(Reuters) – Commercial insurer W R Berkley reported a 5.6% fall in first-quarter profit on Monday, as industry-wide catastrophe losses weighed on its underwriting performance.
This is the first instance in nearly two years that the Greenwich, Connecticut-based insurer has reported a drop in quarterly profit.
Insurers in recent years have been hard-hit by natural disasters, particularly as extreme weather-related events have become increasingly frequent.
The earnings highlight the aftermath of one of California’s most expensive natural disasters, which claimed several lives and destroyed property, with some estimates pegging the economic losses to be as high as $250 billion.
The company’s current-year catastrophe losses surged to $111.1 million, more than tripling from $30.5 million reported in the same period a year earlier.
Cushioning the blow, however, the company’s net written premiums increased 9.9% to $3.13 billion for the quarter, as businesses procured insurance products to manage risks amid heightened macroeconomic uncertainty and market volatility.
Net investment income jumped 12.6% to $360.3 million in the first quarter, largely driven by an improvement in the company’s earnings from its holdings in other investment funds.
The company’s portfolio gained $27 million from these holdings, compared with a $29.3 million loss in the first quarter of 2024.
For the first quarter ended March 31, WR Berkley reported a profit for common stockholders amounting to $417.6 million, or $1.04 per share, a decline from $442.5 million, or $1.09 per share, last year.
The company reported a combined ratio of 90.9%, compared to 88.8% a year earlier. A ratio below 100% shows that an insurer earned more in premiums than it paid out in claims.
Japanese carrier Mitsui Sumitomo Insurance announced in March its plans to acquire 15% of the 58-year-old company’s outstanding common stock.
Shares of the company fell 0.5% to $67 after the bell.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Mohammed Safi Shamsi)
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