W.R. Berkley (WRB) has earned a good reputation, with long-term core earnings and book value growth trends well above the average, as well as a strong underwriting history. Even so, while I can understand a “flight to safety” preference for this more specialty-oriented insurer, it’s tough to reconcile the current and likely near-term trends with the valuation.
While lower rates do support a higher valuation, all other things being equal, lower rates also undermine W.R. Berkley’s investment yields. I’m likewise concerned about the risk of ongoing “social inflation” in claims costs and the