<PAGE> 1
W. R. BERKLEY CORPORATION NEWS
165 MASON STREET, P.O. BOX 2518 RELEASE
GREENWICH, CONNECTICUT 06836-2518
(203) 629-3000
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 THIRD QUARTER AND NINE MONTHS OF 2000
GREENWICH, CT, OCTOBER 30, 2000 -- W.R. BERKLEY CORPORATION (NASDAQ:
BKLY) today reported that revenues for the third quarter and nine months ended
September 30, 2000 increased four percent to $446 million and $1,301 million,
respectively, from $428 million and $1,252 million for the corresponding periods
in 1999.
Operating income for the third quarter of 2000 was $6.4 million, or 25
cents per diluted share, compared with $0.9 million, or 3 cents per diluted
share, for the third quarter of 1999. For the first nine months of 2000,
operating income was $18.1 million, or 70 cents per diluted share, compared with
$15.1 million, or 57 cents per diluted share, for the first nine months of 1999.
<PAGE> 2
W. R. Berkley Corporation 2
Net income for the third quarter was $7.1 million, or 27 cents per
diluted share, compared with a net loss of $0.6 million, or 2 cents per diluted
share, for the 1999 period. Net income for the first nine months was $18.1
million, or 70 cents per diluted share, compared with $3.7 million, or 14 cents
per diluted share, for the first nine months of last year. Net income includes
realized investment gains, restructuring charges, extraordinary gains and
changes in accounting principles, which are not part of operating income.
Commenting on the Company's results, William R. Berkley, Chairman and
President, said: "In spite of a significant increase in catastrophe losses, our
overall operating results continue to improve. We saw a marked improvement in
the combined ratio of our regional business, as well as a modest overall
increase in premium volume due to price increases. Currently, we are still able
to increase prices for most lines in excess of 10 percent. For some business we
are in our second round of double-digit price increases. We anticipate continued
improvement in the fourth quarter operating results."
W.R. Berkley Corporation is a holding company which, through its
subsidiaries, operates in all 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.
<PAGE> 3
W. R. Berkley Corporation 3
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 2000, 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 impact of competition, product demand and pricing, claims
development, catastrophe and storm losses, investment results, legislative and
regulatory developments 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 2000 fiscal year 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)
<PAGE> 4
W. R. Berkley Corporation 4
<TABLE>
<CAPTION>
Unaudited
---------
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
(Amounts in thousands except per share data)
<S> <C> <C> <C> <C>
Revenues:
Net premiums written $ 376,084 $ 359,881 $ 1,111,926 $ 1,085,652
Change in unearned premiums (5,252) 3,657 (20,243) (33,760)
----------- ----------- ----------- -----------
Premiums earned 370,832 363,538 1,091,683 1,051,892
Net investment income 56,513 48,090 153,025 145,265
Management fees and commissions 15,818 19,099 51,535 55,347
Realized gains (losses)on investments 1,092 (3,417) 1,885 (2,404)
Other income 1,702 513 3,086 1,686
----------- ----------- ----------- -----------
Total revenues 445,957 427,823 1,301,214 1,251,786
Operating costs and expenses:
Losses and loss expenses 276,344 272,819 803,596 764,916
Other operating costs and expenses 150,829 151,792 444,406 448,150
Interest expense 11,670 12,246 35,954 38,068
Restructuring charge -- -- 1,850 11,505
----------- ----------- ----------- -----------
Income (loss) before income taxes
And minority interest 7,114 (9,034) 15,408 (10,853)
Federal income tax benefit 869 8,145 4,085 17,768
----------- ----------- ----------- -----------
Income (loss) before minority
Interest 7,983 (889) 19,493 6,915
Minority interest (891) (467) (1,419) (175)
----------- ----------- ----------- -----------
Net income (loss) before preferred
Dividends 7,092 (1,356) 18,074 6,740
Preferred dividends -- -- -- (497)
----------- ----------- ----------- -----------
Net income (loss) attributable to
Common Stockholders before change
In accounting and extraordinary
Loss 7,092 (1,356) 18,074 6,243
Cumulative effect of change in
Accounting principle (net of taxes) -- -- -- (3,250)
Extraordinary gain on early
Extinquishment of long-term debt
(net of taxes) -- 735 -- 735
----------- ----------- ----------- -----------
Net income (loss) attributable to
Common stockholders 7,092 (621) 18,074 $ 3,728
=========== =========== =========== ===========
Earnings (loss) per share:
Basic $ .28 $ (.02) $ .71 $ .14
=========== =========== =========== ===========
Diluted $ .27 $ (.02) $ .70 $ .14
=========== =========== =========== ===========
Average shares outstanding:
Basic 25,476 25,723 25,571 25,999
=========== =========== =========== ===========
Diluted 25,807 25,822 25,769 26,133
=========== =========== =========== ===========
</TABLE>
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W. R. Berkley Corporation 5
ADDENDUM #1 TO PRESS RELEASE DATED October 30, 2000
Operating Statistics by Insurance Industry Segment
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Unaudited
---------
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------- -------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Regional Insurance:
Net premiums written $ 158,380 $ 159,893 $ 484,898 $ 492,349
Total revenues 180,387 173,505 535,277 519,980
Pre-tax operating loss (1) (3,105) (17,343) (3,980) (26,552)
Loss ratio 77.7% 81.5% 75.3% 76.4%
Expense ratio 35.0% 35.4% 34.0% 35.9%
Policyholders' dividend ratio .6% .7% .6% .8%
Combined ratio (2) 113.3% 117.6% 109.9% 113.1%
Reinsurance:
Net premiums written $ 66,962 $ 78,079 $ 200,605 $ 231,957
Total revenues 85,671 91,251 252,397 257,220
Pre-tax operating income (1) 6,876 5,822 19,498 15,586
Loss ratio 74.3% 75.4% 72.8% 75.5%
Expense ratio 32.6% 30.4% 33.3% 32.6%
Combined ratio (2) 106.9% 105.8% 106.1% 108.1%
Specialty Insurance :
Net premiums written $ 70,239 $ 63,657 $ 207,930 $ 199,906
Total revenues 80,253 81,320 238,071 234,307
Pre-tax operating income (1) 5,942 12,886 17,691 36,631
Loss ratio 73.5% 64.6% 74.5% 66.9%
Expense ratio 34.8% 34.5% 33.4% 32.2%
Policyholders' dividend ratio .3 .4% .1 .2%
Combined ratio (2) 108.6% 99.5% 108.0% 99.3%
Alternative Markets:
Net premiums written $ 51,705 $ 35,985 $ 135,936 $ 101,076
Total revenues 69,827 56,492 190,428 168,310
Pre-tax operating income (1) 8,989 7,622 23,235 24,193
Loss ratio 71.5% 63.6% 71.8% 65.9%
Expense ratio 36.9% 39.7% 35.6% 35.3%
Combined ratio (2) 108.4% 103.3% 107.4% 101.2%
International (3):
Net premiums written $ 28,798 $ 22,267 $ 82,557 $ 60,364
Total revenues 30,748 24,522 84,319 68,556
Pre-tax operating income (1) 1,499 1,022 3,508 2,253
Loss ratio 64.3% 52.2% 60.2% 52.2%
Expense ratio 38.3% 46.3% 38.8% 48.2%
Combined ratio (2) 102.6% 98.5% 99.0% 100.4%
Combined:
Net premiums written $ 376,084 $ 359,881 $ 1,111,926 $ 1,085,652
Total revenues 446,886 427,090 1,300,492 1,248,373
Pre-tax operating income (1) 20,201 10,009 59,952 52,111
Loss ratio 74.9% 74.0% 73.5% 72.4%
Expense ratio 35.0% 35.0% 34.2% 34.9%
Policyholders' dividend ratio .3% .4% .3% .4%
Combined ratio (2) 110.2% 109.4% 108.0% 107.7%
</TABLE>
(1) Pre-tax operating income (loss) represents earnings before the effects
of realized investment gains, restructuring charges, extraordinary
gains and the effect of changes in accounting principles.
(2) Ratios are based on statutory accounting practices.
(3) International includes life insurance premiums of $24.7 million and
$16.7 million for the nine months ended September 30, 2000 and 1999,
respectively. Life insurance results are not included in the statutory
ratios.
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W. R. Berkley Corporation 6
ADDENDUM #2 TO PRESS RELEASE DATED October 30, 2000
Supplementary Information
(Amounts in thousands except per share data)
<TABLE>
<CAPTION>
Unaudited
---------
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------- ----------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
After-tax earnings amounts:
Operating income (1) $ 6,383 $ 865 $ 18,053 $ 15,100
Restructuring charge (net of
minority interest) -- -- (1,203) (7,294)
Extraordinary gain -- 735 -- 735
Cumulative effect of change in
Accounting principle -- -- -- (3,250)
Realized investment gains (losses) 709 (2,221) 1,224 (1,563)
-------- -------- -------- --------
Net income (loss) $ 7,092 $ (621) $ 18,074 $ 3,728
======== ======== ======== ========
After-tax diluted earnings per share:
Operating income (1) $ .25 $ .03 $ .70 $ .57
Restructuring charge (net of
minority interest) -- -- (.05) (.28)
Extraordinary gain -- .03 -- .03
Cumulative effect of change in
Accounting principle -- -- -- (.12)
Realized investment gains (losses) .02 (.08) .05 (.06)
-------- -------- -------- --------
Net income (loss) $ .27 $ (.02) $ .70 $ .14
======== ======== ======== ========
Cash flow from operations 54,115 21,149 51,450 27,065
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
<S> <C> <C>
Balance sheet information:
Total investments (2) $3,030,270 $2,975,929
Total assets 4,884,904 4,784,791
Reserves for losses and loss expenses 2,462,114 2,361,238
Long-term debt 370,068 394,792
Capital Trust Securities 198,158 198,126
Common stockholders' equity 620,783 591,778
Common shares outstanding 25,414 25,617
Common stockholders' equity per share (3) 24.43 23.10
</TABLE>
(1) Operating income includes after-tax catastrophe losses of $12.8
million, or 50 cents per diluted share, for the 2000 quarter compared
to $8.2 million, or 32 cents per diluted share, for the third quarter
of 1999 and $28.3 million, or $1.10 per diluted share, for the first
nine months of 2000 compared to $31.5 million, or $1.20 per diluted
share, for the first nine months of 1999. After-tax catastrophe losses,
before recoveries under a 1999 aggregate reinsurance cover were $12.3
million or 48 cents per diluted share, for the third quarter of 1999
and $35.6 million or $1.36 per diluted share, for the first nine months
of 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 losses of $18.2 million and $44.5
million as of September 30, 2000 and December 31, 1999, respectively.
