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W. R. Berkley Corporation (WRB)
NYSE:WRB
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W. R. Berkley Corporation
(NYSE:WRB)
82Outperform
Positive Factors
Financial Performance
The combined ratio of 85.4% was much better than consensus expectation of 89.2%, supported by stronger premium growth of 8.2% and an improving core loss ratio of 50.0%.
Investment Income
Net investment income of $360 million is above the consensus expectation of $347 million, supported by higher new money rates and improvements in investment fund income.
Strategic Investments
Japanese insurer Mitsui Sumitomo entered into an agreement with WR Berkley to acquire a 15% stake in the company from third parties, which could signal confidence in WRB's operations.
Negative Factors
Earnings
WRB shares should trade down on earnings as the shortfall in the insurance underlying loss ratio, adverse development in insurance, and concern surrounding potential impact of tariffs should weigh on the shares.
Foreign Exchange Loss
FX was a loss of $19m, which negatively impacted the earnings per share.
Insurance Losses
The company saw higher than expected CAT loss ratio of 2.7% vs consensus of 2.4% in the Insurance segment, with a total CAT loss ratio of 3.7% higher than consensus expectations of 3.2%.
W. R. Berkley Corporation (WRB) vs. S&P 500 (SPY)
Market Cap
$27.56B
Dividend Yield0.44%
Average Volume (3M)2.31M
Price to Earnings (P/E)16.8
Beta (1Y)0.41
Revenue Growth11.38%
EPS Growth14.76%
CountryUS
Employees8,606
SectorFinancial
Sector Strength87
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.01
Shares Outstanding379,355,830
10 Day Avg. Volume1,838,837
30 Day Avg. Volume2,309,633
Financial Highlights & Ratios
PEG Ratio-14.46
Price to Book (P/B)3.23
Price to Sales (P/S)0.00
P/FCF Ratio9.77
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit2.28
Enterprise Value/Ebitda3.17
Forecast
1Y Price Target
$68.30Price Target Upside-5.78% Downside
Rating ConsensusHold
Number of Analyst Covering11
W. R. Berkley Corporation Business Overview & Revenue Model
Company DescriptionW. R. Berkley Corporation (WRB) is a prominent commercial lines property and casualty insurance provider based in the United States. Founded in 1967, the company operates through a decentralized structure with a wide range of specialized subsidiaries, each focusing on particular niches of the insurance market. These subsidiaries offer a comprehensive portfolio of insurance products, including general liability, workers' compensation, commercial automobile, professional liability, and reinsurance. W. R. Berkley Corporation is known for its expertise in addressing complex risks and delivering tailored insurance solutions to businesses across various sectors.
How the Company Makes MoneyW. R. Berkley Corporation generates revenue primarily through the underwriting of insurance policies and the management of investment income. The company's key revenue streams include premiums collected from policyholders for providing insurance coverage, which is the core of its underwriting business. In addition to underwriting income, the company invests premiums and capital in a diversified portfolio of financial instruments, generating investment income that contributes significantly to its earnings. W. R. Berkley Corporation's decentralized operating model allows its subsidiaries to focus on niche markets, enabling them to better assess risks and price policies competitively. The company's financial performance is also influenced by its ability to effectively manage claims expenses, maintain strong underwriting discipline, and leverage its market expertise to underwrite profitable business segments.
W. R. Berkley Corporation Financial Statement Overview
Summary
W. R. Berkley Corporation's financial statements are impressive, demonstrating strong profitability, growth, and cash generation. The company benefits from high margins, a debt-free balance sheet, and efficient cash flow management. While the balance sheet's lack of leverage could limit expansion opportunities, the overall financial health is excellent, with sustainable growth and profitability trends.Income Statement
W. R. Berkley Corporation exhibits strong income statement metrics with a remarkable gross profit margin of 86.40% in TTM, indicating efficient cost management. The net profit margin remains healthy at 12.39%. Revenue growth is robust with a TTM increase of 2.51% over the previous year and a notable 47.22% increase from 2021 to 2022. The company's EBIT and EBITDA margins for TTM are solid at 33.96% and 12.36%, respectively, highlighting operational efficiency. The income statement demonstrates excellent profitability and growth, with minimal weaknesses observed.92
Very Positive
Balance Sheet
The balance sheet of W. R. Berkley Corporation is strong, with a debt-to-equity ratio of 0.00 in TTM, indicating a debt-free position, which is rare and advantageous for stability. The return on equity (ROE) is commendable at 18.63% for TTM, reflecting effective use of equity capital. The equity ratio improved to 22.48% in TTM, showing a solid equity base. While the balance sheet is robust, the absence of debt may limit leverage opportunities for expansion.85
Very Positive
Cash Flow
The cash flow statement reveals a strong performance, with an operating cash flow to net income ratio of 1.66 in TTM, indicating effective cash generation relative to net income. Free cash flow shows a slight decline in growth with a reduction of 21.23% in TTM compared to the previous year, but remains positive at $2.82 billion. The free cash flow to net income ratio stands at 1.63 in TTM, showcasing strong cash conversion. Overall, cash flow metrics are robust, with minor weaknesses in free cash flow growth.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 13.96B | 13.64B | 12.14B | 11.22B | 9.48B | 8.10B | Gross Profit |
| 12.06B | 13.64B | 8.78B | 8.26B | 6.88B | 5.71B | EBIT |
| 1.74B | 2.26B | 1.75B | 1.85B | 781.05M | 310.00M | EBITDA |
| 2.29B | 2.39B | 1.86B | 1.91B | 1.56B | 990.40M | Net Income Common Stockholders |
| 1.73B | 1.76B | 1.38B | 1.38B | 1.02B | 530.67M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 22.08B | 364.73M | 317.62M | 2.64B | 2.51B | 3.00B | Total Assets |
| 33.58B | 40.57B | 32.91B | 33.88B | 32.10B | 34.93B | Total Debt |
| 3.07B | 2.84B | 2.84B | 2.84B | 3.27B | 2.73B | Net Debt |
| 1.90B | 866.22M | 1.47B | 1.39B | 1.70B | 352.97M | Total Liabilities |
| 25.78B | 32.16B | 25.44B | 27.11B | 25.43B | 28.61B | Stockholders Equity |
| 7.78B | 8.40B | 7.46B | 6.75B | 6.65B | 6.31B |
| Cash Flow | Free Cash Flow | ||||
| 2.82B | 3.57B | 2.88B | 2.52B | 2.12B | 1.58B | Operating Cash Flow |
| 3.61B | 3.68B | 2.93B | 2.57B | 2.18B | 1.62B | Investing Cash Flow |
| -1.28B | -2.18B | -1.96B | -1.89B | -2.99B | 119.70M | Financing Cash Flow |
| -904.19M | -852.49M | -1.06B | -771.99M | 5.83M | -397.84M |
W. R. Berkley Corporation Technical Analysis
Positive
72.49
Price Trends
67.27
Positive
63.34
Positive
60.63
Positive
Market Momentum
1.62
Positive
62.48
Neutral
81.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WRB, the sentiment is Positive. The current price of 72.49 is above the 20-day moving average (MA) of 70.80, above the 50-day MA of 67.27, and above the 200-day MA of 60.63, indicating a bullish trend. The MACD of 1.62 indicates Positive momentum. The RSI at 62.48 is Neutral, neither overbought nor oversold. The STOCH value of 81.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WRB.
W. R. Berkley Corporation Risk Analysis
W. R. Berkley Corporation disclosed 29 risk factors in its most recent earnings report. W. R. Berkley Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
W. R. Berkley Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $27.56B | 16.83 | 20.73% | 0.44% | 11.38% | 14.76% | |
76 Outperform | $22.65B | 15.70 | 10.97% | 2.23% | 2.44% | -38.76% | |
74 Outperform | $13.06B | 14.64 | 8.98% | 3.67% | 6.34% | -28.19% | |
73 Outperform | $23.78B | 13.81 | 10.94% | ― | -6.46% | -26.71% | |
67 Neutral | $18.20B | 14.22 | 7.95% | 0.28% | 9.02% | -9.73% | |
66 Neutral | $10.87B | 12.21 | 18.51% | 2.55% | 3.76% | -9.12% | |
64 Neutral | $12.60B | 9.73 | 7.92% | 16985.68% | 12.21% | -5.61% |
* Financial Sector Average
Performance Comparison
WRB
W. R. Berkley Corporation
72.49
21.35
41.75%
AFG
American Financial Group
121.82
-0.81
-0.66%
CINF
Cincinnati Financial
147.80
32.36
28.03%
CNA
CNA Financial
48.43
6.99
16.87%
L
Loews
88.40
11.30
14.66%
MKL
Markel
1,901.24
266.77
16.32%
W. R. Berkley Corporation Earnings Call Summary
Earnings Call Date:Apr 21, 2025
(Q1-2025)
| % Change Since: 7.66%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with significant growth in net income, premiums, and investment income. Despite challenges from catastrophic events and specific market segments, the company demonstrated resilience and maintained a strong balance sheet.Q1-2025 Updates
Positive Updates
Strong Net Income and Return on Equity
The company reported a net income of $418 million or $1.04 per share, and an annualized return on beginning of year equity of 19.9%.
Record Net Premiums and Growth in Insurance Segment
Net premiums written grew to a record of more than $3.1 billion, with the insurance segment growing 10.2% to $2.7 billion, marking the second-best quarter.
Growth in Investment Income
Net investment income increased by 12.6% to $360 million, driven by record net invested assets of $30.7 billion and strong operating cash flows.
Increase in Stockholders' Equity
Stockholders' equity increased by more than $500 million or 6.2% over the beginning of the year, reaching a record $8.9 billion.
Strong Balance Sheet and Financial Leverage
The company maintains strong cash and cash equivalents of more than $1.9 billion and a financial leverage of 24.2%, the lowest level in decades.
Negative Updates
Impact of Catastrophic Activity
Catastrophic losses contributed 3.7 loss ratio points or $111 million, primarily due to the California wildfires.
Challenges in Professional Liability Reinsurance
The professional liability book in reinsurance was down over 25%, reflecting challenging market conditions and the company's disciplined approach.
Foreign Currency Losses
The company faced foreign currency losses of $19 million related to the weakening U.S. Dollar, offsetting income statement gains.
Company Guidance
During W. R. Berkley Corporation's First Quarter 2025 Earnings Conference Call, the company provided several key metrics reflecting their performance. The company reported a net income of $418 million, or $1.04 per share, and an annualized return on beginning of year equity of 19.9%. Operating earnings were $405 million, or $1.01 per share, with an annualized return on equity of 19.3%. The calendar year combined ratio was 90.9%, while the current accident year combined ratio excluding catastrophe losses was 87.2%. Catastrophe losses accounted for 3.7 loss ratio points or $111 million, primarily due to California wildfires. The company's net premiums written grew to a record $3.1 billion, with the insurance segment increasing 10.2% to $2.7 billion and the Reinsurance and Monoline Access segment growing 8.2% to $439 million. Net investment income rose 12.6% to $360 million, driven by record net invested assets of $30.7 billion and strong operating cash flows of $744 million. The effective tax rate for the quarter was 22.5%, with stockholders' equity increasing by more than $500 million to a record $8.9 billion. The company also highlighted a strategic investment by Mitsubishi, expected to commence in May, pending regulatory processes.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.