Investopedia: Berkley Looking Unloved

Insurance companies have largely missed out on a lot of the recent stock market rally. True, reinsurance companies like Arch Capital (Nasdaq:ACGL) and RenRe (NYSE:RNR) have done well as these markets have started to harden and company-specific risk and capital models have shown their quality. But in the P&C and specialty insurance markets, times have been tougher and that has kept a lid on W.R. Berkley's (NYSE:WRB) stock.

There is nothing in the numbers from Berkley's first quarter to promise an immediate turnaround, but patient investors should give this name a long look. This is not Berkshire Hathaway (NYSE:BRK.A), but insurance companies that consistently earn better than their cost of capital are valuable wealth-building enterprises, and Berkley has a very good track record on that score. (For more, see Intro To Insurance: Property And Casulty Insurance.)


First Quarter Results a Mixed Bag
Top line results should offer some encouragement. Net premiums grew about 10% this quarter, and the company reported that pricing improved by about 1%, while renewal retention rose to about 80%. There was a fair bit of turbulence on the individual unit level, but four of the five units showed net premium growth. The alternative markets unit was the lone decliner (down almost 5%), while specialty grew almost 19% and international jumped almost 38%.

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