Rob Berkley
President and Chief Executive Officer at W. R. Berkley
Okay. Thanks, Rich. That was great. A couple of comments from me, maybe starting on the more macro in the industry, and then we can touch on our quarter as promised. So from my perspective, the industry continues to be one that responds to pain. Pain is the catalyst for discipline and change. We see that from one product to another. I guess perhaps one analogy would be the cast may change, but generally speaking, the script does not change. Unfortunately, it's somewhat predictable. Speaking of change, certainly we are seeing a bit of a tempering on the financial and economic inflation front. That having been said, social inflation shows no sign of abating.
Social inflation is something that we have been very actively and loudly talking about going back to 2018 when we started to wave our arms and share with people what we were seeing in loss trend. One of the challenges, particularly as of late, and it's really, in much of the country is there's a bit of resistance to many insurance departments and allowing carriers to get rate filings that they need to keep up with lost cost trend. That consequently has been creating and continued to create an opportunity in the specialty lines, in particular the E&S lines as the standard market is not able to get their rates to where they need to be again given what trend is driven by social inflation.
I'm not going to get into every nook and cranny of every major commercial line. But I will flag that auto liability continues to be an area of concern and obviously, by extension, that can feed into the umbrella line from our perspective when you talk about social inflation, there is no product line that is more exposed than auto liability these days. Turning to our quarter as Rich covered earlier, I would just point out the gross was up by 11.4%. As he mentioned the net was up by 11.2%. The big delta there was a couple of old one was our captive business, which continues to do exceptionally well.
A few new operations that we started and when they're in their infancy and don't have much balance to them. We'll maybe be a bit more dependent on the reinsurance buy. And lastly, there was a moment. Post 01/01but before everyone started to turn their attention to what could be a very active wind season, the ILW market softened a little bit and we took advantage of that. As Rich mentioned, the eleven 11/02[Phonetic] on the top line was reasonably healthy growth. The rate coming in at 83 ex comp. From our perspective, should give comfort to others. As it gives to us that we are keeping up with trend. That having been said, rates are important, but it's not the whole story.
One needs to be conscious of what's happening with terms and conditions and history would remind all of us that oftentimes, terms and conditions can have a greater impact than rate on the outcome of underwriting. In addition to that, something that we talk about from time to time, but is coming into sharper and sharper focus. And that is how there are certain territories or jurisdictions or venues that, as far as a legal environment or a legal climate are changing and changing very rapidly. So there are certain territories that once upon a time, politically were red and that would spill over to the legal environment.
We are seeing those change, and I wouldn't say that they're bright blue, but they are certainly evolving to something that's more of a shade of purple from our perspective. Rich touched on the expense ratio, again, reasonably stable there, obviously, as he had mentioned earlier in the year and again touched on in his comments a few moments ago. New businesses that we started that are in their infancy are now incorporated into that until they get their critical mass. They're a bit of a drag on the expense side. And in addition to that, we are making some pretty chunky investments on the tech front as well as the data and analytics front.
Loss ratio, the [Indecipherable] again, not bad given the time of year and what's going on with SES and related. That having been said. We are always looking to try and improve upon that. There's a lot of chatter in the marketplace at the moment around losses and specifically around reserves. Look, when the day is all done, one of the great challenges of this industry is you sell your product before you know your costs of goods sold. None of us know what tomorrow will bring. None of us know what a jury is going to do?
That having been said. As we have commented countless times over the past several years, particularly in light of the commentary, the questioning, and occasionally the chastising that we've received for in spite of all the rate we've gotten, how is it that you are not dropping our losses. Our response has been consistently that we have a respect for the unknown, we have an appreciation for what's going on with social inflation and consequently, early on, we are going to hold our picks at a higher level and they will season out over time as we have more information. A couple of data points that I thought could be possibly helpful is the paid loss ratio continues to run in the mid 40s.
When we look back at how much rate we have gotten since 2019, all lines. Ex comp on the insurance front or approximately 68%. That's cumulative, of course. And finally, another data point since some people have suggested that the paid loss ratio only tells part of the story because your business is growing. I would add to that much of the business growth has been due to rate, but nevertheless, I would suggest that people could look at a different data point if it would be helpful to them. That being -- initial IBNR relative to net earned premium.
And if you go back in time and you look at that data, which we have, If you look at sort of the 16 to 19 period that was running at somewhere between 31 and 34-ish percent. If you look at 20 to 23, that's running between 37.5 and 39%. So as people think about the strength of our loss reserves perhaps that would be a helpful data point. Pivoting over to the investment portfolio, Rich touched on this earlier duration, 2.5, strong AA minus. The domestic book yields coming in at 4.5 in the new money rate in spite of all the chatter around interest rates and where they're going, so on and so forth. It still starts with a 5 and I would tell you it's probably flirting with 5.25 these days.
Cash flow remains strong for the quarter, it was $881.6 billion for the first half of the year. Maybe taking half a step back and little more of a macro front. I think some people have taken note that we played it reasonably well in how we positioned things for this rising interest rate environment. And after the quick acknowledgment of that, I think attention quickly turns to so. What are you doing now? What are you doing to make sure you set the table appropriately for tomorrow and to make a long story short, we have a view that regardless of who ends up in the White House and regardless of who's sitting in what seat in Washington DC, this country has a serious issue with deficit and fundamentally a serious issue with spending.
So there is nothing that leads us to believe that, that is going to be curtailed anytime soon. That having been said what compounds the challenge is that some of the largest buyers of US treasuries, that being foreign buyers, specifically China and Japan. It's reasonably apparent that they, along with other foreign buyers, the appetite may not be there. So when you put all of this together, our view is that even if short term rates come down. You are likely to see the yield curve uninvert[Phonetic], and that will provide an opportunity for us to nudge our duration out. Obviously, around the election, there's a lot of commentary and speculation as to what leaders that will be in the White House will be doing going forward.
I would just add the observation from our perspective. If we find ourselves in a situation where an administration takes a different view around immigration and we find ourselves further in a situation where certain parts of the labor market are no longer here to do those jobs that will likely lead to greater inflation. Additionally, the idea of tariffs does quite frankly, all it does is raise the cost of products that will likely lead to inflation as well.
Just pivoting quickly over to capital. Rich touched on the capital we've been returning. When the day is all done, the company at this stage for the foreseeable, we think is going to be growing at 10% to 15%. Could there be a quarter where we do a little more? A quarter we do a little less. Absolutely. But that's sort of the strike zone as we see it. But at the same time, we're generating returns and give or take high teens, low 20s pretty consistently, and there's a lot of visibility around that from our perspective, so our ability to return capital for the foreseeable is pretty robust. When you layer that on top of, I think, the view, if you take a close look at the analysis any of the rating agencies have done we are an exceptionally strong place to begin with.
So we'll have to see what tomorrow brings. But there is a lot of flexibility that the organization enjoys at this stage. So I will pause there and, Krista, we would be pleased to open it up for questions. Thank you.
