UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
 ___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 3, 2021
 ___________________________________
W. R. BERKLEY CORPORATION
(Exact name of registrant as specified in its charter)

 ___________________________________
 
     
Delaware
001-15202
22-1867895
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
   
475 Steamboat Road, Greenwich, CT
06830
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (203) 629-3000
Not Applicable
(Former name or former address, if changed since last report)

___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange
on Which Registered
Common Stock, par value $.20 per share
 
WRB
 
New York Stock Exchange
5.900% Subordinated Debentures due 2056
 
WRB-PC
 
New York Stock Exchange
5.75% Subordinated Debentures due 2056
 
WRB-PD
 
New York Stock Exchange
5.70% Subordinated Debentures due 2058
 
WRB-PE
 
New York Stock Exchange
5.10% Subordinated Debentures due 2059
 
WRB-PF
 
New York Stock Exchange
4.25% Subordinated Debentures due 2060
 
WRB-PG
 
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.  ☐
Item 8.01 Other Events.
Attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference is certain unaudited financial information relating to the results of operations and financial condition as of, and for the quarter and year ended, December 31, 2020 of W. R. Berkley Corporation (the “Company”). This information was previously released by the Company and furnished under Item 2.02, Results of Operations and Financial Condition on Form 8-K on January 26, 2021.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Unaudited financial information relating to the Company.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
W. R. BERKLEY CORPORATION
 
     
     
 
By:
/s/ Richard M. Baio                    
 
   
Name:  Richard M. Baio
 
   
Title:  Executive Vice President –
           Chief Financial Officer and Treasurer
 
       
     

Date:  February 3, 2021


Exhibit 99.1
Unaudited financial information relating to the Company

Consolidated Financial Summary
(Amounts in thousands, except per share data)

   
Fourth Quarter
 
Twelve Months
   
2020
 
2019
 
2020
 
2019
Revenues:
               
Net premiums written
 
$
1,797,457
   
$
1,660,528
   
$
7,262,437
   
$
6,863,499
 
Change in unearned premiums
 
16,133
   
56,253
   
(331,594)
   
(230,211)
 
Net premiums earned
 
1,813,590
   
1,716,781
   
6,930,843
   
6,633,288
 
Net investment income
 
180,977
   
137,334
   
583,821
   
645,614
 
Net investment gains (losses):
               
Net realized and unrealized gains (losses) on investments
 
162,918
   
(22,988)
   
73,514
   
120,703
 
                                                     
Change in allowance for credit losses on investments (1)
 
393
   
-
   
29,486
   
-
 
Net investment gains (losses)
 
163,311
   
(22,988)
   
103,000
   
120,703
 
Revenues from non-insurance businesses
 
132,923
   
123,537
   
389,888
   
406,541
 
Insurance service fees
 
21,521
   
21,240
   
88,777
   
92,680
 
Other income
 
149
   
170
   
2,596
   
3,370
 
Total revenues
 
2,312,471
   
1,976,074
   
8,098,925
   
7,902,196
 
Expenses:
               
Losses and loss expenses
 
1,111,695
   
1,072,166
   
4,468,706
   
4,131,116
 
Other operating costs and expenses
 
637,250
   
601,121
   
2,390,392
   
2,362,082
 
Expenses from non-insurance businesses
 
128,457
   
122,527
   
384,488
   
402,669
 
Interest expense
 
35,663
   
33,496
   
150,537
   
153,409
 
Total expenses
 
1,913,065
   
1,829,310
   
7,394,123
   
7,049,276
 
Income before income taxes
 
399,406
   
146,764
   
704,802
   
852,920
 
Income tax expense
 
(86,917)
   
(26,970)
   
(171,817)
   
(168,935)
 
Net income before noncontrolling interests
 
312,489
   
119,794
   
532,985
   
683,985
 
Noncontrolling interests
 
(339)
   
(488)
   
(2,315)
   
(2,041)
 
Net income to common stockholders
 
$
312,150
   
$
119,306
   
$
530,670
   
$
681,944
 
                 
Net income per share:
               
Basic
 
$
1.68
   
$
0.62
   
$
2.84
   
$
3.58
 
Diluted
 
$
1.67
   
$
0.62
   
$
2.81
   
$
3.52
 
                 
Average shares outstanding (2):
               
Basic
 
185,693
   
191,106
 
186,924
   
190,722
Diluted
 
187,180
   
193,280
 
188,763
   
193,521


(1) The inclusion of the allowance for credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13.
(2) Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.

Business Segment Operating Results
(Amounts in thousands, except ratios) (1)

   
Fourth Quarter
 
Twelve Months
   
2020
 
2019
 
2020
 
2019
Insurance:
               
Gross premiums written
 
$
1,996,169
 
$
1,832,711
 
$
7,837,496
 
$
7,398,573
Net premiums written
 
1,592,311
 
1,484,932
 
6,347,101
 
6,086,009
Premiums earned
 
1,586,578
 
1,523,748
 
6,067,669
 
5,919,819
Pre-tax income
 
236,548
 
202,085
 
668,012
 
814,862
Loss ratio
 
63.4%
 
62.6%
 
64.9%
 
62.4%
Expense ratio
 
29.4%
 
30.4%
 
30.3%
 
31.1%
GAAP combined ratio
 
92.8%
 
93.0%
 
95.2%
 
93.5%
                 
Reinsurance & Monoline Excess:
               
Gross premiums written
 
$
225,315
 
$
200,367
 
$
1,010,151
 
$
863,646
Net premiums written
 
205,146
 
175,596
 
915,336
 
777,490
Premiums earned
 
227,012
 
193,033
 
863,174
 
713,469
Pre-tax income
 
94,975
 
44,837
 
205,587
 
189,188
Loss ratio
 
46.7%
 
61.1%
 
61.3%
 
61.5%
Expense ratio
 
31.1%
 
34.4%
 
31.8%
 
35.0%
GAAP combined ratio
 
77.8%
 
95.5%
 
93.1%
 
96.5%
                 
Corporate and Eliminations:
               
Net investment gains (losses)
 
$
163,311
 
$
(22,988)
 
$
103,000
 
$
120,703
                                                     
Interest expense
 
(35,663)
 
(33,496)
 
(150,537)
 
(153,409)
Other revenues and expenses
 
(59,765)
 
(43,674)
 
(121,260)
 
(118,424)
Pre-tax gain (loss)
 
67,883
 
(100,158)
 
(168,797)
 
(151,130)
                 
Consolidated:
               
Gross premiums written
 
$
2,221,484
 
$
2,033,078
 
$
8,847,647
 
$
8,262,219
Net premiums written
 
1,797,457
 
1,660,528
 
7,262,437
 
6,863,499
Premiums earned
 
1,813,590
 
1,716,781
 
6,930,843
 
6,633,288
Pre-tax income
 
399,406
 
146,764
 
704,802
 
852,920
Loss ratio
 
61.3%
 
62.4%
 
64.5%
 
62.3%
Expense ratio
 
29.6%
 
30.9%
 
30.4%
 
31.5%
GAAP combined ratio
 
90.9%
 
93.3%
 
94.9%
 
93.8%
(1) Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.

Supplemental Information
(Amounts in thousands)

   
Fourth Quarter
 
Twelve Months
   
2020
 
2019
 
2020
 
2019
Net premiums written:
               
Other liability
 
$
594,546
   
$
537,674
   
$
2,342,884
   
$
2,145,287
 
Short-tail lines (1)
 
325,809
   
319,423
   
1,300,750
   
1,254,180
 
Workers' compensation
 
241,935
   
282,840
   
1,099,886
   
1,280,573
 
Commercial automobile
 
227,190
   
188,459
   
876,031
   
796,993
 
Professional liability
 
202,831
   
156,536
   
727,550
   
608,976
 
Total Insurance
 
1,592,311
   
1,484,932
   
6,347,101
   
6,086,009
 
Casualty reinsurance
 
141,481
   
116,698
   
560,717
   
460,239
 
Property reinsurance
 
41,174
   
37,673
   
178,023
   
154,455
 
Monoline excess
 
22,491
   
21,225
   
176,596
   
162,796
 
Total Reinsurance & Monoline Excess
 
205,146
   
175,596
   
915,336
   
777,490
 
Total
 
$
1,797,457
   
$
1,660,528
   
$
7,262,437
   
$
6,863,499
 
                 
Losses from catastrophes (including COVID-19 related losses):
           
Insurance
 
$
62,380
   
$
14,744
   
$
307,037
   
$
68,187
 
Reinsurance & Monoline Excess
 
(19,934)
   
5,736
   

32,799
   
21,914
 
Total
 
$
42,446
   
$
20,480
   
$
 339,836    
$
90,101
 
                 
Net investment income:
               
Core portfolio (2)
 
$
102,039
   
$
137,022
   
$
451,637
   
$
541,834
 
Investment funds
 
52,992
   
(8,090)
   
54,253
   
69,194
 
Arbitrage trading account
 
25,946
   
8,402
   
77,931
   
34,586
 
Total
 
$
180,977
   
$
137,334
   
$
583,821
   
$
645,614
 
                 
Net realized and unrealized gains (losses) on investments:
               
Net realized gains on investments
 
$
126,927
   
$
7,442
   
$
99,382
   
$
35,411
 
Change in unrealized gains (losses) on equity securities
 
35,991
   
(30,430)
   
(25,868)
   
85,292
 
Total
 
$
162,918
   
$
(22,988)
   
$
73,514
   
$
120,703
 
                 
Other operating costs and expenses:
               
Policy acquisition and insurance operating expenses
 
$
536,507
   
$
529,951
   
$
2,111,013
   
$
2,090,301
 
Insurance service expenses
 
21,694
   
23,804
   
85,724
   
101,317
 
Net foreign currency losses (gains)
 
24,207
   
(1,631)
   
363
   
(30,715)
 
Debt extinguishment costs
 
8,440
   
-
   
8,440
   
-
 
Other costs and expenses
 
46,402
   
48,997
   
184,852
   
201,179
 
Total
 
$
637,250
   
$
601,121
   
$
2,390,392
   
$
2,362,082
 
                 
Cash flow from operations
 
$
479,740
   
$
348,749
   
$
1,616,686
   
$
1,143,793
 
                 
Reconciliation of net income to operating income:
               
Net income
 
$
312,150
   
$
119,306
   
$
530,670
   
$
681,944
 
Pre-tax investment (gains) losses, net of related expenses
 
(162,337)
   
23,066
   
(102,027)
   
(117,730)
 
Income tax expense (benefit)
 
23,230
   
(4,842)
   
9,610
   
24,843
 
Operating income after-tax (3)
 
$
173,043
   
$
137,530
   
$
438,253
   
$
589,057
 

(1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines.
(2) Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.
(3) Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.



Selected Balance Sheet Information
(Amounts in thousands, except per share data)

 
December 31,
2020
 
December 31,
2019
       
Net invested assets (1)
$
21,370,503
   
$
19,856,776
 
Total assets
28,606,913
   
26,662,144
 
Reserves for losses and loss expenses
13,784,430
   
12,583,249
 
Senior notes and other debt
1,623,025
   
1,427,575
 
Subordinated debentures
1,102,309
   
1,198,704
 
Common stockholders’ equity (2)
6,310,802
   
6,074,939
 
Common stock outstanding (3)
177,825
   
183,412
 
Book value per share (4)
35.49
   
33.12
 
Tangible book value per share (4)
34.22
   
31.87
 

(1)Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities.
(2)As of December 31, 2020, reflected in common stockholders' equity are after-tax unrealized investment gains of $290 million and unrealized currency translation losses of $352 million. As of December 31, 2019, after-tax unrealized investment gains were $125 million and unrealized currency translation losses were $382 million.
(3)During the three months ended December 31, 2020, the Company repurchased 542,434 shares of its common stock for $34 million. During the twelve months ended December 31, 2020, the Company repurchased 6,363,301 shares of its common stock for $346 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.
(4)Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding.