W.R. Berkley Corporation (WRB) recently announced the formation of a new operating unit, Berkley North Pacific Group, LLC. The new unit will be based in Seattle, Washington and will be a part of its regional segment. It will underwrite products on behalf of W.R. Berkley’s regional insurance member companies.

The new unit will provide standard commercial lines insurance services and expertise to several businesses in the Pacific Northwest by utilizing the independent agency system. Berkley has been associated with this region through the Boise regional office of Continental Western Group, which will become a branch of Berkley North Pacific Group.

The company has appointed Jeffrey R. Dehn as President of Berkley North Pacific Group. He has over 34 years of experience in the insurance and financial services industries and over 25 years of expertise in the Pacific Northwest market.

Berkley, which competes with companies such as Berkshire Hathaway Inc. and The Travelers Companies (TRV), posted second-quarter core earnings of 60 cents per share, in line with the Zacks Consensus Estimate.

However, the company has experienced a decrease in premium writings in the second quarter. This premium compression was due to lower business written in Regional, Alternative and Reinsurance segments. New business volume remains curtailed as a result of increased competition and downward pressure on pricing.

We are encouraged with this expansion of Berkley in the Pacific Northwest as such expansions will be accretive to the company’s earnings. Recently, WRB has also increased its share repurchase authorization to 10 million shares of common stock. This represents about 6% of the company’s outstanding shares at Jun 30, 2009.

Moreover, WRB has enjoyed a strong balance sheet and lack of material exposure from legacy issues, such as asbestos and environmental liabilities. These have resulted in additional visibility to its earnings stream in recent years.

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