EXHIBIT 99.1
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W. R. Berkley Corporation NEWS
165 Mason Street, P.O. Box 2518 RELEASE
Greenwich, Connecticut 06836-2518
(203) 629-3000
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FOR IMMEDIATE RELEASE CONTACT: Eugene G. Ballard
Senior Vice President-
Chief Financial Officer
and Treasurer
203-629-3000
W. R. BERKLEY CORPORATION ANNOUNCES
INCREASE IN REINSURANCE RESERVES
Greenwich, CT, February 5, 2002 -- W. R. Berkley Corporation (NYSE: BER)
announced today that it will increase loss reserves for its discontinued
alternative markets reinsurance business by $34 million, after tax, in the
fourth quarter of 2001. The company also stated that it will strengthen loss
reserves for its treaty reinsurance business by $21 million, after tax,
primarily for reinsurance contracts that were not renewed and are no longer in
effect. This is in addition to a previously announced fourth quarter charge of
$12 million, after tax, for potential losses from the Enron bankruptcy.
The company expects to report a net loss of approximately $2.05 per share
for the fourth quarter of 2001. Realized losses in the fourth quarter will
include a charge of approximately $7 million, after tax and minority interest,
for a reduction in the carrying value of investments held by a subsidiary in
Argentina.
The company expects to report an operating loss (excluding discontinued
businesses, realized investment losses and restructuring charges) of
approximately 50 cents per share in the fourth quarter of 2001.
The company plans to report its full quarterly results after the close of
business on Thursday, February 14, 2002.
William R. Berkley, chairman and chief executive officer, said: "It is
important to recognize the reality of the unprofitable treaty reinsurance
marketplace over the past several years. We experienced an unexpected level of
reinsurance claim activity in the fourth quarter and have adjusted our loss
reserves accordingly."
Mr. Berkley continued, "The company's on-going premium levels and
underwriting profits are expected to result in earnings of $4.00 to $4.50 per
share in 2002. Current pricing and volume levels for new and renewal business
have reinforced our optimism for continued improvement over the next several
years."
Founded in 1967, W. R. Berkley Corporation is an insurance holding company
which operates in five segments of the property casualty insurance business:
specialty insurance, alternative markets, reinsurance, regional property
casualty insurance and international.
This is a "Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995. Any forward-looking statements contained herein, including
statements related to our outlook for the industry and for our performance for
the year 2001 and beyond, are based upon the Company's 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 or
any other person 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 long-tail and potentially volatile nature of the reinsurance
business, product demand and pricing, claims development and the process of
estimating reserves, timing and development of losses related to the Enron
bankruptcy, the uncertain nature of damage theories and loss amounts and the
development of additional facts related to the attacks of September 11, 2001,
the increased level of our retention, natural and man-made catastrophic losses,
including as a result of terrorist activities, the impact of competition, the
availability of reinsurance, the ability of our reinsurers to pay reinsurance
recoverables owed to us, investment results, exchange rate and political risks,
legislative and regulatory developments, changes in the ratings assigned to us
by ratings agencies, the effects of the refocusing of our business, including
our withdrawal from the personal lines business, uncertainty as to reinsurance
coverage for terrorist acts, the availability of dividends from our insurance
company subsidiaries, our successful integration of acquired companies or
investment in new insurance ventures, our ability to attract and retain
qualified employees, and other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission. These risks could cause
actual results of the industry or our 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.
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