We are downgrading our recommendation on the shares of W.R. Berkley Corporation (WRB) to Underperform from Neutral.
W.R. Berkley’s third quarter earnings report showed lower premiums written, reflecting the overall competitive business environment and pricing pressures. The company’s combined ratio, which has increased of late, is also expected to rest at higher levels for some quarters to come.
Though management has historically managed capital, the company’s current debt-to-capital ratio stands at approximately 30%. Also, the company has experienced deterioration in its fixed charge coverage ratio and return on equity.Zacks Investment Research
