W. R. Berkley CEO bemoans sluggish casualty reinsurance market as book shrinks 15%

W. Robert Berkley, Jr., President and CEO of insurer W. R. Berkley, has expressed his disappointment with the reinsurance market’s sluggish response to social inflation and other challenges, arguing that a lack of discipline is preventing the casualty market from achieving appropriate risk-adjusted returns.

Berkley’s concerns are reflected in the reduction of the company’s casualty reinsurance premiums by around 15% in the fourth quarter of 2024, which decreased from $201.6 million in Q4 2023 to $170.2 million.

“One of the things that’s been both surprising, and quite frankly, a bit disappointing to me, has been how slow or sluggish the reinsurance market has been to respond to social inflation and some of the challenges,” Berkley stated.

He continued: “It is our suspicion that you are seeing a gradual groundswell that is building, and we will see discipline coming to the casualty reinsurance market, hopefully over the coming months and years, and that will create an opportunity for our colleagues in the reinsurance space.

“But in the meantime, when there is that lack of discipline, we very much applaud our colleagues for the discipline that they are exercising.”

At the same time, Berkley has a more optimistic view of the primary casualty insurance market. When questioned about this discrepancy, Berkley highlighted the lack of discipline in the casualty reinsurance market and the fact that it needs more rate.

He said: “I think the casualty reinsurance market needs more discipline, and they need to charge more, whether that be through adjusting ceding commissions or in an XOL basis getting at it a different way. And I think there’s a disconnect. No different than if you go back a few years ago before the reinsurance market woke up, there was a disconnect between property primary and property reinsurance.”

Berkley recently announced its Q4 2024 financial results, reporting a net income of $1.76 billion, its highest-ever.

The firm’s gross and net premiums written also saw improvement, growing 9.6% and 9.3% to records of $14.2 billion and $12 billion, respectively.

In a recent video interview with Reinsurance News, James Vickers, Chairman of Gallagher Re’s International division, discussed the current state of the casualty reinsurance market.

He acknowledged the improvements in the market but noted that there are lingering questions about the long-term profitability of the business being written.

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