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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, and welcome to W.R. Berkley Corporation's Fourth Quarter 2020 Earnings Conference Call. Today's conference call is being recorded. The speakers' remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, believes, except or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will in fact be achieved.
Please refer to our annual report on Form 10-K for the year ended December 31, 2019, and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. W.R. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.
Christine, thank you very much and welcome all to our fourth quarter call.
I think we're well on our way to our Safe Harbor statement being the longest component of our call. But perhaps that's just a reflection of sign of the times. On the call and in addition to me, you also have Bill Berkley, Executive Chairman as well as Rich Baio, Executive Vice President and Chief Financial Officer. We're going to follow a similar agenda to what we have in the past, where, which is going to lead us through some highlights for the quarter. I will follow with a couple of observations on my end. And then we will open it up for Q&A and the three of us are available to answer your questions to the best of our ability.
So with that, Rich, do you want to lead off, please?
Absolutely. Thanks, Rob. Good evening, everyone.
The company reported record quarterly net income of $312 million, or $1.67 per share. Despite the heightened catastrophes experienced by the industry, and slowdown in the economic environment through the global pandemic, our financials significantly improved in the quarter. This improvement was evidenced in our current accident year combined ratio x cats of 88.8% and strong investment income and net investment gains, which contributed to an annualized quarterly return on equity of 20.6%.
Starting first with our top-line, growth in our gross premiums written accelerated through the year with fourth quarter representing growth of 9.3%. Similarly, net premiums written grew by 8.2% to approximately $1.8 billion in the quarter. All lines of business grew in the insurance segment with the exception of workers compensation, increasing net premiums written by 7.2% to approximately $1.6 billion.
Professional liability led this growth with 29.6% followed by commercial auto of 20.6%, other liability of 10.6% and short tail lines of 2%. Growth in the reinsurance and monoline excess segment was 16.8%, bringing net premiums written to $205 million. Casualty reinsurance led this growth with 21.2% followed by 9.3% in property, reinsurance and 6% in monoline excess.
Rate improvement along with lower claims frequency and non-cat property losses contributed to our improvement in underwriting income of 44.2% to $165 million. Offsetting this improvement or higher catastrophe losses, resulting from natural cats and COVID-19 related losses. We recognized $42 million of total catastrophe losses in the quarter, or 2.3 loss ratio points, of which 1.5 loss ratio points relates to COVID-19.
You will see in our earnings release supplemental information that the cat losses for the reinsurance and monoline excess segment is negative due to the reclass of COVID-19 IBNR to the insurance segment. The current quarters natural cat losses compare favorably with the prior year quarter of $20 million or 1.2 loss ratio points.
The reported loss ratio was 61.3% in the current quarter, compared with 62.4% in 2019. Prior year loss reserves developed favorably by $4 million, or 0.2 loss ratio points in the current quarter. Accordingly, our current accident year loss ratio excluding catastrophes was 59.2% compared with 61.4% a year ago.
Rounding out the combined ratio, we benefited from an improving expense ratio of 1.3 points to 29.6%. We continue to benefit from growth in net premiums earned 5.6%, which outpaced an increase in underwriting expenses of 1.2%. In addition, the expense ratio is benefiting from reduced costs impacted by the global pandemic, including travel and entertainment. This contributes a benefit of more than 50 basis points to the expense ratio.
Touching on investments, net investment income for the quarter increased 32% to approximately $181 million. The increase was driven by investment fund income of $53 million due to market value adjustments and arbitrage trading income of $26 million in large part coming from investments and special purpose acquisition companies. Investment income from the fixed maturity portfolio declined due to lower reinvestment yields compared with the roll off of securities, due to maturities calls and pay downs.
In addition, we continued to maintain a cash and cash equivalent position of approximately $2.4 billion, enabling us to maintain a relatively short duration of 2.4 years and significant liquidity.
Pre-tax net investment gains in the quarter of $163 million is primarily attributable to realize gains of $127 million and changes in unrealized gains on equity securities of $36 million. As previously announced, the realized gain was largely driven by the sale of a real estate investment in New York City, which resulted in a gain of $105 million.
Foreign currency losses in the quarter were driven by the weakening U.S. dollar. Two items of note. First, you'll see that on a year-to-date basis, we were about breakeven. Second, loss in the quarterly income statement is offset considerably by the increase in stockholders equity. In the quarter, our unrealized currency translation loss improved by $66 million, resulting in a net equity pickup of approximately $47 million.
As a reminder, expenses included a non-recurring cost of $8.4 million relating to the redemption of our $350 million subordinated debentures in the quarter. Stockholders equity increased 5.3% in the quarter and book value per share before share repurchases and dividends increased 6.1%.
We ended the year with more than $6.3 billion in stockholders equity, after share repurchases of approximately 6.4 million shares for $346 million at an average price per share $54.43 and ordinary dividends totaling $84 million. That brings total return to shareholders of $430 million in the year.
Finally, the company had strong cash flow from operations in the quarter of $480 million and more than $1.6 billion for the full year, an increase of more than 41%.
With that, I'll turn it back to Rob. Thank you.
Okay, Rich, thank you very much. Very complete, you leave me nothing to say. But I'll come up with something to babble on about for a relatively brief amount of time.
So, from my perspective, and I believe from our perspective, the market is clearly in the throes of firming. When we look at the marketplace, is it what we saw at least at this stage in 86. No, clearly not there is not a vacuum when it comes to capacity. But clearly, there is a recognition within the industry amongst carriers. That capacity is not going to be build out in such a casual manner as it has been done in the past. And when it is provided, it will be with a lens towards a more appropriate rate associated with that.
When we look at the marketplace, overall, we think this is very appropriate. And whether it will prove to be similar to what we saw in sort of late 2001 and 2002 and 2003, when we see with the time, but the reality is no cycle looks like any other cycle.
All that being said, when we look at Q4 and when we think about our own business, every product line at this stage with the exception of workers compensation, we believe is achieving rate in excess of [indiscernible].
And quite frankly, that is appropriate and necessary when you think about where trend is. And in addition to that, when you think about the realities of what one can expect from the investment income portfolio, particularly around the fixed income, if we do need to be pushing for rates and driving down the combined ratio further in order to achieve a sensible risk adjusted return.
This as far as different product lines go at this stage, we are seeing meaningful firming continuing in the much of the PL market. Also, the excess in umbrella market is quite firm as well, property continues to be notably hard, and auto, I would suggest is also quite firm. One of the laggards has been primary GL and we've been pleased to see over the past couple of quarters that seems to be building some momentum. And we think that's really important given what's going on, on the social inflation front. And again, as well as the realities of investment income. And as mentioned in prior calls, and just a couple of moments ago, worker's comp does continue to be the outlier. Having said that, we continue to believe that's in the early stages of bottoming out, and would expect that to be reversing direction by the end of or later part or end of '21.
Just on the topic of rate. From our perspective, we think that there are many market participants that have a good deal of catching up to do. When we think about the past several years, there have been moments where quite frankly, it's been a little bit lonely when we've been pushing for rate. As you may have picked up in the release x comp, we got 15.5-ish points of rate. In the quarter, if you go back a year earlier to Q4 '19, we were getting just shy of 9 points of rate, Q4 '18, 4 points of rate, Q4 '17, 2.3, Q4 '16, we got a point of rate.
We think that there are many parts of market participants that have not been pushing for rate for an extended period of time. And again, we are going to see them needing to catch up and they are going to need to catch a moving target.
One other comment that I would just make them on this front related to rate and loss costs and how people think about rate adequacy. It would appear as though there are some market participants that may be thinking about loss costs slightly differently than how we think about loss costs. When we look at the current circumstance, I think it's very clear that severity is on the rise for much of the liability market.
And recently, as a result of COVID-19, there are certainly many parts of the market that have experienced somewhat of a benign period when it comes to frequency. And our observation is that some may be in for a little bit of a rude awakening, hopefully sooner rather than later, when COVID is somewhat behind us, we see frequency return to a more traditional normal and that severity trend continues to take off like a rocket set for the foreseeable future, as we've been discussing,
Turning to our quarter, as Rich referenced, pretty healthy growth on the top-line. The growth was up about 9%, the net was up about 8%. And obviously the rate increase that we mentioned earlier, is a big contributor to that. We've gotten the question from time to time from folks to saying, hey, help me do the math. So you're getting 15 points a rate in this quarter or so. But you're only growing a smaller amount? What's going on? Are you shrinking your business from an exposure perspective? And the answer to the question is, yes and no. And what I mean by that is our policy count is actually up a bit. But what's actually going on is that our insurers, while we may be selling more policies and that number is growing, many of the insurers business activity and particularly measured in their revenue, which we price the policies off of is down as a result of this economic activity in the industry.
So when we look at the situation here, sort of the short version, policy count is up a little bit, rate is up, but the number, the amount of revenue or a number of widgets, if you will, that our insurance are producing is down.
So what does that mean? That means that we are reasonably well positioned for growth, when the economy starts to open back up. And you will see in all likelihood, from my perspective, a notable catch up in audit premiums, as the revenue begins to pick up, even with those policies that we've already issued, because again, there is a catch up in our audit activities.
Just stuck with other things quickly, the expense ratio, again, Rich, covered this pretty thoroughly, I would just offer a couple of quick sound bites. One, the 15 basis points benefit, if you will, that the expense ratio is getting as a result of a reduction of activity on our end with travel and entertainment, and so on. That will one of these days come back but we are actively looking at what does return to work look like for us, we certainly expect that people will be back in the office. But will the travel be the same? Or were there opportunities to learn through this period of time where maybe travel will not have to return to it what it once was.
That all being said, the reality is that we envision the business growing considerably more as the economy opens back up. And in addition to that, these higher rates which will also contribute to the higher earned premium coming through, will help out on that front.
And on the lost ratio front, obviously, there was some improvement there. We also have heard some commentary from some really asking, given all the rate increases, why are we not seeing more improvement in the loss ratio? Short answer is that we're trying to be as always very measured and not declaring victory prematurely. As we've shared with some in the past, the simple reality is, we do not know what the legal system is going to look like and what that is going to mean for loss costs activity once the economy opens back up, and we see the legal system, particularly the courts, operating at more of a traditional level.
Having said all this, let me share with you just a quick observation. If one were ypothetically, to look at our loss ratio that we had in 2020. And one were to apply a healthy level of trend, just to pick a number arbitrarily a handful of points. And then one were to apply that type of rate increases earnings through that we have been achieving.
I think that gives you a reasonable indication as to what the math may look like. One other piece that one could factor in hypothetically speaking, would be it is perhaps reasonable assumption, I should say that a pandemic will not happen every year. And obviously there's significant loss associated with the pandemics and our 2020 numbers. So some might suggest that we're being a little bit optimistic. But quite frankly, one of the days all done is pretty simple, straightforward math.
Just on the investment portfolio, again, I'm not going to repeat what you already heard from Rich, but again, it was a strong quarter both as far as the gains. We have shared with people in the past that on the realized gain front, it's going to be lumpy. And quite frankly, [indiscernible] returns are going to be lumpy.
Penciling in on average, give or take 25 million a quarter is what we've suggested to people in the past. We still think that's appropriate. And they're going to be moments in time where it may feel like there's a bit of a drought. And there's going to be moments in time where it feels like it's raining money but on average, we think we get great risk adjusted returns.
And again, the same thing applies to the funds. As we have suggested to people they're going to be moments when the funds do break they're going to be moments where the funds are lagging a little bit but on average, we suggested that people pencil in high teens call it 20 million a quarter.
Rich mentioned and I know we've talked about this last quarter how the duration is sitting there at about 2.4 years, we continue to have a view, that one does not get rewarded for taking the duration out or going out on the yield curve. When we look at -- when we do the math, when we look at the numbers, yes, we could take it, the duration back out of it. But the simple fact is that if you move rates up, call it our modeling 100 basis points or so, the impact on a quarterly basis, we will pick up after tax give or take maybe $5 million. But if you move rates up 100 basis points, the impact on book value will be approximately $160 million. So we are at this stage prepared to live with a slightly lower book yield and maintain the flexibility, the high quality and the liquidity and we think that makes sense.
One last topic for me is listen, you may have picked up the announcement that we made just in time for the 1-1, this is a vehicle that we created to sit side by side with our traditional reinsurance partners. We remained very committed to traditional reinsurance. But we felt as though that this was a good platform to sit side by side.
We're very fortunate to have two outstanding partners in this re and while there certainly are plenty of people to partner with these two institutions, not only are financially well heeled, but they are two organizations that are both thoughtful, sophisticated, with tremendous expertise in the insurance industry, and they are truly partners.
In addition to that, it was very important to us that there's a shared view around the topic of risk adjusted return, and a shared sense of obligation and duty to capital. So since people tend to unplug right after the Q&A, I'll just tuck in my parting comments now. And that is while some might suggest that, I found a bit optimistic and some might even suggest that it is a genetic flaw being overly optimistic. I think the simple reality of the situation is all you need to do is look at the facts and do the math.
And if one were to go down that path and look at the facts and do the math, I think it paints a pretty clear picture for what the next several years look like for this organization. So I'm going to pause there and Christine at this time, we would like to open it up for questions.
Thank you. [Operator Instructions] Your first question comes from the line of Mike Zaremski from Credit Suisse.
First question, I saw in the release, you talked about the pay loss ratio being 51.9. Do you guys have offhand what last years was feels awfully good.
Rich, do you have that handy if we so, Mike, can we just follow up with you or [indiscernible] favorite tip?
I do with the full year for 2019 was 55.2.
Okay. Okay, so it's lower. And so, I guess, Rob, you've been telling us pretty loud and clear that, there's uncertainty about whether the recent frequency dip kind of comes back to normal levels in 2021. And severity has been a big part of the problem for the industry. Just curious, is severity currently or just in '20, is severity also running at improved level versus pre-pandemic?
No. At least from my perspective, and I'm using a very broad brush here. So there are going to be pockets that would not fit under this response. But generally speaking, when we look at 2020, we think severity continues to be an issue, this whole sort of topic of social inflation, we think remains very real. And honestly, given how the courts were at best brought to a crawl during the COVID-19 period, I'm not sure if anyone really fully appreciate how ugly it is. But certainly, I think without a doubt, we can all assume that frequency has been for many product lines are remarkably benign during COVID-19. And once the world returns to a more traditional circumstance, you will see frequency return to a more historic level and certainly [indiscernible].
And switching gears to when your comments earlier about the top-line growth, lagging pricing? I guess I had thought one of the main reasons was, you're giving a pricing finger, it includes comp, but doesn't include comp, which is more of flattish to negative pricing. But, I guess my real question was, you talked about audit premiums, potentially being a plus, hopefully in '21. But any color you can give us on how other premiums impacted Berkley's income statement in 2020?
I don't have those numbers, and Karen can perhaps follow up with whatever we are able to share. But what I can tell you is this, for policies that were written during '19, that were providing coverage during '20, or policies that were written early in '20. Obviously, the expectation that many of those insured had was that their revenue in all likelihood would be significantly above what it turned out to be when much of the economy shut down. And obviously, that had an impact on their revenue.
So what I'm suggesting is, if you assume that at some point, during 2021, the economy begins to more meaningfully open up in this country and other economies around the world. I think what you will see is, when people go out to do audits, the economic activity was more than they had estimated for 2021 and there will be a lot of premium catch up through the audit process i.e., if I own a store, and I buy a policy today, I'm probably estimating that my revenue is going to be considerably less perhaps than it was in 2019.
But if the economy opens back up, my revenue in all likelihood, will open will pick up considerably. And when the insurance company goes out and does an audit, to see what your revenues were, you will owe the insurance company considerable premium. And there will be a catch up.
That's helpful. Lastly, a numbers question, if you have it, the COVID charges, you've taken the just '20, what percentage is sitting in IBNR bucket still?
I'm sorry. Could you repeat that once more Mike?
The COVID-19 charges you've taken in 2020, what percentage are sitting in IBNR roughly?
The total amount that we have put up somewhere between 45% and 50% is still sitting in IBNR.
Your next question comes from the line of Yaron Kinar from Goldman Sachs.
My first question is around the severity trend. Rob, I just want to clarify on your comment that it continues to take off like a rocket ship after COVID. Are you taking further deterioration in the trend [indiscernible]?
Here is my view that social inflation is a moving target and that it continues to tick along? And I think that there are some people that have underestimated that. And we have worked very hard as an organization, not to get caught behind.
So my view is that, when I say a rocket ship, I think that there are a lot of people that are just proportionately consumed by what was a benign period for many, many years, and it really wasn't until maybe the past two, three years or so that we started to see it really where is that.
But it's not necessarily that this trend gets worse, it's just that others may have been slowed this up to this realization.
I think the others may be slow to wake up to it. And I think in addition to that, that it continues and you get a compounding effect. And if you haven't been keeping up with it, you will continue to fall farther behind.
Got it. And then my second question is, so, for a company that has recognized this trend early and it is also showing duration on the asset side, is there the opportunity to perhaps take the foot off of the rate pedal, in order to take market share and what is potentially much more lucrative business today, considering that you have recognized these trends already.
So we look at each product line by operating unit and try and strike the balance between rate versus growth. And there certainly are parts of the business where we are very satisfied with the margin. And we are actively growing policy count. And then there are other parts of the business where given where rates have gone, workers comp as an example, where there are pockets of the workers comp market where we have no problem whatsoever shedding policy count.
Your next question comes from the line of Ryan Tunis from Autonomous Research.
So I guess my question is, just it looks like any insurance segment, the past three quarters have been underlying loss ratio, pretty steady, kind of 59.5 to 60. It doesn't look like we're really seeing that much positive margin impact from this relationship between rate and loss trend. I was just hoping maybe, if you wanted to just quantify at this juncture, how much is that dynamic? If at all, helping your margins on a quarterly basis?
I think that when you say, well, how much, what dynamic is helping our margins on quarterly? I just want to make sure I'm understanding.
I'm sorry, I just mean, so the relationship between earned rate exceeding lost trend, including margins by how much this quarter, relative to a year ago.
So I'm trying to think about how I can answer it. Our margins, we believe, the impact of rate increases will become more visible in 2021. I would suggest to you over the past several quarters, obviously, we have had an impact associated with COVID-19, as they've written and I have discussed, and that has been disproportionately weighted towards the insurance segment.
So I think if you thought about the insurance segment and do move COVID-19 out, you might see it a little differently. Or if you looked at insurance segment, accident year loss ratio excess, you might see a different picture too.
So Rob in your mind, what impact has COVID had on the attritional loss ratio in insurance in 2020?
Well, when you say attritional loss ratio, we view COVID as a cat.
Okay. I'm sorry, I meant how about on the x-cat loss ratio in terms of things in our direct losses. But, whether it's lower frequency of various things versus…
By and large, as far as benefits stemming from COVID on the frequency front, we have been very reluctant to come off of our loss picks. Yes, maybe we've gotten a little bit of benefit on the physical damage front of auto. But other than that, we are thinking that one needs to be very cautious around reaching its inclusion on the frequency front. And the reason for that is no one really knows for sure when COVID is behind us and the legal system opens back up what the catch up is going to be.
So when you look at our loss ratios for the past couple of quarters in the insurance segment, you're seeing the impact of COVID as far as claims that we've had to deal with, but as far as the reduction in frequency, you're seeing a very modest recognition of that.
Your next question comes from the line of Michael Phillips from Morgan Stanley.
Rob another one may be on, I guess my question gets to the heart of your need for continued rate versus the industries. And when you say some will be shocked, with frequency and severity things off, you won't be shocked. And you've already [indiscernible], you've spent a lot here with social inflation, and you're concerned, so you've already kind of built things in for that. To take that with the backdrop of an 88 some, core combined, it would appear to be your need for continued to rate is significantly less than the industries. And I guess that the question. And if so, then I assume that bodes well for competitive position for you going forward?
Yes. We share your observation that we think we're in a good place. And we've been pushing for race for a while, which is one of the reasons why we probably have a little bit -- we don't have to catch up the way some others did. And as far as our positioning, we think we're in a good place, because we don't have the kind of legacy issues that others may need to deal with. At the same time, we think our margins, not everyplace, but in many places are quite attractive.
Okay. I guess when I read your commentary on the press release and you talk about the need for additional rate, I assume you're saying they're more for your peers and for you, is that…
I think the marketplace needs additional rate, and certainly to the extent that rate is available, we will be taking the rate.
I guess it's unrelated question. With the new administration in place, anything you want to share on how you might want to manage potential changes in tax with maybe something in Bermuda or whatever else, anything, you can share them how you thinking about managing that?
Obviously, we're conscious that the new administration has likely to be raising taxes in any way it possibly can and corporate taxes are likely a piece of that. We are conscious of that and trying to analyze it. appropriately.
Your next question comes from line of Meyer Shields from Keefe, Bruyette & Woods.
Rob, if you can go back to your comments on the difference between rates and premium growth. You mentioned, I guess that exposure units are down, does that itself have any impact on your underwriting results?
So just to make sure that we're clear, what I'm suggesting is that the exposure unit may be down, if you will, but the number of policies is up and the rate is up? And does that have an impact on -- an impact on what?
And so when you've got that decline in exposure unit or a smaller increase? Does that itself have any impact on any elements of the combined ratio?
Well, certainly when we calculate our rate, we think about the number -- the exposure to come up with the rate that we're achieving, right? So what is the impact that how we think about our loss ratio.
Okay, understood. The second question, I guess now that we've gone through at least January 1, is it reasonable to expect continued growth in reinsurance either for a property casualty, to be in line with the growth that we saw in 2020? This is on the reinsurance side.
None of us know exactly what tomorrow will bring. I think there's clearly more discipline in the reinsurance marketplace than there has been in an extended period of time. Kudos to our colleagues that run our reinsurance businesses for exercising tremendous discipline, which came undoubtedly a great frustration and pain at times, but they did it and they did it very well.
And I think as long as we see an attractive market, that team will, people will look to capitalize on it, and they will utilize the shareholders capital when they think they can make a good risk adjusted return. There is nothing that leads me to believe based on everything, I know that the reinsurance market is going to lose momentum in the 2021 year. But, again, no one knows for sure what tomorrow will bring.
Your next question comes from the line of Yaron Kinar from Goldman Sachs.
Couple of follow up questions. I guess one, can you talk about the sources of COVID losses this quarter?
The lion's share of our COVID loss activity as a group has stemmed from event cancellation.
Okay.
Not just this quarter, but from inception.
Okay. And in this quarter specifically, I'm assuming that from policies that have yet to be renewed in the COVID environment?
It is from exposures, it's a whole mishmash. But the biggest piece of what we saw in the quarter related to COVID was, we are constantly looking at the exposure. And as we and one, the biggest testament is, how long is it going to go on or how severe is it going to be? And to what extent are people going to come up with a plan B, as opposed to having to cancel the event, if you will, altogether when it comes to event cancellation?
And what we did here, again, for the most part was, we're spending a lot of time trying to look forward, think about how long do we see this going on for? And what adjustments do we need to make to take that into account?
Got it. And then, my second question. I know it's in the insurance segment, there's a bit of an increase in seated premiums. Is that just a function of change in business mix or are you actually purchasing more reinsurance dollar for dollar?
It's primarily a shift in business mix. And to a certain extent, some reinsurance pricing has gone up. I think one of the things you may likely see as the year goes on, and quite frankly, the reinsurance pricing is firming further, you may see us revisiting what our net retentions are and perhaps keeping more net.
Your next question comes from the line of and Brian Meredith from UBS.
Quick question for you. So if I take a look back at kind of the 2000 through 2004 time period for you all, you had 24 points of this attritional fully combined ratio improvement just as much on a kind of reported. Can you maybe compare and contrast a little bit, today's market versus, back then granted, I understand that rate is not as high as it was back then. But then again, lost trend is not as high as it was back then.
Yes. So my take on it, and then, maybe our Chairman, they have a view. But my take on it is that it's not nearly -- it's ugly right now. And it may prove to be uglier than we even realize. But it's not in all likelihood, as ugly as it was in 1999, 2000 and 2001. And there's a general rule of thumb that the farther the pendulum swings in one direction, the farther it will swing back in the other. So I don't think we know for sure how much pain is going to come out of the past several years. I don't think that has fully come into focus for many industry participants, to be perfectly honest. But clearly, so far, there are parts of the market that has firms considerably and there are opportunities from our perspective to make very healthy returns.
As it relates to our numbers. I think in the late 90s and into 2001. There are parts of our business that may be drifted a little farther off course. I think it is highly unlikely that you will see that type of circumstance, we are head again.
Brian, I think one of the things you need to remember this something else, and that is you're seeing companies report substantial reserve issues and the market is doing ignoring them. Back in the late 90s, early 2000s, when people really had big reserve problems, their stocks and their ability to raise capital that really punished and the cost of raising capital increased dramatically. So the availability of capital was quite different. So, I think that these things take their own lives. But I think if I had to guess the results are worse than we're seeing in a number of cases. And the company who have done a good job will continue to benefit. The companies who have not will suffer more.
There are no further questions at this time. I'll turn the call back over to Mr. Rob Berkley.
Okay. Christine, thank you very much, and thank you to all for dialing in. I think, by virtually any measure, it was a great quarter. And that's really a result of the efforts of the whole team and that's 1000s of people. So we thank them for their efforts on behalf of all stakeholders. And we think again, we are very well positioned and we look forward to the coming years. Have a good evening. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating You may now disconnect.