W. R. Berkley Corp. shareholders could see a "double positive" from a reformed U.S. corporate tax code, company leadership said during an earnings call.
A lower corporate tax rate would directly benefit the insurer, President and CEO William Berkley Jr. and Chairman William Berkley said, while a possible reform of the way the tax code treats offshore insurance companies could hamstring W. R. Berkley's competitors based in tax havens such as Bermuda and Ireland.
"A lower tax rate for us and a higher tax rate for them is just going to force them to focus their underwriting results and their core economic model, and quite frankly ... it could be a double positive for our shareholders," the CEO said.
Companies either underwrite "brilliantly or terribly," the chairman said, and that could become clearer if U.S.-based and offshore companies' taxes are treated equally in the code.
The tax code, as it was written, was not meant to benefit non-U.S. insurers, Chairman Berkley said, but that has been the impact. He believes that any new tax bill would most likely include P&C insurance, an industry in which many companies operate offshore for tax purposes. Those companies currently receive "a benefit and a competitive advantage," he said.
"The money [invested in offshore insurance businesses] all came from the U.S., goes offshore, and then they pay no tax on the United States business that they bring over there," he said.