EXHIBIT 99.1
W. R. Berkley Corporation
165 Mason Street, P.O. Box 2518
Greenwich, Connecticut 06836-2518
(203) 629-3000
NEWS
RELEASE
FOR IMMEDIATE RELEASE CONTACT: Eugene G. Ballard
Senior Vice President-
Chief Financial
Officer and Treasurer
203-629-3000
W. R. BERKLEY CORPORATION ANNOUNCES RESULTS OF
OPERATIONS FOR THE FOURTH QUARTER AND FULL YEAR
Greenwich, CT, February 5, 2001 -- W.R. Berkley Corporation (NASDAQ: BKLY)
today reported revenues for the fourth quarter ended December 31, 2000 increased
14 percent to $480 million from $422 million for the same period in 1999.
Revenues for the year increased six percent to $1,781 million from $1,674
million in 1999.
Operating income for the fourth quarter was $14 million, or 53 cents per
diluted share, compared with an operating loss of $38 million, or $1.50 per
diluted share, for the fourth quarter of 1999. Operating income for the year was
$32 million, or $1.23 per diluted share, compared with an operating loss of $23
million, or 91 cents per diluted share, for 1999. In the 1999 fourth quarter,
the Company established additional loss reserves for the regional insurance
group of approximately $55 million (before tax). There was no comparable reserve
adjustment in 2000.
Net income for the fourth quarter was $18 million, or 68 cents per diluted
share, compared with a net loss of $41 million, or $1.59 per diluted share, for
the 1999 period. Net income for the year was
W.R. Berkley Corporation 2
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$36 million, or $1.39 per diluted share, compared with a net loss of $37
million, or $1.43 per diluted share, for 1999. Net income includes realized
investment gains and losses, restructuring charges, extraordinary items and
changes in accounting principles, which are not part of operating income.
Commenting on the Company's results, William R. Berkley, chairman and chief
executive officer, said: "We are very pleased with our fourth quarter results
and believe they reflect a clear sign of the improving environment and the
actions we have taken to date. Our annualized return approached double digits in
the fourth quarter, while for the year our reserves increased at a greater rate
than the increase in our premium volume. We continue to implement further
substantial price increases, in addition to those previously put in place.
"Book value increased by approximately 15 percent for the year. We
anticipate improved returns for 2001 and are enthusiastic about prospects for
2002. We expect that pricing will continue to tighten in commercial lines for
the next several years."
W.R. Berkley Corporation will webcast its fourth quarter earnings call on
Tuesday, February 6, 2001 at 10:00am eastern time through the Investor
Broadcasting Network Vcall website. Those who want to hear the conference call
should go to www.vcall.com fifteen minutes prior to the start of the call to
register, download and install any necessary audio software.
W.R. Berkley Corporation 3
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W.R. Berkley Corporation is a holding company which, through its
subsidiaries, operates in broad segments of the property casualty insurance
business. The operating units are grouped for management purposes into five
segments according to market served: Regional Property Casualty Insurance,
Reinsurance, Specialty Insurance, Alternative Markets and International.
This is a "Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995. Any forward-looking statements contained herein, including those
related to the Company's performance for the year 2001 and beyond, are based
upon the Company's historical performance and on current plans, estimates and
expectations. They are subject to various risks and uncertainties, including but
not limited to, the cyclical nature of the property casualty industry, the
long-term and potentially volatile nature of the reinsurance business, the
impact of competition, product demand and pricing, claims development and the
process of estimating reserves, the level of the Company's retention,
catastrophe and storm losses, legislative and regulatory developments, changes
in the ratings assigned to the Company by rating agencies, investment results,
availability of reinsurance and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission. These risks could
cause the Company's actual results for the year 2001 and beyond to differ
materially from those expressed in any forward-looking statement made by or on
behalf of the Company. Forward-looking statements speak only as of the date on
which they are made, and the Company undertakes no obligation to update publicly
or revise any forward-looking statement, whether as a result of new information,
future developments or otherwise.
(See accompanying financial tables)
W.R. Berkley Corporation 4
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For the Three Months For Year Ended
Ended December 31, December 31,
-------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
(Amounts in thousands except per share data)
Revenues:
Net premiums written $ 394,318 $ 342,067 $1,506,244 $1,427,719
Change in unearned premiums 5,013 20,425 (15,230) (13,335)
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Premiums earned 399,331 362,492 1,491,014 1,414,384
Net investment income 57,423 45,051 210,448 190,316
Management fees and commissions 16,514 16,997 68,049 72,344
Realized gains (losses) on investments 6,479 (3,660) 8,364 (6,064)
Other income 326 1,002 3,412 2,688
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Total revenues 480,073 421,882 1,781,287 1,673,668
Operating costs and expenses:
Losses and loss expenses 290,815 320,910 1,094,411 1,085,826
Other operating costs and expenses 152,173 156,634 596,579 604,784
Interest expense 11,642 12,733 47,596 50,801
Restructuring charge -- -- 1,850 11,505
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Income (loss) before income taxes
And minority interest 25,443 (68,395) 40,851 (79,248)
Federal income tax (expense) benefit (6,536) 27,998 (2,451) 45,766
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Income (loss) before minority
Interest 18,907 (40,397) 38,400 (33,482)
Minority interest (743) (391) (2,162) (566)
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Net income (loss) before preferred
Dividends 18,164 (40,788) 36,238 (34,048)
Preferred dividends -- -- -- (497)
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Net income (loss) attributable to
Common stockholders before change
In accounting and extraordinary
Loss 18,164 (40,788) 36,238 (34,545)
Cumulative effect of change in
Accounting principle (net of taxes) -- -- -- (3,250)
Extraordinary gain on early
Extinguishment of long-term debt
(net of taxes) -- -- -- 735
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Net income (loss) attributable to
Common stockholders $ 18,164 $(40,788) $ 36,238 $ (37,060)
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Earnings (loss) per share:
Basic $ 0.71 $ (1.59) $ 1.41 $ (1.44)
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Diluted $ 0.68 $ (1.59) $ 1.39 $ (1.43)
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Average shares outstanding:
Basic 25,536 25,616 25,632 25,823
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Diluted 26,539 25,689 25,991 25,927
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W.R. Berkley Corporation 5
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ADDENDUM #1 TO PRESS RELEASE DATED February 5, 2001
Operating Statistics by Insurance Industry Segment
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(Amounts in thousands)
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For the Three Months For the Year Ended
Ended December 31, December 31,
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2000 1999 2000 1999
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Regional Insurance:
Net premiums written $ 155,945 $ 157,500 $ 640,843 $ 649,849
Total revenues 183,212 182,149 718,489 702,129
Pre-tax operating income (loss) (1) 1,949 (62,879) (2,031) (89,431)
Loss ratio 74.5% 108.2% 75.1% 84.7%
Expense ratio 32.0% 36.6% 33.5% 36.1%
Policyholders' dividend ratio 1.2% .4% .8% .7%
Combined ratio (2) 107.7% 145.2% 109.4% 121.5%
Reinsurance:
Net premiums written $76,035 $ 77,224 $ 276,640 $ 309,181
Total revenues 96,767 84,720 349,164 341,940
Pre-tax operating income (1) 9,489 1,530 28,987 17,116
Loss ratio 74.1% 77.5% 73.2% 76.0%
Expense ratio 30.3% 34.8% 32.5% 33.2%
Combined ratio (2) 104.4% 112.3% 105.7% 109.2%
Specialty Insurance:
Net premiums written $77,595 $60,474 $ 285,525 $ 260,380
Total revenues 86,788 74,761 324,859 309,068
Pre-tax operating income (1) 13,302 6,046 30,993 42,677
Loss ratio 69.2% 63.1% 73.1% 66.0%
Expense ratio 28.1% 35.5% 32.0% 32.9%
Policyholders' dividend ratio .1% .1% .1% .2%
Combined ratio (2) 97.4% 98.7% 105.2% 99.1%
Alternative Markets:
Net premiums written $48,319 $21,061 $ 184,255 $122,137
Total revenues 78,597 53,966 269,025 222,276
Pre-tax operating income (1) 7,986 5,940 31,221 30,133
Loss ratio 69.8% 72.1% 71.2% 67.4%
Expense ratio 37.8% 46.6% 36.2% 37.3%
Combined ratio (2) 107.6% 118.7% 107.4% 104.7%
International (3):
Net premiums written $36,424 $ 25,808 $ 118,981 $86,172
Total revenues 33,915 25,322 118,234 93,878
Pre-tax operating income (1) 3,083 1,947 6,591 4,200
Loss ratio 61.1% 52.6% 60.5% 53.3%
Expense ratio 32.1% 42.3% 36.6% 46.4%
Combined ratio (2) 93.2% 94.9% 97.1% 99.7%
Combined:
Net premiums written $394,318 $342,067 $ 1,506,244 $1,427,719
Total revenues 479,279 420,918 1,779,771 1,669,291
Pre-tax operating income (loss)(1) 35,809 (47,416) 95,761 4,695
Loss ratio 72.1% 88.2% 73.1% 76.5%
Expense ratio 31.6% 36.9% 33.5% 35.4%
Policyholders' dividend ratio .5% .2% .4% .3%
Combined ratio (2) 104.2% 125.3% 107.0% 112.2%
(1) Pre-tax operating income (loss) represents earnings before the effects of realized investment gains
and losses, restructuring charges, extraordinary items and changes in accounting principles.
(2) Ratios are based on statutory accounting practices.
(3) International includes life insurance premiums of $33.2 million and $24.5 million for the years ended
December 31, 2000 and 1999, respectively. Life insurance results are not included in the statutory
ratios.
W.R. Berkley Corporation 6
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ADDENDUM #2 TO PRESS RELEASE DATED February 5, 2001
Supplementary Information
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(Amounts in thousands except per share data)
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For the Three Months For Year Ended
Ended December 31, December 31,
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2000 1999 2000 1999
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After-tax earnings amounts:
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Operating income (loss)(1) $ 13,953 $ (38,409) $ 32,005 $ (23,309)
Restructuring charge (net of
minority interest) -- -- (1,203) (7,294)
Extraordinary gain -- -- -- 735
Cumulative effect of change in
Accounting principle -- -- -- (3,250)
Realized investment gains (losses) 4,211 (2,379) 5,436 (3,942)
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Net income (loss) $ 18,164 $ (40,788) $ 36,238 $ (37,060)
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After-tax diluted earnings per share:
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Operating income (loss)(1) $ 0.53 $ (1.50) $ 1.23 $ (.91)
Restructuring charge (net of
minority interest) -- -- (0.05) (.28)
Extraordinary gain -- -- -- .03
Cumulative effect of change in
Accounting principle -- -- -- (.12)
Realized investment gains (losses) 0.15 (.09) 0.21 (.15)
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Net income (loss) $ 0.68 $ (1.59) $ 1.39 $ (1.43)
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Cash flow (used in) from operations
before increases in trading account
securities $ (3,095) $ 27,571 $ 76,334 $ 82,047
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December 31, December 31,
2000 1999
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Balance sheet information:
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Total investments (2) $ 3,111,602 $2,975,929
Total assets 5,022,070 4,784,791
Reserves for losses and loss expenses 2,533,917 2,361,238
Long-term debt 370,158 394,792
Capital Trust Securities 198,169 198,126
Common stockholders' equity 680,896 591,778
Common shares outstanding 25,656 25,617
Common stockholders' equity per share (3) 26.54 23.10
(1) Operating income includes after-tax catastrophe losses of $3.6 million, or 13 cents per diluted
share, for the fourth quarter of 2000 compared with $3.5 million, or 14 cents per diluted share, for
the fourth quarter of 1999 and $31.9 million, or $1.23 per diluted share, for 2000 compared with
$39.1 million, or $1.50 per diluted share, for 1999.
(2) Investments include trading account receivable from broker and clearing organizations and trading
securities sold but not yet purchased.
(3) The calculation of common stockholders' equity per share includes after-tax unrealized investment
gains of $19.4 million as of December 31,2000 and unrealized investment losses of $44.5 million as of
December 31, 1999.