filings.toolsItem 16. FORM 10-K Summary
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Item 16. FORM 10-K Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
W. R. BERKLEY CORPORATION
| By | /s/ W. Robert Berkley, Jr. | |
| W. Robert Berkley, Jr. President and Chief Executive Officer |
February 20, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ William R. Berkley | Executive Chairman | February 20, 2020 | ||
| William R. Berkley | of the Board of Directors | |||
| /s/ W. Robert Berkley, Jr. | President | February 20, 2020 | ||
| W. Robert Berkley, Jr. | Chief Executive Officer and Director | |||
| (Principal executive officer) | ||||
| /s/ Christopher L. Augostini | Director | February 20, 2020 | ||
| Christopher L. Augostini | ||||
| /s/ Ronald E. Blaylock | Director | February 20, 2020 | ||
| Ronald E. Blaylock | ||||
| /s/ Mark E. Brockbank | Director | February 20, 2020 | ||
| Mark E. Brockbank | ||||
| /s/ Mary C. Farrell | Director | February 20, 2020 | ||
| Mary C. Farrell | ||||
| /s/ María Luisa Ferré | Director | February 20, 2020 | ||
| María Luisa Ferré | ||||
| /s/ Jack H. Nusbaum | Director | February 20, 2020 | ||
| Jack H. Nusbaum | ||||
| /s/ Leigh Ann Pusey | Director | February 20, 2020 | ||
| Leigh Ann Pusey | ||||
| /s/ Mark L. Shapiro | Director | February 20, 2020 | ||
| Mark L. Shapiro | ||||
| /s/ Jonathan Talisman | Director | February 20, 2020 | ||
| Jonathan Talisman | ||||
| /s/ Richard M. Baio | Executive Vice President | February 20, 2020 | ||
| Richard M. Baio | Chief Financial Officer and Treasurer | |||
| (Principal financial officer and principal accounting officer) |
Schedule II
W. R. Berkley Corporation
Condensed Financial Information of Registrant
Balance Sheets (Parent Company)
| December 31, | |||||||
| (In thousands) | 2019 | 2018 | |||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 389,801 | $ | 83,950 | |||
| Fixed maturity securities available for sale at fair value (cost $718,642 and $1,317,058 at December 31, 2019 and 2018, respectively) | 723,959 | 1,307,347 | |||||
| Loans receivable | 55,794 | 51,544 | |||||
| Equity securities, at fair value (cost $3,430 in 2019 and $3,430 in 2018) | 3,430 | 3,430 | |||||
| Investment in subsidiaries | 7,623,639 | 6,786,999 | |||||
| Current federal income taxes | 18,857 | 9,068 | |||||
| Deferred federal income taxes | — | 66,995 | |||||
| Property, furniture and equipment at cost, less accumulated depreciation | 12,323 | 13,391 | |||||
| Other assets | 13,294 | 12,340 | |||||
| Total assets | $ | 8,841,097 | $ | 8,335,064 | |||
| Liabilities and stockholders’ equity: | |||||||
| Liabilities: | |||||||
| Due to subsidiaries | $ | 107,245 | $ | 116,125 | |||
| Other liabilities | 118,593 | 115,562 | |||||
| Deferred federal income taxes | 22,846 | — | |||||
| Subordinated debentures | 1,198,704 | 907,491 | |||||
| Senior notes | 1,318,770 | 1,758,035 | |||||
| Total liabilities | 2,766,158 | 2,897,213 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 70,535 | 70,535 | |||||
| Additional paid-in capital | 1,056,042 | 1,039,633 | |||||
| Retained earnings (including accumulated undistributed net income of subsidiaries of $5,564,980 and $5,068,139 at December 31, 2019 and 2018, respectively) | 7,932,372 | 7,558,619 | |||||
| Accumulated other comprehensive income | (257,299 | ) | (510,470 | ) | |||
| Treasury stock, at cost | (2,726,711 | ) | (2,720,466 | ) | |||
| Total stockholders’ equity | 6,074,939 | 5,437,851 | |||||
| Total liabilities and stockholders’ equity | $ | 8,841,097 | $ | 8,335,064 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
Schedule II, Continued
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Income (Parent Company)
| Year Ended December 31, | |||||||||||
| (In thousands) | 2019 | 2018 | 2017 | ||||||||
| Management fees and investment income including dividends from subsidiaries of$416,027, $639,477, and $694,462 for the years ended December 31, 2019, 2018 and 2017, respectively | $ | 470,773 | $ | 697,687 | $ | 738,923 | |||||
| Net investment gains (losses) | 850 | (1,685 | ) | (4,286 | ) | ||||||
| Other income | 117 | 530 | 805 | ||||||||
| Total revenues | 471,740 | 696,532 | 735,442 | ||||||||
| Operating costs and expense | 204,812 | 191,873 | 182,145 | ||||||||
| Interest expense | 148,282 | 155,082 | 146,929 | ||||||||
| Income before federal income taxes | 118,646 | 349,577 | 406,368 | ||||||||
| Federal income taxes: | |||||||||||
| Federal income taxes provided by subsidiaries on a separate return basis | 207,647 | 409,439 | 115,597 | ||||||||
| Federal income tax expense on a consolidated return basis | (141,190 | ) | (113,138 | ) | (195,261 | ) | |||||
| Net federal income tax expense (benefit) | 66,457 | 296,301 | (79,664 | ) | |||||||
| Income before undistributed equity in net income of subsidiaries | 185,103 | 645,878 | 326,704 | ||||||||
| Equity in undistributed net income (loss) of subsidiaries | 496,841 | (5,129 | ) | 222,390 | |||||||
| Net income | $ | 681,944 | $ | 640,749 | $ | 549,094 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
Schedule II, Continued
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
Statements of Cash Flows (Parent Company)
| Year Ended December 31, | |||||||||||
| (In thousands) | 2019 | 2018 | 2017 | ||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 681,944 | $ | 640,749 | $ | 549,094 | |||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Net investment (gains) losses | (850 | ) | 1,685 | 4,286 | |||||||
| Depreciation and amortization | 7,058 | 9,441 | 2,039 | ||||||||
| Equity in undistributed earnings of subsidiaries | (496,841 | ) | 5,129 | (222,390 | ) | ||||||
| Tax payments received from subsidiaries | 192,407 | 282,084 | 98,313 | ||||||||
| Federal income taxes provided by subsidiaries on a separate return basis | (207,646 | ) | (409,439 | ) | (115,597 | ) | |||||
| Stock incentive plans | 28,389 | 28,531 | 38,075 | ||||||||
| Change in: | |||||||||||
| Federal income taxes | 11,841 | (77,415 | ) | 2,711 | |||||||
| Other assets | (5,343 | ) | 1,348 | (877 | ) | ||||||
| Other liabilities | 11,866 | 109,016 | 18,661 | ||||||||
| Accrued investment income | 4,395 | (2,870 | ) | (2,818 | ) | ||||||
| Net cash from operating activities | 227,220 | 588,259 | 371,497 | ||||||||
| Cash from (used) in investing activities: | |||||||||||
| Proceeds from sales of fixed maturity securities | 619,334 | 668,447 | 849,330 | ||||||||
| Proceeds from maturities and prepayments of fixed maturity securities | 435,473 | 255,528 | 316,611 | ||||||||
| Cost of purchases of fixed maturity securities | (459,418 | ) | (1,188,821 | ) | (1,329,379 | ) | |||||
| Change in loans receivable | (4,250 | ) | 1,475 | (29,600 | ) | ||||||
| Investments in and advances to subsidiaries, net | (36,170 | ) | (184,597 | ) | (21,139 | ) | |||||
| Change in balance due to security broker | 245 | — | — | ||||||||
| Net additions to real estate, furniture & equipment | (112 | ) | (264 | ) | (1,055 | ) | |||||
| Other, net | 142 | — | — | ||||||||
| Net cash from (used in) investing activities | 555,244 | (448,232 | ) | (215,232 | ) | ||||||
| Cash used in financing activities: | |||||||||||
| Net proceeds from issuance of senior notes | 290,454 | 178,562 | — | ||||||||
| Repayment of senior notes | (440,651 | ) | — | — | |||||||
| Purchase of common treasury shares | (18,225 | ) | (24,750 | ) | (47,807 | ) | |||||
| Cash dividends to common stockholders | (308,191 | ) | (254,951 | ) | (188,199 | ) | |||||
| Net cash used in financing activities | (476,613 | ) | (101,139 | ) | (236,006 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 305,851 | 38,888 | (79,741 | ) | |||||||
| Cash and cash equivalents at beginning of year | 83,950 | 45,062 | 124,803 | ||||||||
| Cash and cash equivalents at end of year | $ | 389,801 | $ | 83,950 | $ | 45,062 |
See Report of Independent Registered Public Accounting Firm and note to condensed financial information.
W. R. Berkley Corporation
Condensed Financial Information of Registrant, Continued
December 31, 2019
Note to Condensed Financial Information (Parent Company)
The accompanying condensed financial information should be read in conjunction with the notes to consolidated financial statements included elsewhere herein. Reclassifications have been made in the 2018 and 2017 financial statements as originally reported to conform them to the presentation of the 2019 financial statements.
The Company files a consolidated federal tax return with the results of its domestic insurance subsidiaries included on a statutory basis. Under present Company policy, federal income taxes payable by subsidiary companies on a separate-return basis are paid to W. R. Berkley Corporation, and the Company pays the tax due on a consolidated return basis.
Schedule III
W. R. Berkley Corporation and Subsidiaries
Supplementary Insurance Information
December 31, 2019**,** 2018 and 2017
| (In thousands) | Deferred Policy Acquisition Cost | Reserve for Losses and Loss Expenses | Unearned Premiums | Net Premiums Earned | Net Investment Income | Loss and Loss Expenses | Amortization of Deferred Policy Acquisition Cost | Other Operating Costs and Expenses | Net Premiums Written | ||||||||||||||||||||||||||
| December 31, 2019 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 438,082 | $ | 9,836,950 | $ | 3,304,152 | $ | 5,919,819 | $ | 429,405 | $ | 3,692,551 | $ | 840,333 | $ | 1,049,328 | $ | 6,086,009 | |||||||||||||||||
| Reinsurance & Monoline Excess | 79,282 | 2,746,299 | 352,355 | 713,469 | 164,082 | 438,565 | 161,278 | 88,520 | 777,490 | ||||||||||||||||||||||||||
| Corporate, other and eliminations | — | — | — | — | 52,127 | — | — | 222,623 | — | ||||||||||||||||||||||||||
| Total | $ | 517,364 | $ | 12,583,249 | $ | 3,656,507 | $ | 6,633,288 | $ | 645,614 | $ | 4,131,116 | $ | 1,001,611 | $ | 1,360,471 | $ | 6,863,499 | |||||||||||||||||
| December 31, 2018 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 432,568 | $ | 9,278,729 | $ | 3,081,433 | $ | 5,702,073 | $ | 433,490 | $ | 3,566,358 | $ | 788,508 | $ | 1,136,269 | $ | 5,791,905 | |||||||||||||||||
| Reinsurance & Monoline Excess | 65,061 | 2,687,719 | 278,558 | 669,432 | 179,534 | 408,344 | 126,738 | 112,885 | 641,322 | ||||||||||||||||||||||||||
| Corporate, other and eliminations | — | — | — | — | 61,211 | — | — | 218,821 | — | ||||||||||||||||||||||||||
| Total | $ | 497,629 | $ | 11,966,448 | $ | 3,359,991 | $ | 6,371,505 | $ | 674,235 | $ | 3,974,702 | $ | 915,246 | $ | 1,467,975 | $ | 6,433,227 | |||||||||||||||||
| December 31, 2017 | |||||||||||||||||||||||||||||||||||
| Insurance | $ | 428,535 | $ | 8,858,926 | $ | 2,987,805 | $ | 5,549,403 | $ | 366,862 | $ | 3,469,175 | $ | 908,746 | $ | 1,001,463 | $ | 5,555,515 | |||||||||||||||||
| Reinsurance & Monoline Excess | 79,014 | 2,811,482 | 302,375 | 762,016 | 160,462 | 533,173 | 202,743 | 69,431 | 704,993 | ||||||||||||||||||||||||||
| Corporate, other and eliminations | — | — | — | — | 48,464 | — | — | 254,549 | — | ||||||||||||||||||||||||||
| Total | $ | 507,549 | $ | 11,670,408 | $ | 3,290,180 | $ | 6,311,419 | $ | 575,788 | $ | 4,002,348 | $ | 1,111,489 | $ | 1,325,443 | $ | 6,260,508 |
See Report of Independent Registered Public Accounting Firm.
Schedule IV
W. R. Berkley Corporation and Subsidiaries
Reinsurance
Years ended December 31, 2019**,** 2018 and 2017
| Premiums Written | ||||||||||||||||||
| (In thousands, other than percentages) | Direct Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Percentage of Amount Assumed to Net | |||||||||||||
| Year ended December 31, 2019 | ||||||||||||||||||
| Insurance | $ | 7,180,759 | $ | 1,312,564 | $ | 217,814 | $ | 6,086,009 | 3.6 | % | ||||||||
| Reinsurance & Monoline Excess | 206,000 | 86,155 | 657,645 | 777,490 | 84.6 | % | ||||||||||||
| Total | $ | 7,386,759 | $ | 1,398,719 | $ | 875,459 | $ | 6,863,499 | 12.8 | % | ||||||||
| Year ended December 31, 2018 | ||||||||||||||||||
| Insurance | $ | 6,782,757 | $ | 1,188,297 | $ | 197,445 | $ | 5,791,905 | 3.4 | % | ||||||||
| Reinsurance & Monoline Excess | 190,459 | 80,970 | 531,833 | 641,322 | 82.9 | % | ||||||||||||
| Total | $ | 6,973,216 | $ | 1,269,267 | $ | 729,278 | $ | 6,433,227 | 11.3 | % | ||||||||
| Year ended December 31, 2017 | ||||||||||||||||||
| Insurance | $ | 6,537,777 | $ | 1,143,656 | $ | 161,394 | $ | 5,555,515 | 2.9 | % | ||||||||
| Reinsurance & Monoline Excess | 188,252 | 72,799 | 589,540 | 704,993 | 83.6 | % | ||||||||||||
| Total | $ | 6,726,029 | $ | 1,216,455 | $ | 750,934 | $ | 6,260,508 | 12.0 | % |
See Report of Independent Registered Public Accounting Firm.
Schedule V
W. R. Berkley Corporation and Subsidiaries
Valuation and Qualifying Accounts
Years ended December 31, 2019**,** 2018 and 2017
| (In thousands) | Opening Balance | Additions- Charged to Expense | Deduction- Amounts Written Off | Ending Balance | |||||||||||
| Year ended December 31, 2019 | |||||||||||||||
| Premiums and fees receivable | $ | 39,093 | $ | (5,549 | ) | $ | (6,998 | ) | $ | 26,546 | |||||
| Due from reinsurers | 947 | — | (257 | ) | 690 | ||||||||||
| Deferred federal and foreign income taxes | 35,195 | 1,298 | (3,243 | ) | 33,250 | ||||||||||
| Loan loss reserves | 3,383 | — | (1,237 | ) | 2,146 | ||||||||||
| Total | $ | 78,618 | $ | (4,251 | ) | $ | (11,735 | ) | $ | 62,632 | |||||
| Year ended December 31, 2018 | |||||||||||||||
| Premiums and fees receivable | $ | 39,926 | $ | 6,985 | $ | (7,817 | ) | $ | 39,093 | ||||||
| Due from reinsurers | 1,010 | 65 | (128 | ) | 947 | ||||||||||
| Deferred federal and foreign income taxes | 16,619 | 18,772 | (196 | ) | 35,195 | ||||||||||
| Loan loss reserves | 3,383 | — | — | 3,383 | |||||||||||
| Total | $ | 60,938 | $ | 25,822 | $ | (8,141 | ) | $ | 78,618 | ||||||
| Year ended December 31, 2017 | |||||||||||||||
| Premiums and fees receivable | $ | 26,569 | $ | 20,720 | $ | (7,363 | ) | $ | 39,926 | ||||||
| Due from reinsurers | 1,049 | (29 | ) | (10 | ) | 1,010 | |||||||||
| Deferred federal and foreign income taxes | 5,457 | 12,663 | (1,501 | ) | 16,619 | ||||||||||
| Loan loss reserves | 3,397 | (14 | ) | — | 3,383 | ||||||||||
| Total | $ | 36,472 | $ | 33,340 | $ | (8,874 | ) | $ | 60,938 |
See Report of Independent Registered Public Accounting Firm.
Schedule VI
W. R. Berkley Corporation and Subsidiaries
Supplementary Information Concerning Property-Casualty Insurance Operations
Years Ended December 31, 2019**,** 2018 and 2017
| (In thousands) | 2019 | 2018 | 2017 | ||||||||
| Deferred policy acquisition costs | $ | 517,364 | $ | 497,629 | $ | 507,549 | |||||
| Reserves for losses and loss expenses | 12,583,249 | 11,966,448 | 11,670,408 | ||||||||
| Unearned premiums | 3,656,507 | 3,359,991 | 3,290,180 | ||||||||
| Net premiums earned | 6,633,288 | 6,371,505 | 6,311,419 | ||||||||
| Net investment income | 645,614 | 674,235 | 575,788 | ||||||||
| Losses and loss expenses incurred: | |||||||||||
| Current year | 4,057,989 | 3,926,489 | 3,963,543 | ||||||||
| Prior years | 34,079 | 6,831 | (5,165 | ) | |||||||
| Loss reserve discount accretion | 39,048 | 41,382 | 43,970 | ||||||||
| Amortization of deferred policy acquisition costs | 1,001,611 | 915,246 | 1,111,489 | ||||||||
| Paid losses and loss expenses | 3,659,402 | 3,664,885 | 3,589,955 | ||||||||
| Net premiums written | 6,863,499 | 6,433,227 | 6,260,508 |
See Report of Independent Registered Public Accounting Firm.
Previous: Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES