Downgrading to Underperform on extended growth headwind in soft market

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Downgrading to Underperform on extended growth headwind in soft market

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W.R. Berkley

Downgrading to Underperform on

extended growth headwind in soft market

Rating Change: UNDERPERFORM | PO: 68.00 USD | Price: 71.98 USD

Premium valuation amid growth slowdown 16 July 2026

Our downgrade comes as we expect net premium written (NPW) growth to be in-line Equity

with peers amid softening market conditions. Following outsized growth in 2021-2022,

Berkley’s growth has moderated, and we expect mid-to-low single-digit NPW growth

Key Changesthrough 2H26-2028, in-line with peers. Despite this normalization, the stock continues

to trade at a premium valuation of approximately 2.4-2.5x book value, well above large- (US$) Previous Current

cap peers. Additionally, we believe Berkley's valuation benefited from Mitsui Sumitomo’s Inv. Opinion B-2-7 B-3-8

recent participation in the open-market, building up a 15% stake in the company. Inv. Rating NEUTRAL UNDERPERFORM

Price Obj. 74.00 68.00

Soft market cycle to pressure growth premium

On a 20-year basis Berkley grew NPW at 5.2% CAGR, modestly outpacing its larger Joshua Shanker

Research Analyst

peers, notably due to pockets of outsized growth in firming market years followed by BofAS

underperformance in soft market years. After the 2021-2022 NPW acceleration in a +1 347 821 9017 joshua.shanker@bofa.com

firming market, Berkley’s excess growth has largely disappeared. In 1Q26, Berkley's Cyril Onyango

insurance NPW growth trailed Chubb and was only modestly ahead of Travelers, with all Research Analyst

three carriers producing mid-to-low-single-digit premium growth. As markets continue BofAS cyril.onyango@bofa.com

to soften, we believe it will be difficult for Berkley to outgrow its peers, noting that prior Fatima Keita