BERKLEY W R CORPWRB
BERKLEY W R CORP Fair Value Disclosure
Fair Value Measurements
The Company’s fixed maturity and equity securities classified as available for sale and its trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable.
Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available.
Substantially all of the Company’s fixed maturity securities were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company). The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation.
If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information.
For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate.
The following tables present the assets and liabilities measured at fair value as of December 31, 2025 and 2024 by level:
| (In thousands) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Fixed maturity securities available for sale: | |||||||||||||||||||||||
| U.S. government and government agency | $ | 3,998,038 | $ | — | $ | 3,998,038 | $ | — | |||||||||||||||
| State and municipal | 1,837,194 | — | 1,837,194 | — | |||||||||||||||||||
| Mortgage-backed securities | 4,808,478 | — | 4,808,478 | — | |||||||||||||||||||
| Asset-backed securities | 3,810,346 | — | 3,810,346 | — | |||||||||||||||||||
| Corporate | 8,687,411 | — | 8,667,410 | 20,001 | |||||||||||||||||||
| Foreign government | 1,875,589 | — | 1,875,589 | — | |||||||||||||||||||
| Total fixed maturity securities available for sale | 25,017,056 | — | 24,997,055 | 20,001 | |||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||
| Common stocks | 742,113 | 739,186 | 786 | 2,141 | |||||||||||||||||||
| Preferred stocks | 616,088 | — | 607,414 | 8,674 | |||||||||||||||||||
| Total equity securities | 1,358,201 | 739,186 | 608,200 | 10,815 | |||||||||||||||||||
| Arbitrage trading account | 1,221,103 | 1,139,447 | 81,543 | 113 | |||||||||||||||||||
| Total | $ | 27,596,360 | $ | 1,878,633 | $ | 25,686,798 | $ | 30,929 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Trading account securities sold but not yet purchased | $ | 66,285 | $ | 66,285 | $ | — | $ | — | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Fixed maturity securities available for sale: | |||||||||||||||||||||||
| U.S. government and government agency | $ | 2,235,341 | $ | — | $ | 2,235,341 | $ | — | |||||||||||||||
| State and municipal | 2,294,644 | — | 2,294,644 | — | |||||||||||||||||||
| Mortgage-backed securities | 3,765,490 | — | 3,765,490 | — | |||||||||||||||||||
| Asset-backed securities | 3,885,012 | — | 3,885,012 | — | |||||||||||||||||||
| Corporate | 8,417,641 | — | 8,397,974 | 19,667 | |||||||||||||||||||
| Foreign government | 1,755,325 | — | 1,755,325 | — | |||||||||||||||||||
| Total fixed maturity securities available for sale | 22,353,453 | — | 22,333,786 | 19,667 | |||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||
| Common stocks | 760,167 | 757,115 | 1,011 | 2,041 | |||||||||||||||||||
| Preferred stocks | 443,621 | — | 439,947 | 3,674 | |||||||||||||||||||
| Total equity securities | 1,203,788 | 757,115 | 440,958 | 5,715 | |||||||||||||||||||
| Arbitrage trading account | 1,122,599 | 1,062,459 | 56,630 | 3,510 | |||||||||||||||||||
| Total | $ | 24,679,840 | $ | 1,819,574 | $ | 22,831,374 | $ | 28,892 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Trading account securities sold but not yet purchased | $ | 73,358 | $ | 73,358 | $ | — | $ | — | |||||||||||||||
The following tables summarize changes in Level 3 assets and liabilities for the years ended December 31, 2025 and 2024:
| Gains (Losses) Included in: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Beginning Balance | Earnings (Losses) | Other Comprehensive Income (Loss) | Impairments | Purchases | Sales | Paydowns/Maturities | Transfers In / Out | Ending Balance | ||||||||||||||||||||||||||||||||||||||||||||
| Year ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed maturity securities available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate | $ | 19,667 | $ | — | $ | 334 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 20,001 | |||||||||||||||||||||||||||||||||||
| Total | 19,667 | — | 334 | — | — | — | — | — | 20,001 | ||||||||||||||||||||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stocks | 2,041 | 226 | — | — | — | (126) | — | — | 2,141 | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred stocks | 3,674 | — | — | — | 6,160 | (1,160) | — | — | 8,674 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | 5,715 | 226 | — | — | 6,160 | (1,286) | — | — | 10,815 | ||||||||||||||||||||||||||||||||||||||||||||
| Arbitrage trading account | 3,510 | 1,745 | — | — | — | (5,143) | — | 1 | 113 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 28,892 | $ | 1,971 | $ | 334 | $ | — | $ | 6,160 | $ | (6,429) | $ | — | $ | 1 | $ | 30,929 | |||||||||||||||||||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed maturity securities available for sale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate | $ | — | $ | — | $ | (333) | $ | — | $ | — | $ | — | $ | — | $ | 20,000 | $ | 19,667 | |||||||||||||||||||||||||||||||||||
| Total | — | — | (333) | — | — | — | — | 20,000 | 19,667 | ||||||||||||||||||||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stocks | 1,558 | 611 | — | — | — | (128) | — | — | 2,041 | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred stocks | 3,695 | 36 | — | — | — | (57) | — | — | 3,674 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | 5,253 | 647 | — | — | — | (185) | — | — | 5,715 | ||||||||||||||||||||||||||||||||||||||||||||
| Arbitrage trading account | 3,772 | (261) | — | — | — | (38) | — | 37 | 3,510 | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 9,025 | $ | 386 | $ | (333) | $ | — | $ | — | $ | (223) | $ | — | $ | 20,037 | $ | 28,892 | |||||||||||||||||||||||||||||||||||
For the years ended December 31, 2025 and 2024, one security in each year within the arbitrage trading account portfolio was transferred into Level 3 from Level 2 given there were no available quoted prices or observable inputs.
Fair Value of Financial InstrumentsThe following table presents the carrying amounts and estimated fair values of the Company’s financial instruments as of December 31, 2025 and 2024:
| 2025 | 2024 | ||||||||||||||||||||||
| (In thousands) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Fixed maturity securities | $ | 25,047,662 | $ | 25,048,534 | $ | 22,397,865 | $ | 22,399,426 | |||||||||||||||
| Equity securities | 1,358,201 | 1,358,201 | 1,203,788 | 1,203,788 | |||||||||||||||||||
| Arbitrage trading account | 1,221,103 | 1,221,103 | 1,122,599 | 1,122,599 | |||||||||||||||||||
| Loans receivable | 418,913 | 419,074 | 405,453 | 405,248 | |||||||||||||||||||
| Cash and cash equivalents | 2,539,938 | 2,539,938 | 1,974,747 | 1,974,747 | |||||||||||||||||||
| Trading accounts receivable from brokers and clearing organizations | 11,669 | 11,669 | 60,327 | 60,327 | |||||||||||||||||||
| Due from broker | 629 | 629 | — | — | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Due to broker | — | — | 70,483 | 70,483 | |||||||||||||||||||
| Trading account securities sold but not yet purchased | 66,285 | 66,285 | 73,358 | 73,358 | |||||||||||||||||||
| Senior notes and other debt | 1,829,198 | 1,440,055 | 1,831,158 | 1,425,852 | |||||||||||||||||||
| Subordinated debentures | 1,010,527 | 760,400 | 1,009,808 | 805,864 | |||||||||||||||||||
The estimated fair values of the Company’s fixed maturity securities, equity securities available for sale and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 12 above. The fair value of loans receivable is estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 22, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.