BERKLEY W R CORP (WRB) Q3 2025 Earnings Summary

Executive Summary

Q3 2025 delivered a strong underwriting and investment quarter: ROE 24.3% and operating ROE 21.0%, combined ratio 90.9%, net income $511.0M ($1.28 diluted EPS) and operating income $440.2M ($1.10 operating EPS) .
Revenue materially exceeded Wall Street consensus, driven by higher net premiums earned and investment gains: Total revenues $3.77B vs S&P Global consensus $3.15B; EPS was essentially in line at $1.10 vs $1.103 consensus (operating) [GetEstimates]*.
Rate environment remained firm ex-workers’ comp (~7.6%), with Insurance GAAP combined ratio 92.3% and Reinsurance & Monoline Excess at 81.1% (strong segment profitability); CAT losses were $78.5M (2.5 points) .
Capital and book value strengthened: BVPS +5.8% QoQ to $25.79, equity reached a record $9.8B; management reiterated a disciplined stance on capital returns (special dividends/buybacks opportunistically) .
Near-term catalysts: revenue beat from investment gains and core NII growth, continued rate adequacy, and management commentary on property reinsurance softening into 1/1 potentially shifting portfolio posture .

What Went Well and What Went Wrong

What Went Well

Strong underwriting and investment performance: “Pre-tax quarterly underwriting income increased 8.2% to $287 million… calendar year combined ratio was 90.9%… net investment income grew to $351 million driven by core portfolio +9.4%” .
Rate adequacy and discipline: “Rate ex-comp coming in at 7.6%… highlights … focus on rate adequacy… in business to make good risk-adjusted returns, not solely to issue policies” .
Segment profitability: Reinsurance & Monoline Excess GAAP combined ratio improved to 81.1% (from 86.7% YoY), with pre-tax income up to $144.0M .

What Went Wrong

Higher current accident year loss ratio ex-cats in Insurance: 60.9% (consistent with H1 but elevated YoY), with commentary attributing to business mix .
CAT losses persisted (though lower YoY): $78.5M this quarter (vs $97.8M prior year), driven by severe convective storms; management flagged property market competition in shared/layered and E&S .
Caution on commercial auto and umbrella lines amid social inflation: “Auto… remains pretty choppy… Umbrella… indigestion disproportionately impacted by Auto” .

Financial Results

Quarterly P&L and Operating Metrics

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($USD)	$3,547,399,000	$3,670,808,000	$3,768,236,000
Net Premiums Written ($USD)	$3,133,302,000	$3,351,439,000	$3,226,930,000
Net Premiums Earned ($USD)	$3,012,381,000	$3,098,185,000	$3,156,382,000
Net Investment Income ($USD)	$360,292,000	$379,303,000	$351,238,000
Net Income ($USD)	$417,571,000	$401,288,000	$511,032,000
Diluted EPS ($)	$1.04	$1.00	$1.28
Operating Income ($USD, non-GAAP)	$404,744,000	$420,486,000	$440,198,000
Operating EPS ($, non-GAAP)	$1.01	$1.05	$1.10
GAAP Combined Ratio (%)	90.9%	91.6%	90.9%
Loss Ratio (%)	63.1%	63.1%	62.4%
Expense Ratio (%)	27.8%	28.5%	28.5%
ROE (%)	19.9%	19.1%	24.3%
Operating ROE (%)	19.3%	20.0%	21.0%

Note: Operating income/ EPS exclude after-tax net investment gains (losses) and after-tax net foreign currency gains (losses), restated for 2024 comparability starting Q2 2025 .

Q3 2025 YoY Comparison (vs Q3 2024)

Metric	Q3 2024	Q3 2025
Total Revenues ($USD)	$3,400,379,000	$3,768,236,000
Net Premiums Earned ($USD)	$2,926,823,000	$3,156,382,000
Net Investment Income ($USD)	$323,756,000	$351,238,000
Net Income ($USD)	$365,634,000	$511,032,000
Diluted EPS ($)	$0.91	$1.28
GAAP Combined Ratio (%)	90.9%	90.9%
CAT Losses ($USD)	$97,818,000	$78,517,000

Segment Breakdown (Q3 2025 vs Q3 2024)

Segment	Metric	Q3 2024	Q3 2025
Insurance	Net Premiums Earned ($USD)	$2,564,490,000	$2,773,009,000
Insurance	Pre-tax Income ($USD)	$469,421,000	$474,538,000
Insurance	Loss Ratio (%)	63.1%	63.9%
Insurance	Expense Ratio (%)	28.4%	28.4%
Insurance	GAAP Combined Ratio (%)	91.5%	92.3%
Reinsurance & Monoline Excess	Net Premiums Earned ($USD)	$362,333,000	$383,373,000
Reinsurance & Monoline Excess	Pre-tax Income ($USD)	$105,225,000	$144,008,000
Reinsurance & Monoline Excess	Loss Ratio (%)	57.0%	51.3%
Reinsurance & Monoline Excess	Expense Ratio (%)	29.7%	29.8%
Reinsurance & Monoline Excess	GAAP Combined Ratio (%)	86.7%	81.1%

KPIs and Balance Sheet

KPI	Q1 2025	Q2 2025	Q3 2025
Average Rate Increase ex-Workers’ Comp (%)	8.3%	7.6%	7.6%
Current Accident Year Combined Ratio (ex-CATs)	87.2%	88.4%	88.4%
CAT Losses ($USD)	$111,108,000	$99,234,000	$78,517,000
Cash Flow from Operations ($USD)	$743,817,000	$703,806,000	$1,139,860,000
Book Value per Share ($)	$23.50	$24.50	$25.79
Net Invested Assets ($USD)	$30,728,601,000	$31,577,384,000	$32,815,947,000
Fixed Maturity Duration (yrs, incl. cash)	2.7	2.8	2.9
Fixed Maturity Average Rating	AA-	AA-	AA-

Guidance Changes

No formal quantitative guidance ranges were provided. Management commentary indicated:

Investment income expected to grow given strong operating cash flow and new money rates above book yield (domestic book yield ~4.6%, new money ~5.0%; total fixed maturity book yield 4.8%) — prior quarters referenced similar trajectory; directional stance maintained .
Property reinsurance outlook: softening into 1/1 likely; organization prepared to pivot from offense to defense as margins erode — directional caution increased vs earlier in the year .
Capital return: opportunistic buybacks and special dividends remain preferred tools; no immediate action change signaled vs prior quarter with large special dividend in Q2 .

Metric	Period	Previous Guidance	Current Guidance	Change
Net Investment Income trajectory	Near-term FY25	“Positioned for further investment income growth”	“Expect fixed maturity NII to grow… new money comfortably above roll-off; domestic book yield ~4.6% vs new money ~5%”	Maintained positive
Property Reinsurance posture	1/1 renewals	Softening noted earlier in 2025	“Further softening likely at 1/1; will pivot posture based on margin”	Increased caution
Capital returns	Ongoing	Returned $223.8M in Q2 via special and ordinary dividends	“Not in a rush… will keep powder for buybacks; special dividends underscore shareholder focus”	Maintained opportunistic

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Technology/AI initiatives	Not highlighted in releases; AI risk disclosure (Safe Harbor)	“Technology enhancements contributing to operational efficiencies” aiding expense ratio	Positive operational impact
Tariffs/Macro	Tariffs cited among macro risks in forward-looking disclosures	“Preparing for tariffs; not seeing consequential impact yet”	Monitoring, stable
Property reinsurance	Strength in prior periods; softening began earlier in 2025	“Bloom off the rose” in property CAT; further softening likely at 1/1	Softening risk rising
Commercial auto/umbrella	Mixed; social inflation concerns persistent	Auto “pretty choppy”; umbrella affected by auto severity; reducing exposure where needed	Cautious, selective
Short-tail lines performance	Q1–Q2 short-tail NPW growth ($600M → $706M)	Growth driven by Berkley One (private client homeowners) and Accident & Health	Growth continuing
Regional trends	Not detailed in releases	“We do not participate in California homeowners” for Berkley One	Risk-managed footprint
Legal/regulatory environment	General risk disclosures	Adjusted appetite and attachment points due to legal environment	Tightening underwriting posture

Management Commentary

CEO on rate discipline and growth posture: “Rate ex-comp… 7.6%… highlights… focus on rate adequacy… we are in business to make good risk-adjusted returns, not solely to issue insurance policies” .
CFO on investment income trajectory: “Pre-tax quarterly net investment income grew to $351 million… fixed maturity portfolio had a book yield of 4.8%… new money rates comfortably above roll-off” .
CEO on property CAT reinsurance: “Bloom is off the rose… margin is eroding… further softening likely at 1/1… we’ll pivot posture from offense to defense as needed” .
Chairman on capital returns: “Special dividends let shareholders know we work for them… keep plenty of powder… opportune times to buy back stock” .

Q&A Highlights

Capital and excess headroom: Management emphasized significant rating agency model headroom and a disciplined, opportunistic approach to buybacks/special dividends; not rushing to alter debt structure .
Commercial auto/umbrella exposure: Exposure being reduced where loss costs are mispriced; umbrella indigestion linked to auto severity; growth will not compromise rate integrity .
Property and E&S dynamics: E&S property competition heating; liability E&S seen as having more staying power; modest net participation in pressured property segments .
Expense ratio and corporate expense: Startups shifting from corporate to underwriting expense as they scale; special dividend-related accounting impacted compensation expense YTD .
Berkley One performance: >$500M business, growing at healthy pace; focused on select states (not California) .

Estimates Context

Q3 2025 vs S&P Global consensus:

Metric	Consensus (S&P Global)*	Actual	Surprise
EPS ($)	1.1028*	1.10	-0.0028 (-0.25%)
Total Revenues ($USD)	$3,152,988,000*	$3,768,236,000	+$615,248,000 (+19.5%)

Values retrieved from S&P Global.*

Implications: Large revenue beat driven by higher net premiums earned and investment gains; EPS roughly in line as non-GAAP operating EPS matched actual. Estimate revisions likely to move up for NII and possibly segment margins if rate adequacy persists .

Key Takeaways for Investors

Strong quarter with balanced underwriting and investment engines; combined ratio 90.9% and ROE 24.3% underscore quality of earnings .
Revenue materially beat consensus; NII support from higher new money rates vs book yield provides continued tailwind into FY25–26 .
Portfolio posture is tightening where cycles erode (property CAT, commercial auto); expect continued selective growth with rate integrity .
Reinsurance & Monoline Excess profitability stands out (81.1% combined), offering diversification as Insurance loss ratio ticked up on mix .
Capital deployment remains disciplined and opportunistic; special dividends and buybacks likely when valuation and conditions align .
Watch 1/1 renewals for property reinsurance softening and Q4 CAT seasonality; management ready to pivot defensively if margins compress .
Berkley One and A&H are driving short-tail growth without California homeowners exposure, contributing to resilience and controlled CAT footprint .

Additional Q3 press release: Appointment of Berkley Select President Dan Spragg as President of Gamma Iota Sigma Board (talent/industry leadership; non-financially material) .

References: Press release and 8-K 2.02 Q3 2025 results ; Q3 2025 earnings call transcript ; Prior quarter releases Q2 2025 and Q1 2025 .