W.R. Berkley Corporation

W.R. Berkley Corporation

60.62
EUR
+0.04
(+0.07%)
4.27EPS
14.45P/E
22.97BMarket Cap
Jan 28Next Earn

Q3 FY2010 · Earnings Call TranscriptOctober 26, 2010

Executives

William R Berkley – Chairman and CEO Rob Berkley – President and COO Gene Ballard – SVP and CFO

Analysts

Kevin Walsh – Citi Josh Shanker – Deutsche Bank Vinay Misquith – Credit Suisse Ken Billingsley – BGB Securities Doug McGregor – RBC Capital Markets Greg Locraft – Morgan Stanley Jay Cohen – Bank of America Meyer Shields – Stifel Nicolaus Bob Farnum - Keefe, Bruyette & Woods Larry Greenberg – Langen McAlenney Connie Deboever – The Boston Company

Operator

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William R Berkley

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Rob Berkley

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William R Berkley

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Gene Ballard

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William R Berkley

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions. : So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions.

: So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions. : So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions.

: So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions. : So with that I’m happy to take any questions, and we are all sitting here and we’ll be pleased to answer any of your questions.

Operator

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Kevin Walsh – Citi

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Gene Ballard

Yeah, it’s around $1.2 billion to $1.3 billion each year, in 2011 and ‘12, that would be rolling off and maturing.

William R Berkley

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Kevin Walsh – Citi

And roughly what’s the gap between the portfolio yield and the new money rate today that you’re seeing?

William R Berkley

I would guess that we’re probably talking about 0.5%, maybe 0.75%.

Kevin Walsh – Citi

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Kevin Walsh – Citi

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Rob Berkley

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William R Berkley

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Kevin Walsh – Citi

Okay, thank you very much.

Operator

Our next question comes from the line of Josh Shanker from Deutsche Bank.

Josh Shanker – Deutsche Bank

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William R Berkley

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Josh Shanker – Deutsche Bank

In terms of equilibrium, what would be causing admitted carriers to be behaving more responsibly if they haven’t yet seen losses?

William R Berkley

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Rob Berkley

I think you covered it unless Josh had a further question.

Josh Shanker – Deutsche Bank

The only thing, is there any rule of thumb we can use to think about pricing between business – how it’s priced in the admitted market versus how it’s priced in the ENS market?

Rob Berkley

Well clearly historically the non-admitted market or the ENS market has had more robust rates and perhaps as if not more important, their terms and conditions are such that it translates into perhaps a better all-in effective rate.

Josh Shanker – Deutsche Bank

It’s difficult to quantify.

Rob Berkley

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Josh Shanker – Deutsche Bank

Yep, alright.

William R Berkley

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Josh Shanker – Deutsche Bank

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Operator

Our next question comes from the line of Vinay Misquith from Credit Suisse.

Vinay Misquith – Credit Suisse

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Rob Berkley

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William R Berkley

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Vinay Misquith – Credit Suisse

And then the new business that you’re getting, would it be fair to say some of it is coming from the old companies that are staying with and some of it is coming from the new companies?

Rob Berkley

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William R Berkley

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Vinay Misquith – Credit Suisse

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William R Berkley

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Vinay Misquith – Credit Suisse

Okay, thank you.

Operator

Our next question comes from Ken Billingsley with BGB Securities.

Ken Billingsley – BGB Securities

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William R Berkley

Can you speak a little louder, Ken?

Ken Billingsley – BGB Securities

Yes, can you hear me okay now?

William R Berkley

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Ken Billingsley – BGB Securities

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Gene Ballard

Yeah, $51 million.

Ken Billingsley – BGB Securities

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Gene Ballard

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Ken Billingsley – BGB Securities

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William R Berkley

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Rob Berkley

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William R Berkley

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Ken Billingsley – BGB Securities

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Rob Berkley

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William R Berkley

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Ken Billingsley – BGB Securities

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William R Berkley

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Ken Billingsley – BGB Securities

Great, congratulations on the quarter. William R Berkley – Thank you.

Operator

Our next question comes from Doug McGregor of RBC Capital Markets.

Doug McGregor – RBC Capital Markets

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Rob Berkley

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Doug McGregor – RBC Capital Markets

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Rob Berkley

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William R Berkley

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Doug McGregor – RBC Capital Markets

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William R Berkley

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Doug McGregor – RBC Capital Markets

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Operator

Our next question comes from Greg Locraft with Morgan Stanley.

Greg Locraft – Morgan Stanley

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William R Berkley

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Greg Locraft – Morgan Stanley

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William R Berkley

Well since you’ve already decided what it is you’ve answered your question for yourself, there’s no sense in me responding.

Greg Locraft – Morgan Stanley

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Rob Berkley

Yeah, 11% is not anywhere near a high for that.

Greg Locraft – Morgan Stanley

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William R Berkley

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Greg Locraft – Morgan Stanley

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Operator

Our next question comes from Jay Cohen from Bank of America.

Jay Cohen – Bank of America

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William R Berkley

Yes.

Jay Cohen – Bank of America

Okay.

William R Berkley

And it also says that probably one would think that any takedowns probably are somewhat offset by caution in the current years.

Jay Cohen – Bank of America

I guess you also have the other issue of prices that have been going down, so that would obviously put some upward pressure on that pick, too.

William R Berkley

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Jay Cohen – Bank of America

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William R Berkley

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Jay Cohen – Bank of America

Any exposure to the New Zealand earthquake?

William R Berkley

Nothing of any consequence.

Jay Cohen – Bank of America

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Operator

Our next question comes from Meyer Shields with Stifel Nicolaus.

Meyer Shields – Stifel Nicolaus

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William R Berkley

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Meyer Shields – Stifel Nicolaus

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William R Berkley

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Meyer Shields – Stifel Nicolaus

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Operator

Our next question comes from Bob Farnum at Keefe, Bruyette & Woods. Bob Farnum – Keefe, Bruyette & Woods: : : :

William R Berkley

Yes, sir. Bob Farnum – Keefe, Bruyette & Woods: :

William R Berkley

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William R Berkley

I won’t say we’ll be a very different company but it’s certainly an issue that I take seriously and we will have to give consideration to that, because yes – I believe ultimately the cost of capital is a long-term driver of companies’ abilities to survive. Bob Farnum – Keefe, Bruyette & Woods: : :

William R Berkley

: : : Bob Farnum – Keefe, Bruyette & Woods: So not much different than your current, your domestic book.

William R Berkley

: Bob Farnum – Keefe, Bruyette & Woods: :

Operator

Our next question comes from Larry Greenberg with Langen McAlenney.

Larry Greenberg – Langen McAlenney

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William R Berkley

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Larry Greenberg – Langen McAlenney

Interesting, thank you.

Operator

Our next question comes from Connie Deboever at The Boston Company.

Connie Deboever – The Boston Company

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William R Berkley

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Connie Deboever – The Boston Company

Understood, thank you.

Operator

And sir, I’m showing no further questions in the queue.

William R Berkley

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Operator

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