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): January 26, 2021
| 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 |
| 5.90% Subordinated Debentures due 2056 | WRB-PC | New York Stock Exchange |
| 5.75% Subordinated Debentures due 2056 | WRB-PD | New York Stock Exchange |
| 5.70% Subordinated Debentures due 2058 | WRB-PE | New York Stock Exchange |
| 5.10% Subordinated Debentures due 2059 | WRB-PF | New York Stock Exchange |
| 4.25% Subordinated Debentures due 2060 | WRB-PG | New York Stock Exchange |
W. R. Berkley Corporation 2
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 ☐
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 fourth quarter of 2020. The press release was issued on January 26, 2021. 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 January 26, 2021
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 and Treasurer |
Date: January 26, 2021
W. R. Berkley Corporation 6
EXHIBIT INDEX
Exhibit:
99.1 Press Release dated January 26, 2021
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 FOURTH QUARTER AND FULL YEAR RESULTS
Fourth Quarter Gross Premiums Written Grew 9.3% and Return on Equity of 20.6%
Greenwich, CT, January 26, 2021 - W. R. Berkley Corporation (NYSE: WRB) today reported its fourth quarter and full year 2020 results.
Summary Financial Data
(Amounts in thousands, except per share data)
| Fourth Quarter | Twelve Months | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Gross premiums written | $ | 2,221,484 | $ | 2,033,078 | $ | 8,847,647 | $ | 8,262,219 | ||||
| Net premiums written | 1,797,457 | 1,660,528 | 7,262,437 | 6,863,499 | ||||||||
| Net income to common stockholders | 312,150 | 119,306 | 530,670 | 681,944 | ||||||||
| Net income per diluted share | 1.67 | 0.62 | 2.81 | 3.52 | ||||||||
| Operating income (1) | 173,043 | 137,530 | 438,253 | 589,057 | ||||||||
| Operating income per diluted share | 0.92 | 0.71 | 2.32 | 3.04 | ||||||||
| Return on equity (2) | 20.6 | % | 8.8 | % | 8.7 | % | 12.5 | % |
(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)Return on equity represents net income expressed on an annualized basis as a percentage of beginning of year stockholders’ equity.
W. R. Berkley Corporation 2
Fourth quarter highlights included:
•All-time record net income of $312.2 million.
•Return on equity of 20.6%.
•Gross and net premiums written increased 9.3% and 8.2%, respectively.
•The reported combined ratio was 90.9%. The accident year combined ratio before catastrophe losses was 88.8%.
•Underwriting income increased 44.2% to $165.4 million.
•Catastrophes added 2.3 loss ratio points to the reported combined ratio, including 1.5 loss ratio points for COVID-19 related losses.
•Average rate increases excluding workers' compensation were approximately 15.4%.
•Book value per share grew 6.1%, before share repurchases and dividends.
Full year highlights included:
•Average rate increases excluding workers’ compensation were approximately 13.6%.
•Paid loss ratio of 51.9%.
•Operating cash flow increased 41.3% to more than $1.6 billion.
•Gross and net premiums written increased 7.1% and 5.8%, respectively.
•Book value per share grew 10.5%, before share repurchases and dividends.
•Total capital returned to shareholders was $430 million, including $346 million of share repurchases and $84 million of dividends.
The Company commented:
By every measure, the Company had an outstanding quarter, with earnings of $312 million and more than 9% growth in gross premiums written. We reported a combined ratio of 90.9%, which is the lowest in 13 years, and underwriting income of $165 million, which increased by 44.2%.
Our rate increases continued to accelerate throughout the year in connection with our efforts to stay ahead of current and expected loss trends. The global pandemic, frequent catastrophe losses, social inflation and low interest rates continue to reinforce the industry’s need for disciplined underwriting and additional rate.
Our total return investment strategy delivered strong performance, driven by our alternative investment portfolio. Net investment income grew 32%, despite the defensive position in our fixed-maturity securities, where we maintain a relatively short duration and a high level of liquidity.
The Company again delivered a superior risk-adjusted return, in a challenging environment. We see no signs of rate increases moderating and expect that 2021 will provide opportunities for margin improvement.
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 January 26, 2021, at 5:00 p.m. eastern time. The conference call will be webcast live on the Company's website at https://ir.berkley.com/news-and-events/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/annual-reports/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 2021 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 ongoing COVID-19 pandemic, including the related impact on the U.S. and global economies; the cyclical nature of the property casualty industry; the impact of significant competition, including new alternative 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, epidemics or pandemics, such as COVID-19; the impact of climate change, which may increase the frequency and 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 2021 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.
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W. R. Berkley Corporation 5
Consolidated Financial Summary
(Amounts in thousands, except per share data)
| Fourth Quarter | Twelve Months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Revenues: | ||||||||
| Net premiums written | $ | 1,797,457 | $ | 1,660,528 | $ | 7,262,437 | $ | 6,863,499 |
| Change in unearned premiums | 16,133 | 56,253 | (331,594) | (230,211) | ||||
| Net premiums earned | 1,813,590 | 1,716,781 | 6,930,843 | 6,633,288 | ||||
| Net investment income | 180,977 | 137,334 | 583,821 | 645,614 | ||||
| Net investment gains (losses): | ||||||||
| Net realized and unrealized gains (losses) on investments | 162,918 | (22,988) | 73,514 | 120,703 | ||||
| Change in allowance for credit losses on investments (1) | 393 | — | 29,486 | — | ||||
| Net investment gains (losses) | 163,311 | (22,988) | 103,000 | 120,703 | ||||
| Revenues from non-insurance businesses | 132,923 | 123,537 | 389,888 | 406,541 | ||||
| Insurance service fees | 21,521 | 21,240 | 88,777 | 92,680 | ||||
| Other income | 149 | 170 | 2,596 | 3,370 | ||||
| Total revenues | 2,312,471 | 1,976,074 | 8,098,925 | 7,902,196 | ||||
| Expenses: | ||||||||
| Losses and loss expenses | 1,111,695 | 1,072,166 | 4,468,706 | 4,131,116 | ||||
| Other operating costs and expenses | 637,250 | 601,121 | 2,390,392 | 2,362,082 | ||||
| Expenses from non-insurance businesses | 128,457 | 122,527 | 384,488 | 402,669 | ||||
| Interest expense | 35,663 | 33,496 | 150,537 | 153,409 | ||||
| Total expenses | 1,913,065 | 1,829,310 | 7,394,123 | 7,049,276 | ||||
| Income before income taxes | 399,406 | 146,764 | 704,802 | 852,920 | ||||
| Income tax expense | (86,917) | (26,970) | (171,817) | (168,935) | ||||
| Net income before noncontrolling interests | 312,489 | 119,794 | 532,985 | 683,985 | ||||
| Noncontrolling interests | (339) | (488) | (2,315) | (2,041) | ||||
| Net income to common stockholders | $ | 312,150 | $ | 119,306 | $ | 530,670 | $ | 681,944 |
| Net income per share: | ||||||||
| Basic | $ | 1.68 | $ | 0.62 | $ | 2.84 | $ | 3.58 |
| Diluted | $ | 1.67 | $ | 0.62 | $ | 2.81 | $ | 3.52 |
| Average shares outstanding (2): | ||||||||
| Basic | 185,693 | 191,106 | 186,924 | 190,722 | ||||
| Diluted | 187,180 | 193,280 | 188,763 | 193,521 |
(1)The inclusion of the allowance for credit losses on investments commenced January 1, 2020 due to the adoption of ASU 2016-13.
(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)
| Fourth Quarter | Twelve Months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Insurance: | ||||||||
| Gross premiums written | $ | 1,996,169 | $ | 1,832,711 | $ | 7,837,496 | $ | 7,398,573 |
| Net premiums written | 1,592,311 | 1,484,932 | 6,347,101 | 6,086,009 | ||||
| Premiums earned | 1,586,578 | 1,523,748 | 6,067,669 | 5,919,819 | ||||
| Pre-tax income | 236,548 | 202,085 | 668,012 | 814,862 | ||||
| Loss ratio | 63.4% | 62.6% | 64.9% | 62.4% | ||||
| Expense ratio | 29.4% | 30.4% | 30.3% | 31.1% | ||||
| GAAP combined ratio | 92.8% | 93.0% | 95.2% | 93.5% | ||||
| Reinsurance & Monoline Excess: | ||||||||
| Gross premiums written | $ | 225,315 | $ | 200,367 | $ | 1,010,151 | $ | 863,646 |
| Net premiums written | 205,146 | 175,596 | 915,336 | 777,490 | ||||
| Premiums earned | 227,012 | 193,033 | 863,174 | 713,469 | ||||
| Pre-tax income | 94,975 | 44,837 | 205,587 | 189,188 | ||||
| Loss ratio | 46.7% | 61.1% | 61.3% | 61.5% | ||||
| Expense ratio | 31.1% | 34.4% | 31.8% | 35.0% | ||||
| GAAP combined ratio | 77.8% | 95.5% | 93.1% | 96.5% | ||||
| Corporate and Eliminations: | ||||||||
| Net investment gains (losses) | $ | 163,311 | $ | (22,988) | $ | 103,000 | $ | 120,703 |
| Interest expense | (35,663) | (33,496) | (150,537) | (153,409) | ||||
| Other revenues and expenses | (59,765) | (43,674) | (121,260) | (118,424) | ||||
| Pre-tax gain (loss) | 67,883 | (100,158) | (168,797) | (151,130) | ||||
| Consolidated: | ||||||||
| Gross premiums written | $ | 2,221,484 | $ | 2,033,078 | $ | 8,847,647 | $ | 8,262,219 |
| Net premiums written | 1,797,457 | 1,660,528 | 7,262,437 | 6,863,499 | ||||
| Premiums earned | 1,813,590 | 1,716,781 | 6,930,843 | 6,633,288 | ||||
| Pre-tax income | 399,406 | 146,764 | 704,802 | 852,920 | ||||
| Loss ratio | 61.3% | 62.4% | 64.5% | 62.3% | ||||
| Expense ratio | 29.6% | 30.9% | 30.4% | 31.5% | ||||
| GAAP combined ratio | 90.9% | 93.3% | 94.9% | 93.8% |
(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)
| Fourth Quarter | Twelve Months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Net premiums written: | ||||||||
| Other liability | $ | 594,546 | $ | 537,674 | $ | 2,342,884 | $ | 2,145,287 |
| Short-tail lines (1) | 325,809 | 319,423 | 1,300,750 | 1,254,180 | ||||
| Workers' compensation | 241,935 | 282,840 | 1,099,886 | 1,280,573 | ||||
| Commercial automobile | 227,190 | 188,459 | 876,031 | 796,993 | ||||
| Professional liability | 202,831 | 156,536 | 727,550 | 608,976 | ||||
| Total Insurance | 1,592,311 | 1,484,932 | 6,347,101 | 6,086,009 | ||||
| Casualty reinsurance | 141,481 | 116,698 | 560,717 | 460,239 | ||||
| Property reinsurance | 41,174 | 37,673 | 178,023 | 154,455 | ||||
| Monoline excess | 22,491 | 21,225 | 176,596 | 162,796 | ||||
| Total Reinsurance & Monoline Excess | 205,146 | 175,596 | 915,336 | 777,490 | ||||
| Total | $ | 1,797,457 | $ | 1,660,528 | $ | 7,262,437 | $ | 6,863,499 |
| Losses from catastrophes (including COVID-19 related losses): | ||||||||
| Insurance | $ | 62,380 | $ | 14,744 | $ | 307,037 | $ | 68,187 |
| Reinsurance & Monoline Excess | (19,934) | 5,736 | $ | 32,799 | 21,914 | |||
| Total | $ | 42,446 | $ | 20,480 | 339,836 | $ | 90,101 | |
| Net investment income: | ||||||||
| Core portfolio (2) | $ | 102,039 | $ | 137,022 | $ | 451,637 | $ | 541,834 |
| Investment funds | 52,992 | (8,090) | 54,253 | 69,194 | ||||
| Arbitrage trading account | 25,946 | 8,402 | 77,931 | 34,586 | ||||
| Total | $ | 180,977 | $ | 137,334 | $ | 583,821 | $ | 645,614 |
| Net realized and unrealized gains (losses) on investments: | ||||||||
| Net realized gains on investments | $ | 126,927 | $ | 7,442 | $ | 99,382 | $ | 35,411 |
| Change in unrealized gains (losses) on equity securities | 35,991 | (30,430) | (25,868) | 85,292 | ||||
| Total | $ | 162,918 | $ | (22,988) | $ | 73,514 | $ | 120,703 |
| Other operating costs and expenses: | ||||||||
| Policy acquisition and insurance operating expenses | $ | 536,507 | $ | 529,951 | $ | 2,111,013 | $ | 2,090,301 |
| Insurance service expenses | 21,694 | 23,804 | 85,724 | 101,317 | ||||
| Net foreign currency losses (gains) | 24,207 | (1,631) | 363 | (30,715) | ||||
| Debt extinguishment costs | 8,440 | — | 8,440 | — | ||||
| Other costs and expenses | 46,402 | 48,997 | 184,852 | 201,179 | ||||
| Total | $ | 637,250 | $ | 601,121 | $ | 2,390,392 | $ | 2,362,082 |
| Cash flow from operations | $ | 479,740 | $ | 348,749 | $ | 1,616,686 | $ | 1,143,793 |
| Reconciliation of net income to operating income: | ||||||||
| Net income | $ | 312,150 | $ | 119,306 | $ | 530,670 | $ | 681,944 |
| Pre-tax investment (gains) losses, net of related expenses | (162,337) | 23,066 | (102,027) | (117,730) | ||||
| Income tax expense (benefit) | 23,230 | (4,842) | 9,610 | 24,843 | ||||
| Operating income after-tax (3) | $ | 173,043 | $ | 137,530 | $ | 438,253 | $ | 589,057 |
(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)
| December 31,<br>2020 | December 31, 2019 | |||
|---|---|---|---|---|
| Net invested assets (1) | $ | 21,370,503 | $ | 19,856,776 |
| Total assets | 28,606,913 | 26,662,144 | ||
| Reserves for losses and loss expenses | 13,784,430 | 12,583,249 | ||
| Senior notes and other debt | 1,623,025 | 1,427,575 | ||
| Subordinated debentures | 1,102,309 | 1,198,704 | ||
| Common stockholders’ equity (2) | 6,310,802 | 6,074,939 | ||
| Common stock outstanding (3) | 177,825 | 183,412 | ||
| Book value per share (4) | 35.49 | 33.12 | ||
| Tangible book value per share (4) | 34.22 | 31.87 |
(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 December 31, 2020, reflected in common stockholders' equity are after-tax unrealized investment gains of $290 million and unrealized currency translation losses of $352 million. As of December 31, 2019, after-tax unrealized investment gains were $125 million and unrealized currency translation losses were $382 million.
(3)During the three months ended December 31, 2020, the Company repurchased 542,434 shares of its common stock for $34 million. During the twelve months ended December 31, 2020, the Company repurchased 6,363,301 shares of its common stock for $346 million. The number of shares of common stock outstanding excludes shares held in a grantor trust.
(4)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
December 31, 2020
(Amounts in thousands)
| Carrying<br>Value | Percent<br>of Total | |||
|---|---|---|---|---|
| Fixed maturity securities: | ||||
| United States government and government agencies | $ | 603,871 | 2.8 | % |
| State and municipal: | ||||
| Special revenue | $ | 2,252,067 | 10.6 | % |
| State general obligation | 493,147 | 2.3 | % | |
| Local general obligation | 450,624 | 2.1 | % | |
| Pre-refunded | 276,672 | 1.3 | % | |
| Corporate backed | 214,473 | 1.0 | % | |
| Total state and municipal | 3,686,983 | 17.3 | % | |
| Mortgage-backed securities: | ||||
| Agency | 630,784 | 3.0 | % | |
| Residential - Prime | 199,481 | 0.9 | % | |
| Commercial | 187,717 | 0.9 | % | |
| Residential - Alt A | 8,803 | — | % | |
| Total mortgage-backed securities | 1,026,785 | 4.8 | % | |
| Asset-backed securities | 3,194,586 | 14.9 | % | |
| Corporate: | ||||
| Industrial | 2,564,475 | 12.0 | % | |
| Financial | 1,575,903 | 7.4 | % | |
| Utilities | 421,165 | 2.0 | % | |
| Other | 110,038 | 0.5 | % | |
| Total corporate | 4,671,581 | 21.9 | % | |
| Foreign government | 975,563 | 4.6 | % | |
| Total fixed maturity securities (1) | 14,159,369 | 66.3 | % | |
| Equity securities available for sale: | ||||
| Common stocks | 350,181 | 1.6 | % | |
| Preferred stocks | 275,486 | 1.3 | % | |
| Total equity securities available for sale | 625,667 | 2.9 | % | |
| Cash and cash equivalents (2) | 2,889,630 | 13.5 | % | |
| Real estate | 1,960,914 | 9.2 | % | |
| Investment funds (3) | 1,308,537 | 6.1 | % | |
| Arbitrage trading account | 341,473 | 1.6 | % | |
| Loans receivable | 84,913 | 0.4 | % | |
| Net invested assets | $ | 21,370,503 | 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 $0.9 million.