WRB: Workers' Comp Reserve Well Is Running Dry; Downgrade to Underperform

Research evidence excerpt

WRB: Workers' Comp Reserve Well Is Running Dry; Downgrade to Underperform

Nonlife Insurance

Commercial Lines - Market Weight

W. R. BERKLEY CORPORATION (WRB) July 1, 2026

WRB: Workers' Comp Reserve Well Is Running Dry; Rating:

Downgrade to Underperform Underperform

Prior: Peer Perform

Price:

The Wolfe Byte $70.67

We downgrade WRB to UP from PP. Workers' Comp has been masking an adverse Price Target:

$58casualty reserve deficiency, but the cushion is gone. Its premium P/E multiple vs Prior: NA

peers is not justifiable given we are approaching an inflection toward casualty % Upside:

softening. (17.9)%

View WRB Model

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Insurance Reserve Deficiencies led by OLO. Our reserve review (alongside input from

Company Informationan actuarial consultant) of WRB's schedule P triangles implies an after-tax reserve

52-Week Range $64 - $78

deficiency of $1.3bn; ~5% of current market cap (pre-tax: $1.7bn or ~6%), largely Market Cap. (MM) $26,435

within Other Liability Occurrence, evenly spread across post-COVID AY's (excluding Enterprise Value (MM) $28,860

AY24). We reviewed six lines of business (comprising ~90% of WRB's YE25 stated Shares Out. (MM) 372.3 Avg. Value Traded (MM) $186.55

loss & DCCE reserves). Ask for our underlying work. SI% of Float 8.3%

Dividend Yield 0.6%

Exhibit 1 - Pre-Tax Reserve Adequacy Analysis by Selected Lines of Business - $

in 000 Price Performance

Indicated Stated (Deficiency) / YTD LTM Line of Business % of Stated

Ultimate Loss Incurred Loss Redundancy WRB 2% (4)%

Other Liability Occurrence $7,091,142 $5,867,240 -$1,223,902 -20.9% SPX 9% 21%

Other Liability Claims Made $2,267,177 $2,463,012 $195,835 8.0% WRSI (3)% (6)%

Workers Comp $3,201,590 $2,877,852 -$323,738 -11.2% 85

Commercial Auto $1,888,305 $1,718,951 -$169,354 -9.9%