10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the Transition Period from to .

Commission File Number 1-15202

W. R. BERKLEY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	22-1867895
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
475 Steamboat Road, Greenwich, Connecticut	06830
(Address of principal executive offices)	(Zip Code)

	(203) 629-3000
	(Registrant’s telephone number, including area code)
	None
Former name, former address and former fiscal year, if changed since last report.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ     No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o     No þ

Number of shares of common stock, $.20 par value, outstanding as of October 31, 2012: 135,815,797

TABLE OF CONTENTS

Part I — FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosure About Market Risk
	Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 1A. Risk Factors
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	Item 6. Exhibits
SIGNATURES
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Part I — FINANCIAL INFORMATION

Item 1. Financial Statements

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

	September 30, 2012			December 31, 2011
Assets
Investments:
Fixed maturity securities	$	11,892,412		$	11,312,037
Equity securities available for sale	425,322			443,439
Arbitrage trading account	417,446			397,312
Investment funds	747,638			680,638
Loans receivable	371,408			263,187
Real estate	433,686			342,905
Total investments	14,287,912			13,439,518
Cash and cash equivalents	1,189,564			911,742
Premiums and fees receivable	1,409,246			1,206,204
Due from reinsurers	1,309,463			1,215,679
Accrued investment income	131,790			133,776
Prepaid reinsurance premiums	311,355			258,271
Deferred policy acquisition costs	400,727			364,937
Real estate, furniture and equipment	258,368			262,275
Goodwill	87,865			87,865
Trading account receivables from brokers and clearing organizations	387,352			318,240
Current federal and foreign income taxes	5,122			9,670
Other assets	154,148			195,696
Total assets	$	19,932,912		$	18,403,873
Liabilities and Equity
Liabilities:
Reserves for losses and loss expenses	$	9,562,877		$	9,337,134
Unearned premiums	2,480,449			2,189,575
Due to reinsurers	303,424			241,204
Trading account securities sold but not yet purchased	149,405			62,514
Deferred federal and foreign income taxes	69,968			2,835
Other liabilities	912,357			866,229
Junior subordinated debentures	243,154			242,997
Senior notes and other debt	1,877,431			1,500,503
Total liabilities	15,599,065			14,442,991
Equity:
Preferred stock, par value $.10 per share:
Authorized 5,000,000 shares; issued and outstanding - none	—			—
Common stock, par value $.20 per share:
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 135,956,622 and 137,520,019 shares, respectively	47,024			47,024
Additional paid-in capital	936,915			941,109
Retained earnings	4,800,537			4,491,162
Accumulated other comprehensive income	508,152			354,851
Treasury stock, at cost, 99,161,296 and 97,597,899 shares, respectively	(1,968,227		)	(1,880,790		)
Total stockholders’ equity	4,324,401			3,953,356
Noncontrolling interests	9,446			7,526
Total equity	4,333,847			3,960,882
Total liabilities and equity	$	19,932,912		$	18,403,873

See accompanying notes to interim consolidated financial statements.

1

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Dollars in thousands, except per share data)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
REVENUES:
Net premiums written	$	1,275,887		$	1,126,139		$	3,670,404		$	3,266,857
Change in net unearned premiums	(89,354		)	(70,316		)	(236,863		)	(211,293		)
Net premiums earned	1,186,533			1,055,823			3,433,541			3,055,564
Net investment income	116,019			114,063			434,888			409,261
Insurance service fees	26,208			22,279			77,121			69,487
Net investment gains:
Net realized gains on investment sales	17,226			21,238			84,989			73,812
Change in valuation allowance, net of other-than-temporary impairments	5,000			—			9,014			(400		)
Net investment gains	22,226			21,238			94,003			73,412
Revenues from wholly-owned investees	68,087			65,922			173,196			175,943
Other income	1,428			406			2,204			1,364
Total revenues	1,420,501			1,279,731			4,214,953			3,785,031
OPERATING COSTS AND EXPENSES:
Losses and loss expenses	736,632			683,980			2,147,306			1,965,351
Other operating costs and expenses	451,487			407,149			1,332,024			1,196,936
Expenses from wholly-owned investees	66,177			64,388			172,438			174,059
Interest expense	32,512			28,068			93,750			84,317
Total operating costs and expenses	1,286,808			1,183,585			3,745,518			3,420,663
Income before income taxes	133,693			96,146			469,435			364,368
Income tax expense	(32,685		)	(19,775		)	(124,291		)	(90,282		)
Net income before noncontrolling interests	101,008			76,371			345,144			274,086
Noncontrolling interests	(61		)	39			(41		)	98
Net income to common stockholders	$	100,947		$	76,410		$	345,103		$	274,184
NET INCOME PER SHARE:
Basic	$	0.74		$	0.55		$	2.51		$	1.95
Diluted	0.71			0.53			2.41			1.87

See accompanying notes to interim consolidated financial statements.

2

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Net income before noncontrolling interests	$	101,008		$	76,371		$	345,144		$	274,086
Other comprehensive income (loss):
Change in unrealized foreign exchange gains (losses)	26,056			(30,957		)	24,382			(21,104		)
Unrealized holding gains on investment securities arising during the period, net of taxes	79,772			39,031			188,263			125,085
Reclassification adjustment for net investment gains included in net income, net of taxes	(14,811		)	(13,784		)	(61,743		)	(46,910		)
Change in unrecognized pension obligation, net of taxes	823			707			2,470			2,118
Other comprehensive income (loss)	91,840			(5,003		)	153,372			59,189
Comprehensive income	192,848			71,368			498,516			333,275
Comprehensive (income) loss to the noncontrolling interest	(104		)	40			(112		)	87
Comprehensive income to common stockholders	$	192,744		$	71,408		$	498,404		$	333,362

See accompanying notes to interim consolidated financial statements.

3

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands)

	For the Nine Months Ended
	September 30,
	2012			2011
COMMON STOCK:
Beginning and end of period	$	47,024		$	47,024
ADDITIONAL PAID-IN CAPITAL:
Beginning of period	$	941,109		$	935,099
Stock options exercised and restricted stock units issued, net of tax	(24,683		)	(26,914		)
Restricted stock units expensed	20,035			18,855
Stock issued to directors	454			308
End of period	$	936,915		$	927,348
RETAINED EARNINGS:
Beginning of period	$	4,491,162		$	4,143,207
Net income to common stockholders	345,103			274,184
Dividends	(35,728		)	(32,274		)
End of period	$	4,800,537		$	4,385,117
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Unrealized investment gains (losses):
Beginning of period	$	430,419		$	334,747
Unrealized gains on securities not other-than-temporarily impaired	123,579			79,435
Unrealized gains (losses) on other-than-temporarily impaired securities	2,870			(1,271		)
End of period	556,868			412,911
Currency translation adjustments:
Beginning of period	(61,239		)	(42,488		)
Net change in period	24,382			(21,104		)
End of period	(36,857		)	(63,592		)
Net pension asset:
Beginning of period	(14,329		)	(15,696		)
Net change in period	2,470			2,118
End of period	(11,859		)	(13,578		)
Total accumulated other comprehensive income	$	508,152		$	335,741
TREASURY STOCK:
Beginning of period	$	(1,880,790	)	$	(1,750,494	)
Stock exercised/vested	40,137			40,571
Stock repurchased	(128,155		)	(177,648		)
Stock issued to directors	581			564
End of period	$	(1,968,227	)	$	(1,887,007	)
NONCONTROLLING INTERESTS:
Beginning of period	$	7,526		$	6,980
Contributions	1,808			522
Net loss (income)	41			(98		)
Other comprehensive income, net of tax	71			11
End of period	$	9,446		$	7,415

See accompanying notes to interim consolidated financial statements.

4

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

	For the Nine Months Ended
	September 30,
	2012			2011
CASH FROM (USED IN) OPERATING ACTIVITIES:
Net income to common stockholders	$	345,103		$	274,184
Adjustments to reconcile net income to net cash from operating activities:
Net investment gains	(94,003		)	(73,412		)
Depreciation and amortization	65,089			57,332
Noncontrolling interests	41			(98		)
Investment funds	(50,124		)	(11,236		)
Stock incentive plans	21,070			19,727
Change in:
Arbitrage trading account	(2,355		)	(2,840		)
Premiums and fees receivable	(192,803		)	(111,411		)
Reinsurance accounts	(90,587		)	(137,192		)
Deferred policy acquisition costs	(34,843		)	(41,635		)
Deferred income taxes	(195		)	25,934
Reserves for losses and loss expenses	215,993			250,393
Unearned premiums	284,908			264,681
Other	(13,945		)	(29,184		)
Net cash from (used in) operating activities	453,349			485,243
CASH FROM (USED IN) INVESTING ACTIVITIES:
Proceeds from sale of fixed maturity securities	549,876			1,129,377
Proceeds from sale of equity securities	233,239			112,760
Distributions from (contributions to) investment funds	(6,293		)	(148,537		)
Proceeds from maturities and prepayments of fixed maturity securities	1,659,751			1,190,751
Purchase of fixed maturity securities	(2,510,322		)	(2,118,556		)
Purchase of equity securities	(218,490		)	(49,932		)
Real estate purchased	(71,348		)	(347,602		)
Change in loans receivable	(106,721		)	71,803
Net additions to real estate, furniture and equipment	(22,319		)	(37,405		)
Change in balances due to security brokers	79,344			122,447
Payment for business purchased, net of cash acquired	—			(8,579		)
Net cash from (used in) investing activities	(413,283		)	(83,473		)
CASH FROM (USED IN) FINANCING ACTIVITIES:
Net proceeds from issuance of debt	375,641			309
Net proceeds from stock options exercised	8,667			13,757
Cash dividends to common stockholders	(35,730		)	(32,272		)
Purchase of common treasury shares	(121,362		)	(177,648		)
Other, net	15,799			16,816
Net cash from (used in) financing activities	243,015			(179,038		)
Net impact on cash due to change in foreign exchange rates	(5,259		)	446
Net change in cash and cash equivalents	277,822			223,178
Cash and cash equivalents at beginning of year	911,742			642,952
Cash and cash equivalents at end of period	$	1,189,564		$	866,130

See accompanying notes to interim consolidated financial statements.

5

W. R. Berkley Corporation and Subsidiaries

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) General

The accompanying unaudited consolidated financial statements of W. R. Berkley Corporation and its subsidiaries (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements requires the use of management estimates. For further information related to a description of areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Reclassifications have been made in the 2011 financial statements as originally reported to conform to the presentation of the 2012 financial statements.

The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective tax rate for the quarter differs from the federal income tax rate of 35% principally because of tax-exempt investment income.

(2) Per Share Data

The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on EPS and, accordingly, are excluded from the calculation.

The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows (amounts in thousands):

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2012	2011	2012	2011
Basic	136,553	138,816	137,512	140,535
Diluted	141,637	144,538	142,941	146,553

(3) Recent Accounting Pronouncements

In October 2010, the Financial Accounting Standards Board ("FASB") issued guidance regarding the treatment of costs associated with acquiring or renewing insurance contracts. This guidance modified the definition of the types of costs that can be capitalized and specifies that the costs must be directly related to the successful acquisition of a new or renewed insurance contract. The Company adopted this guidance effective January 1, 2012 and retrospectively adjusted its previously issued financial statements. The impact of applying this guidance retrospectively was a reduction in stockholders' equity of $51 million as of December 31, 2010.

6

A summary of the impact of the adoption of this new guidance is shown below (dollars in thousands except per share amounts):

	Previously Reported			As Adjusted
At December 31, 2011:
Deferred policy acquisition costs	$	448,795		$	364,937
Deferred tax liability	31,623			2,835
Stockholders' equity	4,008,426			3,953,356
For the Nine Months Ended September 30, 2011:
Other operating costs and expenses	$	1,193,040		$	1,196,936
Income before income taxes	368,264			364,368
Federal and foreign income taxes	(91,485		)	(90,282		)
Net income	276,877			274,184
Basic net income per share	$	1.97		$	1.95
Diluted net income per share	1.89			1.87
For the Three Months Ended September 30, 2011:
Other operating costs and expenses	$	405,850		$	407,149
Income before income taxes	97,445			96,146
Federal and foreign income taxes	(20,176		)	(19,775		)
Net income	77,308			76,410
Basic net income per share	$	0.56		$	0.55
Diluted net income per share	0.53			0.53

In May 2011, the FASB issued guidance related to measuring and disclosing fair values. The Company's adoption of the updated guidance effective January 1, 2012 resulted in a change in the presentation of the Company's consolidated financial statements but did not have any impact on the Company's results of operations, financial position or liquidity.

In June 2011, the FASB issued guidance relating to the presentation of the components of net income and other comprehensive income. The Company's adoption of the updated guidance effective January 1, 2012 resulted in a change in the presentation of the Company's consolidated financial statements but did not have any impact on the Company's results of operations, financial position or liquidity.

All recently issued but not yet effective accounting and reporting guidance is either not applicable to the Company or is not expected to have a material impact on the Company.

(4) Statements of Cash Flow

Interest payments were $109,045,000 and $100,840,000 and income taxes paid were $114,343,000 and $42,797,000 in the nine months ended September 30, 2012 and 2011, respectively.

7

(5) Investments in Fixed Maturity Securities

At September 30, 2012 and December 31, 2011, investments in fixed maturity securities were as follows:

(Dollars in thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Held to maturity:
State and municipal	$	64,301	$	17,979	$	—		$	82,280	$	64,301
Residential mortgage-backed	34,065		5,661		—			39,726		34,065
Corporate	4,997		670		—			5,667		4,997
Total held to maturity	103,363		24,310		—			127,673		103,363
Available for sale:
U.S. government and government agency	858,190		80,406		(1,283		)	937,313		937,313
State and municipal	4,509,239		348,413		(14,862		)	4,842,790		4,842,790
Mortgage-backed securities:
Residential (1)	1,458,059		61,231		(7,976		)	1,511,314		1,511,314
Commercial	152,816		5,430		(238		)	158,008		158,008
Corporate	3,052,275		212,664		(15,787		)	3,249,152		3,249,152
Foreign	1,008,266		82,826		(620		)	1,090,472		1,090,472
Total available for sale	11,038,845		790,970		(40,766		)	11,789,049		11,789,049
Total investments in fixed maturity securities	$	11,142,208	$	815,280	$	(40,766	)	$	11,916,722	$	11,892,412
December 31, 2011
Held to maturity:
State and municipal	$	74,354	$	12,546	$	—		$	86,900	$	74,354
Residential mortgage-backed	35,759		5,610		—			41,369		35,759
Corporate	4,996		717		—			5,713		4,996
Total held to maturity	115,109		18,873		—			133,982		115,109
Available for sale:
U.S. government and government agency	906,924		69,920		(351		)	976,493		976,493
State and municipal	5,031,275		308,345		(16,550		)	5,323,070		5,323,070
Mortgage-backed securities:
Residential (1)	1,416,427		75,635		(15,894		)	1,476,168		1,476,168
Commercial	105,383		4,054		(1,018		)	108,419		108,419
Corporate	2,328,200		132,311		(36,087		)	2,424,424		2,424,424
Foreign	850,838		42,165		(4,649		)	888,354		888,354
Total available for sale	10,639,047		632,430		(74,549		)	11,196,928		11,196,928
Total investments in fixed maturity securities	$	10,754,156	$	651,303	$	(74,549	)	$	11,330,910	$	11,312,037

___________

(1) Gross unrealized losses for residential mortgage-backed securities include $3,251,000 and $7,668,000 as of September 30, 2012 and December 31, 2011, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in other comprehensive income.

8

The amortized cost and fair value of fixed maturity securities at September 30, 2012, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.

(Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	877,420	$	896,040
Due after one year through five years	3,223,807		3,416,358
Due after five years through ten years	2,422,530		2,688,914
Due after ten years	2,973,511		3,206,362
Mortgage-backed securities	1,644,940		1,709,048
Total	$	11,142,208	$	11,916,722

At September 30, 2012, there were no investments, other than investments in United States government and government agency securities, which exceeded 10% of common stockholders’ equity.

(6) Investments in Equity Securities Available for Sale

At September 30, 2012 and December 31, 2011, investments in equity securities available for sale were as follows:

(Dollars in thousands)	Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Common stocks	$	228,524	$	96,648	$	(291	)	$	324,881	$	324,881
Preferred stocks	95,566		8,024		(3,149		)	100,441		100,441
Total	$	324,090	$	104,672	$	(3,440	)	$	425,322	$	425,322
December 31, 2011
Common stocks	$	209,210	$	113,660	$	(2,888	)	$	319,982	$	319,982
Preferred stocks	133,183		5,139		(14,865		)	123,457		123,457
Total	$	342,393	$	118,799	$	(17,753	)	$	443,439	$	443,439

(7) Arbitrage Trading Account

At September 30, 2012 and December 31, 2011, the fair value and carrying value of the arbitrage trading account were $417 million and $397 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company believes that this makes arbitrage investments less vulnerable to changes in general financial market conditions.

9

(8) Net Investment Income

Net investment income consists of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Investment income (losses) earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	121,454		$	120,252		$	360,577		$	365,365
Investment funds	(13,118		)	(10,820		)	50,124			21,069
Arbitrage trading account	2,397			(346		)	8,938			10,696
Equity securities available for sale	4,001			2,795			10,980			9,544
Real estate	3,097			2,848			8,621			5,192
Gross investment income	117,831			114,729			439,240			411,866
Investment expense	(1,812		)	(666		)	(4,352		)	(2,605		)
Net investment income	$	116,019		$	114,063		$	434,888		$	409,261

(9) Investment Funds

Investment funds consist of the following:

	Carrying Value as of				Income (Losses) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,
(Dollars in thousands)	2012		2011		2012		2011
Real estate	$	381,986	$	373,413	$	13,513	$	14,977
Energy	129,376		98,974		28,966		10,947
Arbitrage	61,049		58,008		3,041		(2,767		)
Other	175,227		150,243		4,604		(2,088		)
Total	$	747,638	$	680,638	$	50,124	$	21,069

The Company's share of the earnings or losses of investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's financial statements.

(10) Real Estate

Real estate is directly owned property held for investment. At September 30, 2012, real estate consists of three office buildings in London, including two in operation and one under development, and a long-term ground lease in Washington D.C. Future minimum rental income expected on operating leases relating to real estate held for investment is $362,000 in 2012, $1,460,000 in 2013, $1,504,000 in 2014, $1,549,000 in 2015, $1,596,000 in 2016 and $330,657,000 thereafter.

10

(11) Loans Receivable

Loans receivable are as follows:

(Dollars in thousands)	September 30, 2012			December 31, 2011
Total loans receivable	$	371,408		$	263,187
Valuation allowance:
Specific	$	3,080		$	19,041
General	2,674			764
Total	$	5,754		$	19,805
Impaired loans:
With a specific valuation allowance	$	2,362		$	29,702
Without a valuation allowance	30,299			30,357
Unpaid principal balance	35,660			93,922
For the Nine Months Ended September 30,	2012			2011
Increase (decrease) in valuation allowance	$	(14,053	)	$	541
Loans receivable charged off	139			9
For the Three Months Ended September 30,
Decrease in valuation allowance	(7,280		)	(9		)
Loans receivable charged off	54			9

Loans receivable in non-accrual status were $31 million and $30 million at September 30, 2012 and December 31, 2011, respectively. If these loans had been current, additional interest income of $0.6 million and none would have been recognized in accordance with their original terms for the nine months ended September 30, 2012 and 2011, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

The Company's five largest loans receivable, which have an aggregate amortized cost of $217 million and an aggregate fair value of $212 million at September 30, 2012, are secured by commercial real estate located primarily in New York City, California, Hawaii and Boston. These loans earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. As part of the evaluation process, the Company reviews certain credit quality indicators for these loans. The Company utilizes an internal risk rating system to assign a risk to each of its commercial loans. The loan rating system takes into consideration credit quality indicators including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower's financial condition and performance with respect to loan terms, the Company's position in the capital structure, and the overall leverage in the capital structure. Based on this rating system, one loan with an aggregate cost basis of $30 million was considered to be impaired at September 30, 2012. For each of this loan, a determination was made as to the amount of loss in the event of a default and whether the loss is probable. The results of the determination were considered in connection with the valuation allowance noted above. An additional credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to the borrower's principal and interest payments. At September 30, 2012, each of the five largest loans referred to above had a debt service coverage ratio greater than 3.0, except one that is lower due to a recent and temporary rate abatement.

11

(12) Realized and Unrealized Investment Gains

Realized and unrealized investment gains are as follows:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Realized investment gains:
Fixed maturity securities:
Gains	$	4,439		$	10,212		$	25,046		$	25,049
Losses	(1,937		)	(2,207		)	(4,243		)	(4,716		)
Equity securities available for sale	14,447			12,318			58,873			50,539
Other	—			—			1,535			—
Sales of investment funds	277			915			3,778			2,940
Change in valuation allowance, net of other-than -temporary impairments (1)	5,000			—			9,014			(400		)
Total net investment gains before income taxes	22,226			21,238			94,003			73,412
Income tax expense	(7,415		)	(7,454		)	(32,260		)	(26,502		)
Total net investment gains	$	14,811		$	13,784		$	61,743		$	46,910

Change in unrealized gains of available for sale securities:
Fixed maturity securities	$	96,077		$	115,933		$	186,637		$	187,851
Less non-credit portion of OTTI recognized in other comprehensive income	2,483			(1,300		)	4,416			(1,956		)
Equity securities available for sale	(2,891		)	(65,861		)	186			(59,760		)
Investment funds	4,255			(9,257		)	3,281			(5,067		)
Total change in unrealized gains before income taxes and noncontrolling interests	99,924			39,515			194,520			121,068
Income tax expense	(34,963		)	(14,268		)	(68,000		)	(42,893		)
Noncontrolling interests	(43		)	1			(71		)	(11		)
Total change in net unrealized gains	$	64,918		$	25,248		$	126,449		$	78,164

_________

(1) For the nine months ended September 30, 2012, this represents a change in valuation allowance of $14 million, partially offset by an other-than-temporary impairment of $5 million.

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(13) Securities in an Unrealized Loss Position

The following table summarizes all securities in an unrealized loss position at September 30, 2012 and December 31, 2011 by the length of time those securities have been continuously in an unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2012
U.S. government and agency	$	51,405	$	1,283	$	—	$	—	$	51,405	$	1,283
State and municipal	49,594		558		184,408		14,304		234,002		14,862
Mortgage-backed securities	259,508		3,338		65,349		4,876		324,857		8,214
Corporate	313,080		1,784		78,646		14,003		391,726		15,787
Foreign	101,200		516		5,508		104		106,708		620
Fixed maturity securities	774,787		7,479		333,911		33,287		1,108,698		40,766
Common stocks	34,702		291		—		—		34,702		291
Preferred stocks	6,435		954		40,094		2,195		46,529		3,149
Equity securities	41,137		1,245		40,094		2,195		81,231		3,440
Total	$	815,924	$	8,724	$	374,005	$	35,482	$	1,189,929	$	44,206
December 31, 2011
U.S. government and agency	$	24,668	$	169	$	4,800	$	182	$	29,468	$	351
State and municipal	131,417		827		183,205		15,723		314,622		16,550
Mortgage-backed securities	172,729		2,439		94,243		14,473		266,972		16,912
Corporate	341,764		8,327		125,654		27,760		467,418		36,087
Foreign	197,560		4,078		7,159		571		204,719		4,649
Fixed maturity securities	868,138		15,840		415,061		58,709		1,283,199		74,549
Common stocks	47,098		2,888		—		—		47,098		2,888
Preferred stocks	23,782		125		45,314		14,740		69,096		14,865
Equity securities	70,880		3,013		45,314		14,740		116,194		17,753
Total	$	939,018	$	18,853	$	460,375	$	73,449	$	1,399,393	$	92,302

Fixed Maturity Securities – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2012 is presented in the table below.

(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Unrealized loss less than $5 million:
Mortgage-backed securities	13	$	71,135	$	4,908
Corporate	11	28,841		2,003
State and municipal	4	32,625		2,197
Total	28	$	132,601	$	9,108

For OTTI of fixed maturity securities that management does not intend to sell or, more likely than not, would not be required to sell, the portion of the decline in value considered to be due to credit factors is recognized in earnings and the portion of the decline in value considered to be due to non-credit factors is recognized in other comprehensive income. For the nine months ended September 30, 2012 and 2011, there were no changes in the portion of impairments recognized in earnings for those securities that have been impaired due to both credit factors and non-credit factors.

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to

13

continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI.

Preferred Stocks – At September 30, 2012, there were five preferred stocks in an unrealized loss position, with an aggregate fair value of $47 million and a gross unrealized loss of $3 million. Four of those preferred stocks with an aggregate fair value of $21 million and a gross unrealized loss of $2 million were rated non-investment grade. Based upon management’s view of the underlying value of these securities, the Company does not consider these preferred stocks to be OTTI.

Common Stocks – At September 30, 2012, the Company owned three common stocks in an unrealized loss position with an aggregate fair value of $35 million and an aggregate unrealized loss of $0.3 million. The Company does not consider these common stocks to be OTTI.

(14)Fair Value Measurements

The Company’s fixed maturity and equity securities 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. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available.

Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities, securities that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable market data. 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.

14

The following tables present the assets and liabilities measured at fair value, on a recurring basis, as of September 30, 2012 and December 31, 2011 by Level:

(Dollars in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2012
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	937,313	$	—	$	937,313	$	—
State and municipal	4,842,790		—		4,842,790		—
Mortgage-backed securities	1,669,322		—		1,669,322		—
Corporate	3,249,152		—		3,183,648		65,504
Foreign	1,090,472		—		1,090,472		—
Total fixed maturity securities available for sale	11,789,049		—		11,723,545		65,504
Equity securities available for sale:
Common stocks	324,881		323,472		—		1,409
Preferred stocks	100,441		—		97,449		2,992
Total equity securities available for sale	425,322		323,472		97,449		4,401
Arbitrage trading account	417,446		294,713		121,948		785
Total	$	12,631,817	$	618,185	$	11,942,942	$	70,690
Liabilities:
Securities sold but not yet purchased	$	149,405	$	148,301	$	1,084	$	20
December 31, 2011
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	976,493	$	—	$	976,493	$	—
State and municipal	5,323,070		—		5,323,070		—
Mortgage-backed securities	1,584,587		—		1,584,587		—
Corporate	2,424,424		—		2,356,596		67,828
Foreign	888,354		—		888,354		—
Total fixed maturity securities available for sale	11,196,928		—		11,129,100		67,828
Equity securities available for sale:
Common stocks	319,982		318,423		—		1,559
Preferred stocks	123,457		—		111,154		12,303
Total equity securities available for sale	443,439		318,423		111,154		13,862
Arbitrage trading account	397,312		208,516		187,945		851
Total	$	12,037,679	$	526,939	$	11,428,199	$	82,541
Liabilities:
Securities sold but not yet purchased	$	62,514	$	62,493	$	—	$	21

There were no significant transfers between Levels 1 and 2 during the nine months ended September 30, 2012 or during the year ended December 31, 2011.

15

The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2012 and for the year ended December 31, 2011:

			Gains (Losses) Included in
(Dollars in thousands)	Beginning Balance		Earnings			Other Comprehensive Income				Purchases			(Sales)			Maturities			Transfer in		Ending Balance
For the nine months ended September 30, 2012:
Assets:
Fixed maturity securities available for sale:
Corporate	$	67,828	$	189		$	5,367			$	223		$	—		$	(8,103	)	$	—	$	65,504
Total	67,828		189			5,367				223			—			(8,103		)	—		65,504
Equity securities available for sale:
Common stocks	1,559		—			—				—			(150		)	—			—		1,409
Preferred stocks	12,303		2,095			(1,940		)		—			(9,466		)	—			—		2,992
Total	13,862		2,095			(1,940		)		—			(9,616		)	—			—		4,401
Arbitrage trading account	851		(46		)	—			—	—		—	(35		)	—			15		785
Total	$	82,541	$	2,238		$	3,427			$	223		$	(9,651	)	$	(8,103	)	$	15	$	70,690
Liabilities:
Securities sold but not yet purchased	$	21	$	(1	)	$	—			$	—		$	—		$	—		$	—	$	20
For the year ended December 31, 2011:
Assets:
Fixed maturity securities available for sale:
Corporate	$	88,063	$	(454	)	$	(870	)		$	15,271		$	(11,864	)	$	(22,318	)	$	—	$	67,828
Total	88,063		(454		)	(870		)		15,271			(11,864		)	(22,318		)	—		67,828
Equity securities available for sale:
Common stocks	1,559		—			—				—			—			—			—		1,559
Preferred stocks	89,446		28,947			(30,865		)		—			(75,225		)	—			—		12,303
Total	91,005		28,947			(30,865		)		—			(75,225		)	—			—		13,862
Arbitrage trading account	3,187		572			—				269			(3,266		)	—			89		851
Total	$	182,255	$	29,065		$	(31,735	)		$	15,540		$	(90,355	)	$	(22,318	)	$	89	$	82,541
Liabilities:
Securities sold but not yet purchased	$	—	$	40		$	—			$	67		$	(86	)	$	—		$	—	$	21

There were no significant transfers in or out of Level 3 during the nine months ended September 30, 2012 or during the year ended December 31, 2011.

16

(15) Reinsurance

The following is a summary of reinsurance financial information:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Written premiums:
Direct	$	1,267,882		$	1,114,494		$	3,718,477		$	3,286,220
Assumed	226,842			191,806			608,693			535,214
Ceded	(218,837		)	(180,161		)	(656,766		)	(554,577		)
Total net premiums written	$	1,275,887		$	1,126,139		$	3,670,404		$	3,266,857
Earned premiums:
Direct	$	1,208,257		$	1,070,279		$	3,475,375		$	3,063,410
Assumed	193,024			165,208			559,304			489,020
Ceded	(214,748		)	(179,664		)	(601,138		)	(496,866		)
Total net premiums earned	$	1,186,533		$	1,055,823		$	3,433,541		$	3,055,564
Ceded losses incurred	$	114,273		$	134,027		$	308,692		$	329,139

The Company reinsures a portion of its exposures principally to reduce its net liability on individual risks and to protect against catastrophic losses. Estimated amounts due from reinsurers are reported net of reserves for uncollectible reinsurance of $2 million as of September 30, 2012 and December 31, 2011.

(16) Fair Value of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:

	September 30, 2012				December 31, 2011
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Fixed maturity securities	$	11,892,412	$	11,916,722	$	11,312,037	$	11,330,910
Equity securities available for sale	425,322		425,322		443,439		443,439
Arbitrage trading account	417,446		417,446		397,312		397,312
Loans receivable	371,408		363,875		263,187		245,169
Cash and cash equivalents	1,189,564		1,189,564		911,742		911,742
Trading account receivables from brokers and clearing organizations	387,352		387,352		318,240		318,240
Due from broker	—		—		10,875		10,875
Liabilities:
Trading account securities sold but not yet purchased	149,405		149,405		62,514		62,514
Due to broker	82,746		82,746		—		—
Junior subordinated debentures	243,154		254,800		242,997		258,400
Senior notes and other debt	1,877,431		2,110,492		1,500,503		1,587,473

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, as described in note 14 above. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair value of loans receivable are 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 junior subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.

17

(17) Restricted Stock Units

Pursuant to its stock incentive plan, the Company may issue restricted stock units (RSUs) to officers of the Company and its subsidiaries. The RSUs generally vest five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were $20 million and $19 million for the nine months ended September 30, 2012 and 2011, respectively. Grants of RSUs are made periodically, generally every other year. A summary of RSUs issued in the nine months ended September 30,2012 and 2011 follows:

(dollars in thousands)	Units	Fair Value
Nine months ended September 30:
2012	2,114,720	$	78,351
2011	53,250	$	1,674

(18) Industry Segments

The Company’s operations are presently conducted in five segments of the insurance business: Specialty, Regional, Alternative Markets, Reinsurance and International.

Our Specialty lines companies underwrite risks within the excess and surplus lines market and on an admitted basis. The risks are highly complex, often unique exposures that typically fall outside the underwriting guidelines of the standard insurance market or are best served by specialized knowledge of a particular industry. The Specialty lines of business include premises operations, commercial automobile, property, products liability and professional liability lines. The customers in this segment are highly diverse. Operating units deliver their products through a variety of distribution channels, depending on the customer base and particular risks insured.

Our Regional companies provide insurance products and services that meet the specific needs of each regionally differentiated customer base by developing expertise in the niches that drive local communities. They provide commercial insurance products to customers primarily in 45 states and the District of Columbia. Key clients of this segment are small-to-mid-sized businesses and state and local governmental entities. The Regional business is sold through a network of non-exclusive independent agents who are compensated on a commission basis. Our Regional operating units are organized geographically in order to provide them with the flexibility to adapt quickly to local market conditions and customer needs.

Our Alternative Markets operating units offer insurance products, analytical tools and risk management services such as loss control and claims management that enable clients to select their risk tolerance and manage it appropriately. These units specialize in insuring, reinsuring and administering self-insurance programs and other alternative risk transfer mechanisms for clients such as commercial and governmental entity employers, employer groups, insurers, and other groups or entities seeking alternative ways to manage their exposure to risks. In addition to providing insurance products, the Alternative Markets segment also provides a wide variety of fee-based services, including claims, administrative and consulting services.

Our Reinsurance companies provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance.

Our International operating units write business in almost 40 countries worldwide, with branches or offices in 15 locations outside the United States, including the United Kingdom, Continental Europe, South America, Australia, the Asia Pacific region, Scandinavia and Canada. In each of our international operating territories, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our International businesses are managed by teams of professionals with expertise in local markets and knowledge of regional environments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company’s overall effective tax rate.

Summary financial information about the Company’s operating segments is presented in the following table. Income before income taxes by segment consists of revenues, less expenses, related to the respective segment’s operations, including allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.

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	Revenues
(Dollars in thousands)	Earned Premiums		Investment Income		Other		Total		Pre-Tax Income (Loss)			Net Income (Loss)
For the three months ended September 30, 2012
Specialty	$	420,165	$	36,245	$	577	$	456,987	$	59,846		$	42,731
Regional	276,629		16,174		1,695		294,498		33,219			23,296
Alternative Markets	177,041		30,146		23,936		231,123		39,433			28,824
Reinsurance	111,599		19,112		—		130,711		21,118			15,732
International	201,099		12,448		—		213,547		15,736			7,141
Corporate and eliminations (1)	—		1,894		69,515		71,409		(57,885		)	(31,588		)
Net investment gains	—		—		22,226		22,226		22,226			14,811
Consolidated	$	1,186,533	$	116,019	$	117,949	$	1,420,501	$	133,693		$	100,947
For the three months ended September 30, 2011
Specialty	$	367,417	$	37,438	$	664	$	405,519	$	70,590		$	51,206
Regional	267,142		16,099		1,207		284,448		(11,163		)	(4,969		)
Alternative Markets	156,820		25,931		20,408		203,159		32,984			25,124
Reinsurance	103,906		18,641		—		122,547		16,109			13,148
International	160,538		10,741		—		171,279		13,919			9,650
Corporate and eliminations (1)	—		5,213		66,328		71,541		(47,531		)	(31,533		)
Net investment gains	—		—		21,238		21,238		21,238			13,784
Consolidated	$	1,055,823	$	114,063	$	109,845	$	1,279,731	$	96,146		$	76,410
For the nine months ended September 30, 2012:
Specialty	$	1,215,417	$	138,491	$	1,788	$	1,355,696	$	204,573		$	145,270
Regional	809,072		60,780		4,770		874,622		79,211			56,884
Alternative Markets	506,149		116,036		70,563		692,748		141,089			102,012
Reinsurance	327,452		70,435		—		397,887		74,742			54,837
International	575,451		39,788		—		615,239		50,685			22,553
Corporate and eliminations (1)	—		9,358		175,400		184,758		(174,868		)	(98,196		)
Net investment gains	—		—		94,003		94,003		94,003			61,743
Consolidated	$	3,433,541	$	434,888	$	346,524	$	4,214,953	$	469,435		$	345,103
For the nine months ended September 30, 2011:
Specialty	$	1,047,567	$	138,868	$	2,065	$	1,188,500	$	237,613		$	170,918
Regional	795,423		59,459		3,377		858,259		(2,770		)	5,251
Alternative Markets	454,156		96,072		64,049		614,277		116,007			86,798
Reinsurance	315,220		72,230		—		387,450		66,782			51,975
International	443,198		32,692		—		475,890		27,420			18,253
Corporate and eliminations (1)	—		9,940		177,303		187,243		(154,096		)	(105,921		)
Net investment gains	—		—		73,412		73,412		73,412			46,910
Consolidated	$	3,055,564	$	409,261	$	320,206	$	3,785,031	$	364,368		$	274,184

19

Identifiable assets by segment are as follows:

(Dollars in thousands)	September 30, 2012		December 31, 2011
Specialty	$	6,600,690	$	6,157,853
Regional	2,568,126		2,488,940
Alternative Markets	4,324,409		4,044,915
Reinsurance	2,954,710		2,732,489
International	1,880,346		1,569,749
Corporate and eliminations	1,604,631		1,409,927
Consolidated	$	19,932,912	$	18,403,873

___________

(1) Corporate and eliminations represent corporate revenues and expenses that are not allocated to business segments.

20

Net premiums earned by major line of business are as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Specialty
Premises operations	$	135,662	$	119,496	$	386,491	$	331,457
Property	68,767		59,578		202,602		174,690
Professional liability	63,519		58,739		188,680		167,748
Workers’ compensation	43,448		29,166		122,228		86,683
Commercial automobile	42,335		36,440		121,027		102,055
Products liability	27,444		24,954		78,731		71,856
Other	38,990		39,044		115,658		113,078
Total specialty	420,165		367,417		1,215,417		1,047,567
Regional
Commercial multiple peril	104,331		98,200		305,978		292,030
Commercial automobile	72,486		72,537		213,398		217,021
Workers’ compensation	57,194		55,133		166,809		163,602
Other	42,618		41,272		122,887		122,770
Total regional	276,629		267,142		809,072		795,423
Alternative Markets
Primary workers’ compensation	88,655		70,172		243,494		199,768
Excess workers’ compensation	34,179		40,038		105,051		126,940
Accident and health	34,461		27,894		101,701		75,002
Other liability	8,477		8,412		24,756		21,075
Other	11,269		10,304		31,147		31,371
Total alternative markets	177,041		156,820		506,149		454,156
Reinsurance
Casualty	80,643		75,917		232,698		228,529
Property	30,956		27,989		94,754		86,691
Total reinsurance	111,599		103,906		327,452		315,220
International
Automobile	30,557		26,334		90,831		80,585
Casualty reinsurance	32,378		19,650		88,686		52,717
Property	27,418		22,327		79,039		59,430
Professional liability	24,348		24,982		74,356		69,875
Primary workers’ compensation	21,102		18,884		59,618		54,480
Marine	21,741		14,487		59,125		36,050
Accident and health	11,870		9,994		39,932		30,515
Property reinsurance	11,250		6,680		31,281		16,062
Other liability	14,308		9,348		31,919		23,780
Fidelity and surety	6,127		7,852		20,664		19,704
Total international	201,099		160,538		575,451		443,198
Total	$	1,186,533	$	1,055,823	$	3,433,541	$	3,055,564

(19) Commitments, Litigation and Contingent Liabilities

The Company's subsidiaries are subject to disputes, including litigation and arbitration, arising in the ordinary course of their insurance and reinsurance businesses. The Company's estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations. However, adverse outcomes are possible and could negatively impact the Company's financial condition and results of operations.

21

SAFE HARBOR STATEMENT

This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “potential,” “continued,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2012 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information is not and should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, real estate, merger arbitrage and private equity investments; effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts; natural and man-made catastrophic losses, including as a result of terrorist activities; general economic and market activities, including inflation, interest rates and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of any legislative, regulatory, accounting or other initiatives taken in response to it, on our results and financial condition; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Act of 2002, as amended; the ability of our reinsurers to pay reinsurance recoverables owed to us; foreign currency and political risks relating to our international operations; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk relating to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; our ability to attract and retain key personnel and qualified employees; potential difficulties with technology and/or data security; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). These risks and uncertainties could cause our actual results for the year 2012 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Our future financial performance is dependent upon factors discussed in our Annual Report on Form 10-K, elsewhere in this Form 10-Q and our other SEC filings. Forward-looking statements speak only as of the date on which they are made. Except to the extent required by applicable laws, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

22

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates in five business segments: Specialty, Regional, Alternative Markets, Reinsurance and International. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to better understand their individual needs and risk characteristics. While providing our business units with certain operating autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment and reinsurance management, and actuarial, financial and corporate legal staff support. The Company’s primary sources of revenues and earnings are its insurance operations and its investments.

An important part of our strategy is to form new operating units to capitalize on various business opportunities, with 22 of our 48 units formed since 2006. These newer units are focused on important parts of the economy in the U.S., including healthcare, energy and agriculture, and on growing international markets, including Norway, Australia, the Asia-Pacific region and South America. As a result, our international operations have become an increasingly important part of our business.

The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The ultimate adequacy of premium rates is not known with certainty at the time a property casualty insurance policy is issued because premiums are determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court decisions that define and change the extent of coverage and the effects of economic inflation on the amount of compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of policyholders’ surplus employed in the industry, and the industry’s willingness to deploy that capital.

Beginning in 2005, the property casualty insurance market became more competitive and insurance rates decreased across most business lines. Increased competition and the impact of the economic downturn also put pressure on policy terms and conditions. While prices began to increase in 2011, loss costs are also increasing and current market price levels for certain lines of business remain below the prices required for the Company to achieve its return objectives. With its investments in new businesses, the Company believes it is well-positioned to take advantage of new opportunities. Price changes are reflected in the Company’s results over time as premiums are earned.

The Company’s profitability is also affected by its investment income. The Company’s invested assets, which are derived from its own capital and cash flow from its insurance business, are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, which are at historically low levels, as well as the credit quality and duration of the securities. The Company also invests in equity securities, merger arbitrage, private equity investments, investment funds and real estate. The Company's investments in investment funds have experienced, and the Company expects to continue to experience, greater fluctuations in investment income.

Critical Accounting Estimates

The following presents a discussion of accounting policies and estimates relating to reserves for losses and loss expenses, assumed premiums and other-than-temporary impairments of investments. Management believes these policies and estimates are the most critical to its operations and require the most difficult, subjective and complex judgments.

Reserves for Losses and Loss Expenses.To recognize liabilities for unpaid losses, either known or unknown, insurers establish reserves, which is a balance sheet account representing estimates of future amounts needed to pay claims and related expenses with respect to insured events which have occurred. Estimates and assumptions relating to reserves for losses and loss expenses are based on complex and subjective judgments, often including the interplay of specific uncertainties with related accounting and actuarial measurements. Such estimates are also susceptible to change as significant periods of time may elapse between the occurrence of an insured loss, the report of the loss to the insurer, the ultimate determination of the cost of the loss and the insurer’s payment of that loss.

In general, when a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the ultimate payment based upon known information about the claim at that time. The estimate represents an informed judgment based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature and value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon the then current legal interpretation of coverage provided.

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In examining reserve adequacy, several factors are considered in estimating the ultimate economic value of losses. These factors include, among other things, historical data, legal developments, changes in social attitudes and economic conditions, including the effects of inflation. The actuarial process relies on the basic assumption that past experience, adjusted judgmentally for the effects of current developments and anticipated trends, is an appropriate basis for predicting future outcomes. Reserve amounts are based on management’s informed estimates and judgments using currently available data. As additional experience and other data become available and are reviewed, these estimates and judgments may be revised. This may result in reserve increases or decreases that would be reflected in our results in periods in which such estimates and assumptions are changed.

Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management expects the ultimate settlement and claim administration will cost. While the methods for establishing reserves are well tested over time, some of the major assumptions about anticipated loss emergence patterns are subject to unanticipated fluctuation. These estimates, which generally involve actuarial projections, are based on management’s assessment of facts and circumstances then known, as well as estimates of trends in claims severity and frequency, judicial theories of liability and other factors, including the actions of third parties which are beyond the Company’s control. These variables are affected by external and internal events, such as inflation and economic volatility, judicial and litigation trends, reinsurance coverage, legislative changes and claim handling and reserving practices, which make it more difficult to accurately predict claim costs. The inherent uncertainties of estimating reserves are greater for certain types of liabilities where long periods of time elapse before a definitive determination of liability is made. Because setting reserves is inherently uncertain, the Company cannot provide assurance that its current reserves will prove adequate in light of subsequent events.

Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. For example, the paid loss and incurred loss development methods rely on historical paid and incurred loss data. For new lines of business, where there is insufficient history of paid and incurred claims data, or in circumstances where there have been significant changes in claim practices, the paid and incurred loss development methods would be less credible than other actuarial methods. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” and in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit.

The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. Examples of changes in terms and conditions that can have a significant impact on reserve levels are the use of aggregate policy limits, the expansion of coverage exclusions, whether or not defense costs are within policy limits, and changes in deductibles and attachment points.

The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Management believes the estimates and assumptions it makes in the reserving process provide the best estimate of the ultimate cost of settling claims and related expenses with respect to insured events which have occurred; however, different assumptions and variables could lead to significantly different reserve estimates.

Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss

24

controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations.

Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags.

The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect historical changes, current trends and other factors observed. If the actual level of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s estimate. The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity, relative to our assumptions, on our loss estimate for claims occurring in 2011 (dollars in thousands):

	Frequency (+/-)
Severity (+/-)	1%		5%		10%
1%	$	56,116	$	168,908	$	309,896
5%	168,908		286,166		432,738
10%	309,896		432,738		586,291

Our net reserves for losses and loss expenses of approximately $8.3 billion as of September 30, 2012 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above.

Approximately $1.4 billion, or 16.5%, of the Company’s net loss reserves as of September 30, 2012 relate to the reinsurance segment. There is a higher degree of uncertainty and greater variability regarding estimates of assumed loss reserves because those estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is extended. Management considers the impact of delayed reporting in its selection of assumed loss development factors.

Information received from ceding companies is used to set initial expected loss ratios, to establish case reserves and to estimate reserves for incurred but not reported losses on assumed reinsurance business. This information, which is generally provided through reinsurance intermediaries, is gathered through the underwriting process and from periodic claim reports and other correspondence with ceding companies. The Company performs underwriting and claim audits of selected ceding companies to determine the accuracy and completeness of information provided to the Company. The information received from the ceding companies is supplemented by the Company’s own loss development experience with similar lines of business as well as industry loss trends and loss development benchmarks.

25

Following is a summary of the Company’s reserves for losses and loss expenses by business segment as of September 30, 2012 and December 31, 2011:

(Dollars in thousands)	September 30,		December 31,
	2012		2011
Specialty	$	2,949,949	$	2,905,759
Regional	1,277,441		1,283,764
Alternative Markets	2,059,019		1,986,111
Reinsurance	1,376,199		1,439,136
International	657,019		557,342
Net reserves for losses and loss expenses	8,319,627		8,172,112
Ceded reserves for losses and loss expenses	1,243,250		1,165,022
Gross reserves for losses and loss expenses	$	9,562,877	$	9,337,134

Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business as of September 30, 2012 and December 31, 2011:

(Dollars in thousands)	Reported Case Reserves		Incurred But Not Reported		Total
September 30, 2012
General liability	$	983,123	$	1,893,580	$	2,876,703
Workers’ compensation	1,367,359		1,067,002		2,434,361
Commercial automobile	260,814		191,600		452,414
International	351,155		305,864		657,019
Other	205,724		317,207		522,931
Total primary	3,168,175		3,775,253		6,943,428
Reinsurance	574,206		801,993		1,376,199
Total	$	3,742,381	$	4,577,246	$	8,319,627
December 31, 2011
General liability	$	890,238	$	1,974,361	$	2,864,599
Workers’ compensation	1,353,328		992,775		2,346,103
Commercial automobile	275,198		195,323		470,521
International	277,857		279,485		557,342
Other	200,969		293,442		494,411
Total primary	2,997,590		3,735,386		6,732,976
Reinsurance	584,909		854,227		1,439,136
Total	$	3,582,499	$	4,589,613	$	8,172,112

Reserves for excess and assumed workers’ compensation business are net of an aggregate net discount of $864 million and $892 million as of September 30, 2012 and December 31, 2011, respectively.

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The following table presents development in our estimate of claims occurring in prior years:

	For the Nine Months Ended
	September 30,
(Dollars in thousands)	2012		2011
Favorable (unfavorable) reserve development:
Specialty	$	39,008	$	96,625
Regional	13,654		25,277
Alternative markets	3,524		(2,088		)
Reinsurance	22,950		18,674
International	230		3,611
Total favorable reserve development	79,366		142,099
Premium offsets(1):
Specialty	—		321
Alternative markets	—		(20		)
International	3,228		—
Net development	$	82,594	$	142,400

         _____________

(1) Represents portion of reserve development offset by additional or return premiums on retrospectively rated insurance policies and reinsurance agreements.

For the nine months ended September 30, 2012, estimates for claims occurring in prior years decreased by $83 million. The favorable reserve development in 2012 was primarily attributable to accident years 2008 through 2010. The changes in prior year loss reserve estimates are generally the result of ongoing analysis of recent loss development trends. Original estimates are increased or decreased as additional information becomes known regarding individual claims and aggregate claim trends.

Specialty - The majority of the favorable reserve development for the specialty segment during 2012 and 2011 was associated with excess and surplus (“E&S”) casualty business. E&S insurers are free from rate and form regulation and generally charge higher rates for business than those that are charged in the “standard” market. Beginning in 2002, the E&S business began to experience improved claim frequency (i.e., a lower number of reported claims per unit of exposure). One reason for the lower number of claims was the Company’s introduction of more restrictive policy language which included additional exclusions that eliminated claims that would have previously been covered, particularly for the Company’s building contractor business. In addition, as standard carriers tightened their underwriting criteria, the Company benefited from an influx of accounts from the standard market to the E&S market during these years. The more restrictive policy language and the influx of standard market business resulted in an improved risk profile within the E&S business and a reduction in loss costs that was not expected at the time loss reserves were initially established. In addition, loss severity trends for E&S casualty business have been lower than we had initially expected for the 2005 to 2009 period. We began to recognize these trends in 2007 and have continued to reduce our estimates of ultimate claim costs since then as the magnitude of the frequency trends has become more evident. The favorable reserve development in 2012 was primarily attributable to accident years 2007 through 2010.

Regional - Favorable reserve development for the regional segment related to commercial multi-peril business, partially offset by modest adverse development on workers' compensation business. The favorable development for commercial multi-peril business was driven by the 2008 and 2009 accident years and resulted mainly from lower loss emergence on known case reserves relative to historical levels.

Reinsurance - The favorable development for the reinsurance segment was related to facultative program business and to business written through Lloyd’s of London. The favorable development was concentrated in underwriting years 2008 through 2011 and resulted from lower than expected reported losses.

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Loss Reserve Discount - The Company discounts its liabilities for excess and assumed workers’ compensation business because of the long period of time over which losses are paid. Discounting is intended to appropriately match losses and loss expenses to income earned on investment securities supporting the liabilities. The expected losses and loss expense payout pattern subject to discounting was derived from the Company’s loss payout experience. For non-proportional business, reserves for losses and loss expenses have been discounted using risk-free discount rates determined by reference to the U.S. Treasury yield curve. For proportional business, reserves for losses and loss expenses have been discounted at the statutory rate permitted by the Department of Insurance of the State of Delaware of 2.3%. As of September 30, 2012, the aggregate blended discount rates ranged from 2.1% to 6.5%, with a weighted average discount rate of 4.3%. The aggregate net discount, after reflecting the effects of ceded reinsurance, was $864 million and $892 million as of September 30, 2012 and December 31, 2011, respectively.

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $66 million and $64 million at September 30, 2012 and December 31, 2011, respectively. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Other-Than-Temporary Impairments (OTTI) of Investments. The cost of securities is adjusted where appropriate to include a provision for decline in value which is considered to be other-than-temporary. An other-than-temporary decline is considered to occur in investments where there has been a sustained reduction in fair value and where the Company does not expect the fair value to recover prior to the time of sale or maturity. Since equity securities do not have a contractual cash flow or maturity, the Company considers whether the price of an equity security is expected to recover within a reasonable period of time.

The Company classifies its fixed maturity securities and preferred stocks by credit rating, primarily based on ratings assigned by credit rating agencies. For purposes of classifying securities with different ratings, the Company uses the lower rating if two ratings were assigned and the middle rating if three ratings were assigned, unless the Company’s own analysis indicates that the lower rating is more appropriate. Securities that are not rated by a rating agency are evaluated and classified by the Company on a case-by-case basis.

Fixed Maturity Securities – For securities that we intend to sell or, more likely than not, would be required to sell, a decline in value below amortized cost is considered to be OTTI. The amount of OTTI is equal to the difference between amortized cost and fair value at the balance sheet date. For securities that we do not intend to sell or expect to be required to sell, a decline in value below amortized cost is considered to be an OTTI if we do not expect to recover the entire amortized cost basis of a security (i.e., the present value of cash flows expected to be collected is less than the amortized cost basis of the security).

The portion of the decline in value considered to be a credit loss (i.e., the difference between the present value of cash flows expected to be collected and the amortized cost basis of the security) is recognized in earnings. The portion of the decline in value not considered to be a credit loss (i.e., the difference in the present value of cash flows expected to be collected and the fair value of the security) is recognized in other comprehensive income.

Impairment assessments for structured securities, including mortgage-backed securities and asset-backed securities, collateralized debt obligations and corporate debt, are generally evaluated based on the performance of the underlying collateral under various economic and default scenarios that may involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other relevant economic and performance factors. If an OTTI determination is made, a discounted cash flow analysis is used to ascertain the amount of the credit impairment.

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The following table provides a summary of fixed maturity securities in an unrealized loss position as of September 30, 2012:

(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Unrealized Loss
Unrealized loss less than 20% of amortized cost	212	$	1,067,413	$	27,681
Unrealized loss of 20% or greater of amortized cost:
Nine months to less then twelve months	1	132		120
Twelve months and longer	9	41,153		12,965
Total	222	$	1,108,698	$	40,766

A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2012 is presented in the table below.

(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Unrealized loss less than $5 million:
Mortgage-backed securities	13	$	71,135	$	4,908
Corporate	11	28,841		2,003
State and municipal	4	32,625		2,197
Total	28	$	132,601	$	9,108

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized loss are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI.

Preferred Stocks – At September 30, 2012, there were five preferred stocks in an unrealized loss position, with an aggregate fair value of $47 million and a gross unrealized loss of $3 million. Four of those preferred stocks with an aggregate fair value of $21 million and a gross unrealized loss of $2 million were rated non-investment grade. Based upon management's view of the underlying value of their securities, the Company does not consider these preferred stocks to be OTTI.

Common Stocks – At September 30, 2012, the Company owned three common stocks in an unrealized loss position with an aggregate fair value of $35 million and an aggregate unrealized loss of $0.3 million. The Company does not consider these common stocks to be OTTI.

Loans Receivable – The Company monitors the performance of its loans receivable, including current market conditions for each loan and the ability to collect principal and interest. For loans where the Company determines it is probable that the contractual terms will not be met, an analysis is performed and a valuation reserve is established, if necessary, with a charge to earnings. Loans receivable are reported net of a valuation reserve of $6 million and $20 million at September 30, 2012 and December 31, 2011, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

Fair Value Measurements.The Company’s fixed maturity and equity securities 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. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair value of the vast majority of the Company’s portfolio is based on observable data (other than quoted prices) and, accordingly, is classified as Level 2.

29

In classifying particular financial securities in the fair value hierarchy, the Company uses its judgment to determine whether the market for a security is active and whether significant pricing inputs are observable. The Company determines the existence of an active market by assessing whether transactions occur with sufficient frequency and volume to provide reliable pricing information. The Company determines whether inputs are observable based on the use of such information by pricing services and external investment managers, the uninterrupted availability of such inputs, the need to make significant adjustments to such inputs and the volatility of such inputs over time. If the market for a security is determined to be inactive or if significant inputs used to price a security are determined to be unobservable, the security is categorized in Level 3 of the fair value hierarchy.

Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable market data. 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 data, projections and business developments of the issuer and other relevant information.

The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of September 30, 2012:

(Dollars in thousands)	Carrying Value		Percent of Total
Pricing source:
Independent pricing services	$	10,932,098	92.7	%
Syndicate manager	75,875		0.6	%
Directly by the Company based on:
Observable data	715,572		6.1	%
Cash flow model	65,504		0.6	%
Total	$	11,789,049	100.0	%

Independent pricing services - The vast majority of the Company’s fixed maturity securities available for sale 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 generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities). 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 based upon current trading levels for similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or revised. In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of September 30, 2012, the Company did not make any adjustments to the prices provided by the pricing services. Based upon the Company’s review of the methodologies used by the independent pricing services, these securities were classified as Level 2.

Syndicate manager – The Company has a 15% participation in a Lloyd’s syndicate, and the Company’s share of the securities owned by the syndicate is priced by the syndicate’s manager. The majority of the securities are liquid, short duration fixed maturity securities. The Company reviews the syndicate manager’s pricing methodology and audited financial statements and holds discussions with the syndicate manager as necessary to confirm its understanding and agreement with security prices. Based upon the Company’s review of the methodologies used by the syndicate manager, these securities were classified as Level 2.

Observable data – If independent pricing is not available, the Company prices the securities directly. Prices are based on observable market data where available, including current trading levels for similar securities and non-binding quotations from brokers. The Company generally requests two or more quotes. If more than one quote is received, the Company 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 obtained from brokers. Since these securities were priced based on observable data, they were classified as Level 2.

30

Cash flow model – If the above methodologies are not available, the Company prices securities using a discounted cash flow model based upon assumptions as to prevailing credit spreads, interest rates and interest rate volatility, time to maturity and subordination levels. Discount rates are adjusted to reflect illiquidity where appropriate. These securities were classified as Level 3.

31

Results of Operations for the Nine Months Ended September 30, 2012 and 2011

Business Segment Results

Following is a summary of gross and net premiums written, premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of premiums earned), expense ratios (underwriting expenses expressed as a percentage of premiums earned) and United States Generally Accepted Accounting Principles (“GAAP”) combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the nine months ended September 30,2012 and 2011. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.

(Dollars in thousands)	2012			2011
Specialty
Gross premiums written	$	1,526,265		$	1,344,139
Net premiums written	1,295,556			1,146,091
Premiums earned	1,215,417			1,047,567
Loss ratio	61.8		%	57.8		%
Expense ratio	32.8		%	32.9		%
GAAP combined ratio	94.6		%	90.7		%
Regional
Gross premiums written	$	926,242		$	881,224
Net premiums written	852,971			817,380
Premiums earned	809,072			795,423
Loss ratio	60.8		%	71.5		%
Expense ratio	36.5		%	36.2		%
GAAP combined ratio	97.3		%	107.7		%
Alternative Markets
Gross premiums written	$	764,643		$	656,062
Net premiums written	556,067			497,117
Premiums earned	506,149			454,156
Loss ratio	72.4		%	71.9		%
Expense ratio	25.8		%	26.8		%
GAAP combined ratio	98.2		%	98.7		%
Reinsurance
Gross premiums written	$	373,912		$	337,696
Net premiums written	349,361			319,524
Premiums earned	327,452			315,220
Loss ratio	57.8		%	60.9		%
Expense ratio	40.8		%	40.7		%
GAAP combined ratio	98.6		%	101.6		%
International
Gross premiums written	$	736,108		$	602,313
Net premiums written	616,449			486,745
Premiums earned	575,451			443,198
Loss ratio	60.5		%	61.6		%
Expense ratio	38.2		%	39.9		%
GAAP combined ratio	98.7		%	101.5		%
Consolidated
Gross premiums written	$	4,327,170		$	3,821,434
Net premiums written	3,670,404			3,266,857
Premiums earned	3,433,541			3,055,564
Loss ratio	62.5		%	64.3		%
Expense ratio	34.3		%	34.7		%
GAAP combined ratio	96.8		%	99.0		%

32

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the nine months ended September 30, 2012 and 2011 (amounts in thousands, except per share data):

	2012		2011
Net income to common stockholders	$	345,103	$	274,184
Weighted average diluted shares	142,941		146,553
Net income per diluted share	$	2.41	$	1.87

The Company reported net income of $345 million in 2012 compared to $274 million in 2011. The increase in net income was primarily due to an increase in after-tax underwriting income of $51 million, an increase in after-tax net investment income of $18 million and an increase in after-tax net investment gains of $15 million. The number of weighted average diluted shares decreased as a result of the Company’s repurchases of its common stock in 2012 and 2011.

Premiums. Gross premiums written were $4,327 million in 2012, an increase of 13% from $3,821 million in 2011. The increase in gross premiums written was primarily due to growth in our international and specialty business segments as a result of rate increases and expansion into new geographic and product markets. The growth was due to a combination of rate increases and increased exposures. Approximately 78% of policies expiring in 2012 were renewed, compared with a 80% renewal retention rate for policies expiring in 2011. The average rate (i.e., average premium adjusted for change in exposures) for policies that renewed in 2012 increased by approximately 6.4%. Audit premiums were $67 million in 2012 compared with $35 million in 2011.

From 2005 through 2010, the property casualty insurance market was highly competitive and insurance rates decreased across most business lines. Prices began to increase in 2011, and the rate of increase accelerated in the first nine months of 2012. However, overall loss costs are also generally increasing, and current market price levels for certain lines of business remain below the prices required for the Company to achieve its return objectives. A summary of gross premiums written in 2012 compared with 2011 by line of business within each business segment follows:

• Specialty premiums increased 14% to $1,526 million in 2012 from $1,344 million in 2011 primarily due to increased business in the energy and environmental markets. Gross premiums increased $49 million (12%) for other liability, $49 million (18%) for property lines, $41 million (39%) for workers' compensation, $22 million (19%) for commercial automobile, $16 million (7%) for professional liability and $6 million (8%) for products liability and decreased $1 million for other lines.

• Regional gross premiums increased 5% to $926 million in 2012 from $881 million in 2011. Gross premiums increased $32 million (10%) for commercial multiple peril, $11 million (6%) for workers’ compensation and $3 million (1%) for commercial automobile.

• Alternative markets gross premiums increased 17% to $765 million in 2012 from $656 million in 2011. Excluding assigned risk plans, which are fully reinsured, gross premiums increased 12% to $605 million in 2012 from $542 million in 2011. Gross premiums increased $68 million (31%) for primary workers’ compensation, $25 million (26%) for accident and health products and $3 million (8%) for other liability. Gross premiums decreased $29 million (20%) for excess workers' compensation and $3 million (7%) for other lines.

• Reinsurance gross premiums increased 11% to $374 million in 2012 from $338 million in 2011. Gross premiums increased $6 million (3%) for casualty business and $30 million (28%) for property business.

• International gross premiums increased 22% to $736 million in 2012 from $602 million in 2011. The increase was primarily due to an increase in business written by our Lloyd’s operation, our companies in Australia, and new insurance branches in Germany and Norway. Gross premiums increased $46 million (75%) for marine, $28 million (37%) for casualty reinsurance, $21 million (80%) for property reinsurance, $13 million (15%) for property, $12 million (35%) for accident and health and $14 million (4%) for other lines.

Net premiums written were $3,670 million in 2012, an increase of 12% from $3,267 million in 2011. Ceded reinsurance premiums as a percentage of gross written premiums were 15% in 2012 and in 2011. The increase in the percentage of business ceded was due to changes in the reinsurance terms and costs.

Premiums earned increased 12% to $3,434 million in 2012 from $3,056 million in 2011. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly we expect to recognize recent increases over the upcoming quarters. Premiums earned in 2012 are related to business written during both 2012 and 2011.

33

Net Investment Income. Following is a summary of net investment income for the nine months ended September 30,2012 and 2011:

	Amount						Average Annualized Yield
(Dollars in thousands)	2012			2011			2012		2011
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	360,577		$	365,365		3.8	%	4.0	%
Arbitrage trading account	8,938			10,696			3.7		4.0
Investment funds	50,124			21,069			10.2		4.8
Equity securities available for sale	10,980			9,544			3.8		3.5
Real estate	8,621			5,192			3.1		6.0
Gross investment income	439,240			411,866			4.1	%	4.0	%
Investment expenses	(4,352		)	(2,605		)
Total	$	434,888		$	409,261		4.0	%	4.0	%

Net investment income increased 6% to $435 million in 2012 from $409 million in 2011. The increase in investment income was due to an increase in income from investment funds (which are reported on a one quarter lag). The average annualized yield for fixed maturity securities declined from 4.0% to 3.8% due to lower long-term reinvestment yields available in the market. Average invested assets, at cost (including cash and cash equivalents) were $14.5 billion in 2012 and $13.6 billion in 2011.

Insurance Service Fees. The Company is a servicing carrier of worker's compensation assigned risk plans for 20 states and provides insurance program management services to self-insureds, captives, governmental entities, risk retention groups, and insurance companies. Service fees were $77 million in 2012, up from $69 million in 2011, primarily as a result of an increase in fees from assigned risk plans.

Net Realized Gains on Investment Sales. The Company buys and sells securities on a regular basis in order to maximize its total return on investments. Decisions to sell securities are based on management’s view of the underlying fundamentals of specific securities as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized gains on investment sales were $85 million in 2012 compared with $74 million in 2011.

Change in Valuation Allowance, Net of Other-Than-Temporary Impairments. The cost of securities is adjusted where appropriate to include a provision for decline in value which is considered to be other-than-temporary. In 2012, the valuation allowance for mortgage loans decreased by $14 million. The change in valuation allowance, net of other-than-temporary impairments, was a decrease of $9 million in 2012 compared with an increase of $0.4 million in 2011.

Revenues from Wholly-Owned Investees. These revenues were derived from aviation-related businesses that provide services to the general aviation market, including fuel and line service, aircraft sales and maintenance, avionics and engineering services and parts fabrication. Revenues from wholly-owned investees decreased to $173 million in 2012 from $176 million in 2011, primarily as a result of lower aircraft sales.

Losses and Loss Expenses. Losses and loss expenses increased to $2,147 million in 2012 from $1,965 million in 2011. The consolidated loss ratio was 62.5% in 2012 and 64.3% in 2011. Catastrophe losses, net of reinsurance recoveries and reinstatement premiums, were $39 million in 2012 compared with $139 million in 2011, a decrease of 3.5 loss ratio points. Favorable prior year reserve development was $83 million in 2012 compared with $142 million in 2011, a difference of 2.3 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development decreased 0.6 points to 63.8% in 2012 from 64.4% in 2011. A summary of loss ratios in 2012 compared with 2011 by business segment follows:

• Specialty - The loss ratio of 61.8% in 2012 was 4.0 points higher than the loss ratio of 57.8% in 2011. Catastrophe losses were $11 million in 2012 compared with $16 million in 2011. Favorable prior year reserve development was $39 million in 2012 compared with $97 million in 2011, a difference of 6.0 loss ratio points. The loss ratio excluding prior year reserve development decreased 1.5 points to 64.1% in 2012 from 65.6% in 2011.

• Regional - The loss ratio of 60.8% in 2012 was 10.7 points lower than the loss ratio of 71.5% in 2011. Catastrophe losses were $24 million in 2012 compared with $85 million in 2011, an decrease of 7.8 loss ratio points. Favorable prior year reserve development was $14 million in 2012 compared with $25 million in 2011, a difference of 1.5 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development decreased 4.4 points to 59.6% in 2012 from 64.0% in 2011 due to favorable pricing and loss cost trends.

34

• Alternative Markets - The loss ratio was 72.4% in 2012 and 71.9% in 2011. Favorable prior year reserve development was $4 million in 2012 compared with unfavorable development of $2 million in 2011, a difference of 1.2 loss ratio points. The loss ratio excluding prior year reserve development increased 1.9 points to 73.0% in 2012 from 71.1% in 2011.

• Reinsurance - The loss ratio of 57.8% in 2012 was 3.1 points lower than the loss ratio of 60.9% in 2011. Catastrophe losses were $1 million in 2012 compared to $18 million in 2011, a decrease of 5.3 loss ratio points. Favorable prior year reserve development was $23 million in 2012 compared with $18 million in 2011, a difference of 1.1 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development increased 3.3 points to 64.5% in 2012 from 61.2% in 2011.

• International - The loss ratio of 60.5% in 2012 was 1.1 points lower than the loss ratio of 61.6% in 2011. There were $2 million in catastrophe losses in 2012 compared with $19 million in 2011, a decrease of 3.8 loss ratio points. Favorable prior year reserve development was $3 million in 2012 and $4 million in 2011, a difference of 0.2 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development increased 2.5 points to 60.7% in 2012 from 58.2% in 2011.

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for 2012 and 2011:

(Dollars in thousands)	2012			2011
Underwriting expenses	$	1,177,620		$	1,059,485
Service expenses	63,996			55,764
Net foreign currency gains	(2,873		)	(2,171		)
Other costs and expenses	93,281			83,858
Total	$	1,332,024		$	1,196,936

Underwriting expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Underwriting expenses increased 11% compared with an increase in net premiums written of 12%. The expense ratio (underwriting expenses expressed as a percentage of premiums earned) was 34.3% in 2012 and 34.7% in 2011.

Service expenses, which represent the costs associated with the fee-based businesses, increased 15% to $64 million. The increase was due to an increase in general and administrative expenses related to fee-based business.

Net foreign currency gains result from transactions denominated in a currency other than the operating unit’s functional currency.

Other costs and expenses, which represent general and administrative expenses that are not allocated to business segments, increased to $93 million in 2012 from $84 million in 2011.

Expenses from Wholly-Owned Investees. These expenses represent costs associated with aviation-related businesses that include cost of goods sold related to aircraft and other sales, labor and equipment costs related to repairs and other services and general and administrative expenses. Expenses from wholly-owned investees were $172 million in 2012 compared to $174 million in 2011 due to lower cost of aircraft sold as a result of lower sales volume.

Interest Expense. Interest expense was $94 million in 2012 compared with $84 million in 2011 due to the issuance of $350 million of 4.625% senior notes in March 2012.

Income Taxes. The effective income tax rate was 26.5% in 2012 compared to 24.8% in 2011. The effective income tax rate differs from the federal income tax rate of 35% primarily because of tax-exempt investment income. Tax exempt investment income comprised a lower portion of the 2012 pre-tax income and as such had a lesser impact on the effective tax rate for 2012 compared with 2011.

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $73 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. However, in the future, if such earnings were distributed to the Company, taxes of approximately $5.4 million, assuming all tax credits are realized, would be payable on such undistributed earnings and would be reflected in the tax provision for the year in which these earnings are no longer intended to be permanently reinvested in the foreign subsidiary.

35

Results of Operations for the Three Months Ended September 30, 2012 and 2011

Business Segment Results

Following is a summary of gross and net premiums written, premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of premiums earned), expense ratios (underwriting expenses expressed as a percentage of premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the three months ended September 30, 2012 and 2011. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.

(Dollars in thousands)	2012			2011
Specialty
Gross premiums written	$	533,592		$	454,560
Net premiums written	452,000			382,541
Premiums earned	420,165			367,417
Loss ratio	62.4		%	58.3		%
Expense ratio	32.1		%	32.9		%
GAAP combined ratio	94.5		%	91.2		%
Regional
Gross premiums written	$	321,659		$	301,542
Net premiums written	295,122			277,177
Premiums earned	276,629			267,142
Loss ratio	57.2		%	74.2		%
Expense ratio	35.9		%	35.9		%
GAAP combined ratio	93.1		%	110.1		%
Alternative Markets
Gross premiums written	$	272,327		$	222,423
Net premiums written	205,210			174,744
Premiums earned	177,041			156,820
Loss ratio	72.9		%	70.9		%
Expense ratio	24.8		%	26.7		%
GAAP combined ratio	97.7		%	97.6		%
Reinsurance
Gross premiums written	$	132,247		$	118,266
Net premiums written	123,098			113,620
Premiums earned	111,599			103,906
Loss ratio	58.1		%	61.5		%
Expense ratio	40.0		%	40.9		%
GAAP combined ratio	98.1		%	102.4		%
International
Gross premiums written	$	234,899		$	209,509
Net premiums written	200,457			178,057
Premiums earned	201,099			160,538
Loss ratio	60.8		%	60.0		%
Expense ratio	38.3		%	39.1		%
GAAP combined ratio	99.1		%	99.1		%
Consolidated
Gross premiums written	$	1,494,724		$	1,306,300
Net premiums written	1,275,887			1,126,139
Premiums earned	1,186,533			1,055,823
Loss ratio	62.1		%	64.8		%
Expense ratio	33.7		%	34.5		%
GAAP combined ratio	95.8		%	99.3		%

36

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the three months ended September 30, 2012 and 2011 (amounts in thousands, except per share data):

	2012		2011
Net income to common stockholders	$	100,947	$	76,410
Weighted average diluted shares	141,637		144,538
Net income per diluted share	$	0.71	$	0.53

The Company reported net income of $101 million in 2012 compared to $76 million in 2011. The increase in net income was primarily due to a $27 million increase in after-tax underwriting income. The number of weighted average diluted shares decreased as a result of the Company’s repurchases of its common stock in 2012 and 2011.

Premiums. Gross premiums written were $1,495 million in 2012, an increase of 14% from $1,306 million in 2011. The increase in gross premiums written was primarily due to growth in our specialty business and alternative markets segments as a result of expansion into new geographic and product markets. The growth was due to a combination of rate increases and increased exposures. Approximately 78% of policies expiring in 2012 were renewed, compared with a 79% renewal retention rate for policies expiring in 2011. The average rate (i.e., average premium adjusted for change in exposures) for policies that renewed in 2012 increased by approximately 7%. Audit premiums were $22 million in 2012 compared with $12 million in 2011.

From 2005 through 2010, the property casualty insurance market was highly competitive and insurance rates decreased across most business lines. Prices began to increase in 2011, and the rate of increase accelerated in the first nine months of 2012. However, overall loss costs are also generally increasing, and current market price levels for certain lines of business remain below the prices required for the Company to achieve its return objectives. A summary of gross premiums written in 2012 compared with 2011 by line of business within each business segment follows:

• Specialty premiums increased 17% to $534 million in 2012 from $455 million in 2011 primarily due to increased business in the energy and environmental markets. Gross premiums increased $19 million (13%) for other liability, $18 million (19%) for property lines, $15 million (20%) for professional liability, $11 million (28%) for commercial automobile, $9 million (25%) for workers compensation and $7 million for other lines.

• Regional gross premiums increased 7% to $322 million in 2012 from $302 million in 2011. Gross premiums increased $14 million (13%) for commercial multiple peril, $7 million (13%) for workers’ compensation and $2 million (3%) for commercial automobile. Gross premiums written decreased $3 million (6%) for other lines.

• Alternative markets gross premiums increased 22% to $272 million in 2012 from $222 million in 2011. Excluding assigned risk plans, which are fully reinsured, gross premiums increased 15% to $220 million in 2012 from $191 million in 2011. Gross premiums increased $26 million (35%) for primary workers’ compensation and $7 million (17%) for accident and health products. Gross premiums decreased $2 million (6%) for excess workers' compensation and $1 million for other liability lines.

• Reinsurance gross premiums increased 12% to $132 million in 2012 from $118 million in 2011. Gross premiums for casualty business were $83 million in 2012 compared to $82 million in 2011. Gross premiums for property business were $49 million, an increase of $13 million (35%) from 2011.

• International gross premiums increased 12% to $235 million in 2012 from $210 million in 2011. The increase was primarily due to an increase in business written by our Lloyd’s operation, our companies in Australia, and new insurance branches in Germany and Norway. Gross premiums increased $8 million (87%) for property reinsurance, $8 million (97%) for other liability, $6 million (14%) for casualty reinsurance, $5 million (26%) for marine, $2 million (5%) for automobile and $2 million (11%) for workers' compensation and decreased $4 million (24%) for fidelity and surety, $1 million (5%) for professional liability and $1 million (2%) for property.

Net premiums written were $1,276 million in 2012, an increase of 13% from $1,126 million in 2011. Ceded reinsurance premiums as a percentage of gross written premiums increased to 15% in 2012 from 14% in 2011. The increase in the percentage of business ceded was due to changes in the reinsurance terms and costs.

Premiums earned increased 12% to $1,187 million in 2012 from $1,056 million in 2011. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly we expect to recognize recent rate increases over the upcoming years. Premiums earned in 2012 are related to business written during both 2012 and 2011.

37

Net Investment Income. Following is a summary of net investment income for the three months ended September 30,2012 and 2011:

	Amount						Average Annualized Yield
(Dollars in thousands)	2012			2011			2012		2011
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	121,454		$	120,252		3.8	%	4.0	%
Arbitrage trading account	2,397			(346		)	3.0		(0.4	)
Investment funds	(13,118		)	(10,820		)	(7.6	)	(7.2	)
Equity securities available for sale	4,001			2,795			4.1		3.2
Real estate	3,097			2,848			3.1		4.9
Gross investment income	117,831			114,729			3.2	%	3.4	%
Investment expenses	(1,812		)	(666		)
Total	$	116,019		$	114,063		3.2	%	3.3	%

Net investment income increased 2% to $116 million in 2012 from $114 million in 2011. The average annualized yield for fixed maturity securities declined from 4.0% to 3.8% due to lower long-term reinvestment yields available in the market. Losses from investment funds in 2012 and 2011 were primarily attributable to energy-related investments. Average invested assets, at cost (including cash and cash equivalents) were $14.7 billion in 2012 and $13.7 billion in 2011.

Insurance Service Fees. The Company is a servicing carrier of worker's compensation assigned risk plans for 20 states and provides insurance program management services to self-insureds, captives, governmental entities, risk retention groups, and insurance companies. Service fees were $26 million in 2012, up from $22 million in 2011, primarily as a result of an increase in fees from residual market premiums.

Net Realized Gains on Investment Sales. The Company buys and sells securities on a regular basis in order to maximize its total return on investments. Decisions to sell securities are based on management’s view of the underlying fundamentals of specific securities as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized gains on investment sales were $17 million in 2012 compared with $21 million in 2011.

Change in Valuation Allowance, Net of Other-Than-Temporary Impairments. The cost of securities is adjusted where appropriate to include a provision for decline in value which is considered to be other-than-temporary. The change in valuation allowance, net of other-than-temporary impairments, was a decrease of $5 million in 2012 compared with none in 2011.

Revenues from Wholly-Owned Investees. These revenues were derived from aviation-related businesses that provide services to the general aviation market, including fuel and line service, aircraft sales and maintenance, avionics and engineering services and parts fabrication. Revenues from wholly-owned investees increased to $68 million in 2012 from $66 million in 2011.

Losses and Loss Expenses. Losses and loss expenses increased to $737 million in 2012 from $684 million in 2011. The consolidated loss ratio was 62.1% in 2012 and 64.8% in 2011. Catastrophe losses, net of reinsurance recoveries and reinstatement premiums, were $8 million in 2012 compared with $51 million in 2011, a decrease of 4.1 loss ratio points. Favorable prior year reserve development was $28 million in 2012 compared with $56 million in 2011, a difference of 3.0 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development decreased 1.6 points to 63.7% in 2012 from 65.3% in 2011, primarily due to higher earned rate increases. A summary of loss ratios in 2012 compared with 2011 by business segment follows:

• Specialty - The loss ratio of 62.4% in 2012 was 4.1 points higher than the loss ratio of 58.3% in 2011. Favorable prior year reserve development was $14 million in 2012 compared with $36 million in 2011, a difference of 6.3 loss ratio points. The loss ratio excluding prior year reserve development decreased 1.6 points to 64.6% in 2012 from 66.2% in 2011.

• Regional - The loss ratio of 57.2% in 2012 was 17.0 points lower than the loss ratio of 74.2% in 2011. Catastrophe losses were $1 million in 2012 compared with $32 million in 2011, an decrease of 11.6 loss ratio points. Favorable prior year reserve development was $5 million in 2012 compared with $10 million in 2011, a difference of 2.1 loss ratio points. The loss ratio excluding catastrophe losses and prior year reserve development decreased 7.5 points to 58.6% in 2012 from 66.1% in 2011 due to favorable pricing and milder loss activity.

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• Alternative Markets - The loss ratio of 72.9% in 2012 was 2.0 points higher than the loss ratio of 70.9% in 2011. Favorable prior year reserve development was $3 million in 2012 compared with unfavorable development of $5 million in 2011, a difference of 1.8 loss ratio points. The loss ratio excluding prior year reserve development increased 0.8 points to 74.3% in 2012 from 73.5% in 2011.

• Reinsurance - The loss ratio of 58.1% in 2012 was 3.4 points lower than the loss ratio of 61.5% in 2011. There were no catastrophe losses in 2012 compared to $6 million in 2011, a decrease of 5.8 loss ratio points. Favorable prior year reserve development was $5 million in 2012 compared with $4 million in 2011. The loss ratio excluding catastrophe losses and prior year reserve development increased 2.7 points to 62.2% in 2012 from 59.5% in 2011.

• International - The loss ratio of 60.8% in 2012 was 0.8 points higher than the loss ratio of 60.0% in 2011. There were $2 million in catastrophe losses in 2012 compared with $5 million in 2011, a decrease of 2.1 loss ratio points. Favorable prior year reserve development was $1 million in 2012 and in 2011. The loss ratio excluding catastrophe losses and prior year reserve development increased 3.2 points to 60.4% in 2012 from 57.2% in 2011.

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for 2012 and 2011:

(Dollars in thousands)	2012			2011
Underwriting expenses	$	399,677		$	363,889
Service expenses	22,769			18,873
Net foreign currency gains	(1,575		)	(2,700		)
Other costs and expenses	30,616			27,087
Total	$	451,487		$	407,149

Underwriting expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Underwriting expenses increased 10% compared to an increase in net written premiums of 13%. The expense ratio (underwriting expenses expressed as a percentage of premiums earned) was 33.7% in 2012 and 34.5% in 2011.

Service expenses, which represent the costs associated with the fee-based businesses, increased 21% to $23 million. The increase was due to an increase in general and administrative expenses related to fee-based business.

Net foreign currency gains result from transactions denominated in a currency other than the operating unit’s functional currency.

Other costs and expenses, which represent general and administrative expenses that are not allocated to business segments, increased to $31 million in 2012 from $27 million in 2011.

Expenses from Wholly-Owned Investees. These expenses represent costs associated with aviation-related businesses that include cost of goods sold related to aircraft and other sales, labor and equipment costs related to repairs and other services and general and administrative expenses. Expenses from wholly-owned investees were $66 million in 2012 compared to $64 million in 2011.

Interest Expense. Interest expense was $33 million in 2012 compared with $28 million in 2011 due to the issuance of $350 million of 4.625% senior notes in March 2012.

Income Taxes. The effective income tax rate was 24.4% in 2012 compared to 20.6% in 2011. The effective income tax rate differs from the federal income tax rate of 35% primarily because of tax-exempt investment income. Tax exempt investment income comprised a lower portion of the 2012 pre-tax income and as such had a lesser impact on the effective tax rate for 2012 compared with 2011.

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Investments

As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-term securities that, combined with expected cash flow, it believes is adequate to meet its payment obligations.

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio was 3.3 years at September 30, 2012 and 3.6 years at December 31, 2011. The Company’s fixed maturity investment portfolio and investment-related assets as of September 30, 2012 were as follows:

(Dollars in thousands)	Carrying Value		Percent of Total
Fixed maturity securities:
U.S. government and government agencies	$	937,313	6.6	%
State and municipal:
Special revenue	2,198,657		15.4	%
Pre-refunded (1)	995,605		7.0	%
State general obligation	890,990		6.2	%
Local general obligation	391,181		2.8	%
Corporate backed	430,658		3.0	%
Total state and municipal	4,907,091		34.4	%
Mortgage-backed securities:
Agency	1,145,102		8.0	%
Residential-Prime	245,739		1.7	%
Residential-Alt A	154,538		1.1	%
Commercial	158,008		1.1	%
Total mortgage-backed securities	1,703,387		11.9	%
Corporate:
Industrial	1,620,807		11.3	%
Financial	725,550		5.1	%
Asset-backed	578,357		4.1	%
Utilities	219,452		1.5	%
Other	109,983		0.8	%
Total corporate	3,254,149		22.8	%
Foreign government and foreign government agencies	1,090,472		7.6	%
Total fixed maturity securities	11,892,412		83.3	%
Equity securities available for sale:
Common stocks	324,881		2.3	%
Preferred stocks	100,441		0.7	%
Total equity securities available for sale	425,322		3.0	%
Investment funds	747,638		5.2	%
Real estate	433,686		3.0	%
Arbitrage trading account	417,446		2.9	%
Loans receivable	371,408		2.6	%
Total investments	$	14,287,912	100.0	%

______________    

(1) Pre-refunded securities are securities for which an escrow account has been established to fund the remaining payments of principal and interest through maturity. Such escrow accounts are funded almost exclusively with U.S. Treasury and U.S. government agency securities.

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Fixed Maturity Securities. The Company’s investment policy with respect to fixed maturity securities is generally to purchase instruments with the expectation of holding them to their maturity. However, management of the available for sale portfolio is considered necessary to maintain an approximate matching of assets and liabilities as well as to adjust the portfolio as a result of changes in financial market conditions and tax considerations.

The Company’s philosophy related to holding or selling fixed maturity securities is based on its objective of maximizing total return. The key factors that management considers in its investment decisions as to whether to hold or sell fixed maturity securities are its view of the underlying fundamentals of specific securities as well as its expectations regarding interest rates, credit spreads and currency values. In a period in which management expects interest rates to rise, the Company may sell longer duration securities in order to mitigate the impact of an interest rate rise on the fair value of the portfolio. Similarly, in a period in which management expects credit spreads to widen, the Company may sell lower quality securities, and in a period in which management expects certain foreign currencies to decline in value, the Company may sell securities denominated in those foreign currencies. The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result in realized gains; however, there is no reason to expect these gains to continue in future periods.

At September 30, 2012, investments in foreign fixed maturity securities were as follows:

(Dollars in thousands)	Government		Corporate		Total
Australia	$	204,583	$	113,990	$	318,573
United Kingdom	139,804		33,693		173,497
Canada	121,137		51,321		172,458
Argentina	124,833		24,559		149,392
Germany	94,056		27,461		121,517
Brazil	46,650		—		46,650
Norway	38,092				38,092
Supranational (1)	36,950		—		36,950
Netherlands			11,511		11,511
Switzerland	—		11,231		11,231
Singapore	6,990		—		6,990
Uruguay	3,187		—		3,187
New Zealand	424		—		424
Total	$	816,706	$	273,766	$	1,090,472

_______________

(1) Supranational represents investments in the North American Development Bank, European Investment Bank and Inter-American Development Bank.

Equity Securities Available for Sale. Equity securities available for sale primarily represent investments in high-dividend yielding common and preferred stocks issued by large market capitalization companies.

Investment Funds. At September 30, 2012, the carrying value of investment funds was $748 million, including investments in real estate funds of $382 million and investments in energy funds of $129 million.

Real Estate. Real estate is directly owned property held for investment. At September 30, 2012, real estate consists of three office buildings in London, including two in operation and one under development, and a long-term ground lease in Washington D. C.

Arbitrage Trading Account. The arbitrage trading account is comprised of direct investments in arbitrage securities. Merger arbitrage is the business of investing in the securities of publicly held companies that are the targets in announced tender offers and mergers.

Loans Receivable. Loans receivable, which are carried at amortized cost, have an aggregate cost of $371 million and an aggregate fair value of $364 million at September 30, 2012. Amortized cost of these loans is net of a valuation allowance of $6 million as of September 30, 2012. The five largest loans have an aggregate amortized cost of $217 million and an aggregate fair value of $212 million as of such date and are secured by commercial real estate. These loans earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The loans are secured by office buildings (72%) and hotels (28%) located primarily in New York City, California, Hawaii and Boston.

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Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest rates. The Company uses various models and stress test scenarios to monitor and manage interest rate risk. The Company attempts to manage its interest rate risk by maintaining an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration for the fixed maturity portfolio was 3.3 years at September 30, 2012 and 3.6 years at December 31, 2011. In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.

Liquidity and Capital Resources

Cash Flow. Cash flow provided from operating activities decreased to $453 million in 2012 from $485 million in 2011. The decrease in cash flow was due primarily to an increase in income taxes paid in 2012. Paid losses as a percent of earned premiums were 58.4% in 2012 compared with 60.1% in 2011.

As a holding company, the Company derives cash from its subsidiaries in the form of dividends, tax payments and management fees. Maximum amounts of dividends that can be paid without regulatory approval are prescribed by statute. During 2012, the maximum amount of dividends which can be paid without regulatory approval is approximately $417 million. The ability of the holding company to service its debt obligations is limited by the ability of its insurance subsidiaries to pay dividends. In the event dividends, tax payments and management fees available to the holding company were inadequate to service its debt obligations, the Company would need to raise capital, sell assets or restructure its debt obligations.

The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and proceeds from sales and maturities of portfolio investments. The principal uses of cash are payments for claims, taxes, operating expenses and dividends. The Company expects its insurance subsidiaries to fund the payment of losses with cash received from premiums, investment income and fees. The Company targets an average duration for its investment portfolio that is within one year of the average duration of its liabilities so that portions of its investment portfolio mature throughout the claim cycle and are available for the payment of claims if necessary. In the event operating cash flow and proceeds from maturities and prepayments of fixed income securities are not sufficient to fund claim payments and other cash requirements, the remainder of the Company's cash and investments is available to pay claims and other obligations as they become due. The Company's investment portfolio is highly liquid, with approximately 85% invested in cash, cash equivalents and marketable fixed maturity securities as of September 30, 2012. If the sale of fixed maturity securities were to become necessary, a realized gain or loss equal to the difference between the cost and sales price of securities sold would be recognized.

Debt. At September 30, 2012, the Company had senior notes, junior subordinated debentures and other debt outstanding with a carrying value of $2,121 million and a face amount of $2,141 million. The maturities of the outstanding debt are $14 million in 2012, $200 million in 2013, $47 million in 2014, $200 million in 2015, $2 million in 2016, $450 million in 2019, $300 million in 2020, $427 million in 2022, $1 million in 2023, $250 million in 2037 and $250 million in 2045.

Equity. At September 30, 2012, total common stockholders’ equity was $4.3 billion, common shares outstanding were approximately 136 million and stockholders’ equity per outstanding share was $31.81.

As further described in note 3 to the consolidated financial statements for the nine months ended September 30, 2012, the Company adopted FASB guidance regarding deferred acquisition costs effective January 1, 2012. The impact of adopting this guidance was a reduction in common stockholders' equity of $55 million as of January 1, 2012.

Total Capital.Total capitalization (equity, senior notes and other debt and junior subordinated debentures) was $6.4 billion at September 30, 2012. The percentage of the Company’s capital attributable to senior notes, junior subordinated debentures and other debt was 33% at September 30, 2012 and 31% at December 31, 2011.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Reference is made to the information under “Investments - Market Risk” under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.

Item 4. Controls and Procedures

Disclosure Controls and Procedures. The Company’s management, including its Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-14 as of the end of the period covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company has in place effective controls

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and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934 and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control over Financial Reporting. During the quarter ended September 30, 2012, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.Legal Proceedings

The Company’s subsidiaries are subject to disputes, including litigation and arbitration, arising in the ordinary course of their insurance and reinsurance businesses. The Company’s estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations.

Item 1A.Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2011.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Set forth below is a summary of the shares repurchased by the Company during the three months ended September 30, 2012 and the number of shares remaining authorized for purchase by the Company.

	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs (1)
July 2012	615,184	$	36.95	615,184	8,097,613
August 2012	1,243,583	37.08		1,243,583	9,350,298
September 2012	111,905	$	36.98	111,905	9,238,393

(1) The Company's repurchase authorization was increased to 10,000,000 shares on August 7, 2012.

Item 6.Exhibits

Number
(10.1)	Form of Restricted Stock Unit Agreement under the W. R. Berkley Corporation 2012 Stock Incentive Plan.
(31.1)	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
(31.2)	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
(32.1)	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

		W. R. BERKLEY CORPORATION
Date:	November 8, 2012	/s/ William R. Berkley
		William R. Berkley
		Chairman of the Board and Chief Executive Officer
Date:	November 8, 2012	/s/ Eugene G. Ballard
		Eugene G. Ballard
		Senior Vice President - Chief Financial Officer

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EX-10.1

Exhibit 10.1

RESTRICTED STOCK UNIT AGREEMENT

Under the W. R. Berkley Corporation 2012 Stock Incentive Plan

THIS AGREEMENT, dated as of__________, by and between W. R. BERKLEY CORPORATION, a Delaware corporation (the “Company”), and grantee as set forth on Exhibit A hereto (the “Grantee”).

WITNESSETH:

WHEREAS, the Grantee is an employee of the Company or subsidiary thereof (an “Employee”), and the Company wishes to grant the Grantee a notional interest in shares of the Company’s common stock, par value $0.20 per share (the “Stock”), in the form of restricted stock units subject to certain restrictions and on the terms and conditions set forth herein; and

WHEREAS, through the grant of these restricted stock units, the Company hopes to incentivize and retain the services of Grantee and encourage stock ownership by Grantee in order to give Grantee a proprietary interest in the Company's success and align Grantee’s interest with those of the stockholders of the Company; and

WHEREAS, the Restricted Stock Units (as defined below) awarded Grantee hereunder vest after five years, however the issuance of the Stock after vesting is deferred until ninety 90 days following Grantee’s separation from service (as such term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)).

WHEREAS, the Company and Grantee recognize that if Grantee engages in certain activities during or, in certain instances, following the termination of Grantee’s employment with the Company (the “Competitive Actions” or “Misconduct” as defined in Section 3 below), Grantee’s interests are no longer aligned with the interests of the Company and Grantee will no longer be entitled to retain certain benefits of the grants made herein.

NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties hereto hereby agree as follows:

SECTION 1.Grant of Restricted Stock Units. As of the date hereof, subject to the terms and conditions of this Agreement and the W. R. Berkley Corporation 2012 Stock Incentive Plan (the “Plan”), the Company hereby grants to the Grantee the number of restricted stock units set forth on Exhibit A hereto (the restricted stock units granted hereunder are hereafter referred to as the “Restricted Stock Units”). Each Restricted Stock Unit shall represent the right to receive one share of Stock subject to the terms and conditions set forth herein. Capitalized terms not defined herein shall have the meaning ascribed to them in the Plan. This grant shall be administered by the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”).

SECTION 2.Non‑Transferability. Except as specifically consented to by the Committee, the Grantee may not sell, transfer, pledge, or otherwise encumber or dispose of the

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Restricted Stock Units other than by will, the laws of descent and distribution, or as otherwise provided for in the Plan.

SECTION 3.Vesting; Forfeiture; Recapture.

(a)The Restricted Stock Units granted hereunder shall vest (subject to forfeiture, as set forth in Section 3(d) below) on the fifth anniversary of the date hereof, provided the Grantee has remained an Employee from the date hereof through such fifth anniversary. In the event that Grantee’s employment with the Company is terminated on account of death or Disability (as defined below), a pro-rata portion of the Restricted Stock Units shall vest (subject to forfeiture, as set forth in Section 3(d) below) immediately upon such termination. The number of Restricted Stock Units that will vest upon termination on account of death or Disability shall be the total number of Restricted Stock Units granted hereunder multiplied by a fraction, the numerator of which is the number of days the Grantee served as an Employee from the date of this Agreement to the date of such termination and the denominator of which is one thousand eight hundred twenty five (1,825). Notwithstanding the vesting schedule set forth above, the Committee shall have absolute discretion to accelerate the vesting (subject to forfeiture, as set forth in Section 3(d) below) of the Restricted Stock Units at any time and for any reason, including without limitation retirement. The earlier of the date the Restricted Stock Units vest on account of (i) death or Disability, (ii) the fifth anniversary of the date hereof if Grantee has remained an Employee or (iii) upon the Committee’s determination to accelerate vesting shall hereinafter be referred to as the “Vesting Date”.

(b)In the event that Grantee’s employment with the Company is terminated for any reason, all unvested Restricted Stock Units (except for those that vest immediately upon termination) shall be forfeited, and the Grantee shall have no further rights with respect to such Restricted Stock Units.

(c)For purposes of this Agreement, the Grantee’s employment will be deemed to have terminated on account of a Disability if such termination was on account of the total and permanent disability of the Grantee, as determined by the Committee in its sole discretion.

(d)The Restricted Stock Units granted hereunder shall be subject to the following forfeiture and recapture provisions as provided below:

A. In the event that the Committee determines that the Grantee, prior to the Vesting Date during Grantee’s employment, has engaged in a Competitive Action or enters into, or has entered into, an agreement (written, oral or otherwise) to engage in a Competitive Action or has engaged in Misconduct, all of the unvested Restricted Stock Units granted hereunder shall be immediately forfeited, and the Grantee shall have no further rights with respect to such Restricted Stock Units.

B. In the event that the Committee determines that the Grantee, (1) on or after the Vesting Date during Grantee’s employment or for a period of one year following Grantee’s termination of employment for any reason, has engaged in a Competitive Action or has entered into an

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agreement (written, oral or otherwise) to engage in a Competitive Action, or (2) on or after the Vesting Date, has engaged in Misconduct, or prior to the Vesting Date Grantee has engaged in Misconduct that is not discovered or acted upon by the Company until on or after the Vesting Date, (x) the Grantee shall forfeit all shares of Stock not yet delivered to Grantee with respect to the Restricted Stock Units and all rights to future payments of Dividend Equivalents (as defined below), and (y) the Grantee shall pay to the Company, upon demand by the Company, an amount equal to (i) the value, as of the Settlement Date (as defined below), of the number of shares of Stock delivered to the Grantee with respect to the Restricted Stock Units, (ii) all amounts paid to the Grantee on or at any time prior to the Settlement Date in respect of Dividend Equivalents, and (iii) the value of all dividends, if any, paid to the Grantee in respect of the shares of Stock delivered to the Grantee on the Settlement Date. The Grantee may satisfy the payment obligation to the Company of the portion due under (i) above by returning the shares delivered to the Grantee on the Settlement Date, provided that any amounts due under (ii) and (iii) above must be remitted to the Company in addition to the return of the shares.

C. Grantee acknowledges that engaging in (1) a Competitive Action during the Noncompete Period within the geographic areas set forth in Section 3(e) below or (2) Misconduct is contrary to the interests of the Company and would result in irreparable injuries to the Company and would cause loss in an amount that cannot be readily quantified. Grantee acknowledges that retaining the amounts required to be paid to the Company pursuant to this Section 3(d) once Grantee has (x) chosen to engage in or to agree to engage in a Competitive Action or (y) engaged in Misconduct is contrary to the interests of the Company. The amounts forfeited or paid to the Company hereunder do not and are not intended to constitute actual or liquidated damages. Any action or inaction by the Company with respect to enforcing the forfeiture or recapture provisions set forth herein shall not reduce, eliminate or in any way affect the Company’s right to enforce the forfeiture or recapture provisions in any other agreement with Grantee.

D. The term “Noncompete Period” as used herein shall mean the period beginning on the date hereof and ending one year following Grantee’s termination of employment for any reason.

E. Furthermore, if the Grantee engages in Misconduct, then the Company shall be entitled to, and reserves the right to, pursue any other legal or equitable remedies in addition to the right to receive forfeitures and/or payments pursuant to this Section 3(d).

(e)         For purposes of this Agreement, the Grantee has engaged in a "Competitive Action" if, either directly or indirectly, and whether as an employee, consultant, independent contractor, partner, joint venturer or otherwise, the Grantee (i) who was employed by W. R. Berkley Corporation, engages in or directs any business activities, in or directed into any geographical area where the Company is engaged in business, which are competitive with any business activities conducted by the Company in such geographical area, (ii) who was employed by a subsidiary or subsidiaries of the Company, engages in or directs any business activities, in or directed into any geographical area where such subsidiary, or subsidiaries that previously employed Grantee, is or are engaged in business or outside of any such geographical

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area, in either case, which are competitive with any business activities conducted by such subsidiary or subsidiaries in such geographical area, (iii) on behalf of any person or entity engaged in business activities competitive with the business activities of the Company, solicits or induces, or in any manner attempts to solicit or induce, any person employed by, or as an agent or producer of, the Company to terminate such person's employment, agency or producer relationship, as the case may be, with the Company, (iv) diverts, or attempts to divert, any person, concern or entity from doing business with the Company or attempts to induce any such person, concern or entity to cease being a customer of the Company, (v) solicits the business of the Company or (vi) makes use of, or attempts to make use of, the Company's property or proprietary information, other than in the course of the performance of services to the Company or at the direction of the Company. The determination as to whether the Grantee has engaged in a Competitive Action shall be made by the Committee in its sole and absolute discretion. The Committee has sole and absolute discretion to determine whether, notwithstanding its determination that Grantee has engaged in a Competitive Action, recapture or forfeiture as provided herein shall not occur. The Committee’s exercise or nonexercise of its discretion with respect to any particular event or occurrence by or with respect to the Grantee or any other recipient of restricted stock units shall not in any way reduce or eliminate the authority of the Committee to (i) determine that any event or occurrence by or with respect to the Grantee constitutes engaging in a Competitive Action or (ii) determine the related Competitive Action date.

(f)        For purposes of this Agreement, the Grantee has engaged in “Misconduct” if the Grantee, during Grantee’s employment with the Company, has engaged in an act which would, in the judgment of the Committee, constitute fraud that could be punishable as a crime or embezzlement against either the Company or one of its subsidiaries. The determination as to whether the Grantee has engaged in Misconduct shall be made by the Committee in its sole and absolute discretion. The Committee has sole and absolute discretion to determine whether, notwithstanding its determination that Grantee has engaged in Misconduct, recapture or forfeiture as provided herein shall not occur. The Committee’s exercise or nonexercise of such discretion with respect to any particular event or occurrence by or with respect to the Grantee or any other recipient of restricted stock units shall not in any way reduce or eliminate the authority of the Committee to (i) determine that any event or occurrence by or with respect to the Grantee constitutes an act of Misconduct or (ii) determine the related Misconduct date.

(g)        During the Noncompete Period the Grantee shall not (i) on behalf of any person or entity engaged in business activities competitive with the business activities of the Company, solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as an agent or producer of, the Company to terminate such person's employment, agency or producer relationship, as the case may be, with the Company, (ii) divert, or attempt to divert, any person, concern or entity from doing business with the Company or attempt to induce any such person, concern or entity to cease being a customer of the Company, (iii) solicit the business of the Company or (iv) make use of, or attempt to make use of, the Company's property or proprietary information, other than in the course of the performance of services to the Company or at the direction of the Company. If in the event of a violation of this Section 3(g), then the Company shall be entitled to, and reserves the right to, pursue any legal or equitable remedies,

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including, but not limited to, the recovery of monetary damages resulting from such action set forth in this Section 3(g) and injunctive relief, in addition to the right to receive forfeitures and/or payments pursuant to Section 3(d).

(h)        The Grantee hereby agrees to notify the Company within ten (10) days of commencing any employment or other service provider relationship with any company or business during the Noncompete Period, specifying in reasonable detail (i) the name of such company or business and the line of business in which it is engaged, and (ii) the Grantee’s position or title and the types of services to be rendered by the Grantee in such position or title. The Grantee hereby acknowledges that this notice requirement is reasonable and necessary for the Company to enforce the provisions of Sections 3(d) and 3(g) hereof. Furthermore, if the Grantee fails to so notify the Company, the Grantee shall be required to repay (at the Committee’s sole discretion) to the Company the amounts described in Section 3(d) hereof as if the Grantee had engaged in a Competitive Action during the Noncompete Period, unless the Grantee can provide dispositive evidence, which shall be determined in the Committee’s sole discretion, that a Competitive Action did not occur.

SECTION 4.Delivery and Possession of Share Certificates. Ninety (90) days following the Grantee’s “separation from service” (for purposes of Section 409A of the Code) for any reason, including death or Disability, (the “Settlement Date”), provided the Grantee has not engaged in, or entered into an agreement (written, oral or otherwise) to engage in, a Competitive Action or has not engaged in Misconduct, the Company shall deliver to the Grantee (or the Grantee’s estate in the event of death) a certificate or certificates representing the number of shares of Stock equal to the number of vested Restricted Stock Units (if any) as of the date of such separation from service and Grantee shall take possession thereof; provided, however, that if the Grantee is a “specified employee” pursuant to Section 409A(a)(2)(B)(i) of the Code, distribution of shares of Stock shall be delayed for such period of time as may be necessary to satisfy Section 409A(a)(2)(B)(i) of the Code (generally six months), and on the earliest date on which such distribution can be made following such delay without violating the requirements of Section 409A(a)(2)(B)(i) of the Code, the Company shall deliver to the Grantee a certificate or certificates representing the number of shares of Stock equal to the number of such vested Restricted Stock Units. A delay shall not be required to the extent the Grantee terminates employment on account of death or Disability, provided that in the event of a Disability the Grantee is “disabled” within the meaning of Section 409A(a)(2)(C) of the Code, in which case the Restricted Stock Units shall be settled ninety (90) days following the occurrence of such death or Disability. Notwithstanding anything herein to the contrary, in the event of a Change of Control, the Restricted Stock Units shall immediately become fully vested and no longer subject to forfeiture and, provided the event that constitutes a Change of Control also constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A(a)(2)(A)(v) of the Code and the regulations promulgated thereunder, the Company shall immediately deliver to the Grantee (or the Grantee’s estate in the event of death) a certificate or certificates representing the number of shares of Stock equal to the number of vested Restricted Stock Units.

SECTION 5.Dividends and Dividend Equivalents. No dividends or dividend equivalents shall accrue or be paid with respect to any outstanding unvested Restricted Stock

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Units. On the second Tuesday of each January, April, July and October (each, a “Dividend Equivalent Payment Date”) occurring during the period commencing on the Vesting Date and ending on the Settlement Date, the Grantee shall be paid an amount in cash, with respect to each vested Restricted Stock Unit then outstanding and held by such Grantee, equal to the aggregate cash dividends paid by the Company in respect of one share of Stock (the “Dividend Equivalent”) following the immediately prior Dividend Equivalent Payment Date, or with respect to the first Dividend Equivalent Payment Date only, on or following the Vesting Date; provided, however, that with respect to the first Dividend Equivalent Payment Date, no Dividend Equivalents shall be paid to the Grantee in respect of any cash dividends declared or paid by the Company prior to such Vesting Date. To the extent a cash dividend is paid by the Company on or prior to the Settlement Date but the Dividend Equivalent Payment Date relating thereto would not occur prior to the Settlement Date, the Dividend Equivalents relating thereto shall be paid to the Grantee on the Settlement Date. The Grantee’s right to future payments of Dividend Equivalents shall be subject to forfeiture to the same extent that the corresponding Restricted Stock Units are subject to forfeiture pursuant to Section 3.

SECTION 6.Rights of Stockholder. Neither Grantee nor any transferee will have any rights as a stockholder with respect to any share covered by this Agreement until the Grantee or transferee becomes the holder of record of such shares.

SECTION 7.Company; Grantee.

(a)The term “Company” as used in Section 3 or otherwise in this Agreement with reference to the Grantee’s employment shall include the Company and its subsidiaries. The term “subsidiary” as used in this Agreement shall mean any subsidiary of the Company within the meaning of Section 424(f) of the Code.

(b)Whenever the word “Grantee” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Restricted Stock Units may be transferred by will or by the laws of descent and distribution, the word “Grantee” shall be deemed to include such person or persons.

SECTION 8.Compliance with Law. Notwithstanding any of the provisions hereof, the Grantee hereby agrees and the Company will not be obligated to issue or transfer shares to Grantee hereunder, if the issuance or transfer of such shares will constitute a violation by the Grantee or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Committee will be final, binding and conclusive. The Company shall in no event be obliged to register any securities pursuant to the Securities Act or to take any other affirmative action in order to cause the issuance or transfer of shares acquired pursuant to this Agreement to comply with any law or regulation of any governmental authority. The terms with respect to any deferral of the Restricted Stock Units are subject to change and amendment to comply with any applicable laws or regulations, including Section 409A of the Code.

SECTION 9.Notice. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at

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such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided, provided that, unless and until some other address be so designated, all notices or communications by the Grantee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to the Grantee may be given to the Grantee personally or may be mailed to Grantee at the Grantee’s last known address, as reflected in the Company’s records.

SECTION 10.Changes in Capital Structure. The existence of this Agreement will not affect in any way the right or power of the Company or its stockholders to make or authorize any of the following:

(a)     any adjustments, recapitalization, reorganizations or other changes in the Company’s capital structure or its business;

(b)    any merger or consolidation of the Company;

(c)     any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred to prior preference stocks ahead of or affecting the Stock or the rights thereof or convertible into or exchangeable for Stock;

(d)    the dissolution or liquidation of the Company;

(e)    any sale or transfer of all or any part of its assets or business; or

(f)    any other corporate act or proceeding.

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SECTION 11.Other Share Issues. Except as expressly provided in the Plan, the issue by the Company of shares of stock of any class, or securities convertible into or exchangeable for shares of stock of any class, for cash, property or services, either upon direct sale or upon the exercise of options, rights or warrants, or upon conversion of shares or obligations of the Company convertible into such shares or other securities will not affect, and no adjustment by reason thereof will be made with respect to, the number of shares subject to this Agreement.

SECTION 12.Withholding. At the time of vesting and/or settlement of the Restricted Stock Units, as appropriate, the Committee shall require the Grantee to pay to the Company an amount sufficient to pay all federal, state and local withholding taxes applicable (including FICA taxes upon vesting), in the Committee's judgment, to the vesting or settlement of the Restricted Stock Units, and the Grantee’s right to vesting and/or settlement, as appropriate, shall be contingent upon such payment. Such payment to the Company may be effected through (a) payment by the recipient to the Company of the aggregate withholding taxes in cash or cash equivalents; (b) at the discretion of the Committee, the Company's withholding from the number of shares of Stock that would otherwise be delivered to the Grantee upon settlement of the Restricted Stock Units, a number of shares of Stock with an aggregate fair market value on the date of settlement (as determined by the Committee) equal to the aggregate amount of withholding taxes; or (c) at the discretion of the Committee, any combination of these two methods.

SECTION 13.Grantee’s Tax Considerations. The tax impact of the award hereunder can be quite complex and will vary with each Grantee. It is recommended that each Grantee review such Grantee’s own tax situation and consult their tax advisor.

SECTION 14.Waiver of Right To Trial by Jury. BOTH PARTIES HEREBY WAIVE AND RELEASE ANY CLAIM UNDER STATE OR FEDERAL LAW THEY MAY HAVE HAD TO A JURY TRIAL IN CONNECTION WITH CLAIMS ARISING UNDER OR RELATED TO THIS AGREEMENT OR ANY ACTIONS TAKEN OR DETERMINATIONS MADE HEREUNDER.

SECTION 15.No Right to Continued Service. This Agreement does not confer upon the Grantee any right to continue as an Employee of the Company, nor shall it interfere in any way with the right of the Company to terminate Grantee’s employment at any time for any reason.

SECTION 16.Agreement Confidentiality. Grantee understands and agrees that Grantee will keep the terms and conditions of this Agreement strictly confidential unless Grantee is compelled to do otherwise by a court of competent jurisdiction, and Grantee further agrees not to disclose the terms and conditions of this Agreement to any third party other than Grantee’s immediate family members, attorney, financial advisor, or accountant, all of whom must also agree to keep these terms and conditions strictly confidential unless compelled to do otherwise by a court of competent jurisdiction.

SECTION 17.Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.    

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SECTION 18.The Plan. The terms and provisions of the Plan are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall govern. The Grantee hereby acknowledges that he has received a copy of the Plan and understands and agrees to the terms thereof. This Agreement, together with the Plan, constitutes the entire agreement by and between the parties hereto with respect to the subject matter hereof, and this Agreement and the Plan supersede all prior agreements, correspondence and understandings and all prior and contemporaneous oral agreements and understandings, among the parties hereto with regard to the subject matter hereof.

SECTION 19. Governing Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Grantee hereby irrevocably consents to the exclusive personal jurisdiction of the federal and State courts of the State of Delaware for the resolution of any disputes arising out of, or relating to, this Agreement. In any action arising under or relating to this Agreement, the court shall not have the authority to, and shall not, conduct a de novo review of any determination made by the Committee or the Company but is instead authorized to determine solely whether the determination was the result of fraud or bad faith under Delaware law.

SECTION 20. Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision or provisions of this Agreement, which shall remain in full force and effect. If any provision of this Agreement is held to be invalid, void or unenforceable in any jurisdiction, any court so holding shall substitute a valid, enforceable provision that preserves, to the maximum lawful extent, the terms and intent of such provisions of this Agreement. If any of the provisions of, or covenants contained in, this Agreement are hereafter construed to be invalid or unenforceable in any jurisdiction, the same shall not affect the remainder of the provisions or the enforceability thereof in any other jurisdiction, which shall be given full effect, without regard to the invalidity or unenforceability in such other jurisdiction. Any such holding shall affect such provision of this Agreement, solely as to that jurisdiction, without rendering that or any other provisions of this Agreement invalid, illegal or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered excessive, such covenant will be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable.

SECTION 21. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

*    *    *

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

W. R. BERKLEY CORPORATION

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By:    ___________________________

Name: William R. Berkley

Title: Chairman and CEO

__________________________________

Grantee

Address of Grantee:

__________________________________    

__________________________________

__________________________________

RSU.Agreement.L8(8.2012)

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EXHIBIT A

TO THE RESTRICTED STOCK UNIT AGREEMENT DATED

AS OF _________UNDER THE W. R. BERKLEY CORPORATION

2012 STOCK INCENTIVE PLAN.

NAME OF GRANTEE: ________________________________________

NUMBER OF RESTRICTED STOCK UNITS AWARDED GRANTEE: _____________

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, William R. Berkley, Chairman of the Board and Chief Executive Officer of W. R. Berkley Corporation (the “registrant”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2012

/s/ William R. Berkley  

William R. Berkley 

Chairman of the Board and

Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Eugene G. Ballard, Senior Vice President-Chief Financial Officer of W. R. Berkley Corporation (the “registrant”), certify that:

1. I have reviewed this quarterly report on Form 10-Q of the registrant;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2012

/s/ Eugene G. Ballard

Eugene G. Ballard

Senior Vice President -

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of W. R. Berkley Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, William R. Berkley, Chairman of the Board and Chief Executive Officer of the Company, and Eugene G. Ballard, Senior Vice President-Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William R. Berkley

William R. Berkley

Chairman of the Board and Chief Executive Officer

/s/ Eugene G. Ballard

Eugene G. Ballard

Senior Vice President — Chief Financial Officer

November 8, 2012

A signed original of this written statement required by Section 906 has been provided to W. R. Berkley Corporation (the “Company”) and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Restricted Stock Units (Tables)

9 Months Ended

Sep. 30, 2012

Restricted Stock Units [Abstract]

Summary Of Restricted Stock Units Issued

A summary of RSUs issued in the nine months ended September 30,2012 and 2011 follows:

(dollars in thousands)	Units	Fair Value
Nine months ended September 30:
2012	2,114,720	$	78,351
2011	53,250	$	1,674

XML

Realized and Unrealized Investment Gains (Losses) (Change in Unrealized Gains (Losses) of Available For Sales Securities) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Financing Receivable, Allowance for Credit Losses, Period Increase (Decrease)	$ 7,280	$ 9	$ 14,053	$ (541)
Change in unrealized gains (losses) before income taxes and noncontrolling interests	99,924	39,515	194,520	121,068
Income tax expense	(34,963)	(14,268)	(68,000)	(42,893)
Noncontrolling interests	(43)	1	(71)	(11)
Total change in unrealized gains	64,918	25,248	126,449	78,164
Fixed Maturities Securities [Member]
Change in unrealized gains (losses) before income taxes and noncontrolling interests	96,077	115,933	186,637	187,851
Non-Credit Portion of OTTI Recognized In Other Comprehensive Income [Member]
Change in unrealized gains (losses) before income taxes and noncontrolling interests	2,483	(1,300)	4,416	(1,956)
Equity Securities Available For Sale [Member]
Change in unrealized gains (losses) before income taxes and noncontrolling interests	(2,891)	(65,861)	186	(59,760)
Investment Funds [Member]
Change in unrealized gains (losses) before income taxes and noncontrolling interests	$ 4,255	$ (9,257)	$ 3,281	$ (5,067)

XML

Arbitrage Trading Account and Arbitrage Funds (Fair Value and Carrying Value of the Arbitrage Trading Account and Arbitrage Funds and Related Assets and Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Arbitrage Trading Account And Arbitrage Funds [Abstract]
Arbitrage trading account	$ 417,446	$ 397,312

XML

Securities in an Unrealized Loss Position (Securities in an Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Less than 12 Months	$ 815,924	$ 939,018
Gross Unrealized Losses, Less than 12 Months	8,724	18,853
Fair Value, 12 Months or Greater	374,005	460,375
Gross Unrealized Losses, 12 Months or Greater	35,482	73,449
Fair Value, Total	1,189,929	1,399,393
Gross Unrealized Losses, Total	44,206	92,302
U.S. Government And Government Agency [Member]
Fair Value, Less than 12 Months	51,405	24,668
Gross Unrealized Losses, Less than 12 Months	1,283	169
Fair Value, 12 Months or Greater	0	4,800
Gross Unrealized Losses, 12 Months or Greater	0	182
Fair Value, Total	51,405	29,468
Gross Unrealized Losses, Total	1,283	351
State And Municipal [Member]
Fair Value, Less than 12 Months	49,594	131,417
Gross Unrealized Losses, Less than 12 Months	558	827
Fair Value, 12 Months or Greater	184,408	183,205
Gross Unrealized Losses, 12 Months or Greater	14,304	15,723
Fair Value, Total	234,002	314,622
Gross Unrealized Losses, Total	14,862	16,550
Mortgage-Backed Securities [Member]
Fair Value, Less than 12 Months	259,508	172,729
Gross Unrealized Losses, Less than 12 Months	3,338	2,439
Fair Value, 12 Months or Greater	65,349	94,243
Gross Unrealized Losses, 12 Months or Greater	4,876	14,473
Fair Value, Total	324,857	266,972
Gross Unrealized Losses, Total	8,214	16,912
Corporate [Member]
Fair Value, Less than 12 Months	313,080	341,764
Gross Unrealized Losses, Less than 12 Months	1,784	8,327
Fair Value, 12 Months or Greater	78,646	125,654
Gross Unrealized Losses, 12 Months or Greater	14,003	27,760
Fair Value, Total	391,726	467,418
Gross Unrealized Losses, Total	15,787	36,087
Foreign [Member]
Fair Value, Less than 12 Months	101,200	197,560
Gross Unrealized Losses, Less than 12 Months	516	4,078
Fair Value, 12 Months or Greater	5,508	7,159
Gross Unrealized Losses, 12 Months or Greater	104	571
Fair Value, Total	106,708	204,719
Gross Unrealized Losses, Total	620	4,649
Fixed Maturity Securities [Member]
Fair Value, Less than 12 Months	774,787	868,138
Gross Unrealized Losses, Less than 12 Months	7,479	15,840
Fair Value, 12 Months or Greater	333,911	415,061
Gross Unrealized Losses, 12 Months or Greater	33,287	58,709
Fair Value, Total	1,108,698	1,283,199
Gross Unrealized Losses, Total	40,766	74,549
Common Stock [Member]
Fair Value, Less than 12 Months	34,702	47,098
Gross Unrealized Losses, Less than 12 Months	291	2,888
Fair Value, 12 Months or Greater	0	0
Gross Unrealized Losses, 12 Months or Greater	0	0
Fair Value, Total	34,702	47,098
Gross Unrealized Losses, Total	291	2,888
Preferred Stock [Member]
Fair Value, Less than 12 Months	6,435	23,782
Gross Unrealized Losses, Less than 12 Months	954	125
Fair Value, 12 Months or Greater	40,094	45,314
Gross Unrealized Losses, 12 Months or Greater	2,195	14,740
Fair Value, Total	46,529	69,096
Gross Unrealized Losses, Total	3,149	14,865
Equity Securities Available For Sale [Member]
Fair Value, Less than 12 Months	41,137	70,880
Gross Unrealized Losses, Less than 12 Months	1,245	3,013
Fair Value, 12 Months or Greater	40,094	45,314
Gross Unrealized Losses, 12 Months or Greater	2,195	14,740
Fair Value, Total	81,231	116,194
Gross Unrealized Losses, Total	$ 3,440	$ 17,753

XML

Investments in Fixed Maturity Securities (The Amortized Cost and Fair Value of Fixed Maturity Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Investments in Fixed Maturity Securities [Abstract]
Amortized Cost, Due in one year or less	$ 877,420
Amortized Cost, Due after one year through five years	3,223,807
Amortized Cost, Due after five years through ten years	2,422,530
Amortized Cost, Due after ten years	2,973,511
Amortized Cost, Mortgage-backed securities	1,644,940
Total investment in fixed maturity securities, Amortized Cost	11,142,208	10,754,156
Fair Value, Due in one year or less	896,040
Fair Value, Due after one year through five years	3,416,358
Fair Value, Due after five years through ten years	2,688,914
Fair Value, Due after ten years	3,206,362
Fair Value, Mortgage-backed securities	1,709,048
Total investments in fixed maturity securities, Fair Value	$ 11,916,722	$ 11,330,910

XML

Loans Receivable Loans Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2012

Loans Receivable [Abstract]

Schedule of Loans Receivable

Loans receivable are as follows:

(Dollars in thousands)	September 30, 2012			December 31, 2011
Total loans receivable	$	371,408		$	263,187
Valuation allowance:
Specific	$	3,080		$	19,041
General	2,674			764
Total	$	5,754		$	19,805
Impaired loans:
With a specific valuation allowance	$	2,362		$	29,702
Without a valuation allowance	30,299			30,357
Unpaid principal balance	35,660			93,922
For the Nine Months Ended September 30,	2012			2011
Increase (decrease) in valuation allowance	$	(14,053	)	$	541
Loans receivable charged off	139			9
For the Three Months Ended September 30,
Decrease in valuation allowance	(7,280		)	(9		)
Loans receivable charged off	54			9

XML

Securities In An Unrealized Loss Position Securities in an Unrealized Loss Position (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012
Number of securities	28
Preferred Stock [Member]
Number of securities	5
Aggregate fair value	47
Gross unrealized loss	3
Number of investment-grade,. available for sale equity securities, continous unrealized loss	4
Non-investment grade aggregate fair value	21
Non-investment grade gross unrealized loss	2
Common Stock [Member]
Number of securities	3
Aggregate fair value	35
Gross unrealized loss	0

XML

Industry Segments

9 Months Ended

Sep. 30, 2012

Industry Segments Disclosure [Abstract]

Industry Segments

Industry Segments

The Company’s operations are presently conducted in five segments of the insurance business: Specialty, Regional, Alternative Markets, Reinsurance and International.

Our Specialty lines companies underwrite risks within the excess and surplus lines market and on an admitted basis. The risks are highly complex, often unique exposures that typically fall outside the underwriting guidelines of the standard insurance market or are best served by specialized knowledge of a particular industry. The Specialty lines of business include premises operations, commercial automobile, property, products liability and professional liability lines. The customers in this segment are highly diverse. Operating units deliver their products through a variety of distribution channels, depending on the customer base and particular risks insured.

Our Regional companies provide insurance products and services that meet the specific needs of each regionally differentiated customer base by developing expertise in the niches that drive local communities. They provide commercial insurance products to customers primarily in 45 states and the District of Columbia. Key clients of this segment are small-to-mid-sized businesses and state and local governmental entities. The Regional business is sold through a network of non-exclusive independent agents who are compensated on a commission basis. Our Regional operating units are organized geographically in order to provide them with the flexibility to adapt quickly to local market conditions and customer needs.

Our Alternative Markets operating units offer insurance products, analytical tools and risk management services such as loss control and claims management that enable clients to select their risk tolerance and manage it appropriately. These units specialize in insuring, reinsuring and administering self-insurance programs and other alternative risk transfer mechanisms for clients such as commercial and governmental entity employers, employer groups, insurers, and other groups or entities seeking alternative ways to manage their exposure to risks. In addition to providing insurance products, the Alternative Markets segment also provides a wide variety of fee-based services, including claims, administrative and consulting services.

Our Reinsurance companies provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance.

Our International operating units write business in almost 40 countries worldwide, with branches or offices in 15 locations outside the United States, including the United Kingdom, Continental Europe, South America, Australia, the Asia Pacific region, Scandinavia and Canada. In each of our international operating territories, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our International businesses are managed by teams of professionals with expertise in local markets and knowledge of regional environments.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company’s overall effective tax rate.

Summary financial information about the Company’s operating segments is presented in the following table. Income before income taxes by segment consists of revenues, less expenses, related to the respective segment’s operations, including allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.

	Revenues
(Dollars in thousands)	Earned Premiums		Investment Income		Other		Total		Pre-Tax Income (Loss)			Net Income (Loss)
For the three months ended September 30, 2012
Specialty	$	420,165	$	36,245	$	577	$	456,987	$	59,846		$	42,731
Regional	276,629		16,174		1,695		294,498		33,219			23,296
Alternative Markets	177,041		30,146		23,936		231,123		39,433			28,824
Reinsurance	111,599		19,112		—		130,711		21,118			15,732
International	201,099		12,448		—		213,547		15,736			7,141
Corporate and eliminations (1)	—		1,894		69,515		71,409		(57,885		)	(31,588		)
Net investment gains	—		—		22,226		22,226		22,226			14,811
Consolidated	$	1,186,533	$	116,019	$	117,949	$	1,420,501	$	133,693		$	100,947
For the three months ended September 30, 2011
Specialty	$	367,417	$	37,438	$	664	$	405,519	$	70,590		$	51,206
Regional	267,142		16,099		1,207		284,448		(11,163		)	(4,969		)
Alternative Markets	156,820		25,931		20,408		203,159		32,984			25,124
Reinsurance	103,906		18,641		—		122,547		16,109			13,148
International	160,538		10,741		—		171,279		13,919			9,650
Corporate and eliminations (1)	—		5,213		66,328		71,541		(47,531		)	(31,533		)
Net investment gains	—		—		21,238		21,238		21,238			13,784
Consolidated	$	1,055,823	$	114,063	$	109,845	$	1,279,731	$	96,146		$	76,410
For the nine months ended September 30, 2012:
Specialty	$	1,215,417	$	138,491	$	1,788	$	1,355,696	$	204,573		$	145,270
Regional	809,072		60,780		4,770		874,622		79,211			56,884
Alternative Markets	506,149		116,036		70,563		692,748		141,089			102,012
Reinsurance	327,452		70,435		—		397,887		74,742			54,837
International	575,451		39,788		—		615,239		50,685			22,553
Corporate and eliminations (1)	—		9,358		175,400		184,758		(174,868		)	(98,196		)
Net investment gains	—		—		94,003		94,003		94,003			61,743
Consolidated	$	3,433,541	$	434,888	$	346,524	$	4,214,953	$	469,435		$	345,103
For the nine months ended September 30, 2011:
Specialty	$	1,047,567	$	138,868	$	2,065	$	1,188,500	$	237,613		$	170,918
Regional	795,423		59,459		3,377		858,259		(2,770		)	5,251
Alternative Markets	454,156		96,072		64,049		614,277		116,007			86,798
Reinsurance	315,220		72,230		—		387,450		66,782			51,975
International	443,198		32,692		—		475,890		27,420			18,253
Corporate and eliminations (1)	—		9,940		177,303		187,243		(154,096		)	(105,921		)
Net investment gains	—		—		73,412		73,412		73,412			46,910
Consolidated	$	3,055,564	$	409,261	$	320,206	$	3,785,031	$	364,368		$	274,184

Identifiable assets by segment are as follows:

(Dollars in thousands)	September 30, 2012		December 31, 2011
Specialty	$	6,600,690	$	6,157,853
Regional	2,568,126		2,488,940
Alternative Markets	4,324,409		4,044,915
Reinsurance	2,954,710		2,732,489
International	1,880,346		1,569,749
Corporate and eliminations	1,604,631		1,409,927
Consolidated	$	19,932,912	$	18,403,873

___________

(1) Corporate and eliminations represent corporate revenues and expenses that are not allocated to business segments.

Net premiums earned by major line of business are as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Specialty
Premises operations	$	135,662	$	119,496	$	386,491	$	331,457
Property	68,767		59,578		202,602		174,690
Professional liability	63,519		58,739		188,680		167,748
Workers’ compensation	43,448		29,166		122,228		86,683
Commercial automobile	42,335		36,440		121,027		102,055
Products liability	27,444		24,954		78,731		71,856
Other	38,990		39,044		115,658		113,078
Total specialty	420,165		367,417		1,215,417		1,047,567
Regional
Commercial multiple peril	104,331		98,200		305,978		292,030
Commercial automobile	72,486		72,537		213,398		217,021
Workers’ compensation	57,194		55,133		166,809		163,602
Other	42,618		41,272		122,887		122,770
Total regional	276,629		267,142		809,072		795,423
Alternative Markets
Primary workers’ compensation	88,655		70,172		243,494		199,768
Excess workers’ compensation	34,179		40,038		105,051		126,940
Accident and health	34,461		27,894		101,701		75,002
Other liability	8,477		8,412		24,756		21,075
Other	11,269		10,304		31,147		31,371
Total alternative markets	177,041		156,820		506,149		454,156
Reinsurance
Casualty	80,643		75,917		232,698		228,529
Property	30,956		27,989		94,754		86,691
Total reinsurance	111,599		103,906		327,452		315,220
International
Automobile	30,557		26,334		90,831		80,585
Casualty reinsurance	32,378		19,650		88,686		52,717
Property	27,418		22,327		79,039		59,430
Professional liability	24,348		24,982		74,356		69,875
Primary workers’ compensation	21,102		18,884		59,618		54,480
Marine	21,741		14,487		59,125		36,050
Accident and health	11,870		9,994		39,932		30,515
Property reinsurance	11,250		6,680		31,281		16,062
Other liability	14,308		9,348		31,919		23,780
Fidelity and surety	6,127		7,852		20,664		19,704
Total international	201,099		160,538		575,451		443,198
Total	$	1,186,533	$	1,055,823	$	3,433,541	$	3,055,564

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Investment Funds Investment Funds (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Investment Holdings [Line Items]
Carrying Value	$ 747,638		$ 747,638		$ 680,638
Income (Losses) from Investment Funds	117,831	114,729	439,240	411,866
Real Estate Funds [Member]
Investment Holdings [Line Items]
Carrying Value	381,986		381,986		373,413
Energy Fund [Member]
Investment Holdings [Line Items]
Carrying Value	129,376		129,376		98,974
Arbitrage [Member]
Investment Holdings [Line Items]
Carrying Value	61,049		61,049		58,008
Other [Member]
Investment Holdings [Line Items]
Carrying Value	175,227		175,227		150,243
Investment Funds [Member]
Investment Holdings [Line Items]
Income (Losses) from Investment Funds			50,124	21,069
Investment Funds [Member] | Real Estate Funds [Member]
Investment Holdings [Line Items]
Income (Losses) from Investment Funds			13,513	14,977
Investment Funds [Member] | Energy Fund [Member]
Investment Holdings [Line Items]
Income (Losses) from Investment Funds			28,966	10,947
Investment Funds [Member] | Arbitrage [Member]
Investment Holdings [Line Items]
Income (Losses) from Investment Funds			3,041	(2,767)
Investment Funds [Member] | Other [Member]
Investment Holdings [Line Items]
Income (Losses) from Investment Funds			$ 4,604	$ (2,088)

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Per Share Data (Weighted Average Number of Common Shares Used In the Computation of Basic and Diluted Earnings per Share) (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share [Abstract]
Basic	136,553	138,816	137,512	140,535
Diluted	141,637	144,538	142,941	146,553

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Reinsurance (Tables)

9 Months Ended

Sep. 30, 2012

Reinsurance Disclosures [Abstract]

Reinsurance Financial Information

The following is a summary of reinsurance financial information:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Written premiums:
Direct	$	1,267,882		$	1,114,494		$	3,718,477		$	3,286,220
Assumed	226,842			191,806			608,693			535,214
Ceded	(218,837		)	(180,161		)	(656,766		)	(554,577		)
Total net premiums written	$	1,275,887		$	1,126,139		$	3,670,404		$	3,266,857
Earned premiums:
Direct	$	1,208,257		$	1,070,279		$	3,475,375		$	3,063,410
Assumed	193,024			165,208			559,304			489,020
Ceded	(214,748		)	(179,664		)	(601,138		)	(496,866		)
Total net premiums earned	$	1,186,533		$	1,055,823		$	3,433,541		$	3,055,564
Ceded losses incurred	$	114,273		$	134,027		$	308,692		$	329,139

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Loans Receivable (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Loans Receivable [Line Items]
Loans receivable	$ 371,408,000			$ 371,408,000		$ 263,187,000
Valuation allowance of loans receivable	5,754,000			5,754,000		19,805,000
Impaired loans, with a valuation allowance at cost	2,362,000			2,362,000		29,702,000
Impaired loans, without a valuation allowance at cost	30,299,000			30,299,000		30,357,000
Impaired loans, unpaid principal balance	35,660,000			35,660,000		93,922,000
Decrease in valuation allowance	(7,280,000)	(9,000)		(14,053,000)	541,000
Loans receivable charged off	54,000	9,000		139,000	9,000
Loans and Leases Receivable, Impaired, Nonperforming, Nonaccrual of Interest	31,000,000			31,000,000		30,000,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans			0	600,000
Aggregate Amortized Cost Of Six Largest Loans	217,000,000			217,000,000
Aggregate Fair Value Of Six Largest Loans	212,000,000			212,000,000
Aggregate Cost Basis Of Loans Considered Impaired	30,000,000			30,000,000
Debt Service Coverage Ratio	3.0			3.0
Specific Valuation Allowance [Member]
Loans Receivable [Line Items]
Valuation allowance of loans receivable	3,080,000			3,080,000		19,041,000
General Valuation Allowance [Member]
Loans Receivable [Line Items]
Valuation allowance of loans receivable	$ 2,674,000			$ 2,674,000		$ 764,000

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Industry Segments (Net Premiums Earned By Major Line of Business) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net premiums earned	$ 1,186,533	$ 1,055,823	$ 3,433,541	$ 3,055,564
Specialty Segment [Member]
Net premiums earned	420,165	367,417	1,215,417	1,047,567
Regional Segment [Member]
Net premiums earned	276,629	267,142	809,072	795,423
Alternative Markets Segment [Member]
Net premiums earned	177,041	156,820	506,149	454,156
Reinsurance Segment [Member]
Net premiums earned	111,599	103,906	327,452	315,220
International Segment [Member]
Net premiums earned	201,099	160,538	575,451	443,198
Premises Operations [Member] | Specialty Segment [Member]
Net premiums earned	135,662	119,496	386,491	331,457
Property [Member] | Specialty Segment [Member]
Net premiums earned	68,767	59,578	202,602	174,690
Property [Member] | Reinsurance Segment [Member]
Net premiums earned	30,956	27,989	94,754	86,691
Property [Member] | International Segment [Member]
Net premiums earned	27,418	22,327	79,039	59,430
Professional Liability [Member] | Specialty Segment [Member]
Net premiums earned	63,519	58,739	188,680	167,748
Professional Liability [Member] | International Segment [Member]
Net premiums earned	24,348	24,982	74,356	69,875
Commercial Automobile [Member] | Specialty Segment [Member]
Net premiums earned	42,335	36,440	121,027	102,055
Commercial Automobile [Member] | Regional Segment [Member]
Net premiums earned	72,486	72,537	213,398	217,021
Products Liability [Member] | Specialty Segment [Member]
Net premiums earned	27,444	24,954	78,731	71,856
Other [Member] | Specialty Segment [Member]
Net premiums earned	38,990	39,044	115,658	113,078
Other [Member] | Regional Segment [Member]
Net premiums earned	42,618	41,272	122,887	122,770
Other [Member] | Alternative Markets Segment [Member]
Net premiums earned	11,269	10,304	31,147	31,371
Commercial Multiple Peril [Member] | Regional Segment [Member]
Net premiums earned	104,331	98,200	305,978	292,030
Workers' Compensation [Member] | Specialty Segment [Member]
Net premiums earned	43,448	29,166	122,228	86,683
Workers' Compensation [Member] | Regional Segment [Member]
Net premiums earned	57,194	55,133	166,809	163,602
Workers' Compensation [Member] | International Segment [Member]
Net premiums earned	21,102	18,884	59,618	54,480
Marine [Domain] | International Segment [Member]
Net premiums earned	21,741	14,487	59,125	36,050
Primary Workers Compensation [Member] | Alternative Markets Segment [Member]
Net premiums earned	88,655	70,172	243,494	199,768
Casualty [Member] | Reinsurance Segment [Member]
Net premiums earned	80,643	75,917	232,698	228,529
Excess Workers Compensation [Member] | Alternative Markets Segment [Member]
Net premiums earned	34,179	40,038	105,051	126,940
Accident and Health | Alternative Markets Segment [Member]
Net premiums earned	34,461	27,894	101,701	75,002
Accident and Health | International Segment [Member]
Net premiums earned	11,870	9,994	39,932	30,515
Property Reinsurance [Domain] | International Segment [Member]
Net premiums earned	11,250	6,680	31,281	16,062
Automobile [Member] | International Segment [Member]
Net premiums earned	30,557	26,334	90,831	80,585
Casualty Reinsurance [Domain] | International Segment [Member]
Net premiums earned	32,378	19,650	88,686	52,717
Other Liability [Member] | Alternative Markets Segment [Member]
Net premiums earned	8,477	8,412	24,756	21,075
Other Liability [Member] | International Segment [Member]
Net premiums earned	14,308	9,348	31,919	23,780
Fidelity and Surety [Domain] | International Segment [Member]
Net premiums earned	$ 6,127	$ 7,852	$ 20,664	$ 19,704

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Reinsurance (Reinsurance Financial Information) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Reinsurance Disclosures [Abstract]
Written premiums, direct	$ 1,267,882,000	$ 1,114,494,000	$ 3,718,477,000	$ 3,286,220,000
Written premiums, assumed	226,842,000	191,806,000	608,693,000	535,214,000
Written premiums, ceded	(218,837,000)	(180,161,000)	(656,766,000)	(554,577,000)
Total net premiums written	1,275,887,000	1,126,139,000	3,670,404,000	3,266,857,000
Earned premiums, direct	1,208,257,000	1,070,279,000	3,475,375,000	3,063,410,000
Earned premiums, assumed	193,024,000	165,208,000	559,304,000	489,020,000
Earned premiums, ceded	(214,748,000)	(179,664,000)	(601,138,000)	(496,866,000)
Net premiums earned	1,186,533,000	1,055,823,000	3,433,541,000	3,055,564,000
Ceded losses incurred	114,273,000	134,027,000	308,692,000	329,139,000
Uncollectible reinsurance	$ 2,000,000		$ 2,000,000

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Investments in Equity Securities Available for Sale (Investments in Equity Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Cost	$ 324,090	$ 342,393
Gross Unrealized, Gains	104,672	118,799
Gross Unrealized, Losses	(3,440)	(17,753)
Fair Value	425,322	443,439
Carrying Value	425,322	443,439
Common Stock [Member]
Cost	228,524	209,210
Gross Unrealized, Gains	96,648	113,660
Gross Unrealized, Losses	(291)	(2,888)
Fair Value	324,881	319,982
Carrying Value	324,881	319,982
Preferred Stock [Member]
Cost	95,566	133,183
Gross Unrealized, Gains	8,024	5,139
Gross Unrealized, Losses	(3,149)	(14,865)
Fair Value	100,441	123,457
Carrying Value	$ 100,441	$ 123,457

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Per Share Data

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Per Share Data

Per Share Data

The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS is based upon the weighted average number of common and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. Stock options for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on EPS and, accordingly, are excluded from the calculation.

The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows (amounts in thousands):

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2012	2011	2012	2011
Basic	136,553	138,816	137,512	140,535
Diluted	141,637	144,538	142,941	146,553

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Fair Value of Financial Instruments (Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Assets
Fixed maturity securities	$ 11,892,412	$ 11,312,037
Fixed maturity securities, fair value	11,916,722	11,330,910
Equity securities available for sale	425,322	443,439
Equity securities available for sale, fair value	425,322	443,439
Arbitrage trading account	417,446	397,312
Arbitrage trading account, fair value	417,446	397,312
Loans receivable	371,408	263,187
Loans receivable, fair value	363,875	245,169
Cash and cash equivalents	1,189,564	911,742	866,130	642,952
Cash and cash equivalents, fair value	1,189,564	911,742
Trading account receivables from brokers and clearing organizations	387,352	318,240
Trading account receivables from brokers and clearing organizations, fair value	387,352	318,240
Due from broker	0	10,875
Due from broker fair value	0	10,875
Liabilities
Trading account securities sold but not yet purchased	149,405	62,514
Trading account securities sold but not yet purchased, fair value	149,405	62,514
Due to broker	82,746	0
Due to broker, fair value	82,746	0
Junior subordinated debentures	243,154	242,997
Junior subordinated debentures, fair value	254,800	258,400
Senior notes and other debt	1,877,431	1,500,503
Senior notes and other debt, fair value	$ 2,110,492	$ 1,587,473

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Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2010	Dec. 31, 2011
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets					$ 51,000,000
Deferred policy acquisition costs	400,727,000		400,727,000			364,937,000
Stockholders equity	4,324,401,000		4,324,401,000			3,953,356,000
Other operating expenses	451,487,000	407,149,000	1,332,024,000	1,196,936,000
Income before income taxes	133,693,000	96,146,000	469,435,000	364,368,000
Federal and foreign income taxes	(32,685,000)	(19,775,000)	(124,291,000)	(90,282,000)
Net Income (Loss)	100,947,000	76,410,000	345,103,000	274,184,000
Earnings Per Share, Basic	$ 0.74	$ 0.55	$ 2.51	$ 1.95
Earnings Per Share, Diluted	$ 0.71	$ 0.53	$ 2.41	$ 1.87
Scenario, Previously Reported [Member]
Deferred policy acquisition costs						448,795,000
Deferred tax liabilities						31,623,000
Stockholders equity						4,008,426,000
Other operating expenses	405,850,000			1,193,040,000
Income before income taxes	97,445,000			368,264,000
Federal and foreign income taxes	(20,176,000)			(91,485,000)
Net Income (Loss)	77,308,000			276,877,000
Earnings Per Share, Basic	$ 0.56			$ 1.97
Earnings Per Share, Diluted	$ 0.53			$ 1.89
Restatement Adjustment [Member]
Deferred policy acquisition costs						364,937,000
Deferred tax liabilities						2,835,000
Stockholders equity						3,953,356,000
Other operating expenses	407,149,000			1,196,936,000
Income before income taxes	96,146,000			364,368,000
Federal and foreign income taxes	(19,775,000)			(90,282,000)
Net Income (Loss)	$ 76,410,000			$ 274,184,000
Earnings Per Share, Basic	$ 0.55			$ 1.95
Earnings Per Share, Diluted	$ 0.53			$ 1.87

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Investments In Fixed Maturity Securities (Tables)

9 Months Ended

Sep. 30, 2012

Investments in Fixed Maturity Securities [Abstract]

Investments In Fixed Maturity Securities

At September 30, 2012 and December 31, 2011, investments in fixed maturity securities were as follows:

(Dollars in thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Held to maturity:
State and municipal	$	64,301	$	17,979	$	—		$	82,280	$	64,301
Residential mortgage-backed	34,065		5,661		—			39,726		34,065
Corporate	4,997		670		—			5,667		4,997
Total held to maturity	103,363		24,310		—			127,673		103,363
Available for sale:
U.S. government and government agency	858,190		80,406		(1,283		)	937,313		937,313
State and municipal	4,509,239		348,413		(14,862		)	4,842,790		4,842,790
Mortgage-backed securities:
Residential (1)	1,458,059		61,231		(7,976		)	1,511,314		1,511,314
Commercial	152,816		5,430		(238		)	158,008		158,008
Corporate	3,052,275		212,664		(15,787		)	3,249,152		3,249,152
Foreign	1,008,266		82,826		(620		)	1,090,472		1,090,472
Total available for sale	11,038,845		790,970		(40,766		)	11,789,049		11,789,049
Total investments in fixed maturity securities	$	11,142,208	$	815,280	$	(40,766	)	$	11,916,722	$	11,892,412
December 31, 2011
Held to maturity:
State and municipal	$	74,354	$	12,546	$	—		$	86,900	$	74,354
Residential mortgage-backed	35,759		5,610		—			41,369		35,759
Corporate	4,996		717		—			5,713		4,996
Total held to maturity	115,109		18,873		—			133,982		115,109
Available for sale:
U.S. government and government agency	906,924		69,920		(351		)	976,493		976,493
State and municipal	5,031,275		308,345		(16,550		)	5,323,070		5,323,070
Mortgage-backed securities:
Residential (1)	1,416,427		75,635		(15,894		)	1,476,168		1,476,168
Commercial	105,383		4,054		(1,018		)	108,419		108,419
Corporate	2,328,200		132,311		(36,087		)	2,424,424		2,424,424
Foreign	850,838		42,165		(4,649		)	888,354		888,354
Total available for sale	10,639,047		632,430		(74,549		)	11,196,928		11,196,928
Total investments in fixed maturity securities	$	10,754,156	$	651,303	$	(74,549	)	$	11,330,910	$	11,312,037

___________

(1) Gross unrealized losses for residential mortgage-backed securities include $3,251,000 and $7,668,000 as of September 30, 2012 and December 31, 2011, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in other comprehensive income.

The Amortized Cost And Fair Value of Fixed Maturity Securities

The amortized cost and fair value of fixed maturity securities at September 30, 2012, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.

(Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	877,420	$	896,040
Due after one year through five years	3,223,807		3,416,358
Due after five years through ten years	2,422,530		2,688,914
Due after ten years	2,973,511		3,206,362
Mortgage-backed securities	1,644,940		1,709,048
Total	$	11,142,208	$	11,916,722

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Recent Accounting Pronouncements Recent Accounting Pronouncements (Tables)

9 Months Ended

Sep. 30, 2012

Recent Accounting Pronouncements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

A summary of the impact of the adoption of this new guidance is shown below (dollars in thousands except per share amounts):

	Previously Reported			As Adjusted
At December 31, 2011:
Deferred policy acquisition costs	$	448,795		$	364,937
Deferred tax liability	31,623			2,835
Stockholders' equity	4,008,426			3,953,356
For the Nine Months Ended September 30, 2011:
Other operating costs and expenses	$	1,193,040		$	1,196,936
Income before income taxes	368,264			364,368
Federal and foreign income taxes	(91,485		)	(90,282		)
Net income	276,877			274,184
Basic net income per share	$	1.97		$	1.95
Diluted net income per share	1.89			1.87
For the Three Months Ended September 30, 2011:
Other operating costs and expenses	$	405,850		$	407,149
Income before income taxes	97,445			96,146
Federal and foreign income taxes	(20,176		)	(19,775		)
Net income	77,308			76,410
Basic net income per share	$	0.56		$	0.55
Diluted net income per share	0.53			0.53

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Securities in an Unrealized Loss Position (Non-Investment Grade Fixed Maturity Securities) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Number of securities	28
Aggregate Fair Value	$ 132,601
Gross Unrealized Loss	9,108
Unrealized Loss Less than 5 Million [Member] | Mortgage-Backed Securities [Member]
Number of securities	13
Aggregate Fair Value	71,135
Gross Unrealized Loss	4,908
Unrealized Loss Less than 5 Million [Member] | Corporate [Member]
Number of securities	11
Aggregate Fair Value	28,841
Gross Unrealized Loss	2,003
Unrealized Loss Less than 5 Million [Member] | State And Municipal [Member]
Number of securities	4
Aggregate Fair Value	32,625
Gross Unrealized Loss	$ 2,197

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Statements of Cash Flow (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Supplemental Cash Flow Information [Abstract]
Interest payments	$ 109,045,000	$ 100,840,000
Income taxes paid	$ 114,343,000	$ 42,797,000

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Investments In Equity Securities Available For Sale (Tables)

9 Months Ended

Sep. 30, 2012

Available-for-sale Securities [Abstract]

Available-for-sale Securities [Table Text Block]

At September 30, 2012 and December 31, 2011, investments in equity securities available for sale were as follows:

(Dollars in thousands)	Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Common stocks	$	228,524	$	96,648	$	(291	)	$	324,881	$	324,881
Preferred stocks	95,566		8,024		(3,149		)	100,441		100,441
Total	$	324,090	$	104,672	$	(3,440	)	$	425,322	$	425,322
December 31, 2011
Common stocks	$	209,210	$	113,660	$	(2,888	)	$	319,982	$	319,982
Preferred stocks	133,183		5,139		(14,865		)	123,457		123,457
Total	$	342,393	$	118,799	$	(17,753	)	$	443,439	$	443,439

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Net Investment Income (Tables)

9 Months Ended

Sep. 30, 2012

Net Investment Income [Abstract]

Net Investment Income [Table Text Block]

Net investment income consists of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Investment income (losses) earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	121,454		$	120,252		$	360,577		$	365,365
Investment funds	(13,118		)	(10,820		)	50,124			21,069
Arbitrage trading account	2,397			(346		)	8,938			10,696
Equity securities available for sale	4,001			2,795			10,980			9,544
Real estate	3,097			2,848			8,621			5,192
Gross investment income	117,831			114,729			439,240			411,866
Investment expense	(1,812		)	(666		)	(4,352		)	(2,605		)
Net investment income	$	116,019		$	114,063		$	434,888		$	409,261

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General

9 Months Ended

Sep. 30, 2012

General Policies Disclosure [Abstract]

General

General

The accompanying unaudited consolidated financial statements of W. R. Berkley Corporation and its subsidiaries (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. The preparation of financial statements requires the use of management estimates. For further information related to a description of areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Reclassifications have been made in the 2011 financial statements as originally reported to conform to the presentation of the 2012 financial statements.

The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective tax rate for the quarter differs from the federal income tax rate of 35% principally because of tax-exempt investment income.

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Investment Funds Investment Funds (Tables)

9 Months Ended

Sep. 30, 2012

Investment Funds [Abstract]

Schedule of Investment Funds

Investment funds consist of the following:

	Carrying Value as of				Income (Losses) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,
(Dollars in thousands)	2012		2011		2012		2011
Real estate	$	381,986	$	373,413	$	13,513	$	14,977
Energy	129,376		98,974		28,966		10,947
Arbitrage	61,049		58,008		3,041		(2,767		)
Other	175,227		150,243		4,604		(2,088		)
Total	$	747,638	$	680,638	$	50,124	$	21,069

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Industry Segments (Tables)

9 Months Ended

Sep. 30, 2012

Industry Segments Disclosure [Abstract]

Financial Information Of Company Operating Segments

Summary financial information about the Company’s operating segments is presented in the following table. Income before income taxes by segment consists of revenues, less expenses, related to the respective segment’s operations, including allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.

	Revenues
(Dollars in thousands)	Earned Premiums		Investment Income		Other		Total		Pre-Tax Income (Loss)			Net Income (Loss)
For the three months ended September 30, 2012
Specialty	$	420,165	$	36,245	$	577	$	456,987	$	59,846		$	42,731
Regional	276,629		16,174		1,695		294,498		33,219			23,296
Alternative Markets	177,041		30,146		23,936		231,123		39,433			28,824
Reinsurance	111,599		19,112		—		130,711		21,118			15,732
International	201,099		12,448		—		213,547		15,736			7,141
Corporate and eliminations (1)	—		1,894		69,515		71,409		(57,885		)	(31,588		)
Net investment gains	—		—		22,226		22,226		22,226			14,811
Consolidated	$	1,186,533	$	116,019	$	117,949	$	1,420,501	$	133,693		$	100,947
For the three months ended September 30, 2011
Specialty	$	367,417	$	37,438	$	664	$	405,519	$	70,590		$	51,206
Regional	267,142		16,099		1,207		284,448		(11,163		)	(4,969		)
Alternative Markets	156,820		25,931		20,408		203,159		32,984			25,124
Reinsurance	103,906		18,641		—		122,547		16,109			13,148
International	160,538		10,741		—		171,279		13,919			9,650
Corporate and eliminations (1)	—		5,213		66,328		71,541		(47,531		)	(31,533		)
Net investment gains	—		—		21,238		21,238		21,238			13,784
Consolidated	$	1,055,823	$	114,063	$	109,845	$	1,279,731	$	96,146		$	76,410
For the nine months ended September 30, 2012:
Specialty	$	1,215,417	$	138,491	$	1,788	$	1,355,696	$	204,573		$	145,270
Regional	809,072		60,780		4,770		874,622		79,211			56,884
Alternative Markets	506,149		116,036		70,563		692,748		141,089			102,012
Reinsurance	327,452		70,435		—		397,887		74,742			54,837
International	575,451		39,788		—		615,239		50,685			22,553
Corporate and eliminations (1)	—		9,358		175,400		184,758		(174,868		)	(98,196		)
Net investment gains	—		—		94,003		94,003		94,003			61,743
Consolidated	$	3,433,541	$	434,888	$	346,524	$	4,214,953	$	469,435		$	345,103
For the nine months ended September 30, 2011:
Specialty	$	1,047,567	$	138,868	$	2,065	$	1,188,500	$	237,613		$	170,918
Regional	795,423		59,459		3,377		858,259		(2,770		)	5,251
Alternative Markets	454,156		96,072		64,049		614,277		116,007			86,798
Reinsurance	315,220		72,230		—		387,450		66,782			51,975
International	443,198		32,692		—		475,890		27,420			18,253
Corporate and eliminations (1)	—		9,940		177,303		187,243		(154,096		)	(105,921		)
Net investment gains	—		—		73,412		73,412		73,412			46,910
Consolidated	$	3,055,564	$	409,261	$	320,206	$	3,785,031	$	364,368		$	274,184

Identifiable Assets By Segment

Identifiable assets by segment are as follows:

(Dollars in thousands)	September 30, 2012		December 31, 2011
Specialty	$	6,600,690	$	6,157,853
Regional	2,568,126		2,488,940
Alternative Markets	4,324,409		4,044,915
Reinsurance	2,954,710		2,732,489
International	1,880,346		1,569,749
Corporate and eliminations	1,604,631		1,409,927
Consolidated	$	19,932,912	$	18,403,873

___________

(1) Corporate and eliminations represent corporate revenues and expenses that are not allocated to business segments.

Net Premiums Earned By Major Line Of Business

Net premiums earned by major line of business are as follows:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
(Dollars in thousands)	2012		2011		2012		2011
Specialty
Premises operations	$	135,662	$	119,496	$	386,491	$	331,457
Property	68,767		59,578		202,602		174,690
Professional liability	63,519		58,739		188,680		167,748
Workers’ compensation	43,448		29,166		122,228		86,683
Commercial automobile	42,335		36,440		121,027		102,055
Products liability	27,444		24,954		78,731		71,856
Other	38,990		39,044		115,658		113,078
Total specialty	420,165		367,417		1,215,417		1,047,567
Regional
Commercial multiple peril	104,331		98,200		305,978		292,030
Commercial automobile	72,486		72,537		213,398		217,021
Workers’ compensation	57,194		55,133		166,809		163,602
Other	42,618		41,272		122,887		122,770
Total regional	276,629		267,142		809,072		795,423
Alternative Markets
Primary workers’ compensation	88,655		70,172		243,494		199,768
Excess workers’ compensation	34,179		40,038		105,051		126,940
Accident and health	34,461		27,894		101,701		75,002
Other liability	8,477		8,412		24,756		21,075
Other	11,269		10,304		31,147		31,371
Total alternative markets	177,041		156,820		506,149		454,156
Reinsurance
Casualty	80,643		75,917		232,698		228,529
Property	30,956		27,989		94,754		86,691
Total reinsurance	111,599		103,906		327,452		315,220
International
Automobile	30,557		26,334		90,831		80,585
Casualty reinsurance	32,378		19,650		88,686		52,717
Property	27,418		22,327		79,039		59,430
Professional liability	24,348		24,982		74,356		69,875
Primary workers’ compensation	21,102		18,884		59,618		54,480
Marine	21,741		14,487		59,125		36,050
Accident and health	11,870		9,994		39,932		30,515
Property reinsurance	11,250		6,680		31,281		16,062
Other liability	14,308		9,348		31,919		23,780
Fidelity and surety	6,127		7,852		20,664		19,704
Total international	201,099		160,538		575,451		443,198
Total	$	1,186,533	$	1,055,823	$	3,433,541	$	3,055,564

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Realized and Unrealized Investment Gains (Losses) (Realized and Unrealized Investment Gains (Losses) (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Realized And Unrealized Investment Gains (Losses)
Fixed maturity securities, gains	$ 4,439,000		$ 10,212,000		$ 25,046,000		$ 25,049,000
Fixed maturity securities, losses	(1,937,000)		(2,207,000)		(4,243,000)		(4,716,000)
Equity securities available for sale	14,447,000		12,318,000		58,873,000		50,539,000
Other	0		0		1,535,000		0
Sales of investment funds	277,000		915,000		3,778,000		2,940,000
Provision for OTTI	5,000,000	[1]	0	[1]	9,014,000	[1]	(400,000)	[1]
Net investment gains	22,226,000		21,238,000		94,003,000		73,412,000
Income tax expense	(7,415,000)		(7,454,000)		(32,260,000)		(26,502,000)
Total net investment gains	14,811,000		13,784,000		61,743,000		46,910,000
Financing Receivable, Allowance for Credit Losses, Period Increase (Decrease)	(7,280,000)		(9,000)		(14,053,000)		541,000
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Additions, No Previous Impairment					$ 5,000,000

[1] For the nine months ended September 30, 2012, this represents a change in valuation allowance of $14 million, partially offset by an other-than-temporary impairment of $5 million

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Investments:
Fixed maturity securities	$ 11,892,412	$ 11,312,037
Equity securities available for sale	425,322	443,439
Arbitrage trading account	417,446	397,312
Investment funds	747,638	680,638
Loans receivable	371,408	263,187
Real estate	433,686	342,905
Total investments	14,287,912	13,439,518
Cash and cash equivalents	1,189,564	911,742
Premiums and fees receivable	1,409,246	1,206,204
Due from reinsurers	1,309,463	1,215,679
Accrued investment income	131,790	133,776
Prepaid reinsurance premiums	311,355	258,271
Deferred policy acquisition costs	400,727	364,937
Real estate, furniture and equipment	258,368	262,275
Goodwill	87,865	87,865
Trading account receivables from brokers and clearing organizations	387,352	318,240
Current federal and foreign income taxes	5,122	9,670
Other assets	154,148	195,696
Total assets	19,932,912	18,403,873
Liabilities:
Reserves for losses and loss expenses	9,562,877	9,337,134
Unearned premiums	2,480,449	2,189,575
Due to reinsurers	303,424	241,204
Trading account securities sold but not yet purchased	149,405	62,514
Deferred federal and foreign income taxes	69,968	2,835
Other liabilities	912,357	866,229
Junior subordinated debentures	243,154	242,997
Senior notes and other debt	1,877,431	1,500,503
Total liabilities	15,599,065	14,442,991
Equity:
Preferred stock, par value $.10 per share: Authorized 5,000,000 shares; issued and outstanding - none	0	0
Common stock, par value $.20 per share:Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 135,956,622 and 137,520,019 shares	47,024	47,024
Additional paid-in capital	936,915	941,109
Retained earnings	4,800,537	4,491,162
Accumulated other comprehensive income	508,152	354,851
Treasury stock, at cost, 99,161,296 and 97,597,899 shares	(1,968,227)	(1,880,790)
Total stockholders' equity	4,324,401	3,953,356
Noncontrolling interests	9,446	7,526
Total equity	4,333,847	3,960,882
Total liabilities and equity	$ 19,932,912	$ 18,403,873

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Investments in Fixed Maturity Securities (Investments in Fixed Maturity Securities) (Details) (USD $)	Sep. 30, 2012		Dec. 31, 2011
Total held to maturity, Amortized Cost	$ 103,363,000		$ 115,109,000
Total held to maturity, Gross Unrealized Gains	24,310,000		18,873,000
Total held to maturity, Gross Unrealized Losses	0		0
Total held to maturity, Fair Value	127,673,000		133,982,000
Total held to maturity, Carrying Value	103,363,000		115,109,000
Total available for sale, Amortized Cost	11,038,845,000		10,639,047,000
Total available for sale, Gross Unrealized Gains	790,970,000		632,430,000
Total available for sale, Gross Unrealized Losses	(40,766,000)		(74,549,000)
Total available for sale, Fair Value	11,789,049,000		11,196,928,000
Total available for sale, Carrying Value	11,789,049,000		11,196,928,000
Total investment in fixed maturity securities, Amortized Cost	11,142,208,000		10,754,156,000
Total investments in fixed maturity securities, Gross Unrealized Gains	815,280,000		651,303,000
Total investments in fixed maturity securities, Gross Unrealized Losses	(40,766,000)		(74,549,000)
Total investments in fixed maturity securities, Fair Value	11,916,722,000		11,330,910,000
Total investments in fixed maturity securities, carrying value	11,892,412,000		11,312,037,000
Minimum ownership of Common stockholders equity	10.00%
U.S. Government And Government Agency [Member]
Total available for sale, Amortized Cost	858,190,000		906,924,000
Total available for sale, Gross Unrealized Gains	80,406,000		69,920,000
Total available for sale, Gross Unrealized Losses	(1,283,000)		(351,000)
Total available for sale, Fair Value	937,313,000		976,493,000
Total available for sale, Carrying Value	937,313,000		976,493,000
State And Municipal [Member]
Total available for sale, Amortized Cost	4,509,239,000		5,031,275,000
Total available for sale, Gross Unrealized Gains	348,413,000		308,345,000
Total available for sale, Gross Unrealized Losses	(14,862,000)		(16,550,000)
Total available for sale, Fair Value	4,842,790,000		5,323,070,000
Total available for sale, Carrying Value	4,842,790,000		5,323,070,000
Residential Mortgage-Backed [Member]
Total available for sale, Amortized Cost	1,458,059,000	[1]	1,416,427,000	[1]
Total available for sale, Gross Unrealized Gains	61,231,000	[1]	75,635,000	[1]
Total available for sale, Gross Unrealized Losses	(7,976,000)	[1]	(15,894,000)	[1]
Total available for sale, Fair Value	1,511,314,000	[1]	1,476,168,000	[1]
Total available for sale, Carrying Value	1,511,314,000	[1]	1,476,168,000	[1]
Non-credit portion of other-than-temporary impairments ("OTTI")	3,251,000		7,668,000
Commercial Mortgage-Backed Securities [Member]
Total available for sale, Amortized Cost	152,816,000		105,383,000
Total available for sale, Gross Unrealized Gains	5,430,000		4,054,000
Total available for sale, Gross Unrealized Losses	(238,000)		(1,018,000)
Total available for sale, Fair Value	158,008,000		108,419,000
Total available for sale, Carrying Value	158,008,000		108,419,000
Corporate [Member]
Total available for sale, Amortized Cost	3,052,275,000		2,328,200,000
Total available for sale, Gross Unrealized Gains	212,664,000		132,311,000
Total available for sale, Gross Unrealized Losses	(15,787,000)		(36,087,000)
Total available for sale, Fair Value	3,249,152,000		2,424,424,000
Total available for sale, Carrying Value	3,249,152,000		2,424,424,000
Foreign [Member]
Total available for sale, Amortized Cost	1,008,266,000		850,838,000
Total available for sale, Gross Unrealized Gains	82,826,000		42,165,000
Total available for sale, Gross Unrealized Losses	(620,000)		(4,649,000)
Total available for sale, Fair Value	1,090,472,000		888,354,000
Total available for sale, Carrying Value	1,090,472,000		888,354,000
State And Municipal [Member]
Total held to maturity, Amortized Cost	64,301,000		74,354,000
Total held to maturity, Gross Unrealized Gains	17,979,000		12,546,000
Total held to maturity, Gross Unrealized Losses	0		0
Total held to maturity, Fair Value	82,280,000		86,900,000
Total held to maturity, Carrying Value	64,301,000		74,354,000
Residential Mortgage-Backed [Member]
Total held to maturity, Amortized Cost	34,065,000		35,759,000
Total held to maturity, Gross Unrealized Gains	5,661,000		5,610,000
Total held to maturity, Gross Unrealized Losses	0		0
Total held to maturity, Fair Value	39,726,000		41,369,000
Total held to maturity, Carrying Value	34,065,000		35,759,000
Corporate [Member]
Total held to maturity, Amortized Cost	4,997,000		4,996,000
Total held to maturity, Gross Unrealized Gains	670,000		717,000
Total held to maturity, Gross Unrealized Losses	0		0
Total held to maturity, Fair Value	5,667,000		5,713,000
Total held to maturity, Carrying Value	$ 4,997,000		$ 4,996,000

[1] Gross unrealized losses for residential mortgage-backed securities include $3,251,000 and $7,668,000 as of September 30, 2012 and December 31, 2011, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in other comprehensive income.

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
Net income before noncontrolling interests	$ 101,008	$ 76,371	$ 345,144	$ 274,086
Other comprehensive income (loss):
Change in unrealized foreign exchange gains (losses)	26,056	(30,957)	24,382	(21,104)
Unrealized holding gains (losses) on investment securities arising during the period, net of taxes	79,772	39,031	188,263	125,085
Reclassification adjustment for net investment losses included in net income, net of taxes	(14,811)	(13,784)	(61,743)	(46,910)
Change in unrecognized pension obligation, net of taxes	823	707	2,470	2,118
Other comprehensive income (loss)	91,840	(5,003)	153,372	59,189
Comprehensive income	192,848	71,368	498,516	333,275
Comprehensive (income) loss to the noncontrolling interests	(104)	40	(112)	87
Comprehensive income to common stockholders	$ 192,744	$ 71,408	$ 498,404	$ 333,362

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Fair Value Measurements (Assets and Liabilities Measured At Fair Value, On a Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value Assets Measured On Recurring Basis Total Assets	$ 12,631,817	$ 12,037,679
Fair Value, Assets Measured On Recurring Basis, Arbitrage Trading Account assets	387,352	318,240
Fair Value, Liabilities Measured On Recurring Basis, Securities Sold, Not Yet Purchased	149,405	62,514
Fixed Maturities Securities Available for Sale [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	11,789,049	11,196,928
Fixed Maturities Securities Available for Sale [Member] | U.S. Government And Government Agency [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	937,313	976,493
Fixed Maturities Securities Available for Sale [Member] | State And Municipal [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	4,842,790	5,323,070
Fixed Maturities Securities Available for Sale [Member] | Mortgage-Backed Securities [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	1,669,322	1,584,587
Fixed Maturities Securities Available for Sale [Member] | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	3,249,152	2,424,424
Fixed Maturities Securities Available for Sale [Member] | Foreign [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	1,090,472	888,354
Equity Securities Available For Sale [Member]
Total Equity Securities Available For Sale	425,322	443,439
Equity Securities Available For Sale [Member] | Common Stock [Member]
Total Equity Securities Available For Sale	324,881	319,982
Equity Securities Available For Sale [Member] | Preferred Stock [Member]
Total Equity Securities Available For Sale	100,441	123,457
Arbitrage Trading Account [Member]
Fair Value, Assets Measured On Recurring Basis, Arbitrage Trading Account assets	417,446	397,312
Level 1 [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	618,185	526,939
Fair Value, Liabilities Measured On Recurring Basis, Securities Sold, Not Yet Purchased	148,301	62,493
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member] | U.S. Government And Government Agency [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member] | State And Municipal [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member] | Mortgage-Backed Securities [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member] | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Fixed Maturities Securities Available for Sale [Member] | Foreign [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 1 [Member] | Equity Securities Available For Sale [Member]
Total Equity Securities Available For Sale	323,472	318,423
Level 1 [Member] | Equity Securities Available For Sale [Member] | Common Stock [Member]
Total Equity Securities Available For Sale	323,472	318,423
Level 1 [Member] | Equity Securities Available For Sale [Member] | Preferred Stock [Member]
Total Equity Securities Available For Sale	0	0
Level 1 [Member] | Arbitrage Trading Account [Member]
Fair Value, Assets Measured On Recurring Basis, Arbitrage Trading Account assets	294,713	208,516
Level 2 [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	11,942,942	11,428,199
Fair Value, Liabilities Measured On Recurring Basis, Securities Sold, Not Yet Purchased	1,084	0
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	11,723,545	11,129,100
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member] | U.S. Government And Government Agency [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	937,313	976,493
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member] | State And Municipal [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	4,842,790	5,323,070
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member] | Mortgage-Backed Securities [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	1,669,322	1,584,587
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member] | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	3,183,648	2,356,596
Level 2 [Member] | Fixed Maturities Securities Available for Sale [Member] | Foreign [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	1,090,472	888,354
Level 2 [Member] | Equity Securities Available For Sale [Member]
Total Equity Securities Available For Sale	97,449	111,154
Level 2 [Member] | Equity Securities Available For Sale [Member] | Common Stock [Member]
Total Equity Securities Available For Sale	0	0
Level 2 [Member] | Equity Securities Available For Sale [Member] | Preferred Stock [Member]
Total Equity Securities Available For Sale	97,449	111,154
Level 2 [Member] | Arbitrage Trading Account [Member]
Fair Value, Assets Measured On Recurring Basis, Arbitrage Trading Account assets	121,948	187,945
Level 3 [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	70,690	82,541
Fair Value, Liabilities Measured On Recurring Basis, Securities Sold, Not Yet Purchased	20	21
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	65,504	67,828
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member] | U.S. Government And Government Agency [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member] | State And Municipal [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member] | Mortgage-Backed Securities [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member] | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	65,504	67,828
Level 3 [Member] | Fixed Maturities Securities Available for Sale [Member] | Foreign [Member]
Fair Value Assets Measured On Recurring Basis Total Assets	0	0
Level 3 [Member] | Equity Securities Available For Sale [Member]
Total Equity Securities Available For Sale	4,401	13,862
Level 3 [Member] | Equity Securities Available For Sale [Member] | Common Stock [Member]
Total Equity Securities Available For Sale	1,409	1,559
Level 3 [Member] | Equity Securities Available For Sale [Member] | Preferred Stock [Member]
Total Equity Securities Available For Sale	2,992	12,303
Level 3 [Member] | Arbitrage Trading Account [Member]
Fair Value, Assets Measured On Recurring Basis, Arbitrage Trading Account assets	$ 785	$ 851

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Securities In An Unrealized Loss Position (Tables)

9 Months Ended

Sep. 30, 2012

Securities In An Unrealized Loss Position [Abstract]

Securities In An Unrealized Loss Position

The following table summarizes all securities in an unrealized loss position at September 30, 2012 and December 31, 2011 by the length of time those securities have been continuously in an unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2012
U.S. government and agency	$	51,405	$	1,283	$	—	$	—	$	51,405	$	1,283
State and municipal	49,594		558		184,408		14,304		234,002		14,862
Mortgage-backed securities	259,508		3,338		65,349		4,876		324,857		8,214
Corporate	313,080		1,784		78,646		14,003		391,726		15,787
Foreign	101,200		516		5,508		104		106,708		620
Fixed maturity securities	774,787		7,479		333,911		33,287		1,108,698		40,766
Common stocks	34,702		291		—		—		34,702		291
Preferred stocks	6,435		954		40,094		2,195		46,529		3,149
Equity securities	41,137		1,245		40,094		2,195		81,231		3,440
Total	$	815,924	$	8,724	$	374,005	$	35,482	$	1,189,929	$	44,206
December 31, 2011
U.S. government and agency	$	24,668	$	169	$	4,800	$	182	$	29,468	$	351
State and municipal	131,417		827		183,205		15,723		314,622		16,550
Mortgage-backed securities	172,729		2,439		94,243		14,473		266,972		16,912
Corporate	341,764		8,327		125,654		27,760		467,418		36,087
Foreign	197,560		4,078		7,159		571		204,719		4,649
Fixed maturity securities	868,138		15,840		415,061		58,709		1,283,199		74,549
Common stocks	47,098		2,888		—		—		47,098		2,888
Preferred stocks	23,782		125		45,314		14,740		69,096		14,865
Equity securities	70,880		3,013		45,314		14,740		116,194		17,753
Total	$	939,018	$	18,853	$	460,375	$	73,449	$	1,399,393	$	92,302

Non-Investment Grade Fixed Maturity Securities

Fixed Maturity Securities – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2012 is presented in the table below.

(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Unrealized loss less than $5 million:
Mortgage-backed securities	13	$	71,135	$	4,908
Corporate	11	28,841		2,003
State and municipal	4	32,625		2,197
Total	28	$	132,601	$	9,108

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Industry Segments (Financial Information of Company Operating Segments) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012		Sep. 30, 2011
Earned Premiums	$ 1,186,533	$ 1,055,823	$ 3,433,541		$ 3,055,564
Investment Income and Funds	116,019	114,063	434,888		409,261
Other Revenues	117,949	109,845	346,524		320,206
Total revenues	1,420,501	1,279,731	4,214,953		3,785,031
Pre-Tax Income (Loss)	133,693	96,146	469,435		364,368
Net Income (Loss)	100,947	76,410	345,103		274,184
Specialty Segment [Member]
Earned Premiums	420,165	367,417	1,215,417		1,047,567
Investment Income and Funds	36,245	37,438	138,491		138,868
Other Revenues	577	664	1,788		2,065
Total revenues	456,987	405,519	1,355,696		1,188,500
Pre-Tax Income (Loss)	59,846	70,590	204,573		237,613
Net Income (Loss)	42,731	51,206	145,270		170,918
Regional Segment [Member]
Earned Premiums	276,629	267,142	809,072		795,423
Investment Income and Funds	16,174	16,099	60,780		59,459
Other Revenues	1,695	1,207	4,770		3,377
Total revenues	294,498	284,448	874,622		858,259
Pre-Tax Income (Loss)	33,219	(11,163)	79,211		(2,770)
Net Income (Loss)	23,296	(4,969)	56,884		5,251
Alternative Markets Segment [Member]
Earned Premiums	177,041	156,820	506,149		454,156
Investment Income and Funds	30,146	25,931	116,036		96,072
Other Revenues	23,936	20,408	70,563		64,049
Total revenues	231,123	203,159	692,748		614,277
Pre-Tax Income (Loss)	39,433	32,984	141,089		116,007
Net Income (Loss)	28,824	25,124	102,012		86,798
Reinsurance Segment [Member]
Earned Premiums	111,599	103,906	327,452		315,220
Investment Income and Funds	19,112	18,641	70,435		72,230
Other Revenues	0	0	0		0
Total revenues	130,711	122,547	397,887		387,450
Pre-Tax Income (Loss)	21,118	16,109	74,742		66,782
Net Income (Loss)	15,732	13,148	54,837		51,975
International Segment [Member]
Earned Premiums	201,099	160,538	575,451		443,198
Investment Income and Funds	12,448	10,741	39,788		32,692
Other Revenues	0	0	0		0
Total revenues	213,547	171,279	615,239		475,890
Pre-Tax Income (Loss)	15,736	13,919	50,685		27,420
Net Income (Loss)	7,141	9,650	22,553		18,253
Corporate, Other and Eliminations Segment [Member]
Earned Premiums	0	0	0	[1]	0	[1]
Investment Income and Funds	1,894	5,213	9,358	[1]	9,940	[1]
Other Revenues	69,515	66,328	175,400	[1]	177,303	[1]
Total revenues	71,409	71,541	184,758	[1]	187,243	[1]
Pre-Tax Income (Loss)	(57,885)	(47,531)	(174,868)	[1]	(154,096)	[1]
Net Income (Loss)	(31,588)	(31,533)	(98,196)	[1]	(105,921)	[1]
Net Investment Gains Segment [Member]
Earned Premiums	0	0	0		0
Investment Income and Funds	0	0	0		0
Other Revenues	22,226	21,238	94,003		73,412
Total revenues	22,226	21,238	94,003		73,412
Pre-Tax Income (Loss)	22,226	21,238	94,003		73,412
Net Income (Loss)	$ 14,811	$ 13,784	$ 61,743		$ 46,910

[1] Corporate and eliminations represent corporate revenues and expenses that are not allocated to business segments.

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Reinsurance

9 Months Ended

Sep. 30, 2012

Reinsurance Disclosures [Abstract]

Reinsurance

Reinsurance

The following is a summary of reinsurance financial information:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Written premiums:
Direct	$	1,267,882		$	1,114,494		$	3,718,477		$	3,286,220
Assumed	226,842			191,806			608,693			535,214
Ceded	(218,837		)	(180,161		)	(656,766		)	(554,577		)
Total net premiums written	$	1,275,887		$	1,126,139		$	3,670,404		$	3,266,857
Earned premiums:
Direct	$	1,208,257		$	1,070,279		$	3,475,375		$	3,063,410
Assumed	193,024			165,208			559,304			489,020
Ceded	(214,748		)	(179,664		)	(601,138		)	(496,866		)
Total net premiums earned	$	1,186,533		$	1,055,823		$	3,433,541		$	3,055,564
Ceded losses incurred	$	114,273		$	134,027		$	308,692		$	329,139

The Company reinsures a portion of its exposures principally to reduce its net liability on individual risks and to protect against catastrophic losses. Estimated amounts due from reinsurers are reported net of reserves for uncollectible reinsurance of $2 million as of September 30, 2012 and December 31, 2011.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Assets And Liabilities Measured At Fair value, On A Recurring Basis

The following tables present the assets and liabilities measured at fair value, on a recurring basis, as of September 30, 2012 and December 31, 2011 by Level:

(Dollars in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2012
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	937,313	$	—	$	937,313	$	—
State and municipal	4,842,790		—		4,842,790		—
Mortgage-backed securities	1,669,322		—		1,669,322		—
Corporate	3,249,152		—		3,183,648		65,504
Foreign	1,090,472		—		1,090,472		—
Total fixed maturity securities available for sale	11,789,049		—		11,723,545		65,504
Equity securities available for sale:
Common stocks	324,881		323,472		—		1,409
Preferred stocks	100,441		—		97,449		2,992
Total equity securities available for sale	425,322		323,472		97,449		4,401
Arbitrage trading account	417,446		294,713		121,948		785
Total	$	12,631,817	$	618,185	$	11,942,942	$	70,690
Liabilities:
Securities sold but not yet purchased	$	149,405	$	148,301	$	1,084	$	20
December 31, 2011
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	976,493	$	—	$	976,493	$	—
State and municipal	5,323,070		—		5,323,070		—
Mortgage-backed securities	1,584,587		—		1,584,587		—
Corporate	2,424,424		—		2,356,596		67,828
Foreign	888,354		—		888,354		—
Total fixed maturity securities available for sale	11,196,928		—		11,129,100		67,828
Equity securities available for sale:
Common stocks	319,982		318,423		—		1,559
Preferred stocks	123,457		—		111,154		12,303
Total equity securities available for sale	443,439		318,423		111,154		13,862
Arbitrage trading account	397,312		208,516		187,945		851
Total	$	12,037,679	$	526,939	$	11,428,199	$	82,541
Liabilities:
Securities sold but not yet purchased	$	62,514	$	62,493	$	—	$	21

Summarize Changes In Level 3 Assets

The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2012 and for the year ended December 31, 2011:

			Gains (Losses) Included in
(Dollars in thousands)	Beginning Balance		Earnings			Other Comprehensive Income				Purchases			(Sales)			Maturities			Transfer in		Ending Balance
For the nine months ended September 30, 2012:
Assets:
Fixed maturity securities available for sale:
Corporate	$	67,828	$	189		$	5,367			$	223		$	—		$	(8,103	)	$	—	$	65,504
Total	67,828		189			5,367				223			—			(8,103		)	—		65,504
Equity securities available for sale:
Common stocks	1,559		—			—				—			(150		)	—			—		1,409
Preferred stocks	12,303		2,095			(1,940		)		—			(9,466		)	—			—		2,992
Total	13,862		2,095			(1,940		)		—			(9,616		)	—			—		4,401
Arbitrage trading account	851		(46		)	—			—	—		—	(35		)	—			15		785
Total	$	82,541	$	2,238		$	3,427			$	223		$	(9,651	)	$	(8,103	)	$	15	$	70,690
Liabilities:
Securities sold but not yet purchased	$	21	$	(1	)	$	—			$	—		$	—		$	—		$	—	$	20
For the year ended December 31, 2011:
Assets:
Fixed maturity securities available for sale:
Corporate	$	88,063	$	(454	)	$	(870	)		$	15,271		$	(11,864	)	$	(22,318	)	$	—	$	67,828
Total	88,063		(454		)	(870		)		15,271			(11,864		)	(22,318		)	—		67,828
Equity securities available for sale:
Common stocks	1,559		—			—				—			—			—			—		1,559
Preferred stocks	89,446		28,947			(30,865		)		—			(75,225		)	—			—		12,303
Total	91,005		28,947			(30,865		)		—			(75,225		)	—			—		13,862
Arbitrage trading account	3,187		572			—				269			(3,266		)	—			89		851
Total	$	182,255	$	29,065		$	(31,735	)		$	15,540		$	(90,355	)	$	(22,318	)	$	89	$	82,541
Liabilities:
Securities sold but not yet purchased	$	—	$	40		$	—			$	67		$	(86	)	$	—		$	—	$	21

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Restricted Stock Units

9 Months Ended

Sep. 30, 2012

Restricted Stock Units [Abstract]

Restricted Stock Units

Restricted Stock Units

Pursuant to its stock incentive plan, the Company may issue restricted stock units (RSUs) to officers of the Company and its subsidiaries. The RSUs generally vest five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were $20 million and $19 million for the nine months ended September 30, 2012 and 2011, respectively. Grants of RSUs are made periodically, generally every other year. A summary of RSUs issued in the nine months ended September 30,2012 and 2011 follows:

(dollars in thousands)	Units	Fair Value
Nine months ended September 30:
2012	2,114,720	$	78,351
2011	53,250	$	1,674

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
CASH FROM (USED IN) OPERATING ACTIVITIES:
Net income to common stockholders	$ 345,103	$ 274,184
Adjustments to reconcile net income to net cash from operating activities:
Net investment gains	(94,003)	(73,412)
Depreciation and amortization	65,089	57,332
Noncontrolling interests	41	(98)
Investment funds	(50,124)	(11,236)
Stock incentive plans	21,070	19,727
Change in:
Arbitrage trading account	(2,355)	(2,840)
Premiums and fees receivable	(192,803)	(111,411)
Reinsurance accounts	(90,587)	(137,192)
Deferred policy acquisition costs	(34,843)	(41,635)
Deferred income taxes	(195)	25,934
Reserves for losses and loss expenses	215,993	250,393
Unearned premiums	284,908	264,681
Other liabilities	(13,945)	(29,184)
Net cash from (used in) operating activities	453,349	485,243
CASH FROM (USED IN) INVESTING ACTIVITIES:
Proceeds from sale of fixed matuirty securities	549,876	1,129,377
Proceeds from sale of equity securities	233,239	112,760
Distributions from (contributions to) investment funds	(6,293)	(148,537)
Proceeds from maturities and prepayments of fixed maturity securities	1,659,751	1,190,751
Purchase of fixed maturity securities	(2,510,322)	(2,118,556)
Purchase of equity securities	(218,490)	(49,932)
Real estate purchased	(71,348)	(347,602)
Change in loans receivable	(106,721)	71,803
Net additions to real estate, furniture and equipment	(22,319)	(37,405)
Change in balances due to security brokers	79,344	122,447
Payment for business purchased, net of cash acquired	0	(8,579)
Net cash from (used in) investing activities	(413,283)	(83,473)
CASH FROM (USED IN) FINANCING ACTIVITIES:
Net proceeds from issuance of debt	375,641	309
Net proceeds from stock options exercised	8,667	13,757
Cash dividends to common stockholders	(35,730)	(32,272)
Purchase of common treasury shares	(121,362)	(177,648)
Other, net	15,799	16,816
Net cash from (used in) financing activities	243,015	(179,038)
Net impact on cash due to change in foreign exchange rates	(5,259)	446
Net change in cash and cash equivalents	277,822	223,178
Cash and cash equivalents at beginning of year	911,742	642,952
Cash and cash equivalents at end of period	$ 1,189,564	$ 866,130

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Consolidated Balance Sheets Balance Sheet (Parentheticals) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 100	$ 100
Preferred Stock, Shares Authorized	5,000,000,000	5,000,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 200	$ 200
Common Stock, Shares Authorized	500,000,000,000	500,000,000,000
Common Stock, Shares, Issued	135,956,622,000	137,520,019,000
Common Stock, Shares, Outstanding	135,956,622,000	137,520,019,000
Treasury Stock, Shares	99,161,296,000	97,597,899,000

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Real Estate

9 Months Ended

Sep. 30, 2012

Real Estate [Abstract]

Real Estate [Text Block]

Real Estate

Real estate is directly owned property held for investment. At September 30, 2012, real estate consists of three office buildings in London, including two in operation and one under development, and a long-term ground lease in Washington D.C. Future minimum rental income expected on operating leases relating to real estate held for investment is $362,000 in 2012, $1,460,000 in 2013, $1,504,000 in 2014, $1,549,000 in 2015, $1,596,000 in 2016 and $330,657,000 thereafter.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Entity Information [Line Items]
Entity Registrant Name	BERKLEY W R CORP
Entity Central Index Key	0000011544
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		135,815,797

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Loans Receivable

9 Months Ended

Sep. 30, 2012

Loans Receivable, Net [Abstract]

Loans Receivable

Loans Receivable

Loans receivable are as follows:

(Dollars in thousands)	September 30, 2012			December 31, 2011
Total loans receivable	$	371,408		$	263,187
Valuation allowance:
Specific	$	3,080		$	19,041
General	2,674			764
Total	$	5,754		$	19,805
Impaired loans:
With a specific valuation allowance	$	2,362		$	29,702
Without a valuation allowance	30,299			30,357
Unpaid principal balance	35,660			93,922
For the Nine Months Ended September 30,	2012			2011
Increase (decrease) in valuation allowance	$	(14,053	)	$	541
Loans receivable charged off	139			9
For the Three Months Ended September 30,
Decrease in valuation allowance	(7,280		)	(9		)
Loans receivable charged off	54			9

Loans receivable in non-accrual status were $31 million and $30 million at September 30, 2012 and December 31, 2011, respectively. If these loans had been current, additional interest income of $0.6 million and none would have been recognized in accordance with their original terms for the nine months ended September 30, 2012 and 2011, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

The Company's five largest loans receivable, which have an aggregate amortized cost of $217 million and an aggregate fair value of $212 million at September 30, 2012, are secured by commercial real estate located primarily in New York City, California, Hawaii and Boston. These loans earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. As part of the evaluation process, the Company reviews certain credit quality indicators for these loans. The Company utilizes an internal risk rating system to assign a risk to each of its commercial loans. The loan rating system takes into consideration credit quality indicators including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower's financial condition and performance with respect to loan terms, the Company's position in the capital structure, and the overall leverage in the capital structure. Based on this rating system, one loan with an aggregate cost basis of $30 million was considered to be impaired at September 30, 2012. For each of this loan, a determination was made as to the amount of loss in the event of a default and whether the loss is probable. The results of the determination were considered in connection with the valuation allowance noted above. An additional credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to the borrower's principal and interest payments. At September 30, 2012, each of the five largest loans referred to above had a debt service coverage ratio greater than 3.0, except one that is lower due to a recent and temporary rate abatement.

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
REVENUES:
Net premiums written	$ 1,275,887		$ 1,126,139		$ 3,670,404		$ 3,266,857
Change in net unearned premiums	(89,354)		(70,316)		(236,863)		(211,293)
Net premiums earned	1,186,533		1,055,823		3,433,541		3,055,564
Net investment income	116,019		114,063		434,888		409,261
Insurance service fees	26,208		22,279		77,121		69,487
Net investment gains:
Net realized gains on investment sales	17,226		21,238		84,989		73,812
Change in valuation allowance, net of other-than-temporary impairments	5,000	[1]	0	[1]	9,014	[1]	(400)	[1]
Net investment gains	22,226		21,238		94,003		73,412
Revenues from wholly-owned investees	68,087		65,922		173,196		175,943
Other income	1,428		406		2,204		1,364
Total revenues	1,420,501		1,279,731		4,214,953		3,785,031
OPERATING COSTS AND EXPENSES:
Losses and loss expenses	736,632		683,980		2,147,306		1,965,351
Other operating costs and expenses	451,487		407,149		1,332,024		1,196,936
Expenses from wholly-owned investees	66,177		64,388		172,438		174,059
Interest expense	32,512		28,068		93,750		84,317
Total operating costs and expenses	1,286,808		1,183,585		3,745,518		3,420,663
Income before income taxes	133,693		96,146		469,435		364,368
Income tax expense	(32,685)		(19,775)		(124,291)		(90,282)
Net income before noncontrolling interests	101,008		76,371		345,144		274,086
Noncontrolling interests	(61)		39		(41)		98
Net income to common stockholders	$ 100,947		$ 76,410		$ 345,103		$ 274,184
NET INCOME PER SHARE:
Basic	$ 0.74		$ 0.55		$ 2.51		$ 1.95
Diluted	$ 0.71		$ 0.53		$ 2.41		$ 1.87

[1] For the nine months ended September 30, 2012, this represents a change in valuation allowance of $14 million, partially offset by an other-than-temporary impairment of $5 million

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Investments In Fixed Maturity Securities

9 Months Ended

Sep. 30, 2012

Investments in Fixed Maturity Securities [Abstract]

Investments In Fixed Maturity Securities

Investments in Fixed Maturity Securities

At September 30, 2012 and December 31, 2011, investments in fixed maturity securities were as follows:

(Dollars in thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Held to maturity:
State and municipal	$	64,301	$	17,979	$	—		$	82,280	$	64,301
Residential mortgage-backed	34,065		5,661		—			39,726		34,065
Corporate	4,997		670		—			5,667		4,997
Total held to maturity	103,363		24,310		—			127,673		103,363
Available for sale:
U.S. government and government agency	858,190		80,406		(1,283		)	937,313		937,313
State and municipal	4,509,239		348,413		(14,862		)	4,842,790		4,842,790
Mortgage-backed securities:
Residential (1)	1,458,059		61,231		(7,976		)	1,511,314		1,511,314
Commercial	152,816		5,430		(238		)	158,008		158,008
Corporate	3,052,275		212,664		(15,787		)	3,249,152		3,249,152
Foreign	1,008,266		82,826		(620		)	1,090,472		1,090,472
Total available for sale	11,038,845		790,970		(40,766		)	11,789,049		11,789,049
Total investments in fixed maturity securities	$	11,142,208	$	815,280	$	(40,766	)	$	11,916,722	$	11,892,412
December 31, 2011
Held to maturity:
State and municipal	$	74,354	$	12,546	$	—		$	86,900	$	74,354
Residential mortgage-backed	35,759		5,610		—			41,369		35,759
Corporate	4,996		717		—			5,713		4,996
Total held to maturity	115,109		18,873		—			133,982		115,109
Available for sale:
U.S. government and government agency	906,924		69,920		(351		)	976,493		976,493
State and municipal	5,031,275		308,345		(16,550		)	5,323,070		5,323,070
Mortgage-backed securities:
Residential (1)	1,416,427		75,635		(15,894		)	1,476,168		1,476,168
Commercial	105,383		4,054		(1,018		)	108,419		108,419
Corporate	2,328,200		132,311		(36,087		)	2,424,424		2,424,424
Foreign	850,838		42,165		(4,649		)	888,354		888,354
Total available for sale	10,639,047		632,430		(74,549		)	11,196,928		11,196,928
Total investments in fixed maturity securities	$	10,754,156	$	651,303	$	(74,549	)	$	11,330,910	$	11,312,037

___________

(1) Gross unrealized losses for residential mortgage-backed securities include $3,251,000 and $7,668,000 as of September 30, 2012 and December 31, 2011, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in other comprehensive income.

The amortized cost and fair value of fixed maturity securities at September 30, 2012, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.

(Dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	877,420	$	896,040
Due after one year through five years	3,223,807		3,416,358
Due after five years through ten years	2,422,530		2,688,914
Due after ten years	2,973,511		3,206,362
Mortgage-backed securities	1,644,940		1,709,048
Total	$	11,142,208	$	11,916,722

At September 30, 2012, there were no investments, other than investments in United States government and government agency securities, which exceeded 10% of common stockholders’ equity.

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Statements Of Cash Flow

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Information [Abstract]

Statements Of Cash Flow

Statements of Cash Flow

Interest payments were $109,045,000 and $100,840,000 and income taxes paid were $114,343,000 and $42,797,000 in the nine months ended September 30, 2012 and 2011, respectively.

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Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

Fair Value of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:

	September 30, 2012				December 31, 2011
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Fixed maturity securities	$	11,892,412	$	11,916,722	$	11,312,037	$	11,330,910
Equity securities available for sale	425,322		425,322		443,439		443,439
Arbitrage trading account	417,446		417,446		397,312		397,312
Loans receivable	371,408		363,875		263,187		245,169
Cash and cash equivalents	1,189,564		1,189,564		911,742		911,742
Trading account receivables from brokers and clearing organizations	387,352		387,352		318,240		318,240
Due from broker	—		—		10,875		10,875
Liabilities:
Trading account securities sold but not yet purchased	149,405		149,405		62,514		62,514
Due to broker	82,746		82,746		—		—
Junior subordinated debentures	243,154		254,800		242,997		258,400
Senior notes and other debt	1,877,431		2,110,492		1,500,503		1,587,473

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, as described in note 14 above. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair value of loans receivable are 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 junior subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.

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Realized And Unrealized Investment Gains (Losses)

9 Months Ended

Sep. 30, 2012

Realized and Unrealized Investment Gains (Losses) [Abstract]

Realized and Unrealized Investment Gains (Losses)

Realized and Unrealized Investment Gains

Realized and unrealized investment gains are as follows:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Realized investment gains:
Fixed maturity securities:
Gains	$	4,439		$	10,212		$	25,046		$	25,049
Losses	(1,937		)	(2,207		)	(4,243		)	(4,716		)
Equity securities available for sale	14,447			12,318			58,873			50,539
Other	—			—			1,535			—
Sales of investment funds	277			915			3,778			2,940
Change in valuation allowance, net of other-than -temporary impairments (1)	5,000			—			9,014			(400		)
Total net investment gains before income taxes	22,226			21,238			94,003			73,412
Income tax expense	(7,415		)	(7,454		)	(32,260		)	(26,502		)
Total net investment gains	$	14,811		$	13,784		$	61,743		$	46,910

Change in unrealized gains of available for sale securities:
Fixed maturity securities	$	96,077		$	115,933		$	186,637		$	187,851
Less non-credit portion of OTTI recognized in other comprehensive income	2,483			(1,300		)	4,416			(1,956		)
Equity securities available for sale	(2,891		)	(65,861		)	186			(59,760		)
Investment funds	4,255			(9,257		)	3,281			(5,067		)
Total change in unrealized gains before income taxes and noncontrolling interests	99,924			39,515			194,520			121,068
Income tax expense	(34,963		)	(14,268		)	(68,000		)	(42,893		)
Noncontrolling interests	(43		)	1			(71		)	(11		)
Total change in net unrealized gains	$	64,918		$	25,248		$	126,449		$	78,164

_________

(1) For the nine months ended September 30, 2012, this represents a change in valuation allowance of $14 million, partially offset by an other-than-temporary impairment of $5 million.

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Net Investment Income

9 Months Ended

Sep. 30, 2012

Net Investment Income [Abstract]

Net Investment Income [Text Block]

Net Investment Income

Net investment income consists of the following:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Investment income (losses) earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	121,454		$	120,252		$	360,577		$	365,365
Investment funds	(13,118		)	(10,820		)	50,124			21,069
Arbitrage trading account	2,397			(346		)	8,938			10,696
Equity securities available for sale	4,001			2,795			10,980			9,544
Real estate	3,097			2,848			8,621			5,192
Gross investment income	117,831			114,729			439,240			411,866
Investment expense	(1,812		)	(666		)	(4,352		)	(2,605		)
Net investment income	$	116,019		$	114,063		$	434,888		$	409,261

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Fair Value Measurements (Summarize Changes in Level 3 Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Beginning Balance	$ 82,541	$ 182,255
Earnings	2,238	29,065
Other Comprehensive Income	3,427	(31,735)
Purchases	223	15,540
(Sales)	(9,651)	(90,355)
Maturities	(8,103)	(22,318)
Transfer out	15	89
Ending Balance	70,690	82,541
Fixed Maturities Securities [Member]
Beginning Balance	67,828	88,063
Earnings	189	(454)
Other Comprehensive Income	5,367	(870)
Purchases	223	15,271
(Sales)	0	(11,864)
Maturities	(8,103)	(22,318)
Transfer out	0	0
Ending Balance	65,504	67,828
Equity Securities Available For Sale [Member]
Beginning Balance	13,862	91,005
Earnings	2,095	28,947
Other Comprehensive Income	(1,940)	(30,865)
Purchases	0	0
(Sales)	(9,616)	(75,225)
Maturities	0	0
Transfer out	0	0
Ending Balance	4,401	13,862
Securities Sold But Not Yet Purchased [Member]
Beginning Balance	21	0
Earnings	(1)	40
Other Comprehensive Income	0	0
Purchases	0	67
(Sales)	0	(86)
Maturities	0	0
Transfer out	0	0
Ending Balance	20	21
Corporate [Member] | Fixed Maturities Securities [Member]
Beginning Balance	67,828	88,063
Earnings	189	(454)
Other Comprehensive Income	5,367	(870)
Purchases	223	15,271
(Sales)	0	(11,864)
Maturities	(8,103)	(22,318)
Transfer out	0	0
Ending Balance	65,504	67,828
Common Stock [Member] | Equity Securities Available For Sale [Member]
Beginning Balance	1,559	1,559
Earnings	0	0
Other Comprehensive Income	0	0
Purchases	0	0
(Sales)	(150)	0
Maturities	0	0
Transfer out	0	0
Ending Balance	1,409	1,559
Preferred Stock [Member] | Equity Securities Available For Sale [Member]
Beginning Balance	12,303	89,446
Earnings	2,095	28,947
Other Comprehensive Income	(1,940)	(30,865)
Purchases	0	0
(Sales)	(9,466)	(75,225)
Maturities	0	0
Transfer out	0	0
Ending Balance	2,992	12,303
Arbitrage Trading Account [Member]
Beginning Balance	851	3,187
Earnings	(46)	572
Other Comprehensive Income	0	0
Purchases	0	269
(Sales)	(35)	3,266
Maturities	0	0
Transfer out	15	89
Ending Balance	$ 785	$ 851

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Investments In Equity Securities Available for Sale

9 Months Ended

Sep. 30, 2012

Available-for-sale Securities [Abstract]

Investments In Equity Securities Available for Sale

Investments in Equity Securities Available for Sale

At September 30, 2012 and December 31, 2011, investments in equity securities available for sale were as follows:

(Dollars in thousands)	Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
Common stocks	$	228,524	$	96,648	$	(291	)	$	324,881	$	324,881
Preferred stocks	95,566		8,024		(3,149		)	100,441		100,441
Total	$	324,090	$	104,672	$	(3,440	)	$	425,322	$	425,322
December 31, 2011
Common stocks	$	209,210	$	113,660	$	(2,888	)	$	319,982	$	319,982
Preferred stocks	133,183		5,139		(14,865		)	123,457		123,457
Total	$	342,393	$	118,799	$	(17,753	)	$	443,439	$	443,439

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Arbitrage Trading Account And Arbitrage Funds

9 Months Ended

Sep. 30, 2012

Arbitrage Trading Account And Arbitrage Funds [Abstract]

Arbitrage Trading Account And Arbitrage Funds

Arbitrage Trading Account

At September 30, 2012 and December 31, 2011, the fair value and carrying value of the arbitrage trading account were $417 million and $397 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less). The Company believes that this makes arbitrage investments less vulnerable to changes in general financial market conditions.

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Investment Funds Investment Funds (Notes)

9 Months Ended

Sep. 30, 2012

Investment Funds [Abstract]

Investment Funds [Text Block]

Investment Funds

Investment funds consist of the following:

	Carrying Value as of				Income (Losses) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,
(Dollars in thousands)	2012		2011		2012		2011
Real estate	$	381,986	$	373,413	$	13,513	$	14,977
Energy	129,376		98,974		28,966		10,947
Arbitrage	61,049		58,008		3,041		(2,767		)
Other	175,227		150,243		4,604		(2,088		)
Total	$	747,638	$	680,638	$	50,124	$	21,069

The Company's share of the earnings or losses of investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's financial statements.

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Industry Segments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2012 countries segment
Number Of Operating Segments	5
Number of Countries International Operating Units Write Business	40
Regional Segment [Member]
Number of state of providing commercial insurance to customer	45
International Segment [Member]
Number Of Branches Or Offices Outside United States	15

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Industry Segments (Identifiable Assets by Segment) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
Consolidated Assets	$ 19,932,912		$ 18,403,873
Specialty Segment [Member]
Consolidated Assets	6,600,690		6,157,853
Regional Segment [Member]
Consolidated Assets	2,568,126		2,488,940
Alternative Markets Segment [Member]
Consolidated Assets	4,324,409		4,044,915
Reinsurance Segment [Member]
Consolidated Assets	2,954,710		2,732,489
International Segment [Member]
Consolidated Assets	1,880,346		1,569,749
Corporate, Other and Eliminations Segment [Member]
Consolidated Assets	$ 1,604,631	[1]	$ 1,409,927	[1]

[1] Corporate and eliminations represent corporate revenues and expenses that are not allocated to business segments.

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Restricted Stock Units (Summary of Restricted Stock Units Issued) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Restricted Stock Unit expense	$ 20,000,000	$ 19,000,000
Restricted Stock [Member]
Restricted Stock Units	2,114,720	53,250
Restricted Stock Units, Fair Value	$ 78,351,000	$ 1,674,000

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Realized And Unrealized Investment Gains (Losses) (Tables)

9 Months Ended

Sep. 30, 2012

Realized and Unrealized Investment Gains (Losses) [Abstract]

Realized and Unrealized Investment Gains (Losses)

Realized and unrealized investment gains are as follows:

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
(Dollars in thousands)	2012			2011			2012			2011
Realized investment gains:
Fixed maturity securities:
Gains	$	4,439		$	10,212		$	25,046		$	25,049
Losses	(1,937		)	(2,207		)	(4,243		)	(4,716		)
Equity securities available for sale	14,447			12,318			58,873			50,539
Other	—			—			1,535			—
Sales of investment funds	277			915			3,778			2,940
Change in valuation allowance, net of other-than -temporary impairments (1)	5,000			—			9,014			(400		)
Total net investment gains before income taxes	22,226			21,238			94,003			73,412
Income tax expense	(7,415		)	(7,454		)	(32,260		)	(26,502		)
Total net investment gains	$	14,811		$	13,784		$	61,743		$	46,910

Change In Unrealized Gains (Losses) Of Available For Sales Securities

Change in unrealized gains of available for sale securities:
Fixed maturity securities	$	96,077		$	115,933		$	186,637		$	187,851
Less non-credit portion of OTTI recognized in other comprehensive income	2,483			(1,300		)	4,416			(1,956		)
Equity securities available for sale	(2,891		)	(65,861		)	186			(59,760		)
Investment funds	4,255			(9,257		)	3,281			(5,067		)
Total change in unrealized gains before income taxes and noncontrolling interests	99,924			39,515			194,520			121,068
Income tax expense	(34,963		)	(14,268		)	(68,000		)	(42,893		)
Noncontrolling interests	(43		)	1			(71		)	(11		)
Total change in net unrealized gains	$	64,918		$	25,248		$	126,449		$	78,164

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Real Estate (Details) (Real Estate Funds [Member], USD $)	Sep. 30, 2012
Real Estate Funds [Member]
Investment Holdings [Line Items]
Operating Leases, Future Minimum Payments Receivable, Current	$ 362,000
Operating Leases, Future Minimum Payments Receivable, in Two Years	1,460,000
Operating Leases, Future Minimum Payments Receivable, in Three Years	1,504,000
Operating Leases, Future Minimum Payments Receivable, in Four Years	1,549,000
Operating Leases, Future Minimum Payments Receivable, in Five Years	1,596,000
Operating Leases, Future Minimum Payments Receivable, Thereafter	$ 330,657,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company’s fixed maturity and equity securities 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. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available.

Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities, securities that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable market data. 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.

The following tables present the assets and liabilities measured at fair value, on a recurring basis, as of September 30, 2012 and December 31, 2011 by Level:

(Dollars in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2012
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	937,313	$	—	$	937,313	$	—
State and municipal	4,842,790		—		4,842,790		—
Mortgage-backed securities	1,669,322		—		1,669,322		—
Corporate	3,249,152		—		3,183,648		65,504
Foreign	1,090,472		—		1,090,472		—
Total fixed maturity securities available for sale	11,789,049		—		11,723,545		65,504
Equity securities available for sale:
Common stocks	324,881		323,472		—		1,409
Preferred stocks	100,441		—		97,449		2,992
Total equity securities available for sale	425,322		323,472		97,449		4,401
Arbitrage trading account	417,446		294,713		121,948		785
Total	$	12,631,817	$	618,185	$	11,942,942	$	70,690
Liabilities:
Securities sold but not yet purchased	$	149,405	$	148,301	$	1,084	$	20
December 31, 2011
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	976,493	$	—	$	976,493	$	—
State and municipal	5,323,070		—		5,323,070		—
Mortgage-backed securities	1,584,587		—		1,584,587		—
Corporate	2,424,424		—		2,356,596		67,828
Foreign	888,354		—		888,354		—
Total fixed maturity securities available for sale	11,196,928		—		11,129,100		67,828
Equity securities available for sale:
Common stocks	319,982		318,423		—		1,559
Preferred stocks	123,457		—		111,154		12,303
Total equity securities available for sale	443,439		318,423		111,154		13,862
Arbitrage trading account	397,312		208,516		187,945		851
Total	$	12,037,679	$	526,939	$	11,428,199	$	82,541
Liabilities:
Securities sold but not yet purchased	$	62,514	$	62,493	$	—	$	21

There were no significant transfers between Levels 1 and 2 during the nine months ended September 30, 2012 or during the year ended December 31, 2011.

The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2012 and for the year ended December 31, 2011:

			Gains (Losses) Included in
(Dollars in thousands)	Beginning Balance		Earnings			Other Comprehensive Income				Purchases			(Sales)			Maturities			Transfer in		Ending Balance
For the nine months ended September 30, 2012:
Assets:
Fixed maturity securities available for sale:
Corporate	$	67,828	$	189		$	5,367			$	223		$	—		$	(8,103	)	$	—	$	65,504
Total	67,828		189			5,367				223			—			(8,103		)	—		65,504
Equity securities available for sale:
Common stocks	1,559		—			—				—			(150		)	—			—		1,409
Preferred stocks	12,303		2,095			(1,940		)		—			(9,466		)	—			—		2,992
Total	13,862		2,095			(1,940		)		—			(9,616		)	—			—		4,401
Arbitrage trading account	851		(46		)	—			—	—		—	(35		)	—			15		785
Total	$	82,541	$	2,238		$	3,427			$	223		$	(9,651	)	$	(8,103	)	$	15	$	70,690
Liabilities:
Securities sold but not yet purchased	$	21	$	(1	)	$	—			$	—		$	—		$	—		$	—	$	20
For the year ended December 31, 2011:
Assets:
Fixed maturity securities available for sale:
Corporate	$	88,063	$	(454	)	$	(870	)		$	15,271		$	(11,864	)	$	(22,318	)	$	—	$	67,828
Total	88,063		(454		)	(870		)		15,271			(11,864		)	(22,318		)	—		67,828
Equity securities available for sale:
Common stocks	1,559		—			—				—			—			—			—		1,559
Preferred stocks	89,446		28,947			(30,865		)		—			(75,225		)	—			—		12,303
Total	91,005		28,947			(30,865		)		—			(75,225		)	—			—		13,862
Arbitrage trading account	3,187		572			—				269			(3,266		)	—			89		851
Total	$	182,255	$	29,065		$	(31,735	)		$	15,540		$	(90,355	)	$	(22,318	)	$	89	$	82,541
Liabilities:
Securities sold but not yet purchased	$	—	$	40		$	—			$	67		$	(86	)	$	—		$	—	$	21

There were no significant transfers in or out of Level 3 during the nine months ended September 30, 2012 or during the year ended December 31, 2011.

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Commitments, Litigation and Contingent Liabilities

9 Months Ended

Sep. 30, 2012

Commitments, Litigation and Contingent Liabilities [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments, Litigation and Contingent Liabilities

The Company's subsidiaries are subject to disputes, including litigation and arbitration, arising in the ordinary course of their insurance and reinsurance businesses. The Company's estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations. However, adverse outcomes are possible and could negatively impact the Company's financial condition and results of operations.

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Net Investment Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income (Losses) from Investment Funds	$ 117,831	$ 114,729	$ 439,240	$ 411,866
Investment expense	(1,812)	(666)	(4,352)	(2,605)
Net investment income	116,019	114,063	434,888	409,261
Fixed Maturity Securities, Including Cash [Member]
Income (Losses) from Investment Funds	121,454	120,252	360,577	365,365
Investment Funds [Member]
Income (Losses) from Investment Funds	(13,118)	(10,820)	50,124	21,069
Arbitrage Trading Account and Funds [Member]
Income (Losses) from Investment Funds	2,397	(346)	8,938	10,696
Equity Securities Available For Sale [Member]
Income (Losses) from Investment Funds	4,001	2,795	10,980	9,544
Real Estate [Member]
Income (Losses) from Investment Funds	$ 3,097	$ 2,848	$ 8,621	$ 5,192

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General (Details)	9 Months Ended
	Sep. 30, 2012
General Policies Disclosure [Abstract]
Federal income tax rate	35.00%

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Unrealized Investment Gains (Losses) [Member]	Currency Translation Adjustments [Member]	Net Pension Asset [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Noncontrolling Interests [Member]
Beginning of period at Dec. 31, 2010		$ 47,024	$ 935,099	$ 4,143,207	$ 334,747	$ (42,488)	$ (15,696)		$ (1,750,494)	$ 6,980
Stock options exercised and restricted units issued, net of tax			(26,914)
Restricted stock units expensed			18,855
Stock issued to directors			308						564
Net income to common stockholders	274,086			274,184
Dividends				(32,274)
Unrealized gains on securities not other-than-temporarily impaired					79,435
Unrealized gains (losses) on other-than-temporarily impaired securities					(1,271)
Net change in period	(21,104)					(21,104)
Net change in period	2,118						2,118
Stock exercised/vested									40,571
Stock repurchased									(177,648)
Contributions										522
Net loss (income)	98									(98)
Other comprehensive income, net of tax	59,189									11
End of period at Sep. 30, 2011		47,024	927,348	4,385,117	412,911	(63,592)	(13,578)	335,741	(1,887,007)	7,415
Beginning of period at Dec. 31, 2011	3,960,882	47,024	941,109	4,491,162	430,419	(61,239)	(14,329)		(1,880,790)	7,526
Stock options exercised and restricted units issued, net of tax			(24,683)
Restricted stock units expensed			20,035
Stock issued to directors			454						581
Net income to common stockholders	345,144			345,103
Dividends				(35,728)
Unrealized gains on securities not other-than-temporarily impaired					123,579
Unrealized gains (losses) on other-than-temporarily impaired securities					2,870
Net change in period	24,382					24,382
Net change in period	2,470						2,470
Stock exercised/vested									40,137
Stock repurchased									(128,155)
Contributions										1,808
Net loss (income)	(41)									41
Other comprehensive income, net of tax	153,372									71
End of period at Sep. 30, 2012	$ 4,333,847	$ 47,024	$ 936,915	$ 4,800,537	$ 556,868	$ (36,857)	$ (11,859)	$ 508,152	$ (1,968,227)	$ 9,446

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In October 2010, the Financial Accounting Standards Board ("FASB") issued guidance regarding the treatment of costs associated with acquiring or renewing insurance contracts. This guidance modified the definition of the types of costs that can be capitalized and specifies that the costs must be directly related to the successful acquisition of a new or renewed insurance contract. The Company adopted this guidance effective January 1, 2012 and retrospectively adjusted its previously issued financial statements. The impact of applying this guidance retrospectively was a reduction in stockholders' equity of $51 million as of December 31, 2010.

A summary of the impact of the adoption of this new guidance is shown below (dollars in thousands except per share amounts):

	Previously Reported			As Adjusted
At December 31, 2011:
Deferred policy acquisition costs	$	448,795		$	364,937
Deferred tax liability	31,623			2,835
Stockholders' equity	4,008,426			3,953,356
For the Nine Months Ended September 30, 2011:
Other operating costs and expenses	$	1,193,040		$	1,196,936
Income before income taxes	368,264			364,368
Federal and foreign income taxes	(91,485		)	(90,282		)
Net income	276,877			274,184
Basic net income per share	$	1.97		$	1.95
Diluted net income per share	1.89			1.87
For the Three Months Ended September 30, 2011:
Other operating costs and expenses	$	405,850		$	407,149
Income before income taxes	97,445			96,146
Federal and foreign income taxes	(20,176		)	(19,775		)
Net income	77,308			76,410
Basic net income per share	$	0.56		$	0.55
Diluted net income per share	0.53			0.53

In May 2011, the FASB issued guidance related to measuring and disclosing fair values. The Company's adoption of the updated guidance effective January 1, 2012 resulted in a change in the presentation of the Company's consolidated financial statements but did not have any impact on the Company's results of operations, financial position or liquidity.

In June 2011, the FASB issued guidance relating to the presentation of the components of net income and other comprehensive income. The Company's adoption of the updated guidance effective January 1, 2012 resulted in a change in the presentation of the Company's consolidated financial statements but did not have any impact on the Company's results of operations, financial position or liquidity.

All recently issued but not yet effective accounting and reporting guidance is either not applicable to the Company or is not expected to have a material impact on the Company.

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Fair Value Measurements Fair Value Measurements (Narrative) (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number Of Available For Sale Equity Securities Continuous Unrealized Loss Position	28
Fair Value, Level 1 to level 2 Transfers, Amount	$ 0	$ 0
Fair Value,Transfers out of Level 3	0	0
Fair Value, Transfers Into Level 3	$ 0	$ 0

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Per Share Data (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Weighted Average Number of Common Shares Used In the Computation of Basic and Diluted Earnings per Share

The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows (amounts in thousands):

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2012	2011	2012	2011
Basic	136,553	138,816	137,512	140,535
Diluted	141,637	144,538	142,941	146,553

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Of Financial Instruments [Abstract]

Carrying Amounts And Estimated Fair Values Of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:

	September 30, 2012				December 31, 2011
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Fixed maturity securities	$	11,892,412	$	11,916,722	$	11,312,037	$	11,330,910
Equity securities available for sale	425,322		425,322		443,439		443,439
Arbitrage trading account	417,446		417,446		397,312		397,312
Loans receivable	371,408		363,875		263,187		245,169
Cash and cash equivalents	1,189,564		1,189,564		911,742		911,742
Trading account receivables from brokers and clearing organizations	387,352		387,352		318,240		318,240
Due from broker	—		—		10,875		10,875
Liabilities:
Trading account securities sold but not yet purchased	149,405		149,405		62,514		62,514
Due to broker	82,746		82,746		—		—
Junior subordinated debentures	243,154		254,800		242,997		258,400
Senior notes and other debt	1,877,431		2,110,492		1,500,503		1,587,473

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Securities In An Unrealized Loss Position

9 Months Ended

Sep. 30, 2012

Securities In An Unrealized Loss Position [Abstract]

Securities In An Unrealized Loss Position

Securities in an Unrealized Loss Position

The following table summarizes all securities in an unrealized loss position at September 30, 2012 and December 31, 2011 by the length of time those securities have been continuously in an unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2012
U.S. government and agency	$	51,405	$	1,283	$	—	$	—	$	51,405	$	1,283
State and municipal	49,594		558		184,408		14,304		234,002		14,862
Mortgage-backed securities	259,508		3,338		65,349		4,876		324,857		8,214
Corporate	313,080		1,784		78,646		14,003		391,726		15,787
Foreign	101,200		516		5,508		104		106,708		620
Fixed maturity securities	774,787		7,479		333,911		33,287		1,108,698		40,766
Common stocks	34,702		291		—		—		34,702		291
Preferred stocks	6,435		954		40,094		2,195		46,529		3,149
Equity securities	41,137		1,245		40,094		2,195		81,231		3,440
Total	$	815,924	$	8,724	$	374,005	$	35,482	$	1,189,929	$	44,206
December 31, 2011
U.S. government and agency	$	24,668	$	169	$	4,800	$	182	$	29,468	$	351
State and municipal	131,417		827		183,205		15,723		314,622		16,550
Mortgage-backed securities	172,729		2,439		94,243		14,473		266,972		16,912
Corporate	341,764		8,327		125,654		27,760		467,418		36,087
Foreign	197,560		4,078		7,159		571		204,719		4,649
Fixed maturity securities	868,138		15,840		415,061		58,709		1,283,199		74,549
Common stocks	47,098		2,888		—		—		47,098		2,888
Preferred stocks	23,782		125		45,314		14,740		69,096		14,865
Equity securities	70,880		3,013		45,314		14,740		116,194		17,753
Total	$	939,018	$	18,853	$	460,375	$	73,449	$	1,399,393	$	92,302

Fixed Maturity Securities – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2012 is presented in the table below.

(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Unrealized loss less than $5 million:
Mortgage-backed securities	13	$	71,135	$	4,908
Corporate	11	28,841		2,003
State and municipal	4	32,625		2,197
Total	28	$	132,601	$	9,108

For OTTI of fixed maturity securities that management does not intend to sell or, more likely than not, would not be required to sell, the portion of the decline in value considered to be due to credit factors is recognized in earnings and the portion of the decline in value considered to be due to non-credit factors is recognized in other comprehensive income. For the nine months ended September 30, 2012 and 2011, there were no changes in the portion of impairments recognized in earnings for those securities that have been impaired due to both credit factors and non-credit factors.

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due and does not consider any of these securities to be OTTI.