W R Berkley (NYSE: WRB), the commercial insurer, reported nearly a 10% rise in the third-quarter profit helped by strong returns in its investment portfolio.
Insurers benefit in a higher interest rate environment because a significant portion of their investments is in bonds, leading to increased interest payouts.
Additionally, equity markets have also been rallying due to rate cuts and easing recession concerns, helping insurers achieve higher returns on their investments.
The company’s net investment income jumped 19.5% to $323.8 million, compared to the same quarter last year.
Its profit for the quarter ended September 30 was $365.6 million, or 91 cents per share, compared with $333.6 million, or 82 cents per share, last year.
W R Berkley (NYSE: WRB) saw its net premiums written increase by nearly 7.3% as businesses spent more on insurance policies amid easing recession concerns.
The company reported a combined ratio of 90.9%, compared with 90.2% a year earlier. A ratio below 100% shows that an insurer earned more in premiums than it paid out in claims.
(Source: Reuters)
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
