W.R. Berkley (NYSE:WRB) reported higher second-quarter 2026 operating earnings, record investment income and continued premium growth in its insurance segment, while management cautioned that competition is intensifying in parts of the property and reinsurance markets.
On the company’s earnings call, Chairman, CEO and President Rob Berkley opened by acknowledging the death of company founder Bill Berkley, thanking investors and others for their support. He said Bill Berkley’s “spirit, values, and priorities remain foundational” to the company and emphasized that the business had been institutionalized as “a team sport, not an individual one.”
Operating Earnings Rise 21%
Baio said the quarter benefited from what he described as the company’s second-best quarterly pretax underwriting income, at $318 million, and record quarterly pretax net investment income of $419 million. Stockholders’ equity rose to a record of more than $9.8 billion.
The company returned $334 million of capital to shareholders during the quarter through regular and special dividends and share repurchases. Baio said that included $223 million in regular and special dividends and about $111 million in share repurchases. Over the prior 12 months, the company returned more than $1.3 billion, or roughly 14% of stockholders’ equity, and nearly 70% of first-half 2026 earnings.
Underwriting performance included a current accident year combined ratio excluding catastrophe losses of 88.1% and a calendar-year combined ratio of 90%. Catastrophe losses declined to $62 million, or 2 loss ratio points, from 3.2 points in the prior-year quarter. The current accident year loss ratio excluding catastrophes was 59.6%, compared with 59.9% a year earlier. The expense ratio was flat at 28.5%.
Insurance Segment Grows, Reinsurance Shrinks
Baio said the insurance segment generated record gross premiums written of $3.8 billion, up 5.4%, while net premiums written increased 3.7% to a record $3.1 billion. The segment’s current accident year loss ratio excluding catastrophe losses was 61%, comparable with the first quarter. Its expense ratio was 28.3%, flat with the prior year, producing a current accident year combined ratio excluding catastrophe losses of 89.3%.
By contrast, Baio said the Reinsurance & Monoline Excess segment continued to face “heightened competition” in both property and casualty lines, resulting in a decline in net premiums written to $306 million. However, lower catastrophe and non-catastrophe property losses supported an underlying current accident year combined ratio excluding catastrophes of 78.7%.
Rob Berkley said market conditions remain highly fragmented by product line, increasing the importance of underwriting expertise and discipline. He expressed concern about parts of the managing general underwriter, or MGU, model, citing delegated authority and what he called a lack of alignment of interests. He said the most concerning behavior is in property, particularly shared and layered programs, and said some of that pressure is spreading into other property markets.
In casualty, Berkley said the broader market remains more disciplined and attractive, though he pointed to habitational and liquor liability as isolated areas of concern, citing examples where rates were being cut by 20% to 30%. He also said reinsurance is “particularly concerning,” with property eroding rapidly and casualty not having experienced the same earlier pricing improvement as property.
Rate Increases Moderate as Company Pursues Growth
Berkley said top-line growth is being driven by the insurance business, with growth in the mid-single digits. He said the company’s rate increase in the quarter, excluding workers’ compensation, was 3.8%.
He cautioned against overreacting to the lower rate figure, saying it was consistent with management’s prior comments. Berkley said that where the company sees attractive margins, its priority is to increase exposure or policy count while still seeking rate increases, though “not pressing down on it as hard.”
During the question-and-answer session, Berkley said management is encouraged by early July top-line trends but acknowledged that the month was not complete. He said the company has “considerable room” to adjust rates where margins warrant it, but would not do so prematurely. He described the approach as an effort to optimize between rate and growth.
Berkley said renewal retention remains around 80%, suggesting a stable book of business. Asked about whether pricing changes were concentrated in short-tail or casualty lines, he said the company’s actions were more granular than that, using “a scalpel” rather than “a cleaver” and assessing opportunities by subclasses and geography.
In commercial auto, Berkley said the company is taking significantly more rate than the aggregate figures may suggest, while exposure is coming down “pretty quickly.” He said the auto line also includes Berkley One, which offsets some of the commercial auto dynamics.
Investment Income Hits Record
Baio said net invested assets rose to $34.2 billion, aided by strong operating cash flow despite significant capital returns. Operating cash flow was $800 million in the quarter, up from $700 million in the comparable period, according to Rob Berkley.
Income from the core investment portfolio rose 13% from the prior year to $371 million, while investment funds increased 5.6% to $28.8 million. Baio said the credit quality of the portfolio remains strong at double-A-minus. The duration of the fixed maturity portfolio, including cash and equivalents, increased to 3.2 years, still below the 3.9-year average life of insurance reserves.
Rob Berkley said the company has a “fair amount of room” to extend duration if appropriate. He added that new money rates are above the domestic book yield of 4.8%, which he said provides further upside for investment income.
Management Highlights AI Investments
Berkley said the company is making significant investments in technology, data and artificial intelligence while keeping the expense ratio at 30% or better. He said the company does not intend to build its own large language model, but instead plans to use available tools and apply them across its roughly 60 operating businesses.
He cited underwriting workbenches as one area of progress, saying the company has seen early efficiency gains of more than 20% where the technology has been implemented. In claims, he said the company is using AI and other tools to move toward straight-through processing where appropriate, noting that about 50% of claims settle for $5,000 or less.
Looking ahead, Berkley said some parts of the market, especially property, may become more difficult. However, he said the company continues to see opportunities in much of the casualty market and in selected short-tail areas, including accident and health and private client personal lines.
About W.R. Berkley (NYSE:WRB)
W. R. Berkley Corporation (NYSE: WRB) is a publicly traded insurance holding company that underwrites and sells commercial property and casualty insurance, specialty insurance products, and reinsurance. Headquartered in Greenwich, Connecticut, the company operates a portfolio of underwriting businesses that focus on niche and specialty commercial risks, offering coverage tailored to industries such as transportation, construction, professional services and other commercial lines.
The company’s product mix includes primary and excess casualty, property, professional liability, environmental and other specialty lines, together with treaty and facultative reinsurance solutions.
