US commercial property/casualty rates will have risen 8-9% by the end of this year, but some “stupid” companies haven’t begun raising their premiums, according to WR Berkley Chairman and CEO Bill Berkley.

While rates are improving, “the turn in the cycle is not a nice, predictable straight line”, Mr Berkley said in a discussion on first-quarter earnings.

“You are still seeing people compete aggressively here and there, in individual lines of business.

“Stupidity isn’t limited to any one company or any one underwriter – it pops up in all markets.”

Mr Berkley says premium rises are essential for the industry to break even. He estimates that for every 1% decline in interest rates, reinsurers need to charge an extra 7%, while standard commercial lines also need to increase 3.5%.

“Every time we go into the beginnings of an upwards cycle, it takes people a long time to take care of paying for their past sins, and usually someone doesn’t have the ability to make it through.”