W. Robert Berkley
President and Chief Executive Officer at W. R. Berkley
Okay. Rich, thank you. So, let me start with a few sort of comments on the marketplace and then I'll offer a few further observations on our quarter. So perhaps a place to begin would be bifurcating between insurance versus reinsurance, which obviously the markets are related, but they're not one in the same and starting with insurance maybe calling out E&S as a part of the market. I think there's been some commentary around perhaps E&S is losing some momentum and I would suggest that one needs to use, at least through my lens, somewhat of a finer brush. As far as we can see, the momentum for the liability lines is -- continues to be as strong as ever. To the extent you're seeing any slowing in the momentum of E&S, it's likely to be property related.
As far as the property market in general, when it comes to insurance, we think that it still does have some momentum, but it probably does not have the level of momentum that it had last year. We're still seeing rates moving up and we expect they will continue to move up for the immediate future. That having been said, I think part of what you're seeing is the insurance marketplace catching up to what the reinsurance marketplace had taken action around and their costs of the capacity the rent has gone up.
As far as GL, again, from our perspective, it remains very robust, both admitted and non admitted and no surprise, it's the social inflation continuing to persist that is driving that. The topic of social inflation auto, which as I think I've commented on in the past, continues to be very much in the crosshairs of social inflation. We think that, that is part of the market that you're going to see considerable additional firming going on, specifically in commercial auto. Excess and umbrella, particularly to the extent that it relates to the commercial auto market, you are going to see additional firming there as well. Workers compensation, we have offered our more defensive view around that. And of course, as far as professional liability goes, we have called out D&O where obviously some number of years it spiked. More recently it has been dropping at somewhat of a precipitous rate. And at this stage, we view that it is not bottomed, but it is closing in on the bottom.
Pivoting to reinsurance, barring what Mother Nature may do tomorrow, it would seem as though the property cat cycle has run a bit of its course. From our perspective, rates were off for property cat reinsurance at 1.1, 5% or more risk adjusted. And, you know, we'll have to see how that unfolds. That having been said, we are seeing some potential green shoots of discipline returning to the liability market within under the umbrella of reinsurance. We have been reasonably outspoken about our concerns around discipline over the past couple of years within the liability or the reinsurance liability market and we will see what comes of that.
Turning to our quarter top line, just shy of a 11%. As you would have noted in the release, we are pleased with the rate increase that we got at the 7.8%, which in our opinion is comfortably outpacing trend in the aggregate. And the renewal retention ratio continues to be at approximately 80%, which is what we would expect. The strength in the insurance growth, as Rich referenced, just shy of 13% is quite strong. Property in particular was a contributor as we take advantage of that market opportunity. And again, in keeping with my comments about market conditions on the reinsurance front, you would have seen us continuing to exercise discipline when it comes to the casualty or liability lines.
As far as our loss ratio goes, clearly a good performance in the quarter and we believe that the stage is set for a good balance of the year, as well as increasingly what we should be expecting for 2025 and beyond. Just as a data point that I share from time-to-time because I think it's a helpful indicator or certainly a truth that we can all hang our hat on. During the quarter, our paid loss ratio was a 45.8, which is the second lowest it's been in the past eight years and the only time it was lower, it was lower by 50 basis points. So we are in a very comfortable place on that front.
Just on the topic of losses, maybe spending a few moments on the topic of loss reserves and I think there's a shared appreciation for the challenges that stem from just to put a stake in the ground 19 and prior and what that may mean. From our perspective, I think that we are well on our way, as I suggested to some, to having that behind us. The averaged life of our reserves is just inside of four years, so at this stage that period is getting very much towards the tail end, is there perhaps a little bit out there still? We'll see what time it's possible, but certainly our expectation is that much of it has been processed, if you will.
I think a few other data points that are worth noting at least we find them to be helpful as leading indicators when it comes to strength of reserves and putting aside the comment about paid losses, we would encourage people to consider having a look at IBNR as a percent of total reserves, the ratio of IBNR to case reserves and while some people may look at those two data points and say, well, you know, they could be impacted by the growth in the business and certainly there would be that reality to a certain extent, though I would suggest that people should look more carefully at how much of our growth was coming from rate.
That all having been said, there is another data point that we look to and we would encourage others to consider as well and that is initial IBNR as a percent of net premium earned. I think all of these data points that I and drawn to your attention to are worth your consideration and I think would suggest the -- this our reserves are in a improving a good place and more likely than not continuing to improve and we will see that mature over time.
As far as the expenses go, Rich walk through that. In particular, I would just call out that we had four businesses that had been in their infancy and the first quarter of this year is the first time we pulled them into the expense ratio and we're pleased to see how they are developing and maturing.
On the investment portfolio, Rich had walked you through this as well, but a couple of highlights from my perspective, he referenced the AA minus and it happens to be a very strong AA minus, so there could be a lot of credit activity and we would still be in a very comfortable place. As Rich flagged the duration, it nudged out from 2.4 to 2.5. Do we continue to look for opportunities to nudge it out? Yes, absolutely. Do we feel any pressure that we need to do that overnight? Absolutely not.
The book yield as Rich referenced or maybe he didn't, I'll be referencing now was 5.9%, but if you back out the Argentine component, the book yield is actually 4.2%. I think that's relevant because when we talk about how we're sort of laying the ground for the future here or what one should expect going forward with our sort of core domestic portfolio, which is the lion's share of what we have at 4.2% and a new money rate that's somewhere between 5.25 and 5.50. I think that combined with the strength of our cash flow should give you a sense as to the earnings power of the business and the contribution that we will be receiving from the investment portfolio, which again, I think there's considerable upside from here, again with the domestic core fixed income portfolio, that's 100 basis points plus upside from here.
So when you, you put it all together, I think that we have been thoughtful and prudent on the underwriting side. We responded to the data and pushed rate and adjusted terms, conditions and appetite mix of business and we are seeing the benefits of that, but we don't want to quite frankly as we had shared with you in the past, declare victory prematurely and but more likely, in my opinion than not, but we'll see with time, good news to come on that front.
In addition to that, as I just suggested, as it relates to the other part of our economic model, our investment portfolio, very well positioned, benefiting from the focus and the discipline and the opportunity to take advantage of a new money rate that is 100 basis points above where our book yield of our core portfolio will prove to be very advantageous.
So with that, I will pause there and Audra, if we could please open it up for questions?
