Evercore ISI Reiterates Underperform Rating on W.R. Berkley (WRB): "reserves continue to look problematic"

Evercore ISI analyst David Motemaden reiterated an Underperform rating and $69.00 price target on W.R. Berkley (NYSE: WRB)

The analyst commented, "WRB reserves continue to look problematic and slightly worse than a year ago. However, WRB has been able to offset issues we have flagged over the last several years in Other Liability, with reserve releases in professional liability, short tail lines and workers comp. In addition, conservative loss ratios set in recent AYs have helped alleviate some pressure, although it needs to be monitored as WRB has seen early favorable development in OLO turn adverse on AY20-21 and AY23. Despite our slightly worse view than a year ago, our base case is that WRB will be able to continue to rely on redundancy in professional liability and short tail lines (but maybe less so in workers comp) to offset charges taken on Other liability, resulting in neutral PYD on a net basis. It looks like this could be a tighter rope to walk though as WRB had less favorable PYD on comp in ’25 with some adverse on AY20 & prior that was more than offset by releases on AY24-25. While we don’t think WRB will take adverse on comp going forward, it will probably provide less favorable PYD that can be used to offset continued strengthening in Other Liability. We believe WRB will need to continue to be disciplined on growth to achieve rates high enough to embed sufficient conservatism in loss picks. We think this presents downside to 4% consensus NPW growth for ’26. At 15.5x P/E, we think the stock is expensive relative to peers who are growing faster (CB, HIG, AIG) and there is still uncertainty around whether WRB can continue to manage the apparent deficiency in Other Liability Occurrence (our base case is it will)."

For an analyst ratings summary and ratings history on W.R. Berkley click here. For more ratings news on W.R. Berkley click here.

Shares of W.R. Berkley closed at $69.92 yesterday.

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