Hot stock to watch: W. R. Berkley Corp (NYSE: WRB)

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W.R. Berkley Corp (NYSE: WRB) stock rose over 1% on 21st July, 2020 and continued its bullish momentum in the pre-market session of July 22nd, 2020 (Source: Google finance) driven by positive second quarter of 2020 performance.

The firm’s gross premiums written rose 2% to $2.1 billion during the second quarter of 2020 even during the current turmoil aroused from COVID-19 pandemic. The overall rate improvement coupled with a comparable historic premium renewal retention ratio drove the performance. Net premiums written of remained flat at over $1.7 billion as compared to the same period last quarter. Moreover, the firm’s cash and cash equivalent rose to over $2.7 billion as of second quarter end or 13% of net invested assets. The fixed maturity investment portfolio including cash and cash equivalents maintained a high credit quality of AA minus and reported a significant recovery and after-tax unrealized gains in the quarter. The firm’s renewal retention ratio has been consistent at over 80%. The firm’s new business as compared to the renewal business was also decent which was 1.084% during the second quarter of 2020. This means its 8.4% more rate on new business as compared to the renewal business.

The firm’s insurance segment fell 2% to over $1.5 billion, hurt by decreased exposure and rate decline in workers compensation, as well as higher reinsurance reinstatement premiums. The reinsurance and monoline excess segment grew 16.5% to about $200 million in the quarter relating to improving markets. The accident year combined ratio excluding catastrophes and COVID-19 reached 90.2% against 92.9% for the prior corresponding year. Net investment income fell to $85 million as investment funds were hurt during the quarter with financial turmoil leading to a loss of $58 million.

The firm’s equity rose $300 million to $5.8 billion as of end of the quarter, while bought back over 2 million shares for $96 million at an average price per share of $49.29. Book value per share rose 7.7% before share repurchases and dividends.

 

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