2 0 2 3 A n n u a l R e p o r t
W. R. Be rk ley C orporation
“ALWAYS DO RIGHT. THIS WILL
GRATIFY SOME PEOPLE AND
“
ASTONISH THE REST.
— M A R K T W A I N
What O’Clock Is It? by Thomas Hovenden
2023
W. R . B e r k l e y C o r p o r a t i o n
A n n u a l R e p o r t
Table of contents
Financial Highlights
Selected Financial Data
Letter to Shareholders
W. R. Berkley Corporation Performance vs. S&P 500
Relative Stock Price Performance
Stability
Investments
Growth
Responsibility
Our Company
Our Business
Segment Overview
Segment Data
Investments
Form 10-K
Businesses
Board of Directors & Officers
Corporate Information
4
6
7
12
13
16
18
20
22
24
25
26
26
28
29
161
170
172
W. R. Berkley Corporation 2023 Annual Report 3
2023
Financial
highlights
4
BY TRANSFORMING CHALLENGES INTO
OPPORTUNITIES AND BRINGING TOGETHER TALENTED
PEOPLE AND CAPITAL, WE FEEL CONFIDENT THAT
WE WILL BE ABLE TO CONTINUE TO DELIVER
OUTSTANDING VALUE AND LONG-TERM RETURNS.
COMBINED RATIO
TOTAL REVENUES
89.7%
Averaged 91.5% over
the past 5 years
$12.1B
Increased by 57.9% over
the past 5 years
BOOK VALUE PER SHARE
RETURN ON STOCKHOLDERS' EQUITY
$29.06
Grew 81.9% before dividends
and share repurchases over
the past 5 years
20.5%
Averaged 15.7% over
the past 5 years
W. R. Berkley Corporation 2023 Annual Report 5 Selected
financial data
In thousands, except per share data
Years ended December 31,
2019
2020
2021
2022
2023
Total Revenues
$7,902,200
$8,098,932
$9,455,486
$11,166,498
$ 12,142,938
Net Premiums Written
6,863,499
7,262,437
8,862,867
10,004,070
10,954,467
Net Investment Income
645,614
583,821
671,618
779,185
1,052,835
Net Investment Gains
123,467
103,000
90,632
202,397
47,042
Insurance Service Fees
92,680
88,777
93,857
110,544
106,485
Net Income to Common Stockholders
681,944
530,670
1,022,490
1,381,062
1,381,359
Net Income Per Common Share
Basic
Diluted
Return on Equity
At Year End
Total Assets
$2.38
2.35
12.5%
$1.89
1.87
8.7%
$3.69
3.66
$4.99
4.94
$5.10
5.05
16.2%
20.8%
20.5%
$26,643,428
$28,606,913
$32,086,414
$33,861,099
$37,202,015
Total Investments
18,473,674
18,481,767
22,171,814
22,859,646
25,279,504
Reserves for Losses and Loss Expenses
12,583,249
13,784,430
15,390,888
17,011,223
18,739,652
Common Stockholders’ Equity
6,074,939
6,310,802
6,653,011
6,748,332
7,455,431
Common Shares Outstanding
275,118
266,738
265,171
264,546
256,545
Common Stockholders’ Equity Per Share
22.08
23.66
25.09
25.51
29.06
Per share data and common shares outstanding have been adjusted for the 3-for-2 common stock splits effected on April 2, 2019 and March 23, 2022.
6 LEFT TO RIGHT:
W. Robert Berkley, Jr.,
President and Chief Executive Officer
William R. Berkley,
Executive Chairman
To our
shareholders
RECORD UNDERWRITING INCOME
$1.1B
$1.1B
RECORD NET INVESTMENT INCOME
2023 was an extraordinarily
positive year for our Company.
We had record profitability and
revenue. Both underwriting
profit and investment income
achieved new all-time highs of
$1.1 billion each, and our cash
flow for the year exceeded $2.9
billion. This is the second year in
a row our return on shareholders’
equity exceeded 20%. We were
able to pay special dividends
to our shareholders as a direct
result of these outstanding
returns. Book value per share,
before dividends and stock
buybacks, grew in excess of
25%. Our goal, as always, is to
optimize our risk-adjusted return
to our shareholders. We achieved
that in 2023.
While our primary goal is focused
on return to our shareholders, our
business is built on a concern for
the needs of multiple constituents—
society, our customers, our agents
and brokers and, of course, our
employees. Our success comes
from this focus on meeting the
needs of all of these groups. First
and foremost, we must meet the
needs of our customers who buy
insurance from our companies
because they are confident that
we will meet our commitments
in the appropriate way. Agents
and brokers feel confident
recommending our businesses
to their customers because they
recognize our willingness and
ability to pay claims as set forth
in our policies.
W. R. Berkley Corporation 2023 Annual Report 7W. R. Berkley Corporation 2023 Annual Report 7 "WHILE OUR PRIMARY GOAL IS FOCUSED ON
RETURN TO OUR SHAREHOLDERS, OUR BUSINESS IS BUILT
ON A CONCERN FOR THE NEEDS OF MULTIPLE
CONSTITUENTS—SOCIETY, OUR CUSTOMERS, OUR AGENTS
AND BROKERS AND, OF COURSE, OUR EMPLOYEES. OUR
SUCCESS COMES FROM THIS FOCUS ON MEETING THE
NEEDS OF ALL OF THESE GROUPS. "
T O T A L R E V E N U E S
Dollars in Billions
$12.1
$11.2
$9.5
$8.1
$7.9
2 0 1 9
2 0 2 0
2 0 2 1
2 0 2 2
2 0 2 3
8
To our
shareholders
RECORD NET PREMIUMS WRITTEN
$11.0B
$1.4B
RECORD NET INCOME
The role of insurance is extremely
important in a society that
seeks to manage the impact
of unforeseen events. Our
Company’s financial strength
and stability, as well as our
historical reputation of meeting
our obligations, provides peace of
mind to our customers. We are in
the insurance market every day.
Sometimes people choose to buy
from us and on other occasions,
they shop elsewhere, but we are
always in the marketplace. We
are a dependable partner offering
coverage on a consistent basis.
This long-term view of being
consistently in the market ties
in with the key differential that
has helped make W. R. Berkley
Corporation stand out from many
of its competitors.
We have a long-term view while
acknowledging the present risks, but
our focus is always on long-term
risk-adjusted return. Commitments
made by our Company often extend
for years. Thus, the time element is
critical when focusing on risk. We
are concerned about tomorrow, next
month and next quarter, as well
as minimizing extreme volatility.
Our primary focus, however, is
the general direction and long-
term outcome of society’s values,
economic trends, and the impact
and long-term consequences of our
decision-making from a financial
point of view.
Whether it is our decision to
start businesses or to take on
the uncertainty inherent in
acquisitions, we continue to be
concerned about the influence of
long-term social and economic
issues, such as inflation. When
establishing the guidelines for our
investment portfolio, that long-
term view is critical. The ability
to manage our enterprise in an
effective way, and still deliver
outstanding risk-adjusted returns
to our shareholders comes from
this long-term perspective.
I N V E S T M E N T S
Dollars in Billions
2 0 1 9
2 0 2 0
2 0 2 1
2 0 2 2
2 0 2 3
$18.5
$18.5
$22.2
$22.9
$25.3
W. R. Berkley Corporation 2023 Annual Report 9 To our
shareholders
This year, our premiums grew
by over 9.5%. We continued
to build our business through
internal growth and the addition
of one new business. Many of
the businesses that were started
during the past several years
began to come into their own,
while at the same time, other
areas of our business required
us to take our foot off the
accelerator because pricing was
not as attractive as it had been.
Today, varying lines of business
react in different ways in
the marketplace. This is the
advantage of our structure. By
having 60 individual businesses,
we can independently respond to
each competitive circumstance.
these benefits exceed the cost
of our structure. We continue to
evaluate each of our businesses,
how we compete, and where we
compete, to ensure that we get
value for the scale and size of each
piece of our business.
Each of our companies operates
on its own in its marketplace. We
have the benefits of a large-scale
enterprise while still maintaining
the flexibility of being nimble
that generally exists only in much
smaller companies. It is this
combination that allows us to
be a more flexible and effective
competitor. In this ever-more-
rapidly changing world, we think
As we continue to build our
enterprise, we find the Berkley
name has benefited many of our
new companies, continuing to
add strength when we start a new
venture. We now have a number of
companies that individually have
achieved scale in their particular
market niche. This makes them
truly viable competitors against
almost any of the global markets.
R E S E R V E S F O R L O S S E S A N D L O S S E X P E N S E S
Dollars in Billions
$15.4
$13.8
$12.6
$18.7
$17.0
2 0 1 9
2 0 2 0
2 0 2 1
2 0 2 2
2 0 2 3
10
WE HOPE TO
CONTINUE
BUILDING OUR
BUSINESS IN THE
SAME MANNER
THAT WE HAVE
BUILT IT IN THE
PAST, ONE BLOCK
AT A TIME.
We hope to continue building
our business in the same manner
that we have built it in the past,
one block at a time.
Our structure is especially
valuable when considered
in light of our long-term
perspective. It allows us to attract
entrepreneurial talent to build
new businesses. When they enter
the market, they can demonstrate
a strength and stability that only
their largest competitors possess.
This helps us continue to build
our business, and we believe it
will allow us to grow consistently
and faster than most of our
competitors.
Taken all together, this has
resulted in an outstanding year
for our Company. This was a year
everyone on our team was proud
of. We want to thank all of our
brokers and agents who produced
policies for our companies.
Thank you, as well, to each and
every member of our team, our
shareholders, and our customers.
Without you, we could not
have achieved this outstanding
year. It required everyone, both
individually and collectively, for
us to achieve this result. It goes
without saying that the advice
and counsel provided by our
Board of Directors has helped us
immeasurably, and we continue to
be optimistic as we look ahead.
William R. Berkley
Executive Chairman
W. Robert Berkley, Jr.
President and Chief Executive Officer
C O M M O N S T O C K H O L D E R S ’ E Q U I T Y *
Dollars in billions
2 0 1 9
2 0 2 0
2 0 2 1
2 0 2 2
2 0 2 3
*Net of $2.1 billion in special dividends and shares repurchased from 2019 to 2023
$6.1
$6.3
$6.7
$6.7
$7.5
W. R. Berkley Corporation 2023 Annual Report 11 W. R. Berkley Corporation
Performance vs. S&P 500®
Cumulative Total Stock Return (Includes Dividends)
W. R. Berkley Corporation
S&P 500
Difference
Year
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Average Annual Gain 1974–2023
(1)
-43.2%
-38.7%
0.5%
151.5%
499.1%
430.4%
436.8%
601.6%
610.8%
900.1%
1,010.3%
2,543.6%
2,940.8%
2,708.1%
3,398.4%
4,727.3%
4,450.5%
5,516.5%
7,896.1%
6,472.1%
7,009.4%
10,186.7%
9,722.4%
12,779.3%
10,024.5%
6,241.9%
14,552.3%
16,766.9%
18,744.0%
25,051.7%
34,067.7%
51,914.6%
56,702.5%
49,282.8%
51,709.6%
41,500.0%
46,596.4%
59,135.3%
67,184.0%
77,952.3%
94,842.7%
102,211.3%
127,530.0%
140,524.3%
148,906.2%
214,214.4%
207,457.2%
264,190.1%
353,720.2%
354,579.5%
23.3%
(2)
-26.4%
1.0%
24.8%
15.6%
23.0%
45.4%
92.3%
82.7%
121.8%
171.5%
188.0%
279.0%
349.5%
372.5%
450.9%
625.5%
603.0%
817.4%
887.2%
986.9%
1,001.0%
1,415.0%
1,763.4%
2,385.8%
3,096.8%
3,768.1%
3,416.1%
2,997.7%
2,313.1%
3,005.6%
3,344.2%
3,512.9%
4,083.8%
4,313.9%
2,680.7%
3,417.6%
3,948.8%
4,033.8%
4,695.2%
6,248.9%
7,118.1%
7,217.7%
8,095.8%
9,884.9%
9,447.6%
12,454.1%
14,764.1%
19,030.8%
15,566.2%
19,692.7%
12.6%
(1) -(2)
-16.8%
-39.7%
-24.4%
135.9%
476.1%
385.0%
344.5%
518.9%
489.0%
728.7%
822.3%
2,264.6%
2,591.3%
2,335.6%
2,947.5%
4,101.8%
3,847.4%
4,699.1%
7,008.9%
5,485.2%
6,008.4%
8,771.7%
7,958.9%
10,393.4%
6,927.8%
2,473.9%
11,136.2%
13,769.2%
16,430.9%
22,046.0%
30,723.6%
48,401.7%
52,618.7%
44,968.9%
49,028.8%
38,082.4%
42,647.6%
55,101.5%
62,488.8%
71,703.4%
87,724.6%
94,993.6%
119,434.2%
130,639.4%
139,458.6%
201,760.3%
192,693.1%
245,159.2%
338,154.0%
334,886.8%
10.6%
Notes: W. R. Berkley Corporation’s book value per share has been adjusted for stock dividends paid from 1975 to 1983. Stock dividends were 6% in each
year from 1975 to 1978, 14% in 1979, and 7% in each year from 1980 to 1983. The Company has paid cash dividends each year since 1978, including special
dividends paid in 2012, 2014, 2016–2019 and 2021–2023.
12 Cumulative Total Return
1973–2023
*Dividends Compounded
400,000%
300,000%
200,000%
100,000%
0%
W. R. Berkley Corporation*
S&P 500®
354,580%
19,693%
1974
1981
1988
1995
2002
2009
2016
2023
Cumulative Growth
in Book Value Per Share
With Dividends Included
Insurance companies are often measured by book value per share. We have grown book value
per share with dividends included by an average of 16.2% since 1973.
W. R. Berkley Corporation
97,986%
100,000%
75,000%
50,000%
25,000%
0%
1974
1981
1988
1995
2002
2009
2016
2023
W. R. Berkley Corporation 2023 Annual Report 13 Insurance
Humanity
01 Stability
02 Investments
03 Growth
04 Responsibility
14
14 Insurance serves humanity
by fulfilling the needs of people.
In the ordinary course of
life, they all face unforeseen
events. Insurance provides the
stability that allows individuals
and businesses to recover
and move forward, while our
investments support the growth
and development of the
economy and our society.
W. R. Berkley Corporation 2023 Annual Report 15 01
Stability
Stability
to move forward
Insurance provides peace of mind by allowing society to
sustain itself through unforeseen circumstances.
16
Stability | Investments | Growth | Responsibility
BERKLEY’S SPECIALTY INSURANCE
BUSINESSES PROVIDE THE PEACE OF MIND AND
RESILIENCE NECESSARY FOR INDIVIDUALS
AND BUSINESSES TO SUCCEED AND THRIVE.
Insurance is the business of
protecting against losses resulting
from various types of events, which
enables individuals and businesses
to endure their biggest crises and
return to their lives. It provides
people with the peace of mind to go
about their daily activities without
worrying about the financial
consequences of unforeseen events.
Insurance offers predictability in
the face of life’s many uncertainties
and provides stability for society
to function. Groups of insureds
spread their exposure to similar
risks by paying relatively small
periodic premium payments for
insurance coverage, rather than
paying for a large loss all at once.
Then, when the unthinkable
happens, timely claims payments
can help families, communities
and businesses recover from
costly accidents and disasters and
continue on as they did before the
event occurred. It helps to make
them whole.
We help protect business properties,
homes, and other physical assets,
as well as reputations, earnings
streams, and the ability to operate
in the same way as before a loss
occurred. We also help people
and businesses prevent losses or
reduce exposure before an event
occurs through loss control and
education activities that help aid in
understanding and managing the
various exposures they face. The
specialized expertise we bring to
bear through our 60 autonomous
businesses allows us to understand
our policyholders’ activities and
the risks they face, provide tailored
insurance coverages and handle
claims with expertise.
The benefits we provide are more
than just fulfilling the contractual
obligations of our policies. We
understand the financial, intangible,
and sentimental value of what we
protect, never losing sight of the
fact that we are entrusted with the
hopes, dreams, and often life’s work
of people. For example, our excess
workers’ compensation business
is experienced at handling claims
related to catastrophic injuries
in the workplace. In managing
claims, we aim to provide the
injured worker with the highest
quality outcome, focused not just
on medical care and rehabilitation,
but also on maximizing recovery,
quality of life, and independence.
Our liability coverages provide
payment for various types of
damages, injuries, and errors
or omissions for many types of
Sixty Specialized Businesses60
1.3MNearly 1.3 Million Policies Annually
professionals. We believe that
having someone in your corner
who understands the issues and
the process is invaluable to our
clients’ peace of mind. In our high-
net-worth personal lines business,
we protect what matters most
to our clients, from primary and
vacation homes to art and jewelry
collections to recreational vehicles
and watercraft and so much more.
We offer many types of insurance,
yet they all provide one important
thing—the peace of mind that
brings predictability and resiliency
to the lives and businesses of the
people it serves.
W. R. Berkley Corporation 2023 Annual Report 17 02
Investments
Investments
for growth & progress
An insurance company invests money with the expectation of
achieving a return or increasing value, often putting it into assets that help
build the economy and allow enterprises of all types to move forward.
18
18 Stability | Investments | Growth | Responsibility
INVESTING IN BUSINESSES AND INFRASTRUCTURE
PROVIDES A DUAL BENEFIT OF CONTRIBUTING
TO OUR LONG-TERM RISK-ADJUSTED RETURN WHILE
ENABLING THE ECONOMY TO EXPAND
AND FLOURISH.
Investment income is a key
component of an insurance
company’s economic model,
placing our industry at the heart
of the growth and progress of
every modern economy. We invest
with a view towards risk-adjusted
return, which means we must
understand the levels of risk in
each investment so we can meet
our obligations to our insureds
and provide a strong return to our
shareholders.
We primarily invest in fixed-
maturity securities, as well as
other opportunities that help
society work more effectively.
The recipients of our capital
are typically corporations,
municipalities, and federal
governments. Government
bonds support the development
of infrastructure and federal
programs, while municipal bonds
lower borrowing costs for state
and local governments, allowing
for greater investments in those
municipalities and reducing
tax rates for residents. Some
municipal bonds may fund
projects regarding water and
sewer, waste, pollution, industrial
development, and resource
recovery, which can help mitigate
pollution, provide safe drinking
water, and promote conservation.
Mortgage and other asset-
backed bonds allow consumers
to buy homes and other things,
$25B+
Over $25 Billion
in Invested Assets
35.1%
Growth in Net
Investment Income
while corporate bonds allow
businesses to expand and
thrive, bolstering job creation
and economic growth. Housing
bonds provide funding for
multifamily or single-family
housing projects, often for
the low-income sector, while
transportation bonds support
our country’s infrastructure by
improving toll roads, bridges,
and tunnels. Additionally, our
investments in secondary
and higher education support
enterprises directly involved in
improving communities and the
lives of their students.
Through our investments, we
make important contributions
to the safety and security of
our society, the stability of
our financial systems, and the
development of infrastructure.
In this sense, our investments
help to stimulate the economy’s
savings and investments,
allowing businesses and
consumers to have a higher level
of consumption and plan more
confidently. Our investments
help to build the economy and
allow society to move forward.
W. R. Berkley Corporation 2023 Annual Report 19 03
Growth
Growth
to meet obligations
A well-run insurance company increases capital over
time through profits arising from sound business decisions
that support a multitude of constituents.
20
20 Stability | Investments | Growth | Responsibility
THE EXPANSION OF CAPITAL OVER THE
LONG-TERM ENABLES US TO CONSISTENTLY
MEET THE EVOLVING NEEDS OF OUR
CUSTOMERS AND SOCIETY.
For insurance to continue to
fulfill the needs of its constituents,
primarily its insureds and its
role in investing in our society,
insurance companies need to
produce profits and build capital.
Underwriting and investing are
the two engines that drive our
business, and we manage both
through the lens of optimizing
risk-adjusted return on capital to
live up to the expectations of our
communities.
Shareholders provide us with
the capital to run our business.
Profits enable us to earn a
strong risk-adjusted return on
that capital for shareholders.
They also enable us to reinvest
funds back into the organization
and grow our business to
meet the evolving needs of
our policyholders, distribution
partners, and employees. With
strong profits, we can deliver
new products and services that
address emerging exposures
in an ever-changing economy,
expand our resources, develop
our people, and take calculated
risks to meet the needs of
current policyholders and reach
new policyholders in need of
support.
In underwriting, profit
margins are generally thin –
approximately 90% of premium is
used to pay for distribution and
provide our services, including
underwriting, loss control,
education, and claims payments.
Investment income makes
an important contribution to
profitability and, together, they
provide a solid foundation for
our business to succeed and all
of our other interested parties to
thrive. Today, we service nearly
1.3 million policies per year.
Albert Einstein famously
quipped that the eighth wonder
of the world is the power of
compounding. Over the past 50
years as a public company, W. R.
Berkley Corporation has grown
net premiums written 24,000%
and stockholders’ equity by more
than 66,100%. In addition, we
have returned over $7.3 billion to
shareholders through dividends
and share repurchases. Over that
time, we have delivered nearly
18% compound average growth
in total shareholder return and a
14.7% average return on equity.
14.7%
Average Return
on Equity Since 1973
17.8%
Compound Average
Growth in Total Shareholder
Return Since 1973
W. R. Berkley Corporation 2023 Annual Report 21 04
Responsibility
Responsibility
to our constituents
An insurance company that is successful over
the long term is one that is able to balance the needs
of its various constituents.
2 2
22 Stability | Investments | Growth | Responsibility
UNDERSTANDING
THE ROLE OUR
BUSINESS PLAYS
IN SERVING
HUMANITY HAS
BEEN AN ESSENTIAL
COMPONENT OF
OUR SUCCESS.
Shareholders
Employees
Our
Target
Insureds
Society
Distribution
Insurance is a unique business
that fulfills the needs of many
people, including customers,
agents and brokers, employees,
shareholders, and society as a
whole. We are ever conscious
of and remain steadfast in our
unwavering determination to
always do what we believe is
right for these many constituents.
Over time, we have succeeded by
striking a balance that allows us
all to grow and prosper.
By being there for our clients,
we provide the peace of mind
and stability that allows people
and businesses to recover from
insured events and move forward.
Managing risk is inherent to
our business, and we do so
with an unwavering focus on
long-term risk-adjusted return
in our underwriting and our
investing. We are in the insurance
market every day with products
and services that address the
new and existing exposures
of an evolving economy and
society, fulfilling the needs of
customers and distribution
partners alike throughout the
insurance cycle. So, too, are
we in the investment markets
every day, providing capital to
business and governments and
searching for opportunities with
above-average total returns and
below-average risk that will enable
our capital to grow. We give back
to our communities because we
understand that we exist as part
of a greater society and in the long
run, our enterprise and all of its
constituents benefit.
Our business provides stability,
predictability and resiliency that
enables society to function by
protecting against life’s biggest
crises, while our investments help
businesses, the community, and
the economy expand and thrive.
In the end, it allows us to serve
humanity in a way few, if any,
other industries can.
W. R. Berkley Corporation 2023 Annual Report 23 Our company
W. R. BERKLEY CORPORATION,
FOUNDED IN 1967, IS ONE
OF THE NATION’S PREMIER
SPECIALTY PROPERTY CASUALTY
INSURANCE PROVIDERS.
Each of the businesses within Berkley participates
in a niche market requiring specialized knowledge
about a territory or product.
Our competitive advantage lies in our long-term
strategy of decentralized operations, allowing each of
our businesses to identify and respond quickly and
effectively to changing market conditions and local
customer needs. This decentralized structure provides
financial accountability and incentives to local
management and enables us to attract and retain the
highest-caliber professionals.
We have the expertise and resources to utilize our
strengths in the present environment, and the flexibility
to anticipate, innovate and respond to whatever
opportunities and challenges the future may hold.
How we’re different
Risk-Adjusted Returns
Management company-wide is focused on
obtaining the best potential returns with a real
understanding of the amount of risk being assumed.
Superior risk-adjusted returns are generated over
the insurance cycle.
Responsible Financial Practices
Risk exposures are managed proactively. A
strong balance sheet, including a high-quality
investment portfolio, ensures ample resources to
grow the business profitably whenever there are
opportunities to do so.
Accountability
The business is operated with an ownership
perspective and a clear sense of fiduciary
responsibility to shareholders.
Transparency
Consistent and objective standards are used to
measure performance—and, the same standards
are used regardless of the environment.
People-Oriented Strategy
New businesses are started when opportunities are
identified and, most importantly, when the right
talent is found to lead a business. Of the Company’s
60 businesses, 53 were developed internally and
seven were acquired.
24 Our business
TODAY, AS WITH YESTERDAY
AND TOMORROW, THE
COMBINED EXPERTISE
OF UNDERWRITING, RISK
MANAGEMENT, CLAIMS
HANDLING AND INVESTING
WILL DELIVER OUTSTANDING
RISK-ADJUSTED RETURNS.
Insurance
Our Insurance businesses underwrite
predominantly commercial insurance, including
excess and surplus lines, admitted lines, and
specialty personal lines, in the United States, as
well as in the United Kingdom, Continental Europe,
Latin America and the Caribbean, Canada, Mexico,
Scandinavia, Australia and Asia.
Reinsurance & Monoline Excess
Our Reinsurance businesses provide facultative and
treaty reinsurance, primarily in the United States,
the United Kingdom, Continental Europe, Australia,
the Asia-Pacific Region, Latin America and the
Caribbean, and South Africa. Monoline Excess
businesses solely retain risk on an excess basis.
2023 SEGMENT RESULTS
$10.0B
Insurance Segment
Total Revenues
$1.6B
Insurance Segment
Pre-Tax Income
$1.5B
Reinsurance & Monoline
Excess Segment Total Revenues
$439M
Reinsurance & Monoline
Excess Segment Pre-Tax Income
W. R. Berkley Corporation 2023 Annual Report 25 Segment overview
Each of our two business segments—Insurance and Reinsurance & Monoline Excess—comprise
individual businesses that serve a market defined by geography, products, services or types of
customers. Our growth is based on meeting the needs of customers, maintaining a high-quality
balance sheet and allocating capital to our best opportunities.
We combine capital with outstanding people and wrap it all in a culture that is focused on
optimizing risk-adjusted returns. It creates a sustainable competitive advantage that can only be
acquired over many years with consistent discipline.
2023 Segment data
A S S E T S & N E T R E S E R V E S
Insurance
A S S E T S
R E S E RV E S
Reinsurance & Monoline Excess
A S S E T S
R E S E RV E S
2 6
$30.1B
$5.4B
$12.5B
$3.1B
2 0 2 3 N E T P R E M I U M S
W R I T T E N B Y M A J O R L I N E
O F B U S I N E S S
11%
40%
$9.7B
Insurance Segment
13%
14%
Other Liability
Short-tail Lines
Auto
Workers’ Compensation
Professional Liability
59%
Casualty
Property
Monoline Excess
22%
19%
$1.3B
Reinsurance & Monoline
Excess Segment
22%
W. R. Berkley Corporation 2023 Annual Report 27 Investments
Over the past few years, we have held the duration of our fixed-maturity portfolio at approximately 2.4 years,
while maintaining its high quality with an average rating of AA-. As a result, there has been less volatility in our
book value from mark-to-market accounting and we are better able to manage the interest rate environment.
We manage our portfolio for total return, including capital gains. As investment income is an important
component of our economic model, we will continue to seek out investment opportunities with above average
risk-adjusted returns and to position our fixed-maturity portfolio to manage the yield curve as well as the
impact of inflation.
6%
1%
8%
8%
10%
35%
Breakdown
of Fixed-Maturity
Securities
Corporate Bonds
Asset-backed Securities
State & Municipal Bonds
Mortgage-backed Securities
Foreign Bonds
Including Cash
U.S. Government & Government Agency Bonds
13%
19%
Cash & Cash Equivalents
Loans Receivable
I N V E S T M E N T D A T A
Dollars in Millions
Cash & Invested Assets
Invested Assets
Cash and Cash Equivalents
Total
Net Investment Income
Net Investment Gains
2022
$22,860
$1,449
$24,309
$779
$202
2023
$25,280
$1,363
$26,643
$1,053
$47
28 2023 Financial Information
FORM
10-K
W. R . B e r k l e y C o r p o r a t i o n
INSURANCE SERVES HUMANITY BY FULFILLING THE NEEDS OF
PEOPLE. IN THE ORDINARY COURSE OF LIFE, THEY ALL FACE
UNFORESEEN EVENTS. INSURANCE PROVIDES THE STABILITY THAT
ALLOWS INDIVIDUALS AND BUSINESSES TO RECOVER AND MOVE
FORWARD, WHILE OUR INVESTMENTS SUPPORT THE GROWTH
AND DEVELOPMENT OF THE ECONOMY AND OUR SOCIETY.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ______ to ______.
Commission file number 1-15202
W. R. BERKLEY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
475 Steamboat Road
(Address of principal executive offices)
22-1867895
(I.R.S. Employer Identification Number)
Greenwich, CT
06830
(Zip Code)
Registrant’s telephone number, including area code: (203) 629-3000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.20 per share
5.700% Subordinated Debentures due 2058
5.100% Subordinated Debentures due 2059
4.250% Subordinated Debentures due 2060
4.125% Subordinated Debentures due 2061
WRB
WRB-PE
WRB-PF
WRB-PG
WRB-PH
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ☒ No ☐
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements
of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant
to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒
The aggregate market value of the registrant's common stock held by non-affiliates as of June 30, 2023, the last business day of
the registrant’s most recently completed second fiscal quarter, was $12,125,876,386.
Number of shares of common stock, $.20 par value, outstanding as of February 15, 2024: 256,548,669
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company’s definitive proxy statement, which will be filed with the Securities and Exchange Commission within
120 days after December 31, 2023, are incorporated herein by reference in Part III.
2
Page
7
27
39
39
40
40
40
41
43
62
63
113
113
115
115
116
116
116
116
116
117
121
SAFE HARBOR STATEMENT
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
PART I
1.
BUSINESS
1A. RISK FACTORS
1B. UNRESOLVED STAFF COMMENTS
1C. CYBERSECURITY
2.
3.
PROPERTIES
LEGAL PROCEEDINGS
4. MINE SAFETY DISCLOSURES
PART II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
ITEM
EX-10.12
EX-21
EX-23
EX-31.1
EX-31.2
EX-32.1
EX-97
EX-101
EX-101
EX-101
EX-101
PURCHASES OF EQUITY SECURITIES
6.
RESERVED
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
8.
9.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
9A. CONTROLS AND PROCEDURES
9B. OTHER INFORMATION
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
11. EXECUTIVE COMPENSATION
12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
16.
FORM 10-K SUMMARY
FORM OF 2023 PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT UNDER THE W. R.
BERKLEY CORPORATION 2018 STOCK INCENTIVE PLAN
LIST OF COMPANIES AND SUBSIDIARIES
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) /15d-14(a)
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18
U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
W. R. BERKLEY CORPORATION CLAWBACK POLICY
INSTANCE DOCUMENT
SCHEMA DOCUMENT
CALCULATION LINKBASE DOCUMENT
LABELS LINKBASE DOCUMENT
3
EX-101
EX-101
PRESENTATION LINKBASE DOCUMENT
DEFINITION LINKBASE DOCUMENT
4
SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may
contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of
the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,”
“potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,”
“anticipates” or the negative version of those words or other comparable words. Any forward-looking statements
contained in this report including statements related to our outlook for the industry and for our performance for the year
2024 and beyond, are based upon our historical performance and on current plans, estimates and expectations. The
inclusion of this forward-looking information should not be regarded as a representation by us that the future plans,
estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties,
including but not limited to:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
the cyclical nature of the property casualty industry;
the impact of significant competition, including new entrants to the industry;
the long-tail and potentially volatile nature of the insurance and reinsurance business;
product demand and pricing;
claims development and the process of estimating reserves;
investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities,
including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable,
investment funds, including real estate, merger arbitrage, energy related and private equity investments;
the effects of emerging claim and coverage issues;
the uncertain nature of damage theories and loss amounts, including claims for cyber security-related risks;
natural and man-made catastrophic losses, including as a result of terrorist activities;
the ongoing effects of the COVID-19 pandemic or other potential pandemics;
the impact of climate change, which may alter the frequency and increase the severity of catastrophe events;
general economic and market activities, including inflation, interest rates and volatility in the credit and capital
markets;
the impact of conditions in the financial markets and the global economy, and the potential effect of legislative,
regulatory, accounting or other initiatives taken in response to it, on our results and financial condition;
cyber security breaches of our information technology systems and the information technology systems of our vendors
and other third parties;
foreign currency and political risks relating to our international operations;
our ability to attract and retain key personnel and qualified employees;
continued availability of capital and financing;
the success of our new ventures or acquisitions and the availability of other opportunities;
the availability of reinsurance;
our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019 ("TRIPRA");
the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us;
other legislative and regulatory developments, including those related to business practices in the insurance industry;
credit risk relating to our policyholders, independent agents and brokers;
changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies;
the availability of dividends from our insurance company subsidiaries;
the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and
other risks detailed in this Form 10-K and from time to time in our other filings with the Securities and Exchange
Commission (“SEC”).
5
We describe these risks and uncertainties in greater detail in Item 1A, Risk Factors. These risks and uncertainties could
cause our actual results for the year 2024 and beyond to differ materially from those expressed in any forward-looking
statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of
earnings. Our future financial performance is dependent upon factors discussed elsewhere in this Form 10-K and our other
SEC filings. Forward-looking statements speak only as of the date on which they are made.
6
PART I
ITEM 1. BUSINESS
W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the
United States and operates worldwide in two segments of the property casualty insurance business:
•
•
Insurance - Our Insurance businesses underwrite predominantly commercial insurance business, including excess and
surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in
Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom.
Reinsurance & Monoline Excess - Our Reinsurance businesses provide facultative and treaty reinsurance in the United
States, as well as in the Asia Pacific region, Australia, Continental Europe, South Africa and the United Kingdom.
Monoline Excess businesses retain risk solely on an excess basis.
Our two reporting segments are each composed of individual businesses that serve a market defined by geography,
products, services or industry served. Each of our businesses is positioned close to its customer base and participates in a niche
market requiring specialized knowledge. This strategy of decentralized operations allows each of our businesses to identify and
respond quickly and effectively to changing market conditions and specific customer needs, while capitalizing on the benefits
of centralized capital, investment and reinsurance management, and corporate actuarial, financial, enterprise risk management
and legal staff support.
Our business approach is focused on meeting the needs of our customers, maintaining a high quality balance sheet, and
allocating capital to our best opportunities. New businesses are started when opportunities are identified and when the right
talent and expertise are found to lead a business. Of our 60 businesses, 53 have been organized and developed internally and
seven have been added through acquisition.
Net premiums written, as reported based on United States generally accepted accounting principles (“GAAP”), for
each of our reporting segments for each of the past three years were as follows:
(In thousands)
Net premiums written:
Insurance
Reinsurance & Monoline Excess
Total
Percentage of net premiums written:
Insurance
Reinsurance & Monoline Excess
Total
Year Ended December 31,
2023
2022
2021
$
$
9,657,121
1,297,346
10,954,467
$
$
8,784,146
1,219,924
10,004,070
$
$
7,743,814
1,119,053
8,862,867
88.2 %
11.8
100.0 %
87.8 %
12.2
100.0 %
87.4 %
12.6
100.0 %
Thirty-two of our insurance company subsidiaries are rated by A.M. Best Company, Inc. ("A.M. Best") and have
financial strength ratings of A+ (Superior) (the second highest rating out of 15 possible ratings). A.M. Best's ratings are based
upon factors of concern to policyholders, insurance agents and brokers and are not directed toward the protection of investors.
A.M. Best states: “A Best's Financial Strength Rating (FSR) is an independent opinion of an insurer's financial strength and
ability to meet its ongoing insurance policy and contract obligations. An FSR is not assigned to specific insurance policies or
contracts and does not address any other risk.” A.M. Best reviews its ratings on a periodic basis, and its ratings of the
Company's subsidiaries are therefore subject to change.
Our twenty-three insurance company subsidiaries rated by Standard & Poor's (“S&P”) have financial strength ratings of
A+ (the fifth highest rating out of twenty-seven possible ratings).
Our Moody's financial strength ratings are A1 for Berkley Insurance Company, Berkley Regional Insurance Company
and Admiral Insurance Company (the fifth highest rating out of twenty-one possible ratings).
Our twenty-five insurance company subsidiaries rated by Fitch Ratings ("Fitch") have insurer financial strength ratings
of AA- (the fourth highest rating out of twenty-seven possible ratings).
7
The following sections describe our reporting segments and their businesses in greater detail. These businesses
underwrite on behalf of one or more affiliated insurance companies within the group. The businesses are identified for
descriptive purposes only and are not legal entities, but for marketing purposes may sometimes be referred to individually as "a
Berkley company" or collectively as "Berkley companies." Unless otherwise indicated, all references in this Form 10-K to
“Berkley,” “we,” “us,” “our,” the “Company” or similar terms refer to W. R. Berkley Corporation together with its subsidiaries
and businesses. W. R. Berkley Corporation is a Delaware corporation formed in 1970.
Insurance
Our Insurance businesses underwrite predominantly commercial and specialty personal lines insurance business
primarily throughout the United States. Many units offer coverage globally, while others specialize in specific international
markets. The Insurance businesses focus on the following general areas:
Excess & Surplus Lines: A number of our businesses are dedicated to the U.S. excess and surplus lines market. They
serve a diverse group of customers that often have complex risk or unique exposures that typically fall outside the underwriting
guidelines of the standard insurance market. Lines of business underwritten by our excess and surplus lines businesses include
premises operations, auto, property, products liability, general liability and professional liability lines. Products are generally
distributed through wholesale agents and brokers.
Industry Specialty: Certain other businesses focus on providing specialty coverages to customers within a particular
industry that are best served by underwriters and claims professionals with specialized knowledge of that industry. They offer
multiple lines of business with policies tailored to address the unique exposures of these industries, often with the flexibility of
providing coverages on either an admitted or a non-admitted basis in the U.S., as well as internationally. Each business delivers
its products through one or more distribution channels, including retail and wholesale agents, brokers, and managing general
agents (MGAs), depending on the customer and the particular risks insured.
Product Specialty: Other businesses specialize in providing specific lines of insurance coverage, such as workers’
compensation or professional liability, to a wide range of customers. They offer insurance products, analytical tools and risk
management services such as loss control and claims management that enable clients to manage their risk appropriately.
Business is typically written on an admitted basis, although some businesses may offer non-admitted products in the U.S. and
offer products internationally. Independent agents and brokers are the primary means of distribution.
Regional: Certain businesses offer standard insurance products and services focused on meeting the specific needs of a
geographically differentiated customer base. Key clients are small-to-midsized businesses. These regionally focused businesses
provide a broad array of commercial insurance products to customers primarily in 45 states and the District of Columbia and
have developed expertise in niches that reflect local economies. They are organized geographically in order to provide them
with the flexibility to adapt quickly to local market conditions and customer needs.
In addition, through our non-U.S. insurance businesses, we write business in more than 60 countries worldwide, with
branches or offices in 43 cities outside the United States, in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia,
South America and the United Kingdom. In each of our operating territories, we have built decentralized structures that allow
products and services to be tailored to each regional customer base. Our businesses are managed by teams of professionals with
expertise in local markets and knowledge of regional environments.
In addition to providing insurance products, certain businesses also provide a wide variety of fee-based services,
including claims, administrative and consulting services.
Businesses comprising the Insurance segment are as follows:
Acadia Insurance is a Northeast regional property casualty underwriter offering a broad portfolio of products exclusively
through local independent agents in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and
Vermont. In addition to its general offerings, Acadia has specialized expertise in insuring regional industries such as
construction, service contractors, lumber, and transportation.
Admiral Insurance provides excess and surplus lines coverage for commercial risks that generally consist of hard-to-
place, specialized risks that involve moderate to high degrees of hazard. In both general liability and professional lines, Admiral
has a broad line of products to meet the needs of existing as well as emerging opportunities. The distribution of products is
limited solely to wholesale brokers.
Berkley Accident and Health underwrites accident and health insurance and reinsurance products in four primary areas:
medical stop loss, managed care, special risk and group captive. It has a diversified product and service portfolio serving a
range of clients from small employers, health care organizations, and membership groups to Fortune 500 companies.
8
Berkley Agribusiness offers insurance for larger commercial risks across the United States involved in the supply,
storage, handling, processing and distribution of commodities related to the agriculture and food industries.
Berkley Alliance Managers offers tailored insurance coverages and comprehensive risk management solutions designed
to enhance profitability and reduce susceptibility to loss in four target markets - Design Professionals, Construction
Professionals, Accounting Professionals and miscellaneous non-medical Service Professionals.
Berkley Aspire provides excess and surplus lines coverage on a national basis to small to medium-sized insureds with
low to moderate insurance risk. Its product lines include general liability, excess liability and some property and inland marine
coverage. It serves a limited distribution channel, including select Berkley business agents.
Berkley Asset Protection provides specialized insurance coverages for fine arts and jewelry exposures to commercial and
individual clients.
Berkley Canada underwrites specialty, casualty and surety lines of business on behalf of the Canadian branch of Berkley
Insurance Company. It specializes in commercial casualty and professional liability, and offers a broad portfolio of risk
products that include commercial general liability, umbrella, professional liability, directors and officers, commercial property
and surety, in addition to niche products for specific industries such as technology, life sciences and travel.
Berkley Construction Solutions provides excess liability coverage to residential and commercial contractors on a project
or practice basis.
Berkley Custom Insurance focuses on the excess casualty insurance market and offers umbrella and excess liability
coverages to clients from the small/middle market to Fortune 1000 companies in target classes of business including
construction, manufacturing, retail/wholesale trade, finance, real estate, public entities and oil & gas.
Berkley Cyber Risk Solutions focuses on insurance and risk management products that respond to the changing cyber
security vulnerabilities of organizations around the world. It offers specialty commercial cyber insurance coverages on a
worldwide basis to clients of all sizes.
Berkley E&S Solutions provides general liability excess and surplus lines coverages for mid-market U.S. companies with
generally hard-to-place, specialized risks that involve moderate to high degrees of hazard and require tailored terms, primarily
utilizing self-insurance retentions. The distribution of products is highly limited to a small number of individually appointed
wholesale brokers.
Berkley Enterprise Risk Solutions provides custom workers' compensation programs to large employers operating in a
broad range of industries. Loss sensitive and/or guaranteed cost programs are offered to employers with exposure
predominately in California.
Berkley Entertainment underwrites property casualty insurance products, both on an admitted and non-admitted basis, for
clients in the entertainment industry and sports-related organizations.
Berkley Environmental underwrites casualty and specialty environmental products for environmental customers
including contractors, consultants, property owners and facilities operators.
Berkley Financial Specialists serves the insurance needs of companies predominantly in the financial services sector. Its
Berkley Crime division provides crime and fidelity related insurance products for commercial organizations, financial sector
businesses and governmental entities on a primary and excess basis. Its Financial Services segment provides management
liability and fidelity products to financial institutions, insurance companies and asset management firms.
Berkley Fire & Marine offers a broad range of preferred inland marine and related property risks and services to
customers throughout the United States. Products are distributed through independent agents and brokers.
Berkley Healthcare underwrites customized, comprehensive insurance solutions for the full spectrum of healthcare
providers. Through Berkley Healthcare Medical Professional, it offers a wide range of medical professional coverages. Through
Berkley Healthcare Financial Lines, it offers a comprehensive suite of financial lines coverages.
Berkley Human Services provides property casualty insurance coverages to human services organizations, including
nonprofit and for-profit organizations. Its product offerings include traditional primary and excess coverages.
Berkley Industrial Comp specializes in writing workers' compensation insurance for diverse high hazard industries in
select states. Its products are distributed by a select group of independent retail agents and wholesale brokers.
Berkley Insurance Asia underwrites specialty commercial insurance coverages to clients in North Asia and Southeast
Asia through offices in Hong Kong, Singapore, Labuan and Shanghai.
9
Berkley Insurance Australia underwrites general insurance business in Australia, including professional indemnity
insurance for companies of all sizes.
Berkley Latinoamérica provides property, casualty, auto, surety, group life and workers' compensation products and
services in its operating territories of Argentina, Brazil, the Caribbean, Colombia, Mexico and Uruguay.
Berkley Life Sciences offers a comprehensive spectrum of property casualty products to the life sciences industry on a
global basis, including both primary and excess product liability coverages. It serves pharmaceutical and biotech companies,
medical device companies, dietary supplement companies, medical and research related software developers, contract research
and manufacturing organizations, research institutions and organizations, and other related businesses.
Berkley Luxury Group provides commercial package insurance programs for high-end cooperative, condominium, and
quality rental apartment buildings and upscale restaurants in the New York, New Jersey, Chicago and Washington, D.C.
metropolitan markets, as well as other select markets.
Berkley Management Protection offers a modular suite of management liability products for small and middle market
companies through a bespoke and easy to use platform tailored to independent agents. The management liability coverages they
provide include directors and officers, employment practices, fiduciary, cyber, crime and miscellaneous professional liability.
Berkley Mid-Atlantic Group provides commercial property casualty coverages to a wide variety of businesses in
Delaware, the District of Columbia, Maryland, Ohio, Pennsylvania, and Virginia. Focusing on small and middle market
accounts, it complements its standard writings with specialized products in areas such as construction.
Berkley Net Underwriters focuses on small and medium-sized commercial risks, using a web-based system to allow
producers to quote, bind and service workers' compensation insurance products on behalf of Berkley member insurance
companies.
Berkley North Pacific offers preferred insurance products and services to a broad range of small to medium size
commercial entities. It operates through independent agents in Idaho, Montana, Oregon, Utah and Washington.
Berkley Offshore Underwriting Managers is a specialist global underwriter of energy and marine risks. Its three divisions
provide specialty insurance products in the energy upstream, energy liability and marine sectors.
Berkley Oil & Gas provides property casualty products and risk services to the United States energy sector. Its customer
base includes risks of all sizes that work in the oil patch, including operators, drillers, geophysical contractors, well-servicing
contractors, and manufacturers/distributors of oil field products, as well as those in the renewable energy sector.
Berkley One provides a customizable suite of personal lines insurance solutions including home, condo/co-op, auto, fine
art and collectibles, liability, collector vehicle and recreational marine. Berkley One targets high net worth individuals and
families with sophisticated risk management needs.
Berkley Product Protection offers a broad product suite, including product liability and product recall and
Contamination, to assist clients in the manufacturing, wholesale and import space with their risk management and insurance
needs.
Berkley Professional Liability specializes in professional liability insurance for publicly-traded and private entities on a
worldwide basis. Its liability coverages include directors and officers, errors and omissions, fiduciary, employment practices,
and sponsored insurance agents' errors and omissions. Berkley Transactional, a division of Berkley Professional Liability,
underwrites a full suite of transactional insurance products, including representations and warranties insurance, and tax opinion
insurance.
Berkley Program Specialists is a program management business offering both admitted and non-admitted insurance
support on a nationwide basis for commercial casualty and property program administrators with specialized insurance
expertise. Its book is built around blocks of homogeneous business and programs.
Berkley Public Entity specializes in providing excess coverage and services to individual governmental and scholastic
entities and intergovernmental risk sharing groups. Products include general liability, auto liability, law enforcement liability,
public officials and educator's legal liability, employment practices liability, incidental medical, property and crime.
Berkley Risk provides at-risk and alternative risk insurance program management services for a broad range of groups
and individuals including public entity pools, professional associations, captives and self-insured clients. As a third party
administrator, it manages workers’ compensation, liability and property claims nationwide.
10
Berkley Select specializes in underwriting professional liability insurance for law firms and accounting firms, as well as
other professional firms and their practices. It also offers executive liability products, including directors and officers liability,
employment practices and fiduciary liability, to small to middle market privately held and not-for-profit customers. Berkley
Select provides these insurance products on both an admitted and surplus lines basis.
Berkley Small Business Solutions offers commercial insurance products for small businesses through a modern
technology platform that leverages data and analytics. Its initial product offering focuses on preferred risks in the non-fleet
transportation market.
Berkley Southeast offers a wide array of commercial lines products in six southeastern states: Alabama, Georgia,
Mississippi, North Carolina, South Carolina and Tennessee, specializing in small to mid-sized accounts.
Berkley Specialty Excess provides excess and surplus lines coverages for hard-to-place risks involved in moderate to
high degrees of hazard. It focuses on highly specialized risk exposures within specific industry verticals such as the
environmental and energy industries. Its predominate focus is on providing excess insurance; however, in some cases it
provides highly specialized environmental primary products tailored to the individual risk. Products are distributed through a
minimal number of insurance brokers and agents that specialize in these industry verticals.
Berkley Surety provides a full spectrum of surety bonds for construction, environmental and commercial surety accounts
in the U.S. and Canada, through an independent agency and broker platform across 19 field locations.
Berkley Technology Underwriters provides technology error & omission (TE&O) and first party cyber coverage along
with traditional package, umbrella and worker's compensation products. TE&O and cyber products provide industry
specialization for both domestic and foreign technology, government contracting, telecommunications, digital media,
manufacturing and private equity firms.
Carolina Casualty is a national provider of primary commercial insurance products and services to the transportation
industry. It underwrites on an admitted basis in all 50 states and the District of Columbia. Its Berkley Prime Transportation
business provides primary auto liability, auto physical damage and general liability to a broad array of trucking operations.
Continental Western Group is a Midwest regional property and casualty insurance operation providing underwriting and
risk management services to a broad array of regional businesses in thirteen Midwest states. In addition to its generalist
portfolio, Continental Western offers specialty underwriting solutions for diversified agriculture, construction, light
manufacturing, transportation, volunteer fire departments, rural utilities and public entities.
Gemini Transportation is a national provider of excess liability insurance for various domestic surface transportation
businesses, including the railroad industry as well as the trucking, busing and other industries that use rubber-wheeled vehicles
for over-the-road use.
Intrepid Direct provides business insurance coverages through a direct distribution model focused on the franchise
market, with specialties including the restaurant, garage and fitness industries.
Key Risk specializes in writing workers' compensation insurance for diverse industries including healthcare, human
services, transportation, temporary staffing, professional employer organizations and contractors requiring coverage under the
United States Longshore and Harbor Workers' Compensation Act (USL&H). Its products are distributed by a select group of
independent retail agents and wholesale brokers located throughout the United States.
Nautilus Insurance Group insures excess and surplus lines risks for small to medium-sized commercial risks with low to
moderate susceptibility to loss. It writes commercial excess and surplus lines business nationwide and admitted lines
commercial business in a limited number of states. A substantial portion of Nautilus' business is written through its close, long-
standing network of general agents, who are chosen on a highly selective basis.
Preferred Employers Insurance focuses exclusively on workers' compensation products and services for businesses
based in California. It serves thousands of customers covering a broad spectrum of industries throughout the state.
Union Standard offers preferred commercial property and casualty insurance products and services to a wide range of
small to medium size commercial entities with a focus on the construction, farm/ranch, retail and service industries. It operates
through independent agents in Arizona, Arkansas, New Mexico, Oklahoma and Texas.
Vela Insurance Services specializes in commercial casualty insurance on an excess and surplus lines basis. Its primary
focus is on general liability insurance for construction, manufacturing and general casualty clients as well as products liability
and miscellaneous professional liability coverages distributed through wholesale insurance brokers.
11
Verus Specialty Insurance offers tailored casualty, professional liability, and garage coverages, specializing in the excess
and surplus lines market. It primarily serves the construction, manufacturing, garage service and professional sectors through a
selective wholesale broker network.
W R B Europe is comprised of specialist businesses offering a focused range of insurance products to markets in
Continental Europe.
W / R / B Underwriting provides a broad range of insurance products to the Lloyd's marketplace, with a concentration in
specialist classes of business including property, professional indemnity and financial lines.
12
The following table sets forth the percentage of gross premiums written by each Insurance business:
2023
Year Ended December 31,
2022
2021
Acadia Insurance
Admiral Insurance
Berkley Accident and Health
Berkley Agribusiness
Berkley Alliance Managers
Berkley Aspire
Berkley Asset Protection
Berkley Canada
Berkley Construction Solutions
Berkley Custom Insurance
Berkley Cyber Risk Solutions
Berkley E&S Solutions
Berkley Enterprise Risk Solutions
Berkley Entertainment
Berkley Environmental
Berkley Financial Specialists
Berkley Fire & Marine
Berkley Healthcare
Berkley Human Services
Berkley Industrial Comp
Berkley Insurance Asia
Berkley Insurance Australia
Berkley Latinoamérica
Berkley Life Sciences
Berkley Luxury Group
Berkley Management Protection
Berkley Mid-Atlantic Group
Berkley Net Underwriters
Berkley North Pacific
Berkley Offshore Underwriting Managers
Berkley Oil & Gas
Berkley One
Berkley Product Protection
Berkley Professional Liability
Berkley Program Specialists
Berkley Public Entity
Berkley Risk
Berkley Select
Berkley Small Business Solutions
Berkley Southeast
Berkley Specialty Excess
Berkley Surety
Berkley Technology Underwriters
Carolina Casualty
Continental Western Group
Gemini Transportation
Intrepid Direct
Key Risk
Nautilus Insurance Group
Preferred Employers Insurance
Union Standard
Vela Insurance Services
Verus Specialty Insurance
W R B Europe
W/R/B Underwriting
Other
Total
5.3%
7.0
5.3
0.8
2.3
1.2
0.9
1.0
0.6
2.9
0.8
0.1
0.1
1.7
6.6
0.6
0.9
1.5
1.3
0.7
0.8
1.6
3.2
0.5
0.7
0.2
0.9
1.9
0.7
1.5
3.0
2.6
0.3
3.8
0.9
0.7
0.3
1.8
0.2
2.3
0.2
1.1
0.6
2.1
2.6
3.0
1.5
2.1
4.7
1.0
1.3
2.6
1.0
1.1
3.9
1.7
100.0%
13
5.2%
6.2
5.1
0.8
2.7
0.9
1.0
1.2
0.4
3.1
0.9
—
—
1.8
5.6
0.6
0.7
1.8
1.1
0.7
0.8
1.7
2.9
0.5
0.8
0.1
1.0
2.2
0.7
1.4
3.5
1.8
0.3
5.8
1.7
0.6
0.3
1.8
—
2.2
—
1.1
0.6
2.1
2.4
3.1
1.2
2.2
4.7
1.2
1.5
2.5
0.8
1.0
3.6
2.1
100.0%
5.5%
5.9
5.0
0.8
2.8
0.7
0.8
1.2
—
3.2
0.8
—
—
1.8
5.2
0.6
0.8
1.8
1.0
0.8
0.8
1.7
2.7
0.5
0.9
—
1.3
2.1
0.7
1.5
3.0
1.2
0.4
7.5
2.0
0.6
0.2
2.0
—
2.3
—
1.1
0.6
1.7
2.5
3.0
1.1
2.5
4.5
1.5
1.7
2.6
0.8
1.1
4.0
1.2
100.0%
The following table sets forth percentages of gross premiums written, by line, by our Insurance operations:
Other liability
Short-tail lines (1)
Professional liability
Auto
Workers' compensation
Total
2023
38.4%
25.1
13.0
12.7
10.8
100.0%
Year Ended December 31,
2022
37.0%
23.2
15.5
12.6
11.7
100.0%
2021
35.6%
22.2
17.3
12.5
12.4
100.0%
___________________
(1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler
and machinery, high net worth homeowners and other lines.
Reinsurance & Monoline Excess
We provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance
on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance. Our monoline
excess operations solely retain risk on an excess basis.
Businesses comprising the Reinsurance & Monoline Excess segment are as follows:
Berkley Re America provides treaty and facultative reinsurance solutions on a variety of product lines through
reinsurance brokers to companies whose primary operations are within the United States and Canada.
Berkley Re Asia Pacific provides property and casualty reinsurance to the Asia Pacific marketplace. With offices in
Brisbane, Sydney, Beijing, Labuan and Singapore, each branch focuses on excess of loss reinsurance, targeting both property
and casualty treaty and facultative contracts, through multiple distribution channels.
Berkley Re Solutions is a direct casualty facultative reinsurance underwriter serving clients through a nationwide network
of regional offices. Its facultative reinsurance products include automatic, semi-automatic and individual risk assumed
reinsurance. It also provides its customers with turnkey products such as cyber, employment practices liability insurance
("EPLI"), liquor liability insurance and violent events coverage to help enhance their clients' product offerings, along with
underwriting, claims, and actuarial consultation.
Berkley Re UK writes international property casualty treaty and property facultative accounts. Its territorial scope
includes reinsured clients domiciled in the United Kingdom, Europe, Africa, the Middle East and the Caribbean.
Lloyd's Syndicate 2791 Participation represents the Company's minority participation in a Lloyd's syndicate that writes a
broad range of mainly short-tail classes of business.
Midwest Employers Casualty provides excess workers' compensation insurance products to individual employers, groups
and workers' compensation insurance companies across the United States. Its workers' compensation excess of loss products
include self-insured excess of loss coverages and large deductible policies. Through its relationship with Berkley Net
Underwriters, Midwest Employers Casualty also offers multi-state coverage for group self-insureds. It has developed
sophisticated, proprietary analytical tools and risk management services designed to help its insureds lower their total cost of
risk.
14
The following table sets forth the percentages of gross premiums written by each Reinsurance & Monoline Excess
business:
Berkley Re America
Berkley Re Asia Pacific
Berkley Re Solutions
Berkley Re UK
Lloyd's Syndicate 2791 Participation
Midwest Employers Casualty
Total
2023
33.7 %
16.0
10.2
11.4
9.4
19.3
Year Ended December 31,
2022
34.6 %
15.6
12.5
12.8
6.1
18.4
2021
31.2 %
15.4
13.8
13.8
6.8
19.0
100.0%
100.0%
100.0%
The following table sets forth the percentages of gross premiums written, by line, by our Reinsurance & Monoline
Excess operations:
Casualty
Property
Monoline Excess
Total
Results by Segment
2023
56.4 %
24.4
19.2
100.0%
Year Ended December 31,
2022
61.7 %
19.9
18.4
100.0%
2021
61.8 %
19.2
19.0
100.0%
Summary financial information about our segments is presented on a GAAP basis in the following table:
(In thousands)
Insurance
Revenue
Income before income taxes
Reinsurance & Monoline Excess
Revenue
Income before income taxes
Other (1)
Revenue
Loss before income taxes
Total
Revenue
Income before income taxes
Year Ended December 31,
2023
2022
2021
$
$
$
9,961,152 $
1,640,438
8,952,493 $
1,455,658
1,481,991
438,765
699,795
(324,800)
1,386,639
316,527
827,367
(52,504)
12,142,938 $
1,754,403 $
11,166,499 $
1,719,681 $
7,578,592
1,219,798
1,203,647
270,563
673,227
(207,456)
9,455,466
1,282,905
_______________________________________
(1) Represents corporate revenues and expenses, net investment gains and losses, and revenues and expenses from non-
insurance businesses that are consolidated for financial reporting purposes.
15
The table below represents summary underwriting ratios on a GAAP basis for our segments. Loss ratio is losses and loss
expenses incurred expressed as a percentage of net premiums earned. Expense ratio is underwriting expenses expressed as a
percentage of net premiums earned. Underwriting expenses do not include expenses related to insurance services or unallocated
corporate expenses. Combined ratio is the sum of the loss ratio and the expense ratio. The combined ratio represents a measure
of underwriting profitability, excluding investment income. A number in excess of 100 indicates an underwriting loss; a number
below 100 indicates an underwriting profit:
Insurance
Loss ratio
Expense ratio
Combined ratio
Reinsurance & Monoline Excess
Loss ratio
Expense ratio
Combined ratio
Total
Loss ratio
Expense ratio
Combined ratio
Investments
Year Ended December 31,
2023
2022
2021
62.3 %
28.4
90.7 %
53.8 %
28.3
82.1 %
61.3 %
28.4
89.7 %
61.3 %
27.9
89.2 %
61.3 %
28.4
89.7 %
61.3 %
28.0
89.3 %
61.1 %
28.3
89.4 %
61.0 %
29.7
90.7 %
61.1 %
28.5
89.6 %
Investment results, before income taxes, were as follows:
(In thousands)
Average investments, at cost (1)
Net investment income (1)
Percent earned on average investments (1)
Net investment gains
Change in unrealized investment gains (losses) (2)
Year Ended December 31,
2023
2022
2021
$
$
$
$
26,444,111
1,052,835
3.9 %
47,042
392,903
$
$
$
$
24,438,112
779,185
3.2 %
202,397
(1,248,128)
$
$
$
$
22,234,975
671,618
3.0 %
90,632
(254,939)
_______________________________________
(1) Includes investments, cash and cash equivalents, trading accounts receivable (payable) from brokers and clearing
organizations, trading account securities sold but not yet purchased and unsettled purchases.
(2) Represents the change in unrealized investment gains (losses) for available for sale securities recognized in stockholders'
equity.
For comparison, the following are the coupon returns for the Barclays U.S. Aggregate Bond Index and the dividend
returns for the S&P 500® Index:
Barclays U.S. Aggregate Bond Index
S&P 500® Index
Year Ended December 31,
2023
2022
2021
3.3 %
2.0
2.7 %
1.3
2.3 %
1.8
The percentages of the fixed maturity portfolio categorized by contractual maturity, based on fair value, on the dates
indicated, are set forth below. Actual maturities may differ from contractual maturities because certain issuers may have the
right to call or prepay certain obligations.
16
1 year or less
Over 1 year through 5 years
Over 5 years through 10 years
Over 10 years
Mortgage-backed securities
Total
2023
9.2%
46.2
21.2
12.2
11.2
100.0%
Year Ended December 31,
2022
8.7%
47.2
23.4
11.2
9.5
100.0%
2021
9.5%
46.1
25.2
12.7
6.5
100.0%
At each of December 31, 2023 and 2022, the fixed maturity portfolio, including cash and cash equivalents, had an
effective duration of 2.4 years.
Loss and Loss Expense Reserves
To recognize liabilities for unpaid losses, either known or unknown, insurers establish reserves, which is a balance
sheet account representing estimates of future amounts needed to pay claims and related expenses with respect to insured events
which have occurred. Estimates and assumptions relating to reserves for losses and loss expenses are based on complex and
subjective judgments, often including the interplay of specific uncertainties with related accounting and actuarial
measurements. Such estimates are also susceptible to change as significant periods of time may elapse between the occurrence
of an insured loss, the report of the loss to the insurer, the ultimate determination of the cost of the loss and the insurer’s
payment of that loss.
In general, when a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the
ultimate payment based upon known information about the claim at that time. The estimate represents an informed judgment
based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature and
value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not
reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including
legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon
the then current legal interpretation of coverage provided.
In examining reserve adequacy, several factors are considered in estimating the ultimate economic value of losses.
These factors include, among others, historical data, legal developments, changes in social attitudes and economic conditions,
including the effects of inflation. The actuarial process relies on the basic assumption that past experience, adjusted
judgmentally for the effects of current developments and anticipated trends, is an appropriate basis for predicting future
outcomes. Reserve amounts are necessarily based on management’s informed estimates and judgments using currently available
data. As additional experience and other data become available and are reviewed, these estimates and judgments may be
revised. This may result in reserve increases or decreases that would be reflected in our results in periods in which such
estimates and assumptions are changed.
The risk and complexity of estimating loss reserves are greater when economic conditions are uncertain. It is
especially difficult to estimate the impact of inflation on loss reserves given the current economic environment and related
government actions. Whereas a slowing economy would generally lead to lower inflation or even deflation, increased
government spending would generally lead to higher inflation. A change in our assumptions regarding inflation would result in
reserve increases or decreases that would be reflected in our earnings in periods in which such assumptions are changed.
Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management
expects the ultimate settlement and claim administration will cost. While the methods for establishing the reserves are well
tested over time, some of the major assumptions about anticipated loss emergence patterns are subject to unanticipated
fluctuation. These estimates, which generally involve actuarial projections, are based on management’s assessment of facts and
circumstances then known, as well as estimates of trends in claims severity and frequency, judicial theories of liability and other
factors, including the actions of third parties, which are beyond the Company’s control. These variables are affected by external
and internal events, such as inflation and economic volatility, judicial and litigation trends, reinsurance coverage, legislative
changes and claim handling and reserving practices, which make it more difficult to accurately predict claim costs. The inherent
uncertainties of estimating reserves are greater for certain types of liabilities where long periods of time elapse before a
definitive determination of liability is made. Although the loss reserves included in the Company’s financial statements
represent management’s best estimates, setting reserves is inherently uncertain and the Company cannot provide assurance that
its current reserves will prove adequate in light of subsequent events.
17
The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’
compensation reserves that were discounted was $1,352 million and $1,464 million at December 31, 2023 and 2022,
respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $390 million
and $416 million at December 31, 2023 and 2022, respectively. At December 31, 2023, discount rates by year ranged from
0.7% to 6.5%, with a weighted average discount rate of 3.5%.
Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2023)
are excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment
securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount
rates determined by reference to the U.S. Treasury yield curve. These rates are determined annually based on the weighted
average rate for the period. Once established, no adjustments are made to the discount rate for that period, and any increases or
decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are
recognized. The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss
payout experience.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing
approximately 3% of total discounted reserves at December 31, 2023), including reserves for quota share reinsurance and
reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates permitted by the
Department of Insurance of the State of Delaware.
To date, known environmental and asbestos claims have not had a material impact on the Company’s operations,
because its subsidiaries generally did not insure large industrial companies that are subject to significant environmental or
asbestos exposures prior to 1986 when an absolute exclusion was incorporated into standard policy language.
The Company’s net reserves for losses and loss expenses relating to environmental and asbestos claims on policies
written before adoption of the absolute exclusion was $17 million and $20 million at December 31, 2023 and 2022,
respectively. The estimation of these liabilities is subject to significantly greater than normal variation and uncertainty because
it is difficult to make an actuarial estimate of these liabilities due to the absence of a generally accepted actuarial methodology
for these exposures and the potential effect of significant unresolved legal matters, including coverage issues, as well as the cost
of litigating the legal issues. Additionally, the determination of ultimate damages and the final allocation of such damages to
financially responsible parties are highly uncertain.
The table below provides a reconciliation of the beginning of year and end of year property casualty reserves for the
indicated years:
(In thousands)
Net reserves at beginning of year
Net provision for losses and loss expenses:
Claims occurring during the current year (1)
Increase in estimates for claims occurring in prior years (2)
Loss reserve discount amortization
Total
Net payments for claims:
Current year
Prior years
Total
Foreign currency translation
Net reserves at end of year
Ceded reserves at end of year
Gross reserves at end of year
Net change in premiums and losses occurring in prior years:
Increase in estimates for claims occurring in prior years (2)
Retrospective premium adjustments for claims occurring in prior years (3)
Net premium and reserve development on prior years
____________________________________
18
2023
2022
2021
$
14,248,879 $
12,848,362 $
11,620,393
6,311,780
5,774,713
4,921,191
29,681
30,681
54,511
32,526
863
31,906
6,372,142
5,861,750
4,953,960
1,217,078
3,764,532
4,981,610
22,409
15,661,820
3,077,832
1,068,577
3,279,333
4,347,910
(113,323)
14,248,879
2,762,344
887,896
2,777,798
3,665,694
(60,297)
12,848,362
2,542,526
$
18,739,652 $
17,011,223 $
15,390,888
$
$
(29,681) $
10,782
(18,899) $
(54,511) $
18,106
(36,405) $
(863)
7,510
6,647
(1) Claims occurring during the current year are net of loss reserve discounts of $47 million, $35 million and $21 million in
2023, 2022 and 2021, respectively.
(2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the
estimates for claims occurring in prior years decreased by $13 million in 2023, increased by $16 million in 2022, and
decreased by $19 million in 2021.
(3) For certain retrospectively rated insurance policies and reinsurance agreements, changes in loss and loss expenses for prior
years are offset by additional or return premiums.
Also, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and note
13, Reserves for Losses and Loss Expenses included in our audited consolidated financial statements for further information
regarding the changes in estimates for claims occurring in prior years.
A reconciliation between the reserves as of December 31, 2023 as reported in the accompanying consolidated GAAP
financial statements and those reported on the basis of statutory accounting principles (“SAP”) in the Company’s
U.S. regulatory filings is as follows:
(In thousands)
Net reserves reported in U.S. regulatory filings on a SAP basis
Reserves for non-U.S. companies
Loss reserve discounting (1)
Ceded reserves
Allowance for expected credit losses on due from reinsurers
Gross reserves reported in the consolidated GAAP financial statements
$
14,954,598
780,762
(80,832)
3,077,832
7,292
$
18,739,652
_________________________
(1) For statutory purposes, the Company discounts its workers’ compensation reinsurance reserves at 2.5% as prescribed or
permitted by the Department of Insurance of the State of Delaware. In its GAAP financial statements, the Company
discounts excess workers’ compensation reserves at the risk-free rate and assumed workers’ compensation reserves at the
statutory rate.
Reinsurance
We follow a common industry practice of reinsuring a portion of our exposures and paying to reinsurers a portion of the
premiums received on the policies that we write. Reinsurance is purchased principally to reduce net liability on individual risks
and to protect against catastrophic losses. Although reinsurance does not legally discharge an insurer from its primary liability
for the full amount of the policies, it does make the assuming reinsurer contractually liable to the insurer to the extent of the
reinsurance coverage. We monitor the financial condition of our reinsurers and attempt to place our coverages only with
substantial, financially sound carriers. As a result, generally the reinsurers who reinsure our casualty insurance must have an
A.M. Best rating of “A (Excellent)” or better with at least $1 billion in policyholder surplus and the reinsurers who cover our
property insurance must have an A.M. Best rating of “A- (Excellent)” or better with at least $1 billion in policyholder surplus.
Regulation
U.S. Regulation
Our U.S. insurance subsidiaries are principally regulated by their domiciliary state insurance departments and are subject
to varying degrees of regulation and supervision in the other U.S. jurisdictions in which they do business. As of January 1,
2024, there are six domiciliary states related to our U.S. insurance subsidiaries.
Overview. Our domestic insurance subsidiaries are subject to statutes which delegate regulatory, supervisory and
administrative powers to state insurance commissioners. This regulation relates to such matters as the standards of solvency
which must be met and maintained; the licensing of insurers and their agents; the nature of and limitations on investments;
deposits of securities for the benefit of policyholders; approval of certain policy forms and premium rates; periodic examination
of the affairs of insurance companies; annual and other reports required to be filed on the financial condition of insurers or for
other purposes; establishment and maintenance of reserves for unearned premiums, loss expenses and losses; and requirements
regarding numerous other matters. Our property casualty subsidiaries, other than our excess and surplus lines and reinsurance
subsidiaries, must generally file all rates with the insurance department of each state in which they operate. Our excess and
surplus lines and reinsurance subsidiaries generally operate free of rate and form regulation.
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Holding Company Statutes. In addition to regulatory supervision of our insurance subsidiaries, we are subject to state
statutes governing insurance holding company systems. Under the terms of applicable state statutes, any person or entity
desiring to purchase more than a specified percentage (commonly 10%) of our outstanding voting securities would be required
to obtain prior regulatory approval of the purchase. Typically, such statutes require that we periodically file information with
the appropriate domiciliary state insurance commissioner, including information concerning our capital structure, ownership,
financial condition and general business operations.
We must also annually submit to the lead state regulator for our group an “enterprise risk management report” which
identifies the activities and circumstances of any affiliated company that might have a material adverse effect on the financial
condition of our group or our U.S. licensed insurers.
In addition, all states have adopted changes to the holding company act that authorize U.S. insurance regulators to lead or
participate in the group-wide supervision of certain international insurance groups. In November 2019, the International
Association of Insurance Supervisors (“IAIS”), an international standard setter, adopted a global framework for the supervision
of internationally active insurance groups (“IAIGs”), as discussed below under “International Regulation.” This framework
includes a risk-based, group-wide global insurance capital standard (“ICS”), which is undergoing a five-year monitoring period
that started in January 2020. We have received notice from Delaware, our lead state insurance regulator, that we may be
considered an IAIG. In the event that we are deemed to be an IAIG, we would be subject to international oversight coordinated
by the Delaware Department of Insurance.
In the United States, the National Association of Insurance Commissioners (the “NAIC”) has developed a group capital
calculation tool that uses a risk-based capital aggregation methodology for all entities in an insurance holding company system.
The goal is to provide U.S. regulators with a method to aggregate the available capital and the minimum capital of each entity
in a group in a way that applies to all companies regardless of their structure. In 2022, Delaware, our lead state regulator,
adopted the NAIC amendments to the model holding company act and regulation that require the ultimate controlling person of
an insurer subject to holding company registration to submit the group capital calculation filing annually with its lead state
regulator.
All states have adopted the NAIC's Risk Management and Own Risk and Solvency Assessment Model Act (the “ORSA
Model Act”), which requires an insurance holding company system’s chief risk officer to submit annually to its lead state
insurance regulator an Own Risk and Solvency Assessment Summary Report (“ORSA Report”). The ORSA Report is a
confidential internal assessment of the material and relevant risks associated with an insurer’s current business plan and the
sufficiency of capital resources to support those risks. Under the ORSA Model Act, as enacted by the states, we are required to:
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regularly, no less than annually, conduct an Own Risk and Solvency Assessment to assess the adequacy of our risk
management framework, and current and estimated projected future solvency position;
internally document the process and results of the assessment; and
provide an ORSA Report annually to the State of Delaware's Insurance Commissioner.
Cybersecurity Regulations. New York’s cybersecurity regulation applies to financial services institutions authorized by
the New York State Department of Financial Services (the “NYDFS”), including our insurance subsidiaries licensed in New
York. The regulation requires these entities to assess risks associated with their information systems and establish and maintain
a cybersecurity program reasonably designed to protect consumers’ private data and the confidentiality, integrity and
availability of the licensee’s information systems. On November 1, 2023, the NYDFS adopted amendments to New York’s
cybersecurity regulation, which require additional reporting, governance and oversight measures, and enhanced cybersecurity
safeguards to be implemented. The amendments take effect in phases that began in 2023 and continue through 2025.
The NAIC has adopted the Insurance Data Security Model Law (the “Cybersecurity Model Law”) for consideration by
state legislatures, which establishes standards for data security, the investigation of cybersecurity events involving the
unauthorized access to, or misuse of, certain nonpublic information, and reporting to insurance commissioners. The
Cybersecurity Model Law imposes significant regulatory burdens intended to protect the confidentiality, integrity and
availability of information systems. As of December 31, 2023, the Cybersecurity Model Law, or a form thereof, had been
adopted by several states, including three of our U.S. insurance subsidiaries’ domiciliary states. A drafting note in the
Cybersecurity Model Law states that a licensee’s compliance with New York's cybersecurity regulation is intended to constitute
compliance with the Cybersecurity Model Law, but compliance remains a state-by-state issue requiring consideration of any
State differences in implementation and enforcement of the Cybersecurity Model Law.
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Certain other states have enacted or are considering laws and regulations related to privacy and data security. For
example, the California Consumer Privacy Act (“CCPA”), broadly regulates the collection, processing and disclosure of
California residents’ personal information, imposes limits on the “sale” of personal information and grants California residents
certain rights to, among other things, access and delete data about them in certain circumstances. The CCPA also established a
private right of action, with potentially significant statutory damages, whereby businesses that fail to implement reasonable
security measures to protect against breaches of personal information could be liable to affected California consumers.
California subsequently enacted the California Privacy Rights Act (“CPRA”), which came into full effect in January 2023 and
amended the CCPA by imposing additional limitations and obligations with respect to covered businesses’ use and sharing of
certain personal data. Compliance with the CCPA/CPRA may increase the cost of providing our products and services in
California. An increasing number of U.S. states have adopted, or are considering legislation similar to the CCPA.
Additionally, the NAIC is working on a new Insurance Consumer Privacy Protections Model Law to
reflect the extensive innovations in communications and technology since the adoption of the prior model laws.
We cannot predict the impact, if any, that any current, proposed or future federal or state cybersecurity laws or
regulations will have on our business, financial condition or results of operations.
Innovation and Technology. As a result of increased innovation and use of technology in the insurance sector, the
NAIC and insurance regulators have been focusing on the use of “big data” techniques, such as artificial intelligence, machine
learning and automated decision-making. In December 2023, the NAIC adopted the Model Bulletin on the Use of Artificial
Intelligence Systems by Insurers (the “AI Bulletin”). The AI Bulletin may be adopted and issued by state regulators to licensed
insurers. In addition to affirming that the use of artificial intelligence must comply with existing state law, the AI Bulletin sets
forth regulators’ expectations on how insurers will develop, acquire and use artificial intelligence technologies. In 2024, the
NAIC plans to form a new task force to create a regulatory framework for the oversight of insurers’ use of third-party data and
models.
The NAIC and state insurance regulators are also focused on addressing unfair discrimination by insurers in the use of
consumer data and technology, and certain states have passed laws or are considering action targeting unfair discrimination
practices. For example, in 2021 Colorado enacted a law that prohibits insurers from using external consumer data and
information sources (“ECDIS”), as well as algorithms or predictive models that use ECDIS, in a way that unfairly discriminates
based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity or gender expression.
In August 2023, Colorado adopted regulations requiring life insurers to adopt a governance and risk management framework
for the use of artificial intelligence, machine learning and other technologies that utilize “external consumer data.” It is expected
that Colorado will also adopt governance and testing regulations for other lines of insurance, in accordance with the
requirements of its 2021 law.
We cannot predict whether states will adopt the AI Bulletin, or what, if any, changes to laws or regulations may be
enacted with regard to “big data” or artificial intelligence technologies.
Risk-Based Capital Requirements. The NAIC utilizes a Risk-Based Capital (“RBC”) formula that is designed to
measure the adequacy of an insurer's statutory surplus in relation to the risks inherent in its business. The RBC formula
develops a risk adjusted target level of adjusted statutory capital by applying certain factors to various asset, premium and
reserve items. The NAIC RBC Model Law provides for four incremental levels of regulatory attention for insurers whose
surplus is below the calculated RBC target. These levels of attention range in severity from requiring the insurer to submit a
plan for corrective action to actually placing the insurer under regulatory control. The RBC of each of our domestic insurance
subsidiaries was above the calculated RBC target level as of December 31, 2023.
Insurance Regulatory Information System. The NAIC also has developed a set of 13 financial ratios for property and
casualty insurers referred to as the Insurance Regulatory Information System (“IRIS”). On the basis of statutory financial
statements filed with state insurance regulators, the NAIC annually calculates these IRIS ratios to assist state insurance
regulators in monitoring the financial condition of insurance companies. The NAIC has established an acceptable range for each
of the IRIS financial ratios.
Guaranty Funds. Our U.S. insurance subsidiaries are also subject to assessment by state guaranty funds in states where
we transact admitted business when an insurer in a particular jurisdiction has been judicially declared insolvent and the
insolvent company's available funds are insufficient to pay policyholders and claimants the amounts to which they are entitled.
The protection afforded under a state's guaranty fund to policyholders of the insolvent insurer varies from state to state.
Generally, all licensed property casualty insurers are considered to be members of the fund, and assessments are based upon
their pro rata share of direct written premiums in that state. The NAIC Post-Assessment Property and Liability Insurance
Guaranty Association Model Act, a version of which has been adopted by all states, limits assessments to 2% of an insurer’s
subject premiums and permits recoupment of assessments through rate setting. Likewise, several states (or underwriting
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organizations of which our insurance subsidiaries are required to be members) have limited assessment authority with regard to
deficits in certain lines of business.
Additionally, state insurance laws and regulations require us to participate in mandatory property-liability “shared
market,” “pooling” or similar arrangements that provide certain types of insurance coverage to individuals or others who
otherwise are unable to purchase coverage voluntarily provided by private insurers. Shared market mechanisms include
assigned risk plans and fair access to insurance requirement or “FAIR” plans. In addition, some states require insurers to
participate in reinsurance pools for claims that exceed specified amounts. Our participation in these mandatory shared market or
pooling mechanisms generally is related to the amount of our direct writings for the type of coverage written by the specific
mechanism in the applicable state.
Dividends. We receive funds from our insurance company subsidiaries in the form of dividends and management fees
for certain management services. Annual dividends in excess of maximum amounts prescribed by state statutes may not be paid
without the approval of the insurance commissioner of the state in which an insurance subsidiary is domiciled. See
“Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources.”
Trade Practices. State insurance laws and regulations include numerous provisions governing trade practices and the
marketplace activities of insurers, including provisions governing marketing and sales practices, policyholder services, claims
management and complaint handling. State regulatory authorities generally enforce these provisions through periodic market
conduct examinations.
Investment Regulation. Investments by our domestic insurance companies must comply with applicable laws and
regulations which prescribe the kind, quality and concentration of investments. In general, these laws and regulations permit
investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage
loans, real estate and certain other investments, subject to specified limits and certain other qualifications. Investments that do
not comply with these limits and qualifications are deducted in our insurance subsidiaries' calculation of their statutory capital
and surplus.
Terrorism Risk Insurance. The Terrorism Risk Insurance Act of 2002 established a Federal program that provides for a
system of shared public and private compensation for insured losses resulting from acts of terrorism. Pursuant to the Terrorism
Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), the program was extended until December 31, 2027.
TRIPRA provides a federal backstop to all U.S. based property and casualty insurers for insurance related losses
resulting from any act of terrorism on U.S. soil or against certain U.S. air carriers, vessels or foreign missions. TRIPRA is
applicable to almost all commercial lines of property and casualty insurance but excludes auto, burglary and theft, surety,
professional liability and farm owners' multi-peril insurance. Insurers with direct commercial property and casualty insurance
exposure in the United States are required to participate in the program and make available coverage for certified acts of
terrorism. TRIPRA's definition of certified acts includes domestic terrorism. Federal participation will be triggered under
TRIPRA when the Secretary of Treasury certifies an act of terrorism.
Under the program, the federal government will pay 80% of an insurer's covered losses in excess of the insurer's
applicable deductible. The insurer's deductible is calculated as 20% of earned premium for the prior year for covered lines of
commercial property and casualty insurance. Based on our 2023 earned premiums, our aggregate deductible under TRIPRA
during 2024 will be approximately $1,464 million. The federal program will not pay losses for certified acts unless such losses
exceed $200 million industry-wide for any calendar year. TRIPRA limits the federal government's share of losses at
$100 billion for a program year. In addition, an insurer that has satisfied its deductible is not liable for the payment of losses in
excess of the $100 billion cap.
Excess and Surplus Lines. The regulation of our U.S. subsidiaries' excess and surplus lines insurance business differs
significantly from the regulation of our admitted business. Our surplus lines subsidiaries are subject to the surplus lines
regulation and reporting requirements of the jurisdictions in which they are eligible to write surplus lines insurance. Although
surplus lines business is generally less regulated than admitted business, principally with respect to rates and policy forms, strict
regulations apply to surplus lines placements in the laws of every state and the regulation of surplus lines insurance may
undergo changes in the future. Federal or state measures may be introduced to increase the oversight of surplus lines insurance
in the future.
Climate Change and Financial Risks. The NAIC and state insurance regulators continue to evaluate issues related to
the management of climate risk. In 2022, the NAIC adopted a new standard for insurance companies to report their climate-
related risks as part of its annual Climate Risk Disclosure Survey, which applies to insurers that meet the reporting threshold of
$100 million in U.S. direct premium and are licensed in one of the participating jurisdictions. The NYDFS’s 2020 circular
letter, which applies to our insurance subsidiaries licensed in New York, states that regulated insurers are expected to integrate
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financial risks related to climate change into their governance frameworks, risk management processes, business strategies and
scenario analysis, and develop their approach to climate-related financial disclosure. For example, an insurer should designate a
board member or board committee, as well as a senior management function, to oversee the management of financial risks
associated with climate change. The NYDFS also adopted an amendment to the regulation governing enterprise risk
management, which applies to our insurance subsidiaries licensed in New York, that requires an insurance group's enterprise
risk management function to address certain additional risks, including climate change risk.
In addition, the Federal Insurance Office (the “FIO”) is authorized to monitor the U.S. insurance industry under the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), as discussed below under
“Federal Regulation.” Pursuant to this statutory authority, the FIO is assessing how the insurance sector may mitigate climate
risks and help achieve national climate-related goals. In June 2023, the FIO released a report urging insurance regulators to
adopt climate-related risk-monitoring guidance in order to enhance their regulation and supervision of insurers.
Diversity and Corporate Governance.The NAIC and state insurance regulators also continue to evaluate issues related
to diversity within the insurance industry, such as the diversity of an insurer’s board of directors and management. In March
2021, the NYDFS issued a circular letter stating that it expects the insurers it regulates, such as our insurance subsidiaries
licensed in New York, to make diversity of their leadership a business priority and a key element of their corporate governance,
and it includes diversity-related questions in its examination process. In addition, the NAIC is examining practices in the
insurance industry in order to determine how barriers are created that disadvantage or discriminate against people of color or
historically underrepresented groups. NAIC goals include improving access to different types of insurance products in minority
communities, addressing issues related to affordability, and providing guidance to regulators on ways to improve insurance
access and the understanding of insurance in underserved communities. See “Human Capital Resources” below.
Federal Regulation. The federal government and its regulatory agencies generally do not directly regulate the business
of insurance, although federal initiatives could have an impact on our business in a variety of ways. The Dodd-Frank Act
effected sweeping changes to financial services regulation in the United States, and created two new federal government bodies,
the FIO and the Financial Stability Oversight Council (the “FSOC”). The FIO does not have general supervisory or regulatory
authority over the business of insurance, although it has preemption authority over state insurance laws that conflict with certain
international agreements, as discussed below. The FIO also has authority to represent the United States in international
insurance matters and is authorized to monitor the U.S. insurance industry and identify potential regulatory gaps that could
contribute to systemic risk. The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 addresses the roles
played by federal regulators at international insurance standard-setting forums, and it directs the Director of the FIO and the
Board of Governors of the Federal Reserve to support increased transparency at international standard-setting regulatory forums
(e.g., the IAIS). These federal regulations also instruct the FIO and the Federal Reserve to achieve consensus positions with the
states through the NAIC prior to taking a position on any insurance proposal by a global insurance regulatory forum.
The Dodd-Frank Act authorizes the Secretary of the Treasury and U.S. Trade Representative to enter into international
agreements of mutual recognition regarding the prudential regulation of insurance or reinsurance. The U.S. and the European
Union ("EU") signed such a covered agreement (the "EU Covered Agreement") in September 2017, which addresses three areas
of prudential supervision: reinsurance, group supervision and the exchange of information between the U.S. and EU.
In December 2018, the U.S. Department of the Treasury and the Office of the U.S. Trade Representative entered into a
covered agreement with the U.K. (the “U.K. Covered Agreement,” and together with the EU Covered Agreement, the “Covered
Agreements”) in anticipation of the U.K.’s exit from the EU. The U.K. Covered Agreement largely reflects the provisions of the
EU Covered Agreement and incorporates the same timeframes within it.
Under the Dodd-Frank Act, the FIO has preemption authority over state insurance laws that conflict with the Covered
Agreements as of September 1, 2022, such as state credit for reinsurance laws that result in non-U.S. reinsurers subject to the
Covered Agreements being treated less favorably than U.S. reinsurers. The NAIC previously adopted amendments to its Credit
for Reinsurance Model Law to satisfy the substantive and timing requirements of the Covered Agreements, which amendments
have been enacted by all states. On September 30, 2023, the FIO reported that it did not recommend taking any preemption
action as a result of inconsistency between the Covered Agreements and state credit for reinsurance laws, although it is still
monitoring state measures implementing the NAIC’s revisions to the Credit for Reinsurance Model Law. Under the Covered
Agreements, reinsurance collateral requirements no longer apply to qualifying EU and U.K. reinsurers. The amended Credit for
Reinsurance Model Law also extends the zero reinsurance collateral provisions in the Covered Agreements to qualified
reinsurers domiciled in U.S. jurisdictions that are accredited by the NAIC and to non-U.S. jurisdictions that have not entered
into a covered agreement with the U.S. but which the NAIC has identified as “reciprocal jurisdictions” pursuant to the NAIC
Qualified Jurisdiction Process.
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We cannot currently predict the impact of these changes to the law or whether any other covered agreements will be
successfully adopted, and cannot currently estimate the impact of these changes to the law and any such adopted covered
agreements on our business, financial condition or operating results.
The Dodd-Frank Act authorizes the FSOC to designate an insurer as a “systemically important financial institution” or
a “non-bank SIFI” if the insurer’s material financial distress could pose a systemic risk to the financial system or the nature or
scale of its activities could pose a threat to U.S. financial stability. The FIO can recommend that an insurer be designated as a
non-bank SIFI, which would subject the company to Federal Reserve supervision and heightened prudential standards. There
are currently no such non-bank SIFIs designated by the FSOC. In November 2023, the FSOC adopted final guidance that
establishes a new process for designating certain financial companies as non-bank SIFIs. The revised process is based on the
consideration of risk factors set forth in a new analytic framework, which describes how the FSOC intends to monitor a broad
range of institutions and activities and respond to potential risks to U.S. financial stability. The financial vulnerabilities that
most often contribute to this type of risk include leverage, liquidity risk and maturity mismatch, inadequate risk management,
concentration and destabilizing activities. Under the new guidance, the FSOC is no longer required to conduct a cost-benefit
analysis and an assessment of the likelihood of a non-bank financial company’s material financial distress before considering
the designation of the company. The revised process could have the effect of simplifying and shortening FSOC’s procedures for
designating certain financial companies as non-bank SIFIs.
Based upon our current business model and balance sheet, we do not believe that we will be designated by the FSOC
as such an institution. Although the potential impact of any future amendments to the Dodd-Frank Act on the U.S. insurance
industry is not clear, our business could be affected by changes to the U.S. system of insurance regulation or our designation or
the designation of insurers or reinsurers with which we do business as non-bank SIFIs.
Legislative and Regulatory Activity Related to the COVID-19 Pandemic or Other Potential Pandemics. In response to
the outbreak of the COVID-19 pandemic in 2020, legislators in several states and in the United States Congress introduced
proposals that would have mandated insurance coverage for certain pandemic-related losses, including business interruption
losses, or that would have established a federal insurance program for addressing pandemic risk. None of these proposals were
enacted. However, there remains some risk that in the event of another pandemic event, whether related to COVID-19 or
another contagious disease, Congress could take similar actions. See “Risk Factors — Risks Related to Our Industry — The
COVID-19 pandemic materially and adversely affected our results of operations, and, whether as a result of COVID-19's long-
term effects, or new or emerging variants, or other potential pandemics, may further materially and adversely affect our results
of operations, financial position and liquidity in the future."
International Regulation
Our insurance subsidiaries based in the United Kingdom are regulated by the Prudential Regulation Authority (“PRA”)
and/or the Financial Conduct Authority (“FCA”). The PRA’s primary objectives with regard to insurers are to promote the
safety and soundness of insurers and to contribute to the securing of an appropriate degree of protection for current and future
policyholders. The FCA has three operational objectives: (i) to secure an appropriate degree of protection for consumers, (ii) to
protect and enhance the integrity of the United Kingdom’s financial system, and (iii) to promote effective competition in the
interests of consumers in the financial services markets. The PRA and FCA employ a variety of regulatory tools to achieve their
objectives, including periodic auditing and reporting requirements, risk assessment reviews, minimum solvency margins and
individual capital assessment requirements, dividend restrictions, in certain cases, approval requirements governing the
appointment of key officers, approval requirements governing controlling ownership interests and various other requirements.
Our Lloyd’s managing agency is also regulated by Lloyd’s, and the Lloyd’s syndicate business is subject to Lloyd’s
supervision. Through Lloyd’s, we are licensed to write business in various countries throughout the world by virtue of Lloyd’s
international licenses. In each such country, we are subject to the laws and insurance regulation of that country. Our insurance
subsidiary based in Liechtenstein is regulated by the Financial Market Authority of Liechtenstein ("FMA"), which has
regulatory tools analogous to those of the U.K. regulators noted above.
Additionally, U.K. and Liechtenstein laws and regulations also impact us as “controllers” of our European-regulated
subsidiaries, whereby we are required to notify the appropriate authorities about significant events relating to such regulated
subsidiaries’ controllers (i.e. persons or entities which have certain levels of direct or indirect voting power or economic
interests in the regulated entities) as well as changes of control, and to submit annual reports regarding their controllers. The
PRA/FCA’s Senior Managers and Certification Regime and analogous regulation in Liechtenstein further provide regulatory
frameworks for standards of fitness and propriety, conduct and accountability for individuals in positions of responsibility at
insurers. In addition, certain employees are individually registered at Lloyd’s.
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Our insurance business throughout the EU and EEA is subject to “Solvency II,” an insurance regulatory regime
governing, among other things, capital adequacy and risk management. Following the U.K.’s withdrawal from the EU, or
Brexit, our Lloyd’s managing agency (and the U.K. branch of our Liechtenstein subsidiary) are now subject to a separate U.K.
prudential regime, which is broadly identical to Solvency II but will diverge from Solvency II in the future. The U.K. has
recently adopted legislative reforms that amended various parts of the U.K.’s prudential regime, including the risk margin,
matching adjustment requirements and regulatory reporting obligations. The legislative reforms relating to the risk margin took
effect from December 31, 2023, and other areas of reform will come into force throughout 2024.
Similarly, the EU’s legislative bodies have undertaken a review of Solvency II. In September 2021, the European
Commission published a package of proposed legislative reforms for amending the existing regulatory framework. The
legislative bodies reached a provisional agreement on the revised text of Solvency II in December 2023. A finalized set of rules
will now be prepared, which EU member states will implement into their domestic legislation.
Solvency II provides for the supervision of group solvency. Under Solvency II, it is possible that the U.S. parent of a
European Union subsidiary could be subject to certain Solvency II requirements if the U.S. company is not already subject to
regulations deemed “equivalent” to Solvency II. Currently, the U.S. system of insurance regulation relating to group
supervision is not deemed “equivalent” to Solvency II by European Union authorities. The PRA will also perform separate, but
comparable, supervision of group solvency under the U.K.’s own domestic prudential regime where a U.S. holding company is
a parent of a subsidiary U.K. insurer or reinsurer.
The Liechtenstein financial services regulator, the FMA, is the group supervisor for our European-regulated
subsidiaries. However, the Covered Agreements prohibit any EU supervisor or the PRA (as applicable) from exercising group-
wide supervision at any level above the highest company organized in the country of that supervisor.
We must also comply with the EU General Data Protection Regulation (EU) 2016/879) (“GDPR”), which took effect
in May 2018, including EEA member state legislation implementing the GDPR. The regulation’s goal is to impose increased
individual rights and protections for all personal data located in or originating from the EU. The Data Protection Act 2018 and
the U.K. General Data Protection Regulation, which is the retained EU law version of the GDPR by virtue of the European
Union (Withdrawal) Act 2018 and as amended by the Data Protection, Privacy and Electronic Communications (Amendments
etc.) (EU Exit) Regulations 2019 (together, “U.K. GDPR”), regulate data protection for all individuals within the U.K. Both the
GDPR and the U.K. GDPR are extraterritorial in that they apply to all businesses in the EU and the U.K. respectively and any
business outside the EU and the U.K. that offers services, or monitors the behavior of individuals, in the EU and/or U.K., and
that processes the personal data of individuals in the EU and/or the U.K. Moreover, there are significant fines associated with
non-compliance. In particular, we need to monitor our compliance with all relevant member states’ laws and regulations,
including where permitted derogations from the GDPR and the U.K. GDPR are introduced. The introduction of the GDPR and
the U.K. GDPR, and any resultant changes in EU member states’ or U.K. national laws and regulations, has increased our
compliance obligations and has necessitated the review and implementation of policies and processes relating to our collection
and use of data, and has required us to change our business practices regarding these matters.
In addition, we may become subject to or affected by regulatory policies adopted by the IAIS, an international standard
setter consisting of supervisors and regulators from more than 200 jurisdictions. The IAIS has been working on several
initiatives to consider changes to insurer solvency standards and group supervision of companies in a holding company system
in response to the increasing globalization of the insurance sector. In November 2019, the IAIS formally adopted a global
framework for the supervision of IAIGs, which is referred to as the Common Framework for the Supervision of Internationally
Active Insurance Groups, or “ComFrame.” ComFrame is intended to provide a framework of basic standards for IAIGs and a
process for supervisors to cooperate in the supervision of IAIGs. Also in November 2019, the IAIS adopted a risk-based group-
wide global insurance capital standard (“ICS”) that will apply to IAIGs and ultimately form a part of ComFrame. The ICS
commenced a five-year monitoring period in January 2020 which is being used for confidential reporting and discussion in
supervisory colleges to provide feedback to the IAIS on the ICS’s design and performance, but will not trigger any supervisory
action. Following this monitoring period, the ICS is expected to be implemented in 2025 as a group-wide prescribed capital
requirement for IAIGs and integrated into the rest of ComFrame. The IAIS is also conducting a comparability assessment to
determine whether an aggregation method approach to a group capital standard, which forms part of the NAIC’s group capital
calculation, produces comparable outcomes to the ICS. As noted above under “U.S. Regulation,” it is unclear how the
development of the ICS will interact with existing capital requirements for insurance companies in the United States and the
NAIC’s development of the group capital calculation. We have received notice from Delaware, our lead state insurance
regulator, that we may be considered an IAIG. In the event that we are deemed to be an IAIG, we would be subject to
international oversight coordinated by the Delaware Department of Insurance.
Our international operations are also subject to varying degrees of regulation in Mexico, Australia and Canada and in
certain other countries in Europe, South America, and Southeast Asia. Generally, our subsidiaries must satisfy local regulatory
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requirements. While each country imposes licensing, solvency, auditing and financial reporting requirements, the type and
extent of the requirements differ substantially. Key areas where country regulations may differ include: (i) the type of financial
reports to be filed; (ii) a requirement to use local intermediaries; (iii) the amount of reinsurance permissible; (iv) the scope of
any regulation of policy forms and rates; and (v) the type and frequency of regulatory examinations.
Competition
The property casualty insurance and reinsurance businesses are highly competitive, with many insurance companies of
various sizes, as well as other entities offering risk alternatives such as self-insured retentions or captive programs, transacting
business in the United States and internationally. We compete directly with a large number of these companies. Competition in
our industry is largely measured by the ability to provide insurance and services at a price and on terms that are reasonable and
acceptable to the customer. Our strategy in this highly fragmented industry is to seek specialized areas or geographic regions
where our businesses can gain a competitive advantage by responding quickly to changing market conditions. Our businesses
establish their own pricing practices based upon a Company-wide philosophy to price products with the intent of making an
underwriting profit.
Competition for insurance business within the United States comes from other specialty insurers, regional carriers, large
national multi-line companies and reinsurers. Our specialty businesses compete with excess and surplus insurers as well as
standard carriers. Our regional businesses compete with mutual and other regional stock companies as well as national carriers.
Additionally, direct writers of property casualty insurance compete with our regional businesses by writing insurance through
their salaried employees, generally at a lower acquisition cost than through independent agents such as those used by the
Company. We compete internationally with native insurance operations both large and small, which in some cases are related to
government entities, as well as with branches or local subsidiaries of multinational companies.
Competition for reinsurance business, which is especially strong, comes from domestic and foreign reinsurers, which
produce their business either on a direct basis or through the broker market. These competitors include Swiss Re, Munich Re,
Berkshire Hathaway, Partner Re and others.
In recent years, various institutional investors have increasingly sought to participate in the property and casualty
insurance and reinsurance industries. Well-capitalized new entrants to the property and casualty insurance and reinsurance
industries, or existing competitors that receive substantial infusions of capital, provide increasing competition, which may
adversely impact our business and profitability. Further, an expanded supply of reinsurance capital may lower costs for insurers
that rely on reinsurance and, as a consequence, those insurers may be able to price their products more competitively.
Human Capital Resources
As of January 15, 2024, we employed 8,329 individuals. Of this number, our subsidiaries employed 8,194 individuals
and the remaining individuals were employed at the parent company.
We believe that our people are our greatest asset and that our corporate culture is the most important intangible driver of
long-term value creation for our Company and the highest priority for pursuing long-term risk-adjusted returns and growth in
stockholder value.
Human Capital Management: The Company fosters a performance culture. We are focused on creating a respectful,
rewarding, diverse, and inclusive work environment that allows our employees to build meaningful and productive careers. The
success of these human capital management objectives is essential to our strategy, as it is our people who drive our success. We
invest in their growth as individuals and professionals through training and engagement, as well as in their well-being through
robust health and wellness programs and a commitment to diversity.
The Company provides developmental opportunities for our employees through formal and informal programs that focus
on enabling employees to build skills and thought leadership in specific facets of our business. Our leadership programs
cultivate the talent of our high-potential, strong-performing employees as we strive to deepen, enhance and diversify the
Company’s leadership team.
We strive to align employee incentives with the risk and performance frameworks of the Company. The Company’s “pay
for performance” philosophy connects individual, business and Company results to employee compensation, providing
employees with opportunities to share in the Company’s overall growth and success. The Company offers employees a
comprehensive benefits package, including health and wellness, financial, educational and life management benefits. In
addition, we support employees in making an impact in their local communities and globally through environmental and social
efforts that are meaningful to them.
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Our Board of Directors engages with our senior leadership team, including our senior vice president - human resources,
on a periodic basis across a range of human capital management issues, including succession planning and development,
compensation, benefits, talent recruiting and retention, engagement, diversity and inclusion, and employee feedback.
Culture: The Board of Directors has recognized Accountability, People Oriented Strategy, Responsible Financial
Practices, Risk-Adjusted Returns and Transparency as the elements of corporate culture necessary for the Company to achieve
success. Our culture unifies our employees across our decentralized business model, positions us to serve our diverse clients
globally and propels the Company’s continuous evolution.
We are committed to fostering a unifying culture and encouraging innovation across our enterprise. Our culture
encompasses the beliefs that (i) specialized knowledge and having a customer-centric focus are competitive advantages and (ii)
an environment that promotes integrity, embraces the commitment to “always do right,” fosters entrepreneurship and
innovation, and values making thoughtful decisions for the long-term benefit of our enterprise. While there is no one “Berkley”
way, each of our businesses has its own culture that embodies a shared set of values that define our enterprise. Our structure,
with 60 distinct businesses, facilitates the prompt identification of and appropriate action with respect to addressing individual
business or cultural issues arising within a business, without affecting the larger enterprise. Furthermore, our businesses are
overseen by senior corporate business managers and senior corporate functional managers, including actuarial, underwriting,
compliance and finance, providing a governance oversight structure that makes it easier to identify such issues. Because our
Board of Directors diligently exercises its risk management oversight through, among other activities, regular interactions with
employees beyond corporate senior management, our directors have visibility into and receive timely feedback on cultural
issues that may affect our business.
As significant owners of our Company who are required to hold their shares until separation from service, each of our
directors and senior executives have a vested interest in cultivating talent and perpetuating a culture that facilitates the
execution of our long-term objectives.
Other Information about the Company's Business
We maintain an interest in evaluating the startup of possible new ventures and the acquisition of complementary
businesses on an ongoing basis. In addition, our businesses develop new coverages or enter lines of business to meet the needs
of insureds.
Seasonal weather variations and other events affect the severity and frequency of losses sustained by the insurance and
reinsurance businesses. Although the effect on our business of catastrophes such as tornadoes, hurricanes, hailstorms, wildfires,
earthquakes and terrorist acts may be mitigated by reinsurance, they nevertheless can have a significant impact on the results of
any one or more reporting periods.
We have no customer that accounts for 10 percent or more of our consolidated revenues.
Compliance by W. R. Berkley and its subsidiaries with federal, state and local provisions that have been enacted or
adopted regulating the discharge of materials into the environment, or otherwise relating to protection of the environment, has
not had a material effect upon our capital expenditures, earnings or competitive position.
The Company's internet address is www.berkley.com. The information on our website is not incorporated by reference in
this annual report on Form 10-K. The Company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
and other reports filed by us or with respect to our securities by others are accessible free of charge through this website as soon
as reasonably practicable after they have been electronically filed with or furnished to the SEC.
ITEM 1A. RISK FACTORS
Our businesses face significant risks. If any of the events or circumstances described as risks below occur, our
businesses, results of operations and/or financial condition could be materially and adversely affected. In addition to those
described below, our businesses may also be adversely affected by risks and uncertainties not currently known to us or that we
currently consider immaterial.
Risks Relating to Our Industry
Our results may fluctuate as a result of many factors, including cyclical changes in the insurance and reinsurance
industry.
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The results of companies in the property casualty insurance industry historically have been subject to significant
fluctuations and uncertainties in demand and pricing, causing cyclical changes in the insurance and reinsurance industry. The
demand for insurance is influenced primarily by general economic conditions, while the supply of insurance is often directly
related to available capacity or the perceived profitability of the business. At times, we have faced significant competition in our
business as a result of existing insurers seeking to gain or maintain market share as well as new entrants and capital providers.
Recently, premium rates have increased for most lines of business, while they have decreased in others, most notably workers'
compensation and certain professional liability lines of business. The adequacy of premium rates is affected mainly by the
severity and frequency of claims, which are influenced by many factors, including natural disasters, regulatory measures and
court decisions that define and expand the extent of coverage, and the effects of economic and social inflation on the amount of
claims payments due for injuries or losses. In addition, investment rates of return impact rate adequacy. These factors can have
a significant impact on ultimate profitability because a property casualty insurance policy is priced before its costs are known as
premiums usually are determined long before claims are reported. These factors could produce results that would have a
negative impact on our results of operations and financial condition.
We face significant competitive pressures in our businesses, which can pressure premium rates in certain areas and
could harm our ability to maintain or increase our profitability and premium volume in some parts of our business.
We compete with a large number of other companies in our selected lines of business. We compete, and will continue to
compete, with major U.S. and non-U.S. insurers and reinsurers, other regional companies, as well as mutual companies,
specialty insurance companies, underwriting agencies, diversified financial services companies and insurtech companies.
Competitiveness in our businesses is based on many factors, including premium charges, ratings assigned by independent rating
agencies, commissions paid to producers, the perceived financial strength of the company, other terms and conditions offered,
services provided, ease of doing business, speed of claims payment and reputation and experience in the lines to be written.
Periods of insurance industry consolidation may further increase competition in some parts of our business and may cause our
insurance subsidiaries to incur greater customer retention and acquisition expenses, affecting the profitability of existing and
new business.
Some of our competitors, particularly in the reinsurance business, have greater financial and/or marketing resources than
we do. These competitors within the reinsurance market include Swiss Re, Munich Re, Berkshire Hathaway and Partner Re. We
expect that perceived financial strength, in particular, will become more important as customers seek high quality reinsurers.
Recently, insurance prices have generally increased for most lines of business, excluding workers' compensation and
certain professional liability lines of business. However, loss costs have also increased and the duration and magnitude of the
improving pricing environment remains uncertain. Despite higher interest rates, current price levels for certain lines of business
may remain below the prices required for us to achieve our long-term return objectives. We expect to continue to face strong
competition in our business.
In recent years, various types of investors have increasingly sought to participate in the property and casualty insurance
and reinsurance industries. Well-capitalized new entrants to the property and casualty insurance and reinsurance industries, or
existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition,
which may adversely impact our business and profitability. Further, an expanded supply of capital may lower costs for insurers
and, as a consequence, those insurers may be able to price their products more competitively. In addition, technology
companies or other third parties have created, and may in the future create, technology-enabled business models, processes,
platforms or alternate distribution channels that may adversely impact our competitive position in some parts of our business.
This intense competition could cause the supply and/or demand for insurance or reinsurance to change, which affect our
ability to price our products at attractive rates and retain existing business or write new products at adequate rates or on terms
and conditions acceptable to us. If we are unable to retain existing business or write new business at adequate rates or on terms
and conditions acceptable to us, our results of operations could be materially and adversely affected.
Our actual claims losses may exceed our reserves for claims, which may require us to establish additional reserves.
Our gross reserves for losses and loss expenses were approximately $18.7 billion as of December 31, 2023. Our loss
reserves reflect our best estimates of the cost of settling claims and related expenses with respect to insured events that have
occurred.
Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management
expects the ultimate settlement and claims administration will cost for claims that have occurred, whether known or unknown.
The major assumptions about anticipated loss emergence patterns are subject to unanticipated fluctuation. These estimates,
which generally involve actuarial projections, are based on management's assessment of facts and circumstances then known, as
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well as estimates of future trends in claims severity and frequency, inflation, judicial theories of liability, reinsurance coverage,
legislative changes and other factors, including the actions of third parties, which are beyond our control.
The inherent uncertainties of estimating reserves are greater for certain types of liabilities, where long periods of time
elapse before a definitive determination of liability is made and settlement is reached. In periods with increased economic
volatility, it becomes more difficult to accurately estimate claim costs. It is especially difficult to estimate the impact of
inflation on loss reserves given the current economic environment and related government actions. Both inflation overall and
medical cost inflation, which has historically been greater than inflation overall, can have an adverse impact. In addition,
although the Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’
compensation, and other lines of business under a number of possible scenarios, there remains uncertainty around COVID-19's
ultimate impact on the Company and its related reserves.
Reserve estimates are continually refined in an ongoing process as experience develops and further claims are reported
and settled. Adjustments to reserves are reflected in the results of the periods in which such estimates are changed. Because
setting reserves is inherently uncertain, we cannot assure that our current reserves will prove adequate in light of subsequent
events. Should we need to increase our reserves, our pre-tax income for the reporting period would decrease by a corresponding
amount.
We discount our reserves for excess and assumed workers' compensation business because of the long period of time
over which losses are paid. Discounting is intended to appropriately match losses and loss expenses to income earned on
investment securities supporting liabilities. The expected loss and loss expense payout pattern subject to discounting is derived
from our loss payout experience. Changes in the loss and loss expense payout pattern are recorded in the period they are
determined. If the actual loss payout pattern is shorter than anticipated, the discount will be reduced and pre-tax income will
decrease by a corresponding amount.
The effects of emerging claim and coverage issues on our business are uncertain.
As industry practices and economic, legal, judicial, social, technological and other environmental conditions change,
unexpected and unintended issues related to claim and coverage may emerge. These issues may adversely affect our business by
either extending coverage beyond our underwriting intent or by increasing the number or size of claims. Examples of emerging
claims and coverage issues include, but are not limited to:
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judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the
impact of new theories of liability;
plaintiffs targeting property and casualty insurers, including us, in purported class action litigation relating to claims-
handling and other practices;
social inflation trends, including higher and more frequent claims, more favorable judgments and legislated
increases;
• medical developments that link health issues to particular causes, resulting in liability claims;
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claims relating to unanticipated consequences of current or new technologies, including cyber security related risks;
claims relating to potentially changing climate conditions; and
increased claims due to third party funding of litigation.
In some instances, these emerging issues may not become apparent for some time after we have issued the affected
insurance policies. As a result, the full extent of liability under our insurance policies may not be known until many years after
the policies are issued.
In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on
recovery, to extend the statutes of limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on our
business.
The effects of these and other unforeseen emerging claim and coverage issues are difficult to predict and could harm our
business and materially and adversely affect our results of operations.
As a property casualty insurer, we face losses from natural and man-made catastrophes.
Property casualty insurers are subject to claims arising out of catastrophes that may have a significant effect on their
results of operations, liquidity and financial condition. Catastrophe losses have had a significant impact on our results. For
example, catastrophe losses net of reinsurance recoveries, including COVID-19 related losses, were $195 million in 2023, $212
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million in 2022, and $202 million in 2021. Similarly, man-made catastrophes can also have a material impact on our financial
results. Depending on market conditions and other factors, we may seek to increase our writing of property casualty insurance,
and, accordingly, our exposure to catastrophic events would be increased.
Catastrophes can be caused by various events, including hurricanes, windstorms, earthquakes, tsunamis, hailstorms,
explosions, severe winter weather and fires, pandemics, as well as terrorist and other man-made activities, including drilling,
mining and other industrial accidents, the bankruptcy of a major company, war or other military actions, social unrest,
cyber events or terrorist activities. The incidence and severity of catastrophes are inherently unpredictable, and longer-term
natural catastrophe trends may be changing due to climate change causing increased variability and unpredictability. The extent
of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the
severity of the event. Some catastrophes are restricted to small geographic areas; however, hurricanes, earthquakes, tsunamis
and other disasters may produce significant damage in large, heavily populated areas. Catastrophes can cause losses in a variety
of our property and casualty lines, and most of our past catastrophe-related claims have resulted from severe storms. Seasonal
weather variations or the impact of climate change may affect the severity and frequency of our losses. Insurance companies are
not permitted to reserve for a catastrophe until it has occurred. It is therefore possible that a catastrophic event or multiple
catastrophic events could produce significant losses and have a material adverse effect on our results of operations and financial
condition.
The COVID-19 pandemic materially and adversely affected our results of operations, and, whether as a result of
COVID-19's long-term effects, or new or emerging variants, or other potential pandemics, may further materially and
adversely affect our results of operations, financial position and liquidity in the future.
The COVID-19 pandemic, including the related impact on the U.S. and global economies, materially and adversely
affected our results of operations. The pandemic's impact on our business may continue, and potentially even worsen, whether
as a result of COVID-19's long-term effects, or new or emerging variants, or even other potential pandemics. We cannot predict
the magnitude or duration of such impact, particularly given the uncertainties associated with COVID-19 or other potential
pandemics. The ultimate impact of COVID-19 or other potential pandemics on our results of operations, financial position and
liquidity is not yet known, but includes the following:
Adverse Legislative and Regulatory Action. Legislative and regulatory initiatives in response to COVID-19 or other
similar future pandemics may adversely affect us, particularly in our workers’ compensation and property coverages businesses.
For example, our business may be subject to, certain initiatives, including, but not limited to: legislative and regulatory action
that seeks to retroactively mandate coverage for losses that our insurance policies would not otherwise cover and which were
not priced to cover; legislative and regulatory action providing for shifting presumptions with respect to the burdens of proof
for “essential” workers on workers’ compensation coverages and varying definitions of “essential” workers; actions prohibiting
us from cancelling insurance policies in accordance with our policy terms or non-renewing policies at their natural expiration;
and/or orders to provide premium refunds, grant extended grace periods for premium payments, and provide extended time to
pay past due premiums. Any such action would likely increase both our underwriting losses and our expenses and any legal
challenges to any such action could take years to resolve.
Claim Losses Related to COVID-19 May Exceed Reserves. As of December 31, 2023, we recorded approximately $384
million for COVID-19-related losses. Our reserves do not represent an exact calculation of liability, but represent an estimate of
what management expects the ultimate settlement and claims administration will cost for claims that have occurred, whether
known or unknown. Accordingly, given the uncertainties still associated with COVID-19 and its impact, our reserves and the
underlying estimated level of claim losses and costs arising from COVID-19 may materially change.
Claim Losses and Adjustment Expenses May Increase. As the effects of COVID-19 or future pandemics on industry
practices and economic, legal, judicial, social and other environmental conditions occur, unexpected and unintended issues
related to claims and coverages may emerge. These issues may adversely affect our business by extending coverage beyond our
underwriting intent (including in the area of property coverages where physical damage requirements and communicable
disease exclusions are currently being challenged) or by increasing the number and/or size of claims, each of which could
adversely impact our results.
Reinsurance. We purchase reinsurance in order to transfer part of the risk that we have assumed by writing insurance
policies to reinsurance companies in exchange for part of the premium we receive in connection with assuming such risk.
Although reinsurance makes the reinsurer contractually liable to us to the extent the risk is transferred to the reinsurer, it does
not relieve us of our liability to our policyholders. There may be uncertainty surrounding the availability of reinsurance
coverage for losses related to COVID-19 or any future pandemics as our reinsurers may dispute the applicability of reinsurance
to such losses (including the application of reinsurance reinstatements) and, as a result, our reinsurers may refuse to pay
reinsurance recoverables related thereto or they may not pay them on a timely basis. On December 22, 2023, one of the
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Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess of $90 million in respect of certain losses
paid to its policyholders under certain event cancellation and related insurance policies. See, "Item 3. Legal Proceedings." In
addition, we may be unable to renew our current reinsurance coverages or obtain appropriate new reinsurance covers with
respect to certain exposures under our policies, including exposures related to COVID-19 or any future pandemics, and
therefore our net exposures could increase, or if we are unwilling to bear such increase in net exposure, we may reduce our
level of underwriting commitments.
Premium Volumes May Be Negatively Impacted. The demand for insurance is significantly influenced by general
economic conditions. Consequently, any reduced economic activity relating to potential pandemics is likely to decrease demand
for our insurance products and services and negatively impact our premium volumes (and, in certain cases, may result in return
of premiums due to a decrease in exposures).
Investments. Disruptions in global financial markets due to future pandemics could cause us to incur unrealized and/or
realized investment losses, including impairments in our fixed maturity portfolio and other investments. In addition, the
economic uncertainty may result in a decline in interest rates, which may negatively impact our net investment income from
future investment activity.
Operational Disruptions and Costs. Our operations could be disrupted if key members of our senior management or a
significant percentage of our workforce or the workforce of our agents, brokers, suppliers or other third party service providers
are unable to continue to work because of illness, government directives or otherwise. In addition, our agents, brokers, suppliers
and other third party service providers, which we rely on for key aspects of our operations, are subject to similar risks and
uncertainties, which may interfere with their ability to fulfill their respective commitments and responsibilities to us in a timely
manner and in accordance with the agreed-upon terms. Any remote working policies we implement may result in disruptions to
our business routines, heightened risk to cybersecurity attacks and data security incidents and a greater dependency on internet
and telecommunication access and capabilities.
Changing climate conditions may alter the frequency and increase the severity of catastrophic events and thereby
adversely affect our financial condition and results.
In recent years, changing weather patterns and climatic conditions, such as global warming, appear to have contributed
to the unpredictability, frequency and severity of natural disasters and created additional uncertainty as to future trends and
exposures. There is a scientific consensus that global warming and other climate change are altering the frequency, severity and
peril characteristics of catastrophic weather events, such as hurricanes, windstorms, floods and other natural disasters. Such
changes make it more difficult for us to predict and model catastrophic events, reducing our ability to accurately price our
exposure to such events and mitigate our risks. Any increase in the frequency or severity of natural disasters may adversely
affect our financial condition and results.
We, as a primary insurer, may have significant exposure for terrorist acts.
To the extent an act of terrorism, whether a domestic or foreign act, is certified by the Secretary of Treasury, we may
be covered under the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), for up to 80% of our
covered losses for certain property/casualty lines of insurance. However, any such coverage would be subject to a mandatory
deductible based on 20% of earned premium for the prior year for the covered lines of commercial property and casualty
insurance. Based on our 2023 earned premiums, our aggregate deductible under TRIPRA during 2024 is approximately $1,464
million. In addition, the coverage provided under TRIPRA does not apply to reinsurance that we write. To the extent that our
reinsurers have excluded coverage for certain terrorist acts or have priced this coverage at rates that make purchasing such
coverage economically infeasible, we may not have reinsurance protection and could be exposed to potential losses as a result
of any acts of terrorism.
We are exposed to, and may face adverse developments involving, mass tort claims.
We are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure
to potentially harmful products or substances. We face potential exposure to mass tort claims, including claims related to
exposure to potentially harmful products or substances, such as lead paint, polyfluoroalkyl substances, talc and opioids.
Establishing loss reserves for mass tort claims is subject to uncertainties because of many factors, including adverse changes to
the tort environment (e.g., increased and more aggressive attorney involvement in insurance claims, increased litigation,
expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation finance, among others); evolving
judicial interpretations, including application of various theories of joint and several liabilities; disputes concerning medical
causation with respect to certain diseases; geographical concentration of the lawsuits asserting the claims; and the potential for a
large rise in the total number of claims without underlying epidemiological developments suggesting an increase in disease
rates. Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current loss
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reserves. In addition, our estimate of loss reserves may change. These additional liabilities or increases in estimates, or a range
of either, could vary significantly from period to period and could materially and adversely affect our results of operations and/
or our financial position.
We are subject to extensive governmental regulation, which increases our costs and could restrict the conduct of
our business.
We are subject to extensive governmental regulation and supervision in both the United States and foreign
jurisdictions. Most insurance regulations are designed to protect the interests of policyholders rather than stockholders and other
investors. This system of regulation, generally administered in the United States by a department of insurance in each state in
which we do business, relates to, among other things:
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standards of solvency, including risk-based capital measurements;
restrictions on the nature, quality and concentration of investments;
limitations on the amount of dividends, tax distributions, intercompany loans and other payments that can be made
without prior regulatory approval;
requirements pertaining to certain methods of accounting;
evaluating enterprise risk to an insurer;
privacy, data protection, and cybersecurity;
rate and form regulation pertaining to certain of our insurance businesses;
potential assessments for the provision of funds necessary for the settlement of covered claims under certain policies
provided by impaired, insolvent or failed insurance companies; and
involvement in the payment or adjudication of catastrophe or other claims beyond the terms of the policies.
State insurance departments conduct periodic examinations of the affairs of insurance companies and require the filing
of annual and other reports relating to the financial condition of insurance companies, holding company issues and other
matters. Our Insurance business internationally is also generally subject to a similar regulatory scheme in each of the
jurisdictions where we conduct operations outside the United States.
Federal financial services modernization legislation and legislative and regulatory initiatives taken or which may be
taken in response to conditions in the financial markets, global insurance supervision and other factors may lead to additional
federal regulation of the insurance industry in the coming years.
The Dodd-Frank Act effected sweeping changes to financial services regulation in the United States. The Dodd-Frank
Act established the FSOC, which is authorized to recommend that certain systemically significant non-bank financial
companies, including insurance companies, be regulated by the Board of Governors of the Federal Reserve. The Dodd-Frank
Act also established a FIO which is authorized to study, monitor and report to Congress on the U.S. insurance industry and the
significance of global reinsurance to the U.S. insurance market. The FIO also can recommend that the FSOC designate an
insurer as an entity posing risks to the United States financial stability in the event of the insurer's material financial distress or
failure. Our business could be affected by changes, whether as a result of potential changes to the Dodd-Frank Act, to the
U.S. system of insurance regulation or our designation or the designation of insurers or reinsurers with which we do business as
systemically significant non-bank financial companies.
The topic of climate risk has come under increased scrutiny by the NAIC and insurance regulators. For instance, in
New York, the NYDFS’s circular letter, which applies to our insurance subsidiaries licensed in New York, states that regulated
insurers are expected to integrate financial risks related to climate change into their governance frameworks, risk management
processes, business strategies and scenario analysis, and develop their approach to climate-related financial disclosure. The
NYDFS also amended the regulation governing enterprise risk management, which applies to our insurance subsidiaries
licensed in New York, that requires an insurance group's enterprise risk management function to address certain additional
risks, including climate change risk. In addition, the FIO is assessing how the insurance sector may help mitigate climate-
related risks and achieve national climate-related goals, and it released a report in June 2023 urging insurance regulators to
adopt climate-related risk monitoring guidance. These measures may subject us to increased oversight at the state and federal
level.
State regulation is the primary form of regulation of insurance and reinsurance in the United States, although Congress
has considered various proposals regarding federal regulation of insurance, in addition to the changes brought about by the
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Dodd-Frank Act, such as proposals for the creation of an optional federal charter for insurance companies. We may be subject
to potentially increased federal oversight as a financial institution. In addition, the current U.S. administration and the volatile
political environment (including, in particular, the upcoming U.S. presidential election in November 2024) increases the chance
of other federal legislative and regulatory changes that could affect us in ways we cannot predict.
With respect to international measures, Solvency II, the EU regime concerning the capital adequacy, risk management
and regulatory reporting for insurers and reinsurers may affect our insurance businesses. As described in “International
Regulation” above, the EU is performing a review of Solvency II and various regulatory reforms are expected to be introduced
during 2024, which EU member states will implement in their domestic regulation. In addition, despite the waiver of the
Solvency II group capital requirements we received, Solvency II may have the effect of increasing the capital requirements of
our EU domiciled insurers. Additionally, our capital requirements and compliance requirements may be adversely affected if
the European Commission does not deem the insurance regulatory regimes of the jurisdictions outside the EU in which we have
insurance or reinsurance companies domiciled to be “equivalent” to Solvency II.
Similar considerations apply to our U.K. subsidiaries, which are now subject to a separate U.K. prudential regime,
which is broadly identical to Solvency II. However, the two regimes, and their respective requirements, are diverging due to
both the EU’s review of Solvency II described above and the recently adopted reforms to the U.K.’s domestic prudential regime
(please see “International Regulation” above for more information). We therefore may be required to utilize additional
resources to ensure compliance with the different rules in each regime.
If our compliance with Solvency II, the U.K.’s prudential regime or any other regulatory regime is challenged, we may
be subject to monetary or other penalties. In addition, in order to ensure compliance with applicable regulatory requirements or
as a result of any investigation, including remediation efforts, we could be required to incur significant expenses and undertake
additional work, which in turn may divert resources from our business.
We may be unable to maintain all required licenses and approvals and our business may not fully comply with the
wide variety of applicable laws and regulations or the relevant authority's interpretation of the laws and regulations. Also, some
regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals. If we do not have the
requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities
could preclude or temporarily suspend us from carrying on some or all of our activities or monetarily penalize us. Also, changes
in the level of regulation of the insurance industry, whether federal, state or foreign, or changes in laws or regulations
themselves or interpretations thereof by regulatory authorities, may further restrict the conduct of our business.
Risks Relating to Our Business
Our expanding international operations expose us to increased investment, political, legal/regulatory, and economic
risks, including foreign currency and credit risk.
Our expanding international operations in the United Kingdom, Continental Europe, South America, Canada, Mexico,
Scandinavia, the Asia-Pacific region, South Africa and Australia expose us to increased investment, political, legal/regulatory,
and economic risks, including foreign currency and credit risk. Changes in the value of the U.S. dollar relative to other
currencies have had and could in the future have an adverse effect on our results of operations and financial condition.
Our investments in non-U.S.-denominated assets are subject to fluctuations in non-U.S. securities and currency markets,
and those markets can be volatile. Non-U.S. currency fluctuations also affect the value of any dividends paid by our non-
U.S. subsidiaries to their parent companies in the U.S.
We face additional risks as a result of our international operations which could have an adverse effect on our results of
operations and financial condition including: burdens and costs of compliance with a variety of foreign laws and regulations
and the associated risk and costs of non-compliance; exposure to undeveloped or evolving legal systems, which may result in
unpredictable or inconsistent application of laws and regulations; exposure to commercial, political, legal or regulatory
corruption; political, economic or other instability in countries in which we conduct business, including possible terrorist acts;
the imposition of tariffs, trade barriers or other protectionist laws or business practices that favor local competition, increased
costs and adverse effects on our business; changes to visa or immigration policies; diminished ability to enforce our contractual
rights; potential increased risk of data breaches; differences in cultural environments; sociopolitical instability; social, political
or economic instability resulting from climate change; changes in regulatory requirements, including changes in regulatory
treatment of certain products or services; exposure to local economic conditions and its impact on our clients’ performance and
creditworthiness; and restrictions on the repatriation of non-U.S. investments and earnings.
33
Our U.K. business could be specifically adversely impacted by the imposition of trade barriers between the EU and the
U.K. following Brexit, which has already reduced the level of trade between the two markets and the U.K.’s overall trade
exports, thereby negatively affecting the attractiveness of the U.K. market.
We may be unable to attract and retain key personnel and qualified employees.
We depend on our ability to attract and retain key personnel, including our President and CEO, Executive Chairman,
senior executive officers, presidents of our businesses, experienced underwriters and other skilled employees who are
knowledgeable about our business. If the quality of our underwriting team and other personnel decreases, we may be unable to
maintain our current competitive position in the specialized markets in which we operate, and be unable to expand our
operations into new products and markets.
We cannot guarantee that our reinsurers will pay in a timely fashion, if at all, and, as a result, we could experience
losses.
We purchase reinsurance by transferring part of the risk that we have assumed, known as ceding, to a reinsurance
company in exchange for part of the premium we receive in connection with the risk. Although reinsurance makes the reinsurer
contractually liable to us to the extent the risk is transferred or ceded to the reinsurer, it does not relieve us, the reinsured, of our
liability to our policyholders. Our reinsurers may not pay the reinsurance recoverables that they owe to us or they may not pay
such recoverables on a timely basis. This failure to pay or failure to pay on a timely basis may be due to factors such as whether
reinsurers, their affiliates or certain indemnitors have the financial capacity and willingness to make payments under the terms
of a reinsurance treaty or contract. Accordingly, we bear credit risk with respect to our reinsurers, and if our reinsurers fail to
pay us, our financial results would be adversely affected. Underwriting results and investment returns of some of our reinsurers
may affect their future ability to pay claims. As of December 31, 2023, the amount due from our reinsurers was approximately
$3,535 million, including amounts due from state funds and industry pools where it was intended that we would bear no risk.
Certain of these amounts are secured by letters of credit or by funds held in trust on our behalf.
We are subject to credit risk relating to our policyholders, independent agents and brokers.
In addition to exposure to credit risk related to our reinsurance recoverables and investment portfolio, we are exposed to
credit risk in several other areas of our business, including credit risk relating to policyholders, independent agents and brokers.
For example our policyholders, independent agents or brokers may not pay a part of or the full amount of premiums owed to us
or our brokers or other third party claim administrators may not deliver amounts owed on claims under our insurance and
reinsurance contracts for which we have provided funds.
As credit risk is generally a function of the economy, we face a greater credit risk in an economic downturn. While we
attempt to manage credit risks through underwriting guidelines, collateral requirements and other oversight mechanisms, our
efforts may not be successful. For example, to reduce such credit risk, we require certain third parties to post collateral for some
or all of their obligations to us. In cases where we receive pledged securities and the applicable counterparty is unable to honor
its obligations, we may be exposed to credit risk on the securities pledged and/or the risk that our access to that collateral may
be stayed as a result of bankruptcy. In cases where we receive letters of credit from banks as collateral and one of our
counterparties is unable to honor its obligations, we are exposed to the credit risk of the banks that issued the letters of credit.
We are rated by A.M. Best, Standard & Poor's, Moody's, and Fitch, and a decline in these ratings could affect our
standing in the insurance industry and cause our sales and earnings to decrease.
Ratings have become an increasingly important factor in establishing the competitive position of insurance companies.
Certain of our insurance company subsidiaries are rated by A.M. Best, Standard & Poor's, Moody's and Fitch. Our ratings are
subject to periodic review, and we cannot assure you that we will be able to retain our current or any future ratings, especially
given that rating agencies may change their criteria or increase capital requirements for various rating levels. For instance,
Standard & Poor's has recently proposed changes to its rating model which could impact our rating depending on final changes
that are implemented.
If our ratings are reduced from their current levels by A.M. Best, Standard & Poor's, Moody's or Fitch, our competitive
position in the insurance industry could suffer and it would be more difficult for us to market our products. A ratings
downgrade could also adversely limit our access to capital markets, which may increase the cost of debt. A significant
downgrade could result in a substantial loss of business as policyholders move to other companies with higher financial strength
ratings.
If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks
or reduce the level of our underwriting commitments.
34
As part of our overall risk and capacity management strategy, we purchase reinsurance for certain amounts of risk
underwritten by our insurance company subsidiaries, especially catastrophe risks and those risks with relatively high policy
limits. We also purchase reinsurance on risks underwritten by others which we reinsure. Market conditions beyond our control
determine the availability and cost of the reinsurance protection we seek to purchase, which may affect the level of our business
and profitability. Our reinsurance contracts are generally subject to annual renewal, and we may be unable to maintain our
current reinsurance contracts or to obtain other reinsurance contracts in adequate amounts and at favorable rates. In addition, we
may be unable to obtain reinsurance on terms acceptable to us relating to certain lines of business that we intend to begin
writing. If we are unable to renew our expiring contracts or to obtain new reinsurance contracts, either our net exposures would
increase or, if we are unwilling to bear an increase in net exposures, we would have to reduce the level of our underwriting
commitments, especially catastrophe exposed risks.
Depending on conditions in the financial markets and the general economy, we may be unable to raise debt or equity
capital if needed.
If conditions in the financial markets and the general economy are unfavorable, which may result from disruptions,
uncertainty or volatility in the capital and credit markets, we may be unable to access debt or equity capital on acceptable terms
if needed, which could have a negative impact on our ability to invest in our insurance company subsidiaries and/or to take
advantage of opportunities to expand our business, such as the creation of new ventures and possible acquisitions, and inhibit
our ability to refinance our existing indebtedness if we desire to do so, on terms acceptable to us.
We may not find suitable new insurance ventures and acquisition candidates and even if we do, we may not
successfully invest in such ventures or successfully integrate any such acquired companies.
As part of our present strategy, we continue to evaluate the possible start-up of complementary businesses and
acquisition transactions on an ongoing basis, and at any given time we may be engaged in discussions with respect to possible
new ventures and acquisitions. We cannot assure you that we will be able to identify suitable insurance ventures or acquisition
targets, that such transactions will be financed and completed on acceptable terms or that our future start-up ventures or
acquisitions will be successful. Our financial results could be adversely affected by acquired businesses not performing as
projected, unforeseen liabilities, routine and unanticipated transaction-related charges, diversion of management time and
resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating
information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges
for impairment of long-term assets or goodwill and indemnification. The process of investing in new ventures or integrating any
companies we do acquire may have a material adverse effect on our results of operations and financial condition.
If our information technology, telecommunications or other computer systems become unavailable or unreliable, our
ability to conduct our business could be negatively or severely impacted.
Our business is highly dependent upon our employees' ability to perform necessary business functions in an efficient and
uninterrupted fashion. A shut-down of, or inability to access, one or more of our facilities, a power outage or a failure of one or
more of our information technology, telecommunications or other computer systems could significantly impair our employees'
ability to perform such functions on a timely basis. In the event of a disaster such as a natural catastrophe, terrorist attack or
industrial accident, physical or electronic security breaches, such as breaches by computer hackers, the infection of our systems
by a malicious computer virus, denial of service attack, or other cybersecurity incident, our systems could be inaccessible for an
extended period of time. In addition, because our information technology and telecommunications systems interface with and
depend on third-party systems, we could experience service denials or failures of controls if demand for our service exceeds
capacity or a third-party system fails or experiences an interruption. If our business continuity plans or system security does not
sufficiently address such a business interruption, system failure or service denial, our ability to write and process new and
renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions could
be significantly impaired and our business could be harmed.
Failure to maintain the security of information technology systems and confidential data may expose us to liability.
Although we have taken steps intended to protect our data and information technology systems and mitigate the risk of
harm caused by cybersecurity incidents or breaches, no safeguards are perfect and any failure of these safeguards could cause a
substantial disruption of our business operations, which could result in service interruptions, data security compromises,
regulatory action, and other similar operational and legal issues, as well as substantial remediation and other costs. Our
operations rely on the secure processing, storage and transmission of confidential and other sensitive information, including
personal information, in our computer systems and networks. Cybersecurity breaches, including physical or electronic break-
ins, computer viruses, malware, attacks by hackers, ransomware attacks, phishing attacks, supply chain attacks, breaches due to
employee error or misconduct and other similar breaches can create system disruptions, shutdowns or unauthorized access to, or
disclosure of, information maintained in our information technology systems and in the information technology systems of our
35
vendors and other third parties. We have in the past experienced cybersecurity breaches of our information technology systems
as well as the information technology systems of our vendors and other third parties, but, to our knowledge, we have not
experienced any material cybersecurity breaches. We expect cybersecurity breaches to continue to occur in the future and we
are constantly managing efforts to infiltrate and compromise our systems and data. Our electronic transmission of personal,
confidential and proprietary information to third parties with whom we have business relationships and our outsourcing of
certain technology and business process functions to third parties may expose us to enhanced risk related to data security. While
we have implemented secure data transmission capabilities with these third-party vendors and others with whom we do
business, such capabilities may not function as intended and our vendors and third parties could still suffer data breaches that
could result in the exposure of sensitive data and the infiltration of our computer systems. Our failure to effectively protect
sensitive personal and/or proprietary information, whether owing to breaches of our own systems or those of our vendors and
other third parties, could result in significant monetary and reputational damages, material adverse effects to our financial
condition, costly litigation, or other regulatory enforcement actions. These increased risks, and expanding regulatory
requirements regarding data security, including required compliance with applicable privacy and data protection laws (e.g., the
GDPR, CCPA, and other state-specific privacy statutes and regulations, could expose us to data loss, monetary and reputational
damages and significant increases in compliance costs. As a result, our ability to conduct our business could be materially and
adversely affected.
We could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory
standards are not effective.
Our business is highly dependent on our ability to engage on a daily basis in a large number of insurance underwriting,
claim processing and investment activities, many of which are highly complex. These activities often are subject to internal
guidelines and policies, as well as legal and regulatory standards, including those related to privacy and data security, anti-
corruption, anti-bribery and global finance and insurance matters. Our continued expansion into new international markets has
brought about additional requirements. A control system, no matter how well designed and operated, can provide only
reasonable assurance that the control system's objectives will be met. If our controls are not effective, it could lead to financial
loss, unanticipated risk exposure (including underwriting, credit and investment risk), regulatory scrutiny, and/or damage to our
reputation.
We could be adversely affected by changes in U.S. Federal income tax laws.
Tax legislation commonly referred to as the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017,
fundamentally overhauled the U.S. tax system by, among other significant changes, reducing the U.S. corporate income tax rate
to 21%. In the context of the taxation of U.S. property/casualty insurance companies such as the Company, the Act also
modified the loss reserve discounting rules and the proration rules that apply to reduce reserve deductions to reflect the lower
corporate income tax rate. It is possible that other legislation could be introduced and enacted by the current Congress or future
Congresses that could have an adverse impact on us. New regulations or pronouncements interpreting or clarifying provisions
of the Act may be forthcoming. We cannot predict if, when or in what form such regulations or pronouncements may be
provided, whether such guidance will have a retroactive effect or their potential impact on us.
Limitations in risk management and loss limitation methods may adversely impact our business.
We seek to effectively manage risk and limit our losses in a variety of ways including through effective underwriting,
tailoring policy terms, and the use of reinsurance. However, there are certain limitations in these and similar tactics and as a
result, loss levels may be higher than modeled or otherwise expected, which could have a material adverse effect on our
business.
Increased scrutiny on social responsibility and the efforts we take to implement related measures, or the failure to
take such measures, may adversely impact our business.
There is increased scrutiny from regulators and investors on the measures companies take to be socially responsible.
Although we have made efforts to be responsible in this manner, for example through our commitment to fostering a unifying
culture and encouraging innovation across our operating units, these types of pressures may nonetheless present challenges and
have an adverse impact on our business. In addition, we may be subject to negative publicity based on a failure or perceived
failure to achieve various social responsibility initiatives and goals relating to diversity, equity and inclusion, and commitment
to long-term sustainability we may announce from time to time, or based on an actual or perceived increase in related risks as a
result of our or our industry’s business activities.
Risks Relating to Our Investments
A significant amount of our assets is invested in fixed maturity securities and is subject to market fluctuations.
36
Our investment portfolio consists substantially of fixed maturity securities. As of December 31, 2023, our investment in
fixed maturity securities was approximately $20.2 billion, or 75.8% of our total investment portfolio including cash and cash
equivalents. As of that date, our portfolio of fixed maturity securities consisted of the following types of securities:
U.S. Government securities (8.4%); state and municipal securities (13.3%); corporate securities (37.9%); asset-backed
securities (20.8%); mortgage-backed securities (11.3%) and foreign government (8.3%).
The fair value of these assets and the investment income from these assets fluctuate depending on general economic and
market conditions. The fair value of fixed maturity securities generally decreases as interest rates rise. If a significant increase
in interest rates were to occur, the fair value of our fixed maturity securities would be negatively impacted, while investment
income earned from future investments in fixed maturity securities would be higher. Conversely, if interest rates decline, the
fair value of our fixed maturity securities would be positively impacted, and investment income earned from future investments
in fixed maturity securities will be lower. Some fixed maturity securities, such as mortgage-backed and other asset-backed
securities, also carry prepayment risk as a result of interest rate fluctuations. In low interest rate environments, we may not be
able to successfully reinvest the proceeds from maturing securities at yields commensurate with our target performance goals.
The value of investments in fixed maturity securities is subject to impairment as a result of deterioration in the credit
worthiness of the issuer, default by the issuer (including states and municipalities) in the performance of its obligations in
respect of the securities and/or increases in market interest rates. To a large degree, the credit risk we face is a function of the
economy; accordingly, we face a greater risk in an economic downturn or recession. During periods of market disruption, it
may be difficult to value certain of our securities, particularly if trading becomes less frequent and/or market data becomes less
observable. There may be certain asset classes that were in active markets with significant observable data that become illiquid
due to the then current financial environment. In such cases, more securities may require additional subjectivity and
management judgment.
Although the historical rates of default on state and municipal securities have been relatively low, our state and
municipal fixed maturity securities could be subject to a higher risk of default or impairment due to declining municipal tax
bases and revenue. Many states and municipalities operate under deficits or projected deficits, the severity and duration of
which could have an adverse impact on both the valuation of our state and municipal fixed maturity securities and the issuer's
ability to perform its obligations thereunder. Additionally, our investments are subject to losses as a result of a general decrease
in commercial and economic activity for an industry sector in which we invest, as well as risks inherent in particular securities.
Although we attempt to manage these risks through the use of investment guidelines and other oversight mechanisms and
by diversifying our portfolio and emphasizing preservation of principal, our efforts may not be successful. Impairments,
defaults and/or rate increases could reduce our net investment income or realized and unrealized investment gains or result in
investment losses. Investment returns are currently, and will likely continue to be, impacted by economic uncertainty, more
generally, and the shape of the yield curve. As a result, our exposure to the risks described above could materially and adversely
affect our results of operations, liquidity and financial condition.
We have invested a portion of our assets in equity securities, merger arbitrage securities, investment funds, private
equity, loans and real estate related assets, which are subject to significant volatility and may decline in value.
We invest a portion of our investment portfolio in equity securities, merger arbitrage securities, investment funds, private
equity, loans and real estate related assets. At December 31, 2023, our investment in these assets was approximately $5.1
billion, or 19.1%, of our investment portfolio, including cash and cash equivalents.
Merger and arbitrage trading securities were $0.9 billion, or 3.5% of our investment portfolio, including cash and cash
equivalents at December 31, 2023. Merger arbitrage involves investing in the securities of publicly held companies that are the
targets in announced tender offers and mergers. Merger arbitrage differs from other types of investments in its focus on
transactions and events believed likely to bring about a change in value over a relatively short time period, usually four months
or less. Our merger arbitrage positions are exposed to the risk associated with the completion of announced deals, which are
subject to regulatory as well as political and other risks.
Real estate related investments, including directly owned, investment funds and loans receivable, were $1.7 billion, or
6.2% of our investment portfolio, including cash and cash equivalents, at December 31, 2023. We also invest in real estate,
financial services, energy, transportation and other investment funds. The values of these investments are subject to fluctuation
based on changes in the economy and interest rates in general and the related asset valuations in particular. In addition, our
investments in real estate related assets and other alternative investments are less liquid than our other investments.
These investments are subject to significant volatility as a result of the conditions in the financial and commodity
markets and the global economy.
37
Risks Relating to Limitations on Dividends from Subsidiaries and Anti-Takeover Provisions
We are an insurance holding company and, therefore, may not be able to receive dividends in needed amounts.
As an insurance holding company, our principal assets are the shares of capital stock of our insurance company
subsidiaries. We have to rely on dividends from our insurance company subsidiaries to meet our obligations for paying
principal and interest on outstanding debt obligations, paying dividends to stockholders and repurchasing our shares and paying
corporate expenses. The payment of dividends by our insurance company subsidiaries is subject to regulatory restrictions and
competitive pressures on maintaining financial strength ratings and will depend on the surplus and future earnings of these
subsidiaries. During 2024, the maximum amount of dividends that can be paid without regulatory approval is approximately
$1.2 billion. Future regulatory actions could further restrict our insurance subsidiaries’ ability to pay us dividends. As a result,
in the future we may not be able to receive dividends from these subsidiaries at times and in amounts necessary to meet our
obligations, pay dividends or repurchase shares.
Laws and regulations of the jurisdictions in which we conduct business could delay, deter or prevent an attempt to
acquire control of us that stockholders might consider to be desirable, and may restrict a stockholder's ability to purchase
our common stock.
Generally, United States insurance holding company laws require that, before a person can acquire control of an
insurance company, prior written approval must be obtained from the insurance regulatory authority in the state in which that
insurance company is domiciled. Pursuant to applicable laws and regulations, “control” over an insurer is generally presumed to
exist if any person, directly or indirectly, owns, controls, holds the power to vote, or holds proxies representing 10% or more of
the voting securities of that insurer or any parent company of such insurer. Indirect ownership includes ownership of the shares
of our common stock. Thus, the insurance regulatory authorities of the states in which our insurance subsidiaries are domiciled
are likely to apply these restrictions on acquisition of control to any proposed acquisition of our common stock. Some states
require a person seeking to acquire control of an insurer licensed but not domiciled in that state to make a filing prior to
completing an acquisition if the acquirer and its affiliates, on the one hand, and the target insurer and its affiliates, on the other
hand, have specified market shares in the same lines of insurance in that state. Additionally, many foreign jurisdictions where
we conduct business impose similar restrictions and requirements.
These provisions can also lead to the imposition of conditions on an acquisition that could delay or prevent its
consummation. These laws may discourage potential acquisition proposals and may delay, deter or prevent a change in control
of us through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be
desirable.
Certain provisions in our organizational documents may have the effect of hindering, delaying or preventing third
party takeovers and thus may prevent our stockholders from receiving premium prices for their shares in an unsolicited
takeover or make it more difficult for third parties to replace our current management.
Provisions of our Restated Certificate of Incorporation and By-Laws, as well as state insurance statutes, may hinder,
delay or prevent unsolicited acquisitions or changes of our control. These provisions may also have the effect of making it more
difficult for third parties to cause the replacement of our current management without the concurrence of our Board of
Directors.
These provisions include:
•
our classified board of directors and the ability of our board to increase its size and to appoint directors to fill newly
created directorships;
•
•
the requirement that the holders of 80% of our shares must approve mergers and other transactions between us and
the holder of 5% or more of our shares, unless the transaction was approved by our board of directors prior to such
holder's acquisition of 5% of our shares; and
the need for advance notice in order to raise business or make nominations at stockholders' meetings.
These provisions may discourage potential acquisition proposals and may delay, deter or prevent a change in control of
us through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be
desirable.
38
ITEM 1B. UNRESOLVED STAFF COMMENTS
There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our
fiscal year relating to our periodic or current reports under the Securities Exchange Act of 1934.
ITEM 1C. CYBERSECURITY
Cybersecurity Strategy and Risk Management Program
The Company has a documented information security program (the Program) to identify, assess, monitor and manage
potential cybersecurity threats and incidents. The Program is designed to protect the confidentiality, integrity and availability of
our information systems and assets that store, process, or transmit information. The Program is modeled on the global standard
for risk assessment, International Organization for Standardization 27001, and is guided by the six domains of cybersecurity
established by the National Institute of Standards and Technology Cybersecurity Framework (i.e., govern, identify, protect,
detect, respond, and recovery). The Program seeks to adhere to applicable U.S. and international laws and regulations,
including New York State’s cybersecurity regulation applicable to financial services institutions authorized by the New York
State Department of Financial Services.
The Program’s security and risk policies and standards, implemented by either the Company or third party assessors or
consultants, include:
–
–
–
–
–
information security management tools, such as firewalls, intrusion prevention and detection systems, anti-malware
functionality, and access privilege controls;
vulnerability management, including penetration and control testing and vulnerability scans of information systems;
incident monitoring, breach notification and escalation, including disaster recovery and incident response plans and
resources;
risk based assessment of third party service providers; and
annual cybersecurity awareness training for employees and contractors.
The Company has not identified any cybersecurity incidents that have materially affected or are reasonably likely to
materially affect the Company, including its business strategy, results of operations, or financial condition, for the period
covered by this annual report. For a discussion regarding risks associated with cybersecurity threats, see Risk Factors – Risks
Relating to Our Business – “If our information technology, telecommunications or other computer systems become unavailable
or unreliable, our ability to conduct our business could be negatively or severely impacted” and “Failure to maintain the
security of information technology systems and confidential data may expose us to liability.”
Board Oversight, Governance and Risk Management
The entire Board of Directors has oversight of risks from cybersecurity threats and receives periodic updates on such
risks from the Company’s management, including from the Company’s President and CEO and its Vice President, Chief
Information Security Officer (CISO).
Our CISO is principally responsible for assessing and managing all aspects of the Program, including the Company’s
Regional Information Security Officers (RISOs), third-party consultants, development of industry trends and control testing and
tracking by risk level. Our CISO meets periodically with senior executives, including the Company’s President and Chief
Executive Officer, to discuss the Company’s cybersecurity strategy, and its monitoring, prevention, detection, mitigation, and
remediation of cybersecurity risks. Regular reporting on the Program is also provided to the Company’s Enterprise Risk
Management Committee, which is comprised of the President and CEO, Senior Vice President – Enterprise Risk Management,
Executive Vice President – Investments, Executive Vice President – Chief Financial Officer, Executive Vice President –
Secretary, and the Of Counsel and Assistant Secretary. Collectively, the CISO and RISOs, along with their teams, in
collaboration with the technology and business owners, implement the Program. Legal, Compliance, and Internal Audit
functions also assess the Program’s adherence to regulatory requirements and internal controls.
In the event of a potentially material cybersecurity incident, the Company’s incident response plans establish escalation
protocols for relevant IT leaders and functional leaders within Enterprise Risk Management, Legal, Compliance and Internal
Audit to engage management as appropriate.
Our CISO has over 25 years of information security experience and is licensed as a Certified Information Systems
Security Professional.
39
ITEM 2. PROPERTIES
W. R. Berkley and its subsidiaries own or lease office buildings or office space suitable to conduct their operations. At
December 31, 2023, the Company had aggregate office space of 4,333,225 square feet, of which 1,042,156 were owned and
3,291,069 were leased.
Rental expense for the Company's operations was approximately $44,256,000, $43,383,000 and $44,051,000 for 2023,
2022 and 2021, respectively. Future minimum lease payments, without provision for sublease income, are $50,222,000 in 2024,
$41,249,000 in 2025 and $166,192,000 thereafter.
ITEM 3. LEGAL PROCEEDINGS
The Company's subsidiaries are subject to disputes, including litigation and arbitration, arising in the ordinary course of
their insurance and reinsurance businesses. The Company's estimates of the costs of settling such matters are reflected in its
aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters
will have a material adverse effect on its financial condition or results of operations.
On December 22, 2023, one of the Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess
of $90 million in respect of certain losses paid to its policyholders under certain event cancellation and related insurance
policies. The Company believes its claims against the reinsurers are meritorious and expects a positive resolution to its lawsuit.
While an adverse outcome is possible, the Company believes that the outcome, in any case, will not be material to the
Company’s financial condition.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
40
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The common stock of the Company is traded on the New York Stock Exchange under the symbol “WRB”.
In 2023, the Board declared regular quarterly cash dividends of $0.10 per share in the first quarter and $0.11 per share in
each of the remaining three quarters, as well as special dividends of $0.50 per share in the first, third, and fourth quarters, for a
total of $501 million in aggregate dividends in 2023.
The approximate number of record holders of the common stock on February 15, 2024 was 327.
41
The chart below shows a comparison of 5 year cumulative total return.
Comparison of 5 Year Cumulative Total Return
Assumes initial investment of $100 on January 1, 2018, with dividends reinvested.
As of December 31, 2023, the S&P 500® Property and Casualty Insurance Index consists of The Allstate Corporation, Arch
Capital Group Ltd. (added Nov. 2022), Chubb Limited, Cincinnati Financial Corporation, The Hartford Financial Services Group, Inc., Loews
Corporation (CNA), The Progressive Corporation, The Travelers Companies, Inc., and W. R. Berkley Corporation (added Dec. 2019).
W. R. Berkley Corporation
S&P 500 Index - Total Returns
2018
2019
2020
2021
2022
2023
Cum $
100.00
143.83
139.30
177.37
237.46
238.04
Cum $
100.00
131.48
155.64
200.28
163.89
207.05
S&P 500 Property and Casualty Insurance Index
Cum $
100.00
125.87
133.84
157.28
187.04
207.20
Set forth below is a summary of the shares repurchased by the Company during the fourth quarter of 2023 and the
remaining number of shares authorized for purchase by the Company during such period.
October 2023
November 2023
December 2023
Total Number of
Shares Purchased
Average Price
Paid per Share
371,497 $
—
1,189,204
63.75
—
69.75
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
Maximum Number of
Shares that may yet be
Purchased Under the Plans
or Programs
371,497
—
1,189,204
14,430,487
14,430,487
13,241,283
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W. R. Berkley CorporationS&P 500 Index - Total ReturnsS&P 500 Property & CasualtyInsurance Index201820192020202120222023$0$50$100$150$200$250
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the
United States and operates worldwide in two segments of the property and casualty business: Insurance and Reinsurance &
Monoline Excess. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or
specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to
better understand their individual needs and risk characteristics. While providing our business units with certain operating
autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment,
reinsurance, enterprise risk management, and actuarial, financial and corporate compliance support. The Company’s primary
sources of revenues and earnings are its insurance operations and its investments.
An important part of our strategy is to form new businesses to capitalize on various opportunities. Over the years, the
Company has formed numerous businesses that are focused on important parts of the economy in the U.S., including healthcare,
cyber security, energy and agriculture, and on growing international markets, including the Asia-Pacific region, South America
and Mexico.
The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The
ultimate adequacy of premium rates is not known with certainty at the time an insurance policy is issued because premiums are
determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and
frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court
decisions that define and change the extent of coverage and the effects of economic or social inflation on the amount of
compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level
of capital employed in the industry, and the industry’s willingness to deploy that capital.
The Company’s profitability is also affected by its investment income and investment gains. The Company’s invested
assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by
general interest rates, as well as the credit quality and duration of the securities.
The Company also invests in equity securities, merger arbitrage securities, investment funds, private equity, loans and
real estate related assets. The Company's investments in investment funds and its other alternative investments have
experienced, and the Company expects to continue to experience, greater fluctuations in investment income. The Company's
share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely
completion of the Company's consolidated financial statements.
In March 2022, the Company sold a real estate investment consisting of an office building located in London for £718
million. The Company realized a pretax gain of $317 million in the first quarter of 2022, before transaction expenses and the
impact of foreign currency, including the reversal of the currency translation adjustment. The gain was $251 million after such
adjustments.
In June 2023, the Company completed a sale of the property and casualty insurance services division of Breckenridge
IS, Inc. and recognized a pre-tax net realized gain on investment of $89 million.
The ultimate impact of COVID-19 on the Company’s results of operations, financial position and liquidity is not
within the Company’s control and remains unclear due to, among other factors, its ongoing impact and uncertainty in
connection with its claims, reserves and reinsurance recoverables.
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Critical Accounting Estimates
The following presents a discussion of accounting policies and estimates relating to reserves for losses and loss
expenses, assumed reinsurance premiums and other-than-temporary impairments of investments. Management believes these
policies and estimates are the most critical to its operations and require the most difficult, subjective and complex judgments.
Reserves for Losses and Loss Expenses. To recognize liabilities for unpaid losses, either known or unknown,
insurers establish reserves, which is a balance sheet account representing estimates of future amounts needed to pay claims and
related expenses with respect to insured events which have occurred. Estimates and assumptions relating to reserves for losses
and loss expenses are based on complex and subjective judgments, often including the interplay of specific uncertainties with
related accounting and actuarial measurements. Such estimates are also susceptible to change as significant periods of time may
elapse between the occurrence of an insured loss, the report of the loss to the insurer, the ultimate determination of the cost of
the loss and the insurer’s payment of that loss.
In general, when a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the
ultimate payment based upon known information about the claim at that time. The estimate represents an informed judgment
based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature and
value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not
reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including
legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon
the then current legal interpretation of coverage provided.
In examining reserve adequacy, several factors are considered in estimating the ultimate economic value of losses.
These factors include, among other things, historical data, legal developments, changes in social attitudes and economic
conditions, including the effects of inflation. The actuarial process relies on the basic assumption that past experience, adjusted
judgmentally for the effects of current developments and anticipated trends, is an appropriate basis for predicting future
outcomes. Reserve amounts are based on management’s informed estimates and judgments using currently available data. As
additional experience and other data become available and are reviewed, these estimates and judgments may be revised. This
may result in reserve increases or decreases that would be reflected in our results in periods in which such estimates and
assumptions are changed.
Reserves do not represent a certain calculation of liability. Rather, reserves represent an estimate of what management
expects the ultimate settlement and claim administration will cost. While the methods for establishing reserves are well tested
over time, the major assumptions about anticipated loss emergence patterns are subject to uncertainty. These estimates, which
generally involve actuarial projections, are based on management’s assessment of facts and circumstances then known, as well
as estimates of trends in claims severity and frequency, judicial theories of liability and other factors, including the actions of
third parties which are beyond the Company’s control. These variables are affected by external and internal events, such as
inflation and economic volatility, judicial and litigation trends, reinsurance coverage, legislative changes and claim handling
and reserving practices, which make it more difficult to accurately predict claim costs. The inherent uncertainties of estimating
reserves are greater for certain types of liabilities where long periods of time elapse before a definitive determination of liability
is made. Because setting reserves is inherently uncertain, the Company cannot provide assurance that its current reserves will
prove adequate in light of subsequent events.
Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an
actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to
derive an actuarial point estimate for each business. These methods include paid loss development, incurred loss development,
paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial
method is considered more credible than the others, that method is used to set the point estimate. For example, the paid loss and
incurred loss development methods rely on historical paid and incurred loss data. For new lines of business, where there is
insufficient history of paid and incurred claims data, or in circumstances where there have been significant changes in claim
practices, the paid and incurred loss development methods would be less credible than other actuarial methods. The actuarial
point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered.
Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” and in areas where the
Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as
appropriate, for each business.
The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative
factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-
underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and
conditions. Examples of changes in terms and conditions that can have a significant impact on reserve levels are the use of
aggregate policy limits, the expansion of coverage exclusions, whether or not defense costs are within policy limits, and
changes in deductibles and attachment points.
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The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost
inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at
the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant
determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to
consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost
trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business
within each business. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and
claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to
project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the
historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry
data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those
reserves are discounted to their estimated present value based upon such estimated payout patterns. Management believes the
estimates and assumptions it makes in the reserving process provide the best estimate of the ultimate cost of settling claims and
related expenses with respect to insured events which have occurred; however, different assumptions and variables could lead
to significantly different reserve estimates.
Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions
described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and
reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure,
and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss
controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include
changes in policy limits, retentions, rate of inflation and judicial interpretations.
Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time
between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects
our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well
as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags).
As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines
with short reporting lags, which include auto, primary workers’ compensation, other liability (claims-made) and property
business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or
reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability,
excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little
paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for
lines of businesses with short reporting lags than for lines of business with long reporting lags.
The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and
adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. If the actual
level of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s
estimate. The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and
severity, relative to our assumptions, on our loss estimate for claims occurring in 2023:
(In thousands)
Severity (+/-)
1%
5%
10%
Frequency (+/-)
1%
5%
$
126,867 $
381,863 $
381,863
700,608
646,957
978,326
10%
700,608
978,326
1,325,474
Our net reserves for losses and loss expenses of approximately $15.7 billion as of December 31, 2023 relate to
multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be
higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the
course of many years, as the magnitude of the changes became evident.
Approximately $3.1 billion, or 20%, of the Company’s net loss reserves as of December 31, 2023 relate to the
Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of
excess workers' compensation and assumed reinsurance loss reserves. In the case of excess workers’ compensation, our policies
generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and
many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less
frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our
loss reserve estimates are based, in part, upon information received from ceding companies. If information received from
ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to
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delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended.
Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for
these lines of business.
Information received from ceding companies is used to set initial expected loss ratios, to establish case reserves and to
estimate reserves for incurred but not reported losses on assumed reinsurance business. This information, which is generally
provided through reinsurance intermediaries, is gathered through the underwriting process and from periodic claim reports and
other correspondence with ceding companies. The Company performs underwriting and claim audits of selected ceding
companies to determine the accuracy and completeness of information provided to the Company. The information received
from the ceding companies is supplemented by the Company’s own loss development experience with similar lines of business
as well as industry loss trends and loss development benchmarks.
Following is a summary of the Company’s reserves for losses and loss expenses by business segment as of
December 31, 2023 and 2022:
(In thousands)
Insurance
Reinsurance & Monoline Excess
Net reserves for losses and loss expenses
Ceded reserves for losses and loss expenses
Gross reserves for losses and loss expenses
2023
12,518,591 $
3,143,229
15,661,820
3,077,832
18,739,652 $
2022
11,233,924
3,014,955
14,248,879
2,762,344
17,011,223
$
$
Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business as of
December 31, 2023 and 2022:
(In thousands)
December 31, 2023
Other liability
Workers’ compensation (1)
Professional liability
Auto
Short-tail lines (2)
Total Insurance
Reinsurance & Monoline Excess (1) (3)
Total
December 31, 2022
Other liability
Workers’ compensation (1)
Professional liability
Auto
Short-tail lines (2)
Total Insurance
Reinsurance & Monoline Excess (1) (3)
Total
Reported Case
Reserves
Incurred But
Not Reported
Total
$
1,927,701 $
4,561,410 $
6,489,111
$
$
1,019,445
527,555
722,963
377,278
4,574,942
1,579,069
790,944
1,438,102
734,832
418,361
7,943,649
1,564,160
1,810,389
1,965,657
1,457,795
795,639
12,518,591
3,143,229
6,154,011 $
9,507,809 $
15,661,820
1,808,700 $
3,826,444 $
5,635,144
1,023,961
501,572
629,149
403,974
4,367,356
1,551,687
899,215
1,243,604
528,398
368,907
6,866,568
1,463,268
1,923,176
1,745,176
1,157,547
772,881
11,233,924
3,014,955
$
5,919,043 $
8,329,836 $
14,248,879
____________________
(1) Reserves for excess and assumed workers’ compensation business are net of an aggregate net discount of $390 million and
$416 million as of December 31, 2023 and 2022, respectively.
(2) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler
and machinery, high net worth homeowners and other lines.
(3) Reinsurance & Monoline Excess includes property and casualty reinsurance as well as operations that solely retain risk on
an excess basis.
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The Company evaluates reserves for losses and loss expenses on a quarterly basis. Changes in estimates of prior year
losses are reported when such changes are made. The changes in prior year loss reserve estimates are generally the result of
ongoing analysis of recent loss development trends. Original estimates are increased or decreased as additional information
becomes known regarding individual claims and aggregate claim trends.
Certain of the Company's insurance and reinsurance contracts are retrospectively rated, whereby the Company collects
more or less premiums based on the level of loss activity. For those contracts, changes in loss and loss expenses for prior years
may be fully or partially offset by additional or return premiums.
Net prior year development (i.e, the sum of prior year reserve changes and prior year earned premiums changes) for
each of the last three years ended December 31, are as follows:
(In thousands)
Increase in prior year loss reserves
Increase in prior year earned premiums
Net (unfavorable) favorable prior year development
2023
2022
2021
$
$
(29,681) $
(54,511) $
10,782
18,106
(18,899) $
(36,405) $
(863)
7,510
6,647
The COVID-19 global pandemic has impacted, and may further impact, the Company’s loss costs. Accordingly, the
ultimate net impact of COVID-19 on the Company's reserves remains uncertain. As of December 31, 2023, the Company had
recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $384 million, of which $326
million relates to the Insurance segment and $58 million relates to the Reinsurance & Monoline Excess segment. Such $384
million of COVID-19-related losses included $381 million of reported losses and $3 million of IBNR. For the year ended
December 31, 2023, the Company recognized current accident year losses for COVID-19-related claims activity, net of
reinsurance, of approximately $1 million, all of which relates to the Insurance segment.
Unfavorable prior year development (net of additional and return premiums) was $19 million in 2023.
Insurance – Reserves for the Insurance segment developed unfavorably by $24 million in 2023 (net of additional and
return premiums). The unfavorable development for the segment was concentrated in the early part of the year, with reserve
development being flat overall during the second half of 2023. A key driver of the unfavorable development early in 2023 was
property catastrophe losses related to 2022 events which were still being adjusted and settled during the early part of 2023. In
particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant
contributor to the development, as information gathering and evaluation of many of these claims were still ongoing into the new
year.
In addition to the property prior year development discussed above, during 2023 the Insurance segment also experienced
adverse prior year development on casualty lines of business for the 2016 through 2019 accident years, which was offset by
favorable prior year development on casualty lines of business for the 2020 through 2022 accident years. The unfavorable
development on the 2016 through 2019 accident years was concentrated in the general liability and commercial auto liability
lines of business. The development, which particularly impacted business attaching excess of primary policy limits, was driven
by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase
in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs,
use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and
corporations, and erosion of tort reforms, among others.
The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance
segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to
elevated uncertainty regarding incurred loss frequency and severity as a result of ongoing social inflation and the impacts of the
COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely
maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines
of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company has
begun to react to this favorable emergence as the accident years mature beyond the age of twelve months. It should also be
noted that commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years,
which partially offset the favorable development discussed above; the adverse development was driven by a larger than
expected number of large losses reported.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $5
million in 2023 (net of additional and return premiums). The overall favorable prior year development for the segment was
driven mainly by favorable development in excess workers’ compensation, substantially offset by unfavorable development in
the non-proportional reinsurance assumed liability and excess general liability (including umbrella) lines of business. The
favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses
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relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior
accident years. The unfavorable development for non-proportional reinsurance assumed liability and excess general liability
was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella
business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020.
Unfavorable prior year development (net of additional and return premiums) was $36 million in 2022.
Insurance – Reserves for the Insurance segment developed unfavorably by $40 million in 2022 (net of additional and
return premiums). The unfavorable development in the segment primarily related to COVID-19 losses at two businesses. These
businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by
losses directly caused by the COVID-19 pandemic. Most of this COVID-19 related unfavorable development emerged during
the third quarter as a result of settlements of claims at values higher than our expectations. However, the Company believes that
as a result of these settlements the remaining level of uncertainty around the ultimate value of its known COVID-19 claims has
been significantly reduced.
The unfavorable development mentioned above also includes favorable prior year development for the Insurance
segment primarily attributable to the 2020 and 2021 accident years and unfavorable development on the 2015 through 2019
accident years. The favorable development on the 2020 and 2021 accident years was concentrated in certain casualty lines of
business including general liability, professional liability, and workers’ compensation. The Company experienced lower
reported claim frequency in these lines of business during 2020 and 2021 relative to historical averages, and continued to
experience lower reported incurred losses relative to its expectations for these accident years as they developed during 2022.
These trends began in 2020 and we believe were caused by the impacts of the COVID-19 pandemic, including for example,
lockdowns, reduced driving/traffic and increased work from home. Due to the uncertainty regarding the ultimate impacts of the
pandemic on accident years 2020 and 2021 incurred losses, the Company was cautious in reacting to these lower trends in
setting and updating its loss ratio estimates for these years. As these accident years have continued to mature, the Company has
continued to recognize some of the favorable reported experience in its ultimate loss estimates made during 2022.
The unfavorable development on the 2015 through 2019 accident years was concentrated in the general liability and
professional liability, including medical professional, lines of business, as well as auto liability. The development was driven by
a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in
the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs,
use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and
corporations, and erosion of tort reforms, among others.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $4
million in 2022 (net of additional and return premiums). The overall favorable development for the segment was driven mainly
by favorable development in excess workers compensation, substantially offset by unfavorable development in the professional
liability and non-proportional reinsurance assumed liability lines of business. The favorable excess workers’ compensation
development was spread across most prior accident years, including 2012 and prior years, and was driven by a review of the
Company’s claim reporting patterns as well as a number of favorable claim settlements relative to expectations. The
unfavorable professional liability and non-proportional reinsurance assumed liability development was concentrated mainly in
accident years 2016 through 2018 and was associated primarily with our U.S. assumed reinsurance business and related to
accounts insuring construction projects and professional liability exposures.
Favorable prior year development (net of additional and return premiums) was $7 million in 2021.
Insurance – Reserves for the Insurance segment developed favorably by $20 million in 2021 (net of additional and return
premiums). The overall favorable development in 2021 was attributable to favorable development on the 2020 accident year,
partially offset by adverse development on the 2016 through 2019 accident years.
The favorable development on the 2020 accident year was largely concentrated in the auto liability and other liability
lines of business, including commercial multi-peril liability. During 2020 the Company achieved larger rate increases in these
lines of business than were contemplated in its budget and in its initial loss ratio selections. The Company also experienced
significantly lower reported claim frequency in these lines in 2020 relative to historical averages, and lower reported incurred
losses relative to its expectations. We believe that the lower claim frequency and lower reported incurred losses were caused by
the impacts of the COVID-19 pandemic, for example, lockdowns, reduced driving and traffic, work from home, and court
closures. However, due to the uncertainty regarding the ultimate impacts of the pandemic on accident year 2020 incurred losses,
the Company elected not to react to these lower reported trends during 2020. As more information became available and the
2020 accident year continued to mature, during 2021 the Company started to recognize favorable accident year 2020
development in response to the continuing favorable reported loss experience relative to its expectations.
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The adverse development on the 2016 through 2019 accident years is concentrated largely in the other liability line of
business, including commercial multi-peril liability, but is also seen to a lesser extent in auto liability. The adverse development
for these accident years is driven by a higher than expected number of large losses reported, and particularly impacted the
directors and officers liability, lawyers professional liability, and excess and surplus lines casualty classes of business. We also
believe that increased social inflation is contributing to the increased number of large losses, for example, higher jury awards on
cases which go to trial, and the corresponding higher demands from plaintiffs and higher values required to reach settlement on
cases which do not go to trial.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed unfavorably by
$13 million in 2021. The unfavorable development in the segment was driven by the non-proportional reinsurance assumed
liability and other liability lines of business, related primarily to accident years 2017 through 2019, and was partially offset by
favorable development in excess workers’ compensation business which was spread across many prior accident years. The
unfavorable non-proportional reinsurance assumed liability and other liability development was associated with our U.S. and
U.K. assumed reinsurance business, and related primarily to accounts insuring construction projects and professional liability
exposures.
Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of
workers’ compensation reserves that were discounted was $1,352 million and $1,464 million at December 31, 2023 and 2022,
respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $390 million
and $416 million at December 31, 2023 and 2022, respectively. At December 31, 2023, discount rates by year ranged from
0.7% to 6.5%, with a weighted average discount rate of 3.4%.
Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2023)
are excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment
securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount
rates determined by reference to the U.S. Treasury yield curve. These rates are determined annually based on the weighted
average rate for the period. Once established, no adjustments are made to the discount rate for that period, and any increases or
decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are
recognized. The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss
payout experience.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing
approximately 3% of total discounted reserves at December 31, 2023), including reserves for quota share reinsurance and
reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates prescribed or
permitted by the Department of Insurance of the State of Delaware.
Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will
receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual
amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are
made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are
recorded. Estimated assumed premiums receivable were approximately $65 million and $60 million at December 31, 2023 and
2022, respectively. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information
received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding
companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of
market conditions, economic trends and experience with similar lines of business. These premium estimates represent
management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.
Allowance for Expected Credit Losses on Investments.
Fixed Maturity Securities – For fixed maturity securities in an unrealized loss position where the Company intends to
sell, or it is more likely than not that it will be required to sell the security before recovery in value, the amortized cost basis is
written down to fair value through net investment gains (losses). For fixed maturity securities in an unrealized loss position
where the Company does not intend to sell, or it is more likely than not that it will not be required to sell the security before
recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or all other factors
(non-credit factors). In making this assessment, the Company considers the extent to which fair value is less than amortized
cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among
other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from
the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected
is less than the amortized cost basis, an allowance for expected credit losses is recorded for the credit loss through net
investment gains (losses), limited by the amount that the fair value is less than the amortized cost basis. The allowance is
adjusted for any change in expected credit losses and subsequent recoveries through net investment gains (losses). The
49
impairment related to non-credit factors is recognized in other comprehensive income (loss).
The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for
sale and held to maturity securities, as well as loans receivable. The allowance for expected credit losses is generally based on
the performance of the underlying collateral under various economic and default scenarios that involve subjective judgments
and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and
realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other
relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance
for expected credit losses, if any. In general, the model reverts to the rating-level long-term average marginal default rates based
on 10 years of historical data, beyond the forecast period. For other inputs, the model in most cases reverts to the baseline long-
term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical
averages.
The Company classifies its fixed maturity securities by credit rating, primarily based on ratings assigned by credit
rating agencies. For purposes of classifying securities with different ratings, the Company uses the average of the credit ratings
assigned, unless in limited situations the Company’s own analysis indicates an internal rating is more appropriate. Securities
that are not rated by a rating agency are evaluated and classified by the Company on a case-by-case basis.
A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position
at December 31, 2023 is presented in the table below.
($ in thousands)
Foreign government
State and municipal
Corporate
Mortgage-backed securities
Asset-backed securities
Total
Number of
Securities
Aggregate
Fair Value
Unrealized
Loss
33 $
102,689 $
107,301
5
16
15
5
22,830
21,424
4,393
197
6,469
1,928
185
148
74 $
151,533 $
116,031
As of December 31, 2023, the Company has recorded an allowance for expected credit losses on fixed maturity
securities of $37 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and
believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific
factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers,
the Company expects them to continue to meet their contractual payment obligations as they become due.
Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on
relevant information about past events, including historical loss experience, current conditions and forecasts that affect the
expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a
reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected
credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for
expected credit losses of $3 million and $2 million as of December 31, 2023 and 2022, respectively.
Fair Value Measurements. The Company’s fixed maturity available for sale securities, equity securities, and its
trading account securities are carried at fair value. Fair value is defined as "the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date". The Company utilizes
a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability
to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are
observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable
inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair value of the vast
majority of the Company’s portfolio is based on observable data (other than quoted prices) and, accordingly, is classified as
Level 2.
In classifying particular financial securities in the fair value hierarchy, the Company uses its judgment to determine
whether the market for a security is active and whether significant pricing inputs are observable. The Company determines the
existence of an active market by assessing whether transactions occur with sufficient frequency and volume to provide reliable
pricing information. The Company determines whether inputs are observable based on the use of such information by pricing
services and external investment managers, the uninterrupted availability of such inputs, the need to make significant
50
adjustments to such inputs and the volatility of such inputs over time. If the market for a security is determined to be inactive or
if significant inputs used to price a security are determined to be unobservable, the security is categorized in Level 3 of the fair
value hierarchy.
Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and
processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market
inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided
markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities
that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which
quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable
market data. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of
such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial data,
projections and business developments of the issuer and other relevant information.
The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of
December 31, 2023:
(In thousands)
Pricing source:
Independent pricing services
Syndicate manager
Directly by the Company based on:
Observable data
Total
Carrying
Value
Percent
of Total
$
19,589,441
85,139
450,356
$
20,124,936
97.3 %
0.4
2.3
100.0 %
Independent pricing services - Substantially all of the Company’s fixed maturity securities available for sale were
priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a
limited number of foreign securities held by the Company). The prices provided by the independent pricing services are
generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities).
The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset
class. The Company reviews the prices provided by pricing services for reasonableness based upon current trading levels for
similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or
revised. In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper
valuation and to verify our understanding of how securities are priced. As of December 31, 2023, the Company did not make
any adjustments to the prices provided by the pricing services. Based upon the Company’s review of the methodologies used by
the independent pricing services, these securities were classified as Level 2.
Syndicate manager – The Company has a 15% participation in a Lloyd’s syndicate, and the Company’s share of the
securities owned by the syndicate is priced by the syndicate’s manager. The majority of the securities are liquid, short duration
fixed maturity securities. The Company reviews the syndicate manager’s pricing methodology and audited financial statements
and holds discussions with the syndicate manager as necessary to confirm its understanding and agreement with security prices.
Based upon the Company’s review of the methodologies used by the syndicate manager, these securities were classified as
Level 2.
Observable data – If independent pricing is not available, the Company prices the securities directly. Prices are based
on observable market data where available, including current trading levels for similar securities and non-binding quotations
from brokers. The Company generally requests two or more quotes. If more than one quote is received, the Company sets a
price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the
security. The Company generally does not adjust quotes obtained from brokers. Since these securities were priced based on
observable data, they were classified as Level 2.
Cash flow model – If the above methodologies are not available, the Company prices securities using a discounted
cash flow model based upon assumptions as to prevailing credit spreads, interest rates and interest rate volatility, time to
maturity and subordination levels. Discount rates are adjusted to reflect illiquidity where appropriate. These securities were
classified as Level 3.
51
Results of Operations for the Years Ended December 31, 2023 and 2022
Business Segment Results
Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses
incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage
of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for
the years ended December 31, 2023 and 2022. The GAAP combined ratio represents a measure of underwriting profitability,
excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100
indicates an underwriting profit.
(In thousands)
Insurance
Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio
Reinsurance & Monoline Excess
Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio
Consolidated
Gross premiums written
Net premiums written
Net premiums earned
Loss ratio
Expense ratio
GAAP combined ratio
2023
2022
$
11,561,138
$
10,583,785
9,657,121
9,130,324
8,784,146
8,369,062
62.3 %
28.4
90.7
61.3 %
27.9
89.2
$
1,410,868
$
1,325,267
1,297,346
1,270,363
1,219,924
1,192,367
53.8 %
28.3
82.1
61.3 %
28.4
89.7
$
12,972,006
$
11,909,052
10,954,467
10,400,687
10,004,070
9,561,429
61.3 %
28.4
89.7
61.3 %
28.0
89.3
Net Income to Common Stockholders. The following table presents the Company’s net income to common
stockholders and net income per diluted share for the years ended December 31, 2023 and 2022.
(In thousands, except per share data)
Net income to common stockholders
Weighted average diluted shares
Net income per diluted share
2023
2022
$
$
1,381,359 $
1,381,062
273,298
5.05 $
279,461
4.94
The Company reported net income of $1,381 million in both 2023 and 2022. The 2023 net income reflected an after-
tax increase in net investment income of $216 million primarily due to rising interest rates and a larger investment portfolio
related to fixed maturity securities, an after-tax increase in underwriting income of $38 million mainly due to the growth in
premium rates, an after-tax reduction in interest expenses of $2 million due to debt repayment in 2022, an after-tax increase in
profit from insurance service businesses of $1 million and an after-tax increase of $1 million in minority interest, offset by an
after-tax reduction in net investment gains of $123 million mainly due to the gain on sale of a real estate investment in 2022, an
after-tax increase in foreign currency losses of $65 million mainly due to weakening of the U.S. dollar against other currencies
in 2023, an after-tax increase in corporate expenses of $37 million due to increased compensation-related costs, an increase of
$28 million in tax expense due to a change in the effective tax rate and an after-tax decrease in profits from non-insurance
businesses of $5 million. The number of weighted average diluted shares decreased by 6.2 million for 2023 compared to 2022,
mainly reflecting shares repurchased in 2023.
Premiums. Gross premiums written were $12,972 million in 2023, an increase of 9% from $11,909 million in 2022.
The increase was due to the growth in the Insurance segment of $977 million and $86 million in the Reinsurance & Monoline
Excess segment. Approximately 81% and 82% of premiums expiring were renewed in 2023 and 2022, respectively.
52
Average renewal premium rates for insurance and facultative reinsurance increased 7.1% in 2023 and 6.4% in 2022,
when adjusted for changes in exposures. Average renewal premium rates for insurance and facultative reinsurance excluding
workers' compensation increased 8.1% in 2023 and 7.5% in 2022, when adjusted for changes in exposures.
A summary of gross premiums written in 2023 compared with 2022 by line of business within each business segment
follows:
•
Insurance gross premiums increased 9% to $11,561 million in 2023 from $10,584 million in 2022. Gross premiums
increased $516 million (13%) for other liability, $454 million (19%) for short-tail lines, $141 million (11%) for auto
and $10 million (1%) for workers' compensation, partially offset by a reduction of $144 million (9%) for
professional liability.
•
Reinsurance & Monoline Excess gross premiums increased 6% to $1,411 million in 2023 from $1,325 million in
2022. Gross premiums written increased $79 million (30%) for property lines and $28 million (12%) for monoline
excess, partially offset by a reduction of $22 million (3%) for casualty lines.
Net premiums written were $10,954 million in 2023, an increase of 10% from $10,004 million in 2022. Ceded
reinsurance premiums as a percentage of gross written premiums were 16% in both 2023 and 2022.
Premiums earned increased 9% to $10,401 million in 2023 from $9,561 million in 2022. Insurance premiums
(including the impact of rate changes) are generally earned evenly over the policy term, and accordingly recent rate increases
will be earned over the upcoming quarters. Premiums earned in 2023 are related to business written during both 2023 and 2022.
Audit premiums were $363 million in 2023 compared with $312 million in 2022.
Net Investment Income. Following is a summary of net investment income (loss) for the years ended December 31,
2023 and 2022:
(In thousands)
Fixed maturity securities, including cash and cash equivalents and loans
receivable
Arbitrage trading account
Equity securities
Investment funds
Real estate
Gross investment income
Investment expenses
Total
Amount
2023
2022
Average Annualized
Yield
2023
2022
$
929,098 $
549,281
4.4 %
2.9 %
69,369
55,726
16,743
(11,185)
1,059,751
(6,916)
45,213
52,600
145,099
(3,087)
789,106
(9,921)
5.7
5.1
1.0
(0.9)
4.0
—
3.9
4.9
8.9
(0.2)
3.2
—
$ 1,052,835 $
779,185
4.0 %
3.2 %
Net investment income increased 35% to $1,053 million in 2023 from $779 million in 2022 due primarily to a $380
million increase in income from fixed maturity securities mainly driven by higher interest rates and a larger investment
portfolio, a $24 million increase from the arbitrage trading account (including investment income from trading account
receivables from brokers and clearing organizations), a $3 million increase from equity securities and a $3 million reduction in
investment expenses, partially offset by a $128 million decrease in income from investment funds primarily due to financial
service funds and real estate funds and an $8 million decrease in real estate. Investment funds are reported on a one quarter lag.
The average annualized yield for fixed maturity securities was 4.4% in 2023 and 2.9% in 2022. The effective duration of the
fixed maturity portfolio was 2.4 years at both December 31, 2023 and 2022. The Company maintained the shortened duration of
its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning
the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including
cash and cash equivalents), were $26.4 billion in 2023 and $24.4 billion in 2022.
Insurance Service Fees. The Company earns fees from an insurance distribution business (part of which was sold in
June 2023), a third-party administrator, and as a servicing carrier of workers' compensation assigned risk plans for certain
states. Insurance service fees were $106 million in 2023 and $111 million in 2022. The decrease in service fees resulted from
the sale of the property and casualty insurance services division of Breckenridge IS, Inc.
Net Realized and Unrealized Gains on Investments. The Company buys and sells securities and other investment assets
on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets
are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations
regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized gains on
investments were $48 million in 2023 compared with $217 million in 2022. In 2023, the gains reflected a change in unrealized
53
gains on equity securities of $70 million, partially offset by net realized losses on investments of $23 million. In 2022, the gains
reflected net realized gains on investments of $218 million (primarily due to a $251 million net gain from the sale of a real
estate investment in London after transaction expenses and the foreign currency impact including reversal of the currency
translation adjustment), partially offset by a change in unrealized losses on equity securities of $1 million.
Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected
credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security,
changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other
factors. In 2023, the pre-tax change in allowance for expected credit losses on investments increased by $498 thousand ($393
thousand after-tax), which is reflected in net investment gains. In 2022, the pre-tax change in allowance for expected credit
losses on investments increased by $15 million ($12 million after-tax), which is reflected in net investment gains, primarily due
to change in estimate.
Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses
engaged in the distribution of promotional merchandise, world-wide textile solutions, and aviation-related businesses that
provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and
components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues
from non-insurance businesses were $536 million in 2023 and $510 million in 2022. The increase mainly relates to aviation-
related business and the commercial and residential textile business, which we acquired in 2022, partially offset by the decrease
of promotional merchandise and existing textile business.
Losses and Loss Expenses. Losses and loss expenses increased to $6,372 million in 2023 from $5,862 million in 2022.
The consolidated loss ratio was 61.3% in both 2023 and 2022. Catastrophe losses, net of reinsurance recoveries, were $195
million (including current accident year losses of approximately $1 million related to COVID-19) in 2023 compared with $212
million (including losses of approximately $5 million related to COVID-19) in 2022. Adverse prior year reserve development
(net of premium offsets) was $19 million in 2023 and $36 million in 2022 (refer to Note 13 of our consolidated financial
statements for more detail). The loss ratio excluding catastrophe losses and prior year reserve development was 59.2% and
58.7% in 2023 and 2022, respectively.
A summary of loss ratios in 2023 compared with 2022 by business segment follows:
•
•
Insurance - The loss ratio was 62.3% in 2023 and 61.3% in 2022. Catastrophe losses were $160 million in 2023
compared with $127 million in 2022. Adverse prior year reserve development was $24 million in 2023, principally
from property catastrophe losses, and $40 million in 2022. The loss ratio excluding catastrophe losses and prior year
reserve development increased 1.0 points to 60.3% in 2023 from 59.3% in 2022.
Reinsurance & Monoline Excess - The loss ratio was 53.8% in 2023 and 61.3% in 2022. Catastrophe losses were
$35 million in 2023 compared with $85 million in 2022. Favorable prior year reserve development was $5 million in
2023 and $4 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development
decreased 3.1 points to 51.4% in 2023 from 54.5% in 2022.
Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses:
(In thousands)
Policy acquisition and insurance operating expenses
Insurance service expenses
Net foreign currency losses (gains)
Other costs and expenses
Total
2023
2022
2,954,686 $
2,673,903
91,714
31,799
285,737
96,419
(50,930)
242,113
3,363,936 $
2,961,505
$
$
Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers,
premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses
increased 11% and net premiums earned increased 9% from 2022. The expense ratio (underwriting expenses expressed as a
percentage of net premiums earned) increased by 0.4 points to 28.4% in 2023 from 28.0% in 2022 mainly due to lower ceding
commissions, increased compensation costs and new start-up operating unit expenses.
Service expenses, which represent the costs associated with the fee-based businesses, was $92 million in 2023, down
from $96 million in 2022, as a result of the sale of the property and casualty insurance services division of Breckenridge IS, Inc.
54
Net foreign currency losses (gains) result from transactions denominated in a currency other than a businesses’
functional currency. Net foreign currency losses were $32 million in 2023 compared to gains of $51 million in 2022, primarily
related to the strengthening of the U.K. sterling and Euro against the U.S. dollar in 2023.
Other costs and expenses represent general and administrative expenses of the parent company and other expenses not
allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs
and expenses increased to $286 million in 2023 from $242 million in 2022, primarily due to the increase in compensation-
related costs in 2023.
Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with
businesses engaged in the distribution of promotional merchandise, world-wide textile solutions, and aviation-related
businesses that include (i) cost of goods sold related to aircraft and products sold and services provided and (ii) general and
administrative expenses. Expenses from non-insurance businesses were $525 million in 2023 compared to $493 million in
2022. The increase mainly relates to the aviation-related business and the residential and commercial textile business, which we
acquired in 2022, partially offset by the decrease of promotional merchandise and existing textile business.
Interest Expense. Interest expense was $127 million in 2023, down from $130 million in 2022, primarily due to the
repayment at maturity of its $77 million aggregate principal amount of 8.7% senior notes and its $350 million aggregate
principal amount of 4.625% senior notes in the first quarter of 2022.
Income Taxes. The effective income tax rate was 21.1% in 2023 and 19.5% in 2022. The higher effective income tax
rate for the year, as compared to 2022, was primarily due to a net reduction to the Company’s valuation allowance against
foreign tax credits and foreign net operating losses in the earlier period. See Note 16 of the Consolidated Financial Statements
for a reconciliation of the income tax expense and the amounts computed by applying the Federal income tax rate of 21%.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $261
million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries.
In the future, if such earnings were distributed the Company projects that the incremental tax, if any, will be immaterial.
On August 16, 2022, the Inflation Reduction Act of 2022 was enacted. Among other things, the legislation introduced
a corporate alternative minimum tax on certain corporations. The tax is applicable for taxable years beginning after December
31, 2022 and imposes a 15% minimum tax on a corporation’s applicable financial statement income. While we are not subject
to this tax in 2023, we continue to evaluate the overall impact of this tax legislation on our operations and U.S. federal income
tax position. In addition, a 1% excise tax on the value of corporate share repurchases (net of issuance) went into effect on
January 1, 2023, but was not material for 2023.
Further, the Company is monitoring the impact of the implementation of a global minimum tax rate of 15%, also
known as Pillar Two, as introduced by the Organization for Economic Co-operation and Development, which applies in some
countries commencing in 2024. Our initial assessment is that the impact will not be significant, as the Company mainly
operates in jurisdictions with a statutory tax rate above 15%.
The “Bermuda Corporate Income Tax Act 2023” was passed into law December 27, 2023 in Bermuda. The income tax
will be based on a statutory tax rate of 15% on Bermuda businesses, subject to reductions for foreign tax credits, and will be
effective for fiscal years beginning on or after January 1, 2025. Although we do not currently believe that this will have a
material impact on our income tax position, we will continue to evaluate this tax legislation in 2024.
Results of Operations for the Years Ended December 31, 2022 and 2021
For a comparison of the Company’s results of operations for the year ended December 31, 2022 to the year ended
December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and
Exchange Commission on February 24, 2023.
55
Investments
As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-
term securities that, combined with expected cash flow, it believes is adequate to meet its payment obligations. In addition to
fixed maturity securities, the Company invests in equity securities, merger arbitrage securities, investment funds, private equity,
loans and real estate related assets. The Company's investments in investment funds and its other alternative investments have
experienced, and the Company expects to continue to experience, greater fluctuations in investment income.
The Company also attempts to maintain an appropriate relationship between the effective duration of the investment
portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The effective duration of the
investment portfolio was 2.4 years at both December 31, 2023 and 2022. The Company’s investment portfolio and investment-
related assets as of December 31, 2023 were as follows:
($ in thousands)
Fixed maturity securities:
Carrying
Value
Percent
of Total
U.S. government and government agencies
$ 1,716,731
6.4 %
State and municipal:
Special revenue
State general obligation
Local general obligation
Corporate backed
Pre-refunded (1)
Total state and municipal
Mortgage-backed securities:
Agency
Commercial
Residential-Prime
Residential-Alt A
Total mortgage-backed securities
Asset-backed securities
Corporate:
Industrial
Financial
Utilities
Other
Total corporate
Foreign government
Total fixed maturity securities
Equity securities available for sale:
Common stocks
Preferred stocks
Total equity securities available for sale
Investment funds
Cash and cash equivalents
Real estate
Arbitrage trading account
Loans receivable
1,606,195
432,078
387,336
154,839
104,478
6.0
1.6
1.5
0.6
0.4
2,684,926
10.1
1,429,956
644,313
192,193
2,861
2,269,323
4,187,040
3,559,555
2,779,234
684,924
630,346
7,654,059
1,666,229
20,178,308
838,054
252,293
1,090,347
1,621,655
1,363,195
1,249,874
938,049
201,271
5.4
2.4
0.7
—
8.5
15.7
13.4
10.4
2.6
2.4
28.8
6.3
75.8
3.1
0.9
4.0
6.1
5.1
4.7
3.5
0.8
Total investments
$ 26,642,699
100.0 %
______________
(1) Pre-refunded securities are securities for which an escrow account has been established to fund the remaining payments of
principal and interest through maturity. Such escrow accounts are funded almost exclusively with U.S. Treasury and U.S.
government agency securities.
Fixed Maturity Securities. The Company’s investment policy with respect to fixed maturity securities is generally to
purchase instruments with the expectation of holding them to their maturity. However, management of the available for sale
56
portfolio is considered necessary to maintain an approximate matching of assets and liabilities as well as to adjust the portfolio
as a result of changes in financial market conditions and tax considerations.
The Company’s philosophy related to holding or selling fixed maturity securities is based on its objective of maximizing
total return. The key factors that management considers in its investment decisions as to whether to hold or sell fixed maturity
securities are its view of the underlying fundamentals of specific securities as well as its expectations regarding interest rates,
credit spreads and currency values. In a period in which management expects interest rates to rise, the Company may sell longer
duration securities in order to mitigate the impact of an interest rate rise on the fair value of the portfolio. Similarly, in a period
in which management expects credit spreads to widen, the Company may sell lower quality securities, and in a period in which
management expects certain foreign currencies to decline in value, the Company may sell securities denominated in those
foreign currencies. The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result
in realized gains; however, there is no reason to expect these gains to continue in future periods.
Equity Securities. Equity securities primarily represent investments in common and preferred stocks in companies with
potential growth opportunities in different sectors, mainly in the financial institutions and energy sectors.
Investment Funds. At December 31, 2023, the carrying value of investment funds was $1,622 million, including
investments in financial services funds of $433 million, other funds of $397 million (which includes a deferred compensation
trust asset of $36 million), transportation funds of $344 million, real estate funds of $202 million, infrastructure funds of $131
million and energy funds of $115 million. Investment funds are primarily reported on a one-quarter lag.
Real Estate. Real estate is directly owned property held for investment. At December 31, 2023, real estate properties in
operation included a long-term ground lease in Washington D.C., an office complex in New York City and the completed
portion of a mixed-use project in Washington D.C. In addition, part of the previously mentioned mixed-use project in
Washington D.C. is under development. The Company expects to fund further development costs for the project with a
combination of its own funds and external financing. The Company recognized impairments on real estate of $72 million in
2023. During the first quarter of 2022, the Company sold an office building in London.
Arbitrage Trading Account. The arbitrage trading account is comprised of direct investments in arbitrage securities.
Merger arbitrage is the business of investing in the securities of publicly held companies that are the targets in announced
tender offers and mergers.
Loans Receivable. Loans receivable, net of allowance for expected credit losses, had an amortized cost of $201 million
and an aggregate fair value of $198 million at December 31, 2023. The amortized cost of loans receivable is net of an allowance
for expected credit losses of $3 million as of December 31, 2023. Loans receivable include real estate loans of $200 million that
are secured by commercial and residential real estate located primarily in London and New York. Real estate loans generally
earn interest at fixed or stepped interest rates and have maturities through 2026. Loans receivable include commercial loans of
$1 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 10 years.
57
Liquidity and Capital Resources
Cash Flow. Cash flow provided from operating activities increased to $2,929 million in 2023 from $2,569 million in
2022, primarily due to an increase in premium receipts partially offset by increased loss and loss expense payments.
The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and
proceeds from sales and maturities of portfolio investments. The principal uses of cash are payments for claims, taxes,
operating expenses and dividends. The Company expects its insurance subsidiaries to fund the payment of losses with cash
received from premiums, investment income and fees. The Company generally targets an average duration for its investment
portfolio that is within 1.5 years of the average number of years held for its liabilities so that portions of its investment portfolio
mature throughout the claim cycle and are available for the payment of claims if necessary. In the event operating cash flow and
proceeds from maturities and prepayments of fixed maturity securities are not sufficient to fund claim payments and other cash
requirements, the remainder of the Company's cash and investments is available to pay claims and other obligations as they
become due. The Company's investment portfolio is highly liquid, with approximately 81% invested in cash, cash equivalents
and marketable fixed maturity securities as of December 31, 2023. If the sale of fixed maturity securities were to become
necessary, a realized gain or loss equal to the difference between the cost and sales price of securities sold would be recognized.
Debt. At December 31, 2023, the Company had senior notes, subordinated debentures and other debt outstanding with a
carrying value of $2,837 million and a face amount of $2,865 million. The maturities of the outstanding debt are $7 million in
2024, $3 million in 2025, $250 million in 2037, $350 million in 2044, $470 million in 2050, $400 million in 2052, $185 million
in 2058, $300 million in 2059, $250 million in 2060, and $650 million in 2061.
On April 1, 2022, the Company entered into a senior unsecured revolving credit facility that provides for revolving,
unsecured borrowings up to an aggregate of $300 million with a $50 million sublimit for letters of credit. The Company may
increase the amount available under the facility to a maximum of $500 million subject to obtaining lender commitments for the
increase and other customary conditions. Borrowings under the facility may be used for working capital and other general
corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of credit outstanding
on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the
facility is conditioned on the satisfaction of representations, warranties and covenants that are customary for facilities of this
type. As of December 31, 2023, there were no borrowings outstanding under the facility.
Equity. At December 31, 2023, total common stockholders’ equity was $7.5 billion, common shares outstanding were
256,544,757 and stockholders’ equity per outstanding share was $29.06. The Company repurchased 8,707,676 and 1,370,394
shares of its common stock in 2023 and 2022, respectively. The aggregate cost of the repurchases was $537 million in 2023 and
$94 million in 2022. In 2023, the Board declared regular quarterly cash dividends of $0.10 per share in the first quarter and
$0.11 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share in the first, third, and
fourth quarters, for a total of $501 million in aggregate dividends in 2023.
Total Capital. Total capitalization (equity, debt and subordinated debentures) was $10.3 billion at December 31, 2023.
The percentage of the Company’s capital attributable to senior notes, subordinated debentures and other debt was 28% and 30%
at December 31, 2023 and 2022, respectively.
Federal and Foreign Income Taxes
The Company files a consolidated income tax return in the U.S. and foreign tax returns in each of the countries in which
it has overseas operations. At December 31, 2023, the Company had a gross deferred tax asset of $777 million (which primarily
relates to, loss and loss expense reserves, unearned premium reserves and unrealized losses on investments). The Company also
has a $36 million valuation allowance against the gross deferred tax asset and a gross deferred tax liability of $473 million
(which primarily relates to deferred policy acquisition costs, and various investment funds) resulting in a net deferred tax asset
of $267 million. The realization of this asset is dependent upon the Company's ability to generate sufficient taxable income in
future periods. Based on historical results and the prospects for future operations, management anticipates that it is more likely
than not that future taxable income will be sufficient for the realization of this asset.
58
Reinsurance
The Company follows customary industry practice of reinsuring a portion of its exposures in exchange for paying
reinsurers a part of the premiums received on the policies it writes. Reinsurance is purchased by the Company principally to
reduce its net liability on individual risks and to protect against catastrophic losses. Although reinsurance does not legally
discharge an insurer from its primary liability for the full amount of the policies, it does make the assuming reinsurer liable to
the insurer to the extent of the reinsurance coverage. The Company monitors the financial condition of its reinsurers and
attempts to place its coverages only with financially sound carriers. Reinsurance coverage and retentions vary depending on the
line of business, location of the risk and nature of loss. The Company’s reinsurance purchases include the following:
•
Property reinsurance treaties - The Company purchases property reinsurance to reduce its exposure to large individual
property losses and catastrophe events. Following is a summary of significant property reinsurance treaties in effect as
of January 1, 2024:
◦
◦
The Company’s property per risk reinsurance generally covers losses between $2.5 million and $85 million.
The Company’s catastrophe excess of loss reinsurance program provides protection for business written by its
Insurance segment businesses and U.S. and non-U.S. business written by Lloyd's Syndicate, excluding
offshore energy. For 2024, some of our property catastrophe reinsurance is placed via industry loss warranty
(ILW) covers and the equivalent W. R. Berkley limit and retention (and resulting net position) are estimated
based on our market share and modeled outcome when applying the ILW layering. Retentions by territory and
peril range between $62.1 million and $83.6 million. Limits purchased are the difference between the
corresponding retention and the following amounts:
▪
▪
▪
For terrorism: $700 million.
For Northeast wind exposures: $600 million.
For all other perils and/or territories: $500 million.
•
•
•
•
Casualty reinsurance treaties - The Company purchases casualty reinsurance to reduce its exposure to large individual
casualty losses, workers’ compensation catastrophe losses and casualty losses involving multiple claimants or insureds
for the majority of business written by its U.S. companies. A significant casualty treaty (casualty catastrophe) in effect
as of January 1, 2024 provides protection for losses between $10 million and $70 million from single events with
claims involving two or more insurable interests or for systemic events involving multiple insureds and/or policy
years. The treaty also covers casualty contingency losses in excess of $5 million and up to $100 million. We have a co-
participation on this casualty catastrophe treaty. For losses involving two or more claimants for primary workers’
compensation business, coverage is generally in place for losses between $10 million and $500 million. For excess
workers’ compensation business, such coverage is generally in place for losses between $25 million and $500 million.
Our workers’ compensation catastrophe reinsurance program is a shared cover for both excess and primary workers’
compensation business.
Facultative reinsurance - The Company also purchases facultative reinsurance on certain individual policies or risks
that are in excess of treaty reinsurance capacity.
Other reinsurance - Depending on the business, the Company purchases specific additional reinsurance to supplement
the above programs.
Lifson Re will continue to be a participant on the majority of the Company’s reinsurance placements for a 30.0% share
of the placed amounts. This pertains to all traditional treaty reinsurance/retrocessional placements for both property
and casualty business where there is more than one open market reinsurer participating. Lifson Re is currently
capitalized with $380 million of equity from a small group of sophisticated global investors with long-term investment
horizons, including a minority participation by the Company. Lifson Re will participate on a fully collateralized basis.
The Company places a number of its casualty treaties on a “risk attaching” basis. Under risk attaching treaties, all claims
from policies incepting during the period of the reinsurance contract are covered even if they occur after the expiration date of
the reinsurance contract. If the Company is unable to renew or replace its existing reinsurance coverage, protection for
unexpired policies would remain in place until their expiration. In such case, the Company could revise its underwriting
strategy for new business to reflect the absence of reinsurance protection. The casualty catastrophe treaty highlighted above was
purchased on a “losses discovered” basis. Property catastrophe and workers’ compensation catastrophe reinsurance is generally
placed on a “losses occurring basis,” whereby only claims occurring during the period are covered. If the Company is unable to
renew or replace these reinsurance coverages, unexpired policies would not be protected, though we generally have the option
to purchase run-off coverage in our treaties.
59
Following is a summary of earned premiums and loss and loss expenses ceded to reinsurers for each of the three years
ended December 31, 2023:
(In thousands)
Earned premiums
Losses and loss expenses
Year Ended December 31,
2023
2022
2021
$ 1,958,581 $ 1,883,263 $ 1,805,341
1,376,144
1,269,338
1,236,960
Ceded earned premiums increased 4.0% in 2023 to $1,959 million. The ceded losses and loss expenses ratio increased 3
points to 70% in 2023 from 67% in 2022.
The following table presents the credit quality of amounts due from reinsurers as of December 31, 2023.
(In thousands)
Reinsurer
Amounts due in excess of $20 million:
Lloyd’s of London
Partner Re
Munich Re
Berkshire Hathaway
Hannover Re Group
Renaissance Re
Swiss Re
Everest Re
Liberty Mutual
Axis Capital
Fairfax Financial
Korean Re
Arch Capital Group
Sompo Holdings Group
Axa Insurance
TOA RE
Nationwide Group
Markel Corp Group
Helvetia Holdings Group
Chubb Group
MS & AD Insurance Group
Other reinsurers:
Rated A- or better
Secured (2)
All Others
Subtotal
Residual market pools (3)
Allowance for expected credit losses
Total
Rating
(1)
Amount
A+
A+
AA-
AA+
AA-
A+
AA-
A+
A
A+
A
A
A+
A+
AA-
A
A+
A
A+
AA
A
$
402,210
314,471
310,985
307,878
231,172
217,008
176,377
145,155
117,556
86,680
64,300
57,530
54,175
47,520
45,680
37,140
32,411
31,827
31,429
24,459
20,144
115,696
485,906
50,429
$
3,408,138
134,793
(8,404)
$
3,534,527
(1) S&P rating, or if not rated by S&P, A.M. Best rating.
(2) Secured by letters of credit or other forms of collateral.
(3) Many states require licensed insurers that provide workers' compensation insurance to participate in programs that provide
workers' compensation to employers that cannot procure coverage from an insurer on a voluntary basis. Insurers can fulfill
this residual market obligation by participating in pools where results are shared by the participating companies. The
Company acts as a servicing carrier for workers' compensation pools in certain states. As a servicing carrier, the Company
writes residual market business directly and then cedes 100% of this business to the respective pool. As a servicing carrier,
the Company receives fee income for its services. The Company does not retain underwriting risk, and credit risk is limited
as ceded balances are jointly shared by all the pool members.
60
Contractual Obligations
Following is a summary of the Company's contractual obligations as of December 31, 2023:
(In thousands)
Estimated Payments By Periods
2024
2025
2026
2027
2028
Thereafter
Gross reserves for losses
Operating lease obligations
Purchase obligations
Subordinated debentures
Senior notes and other debt
Interest payments
Other long-term liabilities
Total
$ 4,910,394 $ 3,535,759 $ 2,737,474 $ 2,076,132 $ 1,498,912 $ 4,382,688
50,222
248,326
—
—
41,249
109,243
—
—
34,072
64,741
—
—
24,900
53,865
—
—
23,206
55,842
—
—
125,580
125,580
125,580
125,235
125,120
84,014
—
1,035,000
1,820,000
3,029,044
2,279
19,077
$ 5,336,801 $ 3,813,910 $ 2,963,768 $ 2,281,870 $ 1,704,662 $ 10,369,823
1,738
2,079
1,901
1,582
The estimated payments for reserves for losses and loss expenses in the above table represent the projected
(undiscounted) payments for gross loss and loss expense reserves related to losses incurred as of December 31, 2023. The
estimated payments in the above table do not consider payments for losses to be incurred in future periods. These amounts
include reserves for reported losses and reserves for incurred but not reported losses. Estimated amounts recoverable from
reinsurers are not reflected. The estimated payments by year are based on historical loss payment patterns.The actual payments
may differ from the estimated amounts due to changes in ultimate loss reserves and in the timing of the settlement of those
reserves. In addition, at December 31, 2023, the Company had commitments to invest up to $339 million and $106 million in
certain investment funds and real estate construction projects, respectively. These amounts are not included in the above table.
The Company utilizes letters of credit to back certain reinsurance payments and obligations. Outstanding letters of
credit were $29 million as of December 31, 2023. The Company has made certain guarantees to state regulators that the
statutory capital of certain subsidiaries will be maintained above certain minimum levels.
Off-Balance Sheet Arrangements
An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an
unconsolidated entity under which a company has (1) made guarantees, (2) a retained or contingent interest in transferred
assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable
interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that
engages in leasing, hedging or research and development arrangements with the Company. The Company has no arrangements
of these types that management believes may have a material current or future effect on our financial condition, liquidity or
results of operations.
61
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest
rates. The Company uses various models and stress test scenarios to monitor and manage interest rate risk. The Company
attempts to manage its interest rate risk by maintaining an appropriate relationship between the effective duration of the
investment portfolio and the average number of years held for its liabilities (i.e., policy claims and debt obligations). The
effective duration for the fixed maturity portfolio (including cash and cash equivalents) was 2.4 years at both December 31,
2023 and 2022.
In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts
to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.
The following table outlines the groups of fixed maturity securities and their effective duration at December 31, 2023:
($ in thousands)
Mortgage-backed securities
State and municipal
U.S. government and government agencies
Foreign government
Corporate
Loans receivable
Asset-backed securities
Cash and cash equivalents
Total
Effective
Duration
(Years)
3.9
3.2
3.1
2.7
2.5
1.4
1.1
0.0
2.4
Fair Value
$
2,269,430
2,688,058
1,716,731
1,666,229
7,654,059
198,244
4,187,040
1,363,195
$
21,742,986
Duration is a common measure of the price sensitivity of fixed maturity securities to changes in interest rates. The
Company determines the estimated change in fair value of the fixed maturity securities, assuming parallel shifts in the yield
curve for treasury securities while keeping spreads between individual securities and treasury securities static. The estimated
fair value at specified levels at December 31, 2023 would be as follows:
(In thousands)
Change in interest rates:
300 basis point rise
200 basis point rise
100 basis point rise
Base scenario
100 basis point decline
200 basis point decline
300 basis point decline
Estimated Fair
Value
Change in Fair
Value
$
20,180,450 $
(1,562,536)
20,691,790
21,215,431
21,742,986
22,265,903
22,780,386
23,286,292
(1,051,196)
(527,555)
—
522,917
1,037,400
1,543,306
Arbitrage investing differs from other types of investments in that its focus is on transactions and events believed likely
to bring about a change in value over a relatively short time period (usually four months or less). The Company believes that
this makes arbitrage investments less vulnerable to changes in general stock market conditions. Potential changes in market
conditions are also mitigated by the implementation of hedging strategies, including short sales.
Additionally, the arbitrage positions are generally hedged against market declines by purchasing put options, selling call
options or entering into swap contracts. The Company's merger arbitrage securities are primarily exposed to the risk of
completion of announced deals, which are subject to regulatory as well as transactional and other risks.
62
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
W. R. Berkley Corporation:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of W. R. Berkley Corporation and subsidiaries (the Company)
as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’
equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and
financial statement schedules II to VI (collectively, the consolidated financial statements). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and
2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31,
2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 23, 2024 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Reserves for losses and loss expenses
As discussed in Notes 1 and 13 to the consolidated financial statements, the Company estimates the reserves for losses and
loss expenses (reserves) using a variety of actuarial techniques and methods. The key assumptions used to arrive at the
best estimate of recorded reserves are expected loss ratios, rate of loss cost inflation, reported and paid loss emergence
patterns, loss frequency and severity, and the loss reporting lag. Such amounts are adjusted for certain qualitative factors.
The reserves as of December 31, 2023 were $18.7 billion.
We identified the assessment of the estimate of reserves as a critical audit matter because it involved significant
measurement uncertainty, which required complex auditor judgement. Specialized actuarial skills and knowledge were
required to evaluate the actuarial method or methods and assumptions used. Assumptions included loss development
63
factors; the weighting of actuarial methods when more than one was used; the impact of qualitative factors; and whether
payments are fixed and reliably determinable for certain reserves subject to discounting.
The following are the primary procedures we performed to address the critical audit matter. With the assistance of
actuarial professionals, when appropriate, we evaluated the design and tested the operating effectiveness of certain internal
controls over the Company’s reserving process. This included controls over the Company’s process to develop the
Company’s best estimate of reserves based on actuarial methodologies and assumptions employed by the Company’s
actuaries. We involved actuarial professionals with specialized skills and knowledge, who assisted in:
•
•
•
•
•
•
examining the Company’s actuarial methodologies for compliance with Actuarial Standards of Practice
evaluating the Company’s ability to discount certain reserves by comparing the expected payout pattern of claims paid
to actual claims paid
evaluating the Company’s actuarial point estimate by performing independent actuarial analyses for certain of the
larger, more complex businesses
evaluating the Company’s actuarial point estimate by examining the Company actuaries’ process, and key assumptions
for certain of the remaining businesses
developing an independent range of reserves based on actuarial methodologies and assumptions and comparing to the
Company’s recorded reserves
evaluating the Company’s recorded reserves and year-over-year movements of the Company’s reserves relative to, and
within, the independently developed range of reserves.
We have served as the Company’s auditor since 1972.
New York, New York
February 23, 2024
/S/ KPMG LLP
64
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
REVENUES:
Net premiums written
Change in net unearned premiums
Net premiums earned
Net investment income
Net investment gains:
Net realized and unrealized gains on investments
Change in allowance for expected credit losses on investments
Net investment gains
Revenues from non-insurance businesses
Insurance service fees
Other income
Total revenues
OPERATING COSTS AND EXPENSES:
Losses and loss expenses
Other operating costs and expenses
Expenses from non-insurance businesses
Interest expense
Total operating costs and expenses
Income before income taxes
Income tax expense
Net income before noncontrolling interests
Noncontrolling interests
Net income to common stockholders
NET INCOME PER SHARE:
Basic
Diluted
See accompanying notes to consolidated financial statements.
Year Ended December 31,
2023
2022
2021
$ 10,954,467 $ 10,004,070 $ 8,862,867
(553,780)
(442,641)
(756,836)
10,400,687
9,561,429
8,106,031
1,052,835
779,185
671,618
47,540
217,311
106,958
(498)
(14,914)
(16,326)
47,042
535,508
106,485
381
202,397
509,548
110,544
3,396
90,632
489,151
93,857
4,177
12,142,938
11,166,499
9,455,466
6,372,142
5,861,750
4,953,960
3,363,936
2,961,505
2,599,270
524,998
127,459
493,189
130,374
472,151
147,180
10,388,535
9,446,818
8,172,561
1,754,403
1,719,681
1,282,905
(370,557)
(334,727)
(251,890)
1,383,846
1,384,954
1,031,015
(2,487)
(3,892)
(8,525)
$ 1,381,359 $ 1,381,062 $ 1,022,490
$
$
5.10 $
5.05 $
4.99 $
4.94 $
3.69
3.66
65
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income before noncontrolling interests
Other comprehensive gain (loss):
Change in unrealized translation adjustments
Change in unrealized investment gains (losses), net of taxes
Other comprehensive gain (loss)
Comprehensive income
Noncontrolling interests
Year Ended December 31,
2023
2022
2021
$ 1,383,846 $ 1,384,954 $ 1,031,015
32,192
306,553
338,745
1,179
(20,969)
(983,803)
(198,812)
(982,624)
(219,781)
1,722,591
402,330
811,234
(2,485)
(3,890)
(8,523)
Comprehensive income to common stockholders
$ 1,720,106 $
398,440 $
802,711
See accompanying notes to consolidated financial statements.
66
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
Assets
Investments:
Fixed maturity securities (amortized cost of $20,915,245 and $18,715,483; allowance for expected credit
losses of $36,751 and $37,466 at December 31, 2023 and 2022)
Investment funds
Real estate
Arbitrage trading account
Equity securities
Loans receivable (net of allowance for expected credit losses of $3,004 and $1,791 at December 31, 2023
and 2022)
Total investments
Cash and cash equivalents
Premiums and fees receivable (net of allowance for expected credit losses of $35,110 and $30,660 at
December 31, 2023 and 2022)
Due from reinsurers (net of allowance for expected credit losses of $8,404 and $8,064 at December 31, 2023
and 2022)
Deferred policy acquisition costs
Prepaid reinsurance premiums
Trading account receivable from brokers and clearing organizations
Property, furniture and equipment
Goodwill
Accrued investment income
Current federal and foreign income taxes
Deferred federal and foreign income taxes
Other assets
Total assets
Liabilities and Equity
Liabilities:
Reserves for losses and loss expenses
Unearned premiums
Due to reinsurers
Trading account securities sold but not yet purchased
Current federal and foreign income taxes
Deferred federal and foreign income taxes
Senior notes and other debt
Subordinated debentures
Other liabilities
Total liabilities
Equity:
Preferred stock, par value $.10 per share:
Authorized 5,000,000 shares; issued and outstanding — none
Common stock, par value $.20 per share:
Authorized 1,250,000,000 shares; issued and outstanding, net of treasury shares, 256,544,757 and
264,546,100 shares, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Treasury stock, at cost, 272,469,871 and 264,468,528 shares, respectively
Total common stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to consolidated financial statements.
67
December 31,
2023
2022
20,178,308 $
1,621,655
1,249,874
938,049
1,090,347
201,271
25,279,504
1,363,195
17,587,349
1,608,548
1,340,622
944,230
1,185,894
193,002
22,859,645
1,449,346
3,109,334
2,779,244
3,534,527
861,609
758,927
303,614
426,803
174,597
213,408
1,318
309,623
865,556
37,202,015 $
18,739,652 $
5,922,326
631,164
9,357
47,525
42,660
1,827,951
1,009,090
1,503,053
29,732,778
3,187,730
763,486
696,468
233,863
423,232
185,509
166,784
39,123
340,647
736,022
33,861,099
17,011,223
5,297,654
523,131
—
34,350
11,646
1,828,823
1,008,371
1,377,740
27,092,938
—
—
105,803
1,017,691
11,040,908
(925,838)
(3,783,133)
7,455,431
13,806
7,469,237
37,202,015 $
105,803
997,534
10,161,005
(1,264,581)
(3,251,429)
6,748,332
19,829
6,768,161
33,861,099
$
$
$
$
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except per share data)
COMMON STOCK:
Beginning and end of period
ADDITIONAL PAID IN CAPITAL:
Beginning of period
Restricted stock units issued
Restricted stock units expensed
End of period
RETAINED EARNINGS:
Beginning of period
Net income to common stockholders
Dividends ($1.93, $0.89, and $1.34 per share, respectively)
End of period
ACCUMULATED OTHER COMPREHENSIVE LOSS:
Unrealized investment (losses) gains:
Beginning of period
Change in unrealized gains (losses) on securities without an allowance for expected
credit losses
Change in unrealized gains (losses) on securities with an allowance for expected
credit losses
End of period
Currency translation adjustments:
Beginning of period
Net change in period
End of period
Year Ended December 31,
2023
2022
2021
$
$
105,803 $
105,803 $
105,803
997,534 $
981,104 $
977,215
(29,043)
49,200
(32,622)
49,052
(44,041)
47,930
$
1,017,691 $
997,534 $
981,104
$
10,161,005 $
9,015,135 $
8,348,381
1,381,359
1,381,062
1,022,490
(501,456)
(235,192)
(355,736)
$
11,040,908 $
10,161,005 $
9,015,135
$
(892,905) $
90,900 $
289,714
305,908
(955,435)
(208,938)
643
(586,354)
(28,370)
(892,905)
10,124
90,900
(371,676)
(372,855)
32,192
1,179
(339,484)
(371,676)
(351,886)
(20,969)
(372,855)
Total accumulated other comprehensive loss
$
(925,838) $
(1,264,581) $
(281,955)
TREASURY STOCK:
Beginning of period
Stock exercised/vested
Stock repurchased
Other
End of period
NONCONTROLLING INTERESTS:
Beginning of period
(Distributions) contributions
Net income
Other comprehensive loss, net of tax
End of period
See accompanying notes to consolidated financial statements.
$
(3,251,429) $
(3,167,076) $
(3,058,425)
10,381
(537,163)
(4,922)
9,787
(94,140)
—
13,775
(122,426)
—
$
(3,783,133) $
(3,251,429) $
(3,167,076)
$
19,829 $
14,719 $
(8,508)
2,487
(2)
1,220
3,892
(2)
14,995
(8,799)
8,525
(2)
$
13,806 $
19,829 $
14,719
68
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
CASH FROM OPERATING ACTIVITIES:
Net income to common stockholders
Adjustments to reconcile net income to net cash from operating activities:
Net investment gains
Depreciation and (accretion) amortization
Noncontrolling interests
Investment funds
Stock incentive plans
Change in:
Arbitrage trading account
Premiums and fees receivable
Reinsurance accounts
Deferred policy acquisition costs
Current income taxes
Deferred income taxes
Reserves for losses and loss expenses
Unearned premiums
Other
Net cash from operating activities
CASH FLOWS USED IN INVESTING ACTIVITIES:
Proceeds from sale of fixed maturity securities
Proceeds from sale of equity securities
(Contributions to) distributions from investment funds
Proceeds from maturities and prepayments of fixed maturity securities
Purchase of fixed maturity securities
Purchase of equity securities
Real estate (purchased) sold
Change in loans receivable
Net additions to property, furniture and equipment
Change in balances due from security brokers
Cash received in connection with business disposition
Payment for business purchased, net of cash acquired
Net cash used in investing activities
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
Net (payments) proceeds from issuance of debt
Repayment of senior notes and other debt
Cash dividends to common stockholders
Purchase of common treasury shares
Other, net
Net cash (used in) from financing activities
Net impact on cash due to change in foreign exchange rates
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
See accompanying notes to consolidated financial statements.
69
Year Ended December 31,
2023
2022
2021
$
1,381,359 $
1,381,062 $
1,022,490
(47,042)
(20,861)
2,487
(16,743)
51,000
(54,213)
(334,178)
(306,017)
(99,387)
52,451
(26,691)
(202,397)
55,872
3,892
(145,099)
49,411
(53,291)
(268,171)
(266,307)
(88,844)
(3,534)
(64,712)
(90,632)
129,682
8,525
(220,015)
46,680
(268,649)
(364,395)
(433,644)
(121,663)
(43,890)
7,630
1,715,076
1,684,254
1,635,774
617,535
14,462
466,590
19,878
786,627
89,467
2,929,238
2,568,604
2,183,987
1,011,195
318,852
(19,904)
797,948
82,319
24,623
1,842,139
126,980
101,050
3,506,903
4,891,179
6,067,230
(6,664,763)
(8,036,680)
(10,716,748)
(80,454)
(2,074)
(29,719)
(53,080)
(33,929)
96,567
(11,558)
(340,482)
(45,920)
(83,212)
(52,684)
14,337
906,789
(49,572)
(464,645)
166,886
(27,421)
(66,634)
(17,983)
—
—
(1,961,964)
(1,891,355)
(2,989,146)
(974)
—
(501,456)
(537,163)
(22,902)
(1,062,495)
9,070
(86,151)
1,449,346
(3,309)
(426,503)
(235,192)
(94,140)
(12,848)
(771,992)
(24,754)
(119,497)
1,568,843
1,034,107
(504,952)
(355,736)
(122,426)
(45,162)
5,831
(4,195)
(803,523)
2,372,366
$
1,363,195 $
1,449,346 $
1,568,843
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023, 2022 and 2021
(1) Summary of Significant Accounting Policies
(A) Principles of consolidation and basis of presentation
The consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries
(the "Company"), have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP"). All significant
intercompany transactions and balances have been eliminated. Reclassifications have been made in the 2022 and 2021 financial
statements as originally reported to conform to the presentation of the 2023 financial statements. For the year ended December
31, 2021, the Company did not correct the proceeds from sale of fixed maturity securities and purchase of fixed maturity
securities lines within the consolidated statements of cash flows for an incremental inter-company elimination as the effects
were not material and had no impact on the total amount of investing activities.
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the revenues and expenses reflected during the reporting period. The most significant items
on our balance sheet that involve a greater degree of accounting estimates that are subject to change in the future are the
valuation of investments, allowance for expected credit losses on investments, reserves for losses and loss expenses and
premium estimates. Actual results could differ from those estimates.
(B) Revenue recognition
Insurance premiums are recognized as written at the inception of the policy. Reinsurance premiums are estimated
based upon information received from ceding companies, and subsequent differences from such estimates are recorded in the
period they are determined. Insurance and reinsurance premiums are primarily earned on a pro rata basis over the policy term.
Fees for services are earned over the period that the services are provided. Premiums and fees receivable are reported net of an
allowance for expected credit losses, with the allowance being estimated based on current and future expected conditions,
historical loss data and specific identification of collectability concerns where applicable. Changes in the allowance are reported
within other operating costs and expenses.
Audit premiums are recognized when they are reliably determinable. The change in accruals for earned but unbilled
audit premiums increased net premiums written and premiums earned by $19 million, $25 million and $10 million in 2023,
2022 and 2021, respectively.
Revenues from non-insurance businesses are derived from businesses engaged in the distribution of promotional
merchandise, world-wide textile solutions, and aircraft services provided to the general, commercial and military aviation
markets. These aircraft services include (i) the distribution, manufacturing, repair and overhaul of aircraft parts and
components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenue is
recognized upon the shipment of products and parts, the delivery of aircraft, the delivery of fuel, and over the completion period
of services.
Insurance service fee revenue represents servicing fees for program administration and claims management services
provided by the Company, including workers' compensation assigned risk plans, as well as insurance brokerage and risk
management services. Fees for program administration, claims management and risk management services are primarily
recognized ratably over the related contract period for which the underlying services are rendered.
(C) Cash and cash equivalents
Cash equivalents consist of funds invested in money market accounts and investments with an effective maturity of
three months or less when purchased.
(D) Investments
Fixed maturity securities classified as available for sale are carried at estimated fair value, with unrealized gains and
losses, net of applicable income taxes, excluded from earnings and reported as a component of comprehensive income and a
separate component of stockholders' equity. Fixed maturity securities that the Company has the positive intent and ability to
hold to maturity are classified as held to maturity and reported at amortized cost. Investment income from fixed maturity
securities is recognized based on the constant effective yield method. Premiums and discounts on mortgage-backed securities
are adjusted for the effects of actual and anticipated prepayments on a retrospective basis.
70
Equity securities with readily determinable fair values are measured at fair value, with changes in the fair value
recognized in net income within net realized and unrealized gains on investments.
Fixed maturity securities that the Company purchased with the intent to sell in the near-term are classified as trading
account securities and are reported at estimated fair value. Realized and unrealized gains and losses from trading activity are
reported as net investment income and are recorded at the trade date. Short sales and short call options are presented as trading
securities sold but not yet purchased. Unsettled trades and the net margin balances held by the clearing broker are presented as a
trading account receivable from brokers and clearing organizations.
Investment funds are carried under the equity method of accounting. The Company's share of the earnings or losses of
investment funds is primarily reported on a one-quarter lag in order to facilitate the timely completion of the Company's
consolidated financial statements.
Loans receivable primarily represent commercial and real estate loans and are carried at amortized cost. The accrual of
interest on loans receivable is discontinued if the loan is 90 days past due based on the contractual terms of the loan unless the
loan is adequately secured and in process of collection. In general, loans are placed on non-accrual status or charged off at an
earlier date if collection of principal or interest is considered doubtful. Interest on these loans is accounted for on a cash basis
until qualifying for return to accrual status. Loans are returned to accrual status when all principal and interest amounts
contractually due are brought current and future payments are reasonably assured.
Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.” Fair value of investments is determined based on a fair value
hierarchy that prioritizes the use of observable inputs over the use of unobservable inputs and requires the use of observable
inputs when available. (See Note 12 of the Notes to Consolidated Financial Statements.)
Realized gains or losses represent the difference between the cost of securities sold and the proceeds realized upon sale
and are recorded at the trade date. The Company uses primarily the first-in, first-out method to determine the cost of securities
sold.
For available for sale securities in an unrealized loss position where the Company intends to sell, or it is more likely
than not that it will be required to sell the security before recovery in value, the amortized cost basis is written down to fair
value through net investment gains. For available for sale securities in an unrealized loss position where the Company does not
intend to sell, or it is more likely than not that it will not be required to sell the security before recovery in value, the Company
evaluates whether the decline in fair value has resulted from credit losses or all other factors (non-credit factors). In making this
assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the
security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment
indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the
amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost
basis, an allowance for expected credit losses is recorded for the credit loss through net investment gains, limited by the amount
that the fair value is less than the amortized cost basis. The allowance is adjusted for any change in expected credit losses and
subsequent recoveries through net investment gains. The impairment related to non-credit factors is recognized in
comprehensive income (loss).
For financial assets carried at amortized cost, which includes held to maturity securities and loans receivable, the
Company estimates an allowance for expected credit losses based on relevant information about past events, including historical
loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial
asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the
consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains.
The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for
sale and held to maturity securities, as well as loans receivable. The allowance for expected credit losses is generally based on
the performance of the underlying collateral under various economic and default scenarios that involve subjective judgments
and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and
realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other
relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance
for expected credit losses, if any. In general, the model reverts to the rating-level long-term average marginal default rates based
on 10 years of historical data, beyond the forecast period. For other inputs, the model in most cases reverts to the baseline long-
term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical
averages.
71
The Company reports accrued investment income separately from fixed maturity securities, and has elected not to
measure an allowance for expected credit losses for accrued investment income. Accrued investment income is written off
through net investment income at the time the issuer of the bond defaults or is expected to default on payments.
Real estate held for investment purposes is initially recorded at the purchase price, which is generally fair value, and is
subsequently reported at cost less accumulated depreciation. Real estate taxes, interest and other costs incurred during
development and construction are capitalized. Buildings are depreciated on a straight-line basis over the estimated useful lives
of the building. Minimum rental income is recognized on a straight-line basis over the lease term. Income and expenses from
real estate are reported as net investment income. The carrying value of real estate is reviewed for impairment and an
impairment loss is recognized if the estimated undiscounted cash flows from the use and disposition of the property are less
than the carrying value of the property.
(E) Per share data
The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by
dividing net income by weighted average number of common shares outstanding during the year (including 11,663,450
common shares held in a grantor trust). The common shares held in the grantor trust are for delivery upon settlement of vested
but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares
outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is
based upon the weighted average number of basic and common equivalent shares outstanding during the year and is calculated
using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in
periods in which they have an anti-dilutive effect.
(F) Deferred policy acquisition costs
Acquisition costs associated with the successful acquisition of new and renewed insurance and reinsurance contracts
are deferred and amortized ratably over the terms of the related contracts. Ceding commissions received on reinsurance
contracts are netted against acquisition costs and are recognized ratably over the life of the contract. Deferred policy acquisition
costs are presented net of unearned ceding commissions. Deferred policy acquisition costs are comprised primarily of
commissions, as well as employment-related underwriting costs and premium taxes. Deferred policy acquisition costs are
reviewed to determine if they are recoverable from future income and, if not, are charged to expense. The recoverability of
deferred policy acquisition costs is evaluated separately by each of our operating units. Future investment income is taken into
account in measuring the recoverability of deferred policy acquisition costs.
(G) Reserves for losses and loss expenses
Reserves for losses and loss expenses are an accumulation of amounts determined on the basis of (1) evaluation of
claims for business written directly by the Company; (2) estimates received from other companies for reinsurance assumed by
the Company; and (3) estimates for losses incurred but not reported (based on Company and industry experience). These
estimates are periodically reviewed and, as experience develops and new information becomes known, the reserves are adjusted
as necessary. Such adjustments are reflected in the statements of income in the period in which they are determined. The
Company discounts its reserves for excess and assumed workers' compensation claims using a risk-free or statutory rate. (See
Note 13 of Notes to Consolidated Financial Statements.)
(H) Reinsurance ceded
The unearned portion of premiums ceded to reinsurers is reported as prepaid reinsurance premiums and earned ratably
over the policy term. The estimated amounts of reinsurance recoverable on unpaid losses are reported as due from reinsurers.
To the extent any reinsurer does not meet its obligations under reinsurance agreements, the Company must discharge its
liability. Amounts due from reinsurers are reflected net of funds held where the right of offset is present. The Company has
provided an allowance for expected credit losses for estimated uncollectible reinsurance. The allowance is estimated based on
the composition of the recoverable balance, considering reinsurer credit ratings, collateral received from financial institutions
and funds withheld arrangements, length of collection periods, probability of default methodology, and specific identification of
collectability concerns. Changes in the allowance are reported within losses and loss expenses.
(I) Deposit accounting
Contracts that do not meet the risk transfer requirements of GAAP are accounted for using the deposit accounting
method. Under this method, an asset or liability is recognized at the inception of the contract based on consideration paid or
received. The amount of the deposit asset or liability is adjusted at subsequent reporting dates using the interest method with a
72
corresponding credit or charge to interest income or expense. Deposit liabilities for assumed reinsurance contracts were $31
million and $33 million at December 31, 2023 and 2022, respectively.
(J) Federal and foreign income taxes
The Company files a consolidated income tax return in the U.S. and foreign tax returns in countries where it has
overseas operations. The Company's method of accounting for income taxes is the asset and liability method. Under this
method, deferred tax assets and liabilities are measured using tax rates currently in effect or expected to apply in the years in
which those temporary differences are expected to reverse. Interest and penalties, if any, are reported as income tax expense.
The Company believes there are no uncertain tax positions that would require disclosure under GAAP. Deferred tax assets are
reduced by a valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will not be realized.
(K) Foreign currency
Gains and losses resulting from foreign currency transactions (transactions denominated in a currency other than the
entity's functional currency) are reported on the statements of income as other operating costs and expenses. Unrealized gains or
losses resulting from translating the results of non-U.S. dollar denominated operations are reported in accumulated other
comprehensive income. Revenues and expenses denominated in currencies other than U.S. dollars are generally translated at the
weighted average exchange rate during the year. Assets and liabilities are translated at the rate of exchange in effect at the
balance sheet date.
(L) Property, furniture and equipment
Property, furniture and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using
the estimated useful lives of the respective assets. Depreciation expense was $51 million, $52 million and $52 million for 2023,
2022 and 2021, respectively.
(M) Comprehensive income
Comprehensive income encompasses all changes in stockholders' equity (except those arising from transactions with
stockholders) and includes net income, net unrealized holding gains or losses on available for sale securities and unrealized
foreign currency translation adjustments.
(N) Goodwill and other intangible assets
Goodwill and other intangible assets are tested for impairment on an annual basis and at interim periods where
circumstances require. The Company's impairment test as of December 31, 2023 indicated that there were no material
impairment losses related to goodwill and other intangible assets. Intangible assets of $119 million and $102 million are
included in other assets as of December 31, 2023 and 2022, respectively.
(O) Restricted stock units
The costs resulting from all share-based payment transactions with employees are recognized in the consolidated
financial statements using a fair-value-based measurement method. Compensation cost is recognized for financial reporting
purposes over the period in which the employee is required to provide service in exchange for the award (generally the vesting
period).
(P) Statements of cash flows
Interest payments were $114 million, $138 million and $141 million in 2023, 2022 and 2021, respectively. Income
taxes paid were $332 million, $295 million and $244 million in 2023, 2022 and 2021, respectively. Other non-cash items
include unrealized investment gains and losses. (See Note 10 of Notes to Consolidated Financial Statements.)
(Q) Recent accounting pronouncements
Recently adopted accounting pronouncements:
All accounting and reporting standards that became effective in 2023 were either not applicable to the Company or
their adoption did not have a material impact on the Company.
Accounting and reporting standards that are not yet effective:
73
All recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or
are not expected to have a material impact on the Company.
(2) Consolidated Statements of Comprehensive Income (Loss)
The following tables present the components of the changes in accumulated other comprehensive income (loss)
(AOCI) as of and for the years ended December 31, 2023 and 2022:
(In thousands)
December 31, 2023
Changes in AOCI
Beginning of period
Other comprehensive income before reclassifications
Amounts reclassified from AOCI
Other comprehensive income
Unrealized investment loss related to noncontrolling interest
Ending balance
Amounts reclassified from AOCI
Pre-tax
Tax effect
After-tax amounts reclassified
Other comprehensive income
Pre-tax
Tax effect
Other comprehensive income
(In thousands)
December 31, 2022
Changes in AOCI
Beginning of period
Other comprehensive (loss) income before reclassifications
Amounts reclassified from AOCI
Other comprehensive (loss) income
Unrealized investment loss related to non-controlling interest
Ending balance
Amounts reclassified from AOCI
Pre-tax
Tax effect
After-tax amounts reclassified
Other comprehensive (loss) income
Pre-tax
Tax effect
Other comprehensive (loss) income
Unrealized
Investment Gains
(Losses)
Currency Translation
Adjustments
Accumulated Other
Comprehensive
Income (Loss)
(892,905)
$
(371,676) $
(1,264,581)
252,782
53,771
306,553
(2)
(586,354)
$
68,065
(1) $
(14,294) (2)
53,771
392,903
(86,350)
306,553
$
$
$
32,192
—
32,192
—
(339,484) $
— $
—
— $
32,192 $
—
32,192 $
284,974
53,771
338,745
(2)
(925,838)
68,065
(14,294)
53,771
425,095
(86,350)
338,745
$
$
$
$
$
$
Unrealized
Investment (Losses)
Gains
Currency Translation
Adjustments
Accumulated Other
Comprehensive
Income (Loss)
$
$
$
$
$
$
90,900
$
(372,855) $
(1,054,838)
71,035
(983,803)
(2)
1,179
—
1,179
—
(281,955)
(1,053,659)
71,035
(982,624)
(2)
(892,905)
$
(371,676) $
(1,264,581)
89,918
(1) $
(18,883) (2)
71,035
(1,248,128)
264,325
(983,803)
$
$
$
— $
—
— $
1,179 $
—
1,179 $
89,918
(18,883)
71,035
(1,246,949)
264,325
(982,624)
_______________
(1) Net investment gains in the consolidated statements of income.
(2) Income tax expense in the consolidated statements of income.
74
(3) Investments in Fixed Maturity Securities
At December 31, 2023 and 2022, investments in fixed maturity securities were as follows:
(In thousands)
December 31, 2023
Held to maturity:
State and municipal
Residential mortgage-backed
Total held to maturity
Available for sale:
U.S. government and government agency
State and municipal:
Special revenue
State general obligation
Pre-refunded
Corporate backed
Local general obligation
Total state and municipal
Mortgage-backed securities:
Residential
Commercial
Total mortgage-backed securities
Asset-backed securities
Corporate:
Industrial
Financial
Utilities
Other
Total corporate
Foreign government
2,868
53,415
1,762,997
1,682,550
394,429
103,029
166,873
396,041
2,742,922
1,773,206
657,157
2,430,363
4,252,883
3,679,219
2,838,220
701,865
635,975
7,855,279
1,817,386
Amortized
Cost
Allowance for
Expected Credit
Losses (1)
Gross Unrealized
Gains
Losses
Fair
Value
Carrying
Value
$
50,547 $
(43) $
3,132 $
— $
53,636 $
107
3,239
—
—
2,975
56,611
50,504
2,868
53,372
—
(43)
—
—
—
—
(757)
—
(757)
—
(158)
(158)
(1,164)
(40)
(4,986)
—
—
(5,026)
(29,603)
(36,708)
11,403
(57,669)
1,716,731
1,716,731
5,651
3,550
1,634
696
3,188
(82,006)
1,606,195
1,606,195
(16,405)
(185)
(11,973)
(11,893)
381,574
104,478
154,839
387,336
381,574
104,478
154,839
387,336
14,719
(122,462)
2,634,422
2,634,422
12,780
(163,844)
1,622,142
1,622,142
626
13,406
8,527
24,312
14,681
6,471
1,605
47,069
15,865
(13,312)
644,313
(177,156)
2,266,455
(73,206)
4,187,040
(143,936)
3,559,555
(68,681)
(23,412)
(7,234)
2,779,234
684,924
630,346
(243,263)
7,654,059
(137,419)
1,666,229
644,313
2,266,455
4,187,040
3,559,555
2,779,234
684,924
630,346
7,654,059
1,666,229
110,989
(811,175)
20,124,936
20,124,936
Total available for sale
20,861,830
Total investments in fixed maturity securities
$ 20,915,245 $
(36,751) $
114,228 $
(811,175) $ 20,181,547 $ 20,178,308
75
(In thousands)
December 31, 2022
Held to maturity:
State and municipal
Residential mortgage-backed
Total held to maturity
Available for sale:
U.S. government and government agency
State and municipal:
Special revenue
State general obligation
Pre-refunded
Corporate backed
Local general obligation
Total state and municipal
Mortgage-backed securities:
Residential
Commercial
Total mortgage-backed securities
Asset-backed securities
Corporate:
Industrial
Financial
Utilities
Other
Total corporate
Foreign government
3,608
51,410
960,479
1,837,309
387,709
156,106
210,228
454,983
3,046,335
1,308,019
547,757
1,855,776
4,132,365
3,491,645
2,585,247
586,066
441,230
7,104,188
1,564,930
Amortized
Cost
Allowance for
Expected Credit
Losses (1)
Gross Unrealized
Gains
Losses
Fair
Value
Carrying
Value
$
47,802 $
(114) $
4,239 $
— $
51,927 $
—
(114)
38
4,277
—
—
3,646
55,573
47,688
3,608
51,296
—
—
—
—
—
—
—
(18)
—
(18)
—
(1,704)
(2,997)
—
—
(4,701)
(32,633)
(37,352)
937
(69,158)
892,258
892,258
3,662
2,651
2,741
334
2,967
12,355
395
215
610
(119,474)
1,721,497
1,721,497
(21,335)
(7)
(10,923)
(16,853)
369,025
158,840
199,639
441,097
369,025
158,840
199,639
441,097
(168,592)
2,890,098
2,890,098
(171,595)
1,136,801
1,136,801
(19,363)
528,609
(190,958)
1,665,410
2,730
(152,322)
3,982,773
4,439
5,505
1,307
—
11,251
4,283
(241,381)
3,252,999
(117,383)
2,470,372
(36,325)
(11,657)
551,048
429,573
(406,746)
6,703,992
(135,058)
1,401,522
528,609
1,665,410
3,982,773
3,252,999
2,470,372
551,048
429,573
6,703,992
1,401,522
Total available for sale
18,664,073
32,166
(1,122,834)
17,536,053
17,536,053
Total investments in fixed maturity securities
$ 18,715,483 $
(37,466) $
36,443 $ (1,122,834) $ 17,591,626 $ 17,587,349
——————————
(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected
credit losses is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit
factors.
The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities
for the years ended December 31, 2023 and 2022:
(In thousands)
Allowance for expected credit losses, beginning of period
Change in allowance for expected credit losses
Allowance for expected credit losses, end of period
State and Municipal
2023
2022
$
$
114 $
(71)
43 $
387
(273)
114
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities
for the years ended December 31, 2023 and 2022:
76
2023
2022
(In thousands)
Government Corporate
Foreign
Mortgage-
Backed
Asset-
backed
State and
Municipal
Foreign
Total
Government Corporate
Mortgage-
Backed
Total
Allowance for
expected credit
losses, beginning of
period
$ 32,633 $
4,701 $
18 $
— $
— $ 37,352 $ 22,222 $
16 $
— $ 22,238
Expected credit
losses on securities
for which credit
losses were not
previously recorded
Expected credit
(gains) losses on
securities for which
credit losses were
previously recorded
Reduction due to
disposals
Allowance for
expected credit
losses, end of
period
—
982
1,766
1,444
821
5,013
1,910
2,648
21
4,579
(3,030)
(650)
(1,624)
(280)
(64) (5,648)
8,534
2,042
(3) 10,573
—
(7)
(2)
—
—
(9)
(33)
(5)
—
(38)
$ 29,603 $
5,026 $
158 $
1,164 $
757 $ 36,708 $ 32,633 $ 4,701 $
18 $ 37,352
During the year ended December 31, 2023, the Company decreased the allowance for expected credit losses for
available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model due to a reduction
in unrealized losses primarily associated with foreign government securities. During the year ended December 31, 2022, the
Company increased the allowance for expected credit losses for available for sale securities due to an increase in unrealized
losses primarily associated with foreign government securities.
The amortized cost and fair value of fixed maturity securities at December 31, 2023, by contractual maturity, are
shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or
prepay obligations.
(In thousands)
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Mortgage-backed securities
Total
Amortized
Cost (1)
Fair Value
$ 1,937,329 $ 1,860,397
9,608,345
9,327,652
4,368,259
4,260,217
2,568,038
2,463,851
2,433,231
2,269,430
$ 20,915,202 $ 20,181,547
________________
(1) Amortized cost is reduced by the allowance for expected credit losses of $43 thousand related to held to maturity securities.
At December 31, 2023 and 2022, there were no investments, other than investments in United States government and
government agency securities, which exceeded 10% of common stockholders’ equity. At December 31, 2023, investments with
a carrying value of $2,162 million were on deposit in custodial or trust accounts, of which $1,180 million was on deposit with
insurance regulators, $921 million was on deposit in support of the Company’s underwriting activities at Lloyd’s, $32 million
was on deposit as security for reinsurance clients and $29 million was on deposit as security for letters of credit issued in
support of the Company’s reinsurance operations.
77
(4) Investments in Equity Securities
At December 31, 2023 and 2022, investments in equity securities were as follows:
(In thousands)
December 31, 2023
Common stocks
Preferred stocks
Total
December 31, 2022
Common stocks
Preferred stocks
Total
Gross Unrealized
Cost
Gains
Losses
Fair
Value
Carrying
Value
$
664,997 $
191,806 $
(18,749) $
838,054 $
838,054
284,335
3,075
(35,117)
252,293
252,293
$
949,332 $
194,881 $
(53,866) $ 1,090,347 $ 1,090,347
$
855,987 $
192,165 $
(65,401) $
982,751 $
982,751
259,341
1,053
(57,251)
203,143
203,143
$ 1,115,328 $
193,218 $
(122,652) $ 1,185,894 $ 1,185,894
(5) Arbitrage Trading Account
At December 31, 2023 and 2022, the fair value and carrying value of the arbitrage trading account were $938 million
and $944 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of
investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage
investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in
value over a relatively short time period (usually four months or less).
The Company uses put options and call options in order to mitigate the impact of potential changes in market
conditions on the merger arbitrage trading account. These options are reported at fair value. As of December 31, 2023, the fair
value of long option contracts outstanding was $185 thousand (notional amount of $75 million) and the fair value of short
option contracts outstanding was $9 million (notional amount of $75 million). Other than with respect to the use of these
trading account securities, the Company does not make use of derivatives.
(6) Net Investment Income
Net investment income consists of the following:
(In thousands)
Investment income (loss) earned on:
2023
2022
2021
Fixed maturity securities, including cash and cash equivalents and loans receivable
$
929,098 $
549,281 $
382,001
Arbitrage trading account (1)
Equity securities
Investment funds
Real estate
Gross investment income
Investment expense
Net investment income
69,369
55,726
16,743
45,213
52,600
37,676
32,020
145,099
220,014
(11,185)
(3,087)
7,703
1,059,751
789,106
679,414
(6,916)
(9,921)
(7,796)
$ 1,052,835 $
779,185 $
671,618
(1) Net investment income includes earnings from trading account receivables from brokers and clearing organizations.
78
(7) Investment Funds
The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have
sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a
group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines
whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital
structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks
of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary
beneficiary in any of its investment funds, and accordingly, carries its interests in investments funds under the equity method of
accounting.
The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount
reported on the Company’s consolidated balance sheet and its unfunded commitments of $339 million as of December 31,
2023.
Investment funds consist of the following:
(In thousands)
Financial services
Transportation
Real estate
Energy
Infrastructure
Other funds
Total
Carrying Value
as of December 31,
Income (Loss) From Investment Funds For
the Year Ended
2023
2022
2023
2022
2021
$
433,407 $
465,683 $
(10,911) $
34,030 $
98,893
344,278
201,625
114,794
130,589
396,962
336,753
204,644
116,432
115,428
369,608
40,607
(6,676)
5,058
13,049
(24,384)
53,180
48,723
1,425
4,603
3,138
42,424
29,484
22,118
1,372
25,723
$ 1,621,655 $ 1,608,548 $
16,743 $
145,099 $
220,014
The Company's share of the earnings or losses of investment funds is primarily reported on a one-quarter lag in order
to facilitate the timely completion of the Company's consolidated financial statements.
Financial services investment funds include the Company’s minority investment in Lifson Re, a Bermuda reinsurance
company. Effective January 1, 2021, Lifson Re participated on a fully collateralized basis in a majority of the Company’s
reinsurance placements for a 22.5% share of placed amounts. The percentage increased from 22.5% to 30.0% effective July 1,
2022. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there
is more than one open market reinsurer participating. For the years ended December 31, 2023 and 2022, the Company ceded
approximately $437 million and $399 million, respectively, of written premiums to Lifson Re.
Other funds include deferred compensation trust assets of $36 million and $30 million in 2023 and 2022, respectively.
These assets support other liabilities reflected in the balance sheet of an equal amount for employees who have elected to defer
a portion of their compensation. The change in the net asset value of the trust is recorded in other funds within net investment
income with an offsetting equal amount within corporate expenses.
(8) Real Estate
Investment in real estate represents directly owned property held for investment, as follows:
(In thousands)
Properties in operation
Properties under development
Total
As of December 31,
2023
2022
$ 1,022,654 $ 1,114,167
227,220
226,455
$ 1,249,874 $ 1,340,622
In 2023, properties in operation included a long-term ground lease in Washington, D.C., an office complex in New
York City and the completed portion of a mixed-use project in Washington D.C. Properties in operation are net of accumulated
depreciation and amortization of $32,745,000 and $33,206,000 as of December 31, 2023 and 2022, respectively. Related
79
depreciation expense was $8,935,000 and $12,269,000 for the years ended December 31, 2023 and 2022, respectively. Future
minimum rental income expected on operating leases relating to properties in operation is $35,757,855 in 2024, $35,614,848 in
2025, $33,617,000 in 2026, $32,748,310 in 2027, $33,186,534 in 2028 and $503,569,887 thereafter.
The Company recognized impairments on real estate of $72 million in 2023.
During the first quarter of 2022, the Company sold a real estate investment in London (proceeds from the real estate
and related entity is presented on the business disposition line within the consolidated statements of cash flows).
A mixed-use project in Washington, D.C. had been under development in 2023 and 2022, with the completed portion
as noted above reported in properties in operation as of December 31, 2023.
(9) Loans Receivable
At December 31, 2023 and 2022, loans receivable were as follows:
(In thousands)
Amortized cost (net of allowance for expected credit losses):
Real estate loans
Commercial loans
Total
Fair value:
Real estate loans
Commercial loans
Total
As of December 31,
2023
2022
200,381 $
890
201,271 $
173,616
19,386
193,002
197,354 $
890
198,244 $
168,595
19,386
187,981
$
$
$
$
The real estate loans are secured by commercial and residential real estate primarily located in London and New York.
These loans generally earn interest at fixed or stepped interest rates and have maturities through 2026. The commercial loans
are with small business owners who have secured the related financing with the assets of the business. Commercial loans
primarily earn interest on a fixed basis and have varying maturities generally not exceeding 10 years.
In 2023, the Company recognized an $18.8 million impairment on commercial loans.
Loans receivable in non-accrual status was none and $0.2 million as of December 31, 2023 and 2022, respectively.
The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the
years ended December 31, 2023 and 2022:
(In thousands)
2023
2022
Real Estate
Loans
Commercial
Loans
Total
Real Estate
Loans
Commercial
Loans
Total
Allowance for expected credit losses, beginning of
period
$
Reduction due to write-offs
Change in allowance for expected credit losses
1,100 $
691 $
1,791 $
1,362 $
356 $
1,718
—
1,883
(569)
(101)
(569)
—
1,782
(262)
—
335
—
73
Allowance for expected credit losses, end of period $
2,983 $
21 $
3,004 $
1,100 $
691 $
1,791
During the year ended December 31, 2023, the Company increased the allowance for expected credit losses due to
changes in economic assumptions utilized in its credit loss model.
The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay
principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating
performance of the property and market conditions.
In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios,
which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and
performance with respect to loan terms, the position in the capital structure, the overall leverage in the capital structure and
other market conditions.
80
(10) Net Investment Gains
Net investment gains were as follows:
(In thousands)
Net investment gains:
Fixed maturity securities:
Gains
Losses
Equity securities (1):
Net realized gains (losses) on investment sales (2)
Change in unrealized gains (losses)
Investment funds
Real estate (3) (4)
Loans receivable
Other
2023
2022
2021
$
2,003 $
4,224 $
18,981
(25,429)
(11,654)
(6,975)
161,271
70,448
(25,625)
(70,934)
(18,841)
(45,353)
(12,879)
(632)
12,407
293,525
(32)
16,365
(38,455)
44,778
94,911
(881)
(67,648)
(21,766)
Net realized and unrealized gains on investments in earnings before allowance for expected
credit losses
47,540
217,311
106,958
Change in allowance for expected credit losses on investments:
Fixed maturity securities
Loans receivable
Change in allowance for expected credit losses on investments
Net investment gains
Income tax expense
After-tax net investment gains
Change in unrealized investment gains (losses):
715
(14,841)
(20,045)
(1,213)
(498)
47,042
(10,250)
(73)
(14,914)
202,397
(42,670)
3,719
(16,326)
90,632
(17,710)
$
36,792 $
159,727 $
72,922
Fixed maturity securities without allowance for expected credit losses
$
389,839 $ (1,216,292) $
(262,221)
Fixed maturity securities with allowance for expected credit losses
Investment funds
Other
Total change in unrealized investment gains (losses)
Income tax (expense) benefit
Noncontrolling interests
643
3,989
(1,568)
(28,370)
(2,019)
(1,447)
10,124
(1,270)
(1,572)
392,903
(1,248,128)
(254,939)
(86,350)
264,325
56,127
(2)
(2)
(2)
After-tax change in unrealized investment gains (losses)
$
306,551 $
(983,805) $
(198,814)
____________________
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity
securities. The change in unrealized gains (losses) consists of two components: (i) the reversal of the gain or loss recognized in
previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market
adjustments on equity securities still held.
(2) In June 2023, the Company completed a sale of the property and casualty insurance services division of Breckenridge IS,
Inc. and recognized a pre-tax net realized gain on investment of $89 million on the sale (proceeds from the sale is presented on
the business disposition line within the Consolidated Statements of Cash Flows).
(3) The Company recognized impairments on real estate of $72 million in 2023.
(4) During March 2022, the Company realized a gain on the sale of a real estate investment in London, U.K. of $251 million,
net of transaction expenses and the foreign currency impact, including the reversal of the currency translation adjustment.
81
(11) Fixed Maturity Securities in an Unrealized Loss Position
The following tables summarize all fixed maturity securities in an unrealized loss position at December 31, 2023 and
2022 by the length of time those securities have been continuously in an unrealized loss position.
(In thousands)
December 31, 2023
Less Than 12 Months
12 Months or Greater
Total
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
U.S. government and government agency
$
384,392 $
6,655 $
614,623 $
51,014 $
999,015 $
57,669
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government
264,273
278,819
413,511
874,754
204,908
3,013
2,025
2,070
1,680,034
1,360,748
2,176,035
11,975
4,418,309
1,758
794,174
119,449
175,131
1,944,307
1,639,567
71,136
2,589,546
231,288
135,661
5,293,063
999,082
122,462
177,156
73,206
243,263
137,419
Fixed maturity securities
$ 2,420,657 $
27,496 $ 11,043,923 $
783,679 $ 13,464,580 $
811,175
December 31, 2022
U.S. government and government agency
$
285,391 $
10,219 $
453,520 $
58,939 $
738,911 $
69,158
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government
1,720,443
1,099,549
1,569,647
3,690,856
477,672
89,272
75,430
48,390
598,797
473,318
2,176,638
150,115
2,349,281
29,815
711,786
79,320
2,319,240
115,528
103,932
256,631
105,243
1,572,867
3,746,285
6,040,137
1,189,458
168,592
190,958
152,322
406,746
135,058
Fixed maturity securities
$ 8,843,558 $
403,241 $ 6,763,340 $
719,593 $ 15,606,898 $ 1,122,834
Substantially all of the securities in an unrealized loss position are rated investment grade, except for the securities in
the foreign government classification. A significant amount of the unrealized loss on foreign government securities is the result
of changes in currency exchange rates.
Fixed Maturity Securities — A summary of the Company’s non-investment grade fixed maturity securities that were in
an unrealized loss position at December 31, 2023 is presented in the table below:
($ in thousands)
Foreign government
State and municipal
Corporate
Mortgage-backed securities
Asset-backed securities
Total
Number of
Securities
Aggregate
Fair Value
Gross
Unrealized
Loss
33 $
102,689 $
107,301
5
16
15
5
22,830
21,424
4,393
197
6,469
1,928
185
148
74 $
151,533 $
116,031
For fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline
in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is
considered to be due to non-credit factors is recognized in other comprehensive income.
The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized
losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these
securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects
them to continue to meet their contractual payment obligations as they become due.
82
(12) Fair Value Measurements
The Company’s fixed maturity and equity securities classified as available for sale and its trading account securities
are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date”. The Company utilizes a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability
to access at the measurement date.
Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable.
Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable
inputs are only used to measure fair value to the extent that observable inputs are not available.
Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices
provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing
models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided
markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may
prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for
each security evaluation on any given day. The pricing services used by the Company have indicated that they will only
produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are
active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices
provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to
ensure proper valuation.
If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the
fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields,
sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and
reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the
range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The
Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the
Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent
placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and
other relevant information.
For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed
maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest
rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect
illiquidity, where appropriate.
83
The following tables present the assets and liabilities measured at fair value as of December 31, 2023 and 2022 by
level:
(In thousands)
December 31, 2023
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government
Total fixed maturity securities available for sale
Equity securities:
Common stocks
Preferred stocks
Total equity securities
Arbitrage trading account
Total
Liabilities:
Total
Level 1
Level 2
Level 3
$
1,716,731 $
— $
1,716,731 $
2,634,422
2,266,455
4,187,040
7,654,059
1,666,229
20,124,936
838,054
252,293
1,090,347
938,049
—
—
—
—
—
—
835,338
—
835,338
546,110
2,634,422
2,266,455
4,187,040
7,654,059
1,666,229
20,124,936
1,158
248,598
249,756
388,167
$
22,153,332 $
1,381,448 $
20,762,859 $
—
—
—
—
—
—
—
1,558
3,695
5,253
3,772
9,025
Trading account securities sold but not yet purchased
$
9,357 $
9,357 $
— $
—
December 31, 2022
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency
State and municipal
Mortgage-backed securities
Asset-backed securities
Corporate
Foreign government
Total fixed maturity securities available for sale
Equity securities:
Common stocks
Preferred stocks
Total equity securities
Arbitrage trading account
Total
Liabilities:
$
892,258 $
— $
892,258 $
2,890,098
1,665,410
3,982,773
6,703,992
1,401,522
17,536,053
982,751
203,143
1,185,894
944,230
—
—
—
—
—
—
978,991
—
978,991
822,192
2,890,098
1,665,410
3,982,773
6,703,992
1,401,522
17,536,053
1,161
191,844
193,005
118,448
$
19,666,177 $
1,801,183 $
17,847,506 $
—
—
—
—
—
—
—
2,599
11,299
13,898
3,590
17,488
Trading account securities sold but not yet purchased
$
— $
— $
— $
—
84
The following tables summarize changes in Level 3 assets and liabilities for the years ended December 31, 2023 and
Beginning
Balance
Earnings
(Losses)
Other
Comprehensive
Income
(Losses)
Impairments
Purchases
Sales
Paydowns/
Maturities
Transfers
In / Out
Ending
Balance
Gains (Losses) Included in:
$
— $ — $
—
—
2,599
11,299
13,898
3,590
$ 17,488 $
(1,041)
(3)
(1,044)
117
(927) $
— $
—
—
—
—
—
— $
— $
—
— $ — $
—
—
— $ — $ —
—
—
—
—
(7,601)
(7,601)
—
(7,601) $
—
—
—
—
— $ — $
—
—
—
—
—
—
—
—
— $
1,558
—
3,695
—
5,253
—
65
3,772
65 $ 9,025
$
— $ — $
— $
— $
— $ — $
— $ — $ —
2022:
(In thousands)
Year ended December 31,
2023
Assets:
Fixed maturity securities
available for sale:
Corporate
Total
Equity securities:
Common stocks
Preferred stocks
Total
Arbitrage trading account
Total
Liabilities:
Trading account securities sold
but not yet purchased
Year ended December 31,
2022
Assets:
Fixed maturity securities
available for sale:
Corporate
Total
Equity securities:
Common stocks
Preferred stocks
Total
Arbitrage trading account
$
— $ — $
—
—
9,294
11,296
20,590
—
(6,695)
3
(6,692)
(179)
— $
—
—
—
—
—
— $
— $
—
— $ — $
—
—
— $ — $ —
—
—
—
—
925
925
4,686
—
—
—
—
— $ 5,611 $ (1,842) $
—
(925)
(925)
(917)
2,599
—
—
11,299
—
—
13,898
—
—
—
3,590
—
— $ — $ 17,488
Total
$ 20,590 $ (6,871) $
Liabilities:
Trading account securities sold
but not yet purchased
$
— $ — $
— $
— $
— $ — $
— $ — $ —
For the year ended December 31, 2023, an equity security, which no longer had a publicly traded price, was transferred
into Level 3. For the year ended December 31, 2022, there were no securities transferred into or out of Level 3.
85
(13) Reserves for Losses and Loss Expenses
The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported
liabilities (IBNR). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known
information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or
down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss
reserve development on reported claims.
Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an
actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to
derive an actuarial point estimate for each business. These methods may include paid loss development, incurred loss
development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where
one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial
point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered.
Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the
Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as
appropriate, for each business.
The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative
factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-
underwriting initiatives, changes in claims handling procedures, changes in the mix of business, changes in distribution sources
and changes in policy terms and conditions.
The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost
inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at
the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant
determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to
consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost
trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business
within each business. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and
claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to
project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the
historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry
data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those
reserves are discounted to their estimated present value based upon such estimated payout patterns.
Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions
described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and
reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure,
and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss
controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include
changes in policy limits, retentions, rate of inflation and judicial interpretations.
Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time
between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects
our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well
as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags).
As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines
with short reporting lags, which include auto, primary workers’ compensation, other liability (claims-made) and property
business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or
reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability,
excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little
paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for
lines of businesses with short reporting lags than for lines of business with long reporting lags.
The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and
adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed.
A claim may be defined as an event, as a claimant (number of parties claiming damages from an event) or by exposure
type (e.g., an event may give rise to two parties, each claiming loss for bodily injury and property damage).
86
The most commonly used claim count method is by event. Most of the Company's businesses use the number of events
to define and quantify the number of claims. However, in certain lines of business, where it is common for multiple parties to
claim damages arising from a single event, a business may quantify claims on the basis of the number of separate parties
involved in an event. This may be the case with businesses writing substantial auto or transportation exposure.
Claim counts for assumed reinsurance will vary based on whether the business is written on a facultative or treaty
basis. Further variability as respects treaty claim counts may be reflective of the nature of the treaty, line of business coverage,
and type of participation such as quota share or excess of loss contracts. Accordingly, the claim counts have been excluded
from the below Reinsurance & Monoline Excess segment tables due to this variability.
The claim count information set forth in the tables presented below may not provide an accurate reflection of ultimate
loss payouts by product line.
The following tables present undiscounted incurred and paid claims development as of December 31, 2023, net of
reinsurance, as well as cumulative claim frequency and the total of incurred but not reported liabilities (IBNR). The information
about incurred and paid claims development for the years ended December 31, 2014 to 2022 is presented as supplementary
information. To enhance the comparability of the loss development data, the Company has removed the impact of foreign
exchange rate movements by using the December 31, 2023 exchange rate for all periods.
87
Insurance
Other Liability
(In thousands)
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As of December 31,
2023
IBNR
Cumulative
Number of
Reported
Claims
$ 846,005 $ 847,308 $ 845,254 $ 849,657 $ 862,568 $ 868,639 $ 863,890 $ 862,440 $ 863,636 $ 863,342 $ 28,447
949,853 985,529 960,136 963,237 965,497 975,534 982,145 1,011,753 1,018,418
1,017,074 1,010,016 1,019,067 1,030,490 1,044,563 1,060,478 1,092,036 1,134,162
42,923
80,989
1,065,837 1,099,566 1,121,979 1,138,821 1,178,596 1,249,086 1,267,359
95,118
1,104,011 1,131,672 1,121,429 1,156,233 1,232,803 1,299,691
141,108
1,240,667 1,237,516 1,237,950 1,294,768 1,371,217
205,380
1,339,702 1,212,875 1,158,966 1,167,753
317,212
1,534,634 1,390,800 1,347,336
537,640
1,823,703 1,830,125
1,116,619
2,120,365
1,815,051
$ 13,419,768
28
28
28
28
28
29
23
25
25
19
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 78,811 $ 190,637 $ 337,870 $ 479,657 $ 593,577 $ 679,351 $ 729,573 $ 759,003 $ 782,462 $ 810,687
82,664 210,421 381,682 537,415 675,274 756,353 814,964 873,489
928,793
69,404 208,851 389,988 558,176 676,957 766,774 871,252
955,951
79,937 255,591 453,073 638,879 774,674 930,529 1,048,203
86,788 264,261 435,711 615,688 806,757
986,108
88,173 275,315 471,186 704,851
909,617
72,203 224,991 423,186
621,085
76,568 267,564
492,271
93,477
356,621
92,758
$ 7,202,094
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
154,001
Reserves for loss and loss adjustment expenses, net of reinsurance $ 6,371,675
88
Workers' Compensation
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As of December 31,
2023
IBNR
Cumulative
Number of
Reported
Claims
$ 639,436 $ 637,307 $ 627,767 $ 617,242 $ 615,435 $ 604,030 $ 600,194 $ 602,000 $ 598,977 $ 589,283 $ 12,555
712,800 690,525 650,997 641,169 626,432 620,741 617,478 612,687
603,732
702,716 696,339 684,700 660,520 651,278 657,972 654,385
641,549
18,013
19,823
762,093 733,505 689,622 673,216 683,880 682,153
675,871
22,933
778,964 724,697 715,055 724,056 721,170
715,018
27,179
784,281 721,018 732,762 734,034
722,456
39,081
725,245 716,430 704,008
668,222
36,045
742,687 701,703
667,517
67,127
772,620
745,218
153,476
784,906
352,511
$ 6,813,772
57
58
58
58
56
54
42
46
46
43
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 148,405 $ 319,743 $ 412,611 $ 471,235 $ 503,915 $ 521,141 $ 531,475 $ 538,914 $ 547,894 $ 553,739
139,320 323,744 421,734 477,541 512,933 531,512 544,849 557,215
564,658
142,998 338,835 446,072 504,850 537,861 558,934 572,669
584,330
153,456 362,299 468,817 525,753 559,198 583,258
603,006
171,006 397,464 508,546 574,889 613,675
642,292
184,715 397,376 515,914 581,003
618,324
172,478 380,454 485,203
548,585
172,729 384,867
490,648
180,982
408,929
195,204
$ 5,209,715
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
208,451
Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,812,508
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
89
Professional Liability
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As of December 31,
2023
IBNR
Cumulative
Number of
Reported
Claims
$ 252,473 $ 245,854 $ 258,874 $ 242,903 $ 238,388 $ 257,205 $ 256,157 $ 255,527 $ 254,514 $ 256,527 $ 10,067
259,122 257,634 274,233 275,604 291,157 282,452 282,806 286,950
286,320
310,140 324,043 360,778 401,569 438,761 468,154 463,625
449,678
13,275
15,850
333,255 332,317 338,526 377,209 384,107 393,054
401,661
45,095
335,128 322,297 333,413 359,493 382,239
397,593
81,991
336,397 332,426 345,548 354,121
362,983
89,944
394,304 375,559 337,796
313,386
100,150
525,389 471,456
446,596
215,820
649,725
586,327
405,848
648,231
509,380
$ 4,149,302
7
8
9
10
10
11
11
11
11
12
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 19,318 $ 83,246 $ 137,931 $ 175,230 $ 198,176 $ 214,915 $ 226,323 $ 235,581 $ 238,277 $ 243,397
20,319 85,169 139,396 187,007 215,821 232,506 239,514 246,501
258,988
28,503 102,232 201,167 254,994 297,088 357,094 405,052
412,645
36,450 96,179 162,660 242,929 261,033 306,535
329,303
28,108 99,540 155,102 198,546 244,068
283,639
31,635 97,302 147,767 200,259
235,124
27,996 80,180 128,869
169,000
28,542 85,886
153,063
33,417
90,594
41,064
$ 2,216,817
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
38,814
Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,971,299
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
90
Auto
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As of December 31,
2023
IBNR
Cumulative
Number of
Reported
Claims
$ 363,882 $ 385,214 $ 417,539 $ 415,490 $ 412,929 $ 412,757 $ 408,304 $ 407,435 $ 408,816 $ 408,743 $
291
389,529 416,251 422,344 430,503 431,514 429,950 427,079 428,898
428,339
430,132 429,762 441,051 442,122 438,917 438,616 440,412
442,164
430,445 428,420 430,205 434,186 440,004 444,483
445,263
442,701 462,657 479,085 494,442 521,794
530,374
1,013
2,410
3,148
6,234
483,120 488,379 504,901 530,967
548,688
11,878
523,739 428,761 442,165
469,184
16,227
614,422 596,810
632,918
54,629
792,553
825,359
192,025
916,722
444,715
$ 5,647,754
47
53
52
47
45
45
30
38
44
40
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 155,553 $ 237,622 $ 327,548 $ 364,768 $ 393,428 $ 401,368 $ 404,067 $ 405,061 $ 405,817 $ 407,212
159,932 264,377 324,175 369,223 396,832 410,275 416,060 419,891
421,749
183,777 278,289 340,319 389,233 408,676 419,203 427,662
433,882
180,494 267,309 326,851 371,755 401,846 419,548
431,165
180,110 281,564 350,212 412,985 463,232
498,094
185,289 290,194 374,545 440,449
495,111
142,816 228,358 308,452
374,990
180,860 319,941
429,419
253,206
428,621
277,634
$ 4,197,877
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
2,953
Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,452,830
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
91
Short-tail lines
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
As of December 31,
2023
IBNR
Cumulative
Number of
Reported
Claims
$ 697,102 $ 701,133 $ 658,437 $ 656,704 $ 657,637 $ 657,968 $ 660,388 $ 658,600 $ 656,931 $ 656,326 $ 1,483
737,494 725,927 722,556 721,082 713,225 711,665 709,937 710,266 714,974
771,829 775,358 762,449 757,010 751,510 753,926 752,541 752,960
752,865 753,274 747,521 746,878 746,475 747,710 746,406
759,748 748,859 746,183 744,467 742,212 741,264
2,044
3,288
4,267
7,835
721,072 701,168 690,928 684,606 684,707
14,592
900,816 904,545 922,258 926,379
7,624
828,347 832,240 815,228
24,478
945,041 928,562
54,776
1,075,325
286,870
$ 8,042,131
30
32
34
42
48
43
38
36
36
27
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 369,514 $ 590,511 $ 608,396 $ 626,751 $ 641,861 $ 649,068 $ 651,560 $ 652,054 $ 652,379 $ 652,449
392,762 608,056 663,402 685,314 694,780 700,569 707,271 707,447
716,682
416,513 669,738 711,238 726,462 731,552 738,302 739,143
744,157
445,208 689,587 718,436 730,584 734,415 741,582
746,917
414,833 661,607 708,101 725,027 725,128
730,199
404,870 615,748 645,251 657,699
665,789
460,351 784,553 845,590
900,682
405,461 698,030
754,448
472,020
799,125
565,586
$ 7,276,034
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
5,171
Reserves for loss and loss adjustment expenses, net of reinsurance $ 771,268
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
92
Reinsurance & Monoline Excess
Casualty
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
As of December 31,
2023
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
IBNR
$ 319,818 $ 319,210 $ 318,559 $ 330,354 $ 324,470 $ 323,855 $ 335,560 $ 336,622 $ 341,244 $ 343,235 $
259,244 231,574 230,136 252,249 293,032 303,053 304,503 308,986
313,327
240,868 252,786 245,317 267,808 301,629 301,242 310,273
309,126
231,313 220,878 238,916 261,438 281,132 298,284
314,895
221,393 210,492 230,817 246,861 261,004
292,927
236,517 230,620 239,206 240,879
272,393
299,888 293,574 290,037
313,904
360,399 347,054
344,272
447,231
437,358
449,816
$ 3,391,253
13,680
16,235
19,483
28,441
37,287
52,998
103,742
190,749
325,597
396,340
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 21,302 $ 68,906 $ 115,585 $ 154,811 $ 197,644 $ 227,038 $ 251,736 $ 271,062 $ 283,876 $ 296,469
17,876 48,371 91,016 141,073 178,280 204,981 233,281 250,504
266,497
19,884 61,710 100,074 140,104 171,465 205,052 224,739
241,884
16,457 40,013 69,190 123,404 147,049 174,745
207,378
11,056 40,884 77,371 109,290 141,309
182,326
14,544 39,035 63,945 94,735
142,501
20,746 49,637 81,710
137,043
10,910 43,791
89,076
11,574
45,625
10,603
$ 1,619,402
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
402,281
Reserves for loss and loss adjustment expenses, net of reinsurance $ 2,174,132
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
93
Monoline Excess
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
As of December 31,
2023
3,400
4,664
6,192
9,442
12,964
12,977
26,582
31,581
35,307
73,881
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
IBNR
$ 63,465 $ 57,558 $ 49,478 $ 45,758 $ 41,671 $ 42,541 $ 42,618 $ 40,652 $ 35,707 $
32,185 $
69,977 57,897 50,099 45,115 39,682 39,781 36,774 30,104
27,590
72,657 70,281 71,404 64,957 65,485 65,222 61,432
53,304
76,701 80,508 70,749 71,025 66,795 62,647
55,713
77,820 72,505 71,448 66,180 57,847
50,744
78,929 77,482 76,242 73,978
66,071
84,354 83,468 80,452
72,376
98,110 87,980
77,220
98,923
76,725
110,446
$ 622,374
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$
358 $ 1,729 $ 3,354 $ 4,175 $ 5,808 $ 7,595 $ 11,154 $ 11,938 $ 13,491 $
14,632
2,069
2,481
3,272
4,099
4,416
5,083
5,421
6,457
6,844
2,498
4,783
5,573
5,928
7,685
9,883 11,819
13,569
6,282 12,810 15,356 17,327 18,375 19,275
21,275
6,141
8,230
9,368 10,359 12,414
13,583
6,241 10,884 12,728 15,436
18,836
4,869
8,699 10,471
12,869
4,586
6,026
8,872
5,898
10,564
6,390
$ 127,434
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
576,491
Reserves for loss and loss adjustment expenses, net of reinsurance $ 1,071,431
94
Property
(In thousands)
Loss and Loss Expenses Incurred, Net of Reinsurance
For the Year Ended December 31,
Unaudited
As of December 31,
2023
344
1,007
1,303
1,452
1,898
2,479
4,291
13,709
30,362
60,458
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
IBNR
2014
$ 113,055 $ 96,586 $ 97,261 $ 99,973 $ 99,200 $ 98,846 $ 99,244 $ 97,308 $ 96,648 $
96,135 $
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
Accident
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total
127,315 117,503 131,722 130,389 129,472 131,133 130,697 131,393
131,947
167,998 174,440 181,595 180,816 186,086 184,053 185,133
186,176
206,666 200,487 199,481 198,039 191,941 192,458
193,551
108,348 112,133 103,192 105,165 103,015
101,498
103,316 77,255 82,036 81,192
81,157
114,645 117,885 116,786
121,417
133,989 146,726
144,429
167,223
167,351
137,685
$ 1,361,346
Cumulative Paid Claims and Claim Adjustment Expenses, Net of Reinsurance
For the Year Ended December 31,
Unaudited
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 38,734 $ 66,816 $ 82,113 $ 88,240 $ 91,376 $ 93,087 $ 94,552 $ 95,186 $ 95,620 $
94,996
53,435 89,120 109,053 118,615 122,630 125,494 126,895 128,037
128,947
78,887 133,478 157,341 168,433 175,867 177,961 182,300
184,208
72,114 141,390 171,736 179,799 182,680 185,895
188,497
33,972 65,071 82,327 87,789 94,931
96,262
23,129 54,709 68,693 71,264
73,234
26,606 65,563 86,885
95,643
15,245 71,800
109,179
25,515
91,718
24,737
$ 1,087,421
Reserves for loss and loss adjustment expenses before 2014, net of reinsurance
1,472
Reserves for loss and loss adjustment expenses, net of reinsurance $ 275,397
95
The reconciliation of the net incurred and paid claims development tables to the reserves for losses and loss expenses
in the consolidated balance sheet is as follows:
(In thousands)
Undiscounted reserves for loss and loss expenses, net of reinsurance:
Other liability
Workers' compensation
Professional liability
Auto
Short-tail lines
Other
Insurance
Casualty
Monoline excess
Property
Total undiscounted reserves for loss and loss expenses, net of reinsurance
Reinsurance & Monoline Excess
(In thousands)
Due from reinsurers on unpaid claims:
Other liability
Workers' compensation
Professional liability
Auto
Short-tail lines
Other
Insurance
Casualty
Monoline excess
Property
Reinsurance & Monoline Excess
December 31,
2023
$
6,371,675
1,812,508
1,971,299
1,452,830
771,268
151,204
12,530,784
2,174,132
1,071,431
275,397
3,520,960
$
16,051,744
December 31,
2023
$
951,773
189,182
1,138,129
81,334
379,621
127,581
2,867,620
116,198
40,467
53,547
210,212
Total due from reinsurers on unpaid claims
$
3,077,832
96
(In thousands)
Loss reserve discount:
Other liability
Workers' compensation
Professional liability
Auto
Short-tail lines
Other
Insurance
Casualty
Monoline excess
Property
Reinsurance & Monoline Excess
Total loss reserve discount
Total gross reserves for loss and loss expenses
December 31,
2023
$
—
(12,193)
—
—
—
—
(12,193)
(72,503)
(305,228)
—
(377,731)
(389,924)
18,739,652
$
$
The following is supplementary information regarding average historical claims duration as of December 31, 2023:
8
5.5 %
1.7 %
2.6 %
0.8 %
0.3 %
8
5.6 %
3.2 %
0.6 %
9
4.1 %
1.4 %
4.0 %
0.3 %
0.4 %
10
3.3 %
1.0 %
2.0 %
0.3 %
0.3 %
9
4.4 %
3.1 %
0.2 %
10
3.7 %
3.5 %
— %
Insurance
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years
1
2
3
4
5
6
Other liability
6.4 %
13.4 %
15.8 %
15.6 %
12.9 %
10.4 %
Workers' compensation
24.4 %
30.6 %
16.0 %
9.2 %
Professional liability
7.3 %
17.1 %
17.2 %
14.5 %
Auto
34.5 %
20.6 %
15.8 %
11.3 %
Short-tail lines
54.4 %
33.4 %
5.5 %
2.8 %
5.3 %
9.0 %
7.3 %
1.0 %
3.4 %
9.4 %
3.6 %
0.9 %
7
7.5 %
2.3 %
5.8 %
1.6 %
0.5 %
Reinsurance & Monoline Excess
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
Years
Casualty
Monoline excess
Property
7
8.2 %
4.9 %
1.6 %
2
3
4
5
6
10.0 %
11.7 %
13.9 %
11.7 %
10.1 %
1
4.7 %
7.2 %
5.1 %
3.1 %
28.8 %
33.5 %
17.1 %
2.7 %
5.6 %
3.4 %
3.5 %
3.2 %
1.6 %
97
The table below provides a reconciliation of the beginning and ending reserve balances:
(In thousands)
Net reserves at beginning of year
Net provision for losses and loss expenses:
Claims occurring during the current year (1)
Increase in estimates for claims occurring in prior years (2)
Loss reserve discount accretion
Total
Net payments for claims:
Current year
Prior year
Total
Foreign currency translation
Net reserves at end of year
Ceded reserve at end of year
Gross reserves at end of year
2023
2022
2021
$
14,248,879 $
12,848,362 $
11,620,393
6,311,780
5,774,713
4,921,191
29,681
30,681
54,511
32,526
863
31,906
6,372,142
5,861,750
4,953,960
1,217,078
3,764,532
4,981,610
22,409
1,068,577
3,279,333
4,347,910
(113,323)
15,661,820
14,248,879
3,077,832
2,762,344
887,896
2,777,798
3,665,694
(60,297)
12,848,362
2,542,526
$
18,739,652 $
17,011,223 $
15,390,888
Net change in premiums and losses occurring in prior years:
Increase in estimates for claims occurring in prior years (2)
Retrospective premium adjustments for claims occurring in prior years (3)
Net premium and reserve development on prior years
$
$
(29,681) $
(54,511) $
10,782
18,106
(18,899) $
(36,405) $
(863)
7,510
6,647
_______________________________________
(1) Claims occurring during the current year are net of loss reserve discounts of $47 million, $35 million and $21 million in
2023, 2022, and 2021, respectively.
(2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the
estimates for claims occurring in prior years decreased by $13 million in 2023, increased by $16 million in 2022, and
decreased by $19 million in 2021.
(3) For certain retrospectively rated insurance polices and reinsurance agreements, changes in loss and loss expenses for prior
years are offset by additional or return premiums.
The COVID-19 global pandemic impacted, and may further impact, the Company’s loss costs. Accordingly, the
ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of December 31, 2023, the Company had
recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $384 million, of which
$326 million relates to the Insurance segment and $58 million relates to the Reinsurance & Monoline Excess segment. Such
$384 million of COVID-19-related losses included $381 million of reported losses and $3 million of IBNR. For the year ended
December 31, 2023, the Company recognized current accident year losses for COVID-19-related claims activity, net of
reinsurance, of approximately $1 million, all of which relates to the Insurance segment.
Unfavorable prior year development (net of additional and return premiums) was $19 million in 2023.
Insurance – Reserves for the Insurance segment developed unfavorably by $24 million in 2023 (net of additional and
return premiums). The unfavorable development for the segment was concentrated in the early part of the year, with reserve
development being flat overall during the second half of 2023. A key driver of the unfavorable development early in 2023 was
property catastrophe losses related to 2022 events which were still being adjusted and settled during the early part of 2023. In
particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant
contributor to the development, as information gathering and evaluation of many of these claims were still ongoing into the new
year.
In addition to the property prior year development discussed above, during 2023 the Insurance segment also experienced
adverse prior year development on casualty lines of business for the 2016 through 2019 accident years, which was offset by
favorable prior year development on casualty lines of business for the 2020 through 2022 accident years. The unfavorable
development on the 2016 through 2019 accident years was concentrated in the general liability and commercial auto liability
98
lines of business. The development, which particularly impacted business attaching excess of primary policy limits, was driven
by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase
in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs,
use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and
corporations, and erosion of tort reforms, among others.
The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance
segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to
elevated uncertainty regarding incurred loss frequency and severity as a result of ongoing social inflation and the impacts of the
COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely
maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines
of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company has
begun to react to this favorable emergence as the accident years mature beyond the age of twelve months. It should also be
noted that commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years,
which partially offset the favorable development discussed above; the adverse development was driven by a larger than
expected number of large losses reported.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by
$5 million in 2023 (net of additional and return premiums). The overall favorable prior year development for the segment was
driven mainly by favorable development in excess workers’ compensation, substantially offset by unfavorable development in
the non-proportional reinsurance assumed liability and excess general liability (including umbrella) lines of business. The
favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses
relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior
accident years. The unfavorable development for non-proportional reinsurance assumed liability and excess general liability
was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella
business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020.
Unfavorable prior year development (net of additional and return premiums) was $36 million in 2022.
Insurance – Reserves for the Insurance segment developed unfavorably by $40 million in 2022 (net of additional and
return premiums). The unfavorable development in the segment primarily related to COVID-19 losses at two businesses. These
businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by
losses directly caused by the COVID-19 pandemic. Most of this COVID-19 related unfavorable development emerged during
the third quarter as a result of settlements of claims at values higher than our expectations. However, the Company believes that
as a result of these settlements the remaining level of uncertainty around the ultimate value of its known COVID-19 claims has
been significantly reduced.
The unfavorable development mentioned above also includes favorable prior year development for the Insurance
segment primarily attributable to the 2020 and 2021 accident years and unfavorable development on the 2015 through 2019
accident years. The favorable development on the 2020 and 2021 accident years was concentrated in certain casualty lines of
business including general liability, professional liability, and workers’ compensation. The Company experienced lower
reported claim frequency in these lines of business during 2020 and 2021 relative to historical averages, and continued to
experience lower reported incurred losses relative to its expectations for these accident years as they developed during 2022.
These trends began in 2020 and we believe were caused by the impacts of the COVID-19 pandemic, including for example,
lockdowns, reduced driving/traffic and increased work from home. Due to the uncertainty regarding the ultimate impacts of the
pandemic on accident years 2020 and 2021 incurred losses, the Company was cautious in reacting to these lower trends in
setting and updating its loss ratio estimates for these years. As these accident years have continued to mature, the Company has
continued to recognize some of the favorable reported experience in its ultimate loss estimates made during 2022.
The unfavorable development on the 2015 through 2019 accident years was concentrated in the general liability and
professional liability, including medical professional, lines of business, as well as auto liability. The development was driven by
a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in
the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs,
use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and
corporations, and erosion of tort reforms, among others.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by
$4 million in 2022 (net of additional and return premiums). The overall favorable development for the segment was driven
mainly by favorable development in excess workers compensation, substantially offset by unfavorable development in the
99
professional liability and non-proportional reinsurance assumed liability lines of business. The favorable excess workers’
compensation development was spread across most prior accident years, including 2012 and prior years, and was driven by a
review of the Company’s claim reporting patterns as well as a number of favorable claim settlements relative to expectations.
The unfavorable professional liability and non-proportional reinsurance assumed liability development was concentrated mainly
in accident years 2016 through 2018 and was associated primarily with our U.S. assumed reinsurance business and related to
accounts insuring construction projects and professional liability exposures.
Favorable prior year development (net of additional and return premiums) was $7 million in 2021.
Insurance – Reserves for the Insurance segment developed favorably by $20 million in 2021 (net of additional and return
premiums). The overall favorable development in 2021 was attributable to favorable development on the 2020 accident year,
partially offset by adverse development on the 2016 through 2019 accident years.
The favorable development on the 2020 accident year was largely concentrated in the auto liability and other liability
lines of business, including commercial multi-peril liability. During 2020 the Company achieved larger rate increases in these
lines of business than were contemplated in its budget and in its initial loss ratio selections. The Company also experienced
significantly lower reported claim frequency in these lines in 2020 relative to historical averages, and lower reported incurred
losses relative to its expectations. We believe that the lower claim frequency and lower reported incurred losses were caused by
the impacts of the COVID-19 pandemic, for example, lockdowns, reduced driving and traffic, work from home, and court
closures. However, due to the uncertainty regarding the ultimate impacts of the pandemic on accident year 2020 incurred losses,
the Company elected not to react to these lower reported trends during 2020. As more information became available and the
2020 accident year continued to mature, during 2021 the Company started to recognize favorable accident year 2020
development in response to the continuing favorable reported loss experience relative to its expectations.
The adverse development on the 2016 through 2019 accident years is concentrated largely in the other liability line of
business, including commercial multi-peril liability, but is also seen to a lesser extent in Auto liability. The adverse
development for these accident years is driven by a higher than expected number of large losses reported, and particularly
impacted the directors and officers liability, lawyers professional liability, and excess and surplus lines casualty classes of
business. We also believe that increased social inflation is contributing to the increased number of large losses, for example,
higher jury awards on cases which go to trial, and the corresponding higher demands from plaintiffs and higher values required
to reach settlement on cases which do not go to trial.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed unfavorably by
$13 million in 2021. The unfavorable development in the segment was driven by the non-proportional reinsurance assumed
liability and other liability lines of business, related primarily to accident years 2017 through 2019, and was partially offset by
favorable development in excess workers’ compensation business which was spread across many prior accident years. The
unfavorable non-proportional reinsurance assumed liability and other liability development was associated with our U.S. and
U.K. assumed reinsurance business, and related primarily to accounts insuring construction projects and professional liability
exposures.
Environmental and Asbestos — To date, known environmental and asbestos claims have not had a material impact on
the Company’s operations, because its subsidiaries generally did not insure large industrial companies that are subject to
significant environmental or asbestos exposures prior to 1986 when an absolute exclusion was incorporated into standard policy
language.
The Company’s net reserves for losses and loss expenses relating to asbestos and environmental claims on policies
written before adoption of the absolute exclusion was $17 million and $20 million at December 31, 2023 and 2022,
respectively. The estimation of these liabilities is subject to significantly greater than normal variation and uncertainty because
it is difficult to make an actuarial estimate of these liabilities due to the absence of a generally accepted actuarial methodology
for these exposures and the potential effect of significant unresolved legal matters, including coverage issues, as well as the cost
of litigating the legal issues. Additionally, the determination of ultimate damages and the final allocation of such damages to
financially responsible parties are highly uncertain.
Discounting — The Company discounts its liabilities for certain workers’ compensation reserves. The amount of
workers’ compensation reserves that were discounted was $1,352 million and $1,464 million at December 31, 2023 and 2022,
respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $390 million
and $416 million at December 31, 2023 and 2022, respectively. At December 31, 2023, discount rates by year ranged from
0.7% to 6.5%, with a weighted average discount rate of 3.5%.
Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2023)
are excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment
100
securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount
rates determined by reference to the U.S. Treasury yield curve. These rates are determined annually based on the weighted
average rate for the period. Once established, no adjustments are made to the discount rate for that period, and any increases or
decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are
recognized. The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss
payout experience.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing
approximately 3% of total discounted reserves at December 31, 2023), including reserves for quota share reinsurance and
reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates prescribed or
permitted by the Department of Insurance of the State of Delaware.
(14) Premiums and Reinsurance Related Information
The Company reinsures a portion of its insurance exposures in order to reduce its net liability on individual risks and
catastrophe losses. Reinsurance coverage and retentions vary depending on the line of business, location of the risk and nature
of loss. The Company’s reinsurance purchases include the following: property reinsurance treaties that reduce exposure to large
individual property losses and catastrophe events; casualty reinsurance treaties that reduce its exposure to large individual
casualty losses, workers’ compensation catastrophe losses and casualty losses involving multiple claimants or insureds; and
facultative reinsurance that reduces exposure on individual policies or risks for losses that exceed treaty reinsurance capacity.
Depending on the business, the Company purchases specific additional reinsurance to supplement the above programs.
The following is a summary of reinsurance financial information:
(In thousands)
Written premiums:
Direct
Assumed
Ceded
Total net written premiums
Earned premiums:
Direct
Assumed
Ceded
Total net earned premiums
Ceded losses and loss expenses incurred
Ceded commission earned
2023
2022
2021
$ 11,676,743 $ 10,695,138 $ 9,531,050
1,295,263
1,213,914
1,169,084
(2,017,539)
(1,904,982)
(1,837,267)
$ 10,954,467 $ 10,004,070 $ 8,862,867
$ 11,112,980 $ 10,217,891 $ 8,825,568
1,246,288
1,226,801
1,085,804
(1,958,581)
(1,883,263)
(1,805,341)
$ 10,400,687 $ 9,561,429 $ 8,106,031
$ 1,376,144 $ 1,269,338 $ 1,236,960
$
471,841 $
477,437 $
449,739
The following table presents the rollforward of the allowance for expected credit losses for premiums and fees
receivable for the years ended December 31, 2023 and 2022:
(In thousands)
Allowance for expected credit losses, beginning of period
Change in allowance for expected credit losses
Allowance for expected credit losses, end of period
2023
2022
$
$
30,660
$
25,218
4,450
5,442
35,110
$
30,660
Estimated amounts due from reinsurers are reported net of an allowance for expected credit losses of $8.4 million, $8.1
million and $7.7 million as of December 31, 2023, 2022 and 2021, respectively. The following table presents the rollforward of
the allowance for expected credit losses associated with due from reinsurers for the years ended December 31, 2023 and 2022:
101
(In thousands)
Allowance for expected credit losses, beginning of period
Change in allowance for expected credit losses
Allowance for expected credit losses, end of period
2023
2022
$
$
8,064 $
340
8,404 $
7,713
351
8,064
The following table presents the amounts due from reinsurers as of December 31, 2023:
(In thousands)
Lloyd’s of London
Lifson Re
Partner Re
Munich Re
Berkshire Hathaway
Hannover Re Group
Renaissance Re
Swiss Re
Everest Re
Liberty Mutual
Axis Capital
Fairfax Financial
Korean Re
Arch Capital Group
Sompo Holdings Group
Axa Insurance
TOA RE
Nationwide Group
Markel Corp Group
Helvetia Holdings Group
Chubb Group
MS & AD Insurance Group
Other reinsurers less than $20,000
Subtotal
Residual market pools (1)
Allowance for expected credit losses
Total
$
402,210
335,382
314,471
310,985
307,878
231,172
217,008
176,377
145,155
117,556
86,680
64,300
57,530
54,175
47,520
45,680
37,140
32,411
31,827
31,429
24,459
20,144
316,649
3,408,138
134,793
(8,404)
$ 3,534,527
(1) Many states require licensed insurers that provide workers' compensation insurance to participate in programs that provide
workers' compensation to employers that cannot procure coverage from an insurer on a voluntary basis. Insurers can fulfill
this residual market obligation by participating in pools where results are shared by the participating companies. The
Company acts as a servicing carrier for workers' compensation pools in certain states. As a servicing carrier, the Company
writes residual market business directly and then cedes 100% of this business to the respective pool. As a servicing carrier,
the Company receives fee income for its services. The Company does not retain underwriting risk, and credit risk is limited
as ceded balances are jointly shared by all the pool members.
102
(15) Indebtedness
Indebtedness consisted of the following as of December 31, 2023 (the difference between the face value and the
carrying value is unamortized discount and debt issuance costs):
(In thousands)
Interest Rate
Face Value
2023
2022
Carrying Value
Senior notes and other debt due on:
February 15, 2037
August 1, 2044
May 12, 2050
March 30, 2052
September 30, 2061
Subsidiary debt and other (1)
Total senior notes and other debt
Subordinated debentures due on:
March 30, 2058
December 30, 2059
September 30, 2060
March 30, 2061
Total subordinated debentures
6.250%
$
250,000 $
248,556 $
248,446
4.750%
4.000%
3.550%
3.150%
Various
350,000
470,000
400,000
350,000
5,686
346,205
489,964
394,411
343,129
5,686
346,020
490,721
394,213
342,945
6,478
$ 1,825,686 $ 1,827,951 $ 1,828,823
5.700%
$
185,000 $
179,489 $
179,328
5.100%
4.250%
4.125%
300,000
250,000
300,000
291,418
244,668
293,515
291,179
244,523
293,341
$ 1,035,000 $ 1,009,090 $ 1,008,371
________________
(1) Subsidiary debt of $6 million is due in 2024, partially offset by the unamortized cost of $0.6 million due to entering into the
$300 million senior unsecured revolving credit facility.
On April 1, 2022, the Company entered into a senior unsecured revolving credit facility that provides for revolving,
unsecured borrowings up to an aggregate of $300 million with a $50 million sublimit for letters of credit. The Company may
increase the amount available under the facility to a maximum of $500 million subject to obtaining lender commitments for the
increase and other customary conditions. Borrowings under the facility may be used for working capital and other general
corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of credit outstanding
on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the
facility is conditioned on the satisfaction of representations, warranties and covenants that are customary for facilities of this
type. As of December 31, 2023, there were no borrowings outstanding under the facility.
103
(16) Income Taxes
Income tax expense (benefit) consists of:
(In thousands)
December 31, 2023
Domestic
Foreign
Total expense (benefit)
December 31, 2022
Domestic
Foreign
Total expense (benefit)
December 31, 2021
Domestic
Foreign
Total expense
Current
Expense
Deferred
(Benefit)
Expense
Total
$
352,891 $
(43,456) $
309,435
44,372
16,750
61,122
$
397,263 $
(26,706) $
370,557
$
295,849 $
(27,544) $
268,305
42,890
23,532
66,422
$
338,739 $
(4,012) $
334,727
$
239,090 $
2,752 $
241,842
—
10,048
10,048
$
239,090 $
12,800 $
251,890
Income before income taxes from domestic operations was $1,430 million, $1,240 million and $1,224 million for the
years ended December 31, 2023, 2022 and 2021, respectively. Income before income taxes from foreign operations was $324
million, $480 million and $59 million for the years ended December 31, 2023, 2022 and 2021, respectively.
A reconciliation of the income tax expense and the amounts computed by applying the Federal and foreign income tax
rate of 21% for 2023, 2022 and 2021 to pre-tax income are as follows:
(In thousands)
Computed “expected” tax expense
Tax-exempt investment income
Change in valuation allowance
Impact of foreign tax rates
State and local taxes
Other, net
Total expense
2023
2022
2021
$
368,425 $
361,133 $
269,410
(8,361)
(10,883)
5,461
12,271
3,644
(10,815)
(28,064)
(453)
8,976
3,950
(11,380)
2,974
(2,368)
4,230
(10,976)
$
370,557 $
334,727 $
251,890
104
At December 31, 2023 and 2022, the tax effects of differences that give rise to significant portions of the deferred tax
asset and deferred tax liability are as follows:
(In thousands)
Deferred tax asset:
Loss reserve discounting
Unearned premiums
Unrealized investment losses
Net operating losses & foreign tax credits
Other-than-temporary impairments
Employee compensation plans
Other
Gross deferred tax asset
Less valuation allowance
Deferred tax asset
Deferred tax liability:
Amortization of intangibles
Loss reserve discounting - transition rule
Deferred policy acquisition costs
Property, furniture and equipment
Investment funds
Other
Deferred tax liability
Net deferred tax asset
2023
2022
$
230,956 $
192,181
200,938
126,693
59,154
12,691
68,062
78,025
180,326
228,456
58,182
5,935
63,313
72,536
776,519
800,929
(36,283)
(47,166)
740,236
753,763
15,205
9,894
176,281
43,501
161,867
66,525
473,273
13,973
14,843
157,055
45,887
125,525
67,479
424,762
$
266,963 $
329,001
The Company had a net current tax payable of $46 million and a net tax receivable of $5 million at December 31, 2023
and 2022, respectively. At December 31, 2023, the Company had foreign net operating loss carryforwards of $220 million that
have no expiration date. At December 31, 2023, the Company had a valuation allowance of $36 million as compared to $47
million at December 31, 2022. The Company has provided a valuation allowance against the utilization of foreign tax credits
and the future net operating loss carryforward benefits of certain foreign operations. The statute of limitations for the
Company’s U.S. Federal income tax returns has closed for all years through December 31, 2019.
The realization of the deferred tax asset is dependent upon the Company’s ability to generate sufficient taxable income
in future periods. Based on historical results and the prospects for future current operations, management anticipates that it is
more likely than not that future taxable income will be sufficient for the realization of this asset.
The Tax Cuts and Jobs Act of 2017 (the "Tax Act") provided for a reduction of the U.S. corporate income tax rate
from 35% to 21% effective January 1, 2018. The U.S. tax law requires insurance reserves to be discounted for tax purposes.
The Tax Act modified this computation. The IRS issued revised discount factors to be applied to the 2017 reserves, which
increased the beginning of year 2018 deferred tax asset for loss reserve discounting. Under the related transition rule, a deferred
tax liability was established which will be included in taxable income over the eight year period that began in 2018.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately
$261 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S.
subsidiaries. In the future, if such earnings were distributed the Company projects that the incremental tax, if any, will be
immaterial.
105
(17) Dividends from Subsidiaries and Statutory Financial Information
The Company’s insurance subsidiaries are restricted by law as to the amount of dividends they may pay without the
approval of regulatory authorities. The Company’s lead insurer, Berkley Insurance Company ("BIC"), directly or indirectly
owns all of the Company’s other insurance companies. During 2024, the maximum amount of dividends that can be paid by
BIC without such approval is approximately $1.2 billion.
BIC’s combined net income and statutory capital and surplus, as determined in accordance with statutory accounting
practices ("SAP"), are as follows:
(In thousands)
Net income
Statutory capital and surplus
2023
2022
2021
$ 1,176,255 $ 1,358,813 $ 1,040,342
$ 8,776,138 $ 8,330,587 $ 6,817,535
The significant variances between SAP and GAAP are that for statutory purposes bonds are carried at amortized cost,
unrealized gains and losses on equity securities are recorded in surplus, acquisition costs are charged to income as incurred,
deferred Federal income taxes are subject to limitations, excess and assumed workers’ compensation reserves are discounted at
different discount rates and certain assets designated as “non-admitted assets” are charged against surplus. The Commissioner
of Insurance of the State of Delaware has allowed BIC to recognize a non-tabular discount on certain workers' compensation
loss reserves, which is a permitted practice that differs from SAP. The effect of using this permitted practice was an increase to
BIC’s statutory capital and surplus by $159 million at December 31, 2023.
The National Association of Insurance Commissioners (“NAIC”) has risk-based capital (“RBC”) requirements that
require insurance companies to calculate and report information under a risk-based formula which measures statutory capital
and surplus needs based on a regulatory definition of risk in a company’s mix of products and its balance sheet. This guidance
is used to calculate two capital measurements: Total Adjusted Capital and RBC Authorized Control Level. Total Adjusted
Capital is equal to the Company’s statutory capital and surplus excluding capital and surplus derived from the use of permitted
practices that differ from statutory accounting practices. RBC Authorized Control Level is the capital level used by regulatory
authorities to determine whether remedial action is required. Generally, no remedial action is required if Total Adjusted Capital
is 200% or more of the RBC Authorized Control Level. At December 31, 2023, BIC’s Total Adjusted Capital of $8.6 billion
was 391% of its RBC Authorized Control Level.
See Note 3, Investments in Fixed Maturity Securities, for a description of assets held on deposit as security.
106
(18) Common Stockholders’ Equity
The weighted average number of shares used in the computation of net income per share was as follows:
(In thousands)
Basic
Diluted
2023
2022
2021
271,000
273,298
276,852
279,461
277,430
279,749
Treasury shares have been excluded from average outstanding shares from the date of acquisition. The weighted
average number of basic shares outstanding includes the impact of 11,663,450 common shares held in a grantor trust. The
common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock
units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since shares deliverable under vested
RSUs were already included in diluted shares outstanding. The difference in calculating basic and diluted net income per share
is attributable entirely to the dilutive effect of stock-based compensation plans. Changes in shares of common stock
outstanding, net of treasury shares, are presented below. Shares of common stock issued and outstanding do not include shares
related to unissued restricted stock units (including shares held in the grantor trust).
Balance, beginning of year
Shares issued
Shares repurchased
Balance, end of year
2023
2022
2021
264,546,100
265,170,882
266,737,725
706,333
745,612
1,062,086
(8,707,676)
(1,370,394)
(2,628,929)
256,544,757
264,546,100
265,170,882
The amount of dividends paid is dependent upon factors such as the receipt of dividends from our subsidiaries, our
results of operations, cash flow, financial condition and business needs, the capital and surplus requirements of our subsidiaries,
and applicable insurance regulations that limit the amount of dividends that may be paid by our regulated insurance
subsidiaries.
(19) Fair Value of Financial Instruments
The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments as
of December 31, 2023 and 2022:
(In thousands)
Assets:
Fixed maturity securities
Equity securities
Arbitrage trading account
Loans receivable
Cash and cash equivalents
Trading accounts receivable from brokers and clearing
organizations
Due from broker
Liabilities:
Trading account securities sold but not yet purchased
Senior notes and other debt
Subordinated debentures
2023
2022
Carrying Value
Fair Value
Carrying Value
Fair Value
$
20,178,308 $
1,090,347
938,049
201,271
1,363,195
20,181,547 $
1,090,347
938,049
198,244
1,363,195
17,587,349 $
1,185,894
944,230
193,002
1,449,346
303,614
36,747
303,614
36,747
233,863
3,609
17,591,626
1,185,894
944,230
187,981
1,449,346
233,863
3,609
9,357
1,827,951
1,009,090
9,357
1,480,076
929,598
—
1,828,823
1,008,371
—
1,439,188
805,600
The estimated fair values of the Company’s fixed maturity securities, equity securities available for sale and arbitrage
trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note
12 above. The fair value of loans receivable is estimated by using current institutional purchaser yield requirements for loans
with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the
subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.
107
(20) Commitments, Litigation and Contingent Liabilities
In the ordinary course of business, the Company is subject to disputes, litigation and arbitration arising from its
insurance and reinsurance businesses. These matters are generally related to insurance and reinsurance claims and are
considered in the establishment of loss and loss expense reserves. In addition, the Company may also become involved in legal
actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of
insurance claims. The Company expects its ultimate liability with respect to such matters will not be material to its financial
condition. However, adverse outcomes on such matters are possible, from time to time, and could be material to the Company’s
results of operations in any particular financial reporting period.
On December 22, 2023, one of the Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess
of $90 million in respect of certain losses paid to its policyholders under certain event cancellation and related insurance
policies. The Company believes its claims against the reinsurers are meritorious and expects a positive resolution to its lawsuit.
While an adverse outcome is possible, the Company believes that the outcome, in any case, will not be material to the
Company’s financial condition.
At December 31, 2023, the Company had commitments to invest up to $339 million and $106 million in certain
investment funds and real estate construction projects, respectively.
(21) Leases
Lessees are required to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months
on the balance sheet. All leases disclosed within this note are classified as operating leases. Recognized right-of-use asset and
lease liability are reported within other assets and other liabilities, respectively, in the consolidated balance sheet. Lease
expense is reported in other operating costs and expenses in the consolidated statement of income and accounted for on a
straight-line basis over the lease term.
To determine the discount rate used to calculate present value of future minimum lease payments, the Company uses
its incremental borrowing rate during the lease commencement period in line with the respective lease duration. In certain
cases, the Company has the option to renew the lease. Lease renewal future payments are included in the present value of the
future minimum lease payments when the Company determines it is reasonably certain to renew.
The main leases entered into by the Company are for office space used by the Company’s operating units across the
world. Additionally, the Company, to a lesser extent, has equipment leases mainly for office equipment. Further information
relating to operating lease expense and other operating lease information is as follows:
(In thousands)
Leases:
Lease cost
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash
flows
Right-of-use assets obtained in exchange for new lease liabilities
($ in thousands)
Right-of-use assets
Lease liabilities
Weighted-average remaining lease term
Weighted-average discount rate
108
For the Year Ended December 31,
2023
2022
$
$
$
44,256 $
49,910 $
53,753 $
43,383
43,871
28,075
As of December 31,
2023
$
$
176,496
218,621
$
$
7.3 years
5.10 %
2022
169,271
204,088
7.1 years
4.40 %
Contractual maturities of the Company’s future minimum lease payments are as follows:
(In thousands)
Contractual Maturities:
2024
2025
2026
2027
2028
Thereafter
Total undiscounted future minimum lease payments
Less: Discount impact
Total lease liability
(22) Stock Incentive Plan
December 31,
2023
$
$
50,222
41,249
34,072
24,900
23,206
84,014
257,663
39,042
218,621
Pursuant to the Company's stock incentive plan, the Company may issue restricted stock units ("RSUs") to employees
of the Company and its subsidiaries. The RSUs generally vest three to five years from the award date and are subject to other
vesting and forfeiture provisions contained in the award agreement. The following table summarizes RSU information for the
three years ended December 31, 2023:
RSUs granted and unvested at beginning of period:
Granted
Vested
Canceled
RSUs granted and unvested at end of period:
2023
2022
2021
4,618,426
5,144,519
5,706,504
1,098,460
1,024,960
1,272,990
(1,151,304)
(1,258,680)
(1,523,960)
(275,404)
(292,373)
(311,016)
4,290,178
4,618,426
5,144,519
Upon vesting, shares of the Company’s common stock equal to the number of vested RSUs are issued or deferred to a
later date, depending on the terms of the specific award agreement. As of December 31, 2023, 11,560,624 RSUs had been
deferred. RSUs that have not yet vested and vested RSUs that have been deferred are not considered to be issued and
outstanding shares.
The fair value of RSUs at the date of grant are recorded as unearned compensation, a component of stockholders’
equity, and expensed over the vesting period. Following is a summary of changes in unearned compensation for the three years
ended December 31, 2023:
(In thousands)
Unearned compensation at beginning of year
RSUs granted, net of cancellations
RSUs expensed
RSUs forfeitures
Unearned compensation at end of year
2023
2022
2021
$
142,060 $
135,535 $
132,310
62,418
60,628
56,711
(49,200)
(47,611)
(46,441)
(7,198)
(6,492)
(7,045)
$
148,080 $
142,060 $
135,535
109
(23) Compensation Plans
The Company and its subsidiaries have profit sharing plans in which substantially all employees participate. The plans
provide for minimum annual contributions of 5% of eligible compensation; contributions above the minimum are discretionary
and vary with each participating businesses's profitability. Employees become eligible to participate in the plan on the first day
of the calendar quarter following the first full calendar quarter after the employee's date of hire provided the employee has
completed 250 hours of service during the calendar quarter. The plans provide that 40% of the contributions vest immediately
and that the remaining 60% vest at varying percentages based upon years of service. Profit sharing expense was $75 million,
$62 million and $50 million in 2023, 2022 and 2021, respectively.
The Company has a long-term incentive compensation plan ("LTIP") that provides for compensation to key executives
based on the growth in the Company's book value per share over a five year period.
The following table summarizes the outstanding LTIP awards as of December 31, 2023:
2019 grant
2020 grant
2021 grant
2022 grant
2023 grant
Units Outstanding
Maximum Value
Inception to date earned
through December 31, 2023 on
outstanding units
194,000 $
205,500
212,250
233,250
245,500
19,400,000 $
20,550,000
21,225,000
23,325,000
24,550,000
19,400,000
20,071,041
17,575,043
12,238,628
5,423,639
The following table summarizes the LTIP expense for each of the three years ended December 31, 2023:
(In thousands)
2016 grant
2017 grant
2018 grant
2019 grant
2020 grant
2021 grant
2022 grant
2023 grant
Total
(24) Supplemental Financial Statement Data
Other operating costs and expenses consist of the following:
(In thousands)
Amortization of deferred policy acquisition costs
Insurance operating expenses
Insurance service expenses
Net foreign currency losses (gains)
Debt extinguishment costs
Other costs and expenses
Total
(25) Industry Segments
2023
2022
2021
$
— $
— $
(117)
—
(125)
3,366
7,047
6,561
6,155
5,424
—
4,299
6,904
6,653
6,574
6,232
—
6,012
5,503
5,309
5,065
4,906
—
—
$
28,428 $
30,662 $
26,678
2023
2022
2021
$ 1,038,975 $ 1,038,903 $
961,628
1,915,711
1,635,000
1,345,099
91,714
31,799
—
96,419
(50,930)
—
285,737
242,113
86,003
(25,725)
11,521
220,744
$ 3,363,936 $ 2,961,505 $ 2,599,270
The Company’s reportable segments include the following two business segments, plus a corporate segment:
• Insurance - predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty
personal lines throughout the United States, as well as insurance business in Asia, Australia, Canada, Continental Europe,
Mexico, Scandinavia, South America and the United Kingdom.
110
• Reinsurance & Monoline Excess - reinsurance business on a facultative and treaty basis, primarily in the United States,
United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa, as well as operations that
solely retain risk on an excess basis.
The accounting policies of the segments are the same as those described in the summary of significant accounting
policies. Income tax expense and benefits are calculated based upon the Company’s overall effective tax rate.
Summary financial information about the Company’s reporting segments is presented in the following table. Income
before income taxes by segment includes allocated investment income. Identifiable assets by segment are those assets used in or
allocated to the operation of each segment.
Revenues
(In thousands)
Year ended December 31, 2023
Earned
Premiums (1)
Investment
Income
Other
Total (2)
Net
Income
(Loss)
to Common
Stockholders
Pre-Tax
Income
(Loss)
Insurance
$
9,130,324 $
793,998 $
36,830 $ 9,961,152 $ 1,640,438 $ 1,291,654
Reinsurance & Monoline Excess
1,270,363
211,628
47,209
—
—
1,481,991
438,765
346,782
605,544
47,042
652,753
(371,842)
(293,869)
47,042
47,042
36,792
$ 10,400,687 $ 1,052,835 $
689,416 $ 12,142,938 $ 1,754,403 $ 1,381,359
Insurance
$
8,369,062 $
550,084 $
33,347 $ 8,952,493 $ 1,455,658 $ 1,173,425
Reinsurance & Monoline Excess
1,192,367
194,272
34,829
—
—
1,386,639
316,527
251,386
590,141
202,397
624,970
202,397
(254,901)
(203,476)
202,397
159,727
$
9,561,429 $
779,185 $
825,885 $ 11,166,499 $ 1,719,681 $ 1,381,062
Insurance
$
7,077,708 $
468,821 $
32,063 $ 7,578,592 $ 1,219,798 $
976,184
Reinsurance & Monoline Excess
1,028,323
175,324
27,473
—
—
1,203,647
270,563
215,439
555,122
90,632
582,595
(298,088)
(242,055)
90,632
90,632
72,922
—
—
—
—
—
—
Corporate, other and eliminations (3)
Net investment gains
Consolidated
Year ended December 31, 2022
Corporate, other and eliminations (3)
Net investment gains
Consolidated
Year ended December 31, 2021
Corporate, other and eliminations (3)
Net investment gains
Consolidated
(In thousands)
Insurance
Reinsurance & Monoline Excess
Corporate, other and eliminations (3)
Consolidated
$
8,106,031 $
671,618 $
677,817 $ 9,455,466 $ 1,282,905 $ 1,022,490
Identifiable Assets
December 31,
2023
2022
$
30,132,743 $
27,009,652
5,389,125
1,680,147
5,195,752
1,655,695
$
37,202,015 $
33,861,099
_______________________________________
(1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions.
(2) Revenues for Insurance includes $1,171 million, $1,029 million, and $873 million in 2023, 2022 and 2021, respectively,
from foreign countries. Revenues for Reinsurance & Monoline Excess includes $463 million, $412 million, and $380 million in
2023, 2022 and 2021, respectively, from foreign countries.
(3) Corporate, other and eliminations represent corporate revenues and expenses and other items that are not allocated to
business segments.
111
Net premiums earned by major line of business were as follows:
(In thousands)
Insurance
Other liability
Short-tail lines
Auto
Workers' compensation
Professional liability
Total Insurance
Reinsurance & Monoline Excess
Casualty
Property
Monoline Excess
Total Reinsurance & Monoline Excess
Total
2023
2022
2021
$
3,613,900 $
3,206,846 $
2,673,098
1,897,070
1,313,210
1,212,294
1,093,850
9,130,324
770,920
258,317
241,126
1,630,371
1,208,241
1,197,811
1,125,793
8,369,062
764,793
210,557
217,017
1,389,068
990,945
1,131,283
893,314
7,077,708
643,193
183,943
201,187
1,270,363
1,192,367
1,028,323
$
10,400,687 $
9,561,429 $
8,106,031
112
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
The Company's management, including its Chief Executive Officer and Chief Financial Officer, have conducted an
evaluation of the effectiveness of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b)
as of the end of the period covered by this annual report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company has in place effective controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports it files or submits under the Exchange Act and the rules
thereunder, is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and
forms.
During the quarter ended December 31, 2023, there have been no changes in our internal controls over financial
reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial
reporting.
Management's Report On Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Under the supervision and with the participation of our management, including our principal executive officer and principal
financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of
Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our
management concluded that our internal control over financial reporting was effective as of December 31, 2023.
113
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
W. R. Berkley Corporation:
Opinion on Internal Control Over Financial Reporting
We have audited W. R. Berkley Corporation and subsidiaries’ (the Company) internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated
statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year
period ended December 31, 2023, and the related notes and financial statement schedules II to VI (collectively, the consolidated
financial statements), and our report dated February 23, 2024 expressed an unqualified opinion on those consolidated financial
statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report
On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
New York, New York
February 23, 2024
/S/ KPMG LLP
114
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
115
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
(a) Security ownership of certain beneficial owners
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
(b) Security ownership of management
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
(c) Changes in control
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
(d) Equity compensation plan information
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, New York, NY, Auditor Firm ID: 185.
Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange
Commission within 120 days after December 31, 2023, and which is incorporated herein by reference.
116
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Index to Financial Statements
The schedules to the consolidated financial statements listed below should be read in conjunction with the consolidated
financial statements included in this Annual Report on Form 10-K. Financial statement schedules not included in this Annual
Report on Form 10-K have been omitted because they are not applicable or required information is shown in the financial
statements or notes thereto.
Index to Financial Statement Schedules
Schedule II — Condensed Financial Information of Registrant
Schedule III — Supplementary Insurance Information
Schedule IV — Reinsurance
Schedule V — Valuation and Qualifying Accounts
Schedule VI — Supplementary Information Concerning Property — Casualty Insurance Operations
Page
123
127
128
129
130
117
(b) Exhibits
Number
EXHIBITS
(3.1)
(3.2)
(3.3)
(3.4)
(3.5)
(3.6)
(4.1)
(4.2)
(4.3)
(4.4)
(4.5)
(4.6)
(4.7)
(4.8)
The Company’s Restated Certificate of Incorporation, as amended through May 10, 2004 (incorporated by reference to Exhibits
3.1 and 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003).
Amendment, dated May 11, 2004, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference
to Exhibit 3.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 5,
2004).
Amendment, dated May 16, 2006, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference
to Exhibit 3.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 17, 2006).
Amendment, dated June 12, 2020, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference
to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on June 16, 2020).
Amendment, dated June 15, 2022, to the Company’s Restated Certificate of Incorporation, as amended (incorporated by reference
to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on June 16, 2022).
Amended and Restated By-Laws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on
Form 8-K (File No. 1-15202) filed with the Commission on March 1, 2023).
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by
reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on
February 24, 2023).
Indenture, dated as of February 14, 2003, between the Company and The Bank of New York, as Trustee (incorporated by
reference to Exhibit 4.1 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with the Commission on March
31, 2003).
Fifth Supplemental Indenture, dated as of February 9, 2007, between the Company and The Bank of New York, as Trustee,
relating to $250,000,000 principal amount of the Company’s 6.250% Senior Notes due 2037, including the form of the Notes as
Exhibit A (incorporated by reference to Exhibit 4.7 of the Company’s Annual Report on Form 10-K (File No. 1-15202) filed with
the Commission on March 1, 2007).
Ninth Supplemental Indenture, dated as of August 6, 2014, between the Company and The Bank of New York Mellon, as
Trustee, relating to $350,000,000 principal amount of the Company’s 4.750% Senior Notes due 2044, including the form of the
Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 1-15202)
filed with the Commission on August 6, 2014).
Indenture, dated as of May 12, 2020, between the Company and The Bank of New York Mellon, as Trustee (incorporated by
reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 12,
2020).
First Supplemental Indenture, dated as of May 12, 2020, between the Company and The Bank of New York Mellon, as Trustee,
relating to $470,000,000 principal amount of the Company’s 4.000% Senior Notes due 2050, including the form of the Notes as
Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with
the Commission on May 12, 2020).
Second Supplemental Indenture, dated as of March 16, 2021, between the Company and The Bank of New York Mellon, as
Trustee, relating to $400,000,000 principal amount of the Company’s 3.550% Senior Notes due 2052, including the form of the
Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202)
filed with the Commission on March 16, 2021).
Third Supplemental Indenture, dated as of September 15, 2021, between the Company and The Bank of New York Mellon, as
Trustee, relating to $350,000,000 principal amount of the Company’s 3.150% Senior Notes due 2061, including the form of the
Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No. 1-15202)
filed with the Commission on September 15, 2021).
118
(4.9)
(4.10)
(4.11)
(4.12)
(4.13)
(4.14)
(10.1)
Subordinated Indenture, dated as of March 26, 2018, between the Company and The Bank of New York Mellon, as Trustee
(incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the
Commission on March 26, 2018).
First Supplemental Indenture, dated as of March 26, 2018, between the Company and The Bank of New York Mellon, as Trustee,
relating to $185,000,000 principal amount of the Company’s 5.700% Subordinated Debentures due 2058, including the form of
the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File No.
1-15202) filed with the Commission on March 26, 2018).
Second Supplemental Indenture, dated as of December 16, 2019, between the Company and the Bank of New York Mellon, as
Trustee, relating to $300,000,000 principal amount of the Company's 5.100% Subordinated Debentures due 2059, including the
form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File
No. 1-15202) filed with the Commission on December 16, 2019).
Third Supplemental Indenture, dated as of September 21, 2020, between the Company and The Bank of New York Mellon, as
Trustee, relating to $250,000,000 principal amount of the Company’s 4.250% Subordinated Debentures due 2060, including the
form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File
No. 1-15202) filed with the Commission on September 21, 2020).
Fourth Supplemental Indenture, dated as of February 10, 2021, between the Company and The Bank of New York Mellon, as
Trustee, relating to $300,000,000 principal amount of the Company’s 4.125% Subordinated Debentures due 2061, including the
form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K (File
No. 1-15202) filed with the Commission on February 10, 2021).
The instruments defining the rights of holders of the other long term debt securities of the Company are omitted pursuant to
Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company agrees to furnish supplementally copies of these instruments
to the Commission upon request.
Credit Agreement, dated as of April 1, 2022, by and among W. R. Berkley Corporation, as borrower, each lender from time to
time party thereto, Credit Suisse AG, New York Branch, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc.
as Syndication Agents, and Bank of America, N.A., as Administrative Agent, Several L/C Agent and Fronting L/C Issuer
(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the
Commission on April 4, 2022).
(10.2)
W. R. Berkley Corporation 2018 Stock Incentive Plan (incorporated by reference to Annex B of the Company’s 2018 Proxy
Statement (File No. 1-15202) filed with the Commission on April 19, 2018).
(10.3)
Form of Restricted Stock Unit Agreement for grant of April 4, 2003 (incorporated by reference to Exhibit 10.2 of the Company’s
Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003).
(10.4)
(10.5)
(10.6)
(10.7)
(10.8)
Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by
reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on
May 3, 2005).
Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on
August 6, 2010).
Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on
November 8, 2012).
Form of 2014 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with
the Commission on November 7, 2014).
Form of 2015 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with
the Commission on November 9, 2015).
119
(10.9)
Form of 2017 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with
the Commission on November 8, 2017).
(10.10)
Form of 2018 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2018 Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with
the Commission on November 7, 2018).
(10.11)
Form of 2020 Performance-Based Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2018 Stock Incentive
Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with
the Commission on November 5, 2020).
(10.12)
Form of 2023 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2018 Stock Incentive
Plan.
(10.13) W. R. Berkley Corporation Deferred Compensation Plan for Officers as amended and restated effective December 1, 2021
(incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the
Commission on November 12, 2021).
(10.14) W. R. Berkley Corporation Deferred Compensation Plan for Directors as amended and restated effective December 1, 2021
(incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the
Commission on November 12, 2021).
(10.15) W. R. Berkley Corporation Amended and Restated Annual Incentive Compensation Plan (incorporated by reference to Exhibit
10.1 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on February 25, 2019).
(10.16) W. R. Berkley Corporation 2019 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company's current
Report on Form 8-K (File No. 1-15202) filed with the Commission on February 25, 2019).
(10.17)
Form of 2020 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the
Commission on August 3, 2020).
(10.18)
Form of 2021 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the
Commission on November 4, 2021).
(10.19)
Form of 2022 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the
Commission on May 3, 2022).
(10.20)
Form of 2023 Performance Unit Award Agreement under the W. R. Berkley Corporation 2019 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the
Commission on May 4, 2023).
(10.21) W. R. Berkley Corporation 2009 Directors Stock Plan (incorporated by reference to Annex B of the Company’s 2021 Proxy
Statement (File No. 1-15202) filed with the Commission on April 27, 2021).
(10.22)
Supplemental Benefits Agreement between William R. Berkley and the Company as amended and restated as of December 21,
2011 (incorporated by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K (File No. 1-15202) filed with
the Commission on February 28, 2012).
(14)
Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form
10-K (File No. 1-15202) filed with the Commission on March 14, 2005).
(21)
List of the Company’s subsidiaries.
(23)
Consent of Independent Registered Public Accounting Firm.
(31.1)
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
120
(31.2)
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
(32.1)
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
(97)
W. R. Berkley Corporation Clawback Policy.
ITEM 16. FORM 10-K Summary
None.
121
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
W. R. BERKLEY CORPORATION
By
/s/ W. Robert Berkley, Jr.
W. Robert Berkley, Jr.
President and Chief Executive Officer
February 23, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ William R. Berkley
William R. Berkley
/s/ W. Robert Berkley, Jr.
W. Robert Berkley, Jr.
/s/ Christopher L. Augostini
Christopher L. Augostini
/s/ Ronald E. Blaylock
Ronald E. Blaylock
/s/ Mary C. Farrell
Mary C. Farrell
/s/ María Luisa Ferré
María Luisa Ferré
/s/ Daniel L. Mosley
Daniel L. Mosley
/s/ Mark L. Shapiro
Mark L. Shapiro
/s/ Jonathan Talisman
Jonathan Talisman
/s/ Richard M. Baio
Richard M. Baio
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
February 23, 2024
Executive Chairman
of the Board of Directors
President
Chief Executive Officer and Director
(Principal executive officer)
Director
Director
Director
Director
Director
Director
Director
Executive Vice President
and Chief Financial Officer
(Principal financial officer
and principal accounting officer)
122
W. R. Berkley Corporation
Condensed Financial Information of Registrant
Balance Sheets (Parent Company)
(In thousands)
Assets:
Cash and cash equivalents
Fixed maturity securities available for sale at fair value (cost $190,708 and $285,900 at December 31, 2023 and
2022, respectively)
Loans receivable (net of allowance for expected credit losses of $1,146 and $559 at December 31, 2023 and 2022,
respectively)
Equity securities, at fair value (cost $3,430 in both 2023 and 2022)
Investment in subsidiaries
Current federal income taxes
Deferred federal income taxes
Property, furniture and equipment at cost, less accumulated depreciation
Other assets
Total assets
Liabilities and stockholders’ equity:
Liabilities:
Due to subsidiaries
Other liabilities
Current federal income taxes
Subordinated debentures
Senior notes
Total liabilities
Stockholders’ equity:
Preferred stock
Common stock
Additional paid-in capital
Retained earnings (including accumulated undistributed net income of subsidiaries of $8,497,674 and
$7,975,360 at December 31, 2023 and 2022, respectively)
Accumulated other comprehensive loss
Treasury stock, at cost
Total stockholders’ equity
Total liabilities and stockholders’ equity
________________
Schedule II
December 31,
2023
2022
$
128,434 $
103,522
189,189
275,511
91,304
3,430
109,793
3,430
9,887,117
8,888,455
—
278,946
10,382
44,186
34,452
304,191
11,356
39,741
$ 10,632,988 $ 9,770,451
$
178,676 $
53,029
166,399
139,150
1,721
—
1,009,090
1,008,371
1,821,671
1,821,569
3,177,557
3,022,119
105,803
1,017,691
—
105,803
997,534
11,040,908
10,161,005
(925,838)
(1,264,581)
(3,783,133)
(3,251,429)
7,455,431
6,748,332
$ 10,632,988 $ 9,770,451
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
123
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Income (Parent Company)
Schedule II, Continued
(In thousands)
Management fees and investment income including dividends from subsidiaries of
$1,261,166, $22,807, and $520,251 for the years ended December 31, 2023, 2022 and 2021,
respectively
Net investment (losses) gains
Other income
Total revenues
Operating costs and expense
Interest expense
Income (loss) before federal income taxes
Federal income taxes:
Year Ended December 31,
2022
2021
2023
$ 1,325,997 $
32,585 $
548,512
(5,895)
368
1,320,470
272,750
126,397
921,323
1,007
1,916
35,508
192,175
129,633
(286,300)
1,474
1,138
551,124
214,995
144,837
191,292
Federal income taxes provided by subsidiaries on a separate return basis
253,292
414,660
294,731
Federal income tax expense on a consolidated return basis
Net federal income tax (expense) benefit
Income (loss) before undistributed equity in net income of subsidiaries
Equity in undistributed net income of subsidiaries
Net income
________________
(284,757)
(258,776)
(226,900)
(31,465)
155,884
889,858
(130,416)
491,501
1,511,478
67,831
259,123
763,367
$ 1,381,359 $ 1,381,062 $ 1,022,490
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
124
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Cash Flows (Parent Company)
Schedule II, Continued
(In thousands)
Cash flow from (used in) operating activities:
Net income
Adjustments to reconcile net income to net cash from operating activities:
Net investment losses (gains)
Depreciation and (accretion) amortization
Equity in undistributed earnings of subsidiaries
Tax payments received from subsidiaries
Year Ended December 31,
2022
2021
2023
$ 1,381,359 $ 1,381,062 $ 1,022,490
5,895
(6,753)
(1,007)
4,281
(1,474)
18,761
(491,501)
(1,511,478)
(763,367)
373,504
321,682
328,851
Federal income taxes provided by subsidiaries on a separate return basis
(253,291)
(414,660)
(294,731)
Stock incentive plans
Change in:
Federal income taxes
Other assets
Other liabilities
Accrued investment income
Net cash from (used in) operating activities
Cash from (used in) investing activities:
Proceeds from sales of fixed maturity securities
Proceeds from maturities and prepayments of fixed maturity securities
Cost of purchases of fixed maturity securities
Change in loans receivable
Investments in and advances to subsidiaries, net
Change in balance due to security broker
Net additions to real estate, furniture & equipment
Other, net
Net cash from (used in) investing activities
Cash (used in) from financing activities:
Net proceeds from issuance of senior notes
Repayment and redemption of debt
Purchase of common treasury shares
Cash dividends to common stockholders
Other, net
Net cash (used in) from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
________________
51,000
49,411
48,440
(15,793)
(5,648)
(88,954)
1,200
(40,746)
3,163
87,100
890
(22,017)
(33,319)
(11,758)
755
951,018
(120,302)
292,631
748,825
82,075
543,549
83,134
402,046
654,134
(732,685)
(109,289)
(1,071,823)
17,843
21,605
(38)
(18)
290
(16,249)
(18,227)
(171,062)
(10,289)
(432)
368
(1,411)
10,487
(1,496)
95
137,897
319,730
(26,195)
—
—
(914)
1,029,579
(426,503)
(400,000)
(537,163)
(94,140)
(122,426)
(501,456)
(235,192)
(355,736)
(25,384)
(23,194)
(30,776)
(1,064,003)
(779,943)
24,912
103,522
(580,515)
684,037
120,641
387,077
296,960
$
128,434 $
103,522 $
684,037
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
125
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
December 31, 2023
Note to Condensed Financial Information (Parent Company)
The accompanying condensed financial information should be read in conjunction with the notes to consolidated
financial statements included elsewhere herein. Reclassifications have been made in the 2022 and 2021 financial statements
as originally reported to conform them to the presentation of the 2023 financial statements.
The Company files a consolidated federal income tax return with the results of its domestic insurance subsidiaries
included on a statutory basis. Under present Company policy, federal income taxes payable by subsidiary companies on a
separate-return basis are paid to W. R. Berkley Corporation, and the Company pays the tax due on a consolidated return
basis.
126
W. R. Berkley Corporation and Subsidiaries
Supplementary Insurance Information
December 31, 2023, 2022 and 2021
Schedule III
(In thousands)
December 31, 2023
Insurance
Deferred
Policy
Acquisition
Cost
Reserve for
Losses and
Loss
Expenses
Unearned
Premiums
Net
Premiums
Earned
Net
Investment
Income
Loss and Loss
Expenses
Amortization
of
Deferred
Policy
Acquisition
Cost
Other
Operating
Costs
and Expenses
Net
Premiums
Written
$
748,134 $ 15,386,761 $
5,367,137 $
9,130,324 $
793,998 $
5,689,263 $
931,748 $
1,699,703 $
9,657,121
Reinsurance & Monoline Excess
113,475
3,352,891
555,189
1,270,363
Corporate, other and eliminations
—
—
—
—
211,628
47,209
682,879
107,227
—
—
253,120
372,138
1,297,346
—
Total
December 31, 2022
Insurance
Reinsurance & Monoline Excess
Corporate, other and eliminations
Total
December 31, 2021
Insurance
$
$
$
$
861,609 $ 18,739,652 $
5,922,326 $ 10,400,687 $
1,052,835 $
6,372,142 $
1,038,975 $
2,324,961 $ 10,954,467
651,257 $ 13,786,112 $
4,779,214 $
8,369,062 $
550,084 $
5,130,909 $
935,469 $
1,430,456 $
8,784,146
112,229
3,225,111
518,440
1,192,367
—
—
—
—
194,272
34,829
730,841
103,434
—
—
235,836
256,310
1,219,924
—
763,486 $ 17,011,223 $
5,297,654 $
9,561,429 $
779,185 $
5,861,750 $
1,038,903 $
1,922,602 $ 10,004,070
566,718 $ 12,379,395 $
4,348,171 $
7,077,708 $
468,821 $
4,326,403 $
830,199 $
1,202,192 $
7,743,814
Reinsurance & Monoline Excess
109,427
3,011,493
498,989
1,028,323
Corporate, other and eliminations
—
—
—
—
175,324
27,473
627,557
131,429
—
—
174,098
261,352
1,119,053
—
Total
$
676,145 $ 15,390,888 $
4,847,160 $
8,106,031 $
671,618 $
4,953,960 $
961,628 $
1,637,642 $
8,862,867
__________________________
See Report of Independent Registered Public Accounting Firm.
127
Schedule IV
W. R. Berkley Corporation and Subsidiaries
Reinsurance
Years ended December 31, 2023, 2022 and 2021
Premiums Written
Direct
Amount
Ceded
to Other
Companies
Assumed
from Other
Companies
Net
Amount
Percentage
of Amount
Assumed
to Net
(In thousands, other than percentages)
Year ended December 31, 2023
Insurance
$ 11,310,709 $ 1,904,017 $
250,429 $ 9,657,121
Reinsurance & Monoline Excess
366,034
113,522
1,044,834
1,297,346
Total
Year ended December 31, 2022
Insurance
$ 11,676,743 $ 2,017,539 $ 1,295,263 $ 10,954,467
$ 10,363,730 $ 1,799,639 $
220,055 $ 8,784,146
Reinsurance & Monoline Excess
331,408
105,343
993,859
1,219,924
Total
Year ended December 31, 2021
Insurance
$ 10,695,138 $ 1,904,982 $ 1,213,914 $ 10,004,070
$ 9,220,683 $ 1,727,854 $
250,985 $ 7,743,814
Reinsurance & Monoline Excess
310,367
109,413
918,099
1,119,053
Total
$ 9,531,050 $ 1,837,267 $ 1,169,084 $ 8,862,867
2.6 %
80.5 %
11.8 %
2.5 %
81.5 %
12.1 %
3.2 %
82.0 %
13.2 %
___________________________
See Report of Independent Registered Public Accounting Firm.
128
W. R. Berkley Corporation and Subsidiaries
Valuation and Qualifying Accounts
Years ended December 31, 2023, 2022 and 2021
Schedule V
(In thousands)
Year ended December 31, 2023
Opening
Allowance
Balance
Additions-
Charged to
Expense
Deduction-
Amounts
Written Off
Ending
Allowance
Balance
Premiums, fees and other receivables
$
36,931
$
13,637 $
(8,243) $
Due from reinsurers
Deferred federal and foreign income taxes
Fixed maturity securities
Loan loss reserves
Total
Year ended December 31, 2022
Premiums, fees and other receivables
Due from reinsurers
Deferred federal and foreign income taxes
Fixed maturity securities
Loan loss reserves
Total
Year ended December 31, 2021
Premiums, fees and other receivables
Due from reinsurers
Deferred federal and foreign income taxes
Fixed maturity securities
Loan loss reserves
Total
_______________________
8,064
47,166
37,466
1,791
340
3,864
5,013
1,782
—
(14,747)
(5,728)
(569)
42,325
8,404
36,283
36,751
3,004
$
$
$
$
131,418
$
24,636 $
(29,287) $
126,767
30,860
$
13,734 $
(7,663) $
7,713
75,230
22,625
1,718
352
1,046
15,152
73
(1)
(29,110)
(311)
—
36,931
8,064
47,166
37,466
1,791
138,146
$
30,357 $
(37,085) $
131,418
27,855
$
10,807 $
(7,802) $
7,801
79,488
2,580
5,437
334
6,011
21,013
—
(422)
(10,269)
(968)
(3,719)
30,860
7,713
75,230
22,625
1,718
$
123,161
$
38,165 $
(23,180) $
138,146
See Report of Independent Registered Public Accounting Firm.
129
W. R. Berkley Corporation and Subsidiaries
Supplementary Information Concerning Property-Casualty Insurance Operations
Years Ended December 31, 2023, 2022 and 2021
Schedule VI
(In thousands)
Deferred policy acquisition costs
Reserves for losses and loss expenses
Unearned premiums
Net premiums earned
Net investment income
Losses and loss expenses incurred:
Current year
Prior years
Loss reserve discount accretion
Amortization of deferred policy acquisition costs
Paid losses and loss expenses
Net premiums written
___________________
See Report of Independent Registered Public Accounting Firm.
2023
2022
2021
$
861,609 $
763,486 $
676,145
18,739,652
17,011,223
15,390,888
5,922,326
5,297,654
4,847,160
10,400,687
9,561,429
8,106,031
1,052,835
779,185
671,618
6,311,780
5,774,713
4,921,191
29,681
30,681
54,511
32,526
1,038,975
1,038,903
863
31,906
961,628
4,981,610
4,347,910
3,665,694
10,954,467
10,004,070
8,862,867
130
(800) 773 4300
Bradley T. London, President
Businesses
Berkley Insurance Company
475 Steamboat Road
Greenwich, Connecticut 06830
(203) 542 3800
William R. Berkley, Chairman
W. Robert Berkley, Jr., President and Chief Executive Officer
Insurance
Acadia Insurance
One Acadia Commons
Westbrook, Maine 04092
acadiainsurance.com
David J. LeBlanc, President
Albany, New York
Bedford, New Hampshire
Marlborough, Massachusetts
Rocky Hill, Connecticut
Syracuse, New York
(800) 773 4300
(800) 224 8850
(888) 665 1170
(860) 331 2400
(866) 811 7722
Admiral Insurance Group
1000 Howard Boulevard, Suite 300 P.O. Box 5430
Mount Laurel, New Jersey 08054
(856) 429 9200
admiralins.com
Daniel Smyrl, President and Chief Executive Officer
Atlanta, Georgia
Austin, Texas
Chicago, Illinois
Seattle, Washington
(770) 476 1561
(512) 795 0766
(312) 368 1107
(206) 467 6511
Berkley Accident and Health
100 American Metro Boulevard, Suite 201
Hamilton, New Jersey 08619
berkleyah.com
(609) 584 6990
Brad N. Nieland, President and Chief Executive Officer
Atlanta, Georgia
Chicago, Illinois
Cleveland, Ohio
Coeur D’ Alene, Idaho
Dallas, Texas
Denver, Colorado
(678) 387 1824
(847) 946 8406
(440) 728 1805
(406) 396 7418
(972) 849 7406
(307) 575 3817
Hamilton, New Jersey
Hartford, Connecticut
Kansas City, Kansas
Kulpsville, Pennsylvania
Marlborough, Massachusetts
Minneapolis, Minnesota
New York, New York
Phoenix, Arizona
Pittsburgh, Pennsylvania
Tampa, Florida
Berkley Agribusiness
11201 Douglas Avenue
Urbandale, Iowa 50322
berkleyag.com
(908) 415 2711
(860) 380 1190
(913) 515 7374
(908) 415 2711
(908) 415 2711
(507) 449 6846
(212) 822 3333
(480) 580 7197
(412) 996 0923
(609) 584 4667
(866) 382 7314
Berkley Alliance Managers
30 South Pearl Street, 6th Floor
Albany, New York 12207
(518) 407 0088
Stephen L. Porcelli, President
Berkley Alliance Professional
berkleyallpro.com
(405) 805 6635
Berkley Construction Professional
berkleycp.com
(312) 705 1135
Berkley Design Professional
berkleydp.com
(312) 705 1135
Berkley Service Professionals
Berkley Managers Insurance Services, LLC
berkleysp.com
(312) 705 1135
Berkley Aspire
14902 North 73rd Street
Scottsdale, Arizona 85260
berkleyaspire.com
Brian R. Griffith, President
Scottsdale, Arizona
Glen Allen, Virginia
West Chester, Ohio
(866) 412 7742
(480) 444 5950
(804) 237 5177
(513) 341 4843
W. R. Berkley Corporation 2023 Annual Report 161
Businesses
Berkley Asset Protection
757 Third Avenue, 10th Floor
New York, New York 10017
(212) 497 3700
berkleyassetpro.com
Joseph P. Dowd, President
Berkley Canada
145 King Street West, Suite 1000
Toronto, Ontario M5H 1J8
(416) 304 1178
berkleycanada.com
Andrew Steen, President
1002, Rue Sherbrooke Ouest
Bureau 2120
Montreal, Quebec H3A 3L6
(514) 842 5587
Berkley Construction Solutions
412 Mount Kemble Avenue, Suite 310N
Morristown, New Jersey 07960
(866) 223 7006
berkleycs.com
Andrew Robinson, President
Berkley Custom Insurance
One Metro Center
1 Station Place, Suite 600
Stamford, Connecticut 06902
(203) 658 1500
berkleycustom.com
Michael P. Fujii, President and Chief Executive Officer
Berkley Custom Insurance Services, LLC
Los Angeles, California
(213) 417 5431
BXM Insurance Services, Inc.
Chicago, Illinois
Los Angeles, California
(312) 605 4648
(213) 417 5431
Berkley Cyber Risk Solutions
412 Mount Kemble Avenue, Suite G50
Morristown, New Jersey 07960
(973) 775 7494
berkleycyberrisk.com
Tracey Vispoli, President
Berkley E&S Solutions
520 Pike Street, Suite 2929
Seattle, Washington 98101
Curtis Fletcher, President
(856) 354 8901
Berkley Enterprise Risk Solutions
4 Hutton Centre Drive, Suite 640
Santa Ana, California 92707
(714) 559 6444
berkleyenterpriserisk.com
Wayne W. Bryan, President
Berkley Entertainment
600 Las Colinas Boulevard, Suite 1400
Irving, Texas 75039
(972) 819 8980
berkleyentertainment.com
Mark Schuermann, President
Berkley Environmental
101 Hudson Street, Suite 2550
Jersey City, New Jersey 07302
(201) 748 3121
berkleyenvironmental.com
Kenneth J. Berger, President
Atlanta, Georgia
Boston, Massachusetts
Chicago, Illinois
Irving, Texas
Jersey City, New Jersey
Philadelphia, Pennsylvania
(404) 443 2117
(857) 265 7479
(312) 727 0302
(972) 819 8863
(201) 748 3047
(215) 533 7360
Berkley Managers Insurance Services, LLC
Walnut Creek, California
(925) 472 8201
162
Berkley Financial Specialists
757 Third Avenue, 10th Floor
New York, New York 10017
(866) 539 3995
berkleyfs.com
Michael G. Connor, President
Berkley Crime
433 South Main Street, Suite 200
West Hartford, Connecticut 06110
(844) 44 CRIME
berkleycrime.com
Towson, Maryland
(866) 539 3995
Berkley Insurance Asia
Room 4407, 44/F Hopewell Centre
183 Queen’s Road East
Wanchai, Hong Kong
berkleyasia.com
Unit 09-03, Cross Street Exchange
18 Cross Street
Singapore 048423
30th Floor, Shanghai Tower
501 Middle Yincheng Road
(852) 3708 5000
(65) 6902 0601
Pudong, Shanghai 200120, China
86 (21) 6162 8122
Shasi Nair, Chief Executive Officer
Berkley Fire & Marine Underwriters
425 North Martingale Road, Suite 1520
Berkley Insurance Australia
Schaumburg, Illinois 60173
(847) 466 9371
Level 7, 321 Kent Street
Sydney NSW 2000, Australia
61 (2) 9275 8500
berkleyinaus.com.au
Tony Wheatley, Chief Executive Officer
Adelaide SA, Australia
Brisbane QLD, Australia
Melbourne VIC, Australia
Perth WA, Australia
61 (8) 8470 9020
61 (7) 3220 9900
61 (3) 8622 2000
61 (8) 6488 0900
berkleymarine.com
David A. Higley, President
Berkley Healthcare
16253 Swingley Ridge Road, Suite 375
Chesterfield, Missouri 63017
(860) 380 4931
berkleyhealthcare.com
Gregg A. Piltch, President
Berkley Human Services
222 South Ninth Street, Suite 2700
Minneapolis, Minnesota 55402
(612) 766 3100
berkleyhumanservices.com
Roger M. Nulton, President
Berkley Industrial Comp
One Metroplex Drive, Suite 500
Birmingham, Alabama 35209
(800) 448 5621
berkindcomp.com
Michael Marcus, President
Las Vegas, Nevada
Lexington, Kentucky
(855) 425 5800
(888) 886 9006
W. R. Berkley Corporation 2023 Annual Report 163
Businesses
Berkley International Latinoamérica
Berkley International Seguros S.A.
Berkley International Aseguradora De Riesgos del Trabajo S.A.
Berkley Argentina de Reaseguros S.A.
Carlos Pellegrini 1023, Piso 8
C1009ABU Buenos Aires, Argentina
berkley.com.ar
54 (11) 4378 8100
Bartolomé Mitre 699
S2000COM Rosario, Argentina
54 (341) 410 4200
Eduardo I. Llobet,
President and Chief Executive Officer
Berkley International do Brasil Seguros S.A.
Avenida Presidente Juscelino Kubitschek, 1455
15º andar - cj. 151 Vila Nova Conceição
04543-011 São Paulo, Brazil
berkley.com.br
55 (11) 3848 8622
Edson Morikazu Toguchi, Chief Executive Officer
Berkley International Seguros México, S.A. de C.V.
Avenida Santa Fe 495, Piso 19, Oficina 1901
Cruz Manca, Cuajimalpa de Morelos, 05349, México
berkleymex.com
52 (55) 1037 5300
Javier García Ortíz de Zárate,
President and Chief Executive Officer
Berkley International Seguros S.A. (Uruguay)
Rincón 391, Piso 5
11100 Montevideo, Uruguay
(598) 2916 6998
berkley.com.uy
Eduardo I. Llobet, President
Berkley Latin America and Caribbean Managers
600 Brickell Avenue, Suite 3900
Miami, Florida 33131
(305) 921 6200
Eduardo I. Llobet,
President and Chief Executive Officer
Berkley Insurance Company
Representative Office In Colombia
Carrera 7 No. 80-49, Oficina 303
Edificio Centro de Negocios El Nogal
Berkley International Fianzas México, S.A. de C.V.
Bogotá, Colombia
57 (601) 744 4015
Avenida Santa Fe 495, Piso 19, Oficina 1901
Cruz Manca, Cuajimalpa de Morelos, 05349, México
berkleymex.com
52 (55) 1037 5300
Jaime Aramburo, Director
Representative Office in México
Guillermo Espinosa Barragán,
President and Chief Executive Officer
Avenida Santa Fe 495, Piso 19, Oficina 1901
Cruz Manca, Cuajimalpa de Morelos, 05349, México
berkleymex.com
52 (55) 1037 5300
Berkley International Puerto Rico, LLC
Obdulia Margarita Vela Lopez, Director
Metro Office Park
Edificio 17 Calle 2, Suite 500
Guaynabo, Puerto Rico 00968
(787) 466 7466
Berkley Life Sciences
Eduardo I. Llobet, President
200 Princeton South Corporate Center, Suite 250
Berkley International Seguros Colombia S.A.
Calle 75 No. 5-88, Piso 3
110231 Bogotá, Colombia
berkley.com.co
María Yolanda Ardila Guarin,
President and Chief Executive Officer
Ewing, New Jersey 08628
berkleyls.com
Emily J. Urban, President
(609) 844 7800
57 (601) 357 2727
Naperville, Illinois
(609) 844 7800
Berkley LS Insurance Solutions, LLC
Walnut Creek, California
164
Berkley Luxury Group
301 Route 17 North, Suite 900
Berkley Offshore Underwriting Managers
757 Third Avenue, 10th Floor
Rutherford, New Jersey 07070
(201) 518 2500
New York, New York 10017
(212) 618 2950
berkleyluxurygroup.com
Shadi Albert, President
berkleyoffshore.com
Frank A. Costa, President
Chicago, Illinois
(800) 504 7012
Houston, Texas
(832) 547 2900
Berkley Management Protection
433 S. Main Street, Suite 200
West Hartford, Connecticut 06110
(959) 205 5001
berkleymp.com
Charles E. Thompson, President
Berkley Offshore
Underwriting Managers UK, Limited
Level 13, 52 Lime Street
London EC3M 7AF, United Kingdom 44 (0) 20 3943 1400
R. Christian Walker, Executive Vice President
Berkley Medical Management Solutions
2107 CityWest Boulevard, 8th Floor
Berkley Oil & Gas
berkleymms.com
(855) 444 2667
Eric-Jason Smith, Chief Executive Officer
(877) 972 2264
Houston, Texas 77042
berkleyoil-gas.com
Linda A. Eppolito, President
Berkley Renewable Energy
Berkley Mid-Atlantic Insurance Group
berkleyrenewable.com
(832) 308 6900
4820 Lake Brook Drive, Suite 300
Glen Allen, Virginia 23060
(804) 285 2700
wrbmag.com
Berkley One
Michelle D. Middleton, President
412 Mount Kemble Avenue, Suite G50
Morristown, New Jersey 07960
(973) 355 8210
berkleyone.com
Kathleen M. Tierney, President
Chicago, Illinois
Wilmington, Delaware
(312) 596 4298
(855) 663 8551
Glen Allen, Virginia
Pittsburgh, Pennsylvania
(800) 283 1153
(800) 283 1153
Berkley Net Underwriters
9301 Innovation Drive, Suite 200
Manassas, Virginia 20110
(877) 497 2637
berkleynet.com
Brian P. Douglas, President
Minneapolis, Minnesota
Scottsdale, Arizona
(877) 497 2637
(877) 497 2637
Berkley North Pacific Group
2760 W. Excursion Lane, Suite 300
Meridan, Idaho 83642
berkleynpac.com
Carrie H. Cheshier, President
(800) 480 2942
W. R. Berkley Corporation 2023 Annual Report 165
Businesses
Berkley Public Entity
200 Princeton South Corporate Center, Suite 280
Berkley Product Protection
80 Broad Street, Suite 3200
New York, New York 10004
berkleyproductprotection.com
Luis Rivera, President
Dallas, Texas
London, United Kingdom
(212) 413 2499
(972) 552 6100
44 (0) 20 7088 1900
Berkley Managers Insurance Services, LLC
Los Angeles, California
San Francisco, California
(213) 372 1727
(415) 417 5950
Berkley Professional Liability
757 Third Avenue, 10th Floor
New York, New York 10017
(212) 618 2900
berkleypro.com
John R. Benedetto, President
Alpharetta, Georgia
London, United Kingdom
Schaumburg, Illinois
Toronto, Ontario
Berkley Transactional
(470) 769 7312
44 (0) 20 7088 1916
(630) 237 3650
(416) 304 1178
412 Mount Kemble Avenue, Suite G50
Morristown, New Jersey 07960
(973) 775 7499
berkleytransactional.com
Randolph Hein, President
Ewing, New Jersey 08628
berkleypublicentity.com
John J. Forte, President
Ewing, New Jersey
Morristown, New Jersey
Berkley Risk
(844) 972 2736
(844) 972 2736
(973) 775 7461
222 South Ninth Street, Suite 2700
Minneapolis, Minnesota 55402
(612) 766 3000
berkleyrisk.com
John M. Goodwin, President
Denver, Colorado
Nashville, Tennessee
Scottsdale, Arizona
St. Paul, Minnesota
Berkley Select
550 West Jackson Boulevard, Suite 500
Chicago, Illinois 60661
berkleyselect.com
Daniel R. Spragg, President
(612) 766 3000
(612) 766 3000
(612) 766 3000
(612) 766 3000
(312) 800 6200
Berkley Small Business Solutions
433 South Main Street, Suite 200
West Hartford, Connecticut 06110
(855) 272 7555
berkleysmallbusiness.com
Jeanne R. Fenster, President
Berkley Program Specialists
1250 East Diehl Road, Suite 200
Naperville, Illinois 60563
(630) 210 0360
Berkley Southeast Insurance Group
1745 North Brown Road, Suite 400
Lawrenceville, Georgia 30043
(678) 533 3400
berkley-ps.com
Gregory A. Douglas, President
Berkley Equine & Cattle Division
230 Lexington Green Circle, Suite 215
Lexington, Kentucky 40503
(859) 300 8035
berkleyequine.com
John Egan, Vice President and Manager
berkleysig.com
Jay Weber, President
Birmingham, Alabama
Charlotte, North Carolina
Lawrenceville, Georgia
Meridian, Mississippi
Nashville, Tennessee
(855) 610 4545
(855) 610 4545
(855) 610 4545
(855) 610 4545
(855) 610 4545
166
Carolina Casualty
5011 Gate Parkway
Building 200, Suite 200
Jacksonville, Florida 32256
(904) 363 0900
carolinacas.com
David R. Lockhart, President
Berkley Prime Transportation (833) 79 PRIME (77463)
berkleyprimetrans.com
Continental Western Group
11201 Douglas Avenue
Urbandale, Iowa 50322
cwgins.com
J. Daniel Asahl, President
Denver, Colorado
Lincoln, Nebraska
Luverne, Minnesota
(515) 473 3500
(800) 235 2942
(800) 235 2942
(800) 235 2942
Gemini Transportation Underwriters
99 Summer Street, Suite 1800
Boston, Massachusetts 02110
(617) 310 8200
geminiunderwriters.com
Jason R. Lewis, President
Intrepid Direct Insurance
5400 West 110th Street, Suite 400
Overland Park, Kansas 66211
(877) 249 7181
intrepiddirect.com
William Strout, President
Key Risk Insurance
275 North Elm Street, Suite 300
High Point, North Carolina 27626
(800) 942 0225
keyrisk.com
Scott A. Holbrook, President
Berkley Southwest
222 Las Colinas Boulevard W, Suite 1300
Irving, Texas 75039
berkleysouthwest.com
John Henle, President
Albuquerque, New Mexico
Dallas, Texas
Little Rock, Arkansas
Oklahoma City, Oklahoma
Phoenix, Arizona
San Antonio, Texas
(972) 719 2400
(800) 444 0049
(800) 444 0049
(800) 444 0049
(800) 444 0049
(800) 444 0049
(800) 444 0049
Berkley Specialty Excess
4820 Lake Brook Drive, Suite 200
Glen Allen, Virginia 23060
(888) 417 9935
berkleyse.com
John Termini, President
Berkley Surety
412 Mount Kemble Avenue, Suite 310N
Morristown, New Jersey 07960
(973) 775 5029
berkleysurety.com
Andrew M. Tuma, President
Atlanta, Georgia
Blue Bell, Pennsylvania
Centennial, Colorado
Charlotte, North Carolina
Dallas, Texas
Danvers, Massachusetts
Fulton, Maryland
Morristown, New Jersey
Naperville, Illinois
Nashville, Tennessee
New York, New York
Orlando, Florida
Santa Ana, California
Seattle, Washington
Toronto, Ontario
Urbandale, Iowa
Westbrook, Maine
(770) 407 0927
(610) 729 7606
(206) 830 2565
(973) 775 5089
(469) 458 8372
(978) 539 3303
(975) 775 5078
(973) 775 5029
(630) 210 0451
(615) 514 8078
(212) 882 6390
(407) 867 4595
(657) 356 2892
(206) 830 2566
(416) 594 4802
(515) 473 3183
(207) 228 1922
Berkley Technology Underwriters
222 South Ninth Street, Suite 2550
Minneapolis, Minnesota 55402
(877) 999 1346
berkley-tech.com
Christopher H. Balch, President
W. R. Berkley Corporation 2023 Annual Report 167
Businesses
W. R. Berkley European Holdings AG
Nautilus Insurance Group
7233 East Butherus Drive
Scottsdale, Arizona 85260
nautilusinsgroup.com
Thomas Joyce, President
(800) 842 8972
Preferred Employers Insurance
9797 Aero Drive, Suite 200
Gartenstrasse 14
8002 Zürich, Switzerland
berkleyinsurance.li
Mark Talbot, Managing Director
W. R. Berkley Europe AG
Städtle 35A, P.O. Box 835
9490 Vaduz, Liechtenstein
Markus Beck, General Manager
Rådhusgata 17
0158 Oslo, Norway
Birger Jarlsgatan 22, 4 tr
423 237 27 47
47 (0) 23 27 24 00
San Diego, California 92123
(888) 472 9001
114 34 Stockholm, Sweden
46 (8) 410 337 00
peiwc.com
S. Akbar Khan, President
Vela Insurance Services
550 West Jackson Boulevard, Suite 500
Chicago, Illinois 60661
(877) 835 2467
vela-ins.com
Arthur G. Davis, President
Atlanta, Georgia
Chicago, Illinois
Minneapolis, Minnesota
Naperville, Illinois
New York, New York
Omaha, Nebraska
Scottsdale, Arizona
(877) 835 2467
(877) 835 2467
(877) 835 2467
(877) 835 2467
(877) 835 2467
(877) 835 2467
(877) 835 2467
Vela Insurance Services, LLC
Los Angeles, California
Walnut Creek, California
(877) 835 2467
(877) 835 2467
Verus Specialty Insurance
4820 Lake Brook Drive, Suite 200
Glen Allen, Virginia 23060
(804) 525 1360
verusins.com
Marlo M. Morrison, President
Englewood, Colorado
Scottsdale, Arizona
(303) 357 2640
(877) 598 3787
Christophstrasse 19
50670 Cologne, Germany
49 (0) 22199386 0
Gartenstrasse 14
8002 Zürich, Switzerland
41 43 210 70 99
Paseo de la Castellana, 141-Planta 18
28046 Madrid, Spain
34 (0) 914492646
Level 17, 52 Lime Street
London EC3M 7AF, United Kingdom
44 (0) 2039431000
Berkley European Underwriters AS
Rådhusgata 17
N-0158 Oslo, Norway
47 (0) 23272400
Ivar K. Z. Pedersen, Chief Executive Officer
W/R/B Underwriting
Syndicate 1967 at Lloyd’s
W. R. Berkley UK Limited
Level 14, 52 Lime Street
London EC3M 7AF, United Kingdom
wrbunderwriting.com
44 (0) 20 3943 1900
James Hastings, President and Chief Executive Officer
W/R/B Specialty
757 Third Avenue, 10th Floor
New York, NY 10017
wrbspecialty.com
Daniel Black, Vice President - Underwriting / E&S Commercial Property
168
Reinsurance & Monoline Excess
Berkley Re
berkleyre.com
Berkley Re America
One Metro Center
1 Station Place, Suite 702
Midwest Employers Casualty
14755 North Outer Forty Drive, Suite 300
Chesterfield, Missouri 63017
(636) 449 7000
mecasualty.com
Scott M. McDonough, President
Stamford, Connecticut 06902
(203) 905 4444
Service Operations
Daniel R. Westcott, President
Berkley Re Australia
Level 7, 321 Kent Street
Sydney NSW 2000, Australia
61 (2) 8117 2100
Level 10, 340 Adelaide Street
Brisbane QLD 4000, Australia
61 (7) 3175 0200
Glen Riddell,
Chief Executive Officer, Australia and New Zealand
Berkley Re Asia
Unit 09-03, Cross Street Exchange
18 Cross Street
Singapore 048423
Glen Riddell, Chief Executive Officer, Asia
Room 4901, ChinaWorld Tower B
No. 1 Jian Guo MenWai Avenue
(65) 6671 2070
Berkley Capital, LLC
600 Brickell Avenue, 39th Floor
Miami, Florida 33131
(786) 450 5510
Frank T. Medici, President
Berkley Dean & Company, Inc.
475 Steamboat Road
Greenwich, Connecticut 06830
(203) 629 3000
James G. Shiel, President
Berkley Technology Services LLC
101 Bellevue Parkway
Wilmington, Delaware 19809
(302) 439 2000
Beijing 100004, China
(86) 108 526 4826
James B. Gilbert, President
Berkley Re Solutions
1250 East Diehl Road, Suite 200
Naperville, Illinois 60563
berkleyre.com/solutions
Gregory A. Douglas, President
Johns Creek, Georgia
Lakewood, Ohio
Philadelphia, Pennsylvania
Stamford, Connecticut
Berkley Re UK Limited
Level 17, 52 Lime Street
(630) 210 0360
(800) 348 4229
(216) 978 1652
(800) 519 6341
(800) 974 5714
Des Moines, Iowa
(515) 564 2300
W. R. Berkley Corporation’s businesses conduct business through the following
insurance entities: Acadia Insurance Company; Admiral Indemnity Company; Admiral
Insurance Company; Berkley Argentina de Reaseguros S.A.; Berkley Assurance Company;
Berkley Casualty Company; Berkley Insurance Company; Berkley International
Aseguradora de Riesgos del Trabajo S.A.; Berkley International do Brasil Seguros S.A.;
Berkley International Fianzas México, S.A. de C.V.; Berkley International Seguros
Colombia S.A.; Berkley International Seguros México, S.A. de C.V.; Berkley International
Seguros S.A.; Berkley International Seguros S.A. (Uruguay); Berkley Life and Health
Insurance Company; Berkley National Insurance Company; Berkley Prestige Insurance
Company; Berkley Regional Insurance Company; Berkley Specialty Insurance Company;
Carolina Casualty Insurance Company; Clermont Insurance Company; Continental
Western Insurance Company; East Isles Reinsurance, Ltd.; Firemen’s Insurance Company
London EC3M 7AF, United Kingdom
44 (0) 20 3943 1000
of Washington, D.C.; Gemini Insurance Company; Great Divide Insurance Company;
Clare Himmer, Chief Executive Officer
Intrepid Casualty Company; Intrepid Insurance Company; Intrepid Specialty Insurance
Company; Key Risk Insurance Company; Midwest Employers Casualty Company;
Nautilus Insurance Company; Preferred Employers Insurance Company; Oak Harbor
Reinsurance Company; Queen’s Island Insurance Company, Ltd.; Riverport Insurance
Company; StarNet Insurance Company; Syndicate 1967 at Lloyd’s; Tri-State Insurance
Company of Minnesota; Union Insurance Company; Union Standard Lloyds; W. R.
Berkley Europe AG.
W. R. Berkley Corporation 2023 Annual Report 169
Board of Directors
William R. Berkley
Executive Chairman
W. Robert Berkley, Jr.
President and Chief Executive Officer
Christopher L. Augostini
Executive Vice President — Business and Administration
Chief Financial Officer
E MO RY UNIVER SI T Y
Ronald E. Blaylock
Managing Partner
GENNX360 C API TAL PARTNER S
Mary C. Farrell
Chairman
THE HOWARD GIL MAN FOUNDATION
Retired Managing Director Chief Investment Strategist
UB S WE ALTH MANAGE MEN T USA
María Luisa Ferré
Chief Executive Officer
FRG, LLC
Daniel L. Mosley
Partner and Head of Family Advisory Services
BDT & MSD PARTNER S
Former Partner
CRAVATH, SWAINE & MO ORE LLP
Mark L. Shapiro
Private Investor
Jonathan Talisman
Managing Partner
C API TOL TAX PARTNER S
170 Officers
William R. Berkley
Executive Chairman
W. Robert Berkley, Jr.
President and Chief Executive Officer
Richard M. Baio
Executive Vice President —
Chief Financial Officer
Lucille T. Sgaglione
Executive Vice President
James G. Shiel
Executive Vice President — Investments
Philip S. Welt
Executive Vice President and Secretary
Jared E. Abbey
Executive Vice President
James P. Bronner
Executive Vice President
James B. Gilbert
Executive Vice President —
Enterprise Technology
Jeffrey M. Hafter
Executive Vice President
Robert C. Hewitt
Executive Vice President
Michael J. Maloney
Executive Vice President
William M. Rohde, Jr.
Executive Vice President
Robert W. Standen
Executive Vice President
Robert D. Stone
Executive Vice President
Joseph L. Sullivan
Executive Vice President
Nelson Tavares
Executive Vice President
Kathleen M. Tierney
Executive Vice President
Trish Conway
Senior Vice President —
Enterprise Risk Management
Melissa M. Emmendorfer
Senior Vice President —
Insurance Risk Management
Michele L. Fleckenstein
Senior Vice President —
Underwriting and Analytics
Paul J. Hancock
Senior Vice President —
Chief Corporate Actuary
Lee Iannarone
Senior Vice President —
General Counsel and Assistant Secretary
Carol J. LaPunzina
Senior Vice President —
Human Resources
Edward F. Linekin
Senior Vice President —
Investments
A. Scott Mansolillo
Senior Vice President —
Chief Compliance Officer
Lynn S. Neville
Senior Vice President — Claims
W. R. Berkley Corporation 2023 Annual Report 171 Corporate Information
Annual Meeting
The Annual Meeting of Stockholders of W. R. Berkley Corporation
will be held at 1:30 p.m. on June 12, 2024 at its offices at
475 Steamboat Road, Greenwich, Connecticut 06830
Shares Traded
Common Stock of W. R. Berkley Corporation is traded
on the New York Stock Exchange. Symbol: WRB
Transfer Agent and Registrar
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, Minnesota 55120-4100
(800) 468 9716
shareowneronline.com
Website
For additional information, including press releases, visit our website at:
berkley.com
Follow us on X @WRBerkleyCorp and LinkedIn.
Auditors
KPMG LLP, New York, New York
Outside Counsel
Willkie Farr & Gallagher LLP, New York, New York
172 The W. R. Berkley Corporation 2023 Annual Report editorial sections are printed on recycled paper made
from fiber sourced from well-managed forests and other controlled wood sources and are independently certified
to the Forest Stewardship Council® (FSC®) standards.
© Copyright 2024 W. R. Berkley Corporation. All rights reserved.
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