W. R. Berkley Corporation (NYSE: WRB) delivered record results for the fourth quarter and full year 2025, driven by strong underwriting profitability and higher net investment income.
Strong Quarterly and Annual Performance
The company reported a fourth-quarter return on equity of 21.4% and an annual return on equity of 21.2%. Operating income for the quarter increased 9.5% year over year to $449.6 million, or $1.13 per diluted share. Pre-tax underwriting income reached a quarterly record of $338 million, up 14.9%. Net investment income rose 6.5% to $338.2 million.
For the full year, operating income climbed to $1.73 billion, or $4.33 per diluted share, while net income increased modestly to $1.78 billion, or $4.45 per diluted share. Pre-tax underwriting income set an annual record at $1.2 billion, and net investment income reached a record $1.43 billion, up 7.2%.
Premium metrics showed continued expansion. Fourth-quarter gross premiums written rose to $3.61 billion from $3.50 billion a year earlier, with net premiums written increasing to $3.00 billion from $2.94 billion. The combined ratio improved to 89.4% from 90.2%.
Full-year net premiums written hit a record $12.71 billion, up from $11.97 billion in 2024, with net premiums earned advancing to $12.45 billion from $11.55 billion. The annual combined ratio stood at 90.7%.
Capital Management and Book Value Growth
Book value per share grew 26.7% for the year before dividends and repurchases, closing at $25.72. The company returned $970.5 million to shareholders in 2025, including $567.6 million in special dividends, $270.2 million via share repurchases of over 4 million shares, and $132.7 million in regular dividends. Fourth-quarter capital returns totaled $608.3 million.
Outlook and Strategic Focus
Management highlighted sustained underwriting discipline, rate adequacy, and excellent margins, with select opportunities expected to continue into 2026. Investment income is positioned for further growth, supported by new-money rates above book yields and robust operating cash flows. Capital management remains a priority, with disciplined deployment through dividends and repurchases.
Sector Context
The property-casualty insurance industry in 2025 saw solid underwriting results for many carriers, with combined ratios in the low-to-mid 90s in select segments, benefiting from moderated catastrophe activity and favorable reserve development in prior periods. Outlook for 2026 anticipates some moderation, with industry combined ratios potentially rising to 96-99%, driven by normalized catastrophe experience, slower premium growth around 4-5%, and persistent social inflation pressures in liability lines. Investment income continues to gain from elevated yields, though rate increases have moderated in adequately priced areas.
W. R. Berkley, focused on specialty commercial lines and a decentralized operating model, has maintained profitability metrics above broader industry averages, reflecting the advantages of its targeted underwriting strategy in a competitive yet stabilizing market.
Reasons to pass on WRB
- Stagnant Net Income: Modest rise to $1.78B despite operating records signals hidden pressures.
- 2026 Sector Risks: Combined ratios to 96-99% from catastrophes, 4-5% premium growth, social inflation.
- Rate Momentum Fading: Competitive stabilization caps underwriting gains.
- Investment Yield Ceiling: +7% growth at risk from normalizing rates.
- Premium Valuation: 27% book value jump plus $971M returns embeds high expectations.
- Niche Exposure: Decentralized specialty lines amplify liability inflation risks.
