The CEO spoke during the insurer’s Q4 and full year 2022 investor call.
“From my perspective, based on what I see, and I believe my colleagues’ perspective is that comp is likely going to continue to bump along the bottom throughout 2023 and we can look forward to 2024 and beyond hopefully for some considerable firming, which again is something to look-forward to,” he said.
“But in the meantime, [it] clearly requires thought and discipline, and quite frankly, from our perspective, it’s a little bit unnerving that some rating bureaus seem to not be appropriately taking into account or adjusting for the frequency benefit that occurred during COVID.
“Additionally, we think one needs to be very thoughtful about severity trend as well, and what that could mean in the future, especially on the medical front.”
The business saw workers’ comp net written premiums increase year-on-year, at $1.22 billion for 2022 versus $1.15 billion in 2021. Growth on paper was “really driven by payroll”, according to the CEO.
“If you look at the number of accounts, that product line has really shrunk for us because of my colleagues’ discipline,” Berkley said.
“I mean if you really want to get granular about workers’ compensation, the fact of the matter is the people that are doing the irresponsible things are the same people that did the irresponsible things the last time we were in a trough,” he told analysts and investors.
“Sometimes they’re in the same place, sometimes they’re in a new place, but it’s the same people that – I don’t know if they don’t understand or they don’t care – but they’re creating mayhem in the market.
“We’ve kind of seen some version of the movie before, and we’ll just wait it out.”
WR Berkley results 2022 – full year and Q4
The insurer reported net premiums written of $10 billion for the full year 2022, up from $8.86 billion in 2021.
Net income for 2022 was a “record” $1.4 billion, an increase on $1 billion the prior year. The insurer also saw a record year for pre-tax underwriting income, at $1 billion, it said in a Press release.
WR Berkley’s most recent Q4 net income was $383 million, up from Q4 2021’s $294 million. Pre-tax underwriting income for the quarter was $291.9 million.
In the call with analysts, Berkley reflected on a “splintered” industry.
“What I mean by that is, once upon a time, most P&C product lines marched throughout the cycle, somewhat in lockstep, and what we are seeing more and more is major product lines still operating and behaving in a cyclical manner, but they are [at] very different points in the cycle,” he said.
“And we’re just seeing that in a more and more pronounced way – and when people talk about where is the marketplace, I don’t think that there is one answer anymore.”
#Berkley #CEO #decries #mayhem #workers #comp