not sure.

Richard Mark Baio: Rob, I'm not sure we've been generally given that level of detail. I'm not sure if I can back into it with what you said in the yield. I just want to know what the actual number was. R. Berkley Corp.

Speaker Change: If I come back and do it with the with what you said in the yield but just wanted to know what the actual number was.

Speaker Change: Okay.

Rob: Why don't we take it offline, yes, Brian is just going to check with an attorney and call you back.

Rob: Okay.

Rob: Sure.

Rob: Kevin.

Brian Robert Meredith: Unknown AttendeeFair. Rob, I'm just curious, perhaps you can remind us, you know, how much of your call it short tail business is cat exposed? And, you know, how should we think about your kind of cat load here in 24, based upon just the growth you're seeing in that short tail business?

Rob: Yeah.

Rob: Rob I'm, just curious, perhaps you can remind us.

Rob: How much of your.

Speaker Change: Call. It short tail business is cat exposed and how should we think about your kind of cat load.

Speaker Change: Here in 'twenty four based.

Speaker Change: Based upon just the growth youre seeing in that short tail business.

Speaker Change: I'm just trying to.

Brian Robert Meredith: Let's make sure I understand, Brian. You want to know how much of our business is cat-exposed?

Speaker Change: To make sure I understand Brian you want to know how much of our business is cat exposed, yes, the short tail business, but you're seeing really good.

Brian Robert Meredith: Yeah, the short-tailed business, you're seeing really good growth in that business, and obviously, you said rates were good, right? And I'm just curious, how much of that is actually catastrophe exposed, kind of property versus not catastrophe exposed, where you're seeing the growth? And then if I look at your, call it, cat load that you've had over the last year or two, it's kind of run around 2% to 3%. Is that pretty consistent with what you think it would look like going forward, given your portfolio? The answer is...

Speaker Change: Growth in that business, and obviously, you said rates good right.

Brian Robert Meredith: I'm just curious how much of that is actually catastrophe exposed.

Brian Robert Meredith: Property versus not cat exposed where youre seeing the growth and then if I look at your call. It cat load that you're that you bid.

Brian Robert Meredith: <unk> had over the last year or two is kind of run around 2% to 3% is that is that pretty consistent what do you think it would look like going forward given your portfolio.

Brian Robert Meredith: Yeah.

William Robert Berkley: The answer is that the 2-3% is probably in the red zip code; it may be up a little bit from there. As far as how much of our portfolio is CAT exposed, that's perhaps a more complicated question than it once was because of what we've seen happen with wildfire and SES over the past several years. So I don't have a percentage for you as to what's exposed to earthquakes, or particularly as we get earthquakes apparently now in the Northeast, or exactly what is exposed to wind.

Brian Robert Meredith: The answer is the 2% to 3%.

Brian Robert Meredith: Is probably in the right ZIP code it maybe up a little bit from from there as far as how much of our portfolio is cat exposed.

Brian Robert Meredith: It's become perhaps a more complicated question than it once was because of what we've seen happen with wildfire and Ses over the past several years. So I don't have a percentage for you as to what's exposed or quake or particularly as we get earthquakes apparently now in the northeast.

Brian Robert Meredith: Or exactly what is exposed to win we're happy to pick up the conversation offline, but we have a view the cat load has had to evolve from how people thought about it just a few years ago. So the short answer is I don't have a percentage for you, but we're happy to further the <unk>.

William Robert Berkley: We're happy to pick up the conversation offline, but we have a view that CAT load has had to evolve from how people thought about it just a few years ago. So the short answer is I don't have a percentage for you, but we're happy to continue the conversation if you like.

Brian Robert Meredith: Great. Thanks, Rob. Thank you. We'll go next to Meyer Shields at KBW. Unknown Attendee

Speaker Change: <unk> if you like.

Speaker Change: Great. Thanks, Rob.

Speaker Change: Thank you.

Meyer Shields: We will go next to Meyer shields of <unk>.

Meyer Shields: Yes.

Meyer Shields: Hi, I just had one hi, this is dean on familiar I just had one question.

Meyer Shields: We'll go next to Meyer Shields at KBW. Hi, I just had one. Hi, this is Dean Anfermayer.

Meyer Shields: Kind of surprised I was surprised to see that there were no share repurchases in the quarter.

Dean Anfermayer: We have, I think, as we've discussed in the past, a view as to what the real book value of the business is, putting aside the various accounting principles. We have a view as to what we think the earnings power of the business is. And, obviously, we know what the stock is trading at. And when we see an opportunity to step in and buy the stock in what we view as an attractive manner for the shareholders, we will do so. But at this stage, we have not felt that this is the best mechanism to return capital to shareholders.

Meyer Shields: Is there anything any more color you could provide on that.

Meyer Shields: Should we think about repurchases for the remainder of the year.

Meyer Shields: We have I think as we've discussed in the past we have a view as to what the real book value of the business is putting aside the various accounting principles, we have a view as to what we think the earnings power of the businesses.

Meyer Shields: And obviously, we know what the stock is trading.

Meyer Shields: And when we see an opportunity to step in and buy the stock and then what we view as an attractive manner for the shareholders. We will do so.

Meyer Shields: But at this stage, we have not felt as though.

Meyer Shields: The best mechanism to return capital to shareholders.

Meyer Shields: Okay.

Operator: And that concludes our Q&A session. I will now turn the conference back over to Rob Berkley for closing remarks.

Meyer Shields: And this concludes our Q&A session I will now turn the conference back over to Rob Berkley for closing remarks.

William Robert Berkley: Okay, Audra, thank you very much. And thank you to all for finding time to dial in. We appreciate your interest in the company. Again, by any measure, a very strong quarter, but perhaps, at least from my perspective, more interesting, more exciting is how the stage is set for what will not just be the balance of this year but, likely more and more, what 25 will shape up to be.

William Robert Berkley: Okay Andre.

Andre: Thank you very much and thank you to all for finding time to dial in and we appreciate your interest in the company again, I think by any measure a very strong quarter, but perhaps at least from my perspective more interesting more exciting us.

William Robert Berkley: The stage is set for will not just be the balance of this year, but likely.

William Robert Berkley: More and more with 25 will shape up to be.

Operator: Thank you. Take care. Bye bye.

Speaker Change: Thank you take care bye bye.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Okay.