Q2 2024 W R Berkley Corp Earnings Call
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Operator: Good day, and welcome to W. R. Berkley Corporation's second quarter 2024 earnings conference call. Today's conference call is being recorded.
Speaker Change: Good day and welcome to W. R. Berkley Corporation's second quarter 'twenty 'twenty four earnings Conference call Today's conference call is being recorded.
Operator: The speaker's remarks may contain forward-looking statements, some of which 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. Please refer to our annual report on Form 10-K for the year ending 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's Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. I would now like to turn the call over to Mr. Rob Berkley.
Speaker Change: Speakers remarks may contain forward looking statements some of which forward looking statements can be identified by the use of forward looking words, including without limitation beliefs expects or estimates.
Speaker Change: We caution you that such forward looking statements should not be regarded as a representation by us that the future plans estimates or expectations.
Speaker Change: Completed by US will in fact be achieved please.
Speaker Change: Please refer to our annual report on Form 10-K for the year ending December 31st 2023, and our other filings made with the S. E. C for a description of the business environment in which we operate and the important factors that may materially materially affect our.
Speaker Change: Results.
Speaker Change: 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.
William Robert Berkley: I would now like to turn the call over to Mr. Rob Berkley Pete. Please go ahead Sir.
William Robert Berkley: Please go ahead. Krista, thank you very much. We appreciate you getting us through that marathon of a safe harbor statement. And good afternoon to all, and welcome to our Q2 call. Thank you for finding the time, and thank you for your interest in the company.
William Robert Berkley: Chris. Thank you very much. We appreciate you getting us to that marathon of FSA parks Safe Harbor statement.
Good afternoon to all and welcome to our Q2 call. Thank you for finding the time and thank you for the interest in the company.
William Robert Berkley: Along with me on the call, you have Bill Berkley, Executive Chair, as well as Rich Baio, Executive Vice President and Chief Financial Officer of the group. We're going to follow our typical agenda, where I'll be handing the agenda over to Rich for a moment. He'll run through some highlights for you all, and then he'll flip it back to me.
Speaker Change: Along with me on the call you have Bill Berkley Executive chair as well as rich data of executive Vice President and Chief Financial Officer of the group.
Speaker Change: We're going to follow our typical agenda, where momentarily I'll be handing it over to rich.
Unknown Attendee: <unk> see some highlights for you all he'll then flip it back to me I'll offer a few of my.
Speaker Change: Observing <unk>.
Speaker Change: Both the industry as well as our quarter and then we'll be pleased to open it up for Q&A.
William Robert Berkley: I'll offer a few of my own observations on both the industry as well as our quarter, and then we'll be pleased to open it up for Q&A. Before I hand it to Rich, perhaps stating the obvious, clearly an active quarter of frequency of what I would define as severity, but perhaps relatively modest severity on the property front. From our perspective, it was an opportunity for this organization to differentiate itself as it does when there is severity on the property market front. And in spite of all the challenges, we were still able to deliver a 91 combined. I guess for those that subscribe to the But For Club, it would be an 88.
Richard Mark Baio: I hand, it to rich I guess.
Richard Mark Baio: Perhaps stating the obvious clearly an active quarter of frequency of what I would define as severity, but perhaps relatively modest severity on the property front.
From our perspective, it was an opportunity for this organization to differentiate itself as it does when there is severity on the property market front.
Richard Mark Baio: In spite of all the challenges we were still able to deliver a 91 combined.
Richard Mark Baio: For those that subscribe to the Buck for club it would be an 88, but when we look at the goal of the exercise being to generate good risk adjusted returns to build a book value. We are of the view that cats do count and so does net development.
Richard Mark Baio: But when we look at the goal of the exercise being to generate good risk-adjusted returns to build a book value, we are of the view that cats do count, and so does net development. In our opinion, it's not just about the steps forward that you take; it's also about the steps backwards that you will avoid. And that is very much woven into how we approach the business overall. So, with that, I will hand it to Rich, and I will follow him in a couple of minutes. Rich, if you would, please.
Richard Mark Baio: In our opinion, it's not just about the steps forward that you've take it's also about the steps backwards that you avoid it.
Richard Mark Baio: And that is very much woven into how we approach the business on all fronts.
Richard Mark Baio: So with that I will hand, it to rich and I will follow him in a couple of minutes rich. If you would please of course, thanks, Rob and good evening everyone.
Richard Mark Baio: R. Berkley Corp. Of course. Thanks, Rob. The company continues to perform well, with a second quarter annualized return on beginning of the year equity of 20% on a net income basis. References to per share information in my comments and the earnings release have been adjusted. R. Berkley Corp. R. Berkley Corp. Operating income increased approximately 35% to $418 million, or $1.04 per share, driven by strong underwriting and investment growth. Growth of 11.2% and net premiums written to a record $3.1 billion, the first time above $3 billion for a quarter, provide the opportunity for continued record-setting net premiums earned beyond this quarter. The U.S. dollar strengthened against many foreign currencies in the quarter, adversely impacting the growth rate by approximately 90%.
Richard Mark Baio: Company continues to perform well with the second quarter annualized return on beginning of the year equity of 20% on a net income basis.
Richard Mark Baio: 22, 4% on an operating earnings basis references.
Richard Mark Baio: References to per share information in my comments in the earnings release have been adjusted for the three for two common stock split effected on July 10th.
Richard Mark Baio: Operating income increased approximately 35% to $418 million or $1.04 per share driven by strong underwriting and investment income.
Richard Mark Baio: Growth of 11, 2% and net premiums written to a record $3 $1 billion represents the first time above $3 billion for a quarter and provides the opportunity for continued record setting net premiums earned beyond this quarter.
Richard Mark Baio: S dollar strengthens to many foreign currencies in the quarter adversely impacting the growth rate by approximately 90 basis points.
Richard Mark Baio: Accordingly, it would have been 12.1%. We grew in both segments of our business, led by the insurance segment with 12... R. Berkley Corp. Transcripts provided by Transcription Outsourcing, LLC.
Speaker Change: And accordingly would have been 12, 1%, excluding the foreign currency impact we grew in both segments of our business led by the insurance segment with 12, 2% growth on adjusted for foreign currency and the reinsurance <unk> Monoline excess segment increased three 5% led by property.
Richard Mark Baio: The insurance and monoline excess segment increased 3.5%, led by property. Pre-tax underwriting income was $254 million, which included $90 million of catastrophe losses. [inaudible] heightened catastrophe events during the quarter led to the increase in cat losses. R. Berkley Corp. Our careful and prudent management of cat risks has continued to result in stability. Our accident year loss ratio excluding cats is 59.4%, slightly below the prior year. Prior Year Accident Development was favorable by $1 million combined with the previously mentioned cat losses brings our calendar year loss ratio to 16.5. The expense ratio increased 40 basis points to 28.5 percent, primarily due to higher commissions from businesses.
Speaker Change: Pretax underwriting income was $254 million, which included $90 million of catastrophe losses were $3 two loss ratio points tightened.
Speaker Change: Heightened catastrophe events during the quarter led to the increase in cat losses of one one loss ratio points over the prior year quarter, well below what we would expect will impact the industry.
Speaker Change: A careful and prudent management of Cat risks has continued to result in stability and earnings.
Speaker Change: Our accident year loss ratio, excluding cats is a 59, 4% slightly below the prior year's 59, 5%.
Speaker Change: The prior year accident development.
Favorable by $1 million combined with the previously mentioned cat losses brings our calendar year loss ratio to 62, 6%.
Speaker Change: The expense ratio increased 40 basis points to 28, 5%, primarily due to higher commissions from business mix and is relatively flat to the sequential quarter. We remain confident with our guidance that the expense ratio should be comfortably below 30%.
Richard Mark Baio: Unknown Attendee, Yaron Kinar, Mark Hughes, Taylor Scott, David Motemaden, Elyse Greenspan, We remain confident with our guidance that the expense ratio should be comfortably below Record pre-tax net investment income increased. Six maturity securities continue to drive results quarter over quarter with an increase of more than $100 million. In addition, net investment income from investment funds improved to $25 million. The record operating cash flow through the first six months of $1.6 billion, combined with the ability to reinvest the roll-off of existing, R. Berkley Corp. The credit quality of the investment portfolio and duration remains at double A- and two-and-a-half years to the quarter.
Speaker Change: Record pre tax net investment income increased almost 52% to $372 million fixed.
Speaker Change: Fixed maturity securities continue to drive results quarter over quarter with an increase of more than $100 million. In addition, net investment income from investment funds improved to $25 million in the quarter.
Speaker Change: The record operating cash flow through the first six months of $1 $6 billion combined with the ability to reinvest the roll off of existing port existing securities at higher yields should continue to drive growth in net investment income quarter over quarter for the foreseeable future.
Speaker Change: The credit quality of the investment portfolio and duration remains at a double a minus two and a half years for the quarter.
William Robert Berkley: The effective tax rate was 23.7 percent and will likely remain at this level throughout the remainder of the year due to the contribution of foreign earnings taxed at rates greater than the U.S. statutory rate of Returning to Capital Management, the company returned total capital of $381 million, assisting $224 million of share repurchases. $27 million of special dividends. Stockholders' equity increased 4.3 percent from the beginning of the year to $7.8 billion, while book value per share of $20.49 grew 5.4% over the same book value per share before share repurchases and dividends grew 4.7% in the quarter and 9.7%. I'll turn it back over to you. Okay. Thanks, Rich. That was great!
Speaker Change: The effective tax rate was 23, 7% and will likely remain at this level throughout the remainder of the year due to the contribution of foreign earnings taxed at rates greater than the U S statutory rate of 21%.
Speaker Change: Turning to capital management, the company returned total capital of $381 million consisting.
Speaker Change: Consisting of $224 million of share repurchases of $127 million of special dividends and $30 million of regular dividends.
Speaker Change: Stockholders equity increased four 2% from the beginning of the year at $7 $8 billion, while book value per share of $20.42 grew five 4% over the same period.
Speaker Change: Book value per share before share repurchases and dividends grew four 7% in the quarter and nine 7% on a year to date basis.
Speaker Change: With that Rob I will turn it back to you okay. Thanks rich.
William Robert Berkley: A couple of comments from me, maybe starting on the more macro level, the industry, and then we can. So, from my perspective, the industry continues to be one that responds to pain. Pain is the catalyst for discipline and change. We see that from one product to another. I guess perhaps one analogy would be the cast may change, but, generally speaking, the script does not change.
Speaker Change: Right.
Rob: Comments from me, maybe starting on the more macro.
Rob: The industry and then we can.
Rob: On our quarter as promised.
Speaker Change: From my perspective, the industry continues to be one that responds to pain pain is the catalyst for discipline and change we see that from one product to another.
William Robert Berkley: Unfortunately, it's somewhat predictable. Speaking of change, certainly, we are seeing a bit of a tempering on the financial and economic inflation front. That having been said, social inflation is something that we have been very actively and loudly talking about going back to 2018, when we started to wave our arms and share with people what we were seeing in lost trends.
Speaker Change: Yes, perhaps we announce one analogy would be a big test may change, but generally speaking the script does not change Unfortunately, it's somewhat predictable.
Speaker Change: Speaking of change certainly we are seeing a bit of a temporary on the financial and economic inflation front that having been said social inflation shows no sign of abating.
Speaker Change: Social inflation is something that we have been very actively and loudly talking about going back to 2018, when we started to wave our arms and share with people what we were seeing in loss trend one.
William Robert Berkley: One of the challenges, particularly as of late, and it's really in much of the country, is that there's a bit of resistance amongst many insurance departments in allowing carriers to get rate filings that they need to keep up with the lost cost trend. That consequently has been creating and continues to create an opportunity in the specialty lines, in particular the E&S lines, as the standard market is not able to get their rates to where they need to be again, given what trend is driven by social inflation.
Speaker Change: One of the challenges, particularly as of late and its really in much of the country is there's a bit of resistance.
Speaker Change: Two in amongst many insurance departments, and allowing carriers to get rate filings that they need to keep up with loss cost trend that consequently has been creating and continues to create an opportunity in the specialty lines in particular, the E&S lines as the standard market is not able to get there.
Speaker Change: Rates to where they need to be again, given what a trend is driven by social inflation.
William Robert Berkley: I'm not going to get into every nook and cranny of every major commercial line, but I will flag that auto liability continues to be an area of concern. And, obviously, by extension, that can feed into the umbrella line.
Speaker Change: I'm not going to get into every nook and cranny of every major commercial line, but I will flag that auto liability continues to be an area of concern and obviously by extension that can feed into the umbrella line from our perspective, when you talk about social inflation. There is no product line that is.
Speaker Change: More exposed than auto liability these days.
William Robert Berkley: From our perspective, when you talk about social inflation, there is no product line that is more exposed than auto liability these days. Turning to our quarter, as Rich covered earlier, I would just point out the gross was up by 11.4%, as he mentioned. The net was up by 11.2%.
Speaker Change: Now turning to our quarter.
Richard Mark Baio: Rich covered earlier I would just point the gross was up by 11, 4% as we mentioned and that was up by 11.2. The Big Delta. There was a couple of fold one was a captive business, which continues to do exceptionally well a few new operations that we started and when they're in their infancy.
William Robert Berkley: The big delta there was a couple of folds. One was the captive business, which continues to do exceptionally well. A few new operations that we started, and when they're in their infancy and don't have much balance, we'll maybe be a bit more dependent on the reinsurance buy. Lastly, there was a moment post-1.1, but before everyone started to turn their attention to what could be a very active wind season, the ILW market softened a little bit, and we took advantage of that.
Speaker Change: <unk> don't have much balance to them will maybe.
Speaker Change: <unk> a bit more dependent on the reinsurance buy and lastly, there was a moment post one one but before everyone started to turn their attention to what could be a very active wind season. The IL W market softened a little bit and we took advantage of that as well.
William Robert Berkley: As Rich mentioned, the 11.2 on the top line was reasonably healthy growth. The rate coming in at 8.3x comp, from our perspective, should give comfort to others as it gives comfort to us that we are keeping up with the trend. That having been said, the rate's important, but it's not the whole story.
Speaker Change: Rich mentioned the 11 two on the topline was reasonably healthy growth.
Richard Mark Baio: The rate coming in at eight three ex comp.
Speaker Change: Our perspective should give comfort to others as it gives to us that we are keeping up with trend that having been said rates are important but it's not the whole story one needs to be conscious of whats happening with terms and conditions. If history would remind all of us that oftentimes terms and conditions.
William Robert Berkley: One needs to be conscious of what's happening with terms and conditions. History would remind all of us that, oftentimes, terms and conditions can have a greater impact than rate on the outcome of underwriting. In addition to that, something that we talk about from time to time but is coming into sharper and sharper focus, and that is how there are certain territories or jurisdictions or venues that, as far as the legal environment or the legal climate is concerned, are changing and changing very rapidly.
Speaker Change: A greater impact than rate on the outcome of underwriting in addition to that something that we've talked about from time to time, but it's coming into sharper and sharper focus and that is how there are certain territories or jurisdictions or venues that as far as a legal environment or a legal climate.
Speaker Change: Our changing and changing very rapidly. So there are certain territories that once upon a time politically where red and that would come over to the legal environment.
William Robert Berkley: So there are certain territories that, once upon a time, were read politically, and that would spill over to the legal environment. We are seeing those change, and I wouldn't say that they're bright blue, but they are certainly evolving to something that's more of a shade of purple from our perspective.
Speaker Change: We are seeing those change and I wouldn't say that they're bright blue, but they are certainly evolving into something that's more of a shade of purple from our perspective rich touched on the expense ratio again reasonably stable. There obviously as he had mentioned earlier in the year and again touched on in his comments.
William Robert Berkley: Rich touched on the expense ratio. Again, reasonably stable there, obviously, as he had mentioned earlier in the year and again touched on in his comments a few moments ago. New businesses that we started that are in their infancy are now incorporated into that until they get their critical mass, so they're a bit of a drag on the expense side.
Speaker Change: A few moments ago, new businesses that we started that are in their infancy are now incorporated into that until they get their critical mass there a bit of a drag on the expense side and in addition to that we are making some pretty chunky investments on the tech front as well as the data and analytics front.
William Robert Berkley: And in addition to that, we are making some pretty chunky investments on the tech front, as well as the data and analytics front. Loss ratio, the 62.6, again, not bad given the time of year and what's going on with SCS and related. That having been said, we are always looking to try and improve upon that. There's a lot of chatter in the marketplace at the moment around losses and specifically around reserves.
Speaker Change: Loss ratio of 62.
Speaker Change: Again, not bad given the time of year, and what's going on with SCS and related.
Speaker Change: That having been said.
We are always looking to try and improve upon that.
Speaker Change: There's a lot of chatter in the marketplace at the moment around losses.
Speaker Change: Specifically around our reserves.
William Robert Berkley: When the day is all done, one of the great challenges of this industry is that you sell your product before you know your cost of goods sold. None of us know what tomorrow will bring. None of us know what a jury is going to do.
Speaker Change: When the days all done there is one of the great challenges of this industry as you sell your product before you know your cost of goods sold none of US know what tomorrow will bring none of US know what the jury is going to do that having been said as we have commented countless times over the past several years.
William Robert Berkley: That having been said, as we have commented countless times over the past several years, particularly in light of the commentary, the questioning, and occasionally the chastising that we've received for, in spite of all the rate we've gotten, how is it that you are not dropping our losses? Our response has consistently been that we have a respect for the unknown. We have an appreciation for what's going on with social inflation, and consequently, early on, we are going to hold our picks at a higher level, and they will season out over time as we have more information.
Speaker Change: Particularly in light of the commentary questioning and occasionally the chastising that we've received for in spite of all the rate we've gotten how is it that you are not dropping our losses.
Our response has been consistently that we have a respect for the unknown. We under have an appreciation for what's going on with social inflation and consequently early on we are going to hold our picks at a higher level and they will season out over time as we have more information.
William Robert Berkley: A couple of data points that I thought could possibly be helpful are the paid loss ratio continues to run in the mid 40s. When we look back at how much rate we have gotten since 2019, all lines, X comp on the insurance front are approximately 68%. That's cumulative, of course.
Speaker Change: A couple of data points that I thought could be possibly helpful. As the paid loss ratio continues to run in the mid Forty's.
Speaker Change: When we look back at how much rate, we have gotten since 2019.
Speaker Change: All lines ex comp on the insurance front are approximately 68%.
William Robert Berkley: And finally, another data point, since some people have suggested that, you know, the paid loss ratio only tells part of the story because your business is growing, I would add that much of the business growth has been due to rate. But nevertheless, I would suggest that people could look at a different data point if it would be helpful to them, that being initial IBNR relative to net earned premium. And if you go back in time and you look at that data, which we have, if you look at sort of the 16 to 19 period, that was running at somewhere between 31 and 34-ish percent. If you look at 20 to 23, that's running between 37.5 and 39 percent.
Speaker Change: Cumulative.
Speaker Change: Of course, and finally, another data points and some people have suggested that the paid loss ratio only tells part of the story because your business is growing I would add to that much of the business as growth has been doing a rate, but nevertheless, I would suggest that people could look at a different data point, if it would be helpful.
Speaker Change: That being initial IV in our.
Speaker Change: Relative to net earned premium and if you go back in time and you look at the data, which we have if you look at sort of the 16 to 19 period that was running at somewhere between 31 and 34 ish percent. If you look at 'twenty to 'twenty three.
Speaker Change: That's running between 37, and a half and 39%. So as people think about the strength of our loss reserves, perhaps that would be a helpful data point.
William Robert Berkley: So as people think about the strength of our lost reserves, perhaps that would be a helpful data point. Pivoting over to the investment portfolio, Richie touched on this earlier, duration two and a half, strong AA minus, the domestic book yield came in at four and a half, and the new money rate, in spite of all the chatter around interest rates and where they're going, so on and so forth, still starts with a five. And I would tell you it's probably flirting with five and a quarter these days. Cash flow remains strong for the quarter with $880.
Richie: Pivoting over to the investment portfolio Richie touched on this earlier duration, two and a half strong double a minus.
Richie: The domestic book yields coming in at four and a half and the new money rate in spite of all the chatter around interest rates and where they are growing so on and so forth still.
Richie: Still starts with a five and I would tell you is.
Richie: Probably flirting with five and a quarter. These days our cash flow remains strong for the quarter was $881 6 billion for the first half of the year.
William Robert Berkley: 1.6 billion for the first half of the year. Maybe taking it a half step back and a little more on a macro front, I think some people have taken note that we played it reasonably well in how we positioned things for this rising interest rate environment. After the quick acknowledgement of that, I think attention quickly turns to, "So what are you doing now?" What are you doing to make sure you set the table appropriately for tomorrow?
Taking a half a step back on a little more of a macro front I think some people.
Richie: Have taken note that we played it reasonably well and how we positioned things for this rising interest rate environment.
Speaker Change: After the quick acknowledgment of that I think attention quickly turns to so what are you doing now what are you doing to make sure you set the table appropriately for tomorrow.
William Robert Berkley: And to make a long story short, we have a view that regardless of who ends up in the White House and regardless of who's sitting in what seat in Washington, D.C., this country has a serious deficit and, fundamentally, a serious issue with spending. So there is nothing that leads us to believe that that is going to be curtailed anytime soon. That having been said, it compounds the challenge is that some of the largest buyers of U.S. treasuries, that is, foreign buyers, specifically China and Japan, it's reasonably apparent that they, along with other foreign buyers, the appetite may not be there.
Speaker Change: And to make a long story short we.
Speaker Change: Have a view that regardless of who ends up in the white house and regardless of who's sitting in what seat in Washington D. C. This country has a serious issue with deficits and fundamentally a serious issue with spending. So there is nothing that leads us to believe that that is going to be curtailed.
Speaker Change: Anytime soon.
Speaker Change: Having been said with compounds. The challenge is that some of the largest buyers of U S treasuries that being foreign buyers, specifically, China and Japan, it's reasonably apparent that they along with other foreign buyers the appetite may not be there.
William Robert Berkley: So when you put all of this together, our view is that even if short-term rates come down, you are likely to see the yield curve un-invert, and that will provide an opportunity for us to nudge our duration out. Obviously, around the election, there's a lot of commentary and speculation as to what leaders who will be in the White House will be doing going forward. I would just add the observation from our perspective that if we find ourselves in a situation where an administration takes a different view around immigration, and we find ourselves further in a situation where certain parts of the labor market are no longer here to do those jobs, that will likely lead to greater inflation. Additionally, the idea of tariffs does, quite frankly, all it does is raise the cost of products, which will likely lead to inflation as well.
Speaker Change: So when you put all this together our view is that even if short term rates come down you're likely to see the yield curve on invert and that will provide an opportunity for us to nudge our duration out.
Speaker Change: Obviously around the election Theres, a lot of commentary and speculation as to what leaders that will be in the whitehouse will be doing going forward I would just add the observation from.
Our perspective, if we find ourselves in a situation where an administration takes a different view around immigration and we find ourselves further in a situation where certain parts of the labor market are no longer here to do those jobs that will likely lead to greater inflation.
Additionally, the idea of tariffs does quite frankly, all it does is raise the cost of products that will likely lead to inflation as well.
William Robert Berkley: Just pivoting quickly over to capital. Rich touched on the capital we've been returning. When the day's all done, the company, at this stage, for the foreseeable, we think is going to be growing at 10 to 15 percent. Could there be a quarter where we do a little more, a quarter we do a little less? Absolutely. But that's sort of the strike zone as we see it.
Speaker Change: Just pivoting quickly over to capital rich touched on the capital we've been returning that one.
Speaker Change: The days all done the company at this stage for the foreseeable we think is going to be growing at 10% to 15% could there be a quarter, where we do a little more of a quarter, we do a little less absolutely, but that's sort of our strike zone as we see it.
Speaker Change: But at the same time, we're generating returns.
William Robert Berkley: But at the same time, we're generating returns and, you know, give or take high teens and low 20s pretty consistently, and there's a lot of visibility around that from our perspective. So our ability to return capital for the foreseeable is pretty robust. When you layer that on top of, I think that the view, if you take a close look at the analysis any of the rating agencies have done, we are in an exceptionally strong place to begin with. So we'll have to see what tomorrow brings, but there is a lot of flexibility that the organization enjoys at this stage. So I will pause there for a moment.
Speaker Change: Give or take high teens, low 20, its pretty consistently and theres a lot of visibility around that from our perspective, so our ability to return capital.
Speaker Change: For the foreseeable is pretty robust when you layer that on top of I think the view if you take a close look at the <unk>.
Speaker Change: <unk> any of the rating agencies have done we are an exceptionally strong place to begin with so.
Speaker Change: We'll have to see what tomorrow brings but there is a lot of flexibility that the organization enjoys at this stage.
Operator: And Krista, we would be pleased to open it up for questions. Thank you. Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.
Speaker Change: I will pause there and Krista, we would be pleased to open it up for questions. Thank you.
Operator: If you'd like to withdraw that question, again, press star 1. Your first question comes from Elyse Greenspan with Wells Fargo. Please go ahead. Hi, Elyse.
Krista: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Speaker Change: I would like to withdraw that question press Star one.
Speaker Change: First question comes from Elyse Greenspan with Wells Fargo. Please go ahead.
Elyse Beth Greenspan: Good afternoon.
Elyse Beth Greenspan: Good afternoon. Hi, thanks. Good afternoon as well.
Hi, Thanks, Good afternoon as well my first question you hit on it in your comments right a lot of interest in reserves. These days across the industry I know you guys.
Speaker Change: <unk> released $1 million in the quarter could you just provide some more color or be it the breakdown between insurance and reinsurance R&D driven by accident year, just to give us a sense of what's going on within that one.
Elyse Beth Greenspan: My first question, you know, you hit on it in your comments, right? There is a lot of interest in reserves these days across the industry. I know you guys said you released $1 million in the quarter. Could you just provide, you know, some more color, be it the breakdown between insurance and reinsurance, or anything by accident here, just to give us a sense of what's going on within that? R. Berkley Corp. Well, Rich has the insurance versus reinsurance, and if you're looking for more detail, I would suggest that, if you don't mind, Elyse, just follow up with Rich and Karen, and they'll give you as much detail as they're legally allowed to.
Speaker Change: Rich has the insurance versus reinsurance and if youre looking for more detail I would suggest that if you don't mind the latest us follow up with rich and Karen will give you as much detail as they're legally allowed to.
Richard Mark Baio: So on the insurance segment, we developed favorably by $2.5 million. And on the reinsurance and monoline access segment, I would just add, there's a lot of gives and takes on each one of those, depending on the product line. And for our purposes, we're looking at it by operating unit by product line. Okay. And then, you know, maybe another one for Rich.
Speaker Change: So on the insurance segment, we developed favorably by two $5 million.
Speaker Change: And on the reinsurance <unk> Monoline excess segment, we developed unfavorably by a million and a half and so that ended down to the $1 million I would just add there's a lot of gives and takes.
Speaker Change: Sure.
Speaker Change: Each one each one of those depending on the product line and for our purposes. We're looking at it by operating unit byproduct line.
Richard Mark Baio: You guys had given some guidance on the Argentinian inflation link securities. Where did that come in during the quarter? Do you have a sense of what that could provide in the third quarter? R. Berkley Corp. So in the second quarter, we wound up reporting $63 million in inflation linkers. And then if you were to look at a normalized level with regard to the linkers on a go forward basis, looking out over the next few quarters, we would anticipate, depending on inflation where it goes, it could be somewhere between 20 and 30 million.
Speaker Change: Okay and then.
Speaker Change: Maybe another one for rich.
Speaker Change: You guys had given some guidance on the Argentinian inflation linked securities where did that come in in the quarter do you have a sense of what that could provide in the third quarter.
Speaker Change: So in the second quarter, we wound up reporting $63 million on inflation linker.
Speaker Change: So it was within the high end of the range.
Speaker Change: And then if you were to look at a normalized level with regards to the linker is on a go forward basis looking out over the next few.
Richard: A few quarters, we would anticipate depending on inflation, where it goes it could be somewhere between 20 and $30 million and just to add to that Richard maybe.
Speaker Change: You were just sharing as her contribution and what it means on operating if you could circle back and give a lease a sense of what it means on the net as well because of the FX piece, yes, I don't want to because I think it's important that people have the full picture on this absolutely.
Richard Mark Baio: And just to add to that, Richard, maybe what you were just sharing is sort of contribution and what it means for operating. If you could circle back and give Elyse a sense of what it means on the net as well because of the FX piece and so on, because I think it's important that people have the full picture on this. So in the quarter, one of the things that you'll have noticed is that we had about $58 million of R. Berkley Corp.
Speaker Change: So in the quarter one of the things that you'll have noticed is that we had about $58 million of.
Speaker Change: Losses on a I'll say, a realized slash unrealized capital gain perspective, there's a number of moving pieces in there, but to Rob's point, there's about $50 million of foreign currency losses that are reflected in that number so.
Rob: So that would offset the 63 million that we reflected in net investment income. So on a net income basis pre tax you have about $13 million of impact if you will.
Richard Mark Baio: So on a net income basis pre-tax, you have about $13 million of impact, if you will, impacting the net. And if we were to look out into the foreseeable quarters, you'll likely see a similar situation arise where FX will largely offset the impact that's coming through on the net invest. Thanks. And one last one.
Rob: Impacting the net income.
And if we were to look out into the foreseeable quarters, you'll likely see a similar situation arise where FX will largely offset the impact that's coming through on the net investment income side.
William Robert Berkley: Rob, you said 8.3 rate X workers comp in the quarter. I think that went up 50 basis points sequentially. What was the driver of the increase? We charge more. Well, which lines contributed?
Rob: Thanks, and one last one Rob you said $8 three range ex workers' comp in the quarter I think that went up 50 basis 50 basis points sequentially what was that.
Speaker Change: Driver of the increase.
We charge more.
Speaker Change: Which lines contributed.
William Robert Berkley: You know, I have the aggregate in front of me, Elyse, if you want to circle back with us, we'd be happy to share it with you. But what I would tell you is probably auto is the leading candidate. So when you look at this, maybe this is more than you're looking for, but I'll throw it out there.
Speaker Change: I have the aggregate in front of me at least if you want to circle back with us we'd be happy to share.
Speaker Change: Sure It with you, but what I would tell you is probably auto is the leading candidates. So when you look at maybe this maybe more than you were looking for but I'll throw it out there anyway is when you look at the growth for example, where we break it out in the release the auto lines growing at almost 16%.
William Robert Berkley: Anyways, when you look at the growth, for example, where we break it out in the release, the auto lines are going at almost 16%. What's driving that is rate, rate, rate, as per the comments earlier. So auto is the leading candidate these days.
Speaker Change: What's driving that is right right right per the comments earlier, so auto is the leading candidate these days.
Speaker Change: Okay. Thank you.
William Robert Berkley: Okay, thank you. Yep. Your next question comes from the line of Rob Cox with Goldman Sachs. Please go ahead. I just wanted to go back to reserves. You mentioned some bigger movements; I don't know if that's bigger than usual this quarter between product lines, but any further color on the reserve movements by product line? Unknown Attendee Unknown Attendee, Sorry.
Speaker Change: Your next question comes from the line of Rob Cox with Goldman Sachs. Please go ahead.
Hi, Rob Good afternoon, Hey, good afternoon I appreciate you taking the question yes.
Speaker Change: I just wanted to go back to reserves, Rob you mentioned, some some bigger movements I don't know if thats bigger than usual this quarter between product lines, but any further color on the reserve movements byproduct line.
Speaker Change: Hi.
Rob Cox: I don't recall commenting on reserves by product line. Rich, did you hear anything by product line? Yeah, so I will. What we, There was no commentary on that, Rob.
Speaker Change: Sorry.
Speaker Change: I don't recall, commenting on reserves by product line Rich did you hear something by product line.
Yes.
Speaker Change: What we.
Speaker Change: There was no commentary on that Rob I'm, not quite sure what you're referring to excuse me.
William Robert Berkley: I'm not quite sure what you're referring to, excuse me. I was just commenting on how you said there were like puts and takes, I think by product. Yeah, I mean, ultimately, the point that I was trying to articulate was that we have 60 different businesses that make up the group, and we're looking at it both in the aggregate as well as at a very granular level. So, when you hear about the development that Rich looked at, I think that the reality is that there are a lot of pluses and minuses, and that's just where it came out. But, you know, as far as specifics, as it relates to what's happening, that'll probably be more detailed in the Q&A. Okay, I got it. Thanks.
Speaker Change: I was just commenting on how you said there was like puts and takes.
I think byproducts.
Speaker Change: And then ultimately we might well the point that I was trying to articulate was that we got 60 different businesses that make up the group and we're looking at it both in the aggregate as well as at a very granular level.
Speaker Change: So when you hear about the development in that rich looked at I think that the.
Speaker Change: The reality is that there are pluses and minuses and that's just where it where it came out to but as far as specifics.
Speaker Change: As it relates to what's happening that will probably be more detail in the queue.
William Robert Berkley: And then just as a follow-up, I wanted to just go back to some of the comments from last quarter on raising some IB&R in the insurance picks, and if there was any movement in sort of how you guys looked at loss trends across product lines within the insurance segment this quarter? Well, honestly, Rob, I don't have a clear recollection of what you're referring to. I think, generally speaking, we feel pretty good about our picks, but as mentioned earlier, or alluded to earlier, we're paying close attention to the auto liability. Okay. Thanks. Your next question comes from the line of Josh Shanker with Bank of America. Please go ahead. Thank you. I'm going to get my chances on the reserves.
Speaker Change: Okay got it thanks, and then just as a <unk>.
Speaker Change: Follow up.
Speaker Change: I wanted to just go back to some of the comments from last quarter on.
Speaker Change: Raising some.
Speaker Change: Ivy and are in the.
Speaker Change: Insurance picks and if there was any movement and sort of how you guys looked at loss trend across product lines within the insurance segment this quarter.
Speaker Change: Well honestly, Rob I don't have a.
Rob Cox: Clear recollection of what you're referring to.
Rob Cox: I think generally speaking, we feel pretty good about our picks but.
Rob Cox: As mentioned earlier alluded to earlier, we're paying close attention to to the auto liability line.
Rob Cox: Okay got it thanks.
Speaker Change: Your next question comes from the line of Josh Shanker with Bank of America. Please go ahead.
William Robert Berkley: We'll see what I can find. So one of your competitors or, maybe one of your peers, I should say, said there's been an elongation in the pace of when claims are being paid and are being paid at a higher level of severity. To the extent that that doesn't mean you couldn't have reserved and anticipated for it, but is there another pig that the python has swallowed for the industry in 22 and 23 where the claims are coming in differently than they would have looking at the trends from the years prior? Nothing that's noteworthy from our perspective.
Okay. Thank you.
Joshua David Shanker: I'm going to get my chances on reserves.
Speaker Change: What I can find.
Speaker Change: So one of your competitors or maybe one of your peers I should say because there's been an elongation in the piece.
Speaker Change: When claims are being paid and being paid at a higher level of severity.
Speaker Change: To the extent that that doesn't mean, you couldn't have reserved anticipated work, but is there a another pig.
Speaker Change: Python is swallowed for the industry in 'twenty, two and 'twenty three.
Speaker Change: Claims are coming in differently.
Speaker Change: Looking at the trends from years prior.
William Robert Berkley: Josh, we're not the biggest property shot that they can cover, but we certainly do play in the space. At this stage, we're not noticing any meaningful pattern of an elongation of the property claims tail. And you cited, of course, the difficulties persistently with a line like commercial auto liability. When you talk about how much IB&R you're putting up, are there certain lines that are getting that special IB&R focus that are driving that in particular?
Speaker Change: Nothing that's noteworthy from from our perspective, Josh we're not the biggest property shot cover but we certainly do play in the space and at.
Joshua David Shanker: At this stage, we're not noticing any.
Meaningful pattern of an elongation of the property claims tale.
Speaker Change: And you cited of course, the difficulties persistently with aligned like commercial auto liability. When you talk about how much I know you are putting up.
Speaker Change: Are there certain lines that are getting that special IBM, our focus that are driving that in particular.
William Robert Berkley: I think really what we're focused on, Josh, is the claims environment and making sure that we are acutely aware of where that is going. We have taken a tremendous amount of rate and a variety of other actions, and we continue to pay close attention to that. And when I was making the comment earlier about being sensitive to different legal venues, that would certainly apply to commercial auto or auto liability, if you like.
Speaker Change: I think what.
Speaker Change: Really what we're focused on Josh is the claims environment.
Speaker Change: And making sure that we.
Speaker Change: We are acutely aware of where that is going we have taken a tremendous amount of rate and a variety of other actions and we continue to pay close attention to that and when I was making the comment earlier about being sensitive to different.
Speaker Change: Legal venues.
Speaker Change: That would certainly apply to commercial auto our auto liability if you like.
Richard Mark Baio: So when we look at that product line, are we trying to make sure that we are approaching it with the appropriate level of caution? Absolutely. And if I can sneak one more in for Rich, and I guess in recent quarters, we've been talking about the high interest yield opportunity in fixed income markets. And I think it was said that the appetite for the proportion of income going into alternative strategies would be lower given how much money you can make in bonds. But I noticed that the proportion of alts has been creeping up over time.
Speaker Change: So when we look at that product line are we trying to make sure that we are approaching it with the appropriate level of caution absolutely.
Speaker Change: And if I can sneak one more in for rich.
Speaker Change: And I guess in past quarters, we're talking about the high interest yield opportunity in fixed income markets and I think it was said that the appetite for the.
Speaker Change: The proportion of income going into alternatives regs will be lower given how much money you can make them bonds by noticed the proportion of all has been creeping up over time.
Richard Mark Baio: Is that just an unusual quirk, or are you seeing different opportunities in the alternative markets that you couldn't see six and 12 months ago? Josh, I think it's really more around the commitments that we make. So, as you can imagine, these are private equity-like investments. And so when you make an investment in a particular fund, you're committing to a certain amount of capital over time.
Speaker Change: Just unusual pork or are you seeing different opportunities in the alternative markets that you couldn't see six and 12 months ago.
Speaker Change: Josh I think it's really more around commitments that we make so as you can imagine these are private equity like investments and so when you make an investment in a particular fund you are committing to a certain amount of capital over time.
Richard Mark Baio: So that's what's giving rise to the increase in the dollars that are showing up there. If that's what your question is but I would just add to Rich's comments, Josh we are.
William Robert Berkley: So that's what's giving rise to the increase in the dollars that are showing up there, if that's what you're. But I would just add to Richard's comments, Josh, from our perspective, alternatives are really not of great interest to us going forward. Could there be an exception here or there?
Speaker Change: Given where interest rates are from.
Speaker Change: From our perspective alternatives are really not of great interest to us going forward could there be an exception here or there absolutely but we.
William Robert Berkley: Absolutely. But we are very pleased with the opportunity that the fixed income market offers, and I think you will see us continue to lean into that at this stage. Thank you for all the answers.
Speaker Change: We're very pleased with the opportunity that the fixed income market offers and I think you'll see us continue to lean into that.
Speaker Change: At this stage.
Speaker Change: Thank you for all the answers.
Michael David Zaremski: Your next question comes from the line of Michael Zaremski with BMO Capital Markets. Please go ahead. Unknown Attendee.
Speaker Change: Your next question comes from the line of Michael is Armen ski with BMO capital markets. Please go ahead.
Speaker Change: Hi, Martin Thank you good afternoon.
William Robert Berkley: Thank you. Hey Rob. Just curious, you know, most of the attention on reserves has been coming from Noncommercial auto. Actually, more recently, you've been showing and talking about commercial auto continuing to get an increasing rate. Not that commercial auto has been a good guy for the industry in any way, but, you know, is there anything we should be reading through that, you know, that you think the industry still has?
Rob Cox: Hey, Rob.
Speaker Change: Just curious most of the attention on reserves has been coming from.
Speaker Change: Non commercial auto actually.
Speaker Change: More recently.
Speaker Change: You have been showing and talking about kind of commercial auto continue to get increasing rate.
Speaker Change: No not that commercial auto has been a good guy for the industry in any way but.
Speaker Change: Is there anything we should be reading through that you think the industry still has.
William Robert Berkley: Lots of kinds of, What I'm trying to message, Mike, and I'm probably not doing a great job, is that I think social inflation doesn't necessarily discriminate between lines. I think it is alive and well, and basically every liability line is exposed to it. That having been said, I think there are some liability lines that seem to be getting more attention from the plaintiff bar than others. From my perspective, auto liability has the biggest bullseye on its chest. Does that mean GL gets off scot-free?
Speaker Change: Plenty of kind of.
Speaker Change: Issues to deal with scrap with commercial auto more so than the other.
Speaker Change: Auto or what.
Speaker Change: What I'm trying to message, Mike and I'm, probably not doing a great job is that I think social inflation doesn't necessarily.
Mike: Discriminate between lines I think it is alive and well and basically every liability line is exposed to it that having been said I think there are some liability lines that seem to be getting more attention tension from the plaintiff bar than others from my perspective auto liability.
Mike: Is.
Mike: Got the biggest bullseye on its chest does that mean GL gets off Scot free absolutely not.
William Robert Berkley: Absolutely not. But that's sort of how we think about it. And that's what the data that we see would suggest. Got it. I'm switching gears a bit to, you know, the dynamics within the workers comp market, you all have been kind of clear that, The profitability for your view is that it's likely that the soft market is going to Impact for profitability and most of the commentary has been more on the, R. Berkley Corp I think that how long can it be so negative for, I think, is an appropriate question, but the piece of the puzzle that we have been most preoccupied with is the medical piece, and from our perspective, the COMP benefit schedules in many states, has been, Some would say suppressed, other people would say just benefited from the fact that it prices off of Medicare, much of it prices off of Medicare. The federal government and how it approaches Medicare pricing, I think we all know, is just a mechanism for them to transfer public costs to the private sector.
Mike: But that's sort of how we think about it.
Mike: That's what the data that we see would suggest.
Mike: Got it.
Switching gears a bit.
Speaker Change: The dynamics within the Workers' comp market, you all have been kind of clear that.
Speaker Change: The property for your view is that.
Speaker Change: It is likely that.
Speaker Change: The soft market is going to.
Speaker Change:
Speaker Change: Yes impact for profitability.
Speaker Change: Most of the commentary historically has been more on the.
Speaker Change: Sure.
Speaker Change: <unk> side of the equation and negative pricing, but one of your peers recently brought up that frequency was becoming a little less negative I don't know if you also share that at viewer data that we should be thinking about the frequency component of workers.
Speaker Change: I think that how how long can it be so negative for I think is an appropriate question, but the piece of the puzzle that we had been most preoccupied with.
Speaker Change: Is the medical piece.
Speaker Change: From our perspective.
Speaker Change: Benefit schedules in many states has been.
Some would say suppressed other people would say just benefited from the fact that it prices off of Medicare much of it prices off of Medicare.
Speaker Change: The federal government and how it approaches Medicare pricing I think we all know is just a mechanism for them to transfer public costs to the private sector and comp has benefited from that but when the days all done we don't think that that will happen indefinitely. When you look at other product lines.
William Robert Berkley: And COMP has benefited from that. But when the day is all done, we don't think that that will happen indefinitely. When you look at other product lines, like private passenger auto, and you see the shift in trend around medical costs for claims, I think that that would be another data point. Mike, I think, as we perhaps have talked about in the not-too-distant past, you can look to a state like Florida and the action that they took as it relates to benefits.
Speaker Change: Passenger auto and you see the shift in trend around medical cost for claims I think that that would be another data point.
Mike: Mike I think as we perhaps had talked about in the not too distant past you can look to a state like Florida and the action that they took as it relates to benefits. So I'm sure that it can't be a negative trend with the same pace that it's been on the frequency front indefinitely, but the.
William Robert Berkley: So I'm sure that it can't be a negative trend at the same pace that it's been on the frequency front indefinitely, but in our opinion, one of the big wild cards out there is the medical trend, and we think that that's going to come home to roost. Got it. And lastly, in your prepared remarks, Rob, you talked about Well, I might hack what you said because I don't have a lot of transcripts open, but there is some resistance to allowing carriers to kind of get the rate they need to keep up with the lost cost trend. I had thought that it was more of a personal lines phenomenon, and you're not really much of a personal lines player.
Speaker Change: In our opinion one of the big Wildcards out there is medical trend and we think that's going to come home to roost.
Mike: Got it.
Speaker Change: Lastly.
Speaker Change: Yes.
Speaker Change: In your prepared remarks, Rob you talked about.
Speaker Change #100: It might have what you said I don't have a lot of transit open, but some resistance allowed carriers to kind of get there.
Speaker Change: The rate they need.
Speaker Change #101: Loss cost trend I had thought that more of a personal lines phenomenon and you're not really of much of our personal lines.
William Robert Berkley: My comments were not focused on personal lines, though clearly, to your point that it's a real issue for personal lines. We've seen it in certain states where it's proven to be really problematic and leads to a dislocation in capacity in the marketplace or availability of capacity in the marketplace. That having been said, there are many insurance departments in this country that are resistant, that A, are not operating in a very timely manner, and B, are, in some cases, quite resistant to allowing carriers on the commercial line side to get the rate increases they need.
Speaker Change #102: Comments were not focused on personal lines, though clearly to your point that it's a.
Speaker Change #102: A real issue for personal lines, we've seen it in certain states, where it's proven to be really problematic and leads to a dislocation in capacity in the marketplace or availability of capacity in the marketplace that having been said there are.
Many insurance departments in this country that are resistance.
Speaker Change #103: A R.
Speaker Change #103: Not operating in a very timely manner and be or in some cases quite resistant to allow carriers on the commercial line side to get the rate increases they need. So when you look at the very healthy flow of business into the specialty market and the E&S market in particular, which we are.
William Robert Berkley: So when you look at the very healthy flow of business into the specialty market and the E&S market in particular, which we have been a great beneficiary of and continue to be, Part of the catalyst for that is that standard markets are not able to get the rates that they need, and consequently, that is impacting their writing. And that creates opportunities for organizations like the one that I work for. Okay, interesting. Thank you. Your next question comes from the line of Mark Hughes with Truist Securities. Please go ahead, and Mark.
Speaker Change #103: Been a great beneficiary of and continue to be.
Speaker Change #103: Part of the catalyst for that is standard markets are not able to get the rates that they need and consequently that is impacting their writings and that creates opportunity for organizations like the one that I work for.
Speaker Change #104: Okay interesting. Thank you.
Speaker Change #103: Yes.
Speaker Change #103: Your next question comes from the line of Mark Hughes with <unk> Securities. Please go ahead.
Mark: Hi, Mark good afternoon.
Mark Douglas Hughes: The name.
Speaker Change #103: Hello.
Mark Douglas Hughes: Good afternoon. Hello. Rich, you had suggested, I think, in your commentary that investment income should continue to step up quarter over quarter for the foreseeable future. Unknown AttendeeIs that also taking into account the drop in contribution from the inflation linkers? Yeah, so if you look at it on a prior year basis to the 2024 year, we would expect, for the foreseeable future, an increase in our net, Unknown Attendee Let me think, quarter over quarter. R. Berkley Corresponding period.
Speaker Change #103: Rich you had suggested I think in your commentary that the investment income should continue to step up quarter over quarter for the foreseeable future.
Speaker Change #107: Is that also taking into account the.
Speaker Change #108: Drop in contribution from the inflation linked groups.
Speaker Change #109: Yes, so if you look at it on a prior year basis to the 2024 year.
Speaker Change #110: We would expect for the foreseeable future and increase in our net investment income.
Speaker Change #111: The fact that when you say quarter over quarter.
Richard Mark Baio: So Q2-24 vs. Q2-23, Q3-24 vs. Q3-23, yeah. Okay, got that. And then the expense ratio in the reinsurance segment. Rob, I think you talked about some chunky investments and technology, that sort of thing. Would one expect the expense ratio and reinsurance to kind of stay at this level at 29% or so? Yes, but obviously, a lot of that has to do with scale.
Speaker Change #112: Corresponding period.
Speaker Change #113: Q2, 24 versus Q2, 2003, Q3 24 versus Q3, yes three.
Speaker Change #112: Yes.
Okay. Okay.
Speaker Change #112: And then the.
Speaker Change #112: Expense ratio in the reinsurance segment.
Speaker Change #112: Robert I think you talked about some chunky investments in technology that's everything.
Speaker Change #112: Unexpectedly.
Speaker Change #114: The expense ratio in reinsurance kind of stay at this level of 29% or so.
William Robert Berkley: So, as we've touched on, I think, in the past, much of the opportunity has been in the short tail line. We'll have to see how those opportunities persist. Further, our colleagues, to their credit and their underwriting discipline, have not found as much opportunity on the liability line. So is the 29 sustainable?
Robert: Yes, but obviously a lot of that has to do with scale. So as we've touched on I think in the past.
Much of the opportunity has been in the short tail lines.
Speaker Change #116: We'll have to see how those opportunities persist further our colleagues to their credit and their underwriting discipline have not found as much opportunity on the liability lines.
William Robert Berkley: Yeah, but you know, a lot of that will be in part driven by whether the business is able to grow or remain the size it is or if market conditions were to deteriorate dramatically, and it's possible that could pick up incrementally. And when you think about growth, you pointed out that ENF has become more prominent. Perhaps, you know, how much of the growth is coming from that mixed shift in the ENF? When we think about your top line, the E&S business is probably growing at, give or take, 50% more than the standard market rate. That's a bit of a generalization.
Speaker Change #116: <unk> is the 29 sustainable.
Speaker Change #116: But a lot of that will be in part driven by whether the business is able to grow or remain the size. It is or if market conditions were to deteriorate dramatically and it's possible that could pick up incrementally.
Speaker Change #116: When you think about growth.
Speaker Change #116: Appointing up with E&S has become more prominent perhaps how much of the growth to come.
Speaker Change #117: Going from there.
Speaker Change #118: That mix shift into <unk>.
Speaker Change #118: When we think about your topline.
So the EMS business is probably growing at.
Speaker Change #119: Give or take 50% more than the standard market rate, that's a bit of a generalization.
William Robert Berkley: And is that 50%? Is that a little bit better than, say, what it was this time last year? Or is that held pretty steady?
Speaker Change #120: And is that fair.
Speaker Change #121: Presenting a little bit better than what it was last year.
Speaker Change #121: Or is that instead.
Speaker Change #122: Maybe incrementally better.
Speaker Change #123: Okay, great. Thank you.
Speaker Change #123: Yeah.
William Robert Berkley: Maybe incrementally better. Yeah. Okay. Great. Thank you. Your next question comes from Ryan Tunis with Autonomous Research. Please go ahead. Unknown Attendee. Good afternoon. How are you?
Speaker Change #123: Your next question comes from Ryan Tunis with Autonomous Research. Please go ahead.
Ryan James Tunis: Congrats again.
Ryan James Tunis: Um, first question, just look at the cat losses with an insurance of almost 90 million dollars. Can you give us a feel for the driver of that? Was it the convective stuff in the US or not? It was primarily SCS in the U.S., right up the middle of the country. And I guess just on the capital returns. I was going to ask You know, how do you think about dividends and share buybacks? But then I noticed it because I'm used to you guys doing these specials.
Ryan James Tunis: Good afternoon, how are you.
Ryan James Tunis: First question just wondering.
Speaker Change #125: The cat losses within insurance almost $90 million.
Speaker Change #126: Can you give us.
Speaker Change #134: The driver of that was at the conductors.
Speaker Change #134: Conductive stuff in the U S or.
Speaker Change #131: Some of the international.
Speaker Change #130: It's primarily SCS in the U S right right up the middle of the country.
Speaker Change #133: Got it.
Speaker Change #127: And then I guess just on the capital returns.
Speaker Change #132: I was going to ask.
Speaker Change #126: How do you think between dividends and <unk> and.
Speaker Change #126: Share buyback, but then I noticed.
Speaker Change #144: Are you guys doing specials.
Ryan James Tunis: And then I noticed that these specials and It's been almost as predictable from a time-of-the-year standpoint as just the regular divvies. Can you just give us an idea of why? Why not increase just the common dividend by more and maybe get more credit for that rather than pay these special dividends as data regulars. I think it just boils down to flexibility.
Speaker Change #126: And then I noticed that the special item.
But almost as predictable.
Speaker Change #126: From a total year standpoint.
Speaker Change #126: I was just the regular dividend.
Can you just give us.
Speaker Change #128: An idea of like why.
Speaker Change #137: Why not increase just the common dividend by more and maybe get more credit for that rather than.
Speaker Change #129: Kind of pay the special dividends as boiler radios.
I think that this boils down to flexibility we're pleased to.
William Robert Berkley: We're pleased to, you know, share the capital with the shareholders, return it to them with consistency at the same time. We don't know what the opportunity will be tomorrow. We don't know how the stock will trade tomorrow, so we want to have flexibility as far as growing the business is concerned. We want to have flexibility around what we believe is the most sensible way to return capital to shareholders, whether it be repurchase, special dividend, so on and so forth.
Sure the capital with the shareholders' return it to them with consistency at the same time.
Speaker Change #129: We don't know what the opportunity will be tomorrow.
Speaker Change #129: We don't know how the stock will trade tomorrow. So we didn't want to have flexibility as far as growing the business. We want to have flexibility around what we believe is the most sensible way to return capital to shareholders, whether it be repurchase special dividend, so on and so forth.
Speaker Change #135: Thank you.
Speaker Change #129: Q.
William Robert Berkley: Thank you. Thank you. Your next question comes from the line of Andrew Kligerman with TD Cowan. Please go ahead. Hi everyone. Good evening. Hey, good afternoon. Good evening. Friday was a pretty surreal day with that whole CrowdStrike cyber issue, so I'm kind of curious.
Speaker Change #136: Your next question comes from the line of Andrew Click Roman with TD Cowen. Please go ahead.
Hi, Andrew Hey, good evening.
Good afternoon, and good evening.
Speaker Change #136:
Speaker Change #139: Friday was a pretty surreal today with that whole.
Speaker Change #138: Crowd strike cyber issue.
Speaker Change #138: So kind of curious.
Andrew Kligerman: Could you frame W. R. Berkley's cyber exposure? And then, with that, what do you make of that for the industry and how it's going to affect the industry, whether it's pricing, lost costs, etc. Well, I appreciate the question, and it's certainly a topic that many of us around here have been scratching our heads over, just kind of wondering and daydreaming what will come of it as far as market conditions go. But when the day is all done, as far as our book goes, we don't, is it, will we have perhaps some level of loss activity?
Speaker Change #140: Could you frame.
Speaker Change #141: W. R Berkley cyber.
Speaker Change #142: Cyber exposure.
Speaker Change #142: And then with that.
Speaker Change #143: What do you make of that for the industry and how it's going to affect the industry, whether it's pricing.
Speaker Change #143: Loss costs et cetera.
Speaker Change #145: Well I appreciate the question and its certainly a topic that many of us around here have been.
Speaker Change #146: Scratching our heads over just kind of wondering and daydreaming, what will come of it as far as market conditions, but when the days all done.
Speaker Change #147: As far as our book goes we don't.
Speaker Change #147: Well, we have perhaps some level of loss activity, perhaps but given what we know today, we don't see it as being a material loss to the organization at this stage.
Andrew Kligerman: Yeah, perhaps, but given what we know today, we don't see this being a material loss to the organization at this stage. When the day is all done, to the extent that some type of business interruption is offered, usually there's an hours clause, if you like, associated with that.
Speaker Change #147: When when the days all done.
Speaker Change #148: To the extent that some type of business interruption is offered usually there's an hours clause if you like associated with that.
William Robert Berkley: And consequently, given when the patch was available and how quickly people, particularly institutions that have some level of sophistication, could get back on their feet, we think it will prove to be manageable. So I would be surprised if we didn't have any loss activity, but we certainly do not anticipate this being something of materiality or great consequence at this stage. That having been said, I think what it means for the industry, and what it means for society, we'll have to see over time.
Speaker Change #148: And consequently, given when the patch was available and how quickly people, particularly institutions that have some level of sophistication could get back on their feet.
Speaker Change #148: We think it will prove to be manageable. So I would be surprised if we didn't have any loss activity, but we certainly do not envision this being something of.
Speaker Change #148: Materiality or great consequence at this stage.
Speaker Change #148: Having been said I think for what does it mean for the industry. What does it mean for society I think we'll have to see over time, but I think for many perm.
William Robert Berkley: But I think for many, perhaps it was a reminder or a wake-up call for the systemic exposure. Thank you. That's helpful, Rob. And just quickly, I mean, as a percent of net written premium, like what proportion of your overall book might that size be? Unknown AttendeeLess than a couple of percent.
Speaker Change #149: <unk> was a reminder, or a wakeup call for the systemic exposure that exists around much of the technology that the world uses to operate.
Robin: That's helpful Robin and just quickly I mean as a percent of net written premiums.
What proportion of your overall book.
Speaker Change #151: That size too.
Speaker Change #152: Less than a couple of percent.
Unknown Attendee: Got it. Okay. And then maybe just shifting back to the commercial auto, as you said.
Speaker Change #153: Got it okay.
Speaker Change #153: And then maybe just shifting back to the commercial auto.
Speaker Change #154: 16% you said.
William Robert Berkley: Maybe all of that growth might have been rate, How comfortable are you with the 2024 book of commercial auto that you're writing, and what does that speak to your reserve adequacy from 21 to 23 on that same line? Yeah, look, it's something that we are looking at very carefully. I think that, in our picks, we thought that we were building in appropriately a bit of a risk margin with that period that you just referenced.
Speaker Change #155: Maybe all of that growth might have been.
Speaker Change #155: Right.
Speaker Change #156: How comfortable are you with the 24 book of 2024 book of commercial auto that Youre, writing and what does that speak to your reserve adequacy from 'twenty one to 'twenty three.
Speaker Change #156: On that same line.
Speaker Change #157: Yeah look it's something that we are looking at very carefully I think that.
William Robert Berkley: We'll have to see how much risk margin there still is, but at this time, we feel reasonably comfortable. That having been said, are we looking at it actively, and are we trying to grapple with how much we need to charge today with the assumption that this trend will continue on from here, and when we settle the claims? Yeah, we are focused on that. We are focused on it, so at this stage, are we uncomfortable? No.
Speaker Change #156: We.
Speaker Change #156: Our picks we thought that we were building an appropriately a bit of a risk margin with that period that you just referenced will have to see how much risk.
Speaker Change #158: Arjun there still is there but at this time, we feel reasonably comfortable that having been said are we looking at it actively and are we trying to grapple with how much do we need to charge today with the assumption that trend will continue on from here and when we settled the claims yes. We are focused on it so at this stage.
Speaker Change #158: Are we uncomfortable no are we paying attention to it absolutely.
William Robert Berkley: Are we paying attention to it? Absolutely. Great. Thanks a lot.
Speaker Change #159: Awesome, Thanks, a lot.
Speaker Change #159: Yeah.
David Kenneth Motemaden: Your next question comes from the line of David Motemaden with Evercore ISI. Please go ahead. Hi, thanks. Good afternoon.
David Kenneth Motemaden: Your next question comes from the line of David <unk> with Evercore ISI. Please go ahead.
David Kenneth Motemaden: Hi, Thanks, Good afternoon, Thanks for taking my question.
David Kenneth Motemaden: Thanks for taking my question. I just had a question on the insurance segment. So the accident-year loss ratio, XCAT, was flat year over year, but it increased a little bit versus the first quarter.
David Kenneth Motemaden: Just had a question on the insurance segment. So the accident year loss ratio ex cat was flat year over year increased a little bit versus the first quarter. I was wondering if you could just talk.
William Robert Berkley: I was wondering if you could just talk about some of the puts and takes within that, what was driving it to be up, you know, versus the first quarter, and just how we should think about that going forward. Really, to the extent that I'm just trying to think for a moment, David, really the only big moves that we made in a couple of places would stem from auto and making sure that we're staying on top of that.
Talk about some of the puts and takes within that what was driving it to be up.
Versus the first quarter.
David Kenneth Motemaden: And just how we should think about that going forward.
Speaker Change #161: It really does.
Speaker Change #162: To the extent I'm, just trying to think for a moment, David really the only big moves that and they werent, even big they were just incremental but we made a couple of places would stem from from auto and making sure that we're staying on top of that but again when it comes to the overall, it's pretty incremental and then we may have been a couple of plays.
William Robert Berkley: But again, when it comes to the overall, it's pretty incremental. And then we may have in a couple of places taken a look at the umbrella, because again, how that feeds into how the auto feeds into the umbrella. We want to make sure that we don't fall behind there.
Speaker Change #162: <unk> taken a look at the umbrella because again, how that feeds into how the auto feeds into the umbrella we want to make sure that we don't fall behind there.
Speaker Change #162: Got it that makes sense.
David Kenneth Motemaden: That makes sense. And then I think, you know, the previous question kind of touched on this too, but I noticed in the 10-Q from last quarter that you guys had started to make additional reserve increases to just the other liability line for, I think it was accident years 2020 and 21. It sounded like those were primarily auto-related. I guess I was just hoping to get a little bit more background on exactly what was going on. If you're seeing that happen again here in the second quarter, and then maybe just.
Speaker Change #163: And then I think the previous question kind of touched on this too, but I noticed in the 10-Q from last quarter it looks like.
Speaker Change #164: You guys had started to make additional reserve increases too just the other liability lines for I think it was accident year 2020 in 'twenty one it sounded like those were primarily auto related.
Speaker Change #165: I guess I was just hoping to get a little bit more color on exactly what was going on.
Speaker Change #166: If youre seeing that.
Speaker Change #166: And again here.
In the second quarter, and then maybe just.
Richard Mark Baio: R. Berkley Corp. We, there's no evidence that we see at this time of the issues that we're seeing, an umbrella, if you will, spilling over to the other product lines or the issues that we're seeing specifically in the auto, I should say, spreading to the other product lines. So said differently, we feel quite comfortable at the moment with the GL. As far as the auto goes, it's a challenging moment.
Speaker Change #166: How youre thinking about that and maybe <unk>.
Spreading to general liability and umbrella just non auto related.
Speaker Change #167: There is no evidence that we see at this time of the issues that we're seeing an umbrella.
Speaker Change #169: If you will spilling over to the other product lines.
Speaker Change #168: Uh huh.
Speaker Change #168: Or the issues that we're seeing specifically in auto or I should say spreading to the other product lines. So that differently, we feel quite comfortable at the moment with the GL.
Speaker Change #168: Or is the auto grows.
Speaker Change #168: It's a challenging moment I mean, you drive down 195 or whatever of highway you go down and every other Billboard is lengthy.
William Robert Berkley: I mean, you drive down I-95 or whatever highway you go down, and every other billboard is a plaintiff attorney with their phone number in case a truck cuts you off. And, you know, from our perspective, the trend is meaningful, and we need to make sure that we keep up with it. We want to make sure that the old years are in a reasonable place. But, and, you know, that obviously, as mentioned a few moments ago, has implications, though relatively modest implications for the umbrella. But to your specific question, do we see that sort of some type of viral effect, if you like, spilling over into GL, for example?
Speaker Change #168: <unk>.
Speaker Change #168: Their phone number in case of a truck.
Speaker Change #168: Cuts you off.
Speaker Change #168: And from our perspective the trend is.
Speaker Change #168: The trend is meaningful and we need to make sure that we keep up with it and we wanted to make sure that the old years.
Speaker Change #168: We're in a reasonable place.
Speaker Change #170: But and that obviously has mentioned a few moments ago has.
Speaker Change #171: Implications, so relatively modest implications for umbrella.
To your specific question do we see that sort of some type of viral effect. If you like spilling over into GL. For example, no we are not seeing that.
William Robert Berkley: No, we are not seeing that. Got it. Okay, that's helpful. And then, maybe just a quick one.
Got it Okay. That's helpful. And then maybe just a quick one.
Speaker Change #172: I had said earlier you guys have gotten 68% cumulative rate since 2019.
Speaker Change #173: Excluding workers' comp I'm just wondering.
Speaker Change #174: How does the loss trend look versus 2019, so we were just to compare versus that 68% rate increase.
David Kenneth Motemaden: You had said earlier, you guys have gotten a 68% cumulative rate since 2019. Excluding workers comp, I'm just wondering, you know, how does the loss trend look versus 2019? If we were just to compare versus that 68% rate, the numbers that we have, it's less than, Great, thank you. Your next question comes from the line of Brian Meredith with UBS. Please go ahead.
Speaker Change #175: The numbers that we have it's less than that.
Speaker Change #176: Great. Thank you.
Speaker Change #175: Okay.
Speaker Change #175: Your next question comes from the line of Brian Meredith with UBS. Please go ahead.
Brian Robert Meredith: Hey, two questions for you. The first one: I just noticed professional liability grew this quarter for the first time in over a year. Anything kind of interesting going on there? getting better or worse?
Brian: Hi, Brian good afternoon.
Brian Robert Meredith: Good evening.
Brian Robert Meredith: Two questions for you. The first one just noticed professional liability grew this quarter for the first time in over a year.
Brian Robert Meredith: Kind of interesting going on there is it getting better or just nominally.
William Robert Berkley: It tends to be what I would define as professional liability. Ex-DNO is having a reasonably good moment, and that's both admitted and non-admitted. The challenge, as we've discussed in the past, and of course you're acutely aware of, Brian, on the professional front, is DNO. So, that continues to be a challenged marketplace. A sub-market under DNO that I would flag as very, very concerning is transactional liability. And that is a book of business that we have that is shrinking at a very rapid pace just because we don't like the market conditions.
Speaker Change #179: It tends to be what it is is what I would define as professional liability D&O as having a reasonably good moment and both that's both admitted and non admitted.
Speaker Change #179: The challenge as we've discussed in the past and of course, we are acutely aware of Brian is on.
Brian Robert Meredith: On the professional front as D&O.
Brian Robert Meredith: So that continues to be a challenged marketplace a submarket under D&O that I would flag is very very concerning as transactional liability.
Brian Robert Meredith: And that is a book of business that we have that is shrinking at a very rapid pace, just because we don't like market conditions, but as far as the opportunity.
William Robert Berkley: But as far as the opportunity is concerned, it's much of the professional market, X, D, and O. [inaudible] And then, secondly, you talked a little bit about terms and conditions. And how that's been a – should be a big benefit to profitability, you know, you're going forward with a bunch of these businesses. Maybe you can give us some examples of what's happened over the last several years in terms of conditions, limits, profiles, and that sort of thing that's going to contribute to profitability. And I'm assuming that it's not factored into that 68.
Brian Robert Meredith: Much of the professional market ex piano.
Great.
Speaker Change #180: Submitted an admitted.
Thanks for that and then second question, you talked a little bit about terms and conditions and how that's been a should be a big benefits of profitability.
Speaker Change #183: Going forward on a bunch of this business, maybe you can give us some examples of kind of what's happened over the last several years in terms of conditions limit profiles in that stuff, that's going to contribute to the profitability and I'm, assuming that's not factored into that 68% number that you that you gave us and maybe how that mitigates any type of development.
William Robert Berkley: And maybe how that mitigates any type of development, potentially, on some of the GLM. Yeah, on the GL side, you know, an example would be that you see a contractor move out of the admitted market where they were buying a million dollar limit or a one to one, and their pan, basically. Whatever $50,000 is for the million dollar limit, and all of a sudden, the standard market, because of loss activity or a variety of other reasons, including that they can't get the rate that they need all of a sudden kicks it out. And as opposed to being 50000 dollars, it's 150000 dollars, but to get.
Speaker Change #181: Actually on some of the GL and commercial auto.
Yes.
Speaker Change #180: Hum.
Speaker Change #182: On the NGL side, an example would be that Youll see a contractor move out of the admitted market, where they're buying whatever million dollars limit.
Speaker Change #184: Our one to one.
Speaker Change #184: And they're paying.
Speaker Change #184: Basically what.
Speaker Change #184: Whatever $50000 for the $1 million limit and.
Speaker Change #184: And all of a sudden the standard market because of loss activity or variety of other reasons, including they can't get the rate that they need all of a sudden kicks it out as opposed to being $50000 at the $150000 but to get.
William Robert Berkley: R. Berkley Corp. And that's why, if you look at our history as an organization, some of our most profitable business has been what we've been able to write on an E&S basis. And actually, quick follow up then. Do you know approximately how much of your business today is E&S versus, say, 2019 prior to the cycle hardening? I don't have the number in front of me.
$650000 of cover and maybe Youre doing something with defense and he start sub limiting all kinds of other things and how are you.
Speaker Change #185: It really is very much apples and oranges or maybe even apples and bananas because of what you can do with the terms and the conditions.
Speaker Change #186: And that's why if you look at our history as an organization some of our most profitable business has been what we've been able to write on an E&S basis.
Speaker Change #187: And actually it's a quick follow up then.
Do you know approximately how much of your business today is E&S versus call. It 2019 prior to the cycle hardening up.
Speaker Change #188: I don't have the number in front of me.
William Robert Berkley: But as I mentioned to your colleague earlier, pretty consistently, our E&S business, even putting aside specialty, but E&S has been growing at a rate for some number of years. R. Berkley Corp. So, I mean, the ENS has really been growing quite quickly and provides a good opportunity. Excellent. Thank you. Thank you. Your next question comes from the line of Meyer Shields with KBW. Please go ahead. It looks like we've come to the first quarter of the growth and insurance short-term line. Sorry, Mary, I beg your pardon, but your line is breaking up a bit. I'm sorry; can you hear me now? A little bit.
Speaker Change #189: As I mentioned to your colleague earlier pretty consistently our E&S business, even putting aside the specialty but does the E&S has been growing at a rate for some number of years.
Speaker Change #189: 50% more than what our standard market business has been growing at and just to define standard market a lot of that is admitted specialty.
Speaker Change #189: I mean, the E&S has really been growing quite quickly and provides good opportunity exelon.
Speaker Change #190: Excellent. Thank you thank.
Speaker Change #191: Thank you.
Speaker Change #192: Your next question comes from the line of Meyer Shields with <unk>. Please go ahead.
Speaker Change #193: So some of the questions.
Speaker Change #194: It looks like at least.
Speaker Change #195: The first part of the growth in insurance or can't line.
Speaker Change #196: Sorry, I beg your pardon.
Speaker Change #197: <unk> is breaking up a bit.
Speaker Change #198: I'm sorry.
A little bit.
Speaker Change #198: But let me try that.
Speaker Change #199: I was hoping you could comment on the apparent slowdown in the growth rate of short tailed lines in insurance.
Meyer Shields: I was hoping you could comment on the apparent slowdown in the growth rate of short-tailed lines in insurance. Sure. But, long story short, that's really property.
Speaker Change #199: Sure.
Speaker Change #199: Long story short Thats really property.
William Robert Berkley: And the property market. And I think, as we talked about some number of quarters ago, the property reinsurance market was what drove the property market. But the property reinsurance market has peaked.
Speaker Change #199: Okay.
Speaker Change #199: Property market and I think as we've talked about some number of quarters ago. The property reinsurance market was what drove the property market.
Speaker Change #199: Property reinsurance market has peaked.
William Robert Berkley: And, no surprise to any of us, the waterfall effect of that is that the property market continues to be good, but the level of opportunity there is perhaps not quite as robust as it was six, 12 months ago. Okay, that makes sense.
Speaker Change #199: And no surprise to any of us the waterfall effect of that as the property market continues to be good but the level of opportunity. There is perhaps not quite as robust as it was six to 12 months ago.
Speaker Change #199: Okay.
Meyer Shields: The second question, I guess, in the investment portfolio, we saw, at least on a percentage basis, a decent decline in equities, in common equities. Can you comment on that at all? I'm sorry, could you repeat that once more? Yeah, just the sequential decline in the carried value of the common stock equity portfolio compared to March 31. The answer is we sold a bunch of common stocks. We made some gains. We realized some gains. We just decided that, other than our specialty position, the stock market wasn't the place we are today. Okay, yeah, I just wanted to know if there's any sort of macro view embedded in that.
Speaker Change #200: Second question I guess investment portfolio, we saw at least on a percentage basis.
Speaker Change #200: A decline in equity and common equity.
Speaker Change #200: Hum.
Speaker Change #201: Can you comment on that at all.
Speaker Change #202: I'm, sorry could you repeat it once more.
Speaker Change #202: Yes.
Speaker Change #203: Sequential decline in the carrying value of the common stock equity portfolio compared to March 31.
Speaker Change #203: Yes.
Did you want to put a bunch of June we sold about my comment on common stocks. Yes. We just we took some gains were roughly we realized some gains.
Speaker Change #203: Sorry.
Speaker Change #203: I live in our specialty positions.
Speaker Change #204: The stock market wasn't in place, we ought to be at the moment.
Speaker Change #205: Okay. Yeah, I just wanted to know if there's any sort of macro view embedded in that.
Speaker Change #205: No.
Speaker Change #206: Okay. Thanks, so much.
Speaker Change #205: Okay.
William Robert Berkley: Great. Thank you so much. That concludes our question and answer session. I will now turn the conference back over to Mr. Rob Berkley for closing comments.
Speaker Change #207: That concludes our question and answer session I will now turn the conference back over to Mr. Rob Berkley for closing comments.
William Robert Berkley: Krista, thank you very much. We appreciate your assistance today and thank you to all for finding time to join us for this discussion. Hopefully, you take away from the dialogue that not only was the company able to deliver a great outcome in spite of some of the challenges in the environment, but we are also very well positioned. And it's not that there aren't challenges out there, but the business has, is, and will continue to do a very effective job in managing the shareholder's capital and making sure that we are achieving those risk-adjusted returns that We will look forward to speaking with you in about 90 days. Thank you very much. This concludes today's conference call. Thank you for your participation, and you may now disconnect.
William Robert Berkley: Kristin. Thank you very much we appreciate your assistance today and thank you to all for funding time to join US for this discussion.
William Robert Berkley: Hopefully you take away from the dialogue that not only was the company in spite of some of the challenges in the environment to deliver a great outcome and we're also very well positioned and it's not that there aren't challenges out there, but the business has is and will continue to do a very effective job in managing the shares.
William Robert Berkley: Holders capital and making sure that we are achieving those risk adjusted returns that the capital is entitled to.
Unknown Attendee: We will look forward to speaking with you in about 90 days. Thank you very much.
William Robert Berkley: We'll look forward to speaking with you in about 90 days. Thank you very much.
Unknown Attendee: This concludes today's conference call. Thank you for your participation, and you may now disconnect.
This concludes today's conference call. Thank you for your participation and you may now disconnect.
Unknown Attendee: Thank you very much.
William Robert Berkley: Okay.
William Robert Berkley: Yeah.
William Robert Berkley: Okay.