Operator: Ladies and gentlemen, thank you for joining us. And welcome to the W. R. Berkeley Corporation's Second Quarter 26 Earnings Call. This conference call is being recorded. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in today's call, please press 1. To raise your hand and 1 to withdraw your question. 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, beliefs, 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, 2025 and other filing 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. WR Berkeley 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 like to turn the call over to Mr. William R. Berkley. Please go ahead, sir.

William R. Berkley: Thank you very much, and, let me echo your welcome to all participants. Thank you for finding time in your schedule to join us today. So I am joined on this end of the phone by Richard Mark Baio, and we are going to follow our typical agenda where momentarily Richard is going to walk us through some highlights from the quarter. I will then follow with a few of my own observations and then the 2 of us will be available to answer any questions that may have. Before I do hand it over to Richard, I would like to take a moment on behalf of my colleagues, my family, and myself to express our gratitude for the very kind outreach and support we have received on the heels of the loss of our founder, Bill Berkley. His extraordinary contributions to society, our industry, and our company cannot be overstated. His spirit, values, and priorities remain foundational to who we are and how we operate as a team. 1 of his great achievements while leading the company was the institutionalization of the business and making clear that this business is a team sport not an individual 1. While his vision and character remain central to our foundation the performance and success of this company continues to be a reflection of the hard work and commitment of thousands of people that make up this team. Thank you again to all of those who have been so supportive during this difficult moment. Richard, if you would, please.

Richard Mark Baio: Of course. Thank you. Good evening, everyone. Operating earnings per diluted share grew 21% to $1.27 or $497 million resulting in an annualized return on beginning-of-year equity of 20.5%. The company's second best quarterly pretax underwriting income was $318 million and record quarterly pretax net investment income of $419 million contributed to the excellent second quarter results. We continue to generate meaningful excess capital as evidenced by total capital return to shareholders of $334 million through regular and special dividends as well as share repurchases. While there is no predetermined amount of capital to be returned each quarter, this amount is consistent with what we did in the first quarter. Underwriting performance yielded a current accident year combined ratio excluding catastrophe losses of 88.1% and a calendar year combined ratio of 90%. Cat losses in the current accident year decreased $37 million to $62 million in the second quarter of 26. or 2.0 loss ratio points compared with 3.2 loss ratio points in the prior year's quarter. The current accident year loss ratio excluding cats of 59.6% compared with 59.9% in the prior year. The overall expense ratio is flat quarter over quarter at 28.5% and remains below our previously shared expectations. That being comfortably below 30% but increasing modestly over 2025 barring material changes in the marketplace. Drilling down by segment, insurance reported growth in gross premiums written of 5.4% to a record $3.8 billion and net premiums written increased 3.7% also to a record $3.1 billion The current accident year loss ratio excluding cats is 61% comparable to the first quarter this year. The expense ratio of 28.3% was flat over the prior year bringing our current accident year combined ratio, excluding cats, to 89.3%. The Reinsurance and Monoline Excess segment continued to experience heightened competition in both property and casualty lines, which resulted in a decrease in net premiums written to $36 million Having said that, the underlying performance of the business benefited in the quarter from lower cat and non cat property losses giving rise to a current accident year combined ratio excluding cats of 78.7%. Turning to investments. Net invested assets have grown to $34.2 billion Strong operating cash flows have contributed to the growth despite the significant capital return to investors. Over the prior 12 months, we have returned capital of more than $1.3 billion or approximately 14% to stockholders' equity and nearly 70% of the first half of 26 earnings. Strong second quarter operating cash flow was $800 million and will continue to contribute to the growth in net investment. Investment income. Income from the core portfolio grew 13% over the prior year to $371 million and investment funds performed well growing 5.6% to $28.8 million The credit quality of our portfolio remains very strong at AA-, with the duration on our fixed maturity portfolio, including cash and cash equivalents increasing in the second quarter to 3.2 years which remains below the average life of our insurance reserves. The effective tax rate of 21.4% was below our normalized run rate of 23%, plus or minus due to the mix of earnings from foreign operations, taxed at higher marginal tax rates. As well as the nonrecurring utilization of certain tax credits. Stockholders' equity increased to a record of more than $9.8 billion and capital returned to shareholders comprised regular and special dividends of $223 million as well as share repurchases of approximately $111 million Robert, with that, I will turn it back to you.

William R. Berkley: Okay. Richard, thank you very much. A couple of quick additional comments from me, and then again, we will be pleased to open it up for questions. Maybe starting on the more macro side with regards to market conditions, clearly, it is ever more a fragmented market as far as market conditions by product line, and that puts that much more emphasis and value around the combination of expertise and discipline key ingredients for cycle management regardless where you any product may be in the cycle. Let me start by flagging a few areas where we are seeing some headwinds, and then we will pivot to where we are enjoying tailwinds and get into that a bit more I guess, taking the approach of vegetables before dessert. Long story short, I guess a little reminiscent of past comments from us. We continue to have great concern around much of the MGU model and how it is participating in the marketplace. We have always had questions around delegated authority and the lack of alignment of interests. That having been said, it is just seems like this is just mushrooming and, ultimately is going to end in tears for some market participants that are not having the appropriate control over the capital and how it is being managed. From our perspective, the greatest stupidity can be found most easily in the property arena. Shared and layered, as we have been talking about for some number of quarters, is particularly concerning, and we are seeing that water falling through to other parts of the property market. With that having been said, the casualty market by and large is offering greater discipline, though there are a few isolated pockets within casualty that give us reason for pause. 2 that I will call out in particular would be habitational as well as liquor. Quite frankly, examples of where we are seeing business where rates are being cut by 20%-30% and we kind of look at it from a distance and say you could have had it if you cut it by 10%. As my father used to suggest, this is the type of behavior that turns long tail lines into short tail lines. But we will see how that unfolds. Continuing on some of the challenging areas as Richard referenced, reinsurance is particularly concerning. From our perspective, yes, property is eroding rapidly. But casualty never enjoyed the bounce that property got. So you can see in our numbers, as Richard alluded to, actually, we are shrinking more quickly on the casualty side than we are on the property side. Turning to some of the more encouraging areas, I would tell you the broader casualty market overall with a few exceptions that I referenced remains attractive. We continue to find ways to put capital to work at what we believe will generate very attractive returns. In addition to the broader casualty market, I would tell you there are a few pockets within the short tail lines that we also find attractive as we have flagged in the past couple of quarters. 2 of those that I will call out are 1 would be within the A and H space, and the other 1 would be private client personal lines. Which, again, on both those fronts, we continue to get great traction. Richard walked us through again a bit on the results. I will just echo a few quick comments. On that front specifically. The top line growth, clearly is being driven by what we are able to achieve on the insurance front. With the growth coming in at mid single digits. Just to be clear, much of that is being driven obviously, by the margins that we find attractive. And also while we are still there is a contribution, I should say, coming from rate increases. So the rate in for the quarter was ex comp was 3.8%. And now before anyone overreacts, I would remind you this is exactly what we said we were going to be doing when we talked last quarter. And I believe the quarter before that where we see that there is a attractive margin in the business and our priority is to increase count or exposure and where we will keep our foot on the rate pedal but we may not be pressing down on it as hard. So this is in line very much with our expectations. Quite frankly, it is keeping with our historic approach to cycle management and trying to maximize the opportunity. And, again, grow where the margin is-- that is the approach. that is the game plan, and that is what we are executing on. On the loss ratio front, I guess the only thing I would add is in a moment like we just went through, we certainly benefit from somewhat of a relatively benign cat quarter given the time of year. That having been said, for us as an organization, you really see us stand out when it comes to CAF. When there is serious or significant activity That is when our approach to managing volatility comes into sharper focus. Moving over to the expense ratio, Rich obviously covered this in some detail. I would just offer a couple of additional comments, 1 being and I was surprised that Richard did not throw this caveat in because being the good CPA, he is usually trying to manage expectations and nobody more than me. But we do believe that we will be able to keep the expense ratio at 30 or better. That having been said, we are making investments in the organization as we have in the past, and we continue to lean into it harder and harder. Certainly, on the tech front, the data front, and maybe to give a few specific examples very much on the AI front. You know, AI is a is an interesting topic. There has been a moment of remarkable activity in the broader economy and certainly we are seeing it in the industry. And there have been moments in time where we have seen people talking about AI and it is almost as if they felt like I need to do something because I need to do something because I cannot not do anything. We are big believers in doing something, but we are not going to just participate within AI for the purpose of the headline. We are clearly looking to make investments. We are looking to create value, and we expect to generate returns on those investments. In addition to that, we have a recognition as to what our strengths are and what our limits are. And we are certainly not in a position that we are going to go out and try and create our own large language model. For our purposes, the notion that we are going to try to recreate the likes of an Anthropic or OpenAI or anyone else and spend tens of billions of dollars that is not our strength. What is our strength is to take the tools that are out there and then layer on our own approach on top of that. What is our strength is to use our 60 laboratories, each 1 of our businesses, to be experimenting with tools and then to coalesce around the best solutions and leverage those. So 2 examples amongst many but 2 that I thought we would call out in this conversation 1 would be on the underwriting side, and the other 1 would be related to claims. On the underwriting side, we have focused very much on underwriting workbenches and the idea of how we digitalize activity right from intake straight through to quote. Early returns on that front where we have begun to utilize it are that we are getting 20-plus percent uplift in efficiency. And we are reasonably confident that there is significant additional juice to squeeze out of that. So plenty of upside from there. And the second area would be claims, which is our efforts to try and use AI and other tools. To move in the direction of straight through processing. Where it is appropriate, where it makes sense. Ultimately, if you have a look at our claims profile, if you will, approximately 50% of our claims settle for $5 thousand or less. And there are lots of examples where we are showing up to a situation with a sledgehammer when a flyswatter is really what is required. So using some of this technology where appropriate we are able to deliver a better solution for claimants in a more timely way. So more to come on both of those fronts. But we are making good progress. And we are frankly, an organization, very excited about our ability to reallocate people's time in other directions and utilize the technology to drive these improvements. A couple of quick sound bites, really just echoing some of what Richard said on the investment stuff. Long story short, we are in a pretty good place. And it is a pretty clear we have pretty clear sight to an even better spot. Richard mentioned the strength of the cash flow of $800 million in the quarter. Just as a point of reference, which you would have seen in the release. that is up from $700 million in the corresponding period. That kind of growth is really driving how you are seeing the investment portfolio to continue to increase in scale. That combined with the reality of a new money rate that is well above our domestic book yield of 4.8% So if you say the domestic book yield is 4.8, and you think about a new money rate that certainly comfortably starts with a 5, that gives you a lot of upside from here. So we look forward to being able to continue to deliver on that. And, obviously, the duration piece, Richard, flagged, and it is 3.2. And just as a reminder, we are the average life of our reserves, or how long we hold on to the money is 3.9, we have a fair amount of room to take that duration out. If and when we believe it is appropriate. There is no doubt that in certain lines, as I mentioned earlier, there are clouds building. Those that are weighted towards certain lines such as property, it is going to get tougher before it gets easier. I think we are going through a period of time where mother nature is lulling the property market into a false sense of comfort. And this will go on perhaps for some period of time, and then once again, the industry will learn the hard way. Fortunately, for us as an organization, if you look at the parts of the market that we participate in, those parts of the market are not getting cloudy. In fact, there is still plenty of sunshine. And we continue to lean into those opportunities whether it be much of the casualty market or some of the shorter tail lines that I called out earlier. So with that, Kristen, we will open it up for questions, and Richard and I will do our best to address any topics people would like to discuss.

Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please raise your hand now. If you have dialed in today's call, please press 1. To raise your hand and 1 to withdraw your question. Please stand by while we compile the Q&A roster.

William R. Berkley: that is 1 question with how many parts. Chrislyn?

Operator: You have 1 question and 1 follow-up. Okay. Here, your first question comes from the line of Elyse Greenspan from Wells Fargo. Your line is now open. Please go ahead.

Elyse Greenspan: Hi, Elyse. Good afternoon. Thanks for calling in. Good afternoon, Robert. You know, before I get into, my questions, I just, you know, wanted to express, my sympathies to you and just to everyone at Berkeley, you know, on the passing of Bill, you know, I am sure he will be missed by everyone on the buy and sell side. So I want to extend my sympathies there.

William R. Berkley: And then I guess, getting into my first question, you know, going to the premium growth and pricing that you hit on in your prepared remarks, You have spoken about top line growth improving as rate slows. So, like, as you think about, you know, just you know, thinking out from here, not only in the back half of this year, but going for 2027 as well, do you expect an incremental slowdown in rate? And then how are you expecting insurance growth when you think about what happens to pricing from here? So, you know, it is, in some ways, easier to predict longer farther out than it is I think directionally, we know where a lot of things are going, but it is not necessarily clear how quickly that will unfold.

Elyse Greenspan: Based on what we are seeing and early returns in July, we are reasonably encouraged as far as the top line. The month is not done, and, you know, nobody knows exactly what tomorrow will bring. But from our perspective, we have many pockets where we are very, very pleased with the margin that we believe is available. And as a result of that, if the situation warrants it, we feel as though we have considerable room in the rate to adjust. We are not we are not going to do that prematurely. Ultimately, our goal is to try and optimize between rate and growth. So long story short, do I think that things are going to fall off considerably from here? No. And do I think things can improve from here? I think it is certainly possible. Thanks. And then my follow-up, is, I guess, triangulating some of that pricing commentary to just the underlying loss ratio. Right? I mean, if you guys are taking, you know, the insurance pricing down, would you expect, you know, to start to see more compression on the underlying loss ratio? Are there other things, you know, mix or whatever it might be that would kind of offset, you know, compression from you know, the level of earned rate going down.

William R. Berkley: Well, that you know, obviously, there is a comp several components to that, at least. 1 of them would be business mix. And how that unfolds and how that gets weighted over time. In addition to that, as we get more comfortable with the margin that we believe is in the business, that could have implications for how we think about what the loss ratios are that we need to book the business to. Said differently, the rate we charge and the loss ratio, as you point out, they are not exclusive of 1 another. And we may feel as though there was more room in the pick than we recognized. Got it.

Elyse Greenspan: Thank you. Thank you.

Operator: Your next question comes from the line of Robert Cox from Goldman Sachs. Your line is open. Please go ahead.

Rob Cox: Hi, Robert. Good afternoon. Hey. Good afternoon. Yeah. I just wanted to ask you maybe on other liability and commercial auto. A couple of areas where I think, just looking at what you disclosed on pricing, maybe you are not growing exposure quite as much. Obviously, we do not know your pricing by product, but can you just talk about if there is more growth in those 2 lines or if you are shrinking exposure, why you do not think it is a good time to grow there?

William R. Berkley: So as far as the other liability goes, we continue to find opportunity to grow. But as you point out, we had there is a rate component there. As far as the auto goes, we are taking much more rate than this at first blush would suggest. In fact, the ex- and the exposure is coming down considerably. That having been said, the auto line we are lumping together Berkeley 1 along with the commercial auto piece, and that we continue to see opportunity so that is offsetting it a little bit. But long story short, the commercial auto line, the rate is up a lot, and the exposure is coming down pretty quickly.

Rob Cox: Okay. that is that is helpful. And then I just wanted to ask you on the competition that you are seeing from admitted markets on E and S products. Has there been any sort of change there throughout this year?

William R. Berkley: We were seeing it incrementally more, but as I suggested earlier, the big thorn in the side of the marketplace tends to be these people running around with a pen for someone else. And they get paid based on the policy they write as opposed to the underwriting result they achieve. And so that is really the challenge As far as the standard market coming in, yeah, incrementally, could that become more of an issue over time? Certainly possible.

Rob Cox: Okay. Thanks, Robert. Thank you.

Operator: Your next question comes from the line of Michael Zaremski from BMO Capital Markets. You are welcome.

Michael Zaremski: Afternoon. Hey. Good afternoon. Just wanted to start off by echoing Elyse's comments about my sympathies regarding Bill's passing. He will obviously be missed, but also remembered.

William R. Berkley: Thank you, Mike. I guess, yes, of course. My first question, regarding the deceleration in pricing power, You know, I would not say it is surprising given data points we have seen in the industry's profitability level. But would you say it is also coming with maybe a better view of loss cost trend as well? I know that Travelers alluded to slightly different views. Every company's different, on lost cost trend. That could maybe rationalize some of the kind of the decel the industry is experiencing?

Michael Zaremski: Yeah. Obviously, I have I am not in a position to comment on Travelers. that is a better question for Alan than me. As far as what we are seeing is we just have a pretty clear view as to how much margin is in the business, and there are some places where the returns are exceptional. And to the extent the choice is backing off on the rate incrementally and having more of that exceptional business then, you know, that is a trade that my colleagues are willing to make and has our support. In addition to that, that will certainly, in some situations, perhaps invite an examination of the loss picks that we have been carrying for the past couple of years. And a further examination as to whether there is more room in those than perhaps had been recognized. At the time that they were originally booked. But as far as trend goes, you know, that would be 1 component of a variety of components that go into the analysis, as I know you appreciate. Understood. And just regarding kind of the still constructive view on top line growth, Does some of that underpinning I think you alluded to it, that come from, you what you discussed in previous quarters about new means of distribution with certain new partners that are, you know, where you could be accessing different types of risk that you know, have the same business classification and what we see, but just come from different actual underlying risks.

William R. Berkley: So the short answer is yes. And as we do reference and we have spoken about in the past, as far you know, we are very committed to our traditional distribution. At the same time, in the end, Our view is that the client or the insured is queen or king, and we need to meet them wherever they and however they wish to be met. So we are fully committed to traditional distribution. At the same time, we are not going to ignore the shift in behaviors of customers as well. And specifically to your question, does that contribute to this? Yes. It does contribute to this today, and we expect an all likelihood it will contribute more tomorrow.

Michael Zaremski: Got it. And just as a follow-up then, So still, we heard that expense ratio guidance. So if those distribution methods come with came with a slightly different expense ratio, obviously, maybe different loss ratio. No, still not impactful enough to call out any expense ratio changes. Right?

William R. Berkley: Thanks. Not at the moment. Thank you. Richard's head was going up and down, so clearly that was the right as far as he is concerned.

Operator: Your next question comes from the line of Andrew Kligerman from TD Cowen. Your line is open. Please go ahead.

Andrew Kligerman: Hey. Thank you, William. Good afternoon. Good afternoon to you. And, unfortunately, I had some technical difficulty for the first 10 minutes, so hopefully, I am not covering old ground. But the first question is prior year development by accident year. Could you share a little color on the liability lines and how that played out in the quarter?

William R. Berkley: You know, I do not have that here. I do not think we have got into those details, but if you would not mind just circling back up with Yaron Kinar or Richard afterwards, and they will give you whatever it is that we are that has been sensitized by a herd of attorneys.

Andrew Kligerman: 100%. It sounds like there was not much going on if you are not calling anything out. So No. You mentioned a — yeah. So you mentioned 3.8% rate, ex-comp,. Did that include exposure as well, or was it just purely rate? And with that, could you could you elaborate a little bit on how property played out and how casualty played out and what the loss costs, yeah, underneath that work.

William R. Berkley: So long story short and I know that there are different organizations throw around different metrics. You know, and we have a variety of different metrics. But the 1 that I was referring to and that we are sort of laser locked in on is rate. So from our perspective, what it is all about is how much are you charging how much more are you charging, relative to a unit of exposure? So if we think about a trucking account as an example, if the trucking account has 10 trucks and the rate goes up 5%, that means you are getting 5% more per power unit. If the trucking account ends up adding another 10 trucks but the rate the premium only goes up 5%, that is not a very good answer. So long story short, what we focused on is how much more are you getting per unit of exposure. Irrelevant as to how many more units you actually are covering. That is something we watch but that is not what we obsess about. Pure rate per unit of exposure is what I was referring to and what we are focused on because ultimately, that is what drives or impacts margins. As far as how we think about trends per product line, that is something that we, generally speaking, are just not sharing with the world.

Andrew Kligerman: Okay. And how about loss costs? Underlying the 3.8? How did that move?

William R. Berkley: So we again, loss cost trend is not something that we publish by product line. Or for that matter in general. Okay. Thank you. Yep. Thanks for the question.

Operator: Your next question comes from the line of Joshua Shanker from Bank of America. Your line is open. Please go ahead.

Joshua Shanker: Hi, Joshua. Good afternoon. Afternoon to everybody. And at the risk of repeating, there is no reason not to repeat. I mean, Berkley was a giant and he always made time for me. Which was I am grateful for, and I am I appreciate everything that he accomplished in the organization he built. So congratulations. To you on what he is done and his memory. Will be always cherished.

William R. Berkley: Thank you. you, Joshua.

Joshua Shanker: 1 thing that I was curious about, I noticed that basically over each of the last few quarters, the duration, maybe it is for Richard, has moved up by about a tenth of a year, and it is been going on for a couple of years now. I realized the duration of the portfolio was exceptionally short. But a lot of market prognosticators are thinking that we are in a higher for longer cycle, and maybe that is not what Berkeley thinks or maybe you are just there is so much gap between the liabilities that you feel you need to narrow it. Can you talk a little about whether it is Yeah.

William R. Berkley: We do not it is not that we-- it is a conscious decision. We do not feel obliged to narrow it. It is based on how we think about where we are, how we think about interest rates, and where they are going to be going. And as you pointed out, we were at 1 point very, very short. We are still short, and we are comfortable incrementally nudging that out. We are not racing to push it out. But we are comfortable incrementally nudging that out. And locking in, the yield for a more extended period of time.

Joshua Shanker: And with that, you know, 1 thing that we if you look over, over the course of, say, a 50-year period, the amount you can earn on float has been a indicator of profits for a long period of time and has not been for the recent past as interest rates have gone up underwriting margins have improved. And I know that you talk about MGU markets and whatnot, And but is there a potential to be willing to compromise on underwriting margin, not necessarily at WRB, but the but the industry in general because there is so much opportunity to earn attractive returns on float. Or is that relationship broken for the foreseeable future?

William R. Berkley: I think it is gonna be impacted by how high rates go and how long they stay up there? Do I think today that we are drifting into a cash flow underwriting environment. I do not see that happening, in the short term or today. If rates keep picking up for long enough, then, you know, certainly, that could potentially invite that thinking. As far as MGUs go, you know, while there are some that are responsible operators, generally speaking, as we have been reasonably outspoken about. You know, I think it is inherently in many cases, a flawed model. And do I think people are just throwing around the pen and putting it in people's hands and not caring what the underwriting results are. Because they are looking at the cash flow? No. I think that it is more fundamental error than that, that it is just irresponsible management of capital.

Joshua Shanker: Alright. Well, that is my follow-up. So thank you very much for taking them both. Thanks, Joshua.

William R. Berkley: Have a good evening. You too.

Operator: Your next question comes from the line of David Motemaden from Evercore ISI. Your line is open. Please go ahead.

David Motemaden: Hey, David. Good evening. Thanks. Hey. Good evening, Robert. I also want to extend my sympathies to you, your family, and also the entire Berkeley team on Bill's passing. He obviously will be very missed. So on to my question, just on the on the rate front, the 3.8 that you disclosed, I am I am just wondering if we are right to assume I guess, the main areas where you guys are taking the foot off the gas and have talked about that previously. Is that really more on the short tail lines? Or is that dynamic happening at all on the casualty side as well?

William R. Berkley: So I would tell you that it is more select than you are suggesting. it is not this property or casualty. it is much more of a scalpel than a cleaver as to how we think about rate, and it gets quite granular, not just by broad product line, but we will be looking at a subclass within a state and have a position as to how we feel about what we can or cannot, should or should not do at rates. 1 of the benefits of our organization where we are composed of different businesses, each 1 with its own management team, Again, very focused at a granular level around their P&L and what kind of margin that they have. And we are having conversations with great regularity around you know, incremental changes that are appropriate and, in some cases, significant changes that are required. So I do not have specifics for you by product line.

David Motemaden: Yep. No. That makes that makes sense. And then you know, I think it is it is early I guess, just given the you know, the decline in the pricing or the decel in the pricing this quarter. Versus last quarter. And I know it takes time for that to sort of work its way through the distribution system. But I am wondering if there are any, like, early indicators that you can share, particularly around retention because I would think it would show up there a little sooner than on the new business front.

William R. Berkley: So I think you have, in the past,, talked about So, being in the aggregate, yeah, in the aggregate, our renewal retention ratio continues to hover or sit right around 80%. So that would suggest that, you know, the book is quite stable. Got it.

David Motemaden: Thank you.

Operator: Next question comes from Mark Hughes from Truist Securities. Your line is now open. Please go ahead.

Mark Hughes: Yeah. Thank you. Good afternoon. Hi, Mark. Good afternoon. 3.8%. You have described how you have leaned in and a meaningful part of that is you are doing. Absent your note what your Just to be clear, let's define you, I think it is our doing because they do not let me select or price risk just to be clear. Yeah. Yeah. And I did not mean that in any negative way, but I think you are you have made the point that you are seeing opportunity and you are pursuing those opportunities if you look at the market just absent that how would you describe the pricing if you had not been pursuing those opportunities?

William R. Berkley: I think it varies dramatically by product line. No surprise, I am sure, to you, perhaps most pronounced. In much of the commercial property market. I flagged a couple of pockets, isolated within liability. That has really made us pause and scratch our head. But, you know, long story short, Mark, it is a fine brush, not a broad brush.

Mark Hughes: Appreciate that. Then the follow-up on casualty reinsurance, you described more pressure there. Does that have any impact on the primary market? Are you seeing any knock on impact? Or what is going on in casualty reinsurance?

William R. Berkley: I think that there are people that are willing to write the business on the reinsurance side. it is ceding commissions that do not make sense to us. And our colleagues that are running our reinsurance businesses. So they are their credit. They have the knowledge, expertise, and discipline to do the right thing. And we, you know, we many of us refer to it as cycle management. They are doing it. And we are grateful for that. In this, you know, what will that mean over time? We will we will we will have to see. But I assume you would have taken note in the growth of our gross versus our net. And we are not naive to market conditions within the reinsurance market and what that means for us as a buyer.

Mark Hughes: Appreciate it. Thank you.

Operator: Your next question comes from the line of Brian Meredith with UBS. Line is open. Please go ahead.

Brian Meredith: Yes, Brian, thank you for stopping in this 1. Yeah. I just wanna express my condolences as well. Bill is going to be hugely, hugely missed. Thank you, Brian. My first question for you is, you know, when you talk about rate and kind of going down to 3.8%,, me a little bit what is going on in terms and conditions.

William R. Berkley: Are you starting to see terms and conditions loosen up? Are you thinking about loosening terms and conditions as well? Because that is just as important as the rate.

Brian Meredith: So, generally speaking, we are not seeing a loosening of terms and conditions. it is, quite frankly, it is just been more of a rate conversation in our shop. But the terms and conditions, we are not seeing it come unraveled at this stage, at least in our activity. What other people are doing you know, I cannot speak to that.

William R. Berkley: I think there are some folks out there that are you know, very aggressive. And as I suggested, we will see how that story ends for them. But as far as our ability to operate with our terms and conditions remaining intact, that is not an issue that we are dealing with today.

Brian Meredith: Great. that is terrific. And then my next question, we are hearing about retail agents out there doing their best to keep business in the admitted market and not go to the E and S market. Are you seeing that happen in the market? Is it affecting your E and S business at all? Kinda what are the kind of things you are seeing right now with E and S versus admitted?

William R. Berkley: Well, I think if you look at how the ENS market has grown as a percentage of the overall to the extent they are trying, it would seem as though they have not succeeded particularly over the past couple of years. That having been said, more recently, if I was a retail agent I would do everything in my power not to have to bring it to a wholesaler. Which is obviously the path that most of that business would take. Why would I want to have to split the commission with a wholesaler? So, yeah, I think any retailer unless they had direct access to wholesale like product through retail distribution, of course, they should try and place it in the standard market. You know, it almost doubles the economics for them. I would would not you?

Brian Meredith: Yeah. Makes sense. Thank you. Sure.

Operator: Thank you. Your next question comes from the line of Tracy Benguigui from Wolfe Research. Your line is open. Please go ahead.

Tracy Benguigui: Thank you. Good afternoon. Huge condolences. Mentioned that there may be room. Yeah. I am really sorry. You mentioned that there may be more room in loss picks. Curious how many years of experience you rely on to justify lower picks.

William R. Berkley: Totally depends on the product line. Obviously, as we both have different product lines have different tails. Both especially on the incurred front. So the way we take a view and develop confidence on outcome varies by product line. And again, the incurred tail is really what drives that.

Tracy Benguigui: Oh, wait. Just a quick clarification on that. So the 3 point 9 year duration of your reserves, I am assuming that is on a discounted basis. What would that be on a nominal basis?

William R. Berkley: I do not I the answer is I do not have the math. If you follow-up with Richard, he can do it for you, but it is or Yaron for that matter, but it is not radically different. Okay. Because, really, the only consequestiontial area of a discount in our reserves are many con consequestionces, excess comp. The rest of it, maybe a little bit on the reinsurance, but the rest of it, which is the lion's share of our reserves, are undiscounted. And we do not discount. Okay.

Tracy Benguigui: Got it. And then a cycle question. I am curious if you think the soft cycle is any different than prior cycles, whether it be the key drivers or the duration?

William R. Berkley: I think that this cycle is radically different from past in some ways. In other ways, I think it is remarkably similar. I think it is remarkably similar because it is still as we have talked about in past calls, human emotion that drives that fear and greed. I think it is different because product lines have decoupled as to where they are in the cycle. When I got into this business, or a million years ago when Richard got into this business, you know, all product lines, by and large, marched somewhat in lockstep. So it is either a hard market or a soft market. Today, if you really unpack it a bit, it is notable how different product lines are at different places in the cycle. So, yes, I think that, yes, similar fundamentals, but also radically different in how they present.

Tracy Benguigui: And what would that mean in terms of the duration of the cycle?

William R. Berkley: Because what we have seen is past hard market cycles, the soft cycles tended to be much longer. I think a lot of it has to it has to do with the pain. And how long it takes for the pain to come into focus. that is really what it boils down to. And just the comment a little while ago about tail. I think ultimately, what gives people the discipline and the courage to raise rates is when all of a sudden they recognize the current situation is not sustainable and they are effectively destroying capital or not appropriately utilizing it. We see that happen time and time again. So you saw it happen in the property market a few years ago, and all of a sudden, a rush of discipline entered. You have seen it happen at a different moment in time with professional liability particularly D&O. And I would offer an observation that we are on the eve of seeing that with California workers' compensation. Thank you.

Tracy Benguigui: Thank you.

Operator: Your next question comes from the line of Andrew Andersen with Jefferies. Your line is open. Please go ahead.

Andrew Andersen: Hi, Andrew. Good afternoon. I think this was asked a little bit ago, but I will try again. Could you maybe just discuss how the hit rate or quote to bind improvement has been in lines where you have lowered price and maybe how that is compared with expectations and with expectations and if there is still meaningful room to improve that quote-to-bind?

William R. Berkley: So I do not have data. What I did share with someone else earlier was our renewal retention ratio. It continues to sit at approximately 80% That number does not move a tremendous amount. But as a data point, hopefully, that gives you some visibility as to the book is not shifting dramatically. And our colleagues are adjusting to the market where they see appropriate.

Andrew Andersen: Okay. And, in the past, you have described workers' comp as a market where you are waiting for firmer conditions. I imagine that is still the case. But any update maybe in terms of where we left it last quarter in terms of price or how loss trends are facing on comp?

William R. Berkley: As far as-- yeah, as far as comp goes, maybe as we have said for an extended period of time, California and our estimation, is ahead of the rest of the country as far as where it is in the cycle. And you would have seen perhaps some of the information coming out of the state recently where they shared that the 25 year, I believe it was, was running at an accident year of 129. So yeah, I do not know how a marketplace can make that 129 work. And historically, for the industry overall, comp and other product lines, when it looks bad, it is usually worse. So it would seem as though that there is a growing amount of catalyst for a shift in behavior, and we are seeing early signs of that in the rate market. But we will have to see how it unfolds from here. As far as the rest of the country, you know, we will as we have suggested for some time now, We think it is trailing California, but coming as well.

Andrew Andersen: Thank you.

Operator: Your next question comes from Meyer Shields with Keefe, Bruyette, & Woods. Your line is open. Please go ahead.

Meyer Shields: Great. Thanks. Good afternoon, Good afternoon, Robert. Your dad was a good and great man, and I hope you find comfort in his memory. 2 quick questions if I can. 1, Berkeley was 1 of the first companies, I think, in 2016 to talk about social inflation. And I am wondering whether you are seeing any signs of it maybe tempering as part of the reason for smaller rate increase pushes.

William R. Berkley: Certainly, it is a topic that, as you point out, we have been very focused on for an extended period of time. And it has gotten the attention of many including policymakers. And we have seen some examples of action being taken in certain states What the consequence of that will be and how that will come into focus over what period of time. We will have to see. But are we aware of it? Yes. Do we feel as though we can quantify what that impact will be at this moment in time? Not fully enough that we are taking credit for it.

Meyer Shields: Okay. that is helpful. And then I apologize for having to ask this question, but you talked about a 20% productivity improvement on policy ingestion. Is that 20% more accounts or submissions that you can look at, or what is that 20% actually measuring?

William R. Berkley: that is we are getting to 20% more business. And we are able to run it through, and it is converting. We are touching a lot more business, and we are getting able to get far more at-bats, and that is converting to, quite frankly, more productivity. And I would tell you that early returns are 20%, and we as I tried to suggest earlier, think it grows from here.

Meyer Shields: Excellent. Thank you so much. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Mr. Robert Berkley for closing remarks.

William R. Berkley: Richie, anything you wanna add before I share? Awesome. Okay. Well, thank you all very much for tuning in. We appreciate your time. We appreciate your interest in the company. I think that as we pass the 50 yard line here, the business continues to fire on all cylinders. And perhaps what is most encouraging is that when we look out on the horizon, there is nothing that we see that we expect can get in the way of us continuing to generate really outstanding returns. Thank you again for your time. Have a good evening.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.