8-K
BERKLEY W R CORP (WRB)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 2022
| Commission File Number | 1-15202 |
|---|
W. R. BERKLEY CORPORATION (Exact name of registrant as specified in its charter)
| Delaware | 22-1867895 | |||||
|---|---|---|---|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
| 475 Steamboat Road | Greenwich | Connecticut | 06830 | |||
| (Address of principal executive offices) | (Zip Code) | (203) | 629-3000 | |||
| --- | --- |
(Registrant’s telephone number, including area code)
| None | |
|---|---|
| Former name, former address and former fiscal year, if changed since last report. |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Title of Each Class | Trading Symbol | Name of Each Exchange<br>on Which Registered |
|---|---|---|
| Common Stock, par value $.20 per share | WRB | New York Stock Exchange |
| 5.700% Subordinated Debentures due 2058 | WRB-PE | New York Stock Exchange |
| 5.100% Subordinated Debentures due 2059 | WRB-PF | New York Stock Exchange |
| 4.250% Subordinated Debentures due 2060 | WRB-PG | New York Stock Exchange |
| 4.125% Subordinated Debentures due 2061 | WRB-PH | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
W. R. Berkley Corporation 2
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
W. R. Berkley Corporation 3
Item 2.02 Results of Operations and Financial Condition.
Reference is made to the press release of W. R. Berkley Corporation (the “Company”) relating to the announcement of the Company’s results of operations for the second quarter of 2022. The press release was issued on July 21, 2022. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The information contained herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
W. R. Berkley Corporation 4
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 Press Release dated July 21, 2022
W. R. Berkley Corporation 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
W. R. BERKLEY CORPORATION
| By: | /s/ Richard M. Baio | |
|---|---|---|
| Name: | Richard M. Baio | |
| Title: | Executive Vice President - | |
| Chief Financial Officer |
Date: July 21, 2022
W. R. Berkley Corporation 6
EXHIBIT INDEX
Exhibit:
99.1 Press Release dated July 21, 2022
Document
| NEWS<br>RELEASE | |
|---|---|
| W. R. Berkley Corporation<br><br>475 Steamboat Road<br><br>Greenwich, Connecticut 06830<br><br>(203) 629-3000 |
FOR IMMEDIATE RELEASE CONTACT: Karen A. Horvath
Vice President - External
Financial Communications
(203) 629-3000
W. R. Berkley Corporation Reports Second Quarter Results
Net Premiums Written Grew 16.9% to a Quarterly Record of $2.6 Billion;
Operating Income Increased 43.0%
Greenwich, CT, July 21, 2022 - W. R. Berkley Corporation (NYSE: WRB) today reported its second quarter 2022 results.
Summary Financial Data
(Amounts in thousands, except per share data)
| Second Quarter | Six Months | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Gross premiums written | $ | 3,052,401 | $ | 2,661,236 | $ | 5,912,237 | $ | 5,145,948 | ||||
| Net premiums written | 2,585,635 | 2,212,181 | 4,998,889 | 4,262,219 | ||||||||
| Net income to common stockholders | 179,322 | 237,238 | 769,960 | 466,763 | ||||||||
| Net income per diluted share (2) | 0.64 | 0.85 | 2.76 | 1.66 | ||||||||
| Operating income (1) | 313,359 | 219,059 | 619,827 | 420,840 | ||||||||
| Operating income per diluted share (2) | 1.12 | 0.78 | 2.22 | 1.50 | ||||||||
| Return on equity (3) | 10.8 | % | 15.0 | % | 23.1 | % | 14.8 | % | ||||
| Operating return on equity (1) (3) | 18.8 | % | 13.9 | % | 18.6 | % | 13.3 | % |
(1)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses) and related expenses.
(2)The 2021 per share amounts were restated for comparative purposes to reflect the 3-for-2 common stock split effected on March 23, 2022.
(3)Return on equity and operating return on equity represent net income and operating income, respectively, expressed on an annualized basis as a percentage of beginning of year common stockholders’ equity.
W. R. Berkley Corporation 2
Second quarter highlights included:
•Record gross and net premiums written grew 14.7% and 16.9% to $3.1 billion and $2.6 billion, respectively.
•Underwriting income increased 32.6% to $268.2 million.
•The current accident year combined ratio before catastrophe losses of 2.5 loss ratio points was 86.2%.
•The reported combined ratio was 88.6%, including catastrophe losses of $57.9 million.
•Net investment income for the core portfolio grew 29.7%.
•Total capital returned to shareholders was $159.2 million, consisting of $132.7 million of special dividends and $26.5 million of regular dividends.
•Operating return on equity of 18.8%.
The Company commented:
The Company reported excellent results for the second quarter of 2022, principally due to strong underwriting income, with an 88.6% combined ratio and an 18.8% annualized operating return on beginning stockholders’ equity. The short duration of our investment portfolio tempered the impact of rising interest rates on the value of the Company’s fixed-maturity securities and consequently its book value.
Net premiums written grew by nearly 17% as market conditions remained favorable for most lines of business. The majority of our businesses expanded, particularly in the E&S and specialty markets. After several years of compounding rate, most of our businesses are achieving or exceeding our target return on equity, and we are placing greater emphasis on exposure growth. In addition, this growth has driven further improvement in our expense ratio.
Core net investment income grew nearly 30% due primarily to higher yields. Our investment funds, which are reported on a one-quarter lag, performed well despite challenging equity markets in the first quarter of 2022. We expect investment income will benefit further as interest rates continue to move higher.
The Company is performing exceptionally well. Our results demonstrate how our strategy and execution translate into consistently superior long-term risk-adjusted returns and value creation. Our talented team is well-prepared and our underwriting and investment portfolios remain well-positioned for the uncertainties and challenges of today’s environment, including inflation. We continue to be optimistic about the remainder of 2022 and beyond.
W. R. Berkley Corporation 3
Webcast Conference Call
The Company will hold its quarterly conference call with analysts and investors to discuss its earnings and other information on July 21, 2022, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/events-and-presentations/default.aspx. Please log on at least ten minutes early to register and download and install any necessary software. A replay of the webcast will be available on the Company's website approximately two hours after the end of the conference call. Additional financial information can be found on the Company's website at https://ir.berkley.com/investor-relations/financial-information/quarterly-results/default.aspx.
About W. R. Berkley Corporation
Founded in 1967, W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty business: Insurance and Reinsurance & Monoline Excess.
W. R. Berkley Corporation 4
Forward Looking Information
This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2022 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition, including new entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts, including claims for cybersecurity-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities; the ongoing COVID-19 pandemic; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks (including those associated with the United Kingdom's withdrawal from the European Union, or "Brexit") relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; potential difficulties with technology and/or cyber security issues; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These risks and uncertainties could cause our actual results for the year 2022 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. 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.
#
W. R. Berkley Corporation 5
Consolidated Financial Summary
(Amounts in thousands, except per share data)
| Second Quarter | Six Months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Revenues: | ||||||||
| Net premiums written | $ | 2,585,635 | $ | 2,212,181 | $ | 4,998,889 | $ | 4,262,219 |
| Change in unearned premiums | (228,477) | (240,557) | (392,645) | (440,639) | ||||
| Net premiums earned | 2,357,158 | 1,971,624 | 4,606,244 | 3,821,580 | ||||
| Net investment income | 171,574 | 168,187 | 345,086 | 326,764 | ||||
| Net investment (losses) gains: | ||||||||
| Net realized and unrealized (losses) gains on investments | (163,935) | 20,461 | 205,947 | 72,219 | ||||
| Change in allowance for credit losses on investments | (7,620) | 3,603 | (11,237) | (13,316) | ||||
| Net investment (losses) gains | (171,555) | 24,064 | 194,710 | 58,903 | ||||
| Revenues from non-insurance businesses | 128,421 | 109,122 | 226,197 | 196,552 | ||||
| Insurance service fees | 26,393 | 22,256 | 54,344 | 48,064 | ||||
| Other Income | 896 | 833 | 1,716 | 1,092 | ||||
| Total Revenues | 2,512,887 | 2,296,086 | 5,428,297 | 4,452,955 | ||||
| Expenses: | ||||||||
| Loss and loss expenses | 1,435,817 | 1,203,647 | 2,775,069 | 2,325,238 | ||||
| Other operating costs and expenses | 699,819 | 647,705 | 1,413,718 | 1,263,973 | ||||
| Expenses from non-insurance businesses | 122,966 | 106,698 | 217,822 | 192,989 | ||||
| Interest expense | 31,723 | 38,096 | 66,693 | 74,747 | ||||
| Total expenses | 2,290,325 | 1,996,146 | 4,473,302 | 3,856,947 | ||||
| Income before income tax | 222,562 | 299,940 | 954,995 | 596,008 | ||||
| Income tax expense | (43,095) | (62,262) | (182,499) | (126,614) | ||||
| Net Income before noncontrolling interests | 179,467 | 237,678 | 772,496 | 469,394 | ||||
| Noncontrolling interest | (145) | (440) | (2,536) | (2,631) | ||||
| Net income to common stockholders | $ | 179,322 | $ | 237,238 | $ | 769,960 | $ | 466,763 |
| Net income per share (1): | ||||||||
| Basic | $ | 0.65 | $ | 0.85 | $ | 2.78 | $ | 1.68 |
| Diluted | $ | 0.64 | $ | 0.85 | $ | 2.76 | $ | 1.66 |
| Average shares outstanding (1) (2): | ||||||||
| Basic | 276,815 | 277,733 | 276,794 | 277,763 | ||||
| Diluted | 279,525 | 280,659 | 279,327 | 280,478 |
(1)The 2021 per share amounts were restated for comparative purposes to reflect the 3-for-2 common stock split effected on March 23, 2022.
(2)Basic shares outstanding consist of the weighted average number of common shares outstanding during the period (including shares held in a grantor trust). Diluted shares outstanding consist of the weighted average number of basic and common equivalent shares outstanding during the period.
W. R. Berkley Corporation 6
Business Segment Operating Results
(Amounts in thousands, except ratios) (1)
| Second Quarter | Six Months | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Insurance: | ||||||||||||
| Gross premiums written | $ | 2,771,665 | $ | 2,421,846 | $ | 5,256,464 | $ | 4,561,859 | ||||
| Net premiums written | 2,326,125 | 1,994,212 | 4,399,416 | 3,734,036 | ||||||||
| Net premiums earned | 2,070,157 | 1,727,202 | 4,032,991 | 3,332,181 | ||||||||
| Pre-tax income | 347,461 | 291,290 | 729,873 | 548,399 | ||||||||
| Loss ratio | 61.0 | % | 61.4 | % | 60.3 | % | 61.3 | % | ||||
| Expense ratio | 27.7 | % | 28.5 | % | 27.9 | % | 28.9 | % | ||||
| GAAP Combined ratio | 88.7 | % | 89.9 | % | 88.2 | % | 90.2 | % | ||||
| Reinsurance & Monoline Excess: | ||||||||||||
| Gross premiums written | $ | 280,736 | $ | 239,390 | $ | 655,773 | $ | 584,089 | ||||
| Net premiums written | 259,510 | 217,969 | 599,473 | 528,183 | ||||||||
| Net premiums earned | 287,001 | 244,422 | 573,253 | 489,399 | ||||||||
| Pre-tax income | 92,177 | 74,794 | 149,805 | 143,443 | ||||||||
| Loss ratio | 60.4 | % | 58.2 | % | 60.2 | % | 57.4 | % | ||||
| Expense ratio | 27.4 | % | 30.4 | % | 28.4 | % | 30.6 | % | ||||
| GAAP Combined ratio | 87.8 | % | 88.6 | % | 88.6 | % | 88.0 | % | ||||
| Corporate and Eliminations: | ||||||||||||
| Net investment (losses) gains | $ | (171,555) | $ | 24,064 | $ | 194,710 | $ | 58,903 | ||||
| Interest expense | (31,723) | (38,096) | (66,693) | (74,747) | ||||||||
| Other expenses | (13,798) | (52,112) | (52,700) | (79,990) | ||||||||
| Pre-tax (loss) gain | (217,076) | (66,144) | 75,317 | (95,834) | ||||||||
| Consolidated: | ||||||||||||
| Gross premiums written | $ | 3,052,401 | $ | 2,661,236 | $ | 5,912,237 | $ | 5,145,948 | ||||
| Net premiums written | 2,585,635 | 2,212,181 | 4,998,889 | 4,262,219 | ||||||||
| Net premiums earned | 2,357,158 | 1,971,624 | 4,606,244 | 3,821,580 | ||||||||
| Pre-tax income | 222,562 | 299,940 | 954,995 | 596,008 | ||||||||
| Loss ratio | 60.9 | % | 61.0 | % | 60.2 | % | 60.8 | % | ||||
| Expense ratio | 27.7 | % | 28.7 | % | 28.0 | % | 29.1 | % | ||||
| GAAP Combined ratio | 88.6 | % | 89.7 | % | 88.2 | % | 89.9 | % |
(1)Loss ratio is losses and loss expenses incurred expressed as a percentage of premiums earned. Expense ratio is underwriting expenses expressed as a percentage of premiums earned. GAAP combined ratio is the sum of the loss ratio and the expense ratio.
W. R. Berkley Corporation 7
Supplemental Information
(Amounts in thousands)
| Second Quarter | Six Months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Net premiums written: | ||||||||
| Other liability | $ | 878,120 | $ | 727,384 | $ | 1,708,187 | $ | 1,401,416 |
| Short-tail lines (1) | 484,849 | 391,778 | 878,767 | 716,830 | ||||
| Workers' compensation | 330,721 | 315,638 | 634,141 | 602,362 | ||||
| Commercial automobile | 335,451 | 279,204 | 614,978 | 527,771 | ||||
| Professional liability | 296,984 | 280,208 | 563,343 | 485,657 | ||||
| Total Insurance | 2,326,125 | 1,994,212 | 4,399,416 | 3,734,036 | ||||
| Casualty reinsurance | 189,983 | 156,216 | 388,138 | 331,081 | ||||
| Monoline excess | 24,228 | 23,664 | 116,764 | 109,172 | ||||
| Property reinsurance | 45,299 | 38,089 | 94,571 | 87,930 | ||||
| Total Reinsurance & Monoline Excess | 259,510 | 217,969 | 599,473 | 528,183 | ||||
| Total | $ | 2,585,635 | $ | 2,212,181 | $ | 4,998,889 | $ | 4,262,219 |
| Current accident year losses from catastrophes (including COVID-19 related losses): | ||||||||
| Insurance | $ | 39,891 | $ | 36,803 | $ | 50,658 | $ | 69,632 |
| Reinsurance & Monoline Excess | 18,000 | 7,162 | 36,065 | 10,162 | ||||
| Total | $ | 57,891 | $ | 43,965 | $ | 86,723 | $ | 79,794 |
| Net Investment income: | ||||||||
| Core portfolio (2) | $ | 133,587 | $ | 102,961 | $ | 245,899 | $ | 203,528 |
| Investment funds | 33,861 | 61,311 | 85,874 | 100,246 | ||||
| Arbitrage trading account | 4,126 | 3,915 | 13,313 | 22,989 | ||||
| Total | $ | 171,574 | $ | 168,187 | $ | 345,086 | $ | 326,764 |
| Net realized and unrealized (losses) gains on investments: | ||||||||
| Net realized (losses) gains on investments | $ | (32,405) | $ | 38,700 | $ | 244,264 | $ | 114,793 |
| Change in unrealized losses on equity securities | (131,530) | (18,239) | (38,317) | (42,574) | ||||
| Total | $ | (163,935) | $ | 20,461 | $ | 205,947 | $ | 72,219 |
| Other operating costs and expenses: | ||||||||
| Policy acquisition and insurance operating expenses | $ | 653,093 | $ | 565,733 | $ | 1,288,547 | $ | 1,111,483 |
| Insurance service expenses | 23,890 | 21,789 | 46,356 | 42,575 | ||||
| Net foreign currency gains | (39,827) | (1,125) | (43,995) | (6,719) | ||||
| Debt extinguishment costs | — | 7,903 | — | 11,520 | ||||
| Other costs and expenses | 62,663 | 53,405 | 122,810 | 105,114 | ||||
| Total | $ | 699,819 | $ | 647,705 | $ | 1,413,718 | $ | 1,263,973 |
| Cash flow from operations | $ | 527,971 | $ | 384,819 | $ | 1,005,653 | $ | 695,809 |
| Reconciliation of net income to operating income: | ||||||||
| Net income | $ | 179,322 | $ | 237,238 | $ | 769,960 | $ | 466,763 |
| Pre-tax investment losses (gains), net of related expenses | 171,555 | (23,271) | (190,056) | (56,573) | ||||
| Income tax (benefit) expense | (37,518) | 5,092 | 39,923 | 10,650 | ||||
| Operating income after-tax (3) | $ | 313,359 | $ | 219,059 | $ | 619,827 | $ | 420,840 |
(1)Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines.
(2)Core portfolio includes fixed maturity securities, equity securities, cash and cash equivalents, real estate and loans receivable.
(3)Operating income is a non-GAAP financial measure defined by the Company as net income excluding after-tax net investment gains (losses). Net investment gains (losses) are computed net of related expenses, including performance-based compensatory costs associated with realized investment gains. Management believes this measurement provides a useful indicator of trends in the Company’s underlying operations.
W. R. Berkley Corporation 8
Selected Balance Sheet Information
(Amounts in thousands, except per share data)
| June 30, 2022 | December 31, 2021 | |||
|---|---|---|---|---|
| Net invested assets (1) | $ | 23,545,192 | $ | 23,705,508 |
| Total assets | 32,692,447 | 32,047,876 | ||
| Reserves for losses and loss expenses | 16,145,821 | 15,390,888 | ||
| Senior notes and other debt | 1,832,273 | 2,259,416 | ||
| Subordinated debentures | 1,008,011 | 1,007,652 | ||
| Common stockholders' equity (2) | 6,514,485 | 6,653,011 | ||
| Common stock outstanding (3) (4) | 265,273 | 265,171 | ||
| Book value per share (4) (5) | 24.56 | 25.09 | ||
| Tangible book value per share (4) (5) | 23.60 | 24.27 |
(1)Net invested assets include investments, cash and cash equivalents, trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases, net of related liabilities.
(2)As of June 30, 2022, reflected in common stockholders' equity are after-tax unrealized investment losses of $670 million and unrealized currency translation losses of $360 million. As of December 31, 2021, after-tax unrealized investment gains were $91 million and unrealized currency translation losses were $373 million.
(3)During the six months ended June 30, 2022, the Company did not repurchase any shares of its common stock. The number of shares of common stock outstanding excludes shares held in a grantor trust.
(4)The 2021 per share amounts were restated for comparative purposes to reflect the 3-for-2 common stock split effected on March 23, 2022.
(5)Book value per share is total common stockholders’ equity divided by the number of common shares outstanding. Tangible book value per share is total common stockholders’ equity excluding the after-tax value of goodwill and other intangible assets divided by the number of common shares outstanding.
W. R. Berkley Corporation 9
Investment Portfolio
June 30, 2022
(Amounts in thousands, except percentages)
| Carrying Value | Percent of Total | |||
|---|---|---|---|---|
| Fixed maturity securities: | ||||
| United States government and government agencies | $ | 720,914 | 3.1 | % |
| State and municipal: | ||||
| Special revenue | 1,867,636 | 7.9 | % | |
| Local general obligation | 416,940 | 1.8 | % | |
| State general obligation | 414,939 | 1.7 | % | |
| Pre-refunded | 203,899 | 0.9 | % | |
| Corporate backed | 160,208 | 0.7 | % | |
| Total state and municipal | 3,063,622 | 13.0 | % | |
| Mortgage-backed securities: | ||||
| Agency | 821,398 | 3.5 | % | |
| Commercial | 405,597 | 1.7 | % | |
| Residential - Prime | 250,052 | 1.1 | % | |
| Residential - Alt A | 4,207 | 0.0 | % | |
| Total mortgage-backed securities | 1,481,254 | 6.3 | % | |
| Asset-backed securities | 4,292,488 | 18.2 | % | |
| Corporate: | ||||
| Industrial | 3,215,637 | 13.7 | % | |
| Financial | 1,811,661 | 7.7 | % | |
| Utilities | 422,101 | 1.8 | % | |
| Other | 239,726 | 1.0 | % | |
| Total corporate | 5,689,125 | 24.2 | % | |
| Foreign government | 1,604,111 | 6.8 | % | |
| Total fixed maturity securities (1) | 16,851,514 | 71.6 | % | |
| Equity securities available for sale: | ||||
| Common stocks | 932,672 | 4.0 | % | |
| Preferred stocks | 222,654 | 0.9 | % | |
| Total equity securities available for sale | 1,155,326 | 4.9 | % | |
| Investment funds (3) | 1,701,478 | 7.2 | % | |
| Real estate | 1,304,094 | 5.5 | % | |
| Cash and cash equivalents (2) | 1,277,294 | 5.4 | % | |
| Arbitrage trading account | 1,142,003 | 4.9 | % | |
| Loans receivable | 113,483 | 0.5 | % | |
| Net invested assets | $ | 23,545,192 | 100.0 | % |
(1)Total fixed maturity securities had an average rating of AA- and an average duration of 2.4 years, including cash and cash equivalents.
(2)Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
(3)Investment funds are net of related liabilities of $0.8 million.