BERKLEY W R CORP

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 and Reinsurance & Monoline Excess. The 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. The Reinsurance & Monoline Excess businesses provide facultative and treaty reinsurance in the United States, the Asia Pacific region, Australia, Continental Europe, South Africa and the United Kingdom, as well as operations that solely retain risk on an excess basis and certain program management business. The Company's strategy of decentralized operations allows each of its 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 compliance support. Of the Company's 60 businesses, 53 have been organized and developed internally and seven have been added through acquisition.

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. The Company competes directly with a large number of these companies. Competitors within the reinsurance market include Swiss Re, Munich Re, Berkshire Hathaway and Hannover Re. The Company's strategy in this highly fragmented industry is to seek specialized areas or geographic regions where its businesses can gain a competitive advantage by responding quickly to changing market conditions. Thirty-three of the Company's insurance company subsidiaries are rated by A.M. Best and have financial strength ratings of A+ (Superior) (the second highest rating out of 15 possible ratings). Twenty-three insurance company subsidiaries rated by Standard & Poor's have financial strength ratings of AA- (the fourth highest rating out of twenty-seven possible ratings). 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). Twenty-five insurance company subsidiaries rated by Fitch Ratings have insurer financial strength ratings of AA- (the fourth highest rating out of twenty-seven possible ratings).

The Company generates revenue primarily through its insurance operations and its investments. Insurance premiums are recognized as written at the inception of the policy and are primarily earned on a pro rata basis over the policy term. Reinsurance premiums are estimated based upon information received from ceding companies. The Company also earns revenues from non-insurance businesses engaged in the distribution of promotional merchandise, world-wide textile solutions, and aviation-related businesses that provide services to aviation markets, including the distribution, manufacturing, repair and overhaul of aircraft parts and components, the sale of new and used aircraft, and avionics, fuel, maintenance, storage and charter services. Insurance service fees are earned from an insurance distribution business, a third-party administrator, and as a servicing carrier of workers' compensation assigned risk plans for certain states. The Company's primary customer segments include commercial businesses, and its decentralized structure allows it to pursue specialty business niches and be closer to its customers.

The Insurance segment underwrite predominantly commercial and specialty personal lines insurance business primarily throughout the United States, with many units offering coverage globally or specializing in specific international markets. The Insurance businesses focus on general areas including Excess & Surplus Lines, Industry Specialty, Product Specialty, and Regional. Lines of business underwritten include other liability, short-tail lines, auto, professional liability, and workers' compensation. For the year ended December 31, 2025, Insurance gross premiums written were $13,465,496 thousand ¹, net premiums written were $11,183,713 thousand ², and net premiums earned were $10,936,028 thousand ³. The Insurance segment reported a loss ratio of 63.5% ⁴, an expense ratio of 28.2% ⁵, and a GAAP combined ratio of 91.7% ⁶. The Insurance segment's revenue was $12,095,601 thousand ⁷ and income before income taxes was $2,027,244 thousand ⁸ for 2025. The Insurance segment has extensive worldwide capabilities, with branches or offices in 52 cities outside the United States.

The Reinsurance & Monoline Excess segment provides 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 as well as certain program management businesses. The monoline excess operations solely retain risk on an excess basis. Lines of business include casualty, property, and monoline excess. For the year ended December 31, 2025, Reinsurance & Monoline Excess gross premiums written were $1,639,573 thousand ⁹, net premiums written were $1,527,614 thousand ¹⁰, and net premiums earned were $1,510,910 thousand ¹¹. The segment reported a loss ratio of 54.6% ¹², an expense ratio of 29.1% ¹³, and a GAAP combined ratio of 83.7% ¹⁴. The Reinsurance & Monoline Excess segment's revenue was $1,781,761 thousand ¹⁵ and income before income taxes was $517,538 thousand ¹⁶ for 2025.

In 2025, the Board declared ordinary quarterly cash dividends of $0.08 per share in the first quarter and $0.09 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share and $1.00 per share in the second and fourth quarters, respectively, for a total of $700 million in aggregate dividends in 2025 ¹⁷. The Company repurchased 4,069,026 shares of its common stock in 2025 ¹⁸ at an aggregate cost of $270 million ¹⁹. 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 ²⁰. As of December 31, 2025, there were no borrowings outstanding under the facility ²¹. The Company's repurchase authorization was increased to 25,000,000 shares on January 8, 2026 ²².

Total revenues for the year ended December 31, 2025 were $14,707,856 thousand ²³, compared to $13,638,752 thousand ²⁴ in 2024. Net income to common stockholders was $1,779,403 thousand ²⁵ in 2025, compared to $1,756,115 thousand ²⁶ in 2024. Net income per diluted share was $4.45 ²⁷ in 2025, compared to $4.36 ²⁸ in 2024. Net investment income increased 7% to $1,429,067 thousand ²⁹ in 2025 from $1,333,161 thousand ³⁰ in 2024. The consolidated loss ratio was 62.4% ³¹ in 2025 and 61.8% ³² in 2024. The consolidated GAAP combined ratio was 90.7% ³³ in 2025 and 90.3% ³⁴ in 2024. Cash flow provided from operating activities decreased to $3,582,616 thousand ³⁵ in 2025 from $3,678,368 thousand ³⁶ in 2024.

The Company's strategy includes forming 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 Company maintains an interest in evaluating the startup of possible new ventures and the acquisition of complementary businesses on an ongoing basis. The Company's businesses develop new coverages or enter lines of business to meet the needs of insureds. The Company's expanding international operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, the Asia-Pacific region, South Africa and Australia expose it to increased investment, political, legal/regulatory, and economic risks, including foreign currency and credit risk.

The Company's investment in and use of artificial intelligence technologies or their use by third-parties on which it relies could expose it to technological, security, legal, and other risks. As the Company makes significant investments in AI and related technology and increasingly relies on the use of AI by third parties, it may not achieve the expected operational and other benefits, or such benefits may take longer than anticipated, and its competitors may adopt AI technologies more effectively or efficiently than it does, which may adversely affect its market position and results of operations.The Company's information technology and telecommunications systems interface with and depend on third-party systems and infrastructure beyond its control. The Company has a documented information security program (the 'Program'), which is integrated into its overall risk management processes, to identify, assess, monitor and manage potential cybersecurity threats and incidents. The Program is modeled on the global standard for information security management systems, 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. As of January 15, 2026, the Company employed 8,804 individuals ³⁷, of which 8,678 were employed by subsidiaries and the remaining were employed at the parent company.

The filing does not contain specific R&D spending levels, capital expenditure plans, or share repurchase authorization amounts for the upcoming period beyond the increase to 25,000,000 shares on January 8, 2026 ³⁸. The Company declared ordinary quarterly cash dividends of $0.08 per share in the first quarter and $0.09 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share and $1.00 per share in the second and fourth quarters, respectively, for a total of $700 million in aggregate dividends in 2025 ³⁹.

The Company faces significant competitive pressures in its businesses, which can pressure premium rates in certain areas and could harm its ability to maintain or increase its profitability and premium volume in some parts of its business. Recently, insurance rate increases have generally moderated for many lines of business, particularly for property lines, which in some instances are experiencing rate decreases. Rates for workers' compensation and certain professional liability lines of business continue to decrease. Loss costs continue to increase, principally due to continued social inflation. Current price levels for certain lines of business may remain below the prices required for the Company to achieve its long-term return objectives. The Company expects to continue to face strong competition in its business.

The Company's results may fluctuate as a result of many factors, including cyclical changes in the insurance and reinsurance industry. The results of companies in the property casualty insurance industry historically have been subject to significant fluctuations and uncertainties in supply and demand and pricing, causing cyclical changes in the insurance and reinsurance industry. The demand for insurance is influenced primarily by general economic conditions, including the impact of tariffs, while the supply of insurance is often directly related to available capacity based on the perceived profitability of the 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 and other catastrophic events, 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.

The Company's actual claims losses may exceed its reserves for claims, which were approximately $22.2 billion as of December 31, 2025 ⁴⁰, and may require the Company to establish additional reserves. The Company discounts its reserves for excess and assumed workers' compensation claims, and changes in the loss and loss expense payout pattern could reduce the discount and decrease pre-tax income. The Company faces losses from natural and man-made catastrophes; current accident year catastrophe losses net of reinsurance recoveries were $336 million in 2025 ⁴¹, $298 million in 2024 ⁴² and $195 million in 2023 ⁴³. The Company is subject to credit risk relating to its reinsurers; as of December 31, 2025, the amount due from reinsurers was approximately $3,558 million ⁴⁴. The Company's investment portfolio consists substantially of fixed maturity securities; as of December 31, 2025, the investment in fixed maturity securities was approximately $25.0 billion ⁴⁵, or 75.3% ⁴⁶ of the total investment portfolio including cash and cash equivalents. The fair value of these assets fluctuates depending on general economic and market conditions, and a significant increase in interest rates would negatively impact the fair value of the Company's fixed maturity securities.

Management's message emphasizes that the Company's business approach is focused on meeting the needs of its customers, maintaining a high quality balance sheet, and allocating capital to its best opportunities. The Company's strategy of decentralized operations allows each of its 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 compliance support. Management highlights that new businesses are started when opportunities are identified and when the right talent and expertise are found to lead a business. The Company's primary sources of revenues and earnings are its insurance operations and its investments. An important part of the Company's strategy is to form new businesses to capitalize on various opportunities. The Company believes that its people are its greatest asset and that its corporate culture is the most important intangible driver of long-term value creation for the Company and the highest priority for pursuing long-term risk-adjusted returns and growth in stockholder value.