William Berkley – Chairman and Chief Executive Officer Robert Berkley - President and Chief Operating Officer Eugene Ballard – EVP and Chief Financial Officer.

Crystal Lu - Credit Suisse.

Good day and welcome to the W. R. Berkley Corporation’s Third Quarter 2015 Earnings Conference Call. Today's conference 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, expects, 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, 2014, 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. William R. Berkley. Please go ahead, sir..

Good afternoon. We’re pleased with our quarter and we’re looking forward to an excellent year. I think that I’d like to start with Rob, our very soon to be Chief Executive, and he’s going to talk about our operations..

Okay, thank you very much and good afternoon everyone. Market conditions during the third quarter were by and large a continuation of what we have seen in the second quarter. Yes, competition is modestly on the rise, but truly is at its incremental rate.

And in spite of some of the recent headlines that we heard about cat or cat-like events occurring and affecting the industry, the impact has really been quite modest and one that that’s hard-pressed to find any type of catalyst out on the horizon that is going to shift the direction or I should say the overall market climate.

As far as the domestic insurance market goes, as we’ve said over the past couple of quarters, workers’ compensation, general liability and many of the professional lines remain very attractive and we think are sensible places to be deploying additional capital.

On the other hand, aviation, much of the marine market, cat-exposed property as well as offshore energy are product lines that we are increasingly concerned about and do not see a lot of rational behavior in those parts of the market.

Another large product line that we have been talking to about or I’d say at this stage probably goes back to 2013 or so, maybe even earlier, is commercial auto, particularly long-haul truck.

We have had our reservations about this product line for a very, very long time, it feels like at least at this stage, and the lack of rational behavior that existed in the marketplace.

While we have not come out of the woods as an industry when it comes to this product line, I think the fact is that it is beginning to get the attention that is required and we’re beginning to scratch the surface as far as the needed action that one needs to take in order to get this line to return to meaningful profitability.

Moving onto the international market, it is a bit more competitive; no different than it’s been in the past few quarters.

One of the things that we’ve seen over the past few years has been many organizations have been looking to increase their footprints in some of the international markets that we have been operating in have become more and more crowded.

This is not unique; we’ve seen this happen in the past, and what tends to happen is that it ebbs and flows, folks develop an appetite to expand their footprint and over time they realize that it is not so easy to get the critical mass that they need in order to make their economic model work.

They began to revisit their business plan and in many cases, ultimately retreat. And our sense is, of course, frankly that we may be over the next couple of years approaching a point of inflection with some of the international markets.

In addition to that, we’ll be getting on to a couple of comments regarding the reinsurance business shortly, but we all know how competitive it’s been.

And the international insurance markets tend to be a bit more dependent on the reinsurance markets and that is due to the fact that much of the international market uses much larger limits on a day to day basis than we typically see in the middle and small commercial market in this country.

So consequently cheap reinsurance has perhaps empowered less responsible behavior. And to that point, both domestically and internationally, we have seen increasing correlation between areas of the industries that are under the greatest pressure and those that are most dependent on reinsurance.

On the topic of reinsurance, certainly again a topic we’ve discussed with you all in the past, the marketplace remains exceptionally competitive. Having said that, it would seem as though the pace of competition seems to be not moving or increasing as quickly as it has over the past several quarters.

I don’t think that we’ve necessarily touched bottom, but it would seem as though we continue to get closer as again the pace of erosion is slowing. When we look at the reinsurance market, quite frankly, we are convinced that it is unlikely that the market tomorrow will look like it did yesterday.

At the same time, we’re hopeful that it will not look like what it appears to be today.

And having said that, we do believe that capacity is becoming more and more commodity with every passing day and ultimately it boils down to the expertise that you can bring from a value perspective to your clients and focusing on clients that actually do value expertise and don’t just [view it as a] [ph] commodity.

Turning to our quarter, and I’ve promised Gene I would keep this on a very high level and I wouldn’t steal his thunder, but I do want to tuck in a couple of quick comments here. Top line came in at $1.57 billion. This is up about 3%. The growth was led by our domestic insurance business, which was up about 6%.

Of that, 6 points of growth, roughly 1 point of it was associated with rate. The top line growth was somewhat offset by our international as well as our reinsurance segments, which were both off and that was primarily driven by FX. And I will leave the rest of that for Gene to touch on.

As far as the loss ratio goes, coming at 60.5%, by and large in line with our expectations.

The reinsurance and the international segments both had good quarters, or certainly improving quarters when compared with the corresponding period last year and the domestic business moved slightly in the wrong direction and that was primarily driven by non-cat related property losses.

Moving onto the expense ratio which is certainly something that we have discussed several times in the past, first off, the 33.2% was by and large in line with our expectations. We continue to be pleased with the progress that we make on the domestic front.

The reinsurance segment, the internals are flat; the rise that you see in the quarter is due to commissions and related, and Gene, I guess, you will going into some of that in some more detail.

And then finally on the international front, the tick up I think is in keeping with what we suggested you would see when we had a discussion about 90 days ago, with some one-time expenses associated with some of our operations in the UK.

So when you put it all together, the company achieved 93.7%, which by and large is right in line with our expectations. We think that the performance of the business is reasonably good at this stage.

Having said that, we think some of the obstacles that we have been wrestling with to date, we’re getting those behind us and we’re optimistic as to how we’re positioned going forward for the fourth quarter, but particularly 2016. Thank you..

Thanks, Rob.

Gene, you want to take us through the numbers?.

Okay. Thank you. For the quarter, we’ve reported operating income of $118 million, or $0.91 per share. That’s up from $0.80 and $0.81 that we reported in the first and second quarters of this year, but below the $1.06 that we reported in the third quarter of 2014, which included significantly higher than average earnings from investment funds.

For the quarter, our net premiums increased $46 million or 3% from a year ago to almost $1.6 billion. Domestic premiums grew by 6% to $1.25 billion. That was led by 11% growth in workers’ compensation business and 8% for other liability business.

International premiums declined 5% to $164 million due to the strengthening of the US dollar against the pound, the Canadian and Australian dollar and the Brazilian real, in our case. In local currency terms, international premiums actually grew 7% and that was led by growth in Canada, Germany and South America.

Reinsurance premiums declined 7% to $171 million due to the continuing soft market conditions in both the US and overseas. Without the impact of FX changes, they would have declined as well, but by 5% instead of 7%. Our overall pre-tax underwriting profits were up 2% in the quarter to $96 million.

The third quarter accident year loss ratio before cats was 61%, that's unchanged from a year ago. In fact, if you look back for each of the past seven quarters, our accident year loss ratio has been between 60% and 61% throughout that period as pricing and loss cost trend have generally offset one another.

Our cat losses were relatively light again this quarter at $6 million or 0.4 loss ratio points. That's down from $15 million in the third quarter of 2014. And on a year-to-date basis, our cat losses were $46 million or one loss ratio point.

We reported favorable reserve development of $15 million in the quarter with modest favorable development in all three business segments. That $15 million is in line with our year-to-date favorable development which is $49 million.

That gives us the calendar year loss ratio after cats and reserve releases of $60.5 million, slightly below the $60.7 million a year ago. Our overall expense ratio for the third quarter was 33.2%, that's down 0.6 of a point from the third quarter of 2014.

The domestic expense ratio declined to 30.8%, 0.3 of a point below the third quarter of last year and almost a full point below the full year 2014. On the other hand, the international expense ratio increased 2.5 points to 43.4%.

The increase was due to both the decline in premium volume as well as continuing cost relating to solvency II and the integration of our UK company with our Lloyd's syndicate and we do we expect those costs to decline beginning in the fourth quarter of this year. Reinsurance expense ratio increased by five points to 39.0%.

The increase is attributable to the structured treaties that incepted earlier in the year. I mentioned those in the second quarter call, these treaties have higher than average commissions, including profit commissions that are more than offset by lower loss ratios.

And if you look at the expense ratio, the non-commission portion of the reinsurance expense ratio, it was unchanged from a year ago at roughly 10 percentage points. That gives us an underwriting profit of $96 million for the quarter and a GAAP combined ratio of 93.7%.

Turning to investment income, our investment income was $133 million this quarter, compared with $179 million in the third quarter of 2014. Earnings from our core portfolio including arbitrage trading declined 8% to $110 million, due primarily to lower reinvestment rates available for maturing bonds.

The average bond yield for the first nine months of 2015 was 3.3, down 0.2 from 3.5 in 2014. Income from investment funds were $23 million in the quarter, which is an annualized return of 8%. That compares with $59 million in investment fund income a year ago to well above averages that quarter from our aviation and real estate funds.

Realized investment gains were $54 million in the quarter and were primarily due to the sale of a portion of our investment in HealthEquity.

At September 30, 2015, the average credit rating for the fixed income securities portfolio was AA minus and the average duration was 3.2 years, which is a full year shorter than the duration of our loss reserves. Aggregate unrealized after-tax investment gains were $227 million at September 30, 2015.

Our overall effective tax rate for the quarter increased by one point from a year ago to 33.3% and that's due to higher taxes in certain US states as well as a couple of non-US jurisdictions. Cash flow from operations was $620 million for the first nine months of 2015 compared with $646 million in 2014.

And in the first nine months, we purchased 4.5 million shares of our stock for an aggregate cost of $224 million. All in, that gets us to net income of $153 million and after-tax ROE of 13.3% and an ending book value per share of $37.18..

Thanks, Gene. These are especially interesting times. We really do focus on risk adjusted return. It means, we do some things that some of our competitors don’t do. We don’t focus truly on accounting results, because we’re focused on creating shareholder value more than reported earnings per se.

That means, we start businesses instead of buying them, because that’s a better economic return; it’s not a better accounting statement return. We’re maintaining the quality of our investment portfolio and keeping a short duration, because the risks of an insurance company are doubling down if inflation comes.

You get hurt with your loss reserves and if you extend the maturity and duration of your investment portfolio, you’re effectively doubling down. So we’ve chosen to reduce that risk, the one that we can control.

We haven’t lowered the quality of our investment portfolio, because the risk of an adverse economic turn will have a general adverse view on our business. Therefore, we’ve chosen not to take the risk.

So we’re constantly looking at the risk side of how we manage our business because all of our employees are owners, it’s the biggest single element on our profit-sharing plan. Clearly, the management of the company views that as how they bet on their future. We continue to look out and see lots of volatility and uncertainly in the future.

But we have a lot of confidence in the things that we see. For every problem, for every change, it creates new opportunities. And we think having the smartest people, the best underwriters and the best teams of people continues to give us a competitive advantage.

Rob spends a substantial amount of his time out talking to new teams, constantly trying to find the best teams to do particular things, whatever they might be, they can be small niches or big chunks of opportunity. But we’re constantly out there looking.

And what we really are is a large group of small niches and we do it in a way that we can compete administratively and cost wise. We don’t look like the people we compete with, even though the numbers claim to be the same. So we’re very excited. We think the future is coming along today. We think that the numbers are moving in the direction we like.

Clearly, it’s a cyclical business, but we think we’re well positioned and we’re constantly investing in that future. It probably costs us $20 million a quarter each year for the new things we’ve been investing in. Things we invested in three years ago give us a positive return than new things that we’re spending money on cost us money.

We think that’s how you build business for the future. We think we’re going to have a better business in the future than we have today and today’s business is better than yesterday. So I’m happy to answer any questions. Patricia, we’ll take questions..

[Operator Instructions] Our first question comes from the line of Ryan Tunis with Credit Suisse..

This is Crystal Lu in for Ryan Tunis.

Our first question is just do you have any fourth quarter visibility into the investment fund returns given the move in energy?.

We know that the energy prices are down and that we’re going to probably have a small loss there, but we haven’t released that number yet. We normally put that in our 10-Q filing..

Our net position in our energy funds as relates to our overall fund has continued to diminish as a percentage of our funds. So it’s a smaller and smaller number. But when we file our Q, we’ll announce those funds that we know already..

How should we think about the level of share repurchase this quarter? What kind of considerations are there?.

It’s the same considerations we always give. We consider how to best use the capital owned by our shareholders, which is either buying back stock, paying special dividends, or expanding the business and we’re always looking at the balance for those things.

And the cost of the balance - balance is the price of the shares, the availability of the shares and opportunities that we see..

[Operator Instructions] I'm showing no further questions at this time..

Okay. I thank Mike [McGavick] [ph] for that. Have a wonderful day..

Ladies and gentlemen, that does conclude today’s program. You may all disconnect. Everyone, have a great day..