W. R. Berkley (WRB) 10-K risk factor changes: FY2014 vs FY2013

[removed: Although the insurance markets have recently hardened somewhat,] [added: In recent years,] we have faced [removed: in recent years] increased competition in our business, as a result of new entrants and existing insurers seeking to gain market share, resulting in decreased premium rates and less favorable contract terms and conditions for certain lines of business.

We compete, and will continue to compete, with major U.S. and non-U.S. insurers and reinsurers, other regional companies, as well as mutual companies, [removed: specialty insurance companies, underwriting agencies and diversified financial services companies.]

Our gross reserves for losses and loss expenses were approximately [removed: $10.1] [added: $10.4] billion as of December 31, [removed: 2013.][added: 2014.]

[added: If] the actual loss payout pattern is shorter than anticipated, the discount will be reduced and pre-tax income will decrease by a corresponding amount.

For example, weather-related losses were [added: $87 million in 2014,] $65 million in 2013, $80 million in 2012, $153 million in [removed: 2011, $81 million in 2010,] [added: 2011] and [removed: $63] [added: $81] million in [removed: 2009.][added: 2010.]

For example, financial markets have been affected by concerns over U.S. fiscal policy as well as the related concern regarding the [added: need to reduce the federal deficit.]

These issues, together with the slowing of the global economy generally, could send the U.S. into a new recession, further exacerbate concerns over sovereign debt of other countries and disrupt economic activity in the [removed: U.S. and elsewhere.]

Based on our [removed: 2013] [added: 2014] earned premiums, our deductible under TRIA during [removed: 2014] [added: 2015] is approximately [removed: $698] [added: $786] million.

TRIA is currently in effect through December 31, [removed: 2014.][added: 2020.]

The potential impact of the Dodd-Frank Act [added: on the U.S. insurance business is not clear.]

Although U.S. state regulation is the primary form of regulation of insurance and reinsurance, in addition to the changes brought about by the Dodd-Frank Act, Congress has considered over the past years various proposals relating to the creation of [removed: an optional federal charter, repeal of the insurance company antitrust exemption from the McCarran Ferguson Act, and tax law changes.]

Our expanding international operations in the United Kingdom, Continental Europe, South America, Canada, Scandinavia, [removed: Asia] [added: the Asia-Pacific region] and Australia expose us to increased investment, political and economic risks, including foreign currency and credit risk.

As of December 31, [removed: 2013,] [added: 2014,] the amount due from our reinsurers was approximately [removed: $1,533] [added: $1,503] million, including amounts due from state funds and industry pools where it was intended that we would bear no risk.

While we attempt to manage credit risks through underwriting guidelines, collateral requirements and other oversight mechanisms, our [removed: efforts may not be successful.]

[added: In the event of a disaster such as a natural catastrophe, terrorist attack or] industrial accident, or the infection of our systems by a malicious computer virus, our systems could be inaccessible for an extended period of time.

If our business continuity plans or system security does not sufficiently address such a business interruption, system failure or service denial, our ability to write and process new and [removed: renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions could be significantly impaired and our business could be harmed.]

As of December 31, [removed: 2013,] [added: 2014,] our investment in fixed maturity securities was approximately [removed: $11.6] [added: $12.7] billion, or [removed: 75%] [added: 81.5%] of our total investment portfolio.

As of that date, our portfolio of fixed maturity securities consisted of the following types of securities: U.S. Government securities [removed: (7.6%);] [added: (6.3%);] state and municipal securities [removed: (36.9%);] [added: (34.9%);] corporate securities [removed: (36.2%);] [added: (41.0%);] mortgage-backed securities [removed: (11.7%)] [added: (10.4%)] and foreign government [removed: (7.6%).][added: (7.4%).]

[added: The economic downturn has resulted in many states and municipalities operating under deficits or projected] deficits, the severity and duration of which could have an adverse impact on both the valuation of our state and municipal fixed maturity securities and the issuer's ability to perform its obligations thereunder.

We [removed: invest some] [added: have invested an increasing portion] of our assets in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets, which [added: are subject to significant volatility and] may decline in value.

We invest a portion of our investment portfolio in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets and have [removed: recently] increased our investments in these asset classes as a result of the current historically low interest rate environment.

At December 31, [removed: 2013,] [added: 2014,] our investment in these assets was approximately [removed: $2.6] [added: $2.9] billion, or [removed: 17%,] [added: 18.5%,] of our investment portfolio.

Merger and arbitrage trading securities were [removed: $522] [added: $451] million, or [removed: 3%,] [added: 2.9%,] of our investment portfolio at December 31, [removed: 2013.][added: 2014.]

[removed: Investments in real] [added: Real] estate [added: related investments, including directly owned,] investment funds and [removed: limited partnerships and] loans [removed: receivable] [added: receivable,] were [removed: $1.4] [added: $1.5] billion, or [removed: 9%,] [added: 10.0%,] of our investment portfolio at December 31, [removed: 2013.][added: 2014.]

The values of [removed: our real estate related] [added: these] investments are subject to fluctuations based on changes in the economy and interest rates in general and [removed: real estate] [added: the related asset] valuations in particular.

These investments [removed: have been] [added: are] subject to significant volatility as a result of the [removed: current] conditions in the financial [removed: markets.][added: and commodity markets and the global economy.]

The payment of dividends by our insurance company subsidiaries is subject to regulatory restrictions and will depend on the surplus and future earnings of these [removed: subsidiaries, as well as regulatory restrictions.][added: subsidiaries.]

During [removed: 2014,] [added: 2015,] the maximum amount of dividends that can be paid without regulatory approval is approximately [removed: $491] [added: $631] million.

specialty insurance companies, underwriting agencies and diversified financial services companies.

In recent years, the insurance industry has undergone increasing consolidation, which may further increase competition.

U.S. and elsewhere.

In 2013, FSOC designated three non-bank financial companies, including two insurance groups, as systematically significant, and in 2014, FSOC designated a third insurance group as systematically significant.

an optional federal charter, repeal of the insurance company antitrust exemption from the McCarran Ferguson Act, and tax law changes.

efforts may not be successful.

renewal business, provide customer service, pay claims in a timely manner or perform other necessary business functions could be significantly impaired and our business could be harmed.

We also invest in aviation and rail equipment funds, hedged equity and energy and other investment funds.

If

need to reduce the federal deficit.

We cannot be certain that TRIA will be extended past such expiration date.

Our earnings could be more volatile because of our significant level of retentions.

As compared to a number of our competitors, we maintain significant retention levels in premiums written on certain classes of business.

We purchase less reinsurance, the process by which we transfer, or cede, part of the risk we have assumed to a reinsurance company, thereby retaining more risk.

As a result, our earnings could be more volatile and increased severities are more likely to have a material adverse effect on our results of operations and financial condition.

on the U.S. insurance business is not clear.

In the event of a disaster such as a natural catastrophe, terrorist attack or

The economic downturn has resulted in many states and municipalities operating under deficits or projected

We reported provisions for other than temporary impairments in the value of these assets of approximately $6 million in 2013 and $5 million in 2012.

Since 2006, the Company [added: has] formed 24 new operating units that are focused on important parts of the economy in the U.S., including healthcare, energy and agriculture, and on growing international markets, including Scandinavia, Australia, the Asia-Pacific region and South America.

Although prices have generally increased since the beginning of 2011, [added: the] current market [added: is highly competitive and] price levels for certain lines of business remain below the prices required for the Company to achieve its long-term return objectives.

The Company [removed: also invests] [added: has increasingly invested] in equity securities, merger [removed: arbitrage, private equity investments,] [added: arbitrage securities,] investment funds, [added: private equity,] loans [removed: receivable] and real [removed: estate.][added: estate related assets.]

The Company's investments in investment funds [added: and its other alternative investments] have experienced, and the Company expects to continue to experience, greater fluctuations in investment income.

The estimate represents an informed judgment based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature [added: and value of the specific type of claim.]

The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity, relative to our assumptions, on our loss estimate for claims occurring in [removed: 2013:][added: 2014:]

Our net reserves for losses and loss expenses of approximately [removed: $8.7] [added: $9] billion as of December 31, [removed: 2013] [added: 2014] relate to multiple accident years.

Approximately [removed: $1.6] [added: $1.5] billion, or [removed: 18%,] [added: 16%,] of the Company’s net loss reserves as of December 31, [removed: 2013] [added: 2014] relate to the Reinsurance-Global segment.

Following is a summary of the Company’s reserves for losses and loss expenses by business segment as of December 31, [removed: 2013] [added: 2014] and [removed: 2012:][added: 2013:]

| (In thousands) | [added: 2014 | | | |] 2013 | | | | 2012 | | |

| Insurance-Domestic | $ | [removed: 6,493,401] [added: 6,767,374] | | | $ | [removed: 6,297,773] [added: 6,493,401] | |

| Insurance-International | [removed: 592,709] [added: 750,613] | | | | [removed: 540,769] [added: 592,709] | | |

| Reinsurance-Global | [removed: 1,597,687] [added: 1,452,654] | | | | [removed: 1,573,309] [added: 1,597,687] | | |

| Net reserves for losses and loss expenses | [removed: 8,683,797] [added: 8,970,641] | | | | [removed: 8,411,851] [added: 8,683,797] | | |

| Ceded reserves for losses and loss expenses | [removed: 1,397,144] [added: 1,399,060] | | | | [removed: 1,339,235] [added: 1,397,144] | | |

| Gross reserves for losses and loss expenses | $ | [removed: 10,080,941] [added: 10,369,701] | | | $ | [removed: 9,751,086] [added: 10,080,941] | |

Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business as of December 31, [removed: 2013] [added: 2014] and [removed: 2012:][added: 2013:]

(1) Reserves for excess and assumed workers’ compensation business are net of an aggregate net discount of [removed: $837] [added: $746] million and [removed: $867] [added: $837] million as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] respectively.

Net prior year development (i.e, the sum of prior year reserve changes and prior year earned premiums changes) for each of the three years ended December 31, [removed: 2013] [added: 2014] are as follows:

| (In thousands) | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Decrease in prior year loss reserves | $ | [removed: 78,810] [added: 75,764] | | | $ | [removed: 99,343] [added: 78,810] | | | $ | [removed: 180,585] [added: 102,571] | |

| Increase in prior year earned premiums | [removed: 19,046] [added: 9,088] | | | | [removed: 3,228] [added: 19,046] | | | | [removed: 697] [added: —] | | |

| Net favorable prior year development | $ | [removed: 97,856] [added: 84,852] | | | $ | [removed: 102,571] [added: 97,856] | | | $ | [removed: 181,282] [added: 102,571] | |

Favorable prior year development [added: (net of additional and return premiums)] was [removed: $98] [added: $85] million in [removed: 2013] [added: 2014] compared with [removed: $103] [added: $98 million] in [removed: 2012] [added: 2013] and [removed: $181] [added: $103 million] in [removed: 2011.][added: 2012.]

Favorable reserve development in 2012 was primarily attributable [added: to] improved claim frequency (i.e., number of reported claims per unit of exposure), especially in the [removed: for] excess and surplus casualty business.

[removed: Reserve Discount \-] The Company discounts its liabilities for excess and assumed workers’ compensation business because of the long period of time over which losses are paid.

For proportional business, reserves for losses and loss expenses have been discounted at the statutory rate of [removed: 2.2%.][added: 2.0%.]

As of December 31, [removed: 2013,] [added: 2014,] the aggregate blended discount rates ranged from [removed: 2.1%] [added: 2.0%] to 6.5%, with a weighted average discount [removed: rate of 4.1%.]

The aggregate net discount, after reflecting the effects of ceded reinsurance, was [removed: $837] [added: $746] million and [removed: $867] [added: $837] million as of December 31, [removed: 2013] [added: 2014] and December 31, [removed: 2012,] [added: 2013,] respectively.

Estimated assumed premiums receivable were approximately [removed: $57] [added: $85] million and [removed: $73] [added: $69] million at December 31, [removed: 2013] [added: 2014] and December 31, [removed: 2012,] [added: 2013,] respectively.

The following table provides a summary of fixed maturity securities in an unrealized loss position as of December 31, [removed: 2013:][added: 2014:]

| Unrealized loss less than 20% of amortized cost | [removed: 501] [added: 372] | | | $ | [removed: 3,380,725] [added: 2,736,260] | | | $ | [removed: 103,240] [added: 31,605] | |

| [removed: Nine months to less] [added: Less] than twelve months | 1 | | | [removed: 886] [added: 3,393] | | | | [removed: 242] [added: 946] | | |

| Twelve months and longer | [removed: 7] [added: 15] | | | [removed: 25,266] [added: 89,848] | | | | [removed: 7,383] [added: 26,973] | | |

A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at December 31, [removed: 2013] [added: 2014] is presented in the table below.

| Mortgage-backed securities | [removed: 13] [added: 9] | | | $ | [removed: 66,658] [added: 28,537] | | | $ | [removed: 3,748] [added: 1,699] | |

Preferred Stocks – At December 31, [removed: 2013,] [added: 2014,] there were [removed: three] [added: 6] preferred stocks in an unrealized loss position, with an aggregate fair value of [removed: $33] [added: $49.8] million and a gross unrealized loss of [removed: $6] [added: $4.2] million.

[removed: None] [added: Four] of these preferred stocks are rated non-investment [removed: grade] [added: grade,] and none are [removed: delinquent or in default.][added: delinquent.]

Loans receivable are reported net of a valuation reserve of [removed: $2] [added: $3] million and [removed: $6] [added: $2] million at December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] respectively.

The Company monitors the performance of its loans receivable and assesses the ability of each borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance [added: of the property and market conditions.]

| 1% | $ | 70,266 | | | $ | 211,497 | | | $ | 388,037 | |

| 5% | 211,497 | | | | 358,322 | | | | 541,853 | | |

| 10% | 388,037 | | | | 541,853 | | | | 734,123 | | |

| (In thousands) | 2014 | | | | 2013 | | |

| December 31, 2014 | | | | | | | | | | | |

| Other liability | $ | 1,035,442 | | | $ | 1,785,598 | | | $ | 2,821,040 | |

| Workers’ compensation (1) | 1,603,310 | | | | 1,201,117 | | | | 2,804,427 | | |

| Professional liability | 308,887 | | | | 453,557 | | | | 762,444 | | |

| Commercial automobile | 319,700 | | | | 203,085 | | | | 522,785 | | |

| Short-tail lines | 330,010 | | | | 277,281 | | | | 607,291 | | |

| Total primary | 3,597,349 | | | | 3,920,638 | | | | 7,517,987 | | |

| Reinsurance (1) | 603,851 | | | | 848,803 | | | | 1,452,654 | | |

| Total | $ | 4,201,200 | | | $ | 4,769,441 | | | $ | 8,970,641 | |

___________

For the Insurance-Domestic segment, favorable development in 2014 of $92 million was driven primarily by other liability business for accident years 2006 through 2010, primarily related to our excess and surplus lines casualty business.

Reported losses during these years continued to be below our initial expectations at the time the business was written, largely as a result of persistent improvement in claim frequency trends (i.e., number of reported claims per unit of exposure).

As these accident years have matured, the weighting of actuarial methods has shifted from methods based on initial expected losses to methods based on actual reported losses.

We believe the favorable claim frequency trends we have seen during this time period are due to changes in the mix of business written and to the general slowdown in the economy.

Commercial automobile reported unfavorable development primarily as a result of large losses for long-haul trucking business in 2012 and 2013.

For the Reinsurance-Global segment, favorable reserve development in 2014 of $16 million was driven primarily by assumed professional liability excess of loss and umbrella treaty business, as well as direct facultative business.

This was partially offset by adverse development on brokerage facultative business caused by completed operations losses associated with construction projects in accident years prior to 2009.

For the Insurance-International segment, adverse reserve development in 2014 of $23 million was driven primarily by unexpected large losses from accident years 2009-2012 in the professional indemnity line of business in the United Kingdom.

Reserve Discount.

rate of 4.2%.

| Total | 388 | | | $ | 2,829,501 | | | $ | 59,524 | |

| Corporate | 10 | | | 24,528 | | | | 742 | | |

| Foreign government | 2 | | | 11,177 | | | | 247 | | |

| Total | 21 | | | $ | 64,242 | | | $ | 2,688 | |

Common Stocks – At December 31, 2014, there were two common stocks in an unrealized loss position with an aggregate fair value of $15.9 million and a gross unrealized loss of $5.5 million.

Based on management's view of the underlying securities, the Company does not consider the common stocks to be OTTI.

If the market for a security is determined to be inactive or

| Independent pricing services | $ | 12,265,052 | | | 97.3 | % |

| Syndicate manager | 72,585 | | | | 0.6 | |

| Observable data | 263,155 | | | | 2.1 | |

| Total | $ | 12,603,983 | | | 100.0 | % |

| (In thousands) | 2014 | | | | 2013 | | |

| Gross premiums written | $ | 5,383,679 | | | $ | 4,803,753 | |

| Net premiums written | 4,517,587 | | | | 3,994,387 | | |

| Net premiums earned | 4,271,933 | | | | 3,782,416 | | |

| Expense ratio | 31.6 | | | | 32.7 | | |

and value of the specific type of claim.

| | | | | | | | | | | | |

| 1% | $ | 64,750 | | | $ | 194,893 | | | $ | 357,572 | |

| 5% | 194,893 | | | | 330,191 | | | | 499,313 | | |

| 10% | 357,572 | | | | 499,313 | | | | 676,488 | | |

| December 31, 2012 | | | | | | | | | | | |

| Other liability | $ | 922,568 | | | $ | 1,863,465 | | | $ | 2,786,033 | |

| Workers’ compensation (1) | 1,427,599 | | | | 1,114,340 | | | | 2,541,939 | | |

| Professional liability | 271,854 | | | | 312,811 | | | | 584,665 | | |

| Commercial automobile | 275,322 | | | | 204,900 | | | | 480,222 | | |

| Short-tail lines | 240,411 | | | | 205,272 | | | | 445,683 | | |

| Total primary | 3,137,754 | | | | 3,700,788 | | | | 6,838,542 | | |

| Reinsurance (1) | 626,962 | | | | 946,347 | | | | 1,573,309 | | |

| Total | $ | 3,764,716 | | | $ | 4,647,135 | | | $ | 8,411,851 | |

Favorable reserve development in 2011 was primarily attributable excess and surplus casualty, commercial multi-peril and reinsurance business and was concentrated in accident years 2007 through 2009.

| Six months to less than nine months | 1 | | | 1,039 | | | | 269 | | |

| Total | 510 | | | $ | 3,407,916 | | | $ | 111,134 | |

| Corporate | 9 | | | 31,579 | | | | 1,005 | | |

| Foreign government | 2 | | | 23,603 | | | | 844 | | |

| Total | 24 | | | $ | 121,840 | | | $ | 5,597 | |

Common Stocks – At December 31, 2013, there were no common stocks in an unrealized loss position.

For loans where the Company determines it is probable that the contractual terms will not be met, an analysis is performed and a valuation reserve is established, if necessary, with a charge to earnings.

of the property and market conditions.

| Independent pricing services | $ | 10,372,057 | | | 90.0 | % |

| Syndicate manager | 79,602 | | | | 0.7 | |

| Observable data | 1,021,001 | | | | 8.9 | |

| Total | $ | 11,515,524 | | | 100.0 | % |

fixed maturity securities.

In 2012, the valuation allowance for mortgage loans decreased by $14 million.

We expect our expense ratio to further improve if insurance prices continue to increase at current levels.

| (In thousands) | 2012 | | | | 2011 | | |

| Gross premiums written | $ | 4,261,165 | | | $ | 3,794,862 | |

| Net premiums written | 3,569,883 | | | | 3,238,120 | | |

| Net premiums earned | 3,417,022 | | | | 3,121,281 | | |

| Loss ratio | 63.5 | | % | | 64.9 | | % |

| Expense ratio | 32.5 | | | | 32.6 | | |

| Gross premiums written | $ | 802,057 | | | $ | 681,424 | |

| Net premiums written | 664,459 | | | | 551,910 | | |

| Net premiums earned | 631,841 | | | | 508,509 | | |

| Loss ratio | 59.7 | | % | | 57.4 | | % |

The average duration for the fixed maturity portfolio was [removed: 3.3] [added: 3.2] and [removed: 3.4] [added: 3.3] years at December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] respectively.

The following table outlines the groups of fixed maturity securities and their average duration at December 31, [removed: 2013:][added: 2014:]

| Cash and cash equivalents | — | | | $ | [removed: 839,738] [added: 674,441] | |

| State and municipal | 4.3 | | | [removed: 4,298,385] [added: 4,453,398] | | |

The estimated fair value at specified levels at December 31, [removed: 2013] [added: 2014] would be as follows:

| U. S. government securities | 3.7 | | | 803,388 | | |

| Corporate | 2.7 | | | 5,205,426 | | |

| Foreign government | 2.7 | | | 941,826 | | |

| Mortgage-backed securities | 3.2 | | | 1,321,768 | | |

| Loans receivable | 2.5 | | | 325,219 | | |

| Total | 3.2 | | | $ | 13,725,466 | |

| 300 basis point rise | $ | 12,385,952 | | | $ | (1,339,514 | ) |

| 200 basis point rise | 12,823,926 | | | | (901,540 | | ) |

| 100 basis point rise | 13,271,448 | | | | (454,018 | | ) |

| Base scenario | 13,725,466 | | | | — | | |

| 100 basis point decline | 14,176,637 | | | | 451,171 | | |

| 200 basis point decline | 14,610,529 | | | | 885,063 | | |

| 300 basis point decline | 15,007,036 | | | | 1,281,570 | | |

| U. S. government securities | 4.0 | | | 884,859 | | |

| Corporate | 2.9 | | | 4,208,156 | | |

| Foreign government | 2.8 | | | 879,857 | | |

| Mortgage-backed securities | 3.5 | | | 1,360,487 | | |

| Loans receivable | 2.8 | | | 346,746 | | |

| Total | 3.3 | | | $ | 12,818,228 | |

| 300 basis point rise | $ | 11,521,823 | | | $ | (1,296,405 | ) |

| 200 basis point rise | 11,939,950 | | | | (878,278 | | ) |

| 100 basis point rise | 12,372,886 | | | | (445,342 | | ) |

| Base scenario | 12,818,228 | | | | — | | |

| 100 basis point decline | 13,261,331 | | | | 443,103 | | |

| 200 basis point decline | 13,694,433 | | | | 876,205 | | |

| 300 basis point decline | 14,115,702 | | | | 1,297,474 | | |

| (In thousands) | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Insurance-Domestic | $ | [removed: 3,994,387] [added: 4,517,587] | | | $ | [removed: 3,569,883] [added: 3,994,387] | | | $ | [removed: 3,238,120] [added: 3,569,883] | | | $ | [removed: 2,938,223] [added: 3,238,120] | | | $ | [removed: 2,931,188] [added: 2,938,223] | |

| Insurance-International | [removed: 756,185] [added: 828,076] | | | | [removed: 664,459] [added: 756,185] | | | | [removed: 551,910] [added: 664,459] | | | | [removed: 430,252] [added: 551,910] | | | | [removed: 302,594] [added: 430,252] | | |

| Reinsurance-Global | [removed: 749,601] [added: 651,284] | | | | [removed: 664,197] [added: 749,601] | | | | [removed: 567,338] [added: 664,197] | | | | [removed: 482,451] [added: 567,338] | | | | [removed: 496,313] [added: 482,451] | | |

| Total | $ | [removed: 5,500,173] [added: 5,996,947] | | | $ | [removed: 4,898,539] [added: 5,500,173] | | | $ | [removed: 4,357,368] [added: 4,898,539] | | | $ | [removed: 3,850,926] [added: 4,357,368] | | | $ | [removed: 3,730,095] [added: 3,850,926] | |

| | [added: 2014 | | |] 2013 | | | 2012 | | | 2011 | | | 2010 | | [removed: | 2009 | |]

| Insurance-Domestic | [removed: 72.6] [added: 75.3] | % | | [removed: 72.8] [added: 72.6] | % | | [removed: 74.3] [added: 72.8] | % | | [removed: 76.3] [added: 74.3] | % | | [removed: 78.6] [added: 76.3] | % |

| Insurance-International | 13.8 | | | [removed: 13.6] [added: 13.8] | | | [removed: 12.7] [added: 13.6] | | | [removed: 11.2] [added: 12.7] | | | [removed: 8.1] [added: 11.2] | |

| Reinsurance-Global | [removed: 13.6] [added: 10.9] | | | 13.6 | | | [removed: 13.0] [added: 13.6] | | | [removed: 12.5] [added: 13.0] | | | [removed: 13.3] [added: 12.5] | |

Certain of our [removed: Insurance -Domestic] [added: Insurance-Domestic] operating units underwrite [removed: specialty] risks within the excess and surplus lines market and on an admitted basis.

The [removed: specialty] lines of business [added: underwritten by these operating units] include premises operations, commercial automobile, property, [added: general liability,] products liability and professional liability lines.

Other operating units provide insurance products and services that meet the specific needs of [removed: each regionally] [added: geographically] differentiated [removed: customer base] [added: customers] by developing expertise in the niches that drive local communities.

These operating units are organized [removed: geographically] in [removed: order] [added: a manner designed] to provide them with the flexibility to adapt quickly to local market conditions and customer needs.

In addition to providing insurance products, [removed: the alternative markets] [added: certain of our operating] units also provide a wide variety of fee-based services, including claims, administrative and consulting services.

Berkley Aviation offers a wide range of aviation insurance products, including coverage for airlines, [added: airplanes,] helicopters, miscellaneous general aviation operations, non-owned aircraft, fixed-base operations, control towers, airports and other specialized niche programs.

It offers a comprehensive range of property, casualty, professional liability, and specialty lines insurance products and loss control services, including financial institution-specific commercial package policies, workers' compensation, umbrella, commercial auto, management liability [added: and crime] coverages, and financial institution bonds.

[removed: It serves pharmaceutical and biologic/biotech] [added: biotech] companies, medical device companies, dietary supplement manufacturers, medical and research software developers, contract service organizations, research institutions and organizations, and other related businesses.

Focusing on middle market accounts, it complements its standard writings with specialized products in areas such as social [removed: services, nonprofit organizations] [added: services] and [removed: inland marine.][added: construction.]

Berkley Net Underwriters focuses on [removed: niche insurance products for] small and medium-sized commercial risks, using a web-based system to allow producers to quote, bind and service workers' compensation insurance products on behalf of W. R. Berkley Corporation member companies.

Its customer base includes risks of any size that work in the oil patch, including operators, drillers, geophysical contractors, well-servicing contractors, and manufacturers/distributors of oil field [removed: products.][added: products, as well as those in the renewable energy sector.]

Berkley Professional Liability specializes in professional liability insurance for publicly-traded and private entities based [removed: in the United States and Canada.][added: on a worldwide basis.]

Products include general liability, [removed: auto, property employment practices, incidental medical, miscellaneous professionals, crime and liability for] [added: automobile liability,] law [removed: enforcement,] [added: enforcement liability,] public officials and [removed: educators.][added: educator's legal liability, employment practices liability, incidental medical, property and crime.]

Its entertainment and sports division underwrites property casualty insurance products, both on an admitted and non-admitted basis, for the entertainment industry [added: and sports-related organizations.]

Berkley Surety provides a broad array of surety products for contract and commercial surety [removed: risks,] [added: risks in the U.S. and Canada,] including specialty niches such as environmental and secured credit for small contractors, through an independent agency and broker platform across a [removed: nationwide] network of 16 field offices.

Clermont Specialty Managers is a provider of package insurance programs for high-end cooperative, condominium, and quality rental apartment buildings and upscale restaurants in the New York, New [removed: Jersey and] [added: Jersey,] Chicago [added: and Washington, D.C.] metropolitan [added: markets, as well as other select] markets.

Through its division, Berkley Agribusiness Risk Specialists, [removed: the company] [added: Continental Western] offers insurance for larger commercial risks across the United States [removed: for clients] involved in the supply, storage, handling, processing and distribution of commodities related to the agriculture and food industries.

Key Risk Insurance is a provider of workers' compensation insurance products and services for employers in the public and private sectors [removed: throughout the] [added: in select] Eastern [removed: United] [added: and Southeastern] States.

Riverport Insurance Services provides property casualty insurance coverages to human services organizations, including nonprofit and for-profit organizations, public [removed: entities,] [added: schools and] sports and recreational [removed: organizations, and self-insured companies, associations and purchasing groups.][added: organizations.]

Its product offerings include traditional primary [removed: coverages,] [added: coverages and risk purchasing groups,] as well as alternative market solutions for clients who wish to retain a larger share of their own risk.

| Acadia Insurance | [removed: 8.2] [added: 8.4] | % | | [removed: 8.6] [added: 8.2] | % | | [removed: 9.0] [added: 8.6] | % | | [removed: 9.2] [added: 9.0] | % | | [removed: 9.3] [added: 9.2] | % |

| Admiral Insurance | [added: 6.2 | | |] 5.9 | | | 6.1 | | | 6.8 | | | 7.5 | | [removed: | 8.9 | |]

| American Mining | 0.8 | | | [removed: 0.9] [added: 0.8] | | | [removed: 1.0] [added: 0.9] | | | 1.0 | | | 1.0 | |

| Berkley Accident and Health | [added: 3.4 | | |] 3.0 | | | 3.6 | | | 3.3 | | | 2.2 | | [removed: | 1.2 | |]

| [removed: Berkley Asset Protection] [added: Other] | [added: 2.5 | | |] 1.1 | | | 1.0 | | | 0.8 | | | 0.7 | | [removed: | 0.5 | |]

| Berkley Aviation | 1.0 | | | [removed: 1.5] [added: 1.0] | | | [removed: 1.7] [added: 1.5] | | | [removed: 1.8] [added: 1.7] | | | [removed: 1.6] [added: 1.8] | |

| Berkley Custom Insurance | 2.8 | | | [removed: 0.7] [added: 2.8] | | | [removed: —] [added: 0.7] | | | — | | | — | |

| Berkley Design Professional | [removed: —] [added: 0.1] | | | — | | | — | | | — | | | — | |

| Berkley FinSecure | [removed: 0.9] [added: 0.8] | | | [removed: 0.8] [added: 0.9] | | | 0.8 | | | [removed: 0.5] [added: 0.8] | | | [removed: 0.3] [added: 0.5] | |

| Berkley Life Sciences | 1.1 | | | [removed: 0.8] [added: 1.1] | | | [removed: 0.6] [added: 0.8] | | | [removed: 0.5] [added: 0.6] | | | 0.5 | |

| Berkley Medical Excess | [removed: 0.9] [added: 1.0] | | | 0.9 | | | [removed: 1.0] [added: 0.9] | | | [removed: 1.2] [added: 1.0] | | | [removed: 1.0] [added: 1.2] | |

In addition, it has a specialized program for Certified Public Accountants (CPAs).

It serves pharmaceutical and biologic/

Berkley Public Entity specializes in providing excess coverage and services to individual governmental and scholastic entities and intergovernmental risk sharing groups.

Riverport also insures special events.

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

W. R. Berkley Insurance (Australia) underwrites general insurance business in Australia, including professional indemnity insurance for companies of all sizes.

Through its division Berkley Asset Protection, it provides products that protect high-value commercial and personal assets, including fine art.

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| Lloyd's Syndicate 2791 Participation | 4.0 | | | — | | | — | | | — | | | — | |

| W. R. Berkley Insurance (Australia) | 8.3 | | | 8.6 | | | 5.3 | | | 4.1 | | | 3.3 | |

| W. R. Berkley Insurance (Europe) | 31.3 | | | 31.5 | | | 32.8 | | | 31.3 | | | 32.7 | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

____________________________________

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| (In thousands) | 2014 | | | | 2013 | | | | 2012 | | | | 2011 | | | | 2010 | | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | |

| (In thousands) | 2014 | | | | 2013 | | | | 2012 | | |

____________________________________

| | |

| --- | --- |

| (4) | In 2014, the Company entered into a commutation agreement that resulted in a reduction in prior year workers' compensation reserves of $30 million on an undiscounted basis and $12 million on a discounted basis. |

| Ceded reserves | 1,399,060 | | |

_________________________

| Cumulative redundancy (deficiency), undiscounted | | $ | (829 | ) | | $ | (338 | ) | | $ | 220 | | | $ | 476 | | | $ | 626 | | | $ | 637 | | | $ | 498 | | | $ | 292 | | | $ | 139 | | | $ | 117 | | | $ | — | |

| Year Ended December 31, | | 2004 | | | | 2005 | | | | 2006 | | | | 2007 | | | | 2008 | | | | 2009 | | | | 2010 | | | | 2011 | | | | 2012 | | | | 2013 | | | | 2014 | | |

| Gross cumulative redundancy (deficiency) | | $ | (852 | ) | | $ | (328 | ) | | $ | 230 | | | $ | 516 | | | $ | 634 | | | $ | 583 | | | $ | 445 | | | $ | 261 | | | $ | 102 | | | $ | 146 | | | — | | |

Typically, such statutes require that we periodically file information with

In 2014, additional amendments were adopted by the NAIC which would authorize U.S regulators to lead or participate in the group-wide supervision of certain international insurance groups.

This amount will decrease to 80% on a pro-rata basis over five years, beginning in 2016.

This threshold will increase to $200 million on a pro-rata basis over five years beginning in 2016.

As of December 31, 2014, three insurance groups had been so designated.

Although prices have generally increased since the beginning of 2011, current market price levels for certain lines of business remain below the prices required for the Company to achieve its long-term return objectives.

our business and profitability.

Often, alternative methods of risk management result in our customers choosing to retain more risk than they might otherwise retain in the traditional insurance market.

To address this need, our operating units offer insurance products, analytical tools and risk management services such as loss control and claims management that enable clients to select their risk tolerance and manage it appropriately.

These units specialize in insuring, reinsuring and administering self-insurance programs and other alternative risk transfer mechanisms for clients such as commercial and governmental entity employers, employer groups, insurers, and other groups or entities seeking alternative ways to manage their exposure to risks.

It also serves as a third-party administrator of workers' compensation mining claims for clients in several states.

Berkley Asset Protection provides products designed to protect a broad spectrum of high-value commercial and personal assets, including coverage for fine art risks such as museums, galleries and corporate and private collections; fidelity/crime for commercial and public entity risks; jewelers block for wholesale, retail, manufacturing and mining risks; cash-in-transit carriers and certain inland marine risks.

Package coverages include property, general liability, umbrella and workers' compensation.

Berkley Public Entity specializes in public entities and intergovernmental pools or trusts.

and sports-related organizations.

Regional Excess Underwriters is a full service excess and surplus lines brokerage and general agent offering commercial coverages to agents contracted with W. R. Berkley Corporation member companies and select other agents and brokers throughout the continental United States.

Surplus lines risks are placed either within the W. R. Berkley group of insurance companies, or by drawing upon the resources of other non-admitted insurance carriers.

| Regional Excess Underwriters | — | | | — | | | — | | | — | | | — | |

| W. R. Berkley Insurance (Europe) | 40.1 | % | | 38.1 | % | | 35.4 | % | | 36.0 | % | | 40.4 | % |

| Ceded reserves | 1,397,144 | | |

| Cumulative redundancy (deficiency), undiscounted | | $ | (1,398 | ) | | $ | (820 | ) | | $ | (320 | ) | | $ | 227 | | | $ | 467 | | | $ | 596 | | | $ | 565 | | | $ | 394 | | | $ | 198 | | | $ | 77 | | | $ | — | |

| Gross cumulative redundancy (deficiency) | | $ | (1,527 | ) | | $ | (881 | ) | | $ | (350 | ) | | $ | 187 | | | $ | 463 | | | $ | 558 | | | $ | 477 | | | $ | 304 | | | $ | 149 | | | $ | 2 | | | — | | |

We cannot be certain that TRIA will be extended past such expiration date.

In April 2013, a federal savings association that was indirectly owned by the Company sold substantially all of its assets, and the Company deregistered as a savings and loan holding company.

Although insurance rates increased commencing in 2011, certain products continued to experience strong competition.

existing competitors that receive substantial infusions of capital, provide increasing competition, which may adversely impact our business and profitability.

For the fiscal year ended December 31, [removed: 2013][added: 2014]

The aggregate market value of the voting and non-voting common stock held by non-affiliates (computed by reference to the price at which the common stock was last sold) as of the last business day of the registrant’s most recently completed second fiscal quarter was [removed: $4,360,513,620.][added: $5,097,062,590.]

Number of shares of common stock, $.20 par value, outstanding as of February [removed: 25, 2014: 128,538,265][added: 23, 2015: 125,810,616]

Portions of the Company’s definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] are incorporated herein by reference in Part III.

| [SAFE HARBOR [removed: STATEMENT](#sFC1DACA6457341A840B0EBB7320673D5)] [added: STATEMENT](#s2356F4056F7351D280AD455845E0C055)] | | | |

| ITEM | 1. | [removed: [BUSINESS](#s7E6F87D42FDDEE9625DEEBB72261963E)] [added: [BUSINESS](#sE722A74190725819BC44EE09DF63784D)] | [removed: [1](#s7E6F87D42FDDEE9625DEEBB72261963E)] [added: [1](#sE722A74190725819BC44EE09DF63784D)] |

| ITEM | 1A. | [RISK [removed: FACTORS](#s572D4946DAEA3A7C1FE9EBB733069690)] [added: FACTORS](#s744221B0E91951028835CB380B1529AF)] | [removed: [19](#s572D4946DAEA3A7C1FE9EBB733069690)] [added: [19](#s744221B0E91951028835CB380B1529AF)] |

| ITEM | 1B. | [UNRESOLVED STAFF [removed: COMMENTS](#s2B2354F92DDAE8D4EE35EBB7331D5DFC)] [added: COMMENTS](#s5646713A99F65856B40FCBE0E386219F)] | [removed: [27](#s2B2354F92DDAE8D4EE35EBB7331D5DFC)] [added: [27](#s5646713A99F65856B40FCBE0E386219F)] |

| ITEM | 2. | [removed: [PROPERTIES](#sF05FE667D81AEF09E86AEBB7334F70F7)] [added: [PROPERTIES](#sE01B1EAE28CE5BB1BDCACC71B5897494)] | [removed: [27](#sF05FE667D81AEF09E86AEBB7334F70F7)] [added: [27](#sE01B1EAE28CE5BB1BDCACC71B5897494)] |

| ITEM | 3. | [LEGAL [removed: PROCEEDINGS](#sB4FFEA7E41065A3EC542EBB73371E9F6)] [added: PROCEEDINGS](#sECE65B22B7B9583C844D5A7B81079A94)] | [removed: [27](#sB4FFEA7E41065A3EC542EBB73371E9F6)] [added: [27](#sECE65B22B7B9583C844D5A7B81079A94)] |

| ITEM | 4. | MINE SAFETY DISCLOSURES | [removed: [27](#s5253E21BDABB25087319EBB733A3A1DF)] [added: [27](#sCBD2AB40318955E0A2D2B32C2FF6584C)] |

| ITEM | 5. | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#sC1F223E9CAFBF009E406EBB733F9F0F1)] [added: SECURITIES](#sB2183B404EA45FD9A974C1438CC59270)] | [removed: [28](#sC1F223E9CAFBF009E406EBB733F9F0F1)] [added: [28](#sB2183B404EA45FD9A974C1438CC59270)] |

| ITEM | 6. | [SELECTED FINANCIAL [removed: DATA](#s940DB9811B0693B08F1BEBB723B19E01)] [added: DATA](#s8482E9B2F14C50D0BBE79C5738F01248)] | [removed: [29](#s940DB9811B0693B08F1BEBB723B19E01)] [added: [29](#s8482E9B2F14C50D0BBE79C5738F01248)] |

| ITEM | 7. | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#s53AD6C2E81D8B81FF9C0EBB73449FB8D)] [added: OPERATIONS](#s236DABA1620A514B865888E95026AE99)] | [removed: [29](#s53AD6C2E81D8B81FF9C0EBB73449FB8D)] [added: [29](#s236DABA1620A514B865888E95026AE99)] |

| ITEM | 7A. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#s1C5FC94BB27F0EE439EBEBB724136B4C)] [added: RISK](#s7F0393ED334856FB9C73784AE922D2FE)] | [removed: [52](#s1C5FC94BB27F0EE439EBEBB724136B4C)] [added: [52](#s7F0393ED334856FB9C73784AE922D2FE)] |

| ITEM | 8. | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#s75510507D9A88156972BEBB73596EF69)] [added: DATA](#sBAAB4DEF783D5A9CA3E51A7FF4BAA412)] | [removed: [53](#s75510507D9A88156972BEBB73596EF69)] [added: [53](#sBAAB4DEF783D5A9CA3E51A7FF4BAA412)] |

| ITEM | 9. | [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE](#s8138AE6FECCB80BBCE12EBB73CDBD738)] [added: DISCLOSURE](#sEEEAAC92AA0D5AB7963E306FE2F3D9E7)] | [removed: [85](#s8138AE6FECCB80BBCE12EBB73CDBD738)] [added: [86](#sEEEAAC92AA0D5AB7963E306FE2F3D9E7)] |

| ITEM | 9A. | [CONTROLS AND [removed: PROCEDURES](#sCD3BA15BDEEB1D1B88D2EBB73CE52636)] [added: PROCEDURES](#s393CA19E0DC7559884A7AD68B5A1A64C)] | [removed: [86](#sCD3BA15BDEEB1D1B88D2EBB73CE52636)] [added: [86](#s393CA19E0DC7559884A7AD68B5A1A64C)] |

| ITEM | 9B. | [OTHER [removed: INFORMATION](#s7145C1C8B055065DEF9BEBB73D13B1B8)] [added: INFORMATION](#sDF8453CCD70A5816B1380DA423F2E1A6)] | [removed: [89](#s7145C1C8B055065DEF9BEBB73D13B1B8)] [added: [89](#sDF8453CCD70A5816B1380DA423F2E1A6)] |

| ITEM | 10. | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#s7263D52B242859B0CA8CEBB73D689442)] [added: GOVERNANCE](#s324A36DCF9C45471875989D4B9DB0390)] | [removed: [89](#s7263D52B242859B0CA8CEBB73D689442)] [added: [89](#s324A36DCF9C45471875989D4B9DB0390)] |

| ITEM | 11. | [EXECUTIVE [removed: COMPENSATION](#s0A72B1BF2CDA02FF57DAEBB73D8BB592)] [added: COMPENSATION](#s8833B1C162155DD28764ABEBD9B10ED1)] | [removed: [89](#s0A72B1BF2CDA02FF57DAEBB73D8BB592)] [added: [89](#s8833B1C162155DD28764ABEBD9B10ED1)] |

| ITEM | 12. | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#sB80AFAF07A76BFBFAB9CEBB73DBD6C2F)] [added: MATTERS](#sC1659F4F63FB5E59B1AE4181A0D165F6)] | [removed: [89](#sB80AFAF07A76BFBFAB9CEBB73DBD6C2F)] [added: [89](#sC1659F4F63FB5E59B1AE4181A0D165F6)] |

| ITEM | 13. | [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE](#s32A4E158512D60B87F58EBB73DDB743A)] [added: INDEPENDENCE](#sE6DF74C90639593488434EB4057C5723)] | [removed: [89](#s32A4E158512D60B87F58EBB73DDB743A)] [added: [89](#sE6DF74C90639593488434EB4057C5723)] |

| ITEM | 14. | [PRINCIPAL ACCOUNTING FEES AND [removed: SERVICES](#s7141936C4DAF82D0D9B5EBB73E0D2425)] [added: SERVICES](#sE9BB4DEA58DB539F93F0566444057929)] | [removed: [89](#s7141936C4DAF82D0D9B5EBB73E0D2425)] [added: [89](#sE9BB4DEA58DB539F93F0566444057929)] |

| ITEM | 15. | [EXHIBITS, FINANCIAL STATEMENT [removed: SCHEDULES](#sCC27DCEBDA501434CD4CEBB73E61F1ED)] [added: SCHEDULES](#s347E030C0237576781B5E0C14DF4B913)] | [removed: [89](#sCC27DCEBDA501434CD4CEBB73E61F1ED)] [added: [89](#s347E030C0237576781B5E0C14DF4B913)] |

| | This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report including statements related to our outlook for the industry and for our performance for the year [removed: 2014] [added: 2015] and beyond, are based upon our 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 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: |

| • | 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, [added: including] real estate, merger [removed: arbitrage] [added: arbitrage, energy related] and private equity investments; |

| • | our retention under the Terrorism Risk Insurance Act of 2002, as amended [removed: ("TRIA"), and the potential expiration of TRIA;] [added: ("TRIA");] |

These risks and uncertainties could cause our actual results for the year [removed: 2014] [added: 2015] and beyond to differ materially from those expressed in any forward-looking statement we make.

10-K 1 wrb1231201410k.htm 10-K

10-K 1 wrb1231201310k.htm 10-K

At December 31, [removed: 2013,] [added: 2014,] the Company had aggregate office space of [removed: 3,886,500] [added: 4,117,482] square feet, of which [removed: 1,121,546] [added: 1,081,014] were owned and [removed: 2,764,954] [added: 3,036,468] were leased.

Rental expense for the Company's operations was approximately [removed: $44,752,000, $38,179,000] [added: $45,189,000, $44,752,000] and [removed: $33,003,000] [added: $38,179,000] for [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011,] [added: 2012,] respectively.

Future minimum lease payments, without provision for sublease income, are [removed: $42,586,000] [added: $41,210,000] in [removed: 2014, $39,218,000] [added: 2015, $36,547,000] in [removed: 2015] [added: 2016] and [removed: $276,628,000] [added: $161,209,000] thereafter.

| | Price Range | | | | | | | | | [removed: | |]

| | High | | | | Low | | | | Dividends Declared Per Share | [removed: | |]

| 2013: | | | | | | | | | | [removed: | |]

| Fourth Quarter | $ | 45.00 | | | $ | 41.89 | | | [removed: $ | 0.10 |] [added: $0.10] |

| Third Quarter | 44.88 | | | | 40.42 | | | | 0.10 | [removed: | |]

| Second Quarter | 45.59 | | | | 39.62 | | | | 0.10 | [removed: | |]

| First Quarter | 44.40 | | | | 38.03 | | | | 0.09 | [removed: | |]

The closing price of the common stock on February [removed: 25, 2014] [added: 23, 2015] as reported on the New York Stock Exchange was [removed: $40.57] [added: $50.16] per share.

The approximate number of record holders of the common stock on February [removed: 25, 2014] [added: 23, 2015] was [removed: 407.][added: 390.]

Set forth below is a summary of the shares repurchased by the Company during the fourth quarter of [removed: 2013] [added: 2014] and the remaining number of shares authorized for purchase by the Company during such period.

| | Total Number of Shares Purchased | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Maximum Number of Shares that may yet be Purchased Under the Plans or [removed: Programs(1)] [added: Programs] | |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| 2014: | | | | | | | | | |

| Fourth Quarter | $ | 54.14 | | | $ | 46.79 | | | $1.11 (1) |

| Third Quarter | 48.94 | | | | 44.30 | | | | 0.11 |

| Second Quarter | 46.36 | | | | 40.56 | | | | 0.11 |

| First Quarter | 43.35 | | | | 37.82 | | | | 0.10 |

_________

(1) Includes a special dividend of $1.00 per share paid in December 2014.

| October 2014 | — | | | $ | — | | | — | | | 7,355,582 | |

| November 2014 | 148,605 | | | 50.96 | | | | 148,605 | | | 7,206,977 | |

| December 2014 | 120,860 | | | 49.92 | | | | 120,860 | | | 7,186,117 | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2012: | | | | | | | | | | | |

| Fourth Quarter | $ | 40.39 | | | $ | 36.82 | | | $ | 1.09 | |

| Third Quarter | 39.58 | | | | 36.08 | | | | 0.09 | | |

| Second Quarter | 39.29 | | | | 35.88 | | | | 0.09 | | |

| First Quarter | 36.80 | | | | 33.34 | | | | 0.08 | | |

| October 2013 | 120,000 | | | $ | 43.66 | | | 120,000 | | | 7,977,018 | |

| November 2013 | 1,246,639 | | | 43.52 | | | | 1,246,639 | | | 6,730,379 | |

| December 2013 | 1,586,641 | | | 42.61 | | | | 1,586,641 | | | 9,884,737 | |

(1) The Company's repurchase authorization was increased to 10,000,000 shares on December 18, 2013.

| (In thousands, except per share data) | [added: 2014 | | |] 2013 | | | 2012 | | | 2011 | | | 2010 | | [removed: | 2009 | |]

| Net premiums written | [added: $5,996,947 | | |] $5,500,173 | | | $4,898,539 | | | $4,357,368 | | | $3,850,926 | | [removed: | $3,730,095 | |]

| Net premiums earned | [added: 5,744,418 | | |] 5,226,537 | | | 4,673,516 | | | 4,160,867 | | | 3,835,582 | | [removed: | 3,805,849 | |]

| Net investment income | [added: 600,885 | | |] 544,291 | | | 586,763 | | | 526,351 | | | 530,525 | | [removed: | 379,008 | |]

| Insurance service fees | [added: 117,443 | | |] 107,513 | | | 103,133 | | | 92,843 | | | 85,405 | | [removed: | 93,245 | |]

| Net investment gains [removed: (losses)] | [added: 254,852 | | |] 121,544 | | | 210,465 | | | 125,481 | | | 56,581 | | [removed: | (38,408 | ) |]

| Revenues from wholly-owned investees | [added: 410,022 | | |] 407,623 | | | 247,113 | | | 248,678 | | | 214,454 | | [removed: | 189,347 | |]

| Total revenues | [added: 7,128,928 | | |] 6,408,534 | | | 5,823,554 | | | 5,155,984 | | | 4,724,069 | | [removed: | 4,431,178 | |]

| Interest expense | [added: 128,174 | | |] 123,177 | | | 126,302 | | | 112,512 | | | 106,969 | | [removed: | 87,989 | |]

| Income before income taxes | [added: 952,196 | | |] 698,888 | | | 701,928 | | | 513,086 | | | 598,910 | | [removed: | 379,878 | |]

| Income tax expense | [removed: (193,587] [added: (302,593] | ) | | [removed: (191,285] [added: (193,587] | ) | | [removed: (121,945] [added: (191,285] | ) | | [removed: (152,226] [added: (121,945] | ) | | [removed: (72,349] [added: (152,226] | ) |

| Noncontrolling interests | [added: (719 | ) | |] (5,376 | ) | | (51 | ) | | 70 | | | (279 | ) | [removed: | (23 | ) |]

| Net income to common stockholders | [added: 648,884 | | |] 499,925 | | | 510,592 | | | 391,211 | | | 446,405 | | [removed: | 307,506 | |]

| Net income per basic share | [added: 5.07 | | |] 3.69 | | | 3.72 | | | 2.80 | | | 3.00 | | [removed: | 1.92 | |]

| Net income per diluted share | [added: 4.86 | | |] 3.55 | | | 3.56 | | | 2.69 | | | 2.88 | | [removed: | 1.85 | |]

| Common stockholders’ equity | [added: 36.21 | | |] 32.79 | | | 31.66 | | | 28.75 | | | 25.89 | | [removed: | 22.66 | |]

| Cash dividends declared | [added: 1.43 | | |] 0.39 | | | 1.35 | | | 0.31 | | | 0.27 | | [removed: | 0.24 | |]

| Basic | [added: 127,874 | | |] 135,305 | | | 137,097 | | | 139,688 | | | 148,752 | | [removed: | 160,357 | |]

| Diluted | [added: 133,652 | | |] 140,743 | | | 143,315 | | | 145,672 | | | 155,081 | | [removed: | 166,574 | |]

| Investments | [added: $15,591,824 | | |] $14,548,630 | | | $14,467,440 | | | $13,439,518 | | | $12,995,393 | | [removed: | $13,050,238 | |]

| Total assets | [added: 21,716,691 | | |] 20,551,796 | | | 20,155,896 | | | 18,403,873 | | | 17,477,070 | | [removed: | 17,280,001 | |]

| Reserves for losses and loss expenses | [added: 10,369,701 | | |] 10,080,941 | | | 9,751,086 | | | 9,337,134 | | | 9,016,549 | | [removed: | 9,071,671 | |]

| Subordinated debentures | [added: 340,060 | | |] 339,800 | | | 243,206 | | | 242,997 | | | 242,784 | | [removed: | 249,793 | |]

| Senior notes and other debt | [added: 2,115,527 | | |] 1,692,442 | | | 1,871,535 | | | 1,500,503 | | | 1,500,419 | | [removed: | 1,345,481 | |]

| Common stockholders’ equity | [added: 4,589,945 | | |] 4,336,035 | | | 4,306,217 | | | 3,953,356 | | | 3,651,399 | | [removed: | 3,547,472 | |]

We have audited the accompanying consolidated balance sheets of W. R. Berkley Corporation and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2013.][added: 2014.]

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of W. R. Berkley Corporation and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, [removed: 2013,] [added: 2014,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), W. R. Berkley Corporation's internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February [removed: 28, 2014] [added: 27, 2015] expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

| (In thousands, except per share data) | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Net premiums written | $ | [removed: 5,500,173] [added: 5,996,947] | | | $ | [removed: 4,898,539] [added: 5,500,173] | | | $ | [removed: 4,357,368] [added: 4,898,539] | |

| Change in net unearned premiums | [removed: (273,636] [added: (252,529] | | ) | | [removed: (225,023] [added: (273,636] | | ) | | [removed: (196,501] [added: (225,023] | | ) |

| Net premiums earned | [removed: 5,226,537] [added: 5,744,418] | | | | [removed: 4,673,516] [added: 5,226,537] | | | | [removed: 4,160,867] [added: 4,673,516] | | |

| Net investment income | [removed: 544,291] [added: 600,885] | | | | [removed: 586,763] [added: 544,291] | | | | [removed: 526,351] [added: 586,763] | | |

| Insurance service fees | [removed: 107,513] [added: 117,443] | | | | [removed: 103,133] [added: 107,513] | | | | [removed: 92,843] [added: 103,133] | | |

| Net realized gains on investment sales | [removed: 127,586] [added: 254,852] | | | | [removed: 201,451] [added: 127,586] | | | | [removed: 125,881] [added: 201,451] | | |

| Other-than-temporary impairments and change in valuation allowance | [removed: (6,042] [added: —] | | [removed: )] | | [removed: 9,014] [added: (6,042] | | [added: )] | | [removed: (400] [added: 9,014] | | [removed: )] |

| Net investment gains | [removed: 121,544] [added: 254,852] | | | | [removed: 210,465] [added: 121,544] | | | | [removed: 125,481] [added: 210,465] | | |

| Revenues from wholly-owned investees | [removed: 407,623] [added: 410,022] | | | | [removed: 247,113] [added: 407,623] | | | | [removed: 248,678] [added: 247,113] | | |

| Other income | [removed: 1,026] [added: 1,308] | | | | [removed: 2,564] [added: 1,026] | | | | [removed: 1,764] [added: 2,564] | | |

| Total revenues | [removed: 6,408,534] [added: 7,128,928] | | | | [removed: 5,823,554] [added: 6,408,534] | | | | [removed: 5,155,984] [added: 5,823,554] | | |

| Losses and loss expenses | [removed: 3,197,024] [added: 3,490,567] | | | | [removed: 2,948,479] [added: 3,197,024] | | | | [removed: 2,658,365] [added: 2,948,479] | | |

| Other operating costs and expenses | [removed: 2,000,684] [added: 2,157,456] | | | | [removed: 1,799,623] [added: 2,000,684] | | | | [removed: 1,626,526] [added: 1,799,623] | | |

| Expenses from wholly-owned investees | [removed: 388,761] [added: 400,535] | | | | [removed: 247,222] [added: 388,761] | | | | [removed: 245,495] [added: 247,222] | | |

| Interest expense | [removed: 123,177] [added: 128,174] | | | | [removed: 126,302] [added: 123,177] | | | | [removed: 112,512] [added: 126,302] | | |

| Total operating costs and expenses | [removed: 5,709,646] [added: 6,176,732] | | | | [removed: 5,121,626] [added: 5,709,646] | | | | [removed: 4,642,898] [added: 5,121,626] | | |

| Income before income taxes | [removed: 698,888] [added: 952,196] | | | | [removed: 701,928] [added: 698,888] | | | | [removed: 513,086] [added: 701,928] | | |

| Income tax expense | [removed: (193,587] [added: (302,593] | | ) | | [removed: (191,285] [added: (193,587] | | ) | | [removed: (121,945] [added: (191,285] | | ) |

| Net income before noncontrolling interests | [removed: 505,301] [added: 649,603] | | | | [removed: 510,643] [added: 505,301] | | | | [removed: 391,141] [added: 510,643] | | |

| Noncontrolling interests | [removed: (5,376] [added: (719] | | ) | | [removed: (51] [added: (5,376] | | ) | | [removed: 70] [added: (51] | | [added: )] |

| Net income to common stockholders | $ | [removed: 499,925] [added: 648,884] | | | $ | [removed: 510,592] [added: 499,925] | | | $ | [removed: 391,211] [added: 510,592] | |

| Basic | $ | [removed: 3.69] [added: 5.07] | | | $ | [removed: 3.72] [added: 3.69] | | | $ | [removed: 2.80] [added: 3.72] | |

| Diluted | $ | [removed: 3.55] [added: 4.86] | | | $ | [removed: 3.56] [added: 3.55] | | | $ | [removed: 2.69] [added: 3.56] | |

| (In thousands) | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Net income before noncontrolling interests | $ | [removed: 505,301] [added: 649,603] | | | $ | [removed: 510,643] [added: 505,301] | | | $ | [removed: 391,141] [added: 510,643] | |

| Change in unrealized translation adjustments | [removed: (23,848] [added: (62,125] | | ) | | [removed: 24,563] [added: (23,848] | | [added: )] | | [removed: (18,751] [added: 24,563] | | [removed: )] |

| Change in unrealized investment gains (losses), net of taxes | [removed: (261,064] [added: 49,666] | | [removed: )] | | [removed: 87,316] [added: (261,064] | | [added: )] | | [removed: 95,617] [added: 87,316] | | |

| Change in unrecognized pension obligation, net of taxes | [removed: 8,700] [added: 6,651] | | | | [removed: (1,022] [added: 8,700] | | [removed: )] | | [removed: 1,367] [added: (1,022] | | [added: )] |

| Other comprehensive income [added: (loss)] | [removed: (276,212] [added: (5,808] | | ) | | [removed: 110,857] [added: (276,212] | | [added: )] | | [removed: 78,233] [added: 110,857] | | |

| Comprehensive income | [removed: 229,089] [added: 643,795] | | | | [removed: 621,500] [added: 229,089] | | | | [removed: 469,374] [added: 621,500] | | |

| Comprehensive income [removed: (loss)] to the noncontrolling interest | [removed: (5,404] [added: (752] | | ) | | [removed: (128] [added: (5,404] | | ) | | [removed: 125] [added: (128] | | [added: )] |

| Comprehensive income to common shareholders | $ | [removed: 223,685] [added: 643,043] | | | $ | [removed: 621,372] [added: 223,685] | | | $ | [removed: 469,499] [added: 621,372] | |

| (In thousands, except share data) | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Fixed maturity securities | $ | [removed: 11,616,844] [added: 12,705,160] | | | $ | [removed: 11,943,956] [added: 11,616,844] | |

| Equity securities available for sale | [removed: 283,338] [added: 170,991] | | | | [removed: 376,022] [added: 283,338] | | |

| Arbitrage trading account | [removed: 522,128] [added: 450,648] | | | | [removed: 329,077] [added: 522,128] | | |

February 27, 2015

| Net income to common stockholders | $ | 648,884 | | | $ | 499,925 | | | $ | 510,592 | |

| Current income taxes | (40,935 | | ) | | (45,613 | | ) | | 5,914 | | |

| Other | (58,254 | | ) | | 42,787 | | | | 102,014 | | |

| Proceeds from sale of real estate | 343,723 | | | | — | | | | — | | |

| Cash distributed in connection with business | 15,783 | | | | — | | | | — | | |

These services include (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services.

This guidance modified the amortization method on these investments and the statement of operations classification as pre-adoption amounts were presented in both pre-tax income and income tax expense while post adoption all impacts are recorded in income tax expense.

The Company adopted this guidance effective January 1, 2014, and the impact of applying this guidance was immaterial.

In 2014, the Company acquired a specialty property and casualty insurance distribution company for $83 million.

The fair values of the assets acquired and liabilities assumed have been estimated based on a valuation prepared by a third party.

The estimated useful lives of the intangible assets acquired range from 7 years to 15 years, with approximately $10 million having an indefinite life.

In 2014, the Company sold an aviation-related business for $16 million.

The business had a net carrying value of $15 million, comprised of $7 million of goodwill, $6 million of other assets, $4 million of furniture and equipment and $2 million of liabilities.

| (In thousands) | 2014 | | | | 2013 | | |

| Goodwill and other intangibles assets | 79,646 | | | | 64,464 | | |

| Premium and service fee receivable | 24,432 | | | | — | | |

| Deferred federal income tax | (7,107 | | ) | | — | | |

The following table presents the components of the changes in accumulated other comprehensive income (loss) (AOCI) as of and for the year ended December 31, 2014:

| Beginning of period | $ | 256,566 | | | $ | (60,524 | ) | | $ | (6,651 | ) | | $ | 189,391 | |

| Other comprehensive income (loss) before reclassifications | 98,294 | | | | (62,125 | | ) | | — | | | | 36,169 | | |

| Amounts reclassified from AOCI | (48,628 | | ) | | — | | | | 6,651 | | | | (41,977 | | ) |

| Other comprehensive income (loss) | 49,666 | | | | (62,125 | | ) | | 6,651 | | | | (5,808 | | ) |

| Unrealized investment gain related to non-controlling interest | (33 | | ) | | — | | | | — | | | | (33 | | ) |

| Ending balance | $ | 306,199 | | | $ | (122,649 | ) | | $ | — | | | $ | 183,550 | |

| Pre-tax | $ | (74,812 | ) | (1) | $ | — | | | $ | 10,232 | | (3) | $ | (64,580 | ) |

| Tax effect | 26,184 | | | (2) | — | | | | (3,581 | | ) | (2) | 22,603 | | |

| After-tax amounts reclassified | $ | (48,628 | ) | | $ | — | | | $ | 6,651 | | | $ | (41,977 | ) |

| Pre-tax | $ | 72,889 | | | $ | (62,125 | ) | | $ | 10,232 | | | $ | 20,996 | |

| Tax effect | (23,223 | | ) | | — | | | | (3,581 | | ) | | (26,804 | | ) |

| Other comprehensive income (loss) | $ | 49,666 | | | $ | (62,125 | ) | | $ | 6,651 | | | $ | (5,808 | ) |

| (In thousands) | Unrealized investment gains (losses) | | | | Currency translation adjustments | | | | Net pension asset | | | | Accumulated other comprehensive income (loss) | | |

| Changes in AOCI | | | | | | | | | | | | | | | |

| Amounts reclassified from AOCI | | | | | | | | | | | | | | | |

| Other comprehensive income (loss) | | | | | | | | | | | | | | | |

| December 31, 2014 | | | | | | | | | | | | | | | | | | | |

| State and municipal | $ | 72,901 | | | $ | 17,501 | | | $ | — | | | $ | 90,402 | | | $ | 72,901 | |

| Corporate | 4,998 | | | | 291 | | | | — | | | | 5,289 | | | | 4,998 | | |

| Total held to maturity | 101,177 | | | | 20,646 | | | | — | | | | 121,823 | | | | 101,177 | | |

| U.S. government and government agency | 773,192 | | | | 33,353 | | | | (3,157 | | ) | | 803,388 | | | | 803,388 | | |

February 28, 2014

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Other | (2,826 | | ) | | 107,928 | | | | 10,269 | | |

| Cash and cash equivalents at beginning of year | 905,670 | | | | 911,742 | | | | 642,952 | | |

(Q) Change in accounting

In October 2010, the Financial Accounting Standards Board ("FASB") issued guidance regarding the treatment of costs associated with acquiring or renewing insurance contracts.

This guidance modified the definition of the types of costs that can be capitalized and specifies that the costs must be directly related to the successful acquisition of a new or renewed insurance contract.

The Company adopted this guidance effective January 1, 2012 and retrospectively adjusted its previously issued financial statements.

The impact of applying this guidance retrospectively was a reduction in stockholders' equity of $49 million as of January 1, 2010.

A summary of the impact of the adoption of this new guidance is shown below:

| (In thousands, except per share amounts) | Previously Reported | | | | As Adjusted | | |

| Other operating costs and expenses | $ | 1,621,329 | | | $ | 1,626,526 | |

| Income before income taxes | 518,283 | | | | 513,086 | | |

| Federal and foreign income taxes | (123,550 | | ) | | (121,945 | | ) |

| Net income | 394,803 | | | | 391,211 | | |

| Basic net income per share | $ | 2.83 | | | $ | 2.80 | |

| Diluted net income per share | 2.71 | | | | 2.69 | | |

Information has been restated as a result of the adoption of this new guidance throughout these consolidated financial statements and notes, where applicable.

In February 2013, the Financial Accounting Standards Board (FASB) issued guidance relating to disclosures about items reclassified out of accumulated other comprehensive income ("AOCI").

The Company’s adoption of the updated guidance effective January 1, 2013 resulted in a change in the disclosures for AOCI in the Company’s consolidated financial statements but did not have any impact on the Company’s results of operations, financial position or liquidity.

The guidance must be applied retrospectively for annual periods, and interim periods within those annual periods, beginning after December 15, 2014.

Early adoption is permitted and can be applied retrospectively in reporting periods for which financial statements have not yet been issued.

The Company is currently evaluating the impact of this guidance on the Company’s results of operations, financial position and liquidity, which is not expected to be material.

In 2011, the Company acquired a business that owned an office building in London for $251 million in cash and an inactive insurance company for $23 million in cash.

Approximately $2 million of the aggregate purchase price for these acquisitions was allocated to intangible assets.

| Fixed maturity securities | $ | — | | | $ | 3,213 | |

| Goodwill | 19,664 | | | | 251 | | |

| Intangible assets | 44,800 | | | | — | | |

| December 31, 2012 | | | | | | | | | | | | | | | | | | | |

| State and municipal | $ | 65,190 | | | $ | 18,529 | | | $ | — | | | $ | 83,719 | | | $ | 65,190 | |

| Corporate | 4,997 | | | | 605 | | | | — | | | | 5,602 | | | | 4,997 | | |

| Total held to maturity | 102,951 | | | | 24,420 | | | | — | | | | 127,371 | | | | 102,951 | | |

| U.S. government and government agency | 827,591 | | | | 72,532 | | | | (1,660 | | ) | | 898,463 | | | | 898,463 | | |

| State and municipal | 4,449,238 | | | | 328,974 | | | | (9,693 | | ) | | 4,768,519 | | | | 4,768,519 | | |

| Residential(1) | 1,395,739 | | | | 53,846 | | | | (7,456 | | ) | | 1,442,129 | | | | 1,442,129 | | |

| Commercial | 268,671 | | | | 5,641 | | | | (744 | | ) | | 273,568 | | | | 273,568 | | |

| Corporate | 3,378,884 | | | | 235,289 | | | | (12,525 | | ) | | 3,601,648 | | | | 3,601,648 | | |

During the quarter ended December 31, [removed: 2013,] [added: 2014,] there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2013.][added: 2014.]

We have audited W. R. Berkley Corporation's internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, W. R. Berkley Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of W. R. Berkley Corporation as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2013,] [added: 2014,] and our report dated February [removed: 28, 2014] [added: 27, 2015] expressed an unqualified opinion on those consolidated financial statements.

February 27, 2015

February 28, 2014

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2014, and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, 2014, and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] and which is incorporated herein by reference.

Reference is made to the registrant's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after December 31, [removed: 2013,] [added: 2014,] and which is incorporated herein by reference.

| | [Independent Registered Public Accountants’ Report on [removed: Schedules](#s7219AF6F94FFA29B3146EBB73F0763E7)] [added: Schedules](#sB8A2DA471F175D038D5CCEE7B1929310)] | [removed: [96](#s7219AF6F94FFA29B3146EBB73F0763E7)] [added: [96](#sB8A2DA471F175D038D5CCEE7B1929310)] |

| | [Schedule II — Condensed Financial Information of [removed: Registrant](#s9203F9DAB719A932BAE3EBB71AC9ED50)] [added: Registrant](#s3706ABE3DD265CAC99C1CF940C487F2F)] | [removed: [97](#s9203F9DAB719A932BAE3EBB71AC9ED50)] [added: [97](#s3706ABE3DD265CAC99C1CF940C487F2F)] |

| | [Schedule III — Supplementary Insurance [removed: Information](#s7B3A8D06866FE8D429F2EBB71A85D021)] [added: Information](#sDFE87399AAD05558ABFECE3452438211)] | [removed: [101](#s7B3A8D06866FE8D429F2EBB71A85D021)] [added: [101](#sDFE87399AAD05558ABFECE3452438211)] |

| | [Schedule IV — [removed: Reinsurance](#sB19A0241366AAB511572EBB71AC806D0)] [added: Reinsurance](#sAC6FE1D948E35757A8216E2DD8F6C815)] | [removed: [102](#sB19A0241366AAB511572EBB71AC806D0)] [added: [102](#sAC6FE1D948E35757A8216E2DD8F6C815)] |

| | [Schedule V — Valuation and Qualifying [removed: Accounts](#sF08983F9F8E742B8A415EBB71B5FAD12)] [added: Accounts](#s3A93E1007C1E52E9AD04F7A170013CD2)] | [removed: [103](#sF08983F9F8E742B8A415EBB71B5FAD12)] [added: [103](#s3A93E1007C1E52E9AD04F7A170013CD2)] |

| | [Schedule VI — Supplementary Information Concerning Property — Casualty Insurance [removed: Operations](#sFF4E89803B56CB26C0BBEBB71BB4FE57)] [added: Operations](#s4CD666C19EED525B89571E82C9B4BA4D)] | [removed: [104](#sFF4E89803B56CB26C0BBEBB71BB4FE57)] [added: [104](#s4CD666C19EED525B89571E82C9B4BA4D)] |

The exhibits filed as part of this report are listed on pages [removed: 94] [added: 92] - [removed: 97] [added: 95] hereof.

| William R. Berkley | | Chief Executive Officer | | February [removed: 28, 2014] [added: 27, 2015] |

| W. Robert Berkley, Jr. | | and Director | | February [removed: 28, 2014] [added: 27, 2015] |

| Christopher L. Augostini | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Ronald E. Blaylock | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Mark E. Brockbank | | | | February [removed: 28, 2014] [added: 27, 2015] |

| George G. Daly | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Mary C. Farrell | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Jack H. Nusbaum | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Mark L. Shapiro | | | | February [removed: 28, 2014] [added: 27, 2015] |

| Eugene G. Ballard | | Chief Financial Officer | | February [removed: 28, 2014] [added: 27, 2015] |

February 27, 2015

February 28, 2014

| [removed: (4.8)] [added: (4.9)] | Subordinated Indenture, dated as of May 2, 2013, between the Company and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 2, 2013). |

| [removed: (4.9)] [added: (4.10)] | First Supplemental Indenture, dated as of May 2, 2013, between the Company and The Bank of New York Mellon, as Trustee, relating to $350,000,000 principal amount of the Company's 5.625% Subordinated Debentures due 2053, including the form of the Securities as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on May 2, 2013). |

| [removed: (4.10)] [added: (4.11)] | The instruments defining the rights of holders of the other long term debt securities of the Company are omitted pursuant to Section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Company agrees to furnish supplementally copies of these instruments to the Commission upon request. |

| [removed: (10.3)] [added: (10.4)] | Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on November 8, 2012). |

| [removed: (10.4)] [added: (10.5)] | Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May 3, 2005). |

| [removed: (10.5)] [added: (10.6)] | Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2003 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2010). |

| [removed: (10.6)] [added: (10.7)] | Form of Restricted Stock Unit Agreement for grant of April 4, 2003 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on August 6, 2003). |

| [removed: (10.7)] [added: (10.8)] | W. R. Berkley Corporation Deferred Compensation Plan for Officers as amended and restated effective December 3, 2007 (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on December 19, 2007). |

| [removed: (10.8)] [added: (10.9)] | W. R. Berkley Corporation Deferred Compensation Plan for Directors as amended and restated effective December 3, 2007 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (File No. 1-15202) filed with the Commission on December 19, 2007). |

| [removed: (10.9)] [added: (10.10)] | W. R. Berkley Corporation 2007 Annual Incentive Compensation Plan (incorporated by reference to Annex A of the Company’s 2006 Proxy Statement (File No. 1-15202) filed with the Commission on April 18, 2006). |

| [removed: (10.10)] [added: (10.13)] | W. R. Berkley Corporation [removed: 2004] [added: 2014] Long-Term Incentive Plan (incorporated by reference to Annex [removed: B from] [added: A of] the Company’s [removed: 2004] [added: 2014] Proxy Statement (File No. 1-15202) filed with the Commission on April [removed: 12, 2004).] [added: 7, 2014).] |

| [removed: (10.12)] [added: (10.14)] | Form of [added: 2014] Performance Unit Award Agreement under the W. R. Berkley Corporation [removed: 2004] [added: 2014] Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q (File No. 1-15202) filed with the Commission on May [removed: 3, 2005).] [added: 12, 2014).] |

| [removed: (10.13)] [added: (10.12)] | Form of [removed: 2008] [added: 2011] Performance Unit Award Agreement under the W. R. Berkley Corporation [removed: 2004] [added: 2009] Long-Term Incentive Plan (incorporated by reference to Exhibit [removed: 10.1] [added: 10.12] of the [removed: Company’s Current] [added: Company's Annual] Report on Form [removed: 8-K] [added: 10-K] (File No. 1-15202) filed with the Commission on [removed: March 13, 2008).] [added: February 28, 2012).] |

| [removed: (10.14)] [added: (10.3)] | Form of [removed: 2011 Performance] [added: Performance-Based Restricted Stock] Unit [removed: Award] Agreement under the W. R. Berkley Corporation [removed: 2009 Long-Term] [added: 2012 Stock] Incentive Plan (incorporated by reference to Exhibit [removed: 10.12] [added: 10.1] of the Company's [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] (File No. 1-15202) filed with the Commission on [removed: February 28, 2012).] [added: November 7, 2014).] |

| Tri-State Insurance Company of Minnesota | [removed: Minnesota] [added: Iowa] | 100 | % |

| Preferred Employers [removed: Insurance] [added: Casualty] Company | California | 100 | % |

| Riverport Insurance Company | [removed: Minnesota] [added: Iowa] | 100 | % |

| (23) | | Consent of Independent Registered Public Accounting [removed: Firm] [added: Firm.] |

Under date of February [removed: 28, 2014,] [added: 27, 2015,] we reported on the consolidated balance sheets of W. R. Berkley Corporation and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2013,] [added: 2014,] which are included in the Annual Report on Form 10-K for the year ended December 31, [removed: 2013.][added: 2014.]

| (In thousands) | [added: 2014 | | | |] 2013 | | | | 2012 | | |

| Cash and cash equivalents [added: at end of year] | $ | [added: 90,693 | | | $ |] 17,315 | | | $ | 162,972 | |

| Fixed maturity securities available for sale at fair value (cost [removed: $61,084] [added: $272,283] and [removed: $281,708] [added: $61,084] at December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] respectively) | [removed: 63,115] [added: 273,773] | | | | [removed: 286,597] [added: 63,115] | | |

| Equity securities available for sale, at fair value (cost [removed: $4,668] [added: $3,738] in [removed: 2013] [added: 2014] and [removed: $0] [added: $4,668] in [removed: 2012)] [added: 2013)] | [removed: 11,240] [added: 3,738] | | | | [removed: 25,699] [added: 11,240] | | |

| Investment in subsidiaries | [removed: 6,250,979] [added: 6,693,731] | | | | [removed: 5,979,539] [added: 6,250,979] | | |

| Due from subsidiaries | [removed: 13,648] [added: —] | | | | [removed: 106,334] [added: 13,648] | | |

| Deferred Federal income taxes | [removed: 51,346] [added: —] | | | | [removed: —] [added: 51,346] | | |

| Current Federal income taxes | [removed: 17,540] [added: 62,882] | | | | [removed: —] [added: 17,540] | | |

| Property, furniture and equipment at cost, less accumulated depreciation | [removed: 9,028] [added: 9,852] | | | | [removed: 7,895] [added: 9,028] | | |

| Other assets | [removed: 5,795] [added: 6,978] | | | | [removed: 10,710] [added: 5,795] | | |

| Total assets | $ | [removed: 6,440,006] [added: 7,141,647] | | | $ | [removed: 6,579,746] [added: 6,440,006] | |

| Due to subsidiaries | $ | [removed: —] [added: 87,540] | | | $ | — | |

| Other liabilities | [removed: 148,903] [added: 162,648] | | | | [removed: 176,416] [added: 148,903] | | |

| [removed: Current] [added: Deferred] Federal income taxes | [removed: —] [added: 149] | | | | [removed: 8,253] [added: —] | | |

| Deferred [removed: Federal] [added: federal and foreign] income taxes | — | | | | [removed: 31,914] [added: 1,335] | | | [added: | — | | | | 1,335 | | |]

| [removed: Junior subordinated] [added: Subordinated] debentures | [removed: 339,800] [added: 340,060] | | | | [removed: 243,206] [added: 339,800] | | |

| Senior notes | [removed: 1,615,268] [added: 1,961,305] | | | | [removed: 1,813,740] [added: 1,615,268] | | |

| Total liabilities | [removed: 2,103,971] [added: 2,551,702] | | | | [removed: 2,273,529] [added: 2,103,971] | | |

| Additional paid-in capital | [removed: 967,440] [added: 991,512] | | | | [removed: 945,166] [added: 967,440] | | |

| Retained earnings (including accumulated undistributed net income of subsidiaries of [removed: $4,393,420] [added: $4,700,821] and [removed: $4,023,780] [added: $4,393,420] at December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] respectively) | [removed: 5,265,015] [added: 5,732,410] | | | | [removed: 4,817,807] [added: 5,265,015] | | |

| Accumulated other comprehensive income | [removed: 189,391] [added: 183,550] | | | | [removed: 465,631] [added: 189,391] | | |

| (4.8) | Ninth Supplemental Indenture, dated as of August 6, 2014, between the Company and The Bank of New York Mellon, as Trustee, relating to $350,000,000 principal amount of the Company’s 4.75% Senior Notes due 2044, including form of the Notes as Exhibit A (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 1-15202) filed with the Commission on August 6, 2014). |

| Queen's Island Insurance Company, Ltd. | Bermuda | 100 | % |

| Berkley Life and Health Insurance Company | Iowa | 100 | % |

| W. R. Berkley London Holdings, Limited | United Kingdom | 100 | % |

| | |

February 27, 2015

| (In thousands) | 2014 | | | | 2013 | | |

| Cash and cash equivalents | $ | 90,693 | | | $ | 17,315 | |

| Net income | $ | 648,884 | | | $ | 499,925 | | | $ | 510,592 | |

| Cost of acquired companies | (82,879 | | ) | | — | | | | — | | |

December 31, 2014

| December 31, 2014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Insurance-Domestic | $ | 347,261 | | | $ | 8,000,863 | | | $ | 2,384,511 | | | $ | 4,271,933 | | | $ | 428,632 | | | $ | 2,571,010 | | | $ | 710,141 | | | $ | 729,958 | | | $ | 4,517,587 | |

| Insurance-International | 60,900 | | | | 855,852 | | | | 342,746 | | | | 802,375 | | | | 55,407 | | | | 503,997 | | | | 173,877 | | | | 150,129 | | | | 828,076 | | |

| Reinsurance-Global | 80,364 | | | | 1,512,986 | | | | 299,475 | | | | 670,110 | | | | 88,821 | | | | 415,560 | | | | 169,379 | | | | 58,315 | | | | 651,284 | | |

| Corporate and adjustments | — | | | | — | | | | — | | | | — | | | | 28,025 | | | | — | | | | — | | | | 165,657 | | | | — | | |

| Total | $ | 488,525 | | | $ | 10,369,701 | | | $ | 3,026,732 | | | $ | 5,744,418 | | | $ | 600,885 | | | $ | 3,490,567 | | | $ | 1,053,397 | | | $ | 1,104,059 | | | $ | 5,996,947 | |

| Insurance-Domestic | $ | 5,214,849 | | | $ | 866,092 | | | $ | 168,830 | | | $ | 4,517,587 | | | 3.7 | % |

| Insurance-International | 927,799 | | | | 156,195 | | | | 56,472 | | | | 828,076 | | | | 6.8 | % |

| Reinsurance-Global | 42,594 | | | | 43,604 | | | | 652,294 | | | | 651,284 | | | | 100.2 | % |

| Total | $ | 6,185,242 | | | $ | 1,065,891 | | | $ | 877,596 | | | $ | 5,996,947 | | | 14.6 | % |

| Premiums and fees receivable | $ | 20,951 | | | $ | 5,944 | | | $ | (5,449 | ) | | $ | 21,446 | |

| Due from reinsurers | 1,385 | | | | 301 | | | | (542 | | ) | | 1,144 | | |

| Loan loss reserves | 2,087 | | | | 399 | | | | — | | | | 2,486 | | |

| Total | $ | 24,423 | | | $ | 7,979 | | | $ | (5,991 | ) | | $ | 26,411 | |

Years Ended December 31, 2014, 2013 and 2012

| (In thousands) | 2014 | | | | 2013 | | | | 2012 | | |

| Berkley Surety Group, Inc. | Delaware | 100 | % |

February 28, 2014

| Cash and cash equivalents at end of year | $ | 17,315 | | | $ | 162,972 | | | $ | 270,637 | |

| December 31, 2011 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Insurance-Domestic | $ | 246,580 | | | $ | 7,183,706 | | | $ | 1,639,603 | | | $ | 3,121,281 | | | $ | 372,053 | | | $ | 2,025,139 | | | $ | 529,885 | | | $ | 559,985 | | | $ | 3,238,120 | |

| Insurance-International | 51,753 | | | | 510,245 | | | | 262,483 | | | | 508,509 | | | | 36,958 | | | | 291,827 | | | | 114,126 | | | | 104,097 | | | | 551,910 | | |

| Reinsurance-Global | 66,604 | | | | 1,643,183 | | | | 287,489 | | | | 531,077 | | | | 97,795 | | | | 341,399 | | | | 141,107 | | | | 58,449 | | | | 567,338 | | |

| Corporate and adjustments | — | | | | — | | | | — | | | | — | | | | 19,545 | | | | — | | | | — | | | | 113,680 | | | | — | | |

| Total | $ | 364,937 | | | $ | 9,337,134 | | | $ | 2,189,575 | | | $ | 4,160,867 | | | $ | 526,351 | | | $ | 2,658,365 | | | $ | 785,118 | | | $ | 836,211 | | | $ | 4,357,368 | |

| Insurance-Domestic | $ | 3,664,780 | | | $ | 556,743 | | | $ | 130,083 | | | $ | 3,238,120 | | | 4.1 | % |

| Insurance-International | 681,423 | | | | 129,513 | | | | — | | | | 551,910 | | | | — | |

| Reinsurance-Global | 23,889 | | | | 33,689 | | | | 577,138 | | | | 567,338 | | | | 101.7 | |

| Total | $ | 4,370,092 | | | $ | 719,945 | | | $ | 707,221 | | | $ | 4,357,368 | | | 16.3 | % |

| Deferred federal and foreign income taxes | — | | | | — | | | | — | | | | — | | |

| Premiums and fees receivable | $ | 19,483 | | | $ | 6,158 | | | $ | (7,975 | ) | | $ | 17,666 | |

| Due from reinsurers | 3,098 | | | | 71 | | | | — | | | | 3,169 | | |

| Deferred federal and foreign income taxes | 2,328 | | | | — | | | | (2,328 | | ) | | — | | |

| Loan loss reserves | 19,675 | | | | 889 | | | | (759 | | ) | | 19,805 | | |

| Total | $ | 44,584 | | | $ | 7,118 | | | $ | (11,062 | ) | | $ | 40,640 | |