Berkley posts nearly 10% profit in Q3 on strong investment performance

(Reuters) — Commercial insurer W.R. Berkley reported nearly a 10% increase in its third-quarter profit helped by strong returns in its investment portfolio.

Insurers benefit in a higher interest rate environment because a significant portion of their investments is in bonds, leading to increased interest payouts.

Additionally, equity markets have also been rallying due to rate cuts and easing recession concerns, helping the insurer achieve higher returns on its investments.

The company’s net investment income jumped 19.5% to $323.8 million, compared with the year-ago quarter.

Its profit for the quarter ended Sept. 30 was $365.6 million, or 91 cents per share, compared with $333.6 million, or 82 cents per share, last year.

Greenwich, Connecticut-based W.R. Berkley saw its net premiums written increase by nearly 7.3% as businesses spent more on insurance policies amid easing recession concerns.

The company reported a combined ratio of 90.9%, compared with 90.2% a year earlier.

A ratio below 100% shows that an insurer earned more in premiums than it paid out in claims.