WR Berkley Chairman Bill Berkley has forecast an “excellent year” ahead, after the company delivered a 15% profit increase to $US430.17 million ($395.66 million) last year.

He expects profitability to rise unless there is unusual catastrophe activity and says although there is new competition, “a similar number of players have disappeared from the marketplace”.

“Ultimately, the insurance business is rational over the long run and the trends we currently see cause us to be optimistic, as more rational players enter the industry,” Mr Berkley said.

Gross written premium grew 13% to $US6.51 billion ($5.98 billion) last year, while the combined operating ratio improved to 95.1% from 97.2% in 2012.

Mr Berkley says the company remains focused on raising prices to maintain margins and regain profitability in some lines. “The challenge our industry faces is the threat of inflation, which affects pricing as well as adequate reserving.”