~~Our Specialty lines companies underwrite risks within the~~Insurance-Domestic - commercial insurance business, including excess and surplus lines ~~market~~ and ~~on an~~ admitted ~~basis. The risks are highly complex, often unique exposures that typically fall outside~~lines, throughout 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. O~~perating units deliver their products through a variety of distribution channels, depending on the customer base and particular risks insured.~~United States;

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-International - 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 specializebusiness primarily 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,~~Canada, Scandinavia, and ~~Canada. In each~~Australia; and

Reinsurance-Global - reinsurance business on a facultative and treaty basis, primarily in the United States, United Kingdom, Europe, Australia, and the Asia-Pacific Region.

During the first quarter of ~~our~~2013, the Company changed the aggregation of its business segments. All domestic insurance operating companies, previously included in the Specialty, Regional and Alternative Markets segments, were aggregated into the Insurance-Domestic segment; all reinsurance operating companies were aggregated into the Reinsurance-Global segment; and all international ~~operating territories, we~~insurance companies were aggregated into the Insurance-International segment. The segment disclosures for prior periods have ~~built decentralized structures that allow products and services~~been revised to be ~~tailored to each regional customer base. Our International businesses are managed by teams~~consistent with the new reportable business segment presentation. The segment disclosures for the years ended December 31, 2012, 2011 and 2010, and as of ~~professionals with expertise in local markets~~December 31, 2012 and ~~knowledge of regional environments.~~2011, have also been included herein, revised for the new reportable business segment presentation.

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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Summary financial information about the Company's business segments is presented in the following tables.

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



	Revenues
(In thousands)	Earned Premiums		Investment Income		Other		Total		Pre-Tax Income (Loss)			Net Income (Loss)
Three months ended March 31, 2013:
Insurance-Domestic	$	884,378	$	97,797	$	26,736	$	1,008,911	$	141,350		$	99,408
Insurance-International	171,119		12,061		—		183,180		22,382			15,477
Reinsurance-Global	176,622		22,499		—		199,121		37,941			26,394
Corporate and eliminations (1)	—		3,572		92,016		95,588		(61,419		)	(37,644		)
Net investment gains	—		—		19,969		19,969		19,969			12,980
Total	$	1,232,119	$	135,929	$	138,721	$	1,506,769	$	160,223		$	116,615
Three months ended March 31, 2012:
Insurance-Domestic	$	810,069	$	112,086	$	23,877	$	946,032	$	147,735		$	105,880
Insurance-International	143,885		10,331		—		154,216		15,699			11,112
Reinsurance-Global	145,697		28,687		—		174,384		31,638			23,086
Corporate and eliminations (1)	—		6,515		50,067		56,582		(55,260		)	(35,842		)
Net investment gains	—		—		47,491		47,491		47,491			31,082
Total	$	1,099,651	$	157,619	$	121,435	$	1,378,705	$	187,303		$	135,318
Twelve months ended December 31, 2012:
Insurance-Domestic	$	3,417,022	$	424,787	$	103,133	$	3,944,942	$	578,500		$	412,514
Insurance-International	631,841		45,796		—		677,637		51,639			37,499
Reinsurance-Global	624,653		106,932		—		731,585		103,690			76,584
Corporate and eliminations (1)	—		9,248		249,677		258,925		(242,366		)	(152,807		)
Net investment gains	—		—		210,465		210,465		210,465			136,802
Total	$	4,673,516	$	586,763	$	563,275	$	5,823,554	$	701,928		$	510,592
Twelve months ended December 31, 2011:
Insurance-Domestic	$	3,121,281	$	372,053	$	92,847	$	3,586,181	$	467,126		$	344,521
Insurance-International	508,509		36,958		—		545,467		36,912			28,054
Reinsurance-Global	531,077		97,795		—		628,872		85,271			66,174
Corporate and eliminations (1)	—		19,545		250,438		269,983		(201,704		)	(129,185		)
Net investment gains	—		—		125,481		125,481		125,481			81,647
Total	$	4,160,867	$	526,351	$	468,766	$	5,155,984	$	513,086		$	391,211
Twelve months ended December 31, 2010:
Insurance-Domestic	$	2,963,486	$	385,783	$	85,417	$	3,434,686	$	589,138		$	425,337
Insurance-International	378,693		29,011		—		407,704		15,172			13,050
Reinsurance-Global	493,403		106,862		—		600,265		134,996			99,492
Corporate and eliminations (1)	—		8,869		215,964		224,833		(196,977		)	(128,348		)
Net investment gains	—		—		56,581		56,581		56,581			36,874
Total	$	3,835,582	$	530,525	$	357,962	$	4,724,069	$	598,910		$	446,405

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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



(Dollars in thousands)	March 31, 2013		December 31, 2012		December 31, 2011
Insurance-Domestic	$	14,023,370	$	14,661,476	$	13,126,472
Insurance-International	1,690,937		1,605,448		1,341,907
Reinsurance-Global	3,420,508		3,337,937		3,168,528
Corporate and eliminations	985,819		615,118		766,966
Total	$	20,120,634	$	20,155,896	$	18,403,873

___________

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

~~Table of Contents~~

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



	For the Three Months Ended
	March 31,
(In thousands)	2013		2012
Insurance-Domestic
Other liability	$	295,588	$	273,564
Workers’ compensation	229,011		189,544
Short-tail lines (1)	178,749		173,902
Commercial automobile	116,122		110,367
Products liability	64,908		62,692
Total	884,378		810,069

Insurance-International
Other liability	15,218		15,534
Workers’ compensation	22,889		18,618
Short-tail lines (1)	72,123		52,478
Commercial automobile	34,639		30,668
Products liability	26,250		26,587
Total	171,119		143,885

Reinsurance-Global
Casualty	121,327		105,089
Property	55,295		40,608
Total	176,622		145,697

Total	$	1,232,119	$	1,099,651

_____________________

(1) Short-tail lines includes commercial multi-peril (non-liability), inland and ocean marine, accident and health, fidelity and surety, boiler and machinery and other lines.

(21) Subsequent Event

~~(19) Commitments, Litigation and Contingent Liabilities~~

~~The Company's subsidiaries are subject to disputes, including litigation and arbitration, arising in~~On May 2, 2013, the ~~ordinary course~~Company issued $350 million aggregate principal amount of ~~their insurance and reinsurance businesses. The Company's estimates~~5.625% Subordinated Debentures due 2053. Net proceeds from this offering will be used for the repayment of $250 million principal amount of the ~~costs of settling such matters are reflected in its aggregate reserves~~Company's 6.750% Subordinated Debentures due 2045 on May 26, 2013, which were called for ~~losses and loss expenses, and~~redemption on April 26, 2013; the ~~Company does not believe that the ultimate outcome of such matters~~remainder 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.be used for general corporate purposes.

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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~~2013 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~~2013 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.

2221

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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~~three business segments: ~~Specialty, Regional, Alternative Markets, Reinsurance~~Insurance-Domestic, Insurance-International and ~~International.~~Reinsurance-Global. 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, reinsurance and ~~reinsurance~~enterprise risk 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 2224 of our 4849 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,~~Scandinavia, 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~~an 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~~have increased since the beginning of 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 long-term 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.~~income and investment gains. 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. Returns available on fixed maturity investments are at historically low levels. The Company's investment income has been negatively impacted by the low fixed maturity investment returns, and will be further impacted if investment returns remain at this level.

The Company also invests in equity securities, merger arbitrage, private equity investments, investment funds, loans receivable 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

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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.

~~Table of Contents~~

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.

Table of Contents

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

~~Table of Contents~~

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~~2012 (dollars in thousands):


	Frequency (+/-)						Frequency (+/-)
Severity (+/-)	1%		5%		10%		1%		5%		10%
1%	$	56,116	$	168,908	$	309,896	$	60,260	$	181,379	$	332,777
5%	168,908		286,166		432,738		181,379		307,294		464,689
10%	309,896		432,738		586,291		332,777		464,689		629,579



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.



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



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


							March 31, 2013			December 31, 2012
	September 30, 2012			December 31, 2011			(Unaudited)
Assets
Investments:
Fixed maturity securities	$	11,892,412		$	11,312,037		$	11,665,117		$	11,943,956
Equity securities available for sale	425,322			443,439
Equity securities							399,386			376,022
Arbitrage trading account	417,446			397,312			701,223			329,077
Investment funds	747,638			680,638			793,603			809,689
Loans receivable	371,408			263,187			456,533			401,961
Real estate	433,686			342,905			588,777			606,735
Total investments	14,287,912			13,439,518			14,604,639			14,467,440
Cash and cash equivalents	1,189,564			911,742			945,492			905,670
Premiums and fees receivable	1,409,246			1,206,204			1,504,535			1,440,752
Due from reinsurers	1,309,463			1,215,679			1,441,389			1,450,348
Accrued investment income	131,790			133,776			126,577			127,230
Prepaid reinsurance premiums	311,355			258,271			345,329			316,309
Deferred policy acquisition costs	400,727			364,937			425,070			404,047
Real estate, furniture and equipment	258,368			262,275			271,012			267,227
Goodwill	87,865			87,865			107,529			87,865
Trading account receivables from brokers and clearing organizations	387,352			318,240			28,720			446,873
Current federal and foreign income taxes	5,122			9,670
Other assets	154,148			195,696			320,342			242,135
Total assets	$	19,932,912		$	18,403,873		$	20,120,634		$	20,155,896

Liabilities and Equity
Liabilities:
Reserves for losses and loss expenses	$	9,562,877		$	9,337,134		$	9,809,843		$	9,751,086
Unearned premiums	2,480,449			2,189,575			2,635,995			2,474,847
Due to reinsurers	303,424			241,204			298,557			316,388
Trading account securities sold but not yet purchased	149,405			62,514			79,965			121,487
Deferred federal and foreign income taxes	69,968			2,835
Federal and foreign income taxes - current and deferred							104,810			82,801
Other liabilities	912,357			866,229			844,297			959,080
Junior subordinated debentures	243,154			242,997			243,258			243,206
Senior notes and other debt	1,877,431			1,500,503			1,693,279			1,871,535
Total liabilities	15,599,065			14,442,991			15,710,004			15,820,430
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
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 136,028,287 and 136,017,732 shares, respectively							47,024			47,024
Additional paid-in capital	936,915			941,109			949,926			945,166
Retained earnings	4,800,537			4,491,162			4,922,178			4,817,807
Accumulated other comprehensive income	508,152			354,851			428,592			465,631
Treasury stock, at cost, 99,161,296 and 97,597,899 shares, respectively	(1,968,227		)	(1,880,790		)
Treasury stock, at cost, 99,089,631and 99,100,186 shares, respectively							(1,969,179		)	(1,969,411		)
Total stockholders’ equity	4,324,401			3,953,356			4,378,541			4,306,217
Noncontrolling interests	9,446			7,526			32,089			29,249
Total equity	4,333,847			3,960,882			4,410,630			4,335,466
Total liabilities and equity	$	19,932,912		$	18,403,873		$	20,120,634		$	20,155,896



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



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


	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended
	September 30,						September 30,						March 31
	2012			2011			2012			2011			2013			2012
REVENUES:
Net premiums written	$	1,275,887		$	1,126,139		$	3,670,404		$	3,266,857		$	1,376,966		$	1,203,526
Change in net unearned premiums	(89,354		)	(70,316		)	(236,863		)	(211,293		)	(144,847		)	(103,875		)
Net premiums earned	1,186,533			1,055,823			3,433,541			3,055,564			1,232,119			1,099,651
Net investment income	116,019			114,063			434,888			409,261			135,929			157,619
Insurance service fees	26,208			22,279			77,121			69,487			26,736			23,877
Net investment gains:
Net realized gains on investment sales	17,226			21,238			84,989			73,812
Net investment gains													19,969			43,477
Change in valuation allowance, net of other-than-temporary impairments	5,000			—			9,014			(400		)	—			4,014
Net investment gains	22,226			21,238			94,003			73,412
Revenues from wholly-owned investees	68,087			65,922			173,196			175,943			91,735			49,675
Other income	1,428			406			2,204			1,364			281			392
Total revenues	1,420,501			1,279,731			4,214,953			3,785,031			1,506,769			1,378,705
OPERATING COSTS AND EXPENSES:
Losses and loss expenses	736,632			683,980			2,147,306			1,965,351			744,679			679,472
Other operating costs and expenses	451,487			407,149			1,332,024			1,196,936			481,604			431,779
Expenses from wholly-owned investees	66,177			64,388			172,438			174,059			89,152			51,330
Interest expense	32,512			28,068			93,750			84,317			31,111			28,821
Total operating costs and expenses	1,286,808			1,183,585			3,745,518			3,420,663			1,346,546			1,191,402
Income before income taxes	133,693			96,146			469,435			364,368			160,223			187,303
Income tax expense	(32,685		)	(19,775		)	(124,291		)	(90,282		)	(43,625		)	(52,071		)
Net income before noncontrolling interests	101,008			76,371			345,144			274,086			116,598			135,232
Noncontrolling interests	(61		)	39			(41		)	98			17			86
Net income to common stockholders	$	100,947		$	76,410		$	345,103		$	274,184		$	116,615		$	135,318

NET INCOME PER SHARE:
Basic	$	0.74		$	0.55		$	2.51		$	1.95		$	0.86		$	0.98
Diluted	0.71			0.53			2.41			1.87			0.83			0.94



	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 thousands)	Acquired in 2013

Cash and cash equivalents	$	3,911
Real estate, furniture and equipment	898
Goodwill	19,664
Intangible assets	44,800
Other assets	60,661
Total assets acquired	129,934
Debt	(27,612		)
Other liabilities assumed	(17,076		)
Net assets acquired	$	85,246



	Unrealized Investment gains					Currency translation adjustments			Net pension asset					Accumulated other comprehensive income (loss)
(In thousands)
Changes in AOCI
Beginning of period	$	517,658				$	(36,676	)	$	(15,351	)			$	465,631
Other comprehensive income (loss) before reclassifications	20,989					(46,623		)	—					(25,634		)
Amounts reclassified from AOCI	(13,179		)			—			1,814					(11,365		)
Other comprehensive income (loss)	7,810					(46,623		)	1,814					(36,999		)
Unrealized investment gain related to non-controlling interest	(40		)			—			—					(40		)
Ending balance	$	525,428				$	(83,299	)	$	(13,537	)			$	428,592
Amounts reclassified from AOCI
Pre-tax	$	(20,075	)	(1	)	$	—		$	2,792		(3	)	$	(17,283	)
Tax effect	6,896			(2	)	—			(978		)	(2	)	5,918
After-tax amounts reclassified	$	(13,179	)			$	—		$	1,814				$	(11,365	)
Other comprehensive income (loss)
Pre-tax	$	12,015				$	(46,623	)	$	2,792				$	(31,816	)
Tax effect	(4,205		)			—			(978		)			(5,183		)
Other comprehensive income (loss)	$	7,810				$	(46,623	)	$	1,814				$	(36,999	)


(Dollars in thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2012
(In thousands)												Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
														Gains		Losses
March 31, 2013
Held to maturity:
State and municipal	$	64,301	$	17,979	$	—		$	82,280	$	64,301	$	66,125	$	17,675	$	—		$	83,800	$	66,125
Residential mortgage-backed	34,065		5,661		—			39,726		34,065		31,181		4,977		—			36,158		31,181
Corporate	4,997		670		—			5,667		4,997		4,997		555		—			5,552		4,997
Total held to maturity	103,363		24,310		—			127,673		103,363		102,303		23,207		—			125,510		102,303
Available for sale:
U.S. government and government agency	858,190		80,406		(1,283		)	937,313		937,313		807,341		68,429		(58		)	875,712		875,712
State and municipal	4,509,239		348,413		(14,862		)	4,842,790		4,842,790		4,110,714		308,121		(9,219		)	4,409,616		4,409,616
Mortgage-backed securities:
Residential (1)	1,458,059		61,231		(7,976		)	1,511,314		1,511,314		1,293,875		48,550		(6,878		)	1,335,547		1,335,547
Commercial	152,816		5,430		(238		)	158,008		158,008		203,260		6,504		(398		)	209,366		209,366
Corporate	3,052,275		212,664		(15,787		)	3,249,152		3,249,152		3,370,627		210,832		(10,380		)	3,571,079		3,571,079
Foreign	1,008,266		82,826		(620		)	1,090,472		1,090,472		1,065,472		96,381		(359		)	1,161,494		1,161,494
Total available for sale	11,038,845		790,970		(40,766		)	11,789,049		11,789,049		10,851,289		738,817		(27,292		)	11,562,814		11,562,814
Total investments in fixed maturity securities	$	11,142,208	$	815,280	$	(40,766	)	$	11,916,722	$	11,892,412	$	10,953,592	$	762,024	$	(27,292	)	$	11,688,324	$	11,665,117
December 31, 2011
December 31, 2012
Held to maturity:
State and municipal	$	74,354	$	12,546	$	—		$	86,900	$	74,354	$	65,190	$	18,529	$	—		$	83,719	$	65,190
Residential mortgage-backed	35,759		5,610		—			41,369		35,759		32,764		5,286		—			38,050		32,764
Corporate	4,996		717		—			5,713		4,996		4,997		605		—			5,602		4,997
Total held to maturity	115,109		18,873		—			133,982		115,109		102,951		24,420		—			127,371		102,951
Available for sale:
U.S. government and government agency	906,924		69,920		(351		)	976,493		976,493		827,591		72,532		(1,660		)	898,463		898,463
State and municipal	5,031,275		308,345		(16,550		)	5,323,070		5,323,070		4,449,238		328,974		(9,693		)	4,768,519		4,768,519
Mortgage-backed securities:
Residential (1)	1,416,427		75,635		(15,894		)	1,476,168		1,476,168		1,395,739		53,846		(7,456		)	1,442,129		1,442,129
Commercial	105,383		4,054		(1,018		)	108,419		108,419		268,671		5,641		(744		)	273,568		273,568
Corporate	2,328,200		132,311		(36,087		)	2,424,424		2,424,424		3,144,480		214,322		(12,083		)	3,346,719		3,346,719
Foreign	850,838		42,165		(4,649		)	888,354		888,354		1,029,284		83,347		(1,024		)	1,111,607		1,111,607
Total available for sale	10,639,047		632,430		(74,549		)	11,196,928		11,196,928		11,115,003		758,662		(32,660		)	11,841,005		11,841,005
Total investments in fixed maturity securities	$	10,754,156	$	651,303	$	(74,549	)	$	11,330,910	$	11,312,037	$	11,217,954	$	783,082	$	(32,660	)	$	11,968,376	$	11,943,956


(1)	Gross unrealized losses for residential mortgage-backed securities include $~~3,251,000~~1,925,000 and $~~7,668,000~~3,037,000 as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012, respectively, related to the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in other comprehensive income.


(Dollars in thousands)	Amortized Cost		Fair Value
(In thousands)					Amortized Cost		Fair Value
Due in one year or less	$	877,420	$	896,040	$	798,683	$	826,292
Due after one year through five years	3,223,807		3,416,358		3,482,465		3,673,747
Due after five years through ten years	2,422,530		2,688,914		2,536,987		2,806,448
Due after ten years	2,973,511		3,206,362		2,607,141		2,800,766
Mortgage-backed securities	1,644,940		1,709,048		1,528,316		1,581,071
Total	$	11,142,208	$	11,916,722	$	10,953,592	$	11,688,324


(Dollars in thousands)	Cost		Gross Unrealized					Fair Value		Carrying Value
(Dollars in thousands)	Cost		Gains		Losses			Fair Value		Carrying Value
September 30, 2012
(In thousands)												Cost		Gross Unrealized					Fair Value		Carrying Value
(In thousands)												Cost		Gains		Losses			Fair Value		Carrying Value
March 31, 2013
Common stocks	$	228,524	$	96,648	$	(291	)	$	324,881	$	324,881	$	224,378	$	71,995	$	(1,342	)	$	295,031	$	295,031
Preferred stocks	95,566		8,024		(3,149		)	100,441		100,441		82,600		23,340		(1,585		)	104,355		104,355
Total	$	324,090	$	104,672	$	(3,440	)	$	425,322	$	425,322	$	306,978	$	95,335	$	(2,927	)	$	399,386	$	399,386
December 31, 2011
December 31, 2012
Common stocks	$	209,210	$	113,660	$	(2,888	)	$	319,982	$	319,982	$	222,671	$	60,102	$	(707	)	$	282,066	$	282,066
Preferred stocks	133,183		5,139		(14,865		)	123,457		123,457		85,504		10,103		(1,651		)	93,956		93,956
Total	$	342,393	$	118,799	$	(17,753	)	$	443,439	$	443,439	$	308,175	$	70,205	$	(2,358	)	$	376,022	$	376,022


	For the Nine Months Ended						For the Three Months Ended
	September 30,						March 31
	2012			2011			2013			2012
COMMON STOCK:
Beginning and end of period	$	47,024		$	47,024		$	47,024		$	47,024
ADDITIONAL PAID-IN CAPITAL:
Beginning of period	$	941,109		$	935,099		$	945,166		$	941,109
Stock options exercised and restricted stock units issued, net of tax	(24,683		)	(26,914		)	(233		)	(10,139		)
Restricted stock units expensed	20,035			18,855			4,993			7,447
Stock issued to directors	454			308
End of period	$	936,915		$	927,348		$	949,926		$	938,417
RETAINED EARNINGS:
Beginning of period	$	4,491,162		$	4,143,207		$	4,817,807		$	4,491,162
Net income to common stockholders	345,103			274,184			116,615			135,318
Dividends	(35,728		)	(32,274		)	(12,244		)	(11,041		)
End of period	$	4,800,537		$	4,385,117		$	4,922,178		$	4,615,439
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Unrealized investment gains (losses):
Unrealized investment gains:
Beginning of period	$	430,419		$	334,747		$	517,658		$	430,419
Unrealized gains on securities not other-than-temporarily impaired	123,579			79,435			7,047			20,868
Unrealized gains (losses) on other-than-temporarily impaired securities	2,870			(1,271		)
Unrealized gains on other-than-temporarily impaired securities							723			1,133
End of period	556,868			412,911			525,428			452,420
Currency translation adjustments:
Beginning of period	(61,239		)	(42,488		)	(36,676		)	(61,239		)
Net change in period	24,382			(21,104		)	(46,623		)	15,583
End of period	(36,857		)	(63,592		)	(83,299		)	(45,656		)
Net pension asset:
Beginning of period	(14,329		)	(15,696		)	(15,351		)	(14,329		)
Net change in period	2,470			2,118			1,814			824
End of period	(11,859		)	(13,578		)	(13,537		)	(13,505		)
Total accumulated other comprehensive income	$	508,152		$	335,741		$	428,592		$	393,259
TREASURY STOCK:
Beginning of period	$	(1,880,790	)	$	(1,750,494	)	$	(1,969,411	)	$	(1,880,790	)
Stock exercised/vested	40,137			40,571			232			20,099
Stock repurchased	(128,155		)	(177,648		)	—			(6,532		)
Stock issued to directors	581			564
End of period	$	(1,968,227	)	$	(1,887,007	)	$	(1,969,179	)	$	(1,867,223	)


	For the Nine Months Ended						For the Three Months Ended
	September 30,						March 31,
	2012			2011			2013			2012
CASH FROM (USED IN) OPERATING ACTIVITIES:
CASH FROM OPERATING ACTIVITIES:
Net income to common stockholders	$	345,103		$	274,184		$	116,615		$	135,318
Adjustments to reconcile net income to net cash from operating activities:
Net investment gains	(94,003		)	(73,412		)	(19,969		)	(47,491		)
Depreciation and amortization	65,089			57,332			20,910			22,212
Noncontrolling interests	41			(98		)	(17		)	(86		)
Investment funds	(50,124		)	(11,236		)	(10,934		)	(27,624		)
Stock incentive plans	21,070			19,727			4,989			7,447
Change in:
Arbitrage trading account	(2,355		)	(2,840		)	4,485			(2,946		)
Premiums and fees receivable	(192,803		)	(111,411		)	(76,268		)	(97,077		)
Reinsurance accounts	(90,587		)	(137,192		)	(34,039		)	(16,857		)
Deferred policy acquisition costs	(34,843		)	(41,635		)	(23,608		)	(11,483		)
Deferred income taxes	(195		)	25,934
Income taxes							22,471			48,160
Reserves for losses and loss expenses	215,993			250,393			84,569			47,443
Unearned premiums	284,908			264,681			174,229			115,434
Other	(13,945		)	(29,184		)	(148,321		)	(98,688		)
Net cash from (used in) operating activities	453,349			485,243
Net cash from operating activities							115,112			73,762
CASH FROM (USED IN) INVESTING ACTIVITIES:
Proceeds from sale of fixed maturity securities	549,876			1,129,377			463,388			295,134
Proceeds from sale of equity securities	233,239			112,760			38,248			32,575
Distributions from (contributions to) investment funds	(6,293		)	(148,537		)	(22,072		)	24,744
Proceeds from maturities and prepayments of fixed maturity securities	1,659,751			1,190,751			667,711			408,647
Purchase of fixed maturity securities	(2,510,322		)	(2,118,556		)	(896,378		)	(872,588		)
Purchase of equity securities	(218,490		)	(49,932		)	(35,486		)	(68,652		)
Real estate purchased	(71,348		)	(347,602		)	(10,301		)	(5,611		)
Change in loans receivable	(106,721		)	71,803			(53,405		)	(93,934		)
Net additions to real estate, furniture and equipment	(22,319		)	(37,405		)	(13,042		)	(15,055		)
Change in balances due to security brokers	79,344			122,447			43,325			16,146
Payment for business purchased, net of cash acquired	—			(8,579		)	(38,556		)	—
Net cash from (used in) investing activities	(413,283		)	(83,473		)	143,432			(278,594		)
CASH FROM (USED IN) FINANCING ACTIVITIES:
Repayment of senior notes and other debt							(206,280		)	(1,684		)


	Less Than 12 Months				12 Months or Greater				Total				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
(In thousands)													Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
March 31, 2013
U.S. government and agency	$	51,405	$	1,283	$	—	$	—	$	51,405	$	1,283	$	24,203	$	58	$	—	$	—	$	24,203	$	58
State and municipal	49,594		558		184,408		14,304		234,002		14,862		133,592		1,830		100,664		7,389		234,256		9,219
Mortgage-backed securities	259,508		3,338		65,349		4,876		324,857		8,214		451,452		4,235		44,419		3,041		495,871		7,276
Corporate	313,080		1,784		78,646		14,003		391,726		15,787		348,050		2,425		66,309		7,955		414,359		10,380
Foreign	101,200		516		5,508		104		106,708		620		91,803		309		3,221		50		95,024		359
Fixed maturity securities	774,787		7,479		333,911		33,287		1,108,698		40,766		1,049,100		8,857		214,613		18,435		1,263,713		27,292
Common stocks	34,702		291		—		—		34,702		291		31,119		1,342		—		—		31,119		1,342
Preferred stocks	6,435		954		40,094		2,195		46,529		3,149		386		235		24,324		1,350		24,710		1,585
Equity securities	41,137		1,245		40,094		2,195		81,231		3,440		31,505		1,577		24,324		1,350		55,829		2,927
Total	$	815,924	$	8,724	$	374,005	$	35,482	$	1,189,929	$	44,206	$	1,080,605	$	10,434	$	238,937	$	19,785	$	1,319,542	$	30,219

December 31, 2011
December 31, 2012
U.S. government and agency	$	24,668	$	169	$	4,800	$	182	$	29,468	$	351	$	69,551	$	1,660	$	—	$	—	$	69,551	$	1,660
State and municipal	131,417		827		183,205		15,723		314,622		16,550		152,694		1,639		135,967		8,054		288,661		9,693
Mortgage-backed securities	172,729		2,439		94,243		14,473		266,972		16,912		484,731		3,629		58,292		4,571		543,023		8,200
Corporate	341,764		8,327		125,654		27,760		467,418		36,087		371,781		2,964		70,537		9,119		442,318		12,083
Foreign	197,560		4,078		7,159		571		204,719		4,649		95,623		996		11,210		28		106,833		1,024
Fixed maturity securities	868,138		15,840		415,061		58,709		1,283,199		74,549		1,174,380		10,888		276,006		21,772		1,450,386		32,660
Common stocks	47,098		2,888		—		—		47,098		2,888		46,725		707		—		—		46,725		707
Preferred stocks	23,782		125		45,314		14,740		69,096		14,865		—		—		39,812		1,651		39,812		1,651
Equity securities	70,880		3,013		45,314		14,740		116,194		17,753		46,725		707		39,812		1,651		86,537		2,358
Total	$	939,018	$	18,853	$	460,375	$	73,449	$	1,399,393	$	92,302	$	1,221,105	$	11,595	$	315,818	$	23,423	$	1,536,923	$	35,018


	Carrying Value as of				Income (Losses) from Investment Funds					Carrying Value as of				Income (Losses) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,					March 31		December 31,		For the Three Months Ended March 31,
(Dollars in thousands)	2012		2011		2012		2011
(In thousands)										2013		2012		2013			2012
Real estate	$	381,986	$	373,413	$	13,513	$	14,977		$	379,006	$	373,259	$	(2,001	)	$	8,655
Energy	129,376		98,974		28,966		10,947			147,383		146,325		9,466			17,938
Arbitrage	61,049		58,008		3,041		(2,767		)	63,462		63,920		(458		)	1,770
Other	175,227		150,243		4,604		(2,088		)	203,752		226,185		3,927			(740		)
Total	$	747,638	$	680,638	$	50,124	$	21,069		$	793,603	$	809,689	$	10,934		$	27,623



	Carrying value as of
	March 31,		December 31,
(In thousands)	2013		2012
Properties in operation	$	264,755	$	282,899
Properties under development	324,022		323,836
Total	$	588,777	$	606,735



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



Change in unrealized investment gains and losses:
Fixed maturity securities	$	(15,589	)	$	19,422
Previously impaired fixed maturity securities	1,112			1,743
Equity securities available for sale	24,561			11,595
Investment funds	(3,268		)	1,677
Total change in unrealized investment gains and losses	6,816			34,437
Income tax benefit (expense)	994			(12,413		)
Noncontrolling interests	(40		)	(23		)
Total after-tax unrealized gains and losses	$	7,770		$	22,001


(Dollars in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
($ in thousands)						Number of Securities	Aggregate Fair Value			Gross Unrealized Loss
Unrealized loss greater than $5 million:						—	$	—	—	$	—
Unrealized loss less than $5 million:
Mortgage-backed securities	13	$	71,135	$	4,908	12	54,367			2,925
Corporate	11	28,841		2,003		9	28,242			3,172
State and municipal	4	32,625		2,197		2	24,654			1,264
Foreign						1	11,513			7
Total	28	$	132,601	$	9,108	24	$	118,776		$	7,368


(Dollars in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2012
(In thousands)									Total		Level 1		Level 2		Level 3
March 31, 2013
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	937,313	$	—	$	937,313	$	—	$	875,712	$	—	$	875,712	$	—
State and municipal	4,842,790		—		4,842,790		—		4,409,616		—		4,409,616		—
Mortgage-backed securities	1,669,322		—		1,669,322		—		1,544,913		—		1,544,913		—
Corporate	3,249,152		—		3,183,648		65,504		3,571,079		—		3,515,310		55,769
Foreign	1,090,472		—		1,090,472		—		1,161,494		—		1,161,494		—
Total fixed maturity securities available for sale	11,789,049		—		11,723,545		65,504		11,562,814		—		11,507,045		55,769
Equity securities available for sale:
Equity securities:
Common stocks	324,881		323,472		—		1,409		295,031		293,793		—		1,238
Preferred stocks	100,441		—		97,449		2,992		104,355		—		103,969		386
Total equity securities available for sale	425,322		323,472		97,449		4,401
Total equity securities									399,386		293,793		103,969		1,624
Arbitrage trading account	417,446		294,713		121,948		785		701,223		236,670		463,456		1,097
Total	$	12,631,817	$	618,185	$	11,942,942	$	70,690	$	12,663,423	$	530,463	$	12,074,470	$	58,490
Liabilities:
Securities sold but not yet purchased	$	149,405	$	148,301	$	1,084	$	20	$	79,965	$	70,580	$	9,383	$	2
December 31, 2011
December 31, 2012
Assets:
Fixed maturity securities available for sale:
U.S. government and agency	$	976,493	$	—	$	976,493	$	—	$	898,463	$	—	$	898,463	$	—
State and municipal	5,323,070		—		5,323,070		—		4,768,519		—		4,768,519		—
Mortgage-backed securities	1,584,587		—		1,584,587		—		1,715,697		—		1,715,697		—
Corporate	2,424,424		—		2,356,596		67,828		3,346,719		—		3,287,654		59,065
Foreign	888,354		—		888,354		—		1,111,607		—		1,111,607		—
Total fixed maturity securities available for sale	11,196,928		—		11,129,100		67,828		11,841,005		—		11,781,940		59,065
Equity securities available for sale:
Equity securities:
Common stocks	319,982		318,423		—		1,559		282,066		280,658		—		1,408
Preferred stocks	123,457		—		111,154		12,303		93,956		—		93,335		621
Total equity securities available for sale	443,439		318,423		111,154		13,862
Total equity securities									376,022		280,658		93,335		2,029
Arbitrage trading account	397,312		208,516		187,945		851		329,077		233,603		94,546		928
Total	$	12,037,679	$	526,939	$	11,428,199	$	82,541	$	12,546,104	$	514,261	$	11,969,821	$	62,022
Liabilities:
Securities sold but not yet purchased	$	62,514	$	62,493	$	—	$	21	$	121,487	$	114,909	$	6,558	$	20


			Gains (Losses) Included in																						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:
(In thousands)																							Beginning Balance		Earnings			Other Comprehensive Income				Purchases			(Sales)			Maturities			Transfer in		Ending Balance
Three months ended March 31, 2013:
Assets:
Fixed maturity securities available for sale:
Fixed maturities available for sale:
Corporate	$	67,828	$	189		$	5,367			$	223		$	—		$	(8,103	)	$	—	$	65,504	$	59,065	$	(15	)	$	144			$	14,297		$	(14,255	)	$	(3,467	)	$	—	$	55,769
Total	67,828		189			5,367				223			—			(8,103		)	—		65,504		59,065		(15		)	144				14,297			(14,255		)	(3,467		)	—		55,769
Equity securities available for sale:
Common stocks	1,559		—			—				—			(150		)	—			—		1,409		1,408		—			—				—			(170		)	—			—		1,238
Preferred stocks	12,303		2,095			(1,940		)		—			(9,466		)	—			—		2,992		621		—			(235		)		—			—			—			—		386
Total	13,862		2,095			(1,940		)		—			(9,616		)	—			—		4,401		2,029		—			(235		)		—			(170		)	—			—		1,624
Arbitrage trading account	851		(46		)	—			—	—		—	(35		)	—			15		785		928		169			—			—	—		—	—			—			—		1,097
Total	$	82,541	$	2,238		$	3,427			$	223		$	(9,651	)	$	(8,103	)	$	15	$	70,690	$	62,022	$	154		$	(91	)		$	14,297		$	(14,425	)	$	(3,467	)	$	—	$	58,490
Liabilities:
Securities sold but not yet purchased	$	21	$	(1	)	$	—			$	—		$	—		$	—		$	—	$	20	$	20	$	(18	)	$	—			$	—		$	—		$	—		$	—	$	2

For the year ended December 31, 2011:
For the year ended December 31, 2012:
Assets:
Fixed maturity securities available for sale:
Fixed maturities available for sale:
Corporate	$	88,063	$	(454	)	$	(870	)		$	15,271		$	(11,864	)	$	(22,318	)	$	—	$	67,828	$	67,828	$	(1,497	)	$	9,622			$	283		$	—		$	(17,171	)	$	—	$	59,065
Total	88,063		(454		)	(870		)		15,271			(11,864		)	(22,318		)	—		67,828		67,828		(1,497		)	9,622				283			—			(17,171		)	—		59,065
Equity securities available for sale:
Common stocks	1,559		—			—				—			—			—			—		1,559		1,559		—			—				—			(151		)	—			—		1,408
Preferred stocks	89,446		28,947			(30,865		)		—			(75,225		)	—			—		12,303		12,303		1,126			(1,737		)		—			(11,071		)	—			—		621
Total	91,005		28,947			(30,865		)		—			(75,225		)	—			—		13,862		13,862		1,126			(1,737		)		—			(11,222		)	—			—		2,029
Arbitrage trading account	3,187		572			—				269			(3,266		)	—			89		851		851		(3,534		)	3,570				—			(52		)	—			93		928
Total	$	182,255	$	29,065		$	(31,735	)		$	15,540		$	(90,355	)	$	(22,318	)	$	89	$	82,541	$	82,541	$	(3,905	)	$	11,455			$	283		$	(11,274	)	$	(17,171	)	$	93	$	62,022

Liabilities:
Securities sold but not yet purchased	$	—	$	40		$	—			$	67		$	(86	)	$	—		$	—	$	21	$	21	$	(1	)	$	—			$	—		$	—		$	—		$	—	$	20


(Dollars in thousands)	Reported Case Reserves		Incurred But Not Reported		Total
September 30, 2012
General liability	$	983,123	$	1,893,580	$	2,876,703
(In thousands)							Reported Case Reserves		Incurred But Not Reported		Total
March 31, 2013
Other liability							$	931,703	$	1,845,104	$	2,776,807
Workers’ compensation	1,367,359		1,067,002		2,434,361		1,449,415		1,126,527		2,575,942
Short-tail lines							239,397		209,432		448,829
Commercial automobile	260,814		191,600		452,414		277,563		197,905		475,468
International	351,155		305,864		657,019
Other	205,724		317,207		522,931
Products liability							280,900		324,115		605,015
Total primary	3,168,175		3,775,253		6,943,428		3,178,978		3,703,083		6,882,061
Reinsurance	574,206		801,993		1,376,199		647,161		937,472		1,584,633
Total	$	3,742,381	$	4,577,246	$	8,319,627	$	3,826,139	$	4,640,555	$	8,466,694
December 31, 2011
General liability	$	890,238	$	1,974,361	$	2,864,599
December 31, 2012
Other liability							$	922,568	$	1,863,465	$	2,786,033
Workers’ compensation	1,353,328		992,775		2,346,103		1,427,599		1,114,340		2,541,939
Short-tail lines							240,411		205,272		445,683
Commercial automobile	275,198		195,323		470,521		275,322		204,900		480,222
International	277,857		279,485		557,342
Other	200,969		293,442		494,411
Products liability							271,854		312,811		584,665
Total primary	2,997,590		3,735,386		6,732,976		3,137,754		3,700,788		6,838,542
Reinsurance	584,909		854,227		1,439,136		626,962		946,347		1,573,309
Total	$	3,582,499	$	4,589,613	$	8,172,112	$	3,764,716	$	4,647,135	$	8,411,851


(Dollars in thousands)	Carrying Value		Percent of Total		Carrying Value		Percent of Total
Pricing source:
Independent pricing services	$	10,932,098	92.7	%	$	10,564,047	91.3	%
Syndicate manager	75,875		0.6	%	91,244		0.8	%
Directly by the Company based on:
Observable data	715,572		6.1	%	851,754		7.4	%
Cash flow model	65,504		0.6	%	55,769		0.5	%
Total	$	11,789,049	100.0	%	$	11,562,814	100.0	%


	2012		2011
(In thousands, except per share data)					2013		2012
Net income to common stockholders	$	345,103	$	274,184	$	116,615	$	135,318
Weighted average diluted shares	142,941		146,553		141,223		143,411
Net income per diluted share	$	2.41	$	1.87	$	0.83	$	0.94


($ in thousands)											Amount						Average Annualized Yield
	Amount						Average Annualized Yield				2013			2012			2013		2012
(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	%	$	117,836		$	119,288		3.7	%	3.8	%
Arbitrage trading account	8,938			10,696			3.7		4.0		3,783			6,481			3.7		8.5
Investment funds	50,124			21,069			10.2		4.8		10,934			27,623			5.7		17.8
Equity securities available for sale	10,980			9,544			3.8		3.5		2,247			3,150			2.9		3.5
Real estate	8,621			5,192			3.1		6.0		3,141			2,176			2.1		2.5
Gross investment income	439,240			411,866			4.1	%	4.0	%	137,941			158,718			3.7	%	4.5	%
Investment expenses	(4,352		)	(2,605		)					(2,012		)	(1,099		)
Total	$	434,888		$	409,261		4.0	%	4.0	%	$	135,929		$	157,619		3.7	%	4.5	%


(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.


(Dollars in thousands)	Government		Corporate		Total		Government		Corporate		Total
Australia	$	204,583	$	113,990	$	318,573	$	243,737	$	139,062	$	382,799
Canada							136,247		49,419		185,666
United Kingdom	139,804		33,693		173,497		111,644		58,200		169,844
Canada	121,137		51,321		172,458
Argentina	124,833		24,559		149,392		133,466		29,511		162,977
Germany	94,056		27,461		121,517		72,055		—		72,055
Norway							64,936				64,936
Brazil	46,650		—		46,650		49,550		—		49,550
Norway	38,092				38,092
Supranational (1)	36,950		—		36,950		38,672		—		38,672
Netherlands			11,511		11,511		—		13,057		13,057
Switzerland	—		11,231		11,231		—		11,279		11,279
Singapore	6,990		—		6,990		6,840		—		6,840
Uruguay	3,187		—		3,187		3,400		—		3,400
New Zealand	424		—		424		419		—		419
Total	$	816,706	$	273,766	$	1,090,472	$	860,966	$	300,528	$	1,161,494


Item 3.	Quantitative and Qualitative Disclosure About Market Risk



	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



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.



		W. R. BERKLEY CORPORATION
Date:	~~November 8, 2012~~May 6, 2013	/s/ William R. Berkley
		William R. Berkley
		Chairman of the Board and Chief Executive Officer

Date:	~~November 8, 2012~~May 6, 2013	/s/ Eugene G. Ballard
		Eugene G. Ballard
		Senior Vice President - Chief Financial Officer

(dollars in thousands)

Fair Value

Nine months ended September 30: