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<SEC-DOCUMENT>0000899140-06-001065.txt : 20061030
<SEC-HEADER>0000899140-06-001065.hdr.sgml : 20061030
<ACCEPTANCE-DATETIME>20060718165417
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000899140-06-001065
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060718

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BERKLEY W R CORP
		CENTRAL INDEX KEY:			0000011544
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				221867895
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		475 STEAMBOAT ROAD
		STREET 2:		.
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		2036293000

	MAIL ADDRESS:	
		STREET 1:		475 STEAMBOAT ROAD
		STREET 2:		.
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
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<TEXT>



                  [LETTERHEAD OF WILLKIE FARR & GALLAGHER LLP]



VIA EDGAR
- ---------


July 18, 2006


Securities and Exchange Commission
100 F Street, N.E.
Judiciary Plaza
Washington, D.C.  20549
Attn:  Jim B. Rosenberg, Senior Assistant Chief Accountant
       Division of Corporation Finance


Re:  W. R. Berkley Corporation
     Form 10-K for the Fiscal Year Ended December 31, 2005
     Filed March 13, 2006
     File No. 1-15202

Dear Mr. Rosenberg:

     On behalf of W. R. Berkley Corporation ("Berkley" or the "Company"), set
forth below are Berkley's responses to the comment of the staff (the "Staff") of
the Securities and Exchange Commission (the "Commission") provided orally on
June 12, 2006. For your convenience, we have set forth below a summary of the
Staff's comment in italics, followed by Berkley's response thereto.

Form 10-K for the Fiscal Year Ended December 31, 2005 (the "2005 Form 10-K")

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Reserves for Losses and Loss Expenses, page 3

1.   Please discuss whether, and to what extent, management has adjusted each
     key assumption used in calculating the most recent estimate of the [loss]
     reserves, given the historical changes, current trends and any other
     factors observed.

     In response to this comment, Berkley proposes to expand its disclosure and
     to explicitly state that it does review and adjust each key actuarial
     assumption used in calculating its



<PAGE>

Mr. Jim B. Rosenberg
Securities and Exchange Commission
July 18, 2006
Page 2


     most recent estimate of loss reserves. The disclosure proposed below would
     commence with its Quarterly Report on Form 10-Q for the Quarterly Period
     Ended June 30, 2006.(1)

          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 ultimate losses and
          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
          increases, 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

- ----------------------------
(1)  The first two paragraphs below were previously included in Berkley's Form
     10-Q for the first quarter of 2006; the following two paragraphs were
     previously proposed in our correspondence with the Staff of May 25, 2006.

<PAGE>

Mr. Jim B. Rosenberg
Securities and Exchange Commission
July 18, 2006
Page 3


          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 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 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 ("IBNR") (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, commercial multi-peril business, 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 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. For example,
          as of December 31, 2005, initial loss estimates for accident years
          1996 through 2004 were increased by an average of 6% for lines with
          short reporting lags and by an average of 37% for lines with long
          reporting lags. For the latest accident year ended December 31, 2005,
          initial loss estimates were $1.5 billion for lines with short
          reporting lags and $1.0 billion for lines with long reporting lags.

          The key assumptions used in calculating the most recent estimate of
          loss reserves are reviewed each quarter and adjusted, to the extent
          necessary, to reflect historical changes, current trends and other
          factors observed. For example, in 2005 loss reserves for our
          commercial transportation business were increased to reflect an
          observed trend of higher severity losses and loss reserves for our

<PAGE>

Mr. Jim B. Rosenberg
Securities and Exchange Commission
July 18, 2006
Page 4


          California workers' compensation business were decreased to reflect an
          observed trend of lower severity losses following the enactment of
          legislative reforms.

      As described in its MD&A disclosure included in its Form 10-Q for the
      first quarter of 2006, Berkley prepares separate quarterly actuarial
      analyses for each of its operating units. In fact, twenty-three such
      analyses were prepared for its March 31, 2006 reserve estimate. Each
      of these actuarial analyses has its own set of unique key assumptions
      that are reviewed and revised, if necessary, each quarter. Berkley
      does not believe that providing specific details regarding the
      assumptions and adjustments thereto for each of these analyses is
      either practicable or useful to investors, particularly in light of
      the significantly expanded discussion of its loss reserve policies now
      included in Berkley's periodic reports.

      On behalf of Berkley, we hereby acknowledge that:

      o   Berkley is responsible for the adequacy and accuracy of the
          disclosure in its 2005 Form 10-K;

      o   Staff comments or changes to disclosure in response to Staff
          comments do not foreclose the Commission from taking any action
          with respect to Berkley's 2005 Form 10-K; and

      o   Berkley may not assert Staff comments as a defense in any
          proceeding initiated by the Commission or any person under the
          Federal securities laws of the United States.

     Should any member of the Staff have any questions or comments concerning
this letter, please do not hesitate to call me at (212) 728-8592.

Very truly yours,

/s/ Jeffrey S. Hochman

Jeffrey S. Hochman

Enclosures

cc:  Lisa K. Vanjoske
     Dana Hartz
     Eugene G. Ballard
     Ira S. Lederman, Esq.

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