Berkley earns a 20% return with steady underwriting and rising bond income, but 1.3% premium growth limits expansion. At $73.15, the 8.7% upside to $79.50 supports a hold.
Key points
- $1.17 of operating profit per share in Q3 2026, or profit per share from insurance and investments, beat the $1.16 estimate for Q3 2026.
- $3.27 billion of net premiums written in Q3 2026 rose only 1.3% from Q3 2025 as Insurance growth met an 11.6% reinsurance decline in Q3 2026.
- 90.8% combined ratio in Q3 2026, or the share of premiums spent on claims and costs, included a 2.7 point hit from catastrophes in Q3 2026.
The call
The market expects almost no growth. The $73.15 price today implies about 13.8 times 2027 profit, or price paid per dollar of profit. At 15 times 2027 profit, that needs only $4.88 per share for 2027.
Operating earnings per share holds near record- Operating EPS reported
- My forecast
Company earnings feeds to Oct 2026 and author's forecasts, Oct 20 2026.
I see slow growth instead. Insurance growth plus higher bond income supports $5.30 per share for 2027. At 15 times 2027 profit, or price per dollar of profit, that is worth $79.50 per share by October 2027. That is an 8.7% gain from today, so I rate it a hold.
Valuation
| Item | Figure |
|---|
| 2026 operating profit per share | $4.94 for 2026 |
| 2027 operating profit per share | $5.30 for 2027 |
| Fair multiple | 15 times 2027 profit |
| September book value, or net assets per share | $25.87 for Q3 2026 |
| Target | $79.50 by October 2027 |
A 15 multiple fits a 20% return on equity for 2026, or profit on shareholder funds, with slower premium growth. The price is 2.8 times book value today and the target is 3.1 times book value. An 8.7% gain plus a small dividend leaves a balanced risk and reward.
What the target is worth at different profit outcomesAuthor's arithmetic at 15 times 2027 operating EPS, Oct 20 2026.
Risks
- Commercial auto claims worsen and lift umbrella losses, seen in higher other liability loss picks by accident year in quarterly filings.
- Property and reinsurance rates fall into January renewals, seen in lower gross premiums and shrinking net premiums written in monthly reports.
- Higher rates deepen bond losses and slow buybacks, seen in flat equity and wider unrealized losses in quarterly releases.
What would change my mind
Faster Insurance premium growth with stable auto reserves through 2027 would raise my profit estimate and multiple.