GREENWICH, Conn.--(BUSINESS WIRE)--July 23, 2003--W. R. Berkley
Corporation (NYSE: BER) today reported second quarter net income of
$95.8 million, or $1.65 per share, up from $27.4 million, or 52 cents
per share, a year ago. Net operating income for the second quarter of
2003 was $67.6 million, or $1.16 per share, compared with $34.5
million, or 66 cents per share, for the second quarter of 2002. Net
operating income is a non-GAAP financial measure defined by the
Company as net income excluding gains and losses on investments,
foreign currencies and discontinued business.


Summary Financial Data
(Amounts in thousands, except per share data)

Second Quarter Six Months
--------------- ----------
2003 2002 2003 2002
---- ---- ---- ----

Gross premiums written $1,007,495 $729,003 $2,073,968 $1,505,211
Net premiums written 875,457 601,095 1,767,516 1,235,088

Net income 95,840 27,374 167,543 61,770
Net income per share
(diluted) 1.65 0.52 2.90 1.18

Net operating income 67,553 34,467 130,389 65,672
Net operating income per
share (diluted) $1.16 $0.66 $2.26 $1.26



Second quarter highlights include:

-- Net operating return on equity was 20.2% annualized, or 5.1%
for the quarter

-- Net premiums written were $875.5 million, an increase of 46%
from the second quarter of 2002

-- GAAP combined ratio improved by 5.0 percentage points to 91.6%
from 96.6% in the prior year period

-- Cash flow from operations increased 121% to $320.6 million
compared with $145.3 million in the year-earlier period

-- The paid loss ratio decreased to 37.0% from 56.5% in the prior
year quarter

-- Realized investment gains were $43.7 million compared with
realized losses of $8.4 million in the second quarter of 2002

Commenting on the Company's performance, William R. Berkley,
chairman and chief executive officer, said: "We are very pleased with
our second quarter results. The net operating return on equity
exceeded 20% on an annualized basis. Net premiums written grew 46%
over last year's second quarter due to price increases, which averaged
over 25% on renewed business, and to growth in policy counts.
"We continue to have the ability to raise prices. Given the low
inflation environment, even modest price increases can significantly
increase our return on equity. We do not foresee a return to the
intense price competition of the late 1990's any time soon, given the
current low interest rate environment and the challenges faced by many
companies in the industry.
"We have continued to shorten the duration of our investment
portfolio and have accumulated more than a billion dollars of cash. As
a consequence of this strategy, our investment income has been
adversely impacted in the short run. We believe that our willingness
to forgo the slightly higher yields available by extending the
duration of our portfolio will be rewarded by better investment
opportunities in the future.
"We have strengthened our capital position and are taking
advantage of opportunities to expand our business with a continued
focus on casualty lines. We remain confident in our prospects and
expect that quarterly results will continue to improve," Mr. Berkley
concluded.
Founded in 1967, W. R. Berkley Corporation is an insurance holding
company that operates in five segments of the property casualty
insurance business: specialty insurance, alternative markets,
reinsurance, regional property casualty insurance and international.
This is a "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995. Any forward-looking statements
contained herein, including statements related to our outlook for the
industry and for our performance for the year 2003 and beyond, are
based upon the Company's 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 or any
other person 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, the cyclical nature
of the property casualty industry, the long-tail and potentially
volatile nature of the reinsurance business, product demand and
pricing, claims development and the process of estimating reserves,
the uncertain nature of damage theories and loss amounts, the ultimate
results of the various pending legal and arbitration proceedings, the
increased level of our retention, natural and man-made catastrophic
losses, including as a result of terrorist activities, the impact of
competition, the availability of reinsurance, the ability of our
reinsurers to pay reinsurance recoverables owed to us, investment
results and potential impairment of invested assets, exchange rate and
political risks, legislative and regulatory developments, changes in
the ratings assigned to us by ratings agencies, our exposure for
terrorist acts, the availability of dividends from our insurance
company subsidiaries, our successful integration of acquired companies
or investment in new insurance ventures, our ability to attract and
retain qualified employees, and other risks detailed from time to time
in the Company's filings with the Securities and Exchange Commission.
These risks could cause actual results of the industry or our actual
results for the year 2003 and beyond to differ materially from those
expressed in any forward-looking statement made by or on behalf of the
Company. Forward-looking statements speak only as of the date on which
they are made, and the Company undertakes no obligation to update
publicly or revise any forward-looking statement, whether as a result
of new information, future developments or otherwise.




Consolidated Financial Summary
(Amounts in thousands, except per share data)

Second Quarter Six Months
-------------- ----------
2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Net premiums written $875,457 $601,095 $1,767,516 $1,235,088
Change in unearned
premiums (68,989) (88,407) (260,922) (243,934)
--------- -------- ---------- ----------
Premiums earned 806,468 512,688 1,506,594 991,154
Net investment income 50,421 44,564 102,181 88,716
Service fees 25,910 20,924 51,379 41,117
Realized investment gains
(losses) 43,673 (8,383) 58,277 (3,424)
Foreign currency gains
(losses) 44 (66) (1,194) (62)
Other income 441 208 1,133 320
--------- -------- ---------- ----------
Total revenues 926,957 569,935 1,718,370 1,117,821
--------- -------- ---------- ----------

Expenses:
Losses and loss expenses 514,157 336,515 958,043 647,116
Other operating expenses 258,160 184,883 489,013 360,326
Interest expense 13,273 11,330 25,368 22,465
--------- -------- ---------- ----------
Total expenses 785,590 532,728 1,472,424 1,029,907
--------- -------- ---------- ----------

Income before income taxes
and minority interest 141,367 37,207 245,946 87,914

Income tax expense (44,230) (15,563) (77,216) (31,785)
Minority interest (1,297) 5,730 (1,187) 5,641
--------- -------- ---------- ----------

Net income $95,840 $27,374 $167,543 $61,770
========= ======== ========== ==========

Net income per share:
Basic $1.73 $0.55 $3.03 $1.23
Diluted $1.65 $0.52 $2.90 $1.18

Average shares outstanding:
Basic 55,343 50,125 55,296 50,020
Diluted 58,035 52,399 57,774 52,304


Operating Results by Segment
(Amounts in thousands, except ratios (1))

Second Quarter Six Months
-------------- ----------
2003 2002 2003 2002
---- ---- ---- ----
Specialty Insurance (2):
Gross premiums written $348,936 $252,995 $670,242 $470,931
Net premiums written 321,083 219,764 607,784 412,193
Premiums earned 271,333 174,053 512,960 324,475
Pre-tax income 54,756 35,496 103,297 55,875
Loss ratio 61.5% 58.9% 61.6% 62.3%
Expense ratio 24.1% 27.8% 24.5% 28.0%
GAAP combined ratio 85.6% 86.7% 86.1% 90.3%

Alternative Markets:
Gross premiums written $101,496 $47,867 $271,677 $146,040
Net premiums written 90,723 42,057 227,905 126,637
Premiums earned 106,282 51,487 189,256 96,824
Pre-tax income 22,415 13,749 44,364 27,981
Loss ratio 68.1% 68.1% 67.7% 67.5%
Expense ratio 24.5% 30.0% 24.5% 29.4%
GAAP combined ratio 92.6% 98.1% 92.2% 96.9%

Reinsurance (2):
Gross premiums written $243,362 $175,789 $505,754 $342,732
Net premiums written 207,077 135,410 421,876 264,699
Premiums earned 196,632 82,259 359,109 146,838
Pre-tax income 10,460 2,635 20,129 10,826
Loss ratio 71.3% 74.9% 71.6% 72.5%
Expense ratio 29.8% 34.0% 30.1% 33.4%
GAAP combined ratio 101.1% 108.9% 101.7% 105.9%

Regional Insurance:
Gross premiums written $293,971 $236,686 $589,829 $475,005
Net premiums written 238,225 192,655 475,979 376,358
Premiums earned 214,089 172,062 412,294 328,643
Pre-tax income 34,071 18,565 66,266 41,000
Loss ratio 58.2% 64.3% 58.1% 62.5%
Expense ratio 31.0% 31.4% 31.2% 31.5%
GAAP combined ratio 89.2% 95.7% 89.3% 94.0%

International:
Gross premiums written $19,730 $13,973 $36,466 $60,191
Net premiums written 18,349 11,706 33,972 52,256
Premiums earned 18,132 20,206 32,975 59,390
Pre-tax income (loss) 1,767 (800) 3,002 (534)
Loss ratio 55.1% 56.0% 52.4% 58.7%
Expense ratio 42.1% 49.5% 43.6% 44.4%
GAAP combined ratio 97.2% 105.5% 96.0% 103.1%


Operating Results by
Segment (continued)
(Amounts in thousands, except ratios(1))

Second Quarter Six Months
-------------- ----------
2003 2002 2003 2002
---- ---- ---- ----
Total Continuing
Segments:
Gross premiums written $1,007,495 $727,310 $2,073,968 $1,494,899
Net premiums written 875,457 601,592 1,767,516 1,232,143
Premiums earned 806,468 500,067 1,506,594 956,170
Pre-tax income 123,469 69,645 237,058 135,148
Loss ratio 63.8% 64.2% 63.6% 64.2%
Expense ratio 27.8% 31.1% 28.1% 31.2%
GAAP combined ratio 91.6% 95.3% 91.7% 95.4%

Discontinued Business:
Gross premiums written $- $1,693 $- $10,312
Net premiums written - (497) - 2,945
Premiums earned - 12,621 - 34,984
Pre-tax loss - (4,600) - (4,654)

Corporate & Eliminations:
Realized investment and
foreign
currency gains
(losses) $43,717 $(8,449) $57,083 $(3,486)
Interest and other, net (25,819) (19,389) (48,195) (39,094)
Pre-tax income (loss) 17,898 (27,838) 8,888 (42,580)

Consolidated:
Gross premiums written $1,007,495 $729,003 $2,073,968 $1,505,211
Net premiums written 875,457 601,095 1,767,516 1,235,088
Premiums earned 806,468 512,688 1,506,594 991,154
Pre-tax income 141,367 37,207 245,946 87,914
Loss ratio 63.8% 65.6% 63.6% 65.3%
Expense ratio 27.8% 31.0% 28.1% 31.1%
GAAP combined ratio 91.6% 96.6% 91.7% 96.4%


(1) Underwriting ratios represent losses, loss expenses and
underwriting expenses expressed as a percentage of premiums
earned. Underwriting expenses do not include expenses related to
insurance services or unallocated corporate expenses.

(2) Segment operating results for the prior periods have been restated
to reflect two changes in the accounting presentation. First,
operating results for Vela Insurance Services, Inc., an excess and
surplus lines underwriting manager, were transferred from the
reinsurance segment to the specialty segment as a result of a
change in management responsibility for this business. Second, in
the fourth quarter of 2002, the Company modified the presentation
of reinsurance assumed from Lloyd's syndicates to reflect the
Company's share of the reinsurance and brokerage costs paid by the
syndicates. Previously, these amounts were netted against assumed
premiums.


Supplemental Information
(Amounts in thousands, except per share data)

Second Quarter Six Months
--------------- ---------
2003 2002 2003 2002
---- ---- ---- ----

Components of net income:
Underwriting income (1) $68,133 $17,431 $125,211 $36,072
Insurance services 4,999 3,534 10,651 6,984
Net investment income 50,421 44,564 102,181 88,716
Interest and other expenses (25,903) (19,873) (49,180) (40,372)
Realized investment and
foreign currency gains
(losses) 43,717 (8,449) 57,083 (3,486)
Income taxes and minority
interest (45,527) (9,833) (78,403) (26,144)
--------- --------- --------- ---------
Net income $95,840 $27,374 $167,543 $61,770
========= ========= ========= =========

Reconciliation of net income
to net operating income:
Net income 95,840 27,374 167,543 61,770
Realized investment and foreign
currency gains (losses),
after tax (28,287) 4,103 (37,154) 877
Discontinued business, after
tax - 2,990 - 3,025
--------- --------- --------- ---------
Net operating income (2) $67,553 $34,467 $130,389 $65,672
========= ========= ========= =========
Net operating return on
equity (2) 20.2% 14.8% 19.5% 14.1%

Cash flow from operations
before change in trading
account $320,588 $145,304 $596,419 $239,454

June 30, December 31,
2003 2002
----------- ------------
Selected balance sheet information:
Total investments (3) $5,469,611 $4,663,100
Total assets 8,304,257 7,031,323
Reserves for losses and loss expenses 3,633,849 3,167,929
Long-term debt 499,377 362,985
Trust preferred securities 193,316 198,251
Stockholders' equity (4) 1,525,246 1,335,199
Shares outstanding 55,405 55,223
Stockholders' equity per share 27.53 24.18

(1) For the second quarter of 2003 catastrophe losses were $21 million
pre-tax, or 24 cents per share after-tax, compared with $21
million pre-tax, or 26 cents per share after-tax, in the year
earlier period. For the first six months of 2003, catastrophe
losses were $28 million pre-tax, or 32 cents per share after-tax,
compared with $27 million pre-tax, or 35 cents per share
after-tax, in the year earlier period.

(2) Net operating income is a non-GAAP financial measure defined by
the Company as net income excluding gains and losses on
investments, foreign currencies and discontinued business.
Management believes that excluding investment and foreign currency
gains, which result primarily from changes in general economic
conditions, and excluding results of businesses that have been
discontinued provides a useful indicator of trends in the
Company's underlying and on-going operations. Net operating return
on equity represents net operating income expressed as a
percentage of beginning of year stockholders' equity, adjusted for
stock transactions.

(3) Investments include trading account receivable from brokers and
clearing organizations and trading securities sold but not yet
purchased.


(4) Stockholders' equity includes after-tax unrealized gains from
investments and foreign exchange of $132 million and $105 million
as of June 30, 2003 and December 31, 2002, respectively.