By Andrew Bary
Like Warren Buffett, William R. Berkley got hooked on the stock market as a kid and he used his investment acumen to start what became a successful insurance business.
Berkley, who died last week at 80, was the founder and chairman of W.R. Berkley, a Greenwich, Connecticut-based property and casualty insurer with a Berkshire Hathaway-like record since it went public in 1973.
Bill Berkley was well-regarded in the insurance industry. In a client note, Dowling & Partners, an insurance research firm, called him a "legend."
Berkley shares, now about $68, went public at a split-adjusted price of about a nickel and generated an annualized total return since then of about 18% -- compared with 11% for the S&P 500, according to calculations from Dowling & Partners.
Berkshire has produced a roughly 20% annualized return since the 95-year-old Buffett took control of the company in 1965.
Berkley got the wherewithal to start his insurance business in 1967 from profits from Berkley Dean, an investment firm that he formed during his days as a student at Harvard Business School. He managed the firm from his apartment on campus.
For a time, Berkley worked at Fidelity Management and Research, and got to know its leader, Ned Johnson, who paid Berkley $25,000 in consulting fees to help get the new insurer off the ground.
Berkley became interested in investing as a boy growing up in New Jersey and made his first purchase, Decca Records stock, because friends were buying the label's records to listen to the likes of the Rolling Stones, Patsy Cline, and Tom Jones.
W.R. Berkley now has a market value of $25 billion and has generated consistently strong underwriting results and returns using a decentralized strategy involving about 60 individual insurers under its umbrella.
The approach is notable because new entrants into insurance like Bill Ackman are seeking to emulate the winning insurance formula that Berkley achieved. Unlike Berkshire, Berkley has focused mostly on insurance, rather than combining it with a major equity investment program.
Investors have rewarded Berkley with an above-average valuation for a P&C insurer based earnings and book value. The stock now trades for around 15 times projected 2026 profits and 2.5 times book value. That reflects its high 20%-plus return on equity when most insurers are happy to produce returns in the midteens.
"The numbers speak for themselves," Dowling wrote, describing Berkley as a "premier commercial specialty" insurer and reinsurer "with an enviable record of creating value for shareholders."
Berkley succeeded by developing niche businesses like a sports-and-entertainment insurance unit that would write policies protecting professional teams against injuries to their players.
Berkley wanted his son, W. Robert Berkley Jr., known as Rob, to succeed him as CEO and he did in 2015. The transition has gone well from a business and investor perspective. Rob Berkley was named chairman after his father's death.
The elder Berkley controlled almost 25% of the shares in the company and Forbes estimated his net worth earlier this year at more than $6 billion, mostly in W.R. Berkley stock.
Berkley was a longtime trustee of New York University and a former chairman of its board. He never forgot that NYU granted him a full scholarship and gave him a chance to attend college. Berkley returned that largess. He and his wife, Marjorie, donated more than $50 million to the Stern business school at NYU, and endowed scholarships at the university.
"My big breakwas winning a full scholarship to NYU," Berkley said in a statement from Horatio Alger Association, which gave him an award in 2024.
"Without that, I wouldn't be where I am today, living my own American dream. I'm living proof that an investment in education gives infinite payback, and it's my privilege to pay that forward to the next generation."
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 15, 2026 17:33 ET (21:33 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments