Q2 2025 WR Berkley Corp Earnings Call

Unknown Attendee: Berkley Corporation's second quarter 2025 earnings conference call.

Unknown Attendee: Today's conference is being recorded. The speaker's remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, believes, expects, or estimates.

Ladies and gentlemen, good day and welcome to EWR Berkeley. Corporation's, second quarter 2025 earnings conference call.

Today's conference is being recorded.

Unknown Attendee: We caution you that such forward-looking statements should not be regarded as a representation by us, that the future plans, estimates, or expectations contemplated by us will, in fact, be achieved. Please refer to our annual report on Form 10-K for the year ended December 31st, 2024, and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our W. R.

The speaker's remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words including without limitation beliefs expects or estimates.

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

Please refer to our annual report on form, 10K for the year, ended December, 31st 2024 and our other filings made with the FCC for a description of the business environment, in which we operate. And the important factors that may materially affect our results.

Unknown Attendee: 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.

Rob Berkley: I would now like to turn the call over to Mr. Rob Berkley, please go ahead. Abby, thank you very much. And thank you to all participants for your time today and your interest in the company. In addition to myself, you also have our Executive Chairman Bill Berkley on the call, as well as Rich Baio, our Chief Financial Officer. We're going to follow our typical agenda where momentarily I'll be handing it over to Rich. He'll run us through some highlights from the quarter. He'll then pass it back to me. I'll offer a few more sound bites, and then we look forward to taking people's questions and, for that matter, taking the conversation in any direction participants wish to take it.

WR Berkeley Corporation is not under any obligation and expressly disclaims, any such obligation to update or alter, its forward-looking statements, whether as a result of new information, future events or otherwise.

I would now like to turn the call over to Mr. Raab Berkeley please go ahead, sir.

Speaker Change: Your time today and your interest in the company. Uh in addition to myself you also have our executive chairman Bill Berkeley on the call as well as Rich. Baio our Chief Financial Officer.

Rob Berkley: Before I do hand it over to Rich, perhaps just stating the obvious, it is very much an interesting moment in the property and casualty space. We are reminded of the complications of this industry, an industry where you make a sale before you ultimately truly know your costs of goods sold. We have been grappling with this reality as an industry forever, but there are moments in time when it comes into sharper focus than others. We certainly over the past several years have had to grapple with financial or economic inflation. And that was combined with social inflation, which we have talked about and I suspect we'll continue to talk about.

We're going to follow our, our typical agenda where momentarily, I'll be handing it over to Rich. Uh, he'll run us through some highlights from the quarter. They'll then pass it back to me. I'll offer a few more sound bites, and then we look forward to taking people's questions. And for that matter, taking the conversation and any direction, participants wish to take it. Um, before I do hand, it over to Rich, uh, perhaps, uh, just stating the obvious. It is very much an interesting moment in the Property and Casualty space. Uh, we are reminded of the, the complications of this industry and Industry where you make a sale before. You ultimately truly know your costs of goods sold.

Speaker Change: We have been grappling with this reality as an industry forever, but there are moments in time when it comes into sharper Focus than others.

Rob Berkley: But while on the heels of COVID, financial or economic inflation seems to be brought far more under control, there are some real threats to that. Certainly, tariffs are top of mind for all of us. In addition to that, one should not lose sight of what's going on in the labor market and what that may mean for wage inflation over time, particularly around some of the administration policies that they are in the process of putting into place. And finally, there's the big question around deficits and what that will ultimately mean for the economy. And lastly, to what extent can we expect the U.S.

We certainly over the past several years have had to Grapple with financial or economic inflation and that was combined with social inflation, which we have talked about and I suspect we'll continue to talk about it.

But while on the heels of co uh, Financial or economic inflation, seems to be brought far more under control. There are some real threats to that

Rob Berkley: consumer to continue to be the driver and allow the economy to remain as resilient as it's been? These are amongst some of the macro questions that we are grappling with. Obviously, there's applicability to both our underwriting activities and how we think about selecting and pricing risk. And furthermore, I think it goes without saying, there's meaningful applicability to the investment portfolio and how we think about positioning that. So, as always, lots of moving pieces, trying to not just interpret what they all mean for today, but also how we think about positioning the business going forward.

Certainly tariffs are top of mind for all of us. Uh in addition to that 1 should not lose sight of what's going on in the labor market and what that may mean for wage inflation over time particularly around some of the administration policies uh that they are in the process of putting into to place. And finally, there's the big question around deficits and what that will ultimately mean for the economy. And lastly, to what extent can we expect, uh, the US consumer to continue to be the driver and allow the economy to remain as resilient as it's been? These are amongst some of the, the macro questions that we are grappling with. Obviously, there's applicability to both our underwriting activities and how we think about selecting and pricing risk and furthermore, I think it goes without saying, there's meaningful applicability to the invest.

Speaker Change: Investment Portfolio, and how we think about positioning that

Rob Berkley: So, let me pause there and hand it over to Rich, and I will follow him with a few more soundbites.

So uh, as always, lots of moving pieces uh trying to not just interpret what they all mean for today but also how we think about positioning the business going forward.

Richard Baio: Rich, over to you, please. Great. Thanks. The second quarter marked a continuation of strong performance in both underwriting income and net investment. Net income per diluted share increased 8.7% over the prior year to $1 per share, or $401 million, with an annualized return on beginning of year equity of The definition of operating earnings commencing with this quarter has been changed to exclude after-tax foreign currency.

Speaker Change: So uh let me pause there and hand it over to Rich and I will follow him with a a few more sound bites Rich over to you, please. Great thanks Rob.

Rich: the second quarter Mark to continue of strong performance in both underwriting income and net investment income, net income for diluted share increased 8.7%, over the prior year, to 1 dollar per share, or 401 million with an annualized return on beginning of your Equity of 19.1%,

Unknown Attendee: Unknown Attendee, Robert Cox, Meyer Shields, Jian Huang, W. R. Berkley Corp. $420 million or $1.05 per share, yielding an annualized return on beginning of year equity starting with underwriting. Our current accident year combined ratio before cat losses of 3.2 loss ratio points was 88.4%. Surprised of an accident year loss ratio excluding caps of 59.9% expense ratio of 28. calendar year combined ratio with 91.6. Resulting in $261 million of underwriting. Cat losses were $99 million in the second quarter of 2025, compared with $90 million, or a 3.2 loss ratio points in the prior year. While the industry saw an above-average frequency of severe storms, the point impact of cat losses on our combined ratio remained flat, even as the dollar amount of losses marginally increased with the growth in our property book of business over the prior Drilling down further, the insurance segment's quarterly accident year loss ratio.

the definition of operating earnings commencing with this quarter has been changed to exclude after tax foreign currency, gains and losses, and accordingly, operating earnings

Rich: For 420 million or 1 dollar and 5 cents per share building an annualized return on beginning of your Equity is 20%.

Starting with underwriting performance. Our current accident year combined ratio before cat losses of 3.2 loss ratio points was 88.4% comprised of an accident year loss ratio, excluding cats, of 59.9% and expense ratio of 28 and a half percent.

Rich: The calendar year combined ratio with 91.6% resulting in 261 million of underwriting income.

Cat losses were 99 million in the second quarter of 2025, compared with 90 million, or 3.2 loss ratio points in the prior Year's quarter.

While the industry saw an above average frequency of severe storms. The point impact of cat losses on our combined ratio remained flat even as a dollar amount of losses marginally increased with the growth in our property book of business over the prior year.

Richard Baio: was relatively flat year over year and sequentially at 60.7. bringing the accident year combined ratio before cats to 89. Reinsurance and monoline excess segments, accident year loss ratio. increased to 54.1 with a strong accident year combined ratio before cats of The expense ratio overall was flat at twenty eight and a half. and continue to benefit from the growth in net premiums earned, which was a quarterly record of $3.1 billion. In addition, net premiums written increase to a record $3.4 billion in the quarter with growth in all lines of business in both Record net investment income of $379 million benefited from the ongoing growth in the invested assets from strong operating cash flow and new money rates on fixed maturity securities that remain comfortably above our average book.

Rich: Drilling down further the insurance segments quarterly accident year loss ratio X caps was relatively flat year-over-year and sequentially at 60.7%, bringing the accident year combined ratio before cats to 89%.

Loss ratio X cats increased to 54.1% with a strong accident-year combined ratio before cats of 83.8%.

Rich: The expense ratio overall was flat at 28.5% and continue to benefit from the growth in net premiums earned which was a quarterly record of 3.1 billion dollars. In addition net premiums written increased to a record 3.4 billion dollars in the quarter. With growth in all lines of business in both segments.

Record, net investment income of 379 million benefited from the ongoing growth in the invested assets from strong, operating cash flow, and new money rates on fixed maturity Securities. That remain comfortably above

Richard Baio: Investment income from fixed maturity securities, excluding Argentine inflation linked securities, improved 16.5% year-over-year, with an increase in book yields of 20 basis points. 4.0. Our investment funds performed above our expected quarterly range of $10 to $20 million. Strong results of $27 million driven by transportation, infrastructure, and financial services. The quality of our portfolio remains very strong at a double A minus with the duration on our fixed maturity portfolio including cash and cash equivalents increasing from the fourth quarter of 2.6 years to the current quarter . Foreign Currency Losses in the Quarter of $55 Million Related to the Weakening U.S.

Rich: our average book yield

Rich: Investment income from 6 maturity Securities, excluding Argentine inflation, link Securities, improved 16.5% year-over-year with an increase in book yield of 20 basis points to 4.7%.

Our investment funds, performed above our expected, quarterly range of 10 to 20 million dollars with strong results of 27 million driven by Transportation infrastructure and financial services sectors.

Rich: The quality of our portfolio, remains very strong at a double A minus. With a duration on our fixed maturity portfolio, including cash and cash equivalents increasing from the fourth quarter of 2.6 years to the current quarter of 2.8 years.

Richard Baio: Dollar Relative to Most Other Countries. Offsetting this income statement loss is an improvement in the currency translation loss in stockholders. The effective tax rate was 23.2% in the quarter, which is in line with our expectations for the full year of 2020. The rate exceeds the U.S. statutory rate of 21. Due to taxes on foreign earnings at higher rates and stating Stockholders' equity increased by more than $380 million, or 4.3% over the first quarter of 2025, to a record $9.3 billion. Aftertax unrealized investment losses improved by $120 million to about $249 million. From a capital management perspective, we paid ordinary and special dividends of $224 million in the quarter, bringing our growth and book value per share before dividends.

Foreign currency losses in the quarter of 55 million related to the weakening US dollar relative to most other currencies. Offsetting this income statement loss is an improvement in the currency translation loss in stockholders Equity of 69 million.

The effective tax rate was 23.2% in in the quarter, which is in line with our expectations for the full year of 2025. The rate exceeds, the US statutory rate of 21%, due to taxes on foreign earnings at higher rates and state income taxes.

Rich: Stockholders Equity increased by more than 380 million dollars or 4.3% over the first quarter of 2025 to a record, 9.3 billion dollars.

After tax unrealized investment losses, improved by 120 million dollars to a balance of 249 million as of June 30th 2025.

Richard Baio: balance sheet remains strong with cash and cash equivalents of more than $2 billion.

From the Capital Management perspective. We paid ordinary and special dividends of 224 million in the quarter. Bringing our growth in book, value per share before dividends to 6.8% in the quarter and 14.3% on a year-to-date basis.

Richard Baio: Historically Low Financial Leverage So in summary, another great quarter with exceptional risk-adjusted returns and excellent underwriting.

Our balance sheet remains strong with cash and cash equivalents of more than 2 billion dollars. And historically low financial leverage is 23.4%

Rob Berkley: Rob, with that I'll turn it back. Great. Rich, thank you very much.

Rich: So in summary, another, great quarter with exceptional risk, adjusted returns and excellent underwriting and investment performance.

Rob Berkley: So, maybe just to follow on Rich's comments, a couple of additional thoughts. First, I think as everyone on the call is acutely aware, this is still very much a cyclical industry. As we have discussed in the past, though, one of the changes that has happened over the past, I don't know, sort of five to ten years is a decoupling of product lines as to where they are in the cycle. So, the cyclical nature still exists, but where different major product lines are in the cycle, they are certainly no longer in lockstep.

Rob Berkley: To that end, a couple of thoughts on the insurance marketplace. One, the property market, clearly that marketplace is becoming more competitive, as we have discussed for a couple of quarters now. As far as commercial transportation, again, another product line where there is a fair amount of activity coming from MGAs. That marketplace, we continue to, and others seem to be pushing for rate, but without a doubt, the MGA participants are creating at least a short-term headwind for that market truly going hard. My expectation is that that's a bit of a kink in the hose, if you will, and consequently, it is going to build up pressure and ultimately will inert to the benefit of responsible long-term participants when that snaps and the market shifts.

Rich: Fraud with that. I'll turn it back to you. Uh great uh rich. Thank you very much. So uh let me just to follow on Rich's comments, a couple of additional thoughts. First I I think is everyone on, on the call is acutely aware. This is still very much a cyclical industry as we have discussed in the past, though 1 of the changes that has happened over the past. I don't know, or 5, to to 10 years, is a decoupling of product lines as to where they are in the cycle. So the cyclical nature still exists, but we're a different major product lines are on the cycle. Uh, they are certainly no longer in lock step uh to that end a couple of uh thoughts on the insurance Marketplace. Uh, 1 the property Market, clearly at that, that Marketplace is becoming more competitive as we have discussed for a couple of quarters now.

Rob Berkley: Professional liability, again, a bit of a mixed bag as we all have a shared appreciation, a very broad space. Just a couple of highlights on D&O. It would seem as though the public D&O market is beginning to find some sense of bottom. Private and non-for-profit D&O remains particularly competitive as does some of what I would define as miscellaneous E&O. There is, again, an MGA component to it since people seem to be very fixated on the topic. I thought I'd flag that as well.

Rich: And another product line, where there is a fair amount of activity coming from mgas that Marketplace. We continue to and others seem to be pushing for rate. But without a doubt, the the MGA participants are creating at least a a short-term headwind for that market, truly going hard. My expectation, is that that's a bit of a kink in the hose if you will. And consequently, it is going to build up pressure and ultimately will a ner to the benefit of responsible long-term participants when that snaps and the market shifts professional liability. Uh again a bit of mix of a mixed bag as we all have a shared appreciation uh a very broad space just a couple of highlights on dno. It would seem as though the the public dno market is beginning to find some sense of bottom uh private and non-profit dno remains

Rob Berkley: As far as the casualty lines, clearly there is opportunity to get the rate that the product line needs. It is pronounced both in the primary casualty as well as the umbrella and excess.

Rob Berkley: Finally, as far as workers' compensation goes, presumably all had an opportunity to take note of the action coming out of California. I think some time ago we had flagged for those that were willing to listen that it seemed as though California, as opposed to in the more distant past, this time around is out in front of the rest of the market as far as firming.

Particularly competitive as does some of what I would Define as miscellaneous. Uh, you know, there is again an MGA component to it. Since people seem to be very fixated on the topic, I thought I'd flag that as well. As far as the casualty lines. Uh, clearly there's opportunity to get the rate that the product line needs. Uh, it is pronounced both in the primary casualty as well as the umbrella and excess and finally, as far as workers compensation.

Rob Berkley: I think one other comment I would make would be around the consumer space, particularly P&C personal lines. As you all know, we have a meaningful participation in the private client space, which is a very different business from what I would define as mass market. It is a part of the market that is built or driven by knowledge and expertise, and we have a business that is really coming into its own in that space and has been a great contributor not just to the top line but to the bottom line as well. and those market conditions remain ripe and we are pleased to have that opportunity.

Rich: Goes, presumably all had an opportunity to take note of the action coming out of California. I think some time ago, we had flagged for those that were willing to listen, that it seemed as though, California as opposed to in the more distant, past this time around is out in front of the rest of the market as far as firming, I think the action taken by the commissioner approving 8.7% effective 91. Um, is certainly a strong message that was well received by us and we look forward to more coming behind that. I think 1 other comment I would make uh, would be around the, the consumer space particularly uh, PNC, uh, personal lines. As you all know, we have a, a meaningful participation in the Private Client space, which is a very different business from what I would Define, as, as mass Market, uh, it is a

Rich: Part of the market that is built or driven by knowledge and expertise and we have a a business that is really coming into its own in that space and has been a great contributor, not just to the Top Line, but to the the bottom line as well.

Rob Berkley: I mentioned reinsurance earlier as far as the reinsurance marketplace providing capacity within the property lines, perhaps the discipline I think eroding. I think we've talked about that in the past. It continues to erode. We'll have to see how quickly it remains and how steep the trajectory is, I should say.

Rich: And those market conditions, uh, remain, uh, ripe. And we are are pleased to have that opportunity.

Rob Berkley: And finally, we've expressed our disappointment with the discipline, particularly on the casualty lines within the reinsurance space. I offered a couple of sound bites about MGAs just as a broad category earlier. And within the industry, people tend to oftentimes use some terminology, perhaps somewhat casually and almost interchangeably around MGA, MGU, and ultimately really falls under the category, if you like, of delegated authority. There is no doubt that inherently in many of the delegated authority models, there is a mismatch or a lack of alignment of interest between those with the pen and those with the capital.

Rich: I mentioned, reinsurance earlier, as far as the reinsurance marketplace providing uh, capacity within the, the property lines, uh, perhaps the discipline, I think. Uh, eroding I think we've talked about that in the past, it continues to erode. We'll have to see how quickly, uh, it remains. Uh, and what the house steep. The trajectory is, I should say. And finally, we've expressed our disappointment with the discipline, particularly on the casualty Lines within the reinsurance space, I I offered a couple of sound bites about mgas just as a a uh broad category earlier and within the industry, people tend to often times use some terminology perhaps somewhat casually and almost interchangeably around MGA mgu and ultimately really falls under the category if you like of delegated authority.

Rob Berkley: It is not that all of these relationships are bad, some of them are quite good, one just needs to have their eyes wide open and understand that it is not a perfect alignment of interests and make sure that it is controlled appropriately.

Rich: There is no doubt that inherently in many of the delegated authority models. There is a mismatch or a lack of alignment in of interest between those with the pain and those with the capital.

It is not that all of these relationships are bad, some of them are quite good. 1, just needs to have their eyes wide open.

Rob Berkley: That having been said, there has been extraordinary growth in the MGA space. A lot of it has been generated by new entrants that lack expertise. A lot of it has been supported by reinsurance capacity that seems to have an unquenchable thirst for growth without necessarily their finger fully on the pulse. We'll have to see how this plays out. I think for many of us that have been around for at least a little while and those that have been, particularly those that have been around for a long while, have seen some version of this movie. You know, in some ways, it's the same.

And understand that is not a perfect alignment of interests and make sure that it is controlled appropriately. That having been said, there has been extraordinary growth in the MGA space.

A lot of it has been generated by new entrance that lack expertise. A lot of it has been supported by reinsurance capacity that seems to have an unquenchable thirst for growth without necessarily their finger fully on the pulse.

Rich: We'll have to see how this plays out.

Rich: A little while. And those that have been particularly those that have been around for a long while have seen some version of this movie.

Rob Berkley: In other ways, it's different. Perhaps the only difference is that it's a different cast of characters.

Rob Berkley: One final anecdote on the NGA front, I would tell you that over the last 60 to 90 days, it's been a startling number of inbound calls that we have gotten from investment bankers, suggesting that NGAs that they have to sell, would we be interested in buying them? And typically, they are capitalized or owned by private equity. So oftentimes, perhaps a leading indicator that the music is slowing and we'll see who has a seat at the end, though oftentimes that does take some time. Rich, as always, did a really thorough job as it relates to the quarter and the numbers.

You know, in some ways it's the same and other ways, it's different. Perhaps the only difference is that it's a a different cast of characters.

Rich: 1 final, anecdote on the NGA front, I would tell you that over the last 60 to 90 days. It's been a startling number of inbound calls that we have gotten from investment bankers. Suggesting that MGA, that they have to sell, would we be interested in buying them?

Um and typically they are capitalized or owned by private Equity. So often times perhaps a a leading indicator that uh the music is slowing and we'll see who has a seat at the end though, often times that does take some time.

Rob Berkley: You know, I would just call out the rate at the 7.6 X comp continues to be meaningful and puts us in a comfortable place. Rich talked about the loss ratio. Again, I'm not going to go into a chapter and verse. The 3.2 points of CAT was really frequency of by industry standards, modest severity. And then lastly, it's worth noting the duration of the investment portfolio edging out to 2.8 years. Again, I think this is exactly what we suggested we would be doing if the story unfolded the way it has. We continue to believe that our strategy is the right one, making sure that we are getting an appropriate risk-adjusted return.

Rich: Uh, rich. As always did a really thorough job as it relates to the quarter and the, the numbers, you know, I would just call out the rate at the 76 x comp, uh, continues to be, uh, meaningful and puts us in a, a comfortable place. Uh, Rich talked about the loss ratio again, I'm not going to go into a chapter and verse the 3.2 points of cat was really frequency of by industry, standards, modest severity.

Rob Berkley: I think as Rich alluded to, the cash flow of the organization remains very healthy. The growth in the investment portfolio remains quite significant. And if you think about a new money rate for us today is running about give or take five and a quarter, and the book yield on the portfolio X Argentina is 4.7, you know, that certainly bodes well for where investment income is going for the foreseeable.

Um and then lastly uh you would have uh it's worth noting the duration of the Investment Portfolio, edging out to 2.8 years again. I think this is exactly what we suggested we would be doing if the story unfolded the way it has. Uh we continue to believe that our strategy is the the right 1, making sure that we are getting an appropriate risk adjusted return

Rob Berkley: So long story short, we can't control the environment, but we can control our actions. We remain very focused on making good risk-adjusted returns. The decoupling of product lines and how they make their way through the cycle, combined with the breadth of our offering, allows us to continue to grow when others perhaps are experiencing more of a headwind. In our opinion, you certainly are seeing different product lines at different points of transition. We have historically and continue to be more of a liability market, and we think that much of the liability market is where the opportunity will likely be over the next 12 to 36 years.

I think is risk alluded to the cash flow of the organization remains very healthy. The growth in the Investment Portfolio remains quite significant. And if you think about a new money rates for us to pay is running about give or take 5 and a quarter and the book yield on the portfolio. X Argentina is 4.7. You know, that certainly bodes well for where investment income is going for the foreseeable.

So, long story short, um, we can't control the environment, but we can control our actions. We remain very focused on making good risk adjusted returns

Rich: The decoupling of product lines and how they make their way through the cycle, combined, with the breadth of our offering, allows us to continue to grow when others, perhaps, uh, are experiencing more of a headwind. In our opinion, you certainly are seeing different product lines at different points of transition. We have historically and continue to be

Rob Berkley: So, again, we think we're well-positioned on the underwriting side, we think we're well-positioned on the investment side, and it is our expectation that we will be able to continue to grow earnings in a very thoughtful and controlled manner.

More of a liability market. And we think that the much of the liability Market is where the opportunity will likely uh be over the next 12 to 36 months.

Unknown Attendee: So, with that, Abby, I will take a pause, and we're very pleased to open it up for questions. Thank you.

Rich: So again we think we're well positioned on the underwriting side, we think we're well positioned on the investment side and it is our expectation that we will be able to continue to grow earnings in a very thoughtful and controlled manner.

Unknown Attendee: Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join If you would like to withdraw your question, simply press star 1 a second time.

So with that, Abby, I will take a pause and we're very pleased to open it up for questions. Thank you.

Rich: Thank you.

For session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Unknown Attendee: If you are called upon to ask your question and are listening via speaker phone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one if you would like to join the queue.

Rich: If you would like to withdraw your question, simply press star 1 a second time.

Rich: If you are called upon to ask your question and are listening via speaker phone on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Rob Cox: And our first question comes from the line of Rob Cox with Goldman Sachs. Your line is open. Hey, Rob. Good afternoon. Yeah, just first question on growth. Just thinking about the growth potential here. I know is a tougher quarter with the property pricing deceleration. But just curious if you all still view this as sort of a 10 to 15% growth environment or has the last few quarters changed that? Look, I think we had come out with that band, if you will, probably, I don't know, call it 18 months ago, maybe 24 months ago.

Again it is star 1. If you would like to join the queue,

Rob Cox: And our first question comes from the line of Rob Cox with Goldman Sachs your line is open.

Rob Cox: Hey, Rob good afternoon.

Speaker Change: Good afternoon.

Speaker Change: Yeah, just uh, first question on growth, uh, just thinking about the growth potential here. I know it was a tougher quarter with the property, pricing deceleration, um, but just curious if you all still view this as sort of a 10 to 15% growth environment or has the last few quarters changed that.

Rob Berkley: If you're asking my best guesstimate at this stage, in spite of the number that we saw in this quarter, you know, my view is that it's probably somewhere between 8 and 12 would be my guess, as opposed to 10 to 15. Okay, got it. That's helpful.

Speaker Change: 15.

Rob Berkley: And then just curious on the underlying loss ratio. I think last quarter, you all mentioned that the impact of the Outward Reinsurance Program was a business mix related headwind. This quarter, the underlying loss ratio, at least in insurance, seems pretty flat. You know, anything else unusual to call out there? Or is that just normal dynamics? I think it continues to primarily be be mixed as far as the loss ratio. Got it. Thank you.

Okay, got it. That's helpful.

Um, and then just curious on the underlying loss ratio. I think, last quarter you all mentioned that the impact of the outward reinsurance program, uh, was a business mix related headwind this quarter, the, the underlying loss ratio at least in Insurance, seems pretty flat, you know, anything else unusual to call out there is that just normal Dynamics. I think it continues to to primarily be be mixed as far as the, the loss ratio.

Speaker Change: Got it. Thank you.

Thank you.

Alex Scott: And our next question comes from the line of Alex Scott with Barclays. Your line is open. Hi, Alex. Good afternoon. Yeah, you mentioned tariffs and labor costs in your opening remarks.

Alex Scott: And our next question comes from the line of Alex Scott with Barclays. Your line is open.

Hi Alex. Good afternoon.

Alex Scott: Hey, good afternoon. Um,

Rob Berkley: Yeah, I just wanted to understand if you're actually seeing anything coming through, if that's more of like a forward-looking statement and I'm It is a forward-looking statement. We are not seeing it in any noteworthy way in our loss activity right now. At the same time, we're conscious of the fact that that concept of timing that I referenced in conjunction with the point that you're flagging, and we want to make sure that we're not caught flat-footed. I think at this stage, given the What we're seeing coming out of the administration, it's hard to imagine that tariffs are going to prove just to be something that goes away, but we'll see.

Speaker Change: Yeah, you mentioned tariffs and labor costs and your opening remarks, and

You know I just wanted to understand if you're actually seeing anything coming through if that's more of like a forward-looking statement and obviously just a wider range out there, it is a forward-looking statement. We are not seeing it in any noteworthy way in our loss activity right now. At the same time we're conscious of the fact of that concept of timing.

Uh, that I referenced in conjunction with the point that you're flagging. And we want to make sure that we're not caught flat-footed, I think it at this stage, uh, given the

Rob Berkley: And as far as the labor piece goes, you know, from our perspective. You know, ultimately, when the day's all done, just given the position around immigration and related activities and the actions that the administration are putting into place, there is no doubt that there are certain jobs that are going to meet need to be filled at a different payroll point than they have been. And ultimately, that presumably will drive labor costs.

Um, what we're seeing coming out of the administration, it's, it's hard to imagine that that tariffs are going to, uh, probe just to be something that goes away, but we'll see.

Speaker Change: And as far as the, the labor piece goes, you know, from our perspective,

Speaker Change: You know, ultimately when when the day is all done, just given the the position around immigration and related activities and the actions that the administration are putting into place. There is no doubt that there are certain jobs that are going to meet need to be filled at a different payroll Point than they have been. And ultimately that presumably will drive labor costs.

Rob Berkley: That don't make sense. Trajectory of Origins from here. Pricing still remaining pretty firm. Seems like you guys are being disciplined and still getting pretty good rate in there. I just want to understand.

Speaker Change: since um,

Rob Berkley: Still above the loss cost trend, can margins still improve from here or remain flat? I would expect sort of the makeshift with casualty being the bigger opportunity maybe to affect it one way or another. I think when the day's all done, we feel comfortable that the rate that we are achieving is positioning us well, not just for today, but for tomorrow as well. So can things improve here? Yeah, I think things can improve from here.

second I have is on the trajectory of margins from here. I mean, pricing still remaining pretty firm. Seems like you guys are being disciplined and still getting pretty good rate in there. But, um, just wanted to understand, you know, is is still bubbling us cost Trend can margins still improve from here or or remain flat and you know, we we expect sort of the makeshift with casualty being the bigger opportunity, maybe to uh to affect it 1 way or the other.

Speaker Change: I think when the day is all done, we we feel comfortable that the rate that we are achieving is positioning us. Well, not just for today, but for tomorrow as well.

Rob Berkley: But at the same time, we are all regularly reminded that there is no reward for declaring victory prematurely. And in addition to that, we are also regularly reminded of all of the significantly leveraged variables that one should not reach a conclusion about prematurely. Thank you.

So, can things in improve here? Yeah, I think things can, uh, improve from here. But at the same time we are all regularly. Reminded that there is no reward for declaring Victory prematurely. And in addition to that, we are also regularly reminded of all of the significantly leveraged variables, that 1 should not reach a conclusion about prematurely.

Speaker Change: Understood, thank you.

Speaker Change: Thank you.

Elyse Greenspan: And our next question comes from the line of Elyse Greenspan with Wells Fargo. Your line is open. Hi, thanks. Good evening.

And our next question comes from the line of Elise Greenspan with Wells, Fargo, your line is open.

Elyse Greenspan: My first question is actually on capital. You guys didn't buy back any shares in the quarter. Just wondering, you know, what what drove that decision?

Elise Greenspan: Hi thanks. Um good evening. Uh my first question is actually on Capital. Um you guys didn't buy back. Um any shares in the quarter just wondering um you know what? What you have that decision.

Rob Berkley: Look, ultimately, Elyse, when the day's all done, as we've shared with you and others in the past, we have a view as to how much capital we have and what type of surplus we have at any moment in time. We have a view as to what we see as opportunities potentially before us and want to make sure that we have a surplus of gas in the tank. And in addition to that, ultimately, there's a judgment made around, to the extent there's an above and beyond, what is the most efficient way to return that to shareholders?

uh, look ultimately, at least when the day is all done, uh, as we've shared with you and others in the past,

Rob Berkley: As Rich flagged in his notes, it's not that we weren't returning capital to shareholders. We returned a few hundred million dollars to shareholders. It just seemed at that moment in time that the most efficient and effective way to return the money to the people that belong was through a special dividend.

Rob Berkley: I would strongly encourage you and others not to leap to the assumption that we are out of the repurchase market, because that is not the case. We evaluate that tool along with other tools every day. And again, what we think is the most practical answer to the surplus of capital question.

Rob Berkley: Obviously, we can do our own math as others can do their math as to what we believe real book value is as opposed to this cockamamie accountant version of math. And we also have a view on the earnings power of the business going forward, which I would add we are quite optimistic about. So again, I would encourage you not to count us out of the repurchase activity. Thanks.

Elise Greenspan: Assumption that, that we are out of the repurchase Market because that is not the case we evaluate that tool along with other tools every day. Um, and again, what we think is the most practical answer to the surplus of capital question. Obviously, we can do our own math, as others can do their math. As to what we believe. Uh, real book value is as opposed to this cocking version of math and we also have a view on the earnings power of the business going forward, which I would add, we are quite optimistic about. So, again, I would encourage you not to count us out of the repurchase activity.

Richard Baio: And then my second question, you know, you guys gave the underlying loss ratios right by segment. So I back into around, I guess, 6 million adverse in insurance, and I think just around 8 million favorable and reinsurance within that 6 million in insurance. Is there anything, obviously a large amount of reserves, but anything to call out that, you know, particularly moved relative to your reserves of the quarter? Nothing particularly noteworthy just us, you know, as we've shared with you and others in the past. And we look at it every 90 days, what we're looking at every day, but every 90 days, we're looking at a pretty granular level and.

Thanks. And then my second question. Um, you know, you guys gave the underlying loss ratios right by segment. So I back into around, I guess 6 million adverse in insurance, and I think just around 8 million, favorable and reinsurance within that 6 million in insurance, is there anything? Um, obviously, a large amount of reserves, but anything to call out that, you know, particularly moved relative, um, to your reserves of the quarter.

Richard Baio: You know, a couple of bits and pieces moving around, that's.

Elise Greenspan: Nothing particularly noteworthy. It's just us you know as we've shared with you and others in the past. You know we look at it every 90 days what we're looking at every day. But every 90 days we're looking at it, a pretty granular level and you know a couple of bits and pieces moving around, that's all

Unknown Attendee: Thank you.

Elise Greenspan: Thank you.

Elise Greenspan: Thank you.

Mike Zaremski: And our next question comes from the line of Mike Zaremski with BMO Capital Markets. Your line is open. Hello, Mike. Good afternoon. Hey, good afternoon, Rob.

Speaker Change: And our next question comes from the line of Mike zrinjski with BMO Capital markets. Your line is open.

Elise Greenspan: Hello Mike. Good afternoon.

Rob Berkley: On the 15% Mitsui stake, any update on the timeframe and timeline there? I know no more than anybody else, or at least anybody else who bothered to read the SEC filing. Again, I think as we, I don't know if we shared or not, if we didn't, I should have, that we by design have not been privy to sort of where they stand in their process, because in no way, shape or form, perhaps back to one of Elyse's points, we don't want to be encumbered or restricted in any way in our ability to repurchase stuff. So the short answer is I have no idea.

Hey good afternoon Rob um um on the um 15% uh mitsui stake, any um update on the the time frame and timeline there.

Elise Greenspan: Uh, I know no more than anybody else, or at least. Anybody else who bothered to read the SEC filings? Again, I think as we, I don't know if we shared or not, if we didn't, I should have uh, that we by Design.

Um, have not been privy to sort of where they stand in their process because in no way shape or form, perhaps back to 1 of the Lisa's points. We don't want to in be encumbered or restricted in any way and our ability to repurchase stock.

Elise Greenspan: So, the short answer is I have no idea.

Rob Berkley: I have a high degree of confidence that they will fully comply with any regulation from the SEC from a filing perspective. My understanding is that I think to comply with the SEC, they're going to need to do a filing once they reach 4.99 or call it 5%. And as far as I'm aware, they have not done that yet.

Elise Greenspan: Understood but we'll we we should see disclosure once it gets it's over. I I have a high degree of confidence that they will fully comply with any regulation from the SEC from a filing perspective. I my understanding is that I think to comply with the SEC, they're going to need to do a filing once they reach uh 4.99 or call it 5%.

And it's far as I'm aware. They have not done that yet.

Rob Berkley: Got it, understood.

Mike Zaremski: Pivoting, Rob, to the medical inflation environment as it pertains to your work comp, and I believe also stop loss portfolio. You know, we are obviously seeing all the headlines that you've been seeing, you know, any, any updates that, and you mentioned California as well, obviously, earlier, but any, any kind of updates on a macro level to Berkley's views? On a medical inflation potentially making their way into the comp and or A&H arena. Well, I think it has been and continues to be something that our colleagues and, by extension, Rich, the chairman and I, are focused on.

Speaker Change: Got it. Understood, um, maybe pivoting, um, Rob to, uh, the medical inflation environment as it pertains to your, um, work comp. And, uh, I believe also stop-loss, uh, portfolio. Um, you know, we are obviously seeing all the, the headlines that you've been seeing. Um, you know, any any updates that, uh, and you mentioned California as well, obviously earlier. Um, but any, any kind of updates on a macro level to

Speaker Change: Berkeley's views on on on medical inflation, potentially making their way into the the comp uh and or ANH Arena.

Rob Berkley: And, as we've discussed, it's a very leveraged assumption. Maybe the only other wild card that I would layer on top, Mike, is the commentary that has come out of the administration regarding its desire to onshore pharmaceutical, in particular, manufacturing. And I think it was just a couple of weeks ago that there was a comment that came from the president that suggested he was entertaining the possibility of a 200 percent tariff on all pharmaceuticals that are imported. That having been said, I just read earlier today that the discussions with the EU would suggest there would be no tariffs on pharmaceuticals or medical devices.

Speaker Change: Well I I think it, it has been and continues to be something that uh our colleagues and by extension uh Rich. Uh the chairman and I are are focused on. Um and you know, as we've discussed it's a very leveraged assumption. Maybe the only other

Rob Berkley: So, you know, I think for all of us, the message, perhaps, is just stay tuned. But, without a doubt, if we saw a levy to the tune of 200 percent on pharmaceuticals, that's something that would have an impact. And, perhaps, to jump ahead and anticipate your question, yes, we have done quite a bit of sensitivity analysis as to what that would mean for us. And, at the moment, we feel comfortable that we can manage through that.

Uh, anticipate your question. Yes, we have done quite a bit of sensitivity analysis as to what that would mean for us. And at the moment, we feel comfortable that we can manage through that.

Rob Berkley: Okay, that's helpful.

Richard Baio: And lastly, Rich, I believe I heard you talk about the new operating earnings, non-GAAP definition. Any, just, we'll go back and check, but does that change historicals by like very low single digits? And any, any reasoning we should be aware of and why the change? I think it's really a couple of things.

Speaker Change: Okay, that's that's helpful. And um and lastly um uh rich. I believe I heard you talk about the new operating uh earnings non-cap definition. Any just uh we'll go back and check but does that change historicals by like very low single digits. And, and, and any any reasoning, we we should be aware of on on why they change.

Richard Baio: One, what we've noticed, and we've had some conversations with some of the equity analysts over the last few quarters in terms of some of the volatility that's been coming about as a result of some of the changes that Rob has alluded to since the new administration, And with the equity analyst not really including it because it's not modeled in, we felt it was a more straightforward approach with regards to. foreign currency gains and losses excluded. And you would see if you were to go back over time, there has been some volatility from period to period, but in particular over the Thank you.

Speaker Change: I think it's really a couple things 1, what we've noticed and we've had some conversations with some of the equity analysts over the last few quarters. In terms of some of the volatility that's been coming about as a result of. Uh some of the changes that Rob is alluded to since the new Administration and with the equity analysts, not really including it because it's not modeled in. We felt it was a more straightforward approach with regards to um, having a foreign currency gains and losses excluded. And you would see if you were to go back over time, there has been some volatility from period to period, but in particular, over the last, uh, couple quarters. Um, we've seen quite a bit.

Thank you.

Speaker Change: You're welcome.

Andrew Kligerman: And our next question comes from the line of Andrew Kligerman with TD Cowan. Your line is open. All right, good afternoon. How are you? So, um, Rob, you, you mentioned in the write up, rate increases were 7.6% x workers comp. And I know that you're kind of writing a more specialized higher risk line. So I was just kind of curious, how is the workers comp pricing doing in that arena and any other color on the workers comp.

Speaker Change: And our next question comes from the line of Andrew kleger with TD. Cowen, your line is open.

Rob Berkley: In addition to your prepared remarks, you might call out Well, thanks for the question, Andrew. The answer is that I think what you perhaps are referring to is some of the higher hazard stuff where we see growth opportunities from time to time. We saw particularly in the first quarter, it was still there in the second quarter, but perhaps not to the same degree. That having been said, we do like the pricing there, and that's why we're leaning into it. And while we maintain a little bit more of a defensive posture with the main street stuff, what I would define as the higher hazard, more specialty in nature, we're very pleased with the opportunities that we see.

Andrew Kleger: How are you? So, um, rob you, you mentioned in the write up. Um, rate increases were 7.6% X workers comp and I know that your kind of writing a more specialized higher risk line. So I was just kind of curious, uh, how is the workers comp pricing, uh, doing in that Arena and any other color on the workers comp? Uh, in addition to your prepared remarks, uh, you might call out

Andrew Kleger: Uh well uh thanks for the, the question Andrew. Uh, the the answer is that, I think what you perhaps were referring to is some of the higher Hazard stuff, where we see uh growth opportunities from time to time. We saw a particularly uh, in the the first quarter, it was still there in the second quarter but perhaps not to the same street.

Andrew Kleger: Uh, that having been said we we do like the pricing there uh and that's why we're leaning into it and while we maintain a little bit more of a defensive posture with the Main Street stuff, the what I would Define as the higher Hazard more specialty in nature. We're we're very pleased with the opportunities that that we see there.

Rob Berkley: Got it.

Rob Berkley: And you, Rob, you mentioned in your remarks some some disappointment with commercial auto. As I look at the numbers in your release, net written freemium looked up, it looked like it was up roughly 10%. So is that all just rate? And you're just are you feeling confident in the book that you have? Yes, we're confident in the book. And is it right? The answer is yes, and then some. I see. Okay. Thanks a lot. Sure. Thanks for the question.

Speaker Change: Got it and you rob you you mentioned in your remarks some some disappointment with uh Commercial Auto. Um as I look at the the numbers in your release. Um net written framing. Looked up. It looked like it was up roughly 10%.

So is that all just raised and and and you just are you feeling confident in the book that you have?

Speaker Change: Yes, we're confident in the book. Uh, and as far is it rate, the answer is yes. And, and then some

I see. Okay, thanks a lot.

Sure.

Speaker Change: Thanks for the question.

Mark Hughes: And our next question comes from the line of Mark Hughes with Truist. Your line is open. Hello, Mark. Good afternoon. Yeah, thank you. Hello, Rob. Hello, Rich. On the other liability line, the growth was just a little bit slower this quarter. You expressed some kind of continuing optimism about primary and excess. At the same time, you kind of dialed back your growth outlook just a little bit. Are you seeing any kind of inflection in that core? G. L. or access market or is that still Yeah, we're still encouraged by the opportunity that we see there.

Speaker Change: And our next question comes from the line of Mark Hughes with truist. Your line is open.

Hello Mark. Good afternoon. Yeah. Thank you.

Hello Rob. Um, hello rich.

Speaker Change: On the other liability line, the uh growth was just a little bit slower this quarter. You expect expressed some kind of continuing optimism about primary and excess

Speaker Change: Um at the same time you kind of dialed back your growth Outlook just a little bit. Are you seeing any kind of inflection in that core?

Speaker Change: uh, GL or excess Market or is that the still

Speaker Change: Consistent with prior, a couple of quarters.

Rob Berkley: So, you know, my recalibrating, if you will, as far as the growth opportunity is really a couple of fold. One, the commercial property opportunity, I think that, you know, there's going to be a bit more of a headwind. I think the I think that the casualty piece that you just referred to, I think that opportunity very much remains there. I also think just going back to the commercial auto piece, I think that that will prove to be a terrific opportunity, but it's going to take a little bit longer to get there.

Speaker Change: Yeah, we're still uh, encouraged by the opportunity that that we see there. So, you know, my recalibrating if you will, as far as the growth opportunity is really a couple of fold 1 on the commercial property opportunity. I think that, you know, there's going to be a bit more of a headwind I think the

Rob Berkley: On the other hand, I think that the reinsurance front property in particular has probably seen its best day for some time, and for the life of me, I don't understand why the casualty marketplace isn't getting a little more backbone. Yeah, on the NGAs that are knocking on your door. Is that always a hard no? Or is that something you might consider if the valuation was right? Or are they just their expectations are above and beyond what you'd ever You know, ultimately, when the day is all done, we evaluate every opportunity as you'd expect on it on its own merit.

Speaker Change: I think that on the the um reinsurance front property uh in particular has probably seen its best day for some time and for the life of me, I don't understand why the casualty Marketplace isn't getting a little more backbone.

Speaker Change: Yeah, on the uh, MGA that are knocking on your door.

Speaker Change: Is that always a hard? No. Or is that something you might consider if the valuation was right? Or are they just their expectations or above and beyond which it ever considered pain?

Speaker Change: You know, ultimately when the day is all done, we evaluate every opportunity as you'd expect on a on its own Merit.

Rob Berkley: That having been said, you know, we we take the expertise and the responsibility to capital very both of those things very seriously. So while we're always open to conversations, it's a pretty high hurdle to truly get us to want to engage.

Uh that having been said that we we take uh the expertise and the responsibility to capital V, both of those things, very seriously.

Speaker Change: Uh, so while we're always open to conversations, it's a pretty high hurdle to truly get us to want to engage.

Speaker Change: Thank you.

Speaker Change: Thank you.

David Motemaden: And our next question comes from the line of David Motemaden with Evercore ISI, your line is open. Hi, David. Good afternoon. Hey, Rob, good afternoon. Just a just follow up question, maybe there to Mark's question. You had mentioned the bifurcated property market between large and small, or large and small and middle, maybe we'll call it SMID.

Speaker Change: And our next question comes from the line of David multi Madden with evercore isi. Your line is open.

David: Hi David. Good afternoon.

Hey Rob, good afternoon. Um

Rob Berkley: Do you see that dynamic going in the opposite direction in some of the other markets, like casualty, where maybe large accounts are seeing some rate increase acceleration, and that's yet to really seep down and play out in the small to middle market, or, you know, just hoping to get some color there in terms of how you're thinking about the opportunity? Okay, I think Taking a half a step back, focusing on the casualty stuff, both primary and excess, I think the reality is that social inflation impacts the full spectrum. That having been said, without a doubt, plaintiff attorneys tend to view limits as candy, and so the bigger the limits that are available, the more focus they get.

Just, uh, just follow up question, may maybe there to to Mark's question. Um, you had mentioned, the bifurcated property Market between large and and small or large and small middle. Maybe we'll call it smid. Um, do you see that Dynamic going in the opposite direction? In some of the other markets like casualty where maybe large accounts are seeing some rate increase acceleration and that's yet to really sit down and play out in the small to Middle Market? Or, um, you know, just hoping to get some color there in terms of how you're thinking about the opportunity.

Look, I, I think, um,

David: Taking a half a step back focusing on the the, uh, casualty stuff, both primary and excess. I think the reality is that social inflation. Um,

Rob Berkley: That has been the case for some number of years at this stage. Do I think that we have seen an effort amongst the plaintiff attorney to go a little bit down market? Yeah, I do, but not dramatically. So when the day is all done, I think my expectation is that you're going to continue to see opportunities over the larger end of town, and that will continue to really waterfall through the whole casualty marketplace. The good news is for the smaller accounts, they tend to be a little bit more insulated, and the rate environment tends to be a little bit more sticky.

David: Impacts the full spectrum that having been said, without a doubt plaintiff's, attorneys tend to view limits as candy. And so, the bigger the limits that are available, the more focused they get

Rob Berkley: So similar to perhaps one of the points you were making, the property market, the larger accounts are the ones that get targeted, and you get the greatest feeding frenzy around early on. Well, that applies to casualty, too. So the rates are going up on the larger accounts and casualty, but the smaller and middle market is following, and it tends to be stickier.

David: That has been the case for some number of years at this stage. Do I think that we have seen an effort amongst the plaintiff attorney to go a little bit down Market? Yeah, I I do but not dramatically. So when the day is all done, I think my expectation is that you're going to continue to see opportunities of the the larger end of town and that will continue to um really waterfall through the whole casualty Marketplace. The good news is for the smaller accounts. They tend to be a little bit more insulated and the rate environment tends to be a little bit more sticky. So similar to perhaps 1 of the points, you were making the property Market, the larger accounts are the ones that get targeted. And you get the greatest Feeding Frenzy around early on, well, that applies to casualty too. So the rates are going up on the larger accounts and Casualty. Um, but the smaller and middle

David: markets is following and attends to be stickier.

Rob Berkley: Got it. Thanks.

Rob Berkley: And then maybe just to follow up here, just on the tariffs, you know, at least on the insurance side, didn't really look like there was anything going on in terms of the loss pick, reinsurance, the underlying loss ratio did pick up. It doesn't look like you guys have embedded that into your view of a loss trend. Maybe just, you know, how are you thinking about that? And, you know, is that something you guys are considering doing? It's certainly something that we're grappling with. We are paying close attention to it. We are already factoring it into how we think about required rate or rate need, and we're going to see how it unfolds from here.

Speaker Change: Got it. Thanks. Um,

And then, uh, maybe just, uh, just to follow up here just on the tariffs. Um, you know, at least on the insurance side, didn't really look like there was anything going on in terms of the loss, pick reinsurance, um, the underlying loss ratio did take up, um, it doesn't look like you guys have embedded that into your view of lost Trend. Um, maybe just, um, you know, how are you?

Thinking about that and and you know, is that something you guys are considering doing?

Rob Berkley: Obviously, the impact of tariffs, while it may have applied to a broader cross-section of product, it is heavily weighted towards the shorter tail lines, so APD or property. At least that's how it would appear today, barring pharma, et cetera, that we referred to earlier. So, that's where we're focused, and we'll see how it unfolds, but yes, it is top of mind, and action is being taken from a pricing perspective. Understood. Thank you. Thanks for the question.

Speaker Change: It's certainly Something That We're grappling with. We are paying close attention to it. We are already factoring it into how we think about required rate or, or rate need. And we're going to see how it unfolds from here, obviously, uh, the impact of, um, tariffs. While it may have applied to a broader, cross-section of product. It is heavily weighted towards a shorter tail line, so APD, uh, or or property at least, that's how it would appear today. Barring, you know, Pharma ETA that we referred to earlier. So that that's where we're focused and we'll, we'll see how it unfolds. But but yes it is, uh, top of mind and action is being taken from a pricing perspective.

Speaker Change: Understood, thank you.

Thanks for the question.

Wes Carmichael: And our next question comes from the line of Wes Carmichael with Autonomous Research. Your line is open. Hey, thank you. Good evening. Good afternoon. On the investments portfolio, I think, Rob, in your prepared remarks, you mentioned some moving pieces in terms of what you may do going forward. In thought, I heard you extended duration a little bit, but is there anything else that you might be thinking about in terms of potential repositioning or other actions on the portfolio? I think we generally are of the view that the fixed income portfolio is particularly well-positioned. I think that our expectation is certainly, given what you hear coming out of Washington, the yield curve may steepen a little bit from here, and that may be a catalyst or an opportunity where we'll choose to take the duration out a little bit further, perhaps answering the question with a slightly different bent, consistent with messaging in the past.

Speaker Change: Kind of West Carmichael with autonomous research, your line is open.

Hey, thank you. Good evening.

Speaker Change: Good afternoon on on the Investments portfolio. I think, Rob and your prepared remarks, you mentioned some moving pieces, in terms of what you may do going forward. Um and so I heard you extended duration a little bit, but is there anything else uh that you might be thinking about in terms of potential repositioning or other actions on the portfolio?

Rob Berkley: While we have not completely turned our back to the alternative space going forward from a new money perspective, given the opportunities in the fixed income market, it's a pretty high hurdle.

Rob Berkley: So we're pretty pleased with how things are positioned today, and we think we have a lot of flexibility, regardless of what tomorrow will bring. Got it understood.

Speaker Change: I think we we generally, uh, are of the view that the the fixed income portfolio is particularly well, positioned. I think that our expectation is certainly given what you hear coming out of Washington, uh, the yield curve, may steepen a little bit from here and that may be a catalyst or an opportunity where we'll choose to take the duration out a little bit further. Uh perhaps answering the question with a slightly different bent, uh consistent with messaging in the past. Uh, while we have not completely turned our back to the alternative space going forward from a new money perspective. Uh, given the opportunities in the fixed income Market, it's a pretty high hurdle.

So we're we're pretty pleased with how things are positioned today and we think we have a lot of flexibility regardless of what tomorrow will bring.

Rob Berkley: Um, and maybe my follow up just to come back to property. And Rob, you talked about larger shared and layered property being more competitive. But when you kind of look at the market today, obviously, there's a little bit more rate pressure there and property, but any color you can share on your view of rate adequacy of the market at this point, I think, generally speaking, it's, you know, it, it really took off to the moon. And I think it's still in a good place. And we're happy to write it, but we are being forced to be R.

Speaker Change: Got it understood. Um, and maybe my follow-up just to come back to to property and Robbie talked about larger shared and layered property being more competitive. But when you kind of look at the market today, obviously there's a little bit more rate pressure there and property but any any color you can share on your view of rate adequacy of the market at this point?

Speaker Change: I think generally speaking, it's, you know, it it really took off to the moon and I think it's still in a good place and we're happy to write it, but we are being forced to be.

Rob Berkley: Berkley Corp. position the portfolio in anticipation of what tomorrow's conditions So, yes, I think the larger accounts, the shared and layered accounts, you're seeing more competition there. You're seeing a bit more of a feeding frenzy. By and large, we're still happy with the pricing, but that will not be indefinite, and we have no problem when we don't think that the rate is adequate to walk away.

Speaker Change: Even very very selective and careful. And I think you know, it's not just about where it is today, it's also where you see it going tomorrow and our colleagues are yes writing business today, but they're also trying to position the portfolio and anticipation of what tomorrow's conditions will be.

Speaker Change: So yes, I think that the larger accounts the shared and layered accounts, you're seeing more competition there, you're seeing a bit more of a Feeding Frenzy.

Speaker Change: By and large, we're still happy with the pricing, but that will not be indefinite and we have no problem. When we don't think that the rate is adequate to walk away.

Rob Berkley: Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES I should add those comments around market conditions, again, are very much focused on the commercial lines marketplace. On the private client stuff, we continue to be pleased with, by and large, the opportunities before us.

Speaker Change: And we will be there when the opportunity presents itself again. As we have been in the past,

thank you.

I should add those comments around market conditions. Again, are very much focused on the the commercial lines Marketplace on the uh Private Client stuff. We continue to be pleased with by and large the opportunities before us.

Ryan Tunis: And our next question comes from the line of Ryan Tunis with Cantor Fitzgerald. Evening, guys. All right, I guess just keeping it on the keeping it on the property discussion, Rob.

And our next question comes from the line of Ryan Tunis with Cantor Fitzgerald, your line is open.

Speaker Change: Evening guys.

Speaker Change: Um, I guess just keeping all the keeping it on the property discussion Rob. Um,

Rob Berkley: That's kind of a broad question. But why are we why are we still seeing better growth and in the property lines and the other liability given given your I think a lot of the property growth. is really coming from, well, A, as I said a moment ago, we still think that there's opportunity there. So just because rates are down doesn't mean you don't want to write the business. I think the other piece that is worth noting is our private client business that I referred to before, or said differently, iNetwork Personalized Business, and that is a contributor there as well.

Just kind of a broad question. But why are we? Why are we still seeing better growth in in the property lines and the other liability, given given your assessment of things.

Speaker Change: I think a lot of the property growth is

Is really coming from? Um, well, a, we, as I said, a moment ago, we still think that there's opportunity there. So just because rates are down, doesn't mean you don't want to write the business. I think the other piece, uh, that is worth, uh, noting is our Private Client business that I referred to before or said differently. High net worth personal lines business, uh, and that is a contributor there as well.

Rob Berkley: Got it.

Richard Baio: And then just maybe a more detailed one, maybe for Rich, but the corporate costs or the Well, I don't know what you guys call them all their costs and expenses that picked up this quarter. Are we at a new type of run rate there or were there some new launches or? I'm just curious what's going on. Yes, it's up really Ryan for a couple of reasons. One is with regards to Special Dividend that we paid in the second quarter. As it relates to that dividend, it comes through on vested, mandatorily deferred, R.S. So effectively, it characterizes compensation.

Speaker Change: got it, and then just, uh, I guess a little, maybe a more detailed 1, maybe for rich but uh, the corporate costs or the

Speaker Change: I I don't know what you guys call them other costs and expenses that picked up this quarter.

um, are we at a new type of run rate there, or were there, some new launches, or

Speaker Change: Just curious, what's going on with that?

Speaker Change: yeah, it's it's up really Ryan for a couple reasons, 1 is uh, with regards to the

Richard Baio: So that is a meaningful contributor. current quarter, so that would obviously move around. Special Dividend. And then the second is you might have seen that we had an New Operations, Embedded Solutions, India Brand Similar to what we've done in the past, those expenses when they're in the incubation stage are reflected in our corporate expenses.

Speaker Change: That uh we had announced um a few quarters ago to new operations, our embedded Solutions, and our India branch.

Unknown Attendee: https://www.youtube.com.uk will move that out of corporate. Understood, thanks.

Similar to what we've done in the past those expenses, when they're in the incubation stage are reflected in our corporate expenses and then when they get to some relative size in terms of generation of Premium, we'll move that out of corporate expense on a prospective basis and that would be reflected in our underwriting results.

Speaker Change: Understood. Thanks.

Speaker Change: You're welcome.

Josh Shanker: And our next question comes from the line of Josh Shanker with Bank of America. Your line is open. Good evening, everybody. Evening. Hello.

Speaker Change: And our next question comes from the line of Josh chancre with Bank of America. You can write this open

Rob Berkley: So, Robin, your prepared remarks, it was almost like a throwaway. The last thing you mentioned was being really displeased with the direction of trend in casualty reinsurance markets. And, you know, from my perspective, a lot of casualty reinsurance is just quota share that the underlying risk sets the pricing. And then you have some question about what's going to be the seeding commission. But obviously there's XOL and, you know, some facultative and other types of business that obviously have a set price. Can you go a little into what you meant about being disappointed in the trends on the casualty reinsurance direction?

Rob Berkley: Yeah, absolutely, Josh. Thanks for flagging that. So long story short, and I should have been more specific about it, the thorn in the side is primarily the seeding commissions where we just think that the reinsurance marketplace, when we're playing the assumed game, should be looking for better terms. Obviously we have a different view when we're seeding the business, but that is what I was referring to. In addition to that, just less consequential as far as percent of the marketplace, or for that matter, percent of our portfolio, we've found that the CASFAC market is one where we would have hoped to have seen a bit more discipline at this stage.

Good evening, everybody. Good evening, hello. So Robin, you're prepared remarks. It was almost like a throwaway. The last thing you mentioned was being really displeased with the direction of Trend in a casualty, reinsurance markets. And you know, from my perspective, a lot of cash, reinsurance is uh just quote a share that the underlying risk sets the pricing. And then you have some question about what's going to be the seating commission. But obviously there's X so, well, in the, in, in in, you know, some facultative and other types of business that obviously has a set price. Can you go a little into, uh, what you meant about the being disappointed in the Trends on the cash Insurance Direction? Yeah. Absolutely Josh. Thanks for for flagging. That so long story short, and I should have been more specific about it. They

Speaker Change: The thorn in the side is primarily the the seating commissions where we just think that the reinsurance marketplace.

Rob Berkley: By the way, mapping back to some of the other comments, particularly around the commercial auto sector. I just want to say, on the seeding commissions, you're talking about that the seeding commissions are too low in your primary book when you're trying to seed or they're too high in your interim book? The seeding commissions are too low when we're assuming the business, and I'm saying from a self-serving perspective, we'd like them to be lower when we're seeding the business or an interim. Oh, yeah, okay, that makes sense. Yes, we would like our cake to eat it too, Josh.

When we're playing the assumed game, uh, should be, uh, looking for better terms. Obviously, we have a different view when we're seating the business, but that, that is what I was referring to, in addition to that just uh less uh, consequential as far as uh percent of the marketplace or for that matter percent of our portfolio. We've found that the the cash back Market uh is 1 where we would have hoped to have seen a bit more discipline uh at this stage uh by the way, mapping back to some of the other comments particularly around the commercial Auto space.

Rob Berkley: Yep, I get it, I get it.

Josh Shanker: And then, if I go back three years ago when the 10-year was sub-2%, and now we're at one where it's trying to get above 5%, and there may be some griping about where prices are in various markets, but I assume in an efficient market, the price of yields on investment should have some impact on the underwriter's ability to make money on the underwriting. When we say we don't like the direction of pricing, is pricing much worse? Because there's definitely, for the market and certainly you as well, you're making a whole lot more money on the investment.

Speaker Change: And I just think on, on on, on the seating commissions, that's you're talking about to the scene. Commissions are too low in your primary book when you were when you were trying to seed or they're too high because your meet the seating commissions are too low. When we're assuming the business and I'm saying uh from a self-serving perspective, we'd like them to be lower when we're seating the business or an insurance. Oh yeah okay. Does that make sense? And then yes, we would like our uh, take into either 2 jobs. Yep. I I I get it, I get it. And, and then trying to, you know, if I go back, you know, 3 years ago when uh the 10 year was uh sub 2%. And now we're at like 1, we're

Rob Berkley: So, to what extent is it reflective of just a different investment paradigm? So, Josh, I very much appreciate the point. And clearly, there is an economic model here and there is a relationship between investment income and underwriting profit and how it all comes together to deliver an outcome. That having been said, let's understand that perhaps the most competitive part of the market is in some of the shorter tail lines, i.e. property, where investment income is making the most modest contribution. So, do I think that there is an impact? Yes. Do I think that that is going to take us back to the world of cash flow underwriting?

It's trying to get about 5% in and uh, there may be some griping about where prices are in various markets, but I assume in an efficient market, the, uh, price of, uh, yields on investments. Should have some impact on the underwriters ability to make money on the underwriting. Uh, when when we say, we don't like the direction of pricing is is pricing much worse because there's definitely for the market and certainly you as well, you're making a whole lot more money on the investment income.

Speaker Change: So what is it? Reflective of just a different investment paragraph. So Josh, I very much appreciate the point uh, that have a and clearly there is an economic model here and there is a relationship between investment income and underwriting profit and how it all comes together to deliver an outcome. That having been said, let's understand that. Perhaps, the most competitive part of the market is in some of the shorter tail lines. IE property. Where investment income is making the most modest contribution.

Rob Berkley: No, sir, I do not think so.

Speaker Change: Uh, so do I think that there is an impact? Yes, do I think that that is going to take us back to the world of cash flow underwriting? No, sir. I do not

Unknown Attendee: Okay, thank you very much for all the Thank you, Josh. Have a good evening. Thank you.

Speaker Change: Okay, thank you very much for all the answers.

Unknown Attendee: You too.

Thank you, Josh. Have a good evening.

Brian Meredith: End And our next question comes from the line of Brian Meredith with UBS. Your line is open. Hey Brian. Hey thanks. Hey Rob. Evening.

You too.

Speaker Change: Ryan Meredith with UBS, your line is open.

Rob Berkley: So Rob, I'm wondering if you could talk a little bit about what the competitive dynamics are like right now in the private client business. Are there more opportunities there because maybe some players are pulling back or are we seeing any more competition at Marketplace? I think that certainly there are some, you know, the obvious names participating in the I think each organization or competitor has their own approach to the business. I think there are some that are primarily riding the coattails of a brand that they have, and I think there are others like ourselves that are really through the expertise of people and our team bringing value that's very visible to both distribution and insured.

Hey Brian. Thanks. Hey, Rob evening. So Rob. I wonder if you could talk a little bit about what the competitive Dynamics are like right now in the Private Client business or are there more opportunities there because maybe some players are pulling back or are we seeing any more competition at Marketplace?

Speaker Change: Uh,

Speaker Change: I think that certainly there are some yeah I'll say the obvious names participating in, in the space.

Rob Berkley: So, when the day is all done, why are we getting the traction we are? Because we certainly are not the cheapest, but I would argue we're the best value.

Organization or competitor as their own approach to the business. I think there are some that are primarily riding the coattails of the brands that they have. And I think there are others like ourselves that are really through the expertise of of people, and our team, uh, bringing value, that's very visible to both distribution and insured.

Speaker Change: So when the day is all done, why are we getting the traction? We are because

We certainly are not the cheapest, but I would argue, we're the best value.

Rob Berkley: Second question, just curious, the underlying combined ratio mentioned in the reinsurance, it looked like it's kind of elevated relative to where it's been the last couple of years. Is there anything unusual going on in the quarter catch up or something that happened? R. Berkley Corp Not particular. I think it's really two things just tying in with the comments earlier. Partly it ties in with my bitching about seating commissions and also ties in with the comments around property rates and where they are. And the fact is that the reinsurance market's not charging as much for property or for that matter, property gaps in particular today as it did yesterday.

Speaker Change: Makes sense. Thanks, and then second question, just curious the underlying combined ratio mentioned in the, uh, reinsurance. It looked like it's it's kind of elevated relatives where it's been the last couple of years. Is there anything unusual going on in the quarter um, catch up or something to happen?

Speaker Change: Not particular, I think it's really 2. Things just tying in with the comments earlier partly, it ties in with my bitching about seating commissions and

Rob Berkley: So on both of those fronts, when we think about the changes, our colleagues are reacting to that in what we believe is a very thoughtful manner.

Uh, also ties in with the comments around property, uh, rates and where they are, and the fact is that, the reinsurance Market's not charging as much for property or for that matter property again, in particular today is it did yesterday. So on both of those fronts when we think about the changes our, our colleagues are

Unknown Attendee: Great. Thanks. Thank you.

Speaker Change: Reacting to that and what we believe is a very thoughtful manner.

Speaker Change: Great, thanks.

Speaker Change: Thank you.

Meyer Shields: And our next question comes from the line of Meyer Shields with KBW. Your line is open. Hi, Meyer. Good afternoon, or evening, rather. Hi, Rob. Yeah. Excuse me. I'm sorry.

Speaker Change: And our next question comes from the line of Mayor Shields with KBW, your line is open.

Rob Berkley: Two, I think, quick questions. First of all, among your clients, are you seeing increasing demand for higher limits on the various casualty lines policies? Are we seeing increasing demand from our clients?

Hi Mark. Good afternoon, or evening, rather. Hi Rob. Um yeah, excuse me, I'm sorry. Uh 2, I think 1 questions, first of all among your clients, are you seeing increasing demand for higher limits on the various cases of the lines policies?

Rob Berkley: I think that ultimately – are we talking about larger or smaller accounts, just to make sure I'm following there? Sorry. I actually, I will see you in the smaller one. You were thinking of the smaller one. Not consequentially. You know, they are still looking to buy the typical primary and oftentimes if they're looking to buy the same umbrella. So said differently, I'm not sure that the insured, or for that matter, their distribution is directing them to think about their exposure in a materially different manner than they did yesterday in spite of social inflation.

Um are we seeing increasing demand from our clients? I think that ultimately are we talking about larger or smaller accounts? Just to make sure I'm following their sorry.

I actually I wasn't in the smaller ones.

Speaker Change: You were thinking of the smaller ones.

Rob Berkley: It's just not something that the smaller accounts are thinking about as much as the larger accounts are. I think for given the rate increases that have come about in response to social inflation amongst other things, I think you have a lot of insureds out there trying to think about not just what do they need, but also what can they afford? And I know you were talking about this sort of Main Street casualty, but I would suggest to you that that is perhaps particularly visible in the commercial auto space, where a product line where you're seeing perhaps, or arguably, the greatest level of social inflation, consequently, significant rate need being pushed and more probably to come.

Speaker Change: Um yes not not not consequentially you know, they are still looking to buy the typical primary and often times if they're looking to buy the the the same umbrella, so said differently, I'm not sure that the insured or for that matter. Their distribution is directing them to think about their exposure in a materially different manner than they did yesterday in spite of social inflation.

Speaker Change: it's just not something that the smaller accounts are thinking about as much as the larger accounts are

I think for given the rate increases that have come about in response to social inflation, amongst other things,

Speaker Change: I think you have a lot of insureds out there trying to think about not just what do they need. But also what can they afford? And I know you were talking about this sort of Main Street casualty, but I would suggest to you that that is perhaps

Rob Berkley: And you have insureds sitting there saying, I don't know if I can afford this. I don't know how I make my economic model work. And sometimes you have insureds that are sitting there saying, I'll buy the primary, but the excess that I used to buy, maybe I'll buy less, or maybe I'll have to fix self insure, which, you know, sadly, is a big rolling of the dice.

Particularly visible in the commercial Auto space where a product line, where you've seen perhaps or arguably the greatest level of social inflation. Consequently significant rate need, uh, being pushed and more probably to come. And you have ensured sitting there saying, I I don't know if I can afford this, I don't know how I make my economic model work, and sometimes you have ensured that are sitting there saying, I'll buy the primary, but the excess that I used to buy, maybe I'll buy less or maybe I'll have to fix self-insure which, you know, sadly is a big rolling of the dice.

Rob Berkley: Okay, yeah, that's very helpful. I just wanted to get a sense of that.

Rob Berkley: Second question, you talked about the lost cost increase that was approved in California. When you look at California's workers' compensation market, is that a good proxy or leading indicator for the country? Historically, if you look back over cycles, California has been a laggard as opposed to a leader. As we've suggested, I think for probably A while now, our view was that California was out in front as far as a firming market. Do I think it is a perfect proxy for the rest of the country? No, sir, I don't. I think California is, you know, definitely a unique animal.

Okay. Yeah, that's very helpful. I just wanted to get a sense of that. Um, second question.

Speaker Change: you talked about the, um,

The Lost off increase that was approved in California. When you look at California workers compensation Market, is that a good proxy or leading indicator for those of the country?

Speaker Change: Uh historically, if you look back over Cycles, California has been a lagard as opposed to a leader.

Rob Berkley: That having been said, I would offer the observation that if you've got a product line's rate enough, Eventually, it ends badly. In addition to that, as some colleagues were flagging earlier, and I think we all have an appreciation for, is that medical trend is not working in the workers' comp market's favor. And I think also, as we've discussed, in our opinion, there's a pinch point or it's been artificially held back or suppressed because of how it prices off of Medicare, I believe it is, in many states. So what do I think? I think that the California response is Warranted and then some.

Speaker Change: As we've suggested, I think, for probably a while. Now, our view was a California was out in front, as far as a a affirming Market do. I think it is a perfect proxy for the rest of the country. Uh no sir, I don't, I think California is, you know, definitely a unique animal that having been said

Speaker Change: Signs rate enough.

Speaker Change: Eventually it ends badly.

Speaker Change: In addition to that, as some colleagues were flagging earlier, and I think we are all have an appreciation for is that medical trend.

Is not working in the workers comp markets favor.

Speaker Change: And I think also as we've discussed in our opinion, there's a pinch point or it's been artificially held back or suppressed because of how it prices off of uh Medicare I believe it is in many states. So what do I think? I think that the California response is

Rob Berkley: And I don't think it's a perfect indicator for the rest of the country, but it is an indicator that ultimately, if you take enough rate out of it, eventually it ends badly and response is required.

Speaker Change: warranted and then some and I don't think it's a perfect indicator for the rest of the country. But it is an indicator that ultimately if you take enough rate out of it.

Speaker Change: Eventually, it ends badly and responses required.

Unknown Attendee: That's very helpful. Thank you so much. Thank you.

Speaker Change: That it's very helpful. Thank you so much.

Thank you.

Andrew Andersen: And our next question comes from the line of Andrew Andersen with Jeffreys. Your line is open. Hi, Andrew. Good evening. Hey, hey, good evening.

Speaker Change: And our next question comes from the line of Andrew Anderson with Jeffrey's your line is open.

Andrew Andersen: Maybe just on on the DNO market. Can you remind us, do you guys focus more on the public or the private end? And I guess where I'm going with this is this kind of a rebounding M&A and IPO market provides some upside for premium growth here. So the answer is all of the above. And certainly IPO activity would be well received. And I guess all we need to do is get the SPAC market going again, and then we can have a party. Fair enough.

Speaker Change: Hey, Andrew, good evening. Hey hey, good evening. Um, maybe just on on the dno market. Um Q remind us. Do you guys focus more on the public or or the private and and I guess where I'm going with this, is this kind of a rebounding m&a and IPO, uh, Market provide some upside for premium growth here.

Speaker Change: Uh, so the answer is, uh, all of the above and certainly IPO activity, would be well received and I guess all we need to do is get a SPAC Market going again. And then we can, uh, have a party.

Unknown Attendee: Okay.

Rob Berkley: And then short tail lines within insurance, you know, heard your comments on the high net worth homeowners, but would be interested because there's a few other lines in kind of what you're seeing within A&H or Inland Marine. From our perspective, A&H continues to be an attractive part of our business. We participate in that marketplace in a couple of different ways, and I don't want to bore everyone on the call with it, but if you have interest, we're happy to follow up offline. As far as the inland marine piece, by and large, that tends to run semi, I wouldn't say in perfect lockstep, but is on a similar course to the broader property market.

Speaker Change: Fair enough. Okay, um, and then short tail Lines within Insurance. You know, her heard your comments on the high, net worth homeowners, but would be interested because there's a few other lines in their kind of what you're seeing within A&H or Inland Marine.

From our perspective A&H, uh, continues to be an attractive part of our business. Uh, we participate in that Marketplace and a couple of different ways and I don't want to bore everyone on the call with it, but if you have interest, um, we're happy to follow up offline.

Uh as far as the inland marine piece buy and and large that tends to run semi, uh I wouldn't say imperfect lock step but is on a a similar course to the broader property Market.

Rob Berkley: Thank you.

Speaker Change: Thank you.

Jamie Inglis: And our next question comes from the line of Jamie Inglis with Fargo Smith. Your line is open. Hey, Jamie. What a pleasant surprise, how are you? Good. Good evening.

Speaker Change: And our next question comes from the line of Jamie Inglis with 50 Smith. Your line is open.

Rob Berkley: Um, Rob, I was curious that about your thoughts about risk adjusted return. You mentioned it a couple times. You always do. But the question is, how often and when and how do you change your view about risk as R.

Speaker Change: Hey Danny. What a pleasant surprise? How are you? I'm good. Good evening. Um Baba I was

Speaker Change: Curious that about your thoughts about risk, adjusted return. You mentioned it a couple times. You you always do.

but the question is, is

Speaker Change: how often and when and and and how do you change your view about risk as

Rob Berkley: Berkley Corp The way I would articulate it, and then others on my end of the phone might have a view, because this is, well, Rich may have a thought, but my boss may have a thought as well, because, you know, this is very much a philosophical thing that goes back to day one, when two sticks together to make fire. But long story short is that we are very preoccupied with this, and colleagues throughout the organization are talking about it daily. We have a fair amount of visibility every 30 days, and we have a painfully granular discussion about it by business, by product line, every 90 days.

Speaker Change: By line. And therefore, how does that affect the return? Do you know what I mean? It's like, is it a monthly daily annual things, the world's changing fairly rapidly today? And therefore, I would assume that the underlying risks are changing as well.

Speaker Change: Uh, the way I would articulate it and then others on my end of the phone might have a a a view because this is uh well Rich may have a thought but my boss may have a thought as as well because you know, this is very much, a philosophical thing that goes back to uh day 1 when he moved to 6 together to make fire. But long story short, is that we are very preoccupied with this and colleagues throughout the organization are talking about it daily

Richard Baio: Now, just because we have the formality of monthly and quarterly, that in no way, shape or form inhibits the discussion and, if appropriate, the taking action between those mile marks. Did you want to add to that? I would only add that, you know, one case. that goes in a way you never imagined. could make you change your mind about a line of business. Continuous process for watching how things are going and seeing. Is there something you didn't... Is there something that causes you to re-evaluate? Otherwise, it's a continuous process of examining the risks you see.

we have a fair amount of visibility every 30 days and we have a painfully granular discussion about it by business by product line, every 90 days

Speaker Change: now, just because we have the formality of monthly and quarterly that in no way shape or form, inhibits the discussion, and if appropriate the, uh, taking action between those mile markers,

Speaker Change: um, if you want to add to that, I I would only have it

Speaker Change: you know, 1 case

That goes in a way. You never imagined. Could make you change your mind about a line of business.

Continuous process.

Speaker Change: For watching how things are going and seeing.

Speaker Change: Is there something you didn't expect?

Speaker Change: Examining the risks. You

Richard Baio: in the courtroom, in the underwriting, whatever.

Speaker Change: See.

Rob Berkley: But There was a bad malpractice case in Philadelphia that was decided last week. The Obstetrician had a terribly bad Well, that makes you think about what happens about malpractice and Aesthetics and all those things. It just brings it to your attention. So I think it's a continuous process. R. Berkley Corp. Is there anything you want to add? No, I'm good. Excellent. Great. Thanks a lot, guys. Good job. Thanks.

In the courtroom, in the underwriting, whatever.

but,

There was a bad malpractice case in Philadelphia that was decided. Last week been upset opposite Obstetricians had a terribly bad decision. Well, that makes you think about what happens about malpractice and Obstetrics and all those things.

It just, it brings it to your attention. So I think it's a continuous process of staying on top of what's Happening. How are decisions going? And you're looking at those things on a continuous basis.

Speaker Change: Let's see. Anything you want to add?

Speaker Change: No, I'm sorry. Okay.

Speaker Change: Excellent. Great. Thanks a lot guys. Good job.

Thanks.

Unknown Attendee: Abby, anybody else out there? No, that will conclude our question and answer session.

Speaker Change: Abby, anybody else out there?

Rob Berkley: So I would love to turn the conference back over to Mr. Rob Berkley for closing remarks. Abby, thanks for the help and hosting us. And again, thank you to all the participants. I think that it was a very solid quarter. And again, sort of a story continuing to unfold as promised. I think it's a reminder of the stability of the earnings of the business, whether it's a quarter like one or a quarter like two, we're able to continually and consistently create value for shareholders. Beyond that, I think there's a fair amount of visibility at this stage, not just for the balance of this year, but beyond as to it is likely that this organization will continue for the foreseeable to be able to generate high teens, low 20s returns.

Raab Berkeley: Uh, know that will conclude our question and answer session, so I would love to turn the conference back over to Mr. Raab Berkeley for closing remarks, uh, Abby. Thanks for the the help and hosting us and again, thank you to all the participants. I think that it was a very solid quarter and again, sort of the story continuing to unfold as promised. I think it's a, a reminder of the stability of the earnings of the business, whether it's a quarter like 1 or a quarter, like 2, we're able to continually and consistently uh create value.

Unknown Attendee: And we are very optimistic and confident in our ability to achieve that. So again, our thanks to all for tuning in, and we will look forward to catching up with you in about 90 days. Thank you very much. Good night.

Unknown Attendee: And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.

Speaker Change: Value for shareholders beyond that. I think there's a fair amount of visibility at this stage, not just for the balance of this year. But beyond as to, it is likely that this organization will continue for the foreseeable to be able to generate High Teens low 20s returns. Um, and we are very optimistic and confident in our ability to achieve that. So again, uh, our thanks to all for tuning in and we will look forward to catching up with you in about 90 days. Thank you very much. Good night.

And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect