On the desk today · W.R. Berkley Corporation
Most insurers lose money on the insurance and make it back on investments. Berkley makes money on both.
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The Float That Earns
On Both Sides
In 1967, a 21-year-old named William R. Berkley — an NYU Stern graduate still enrolled at Harvard Business School — founded an insurance holding company in Greenwich, Connecticut. He had no industry experience. He had no actuarial background. What he had was a thesis: the specialty insurance market was full of niches that large insurers overlooked, and a holding company that seeded small, focused underwriting teams could price risk better than the giants.
While still at Harvard, Berkley had been running a $2 million mutual fund from an apartment on campus with a classmate named Paul Dean. He was used to betting his own judgment against the market. Insurance, he realized, was the same thing — just with a longer time horizon and someone else’s money.
I renewed my commercial liability policy last year. The quote came from a company I’d never heard of — one of those specialty names that sounds like a law firm. When I looked it up, it was a subsidiary of W.R. Berkley. I asked my agent how many companies Berkley owns. He said he had lost count. “They have a company for everything,” he said. “Luxury condos. Fleet trucking. Public entities. Fine dining restaurants. If there’s a niche, they built a unit for it.”
That is the model. W.R. Berkley is not one insurance company. It is a holding company that operates more than 50 independent specialty units — each with its own underwriters, its own actuaries, and its own pricing authority. The holding company provides capital and oversight. The units do the underwriting. They pick the risks they want and walk away from the ones they don’t. When a unit is right more often than it’s wrong, the premiums exceed the claims. The leftover is underwriting profit. And the premiums that sit in the account between collection and payout — the float — earn investment income the entire time.
Most insurance companies lose money on the underwriting. Their combined ratio — the percentage of premiums spent on claims and expenses — runs above 100%. They survive by earning enough on investments to cover the gap. Berkley is different. In fiscal 2025, Berkley’s combined ratio was 90.7%. That means for every $100 in premiums, only $90.70 went to claims and expenses. The remaining $9.30 was pure underwriting profit — before a single dollar of investment income was counted.
William Berkley ran the company for nearly five decades. In 2015, he stepped aside as CEO and became executive chairman. His son, W. Robert Berkley Jr. — known as Rob — took over as CEO. William Berkley died on June 9, 2026, at the age of 80. He had married Marjorie, who was his secretary when he founded the company. He left behind an insurer that wrote $15.1 billion in gross premiums in its most recent year.
In fiscal 2025, Berkley reported record gross premiums written of $15.1 billion and net premiums written of $12.7 billion. Underwriting income was $1.2 billion. Net investment income — the earnings on the float — added another $1.4 billion. Operating income reached $1.7 billion. Net income was $1.78 billion. The return on equity for the year ran above 20%.
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That 90.7% combined ratio is the number that separates Berkley from most of the insurance industry. A combined ratio below 100% means the underwriting itself generates profit. Most large commercial insurers operate above 100% — they accept underwriting losses and depend on investment income to make up the difference. Berkley has kept its combined ratio below 100% for years by doing something that sounds simple but is extraordinarily difficult: it says no. Each of the 50+ operating units has the authority to walk away from risks that don’t meet its pricing standards. There is no corporate mandate to grow volume. There is only a mandate to price accurately and collect more in premiums than you pay in claims.
The pricing power is embedded in the specialization. Berkley doesn’t compete in broad commercial lines against Travelers or Chubb. It competes in niches — luxury real estate, fleet trucking, public entities, environmental liability, professional liability, surety bonds, fine dining restaurants. In each niche, Berkley’s unit has underwriters who know the specific risk better than a generalist ever could. A generalist prices the risk with a formula. A specialist prices it with judgment. When the specialist is right, the combined ratio drops. In fiscal 2025, the Reinsurance segment posted a combined ratio of 83.7% — meaning it kept more than $16 of every $100 in premiums as underwriting profit, before investment income.
The Q4 FY2025 earnings call summarized it plainly: “In summary, 2025 was an outstanding year with record top line, both gross and net premiums written of $15.1 billion and $12.7 billion, respectively, underwriting income of $1.2 billion, net investment income of $1.4 billion, operating income of $1.7 billion, and net income of $1.8 billion.”
The flywheel runs on the float. Every premium dollar Berkley collects sits in an account — earning investment income — until a claim is filed, adjudicated, and paid. That lag can be months or years. In fiscal 2025, net investment income was $1.4 billion. That is $1.4 billion earned simply by holding money between collection and payout. When interest rates rise, the float earns more — at zero additional cost. And because Berkley’s combined ratio is below 100%, the float is not borrowed money. It is not money that will need to be paid back dollar for dollar. It is money the company earned from underwriting — and then earned again from investing. You get paid to hold the money. Then you get paid on the money you’re holding.
WHY THIS WORKS
The combined ratio below 100% means both sides pay. Berkley earns on the underwriting (premiums exceed claims) and on the float (premiums earn investment income before claims are paid). Most insurers get one. Berkley gets both.
50+ operating units, each a specialist. Luxury condos. Fleet trucks. Public entities. Fine dining. Each unit prices its niche with judgment, not formulas. The authority to say no is the moat.
$1.4 billion in investment income at zero cost. The float — premiums held between collection and payout — earns $1.4 billion a year. When rates rise, this number rises. Berkley doesn’t need to sell more policies. It just needs to hold the cash longer.
Two generations, one playbook. William Berkley founded the company at 21. His son Rob took over at 46. The model hasn’t changed in 59 years — seed specialty units, price risk accurately, earn on both sides.
William Robert Berkley started investing in the stock market at age 12, with money he earned mowing lawns. At 21, he founded an insurance company. At 69, he handed the CEO title to his son. He died on June 9, 2026, at 80 — four months ago. The company he built from a Harvard apartment wrote $15.1 billion in premiums last year and earned money on both the underwriting and the float. His wife Marjorie was his secretary when he started it. His son Rob runs it now. And the 50 specialty units that William Berkley seeded over half a century — each one a small business inside a big holding company — still price risk the way he taught them: carefully, niche by niche, with the authority to say no.
