Robert Berkley
President and Chief Executive Officer at W. R. Berkley
Okay. Rich. Thank you very much. That was -- that was great. So let me keep this somewhat brief because I'm sure people have their own topics and questions, I'd like to get on to, but maybe just through my lens a couple of sound bites. The top line, obviously just shy of 18% from my perspective by any measure is very healthy and if we unpack that a little bit a couple of other data points for folks as far as the rate increase that components in there ex-comp, it came in at 8.3 and let me give you a couple of the numbers, and I don't want to dig into this a little bit more. So the new business relativity which is a metric that we've shared with some of you in the past is how we measure our new business pricing relative to our renewal pricing. From our perspective, when you look at new business, one needs to recognize that there are oftentimes, not always but often oftentimes could be more risk associated with it. Your renewal book, you know more about new business, you know, less about and to make a long story short, our new business relativity, for the quarter came in at 1.018. So what does that mean? That means based on our macro measurements were charging just shy of 2% more for new business relative to renewal business.
Another, at least in my opinion relevant data point is our renewal retention ratio came in at 82% and change. Why is that important, because it tells you that we're to get the growth we're not churning the book. We are keeping the portfolio intact and from our perspective, that is a very healthy number and certainly from our perspective, also is an invitation [Phonetic], if you will, to keep pursuing additional rate. I think that when you look at the 8.3%, it's also important that people understand that there are several dimensions that we're able to see that perhaps those from the outside looking in can see. We look at this business by operating unit, by product line and are constantly assessing, that's the margin that we believe exists in the business and there is a constant balance or rebalancing that we are doing on a daily basis as to what type of rate we need, what margin we think is in the business and at what point in time when we see the margin that is available is growth of exposure, the priority or is rate [Phonetic] the priority and between those two components which one is more of a priority.
So at this stage, we feel very good about the available margin and as a result in many product lines, we are willing to allow exposure growth to be the priority over rate, though it would not across the board. I also want to spend a couple of moments talking about just staying on that topic of exposure because obviously for some number of years, we've been beating the drum about social inflation. I think we were on the earlier side compared to many of our peers. Some folks may have labeled chicken level but nevertheless, I'm grateful that our colleagues have the insight and we took the action that we did. That having been said, obviously, as of late, this concept of economic or financial inflation seems to be getting all the headlines with good reason, and it's important I think for observers to understand, to take into account that the, in our organization's case. I can't speak to others but in this organization's case the majority of the policies that we write are based on or priced off of, if you will, exposure.
So what do I mean by that? I mean we price our policies off of payroll, off of receipts or revenue, or off of appraised value, which is done in a very timely manner at the time when we are underwriting the policy. So I mentioned this because as people are grappling with what is the impact of economic inflation on our business model, certainly we are not insulated from it. We will on a couple of moments potentially get into the discussion around what does it mean for the investment portfolio. But from an underwriting perspective, while we are not completely insulated, the majority of our business activities, the pricing, if you will, feeds off of our exposure, i.e., in other words, if you own a daily and you are charging a $1 more a sandwich and we are placing your GL, we are pricing off of your revenue and your receipts, consequently, the premium is going up, as your revenue and receipts are going up. That is separate and distinct from rate. Rate is a separate activity, if you will and how you want [Phonetic] things about it from exposure growth and again, obviously, inflation to a great economic inflation to a great extent is contemplated in exposure growth.
A couple of quick soundbites on the loss ratio. Continued improvement from there as Rich mentioned, we did have some cat [Phonetic] activity really the king pieces that are most noteworthy would be one, the European storms during the quarter as well as the Australian floods, to the extent people want more detail. We can certainly get into that in the Q&A or probably best of to pick it up in the queue. The other piece I wanted to flag on the loss ratio, and I know you've touched on this last quarter, I can't remember, and I didn't go back and look at the transcript, but it's something I look at and perhaps it's of interest to others and that is the paid loss ratio. [Indecipherable] which came in the quarter and at a 45.3.
I would like to give you a couple of historical data points, which you can always take up on your own, but let me save you the work, and the numbers I'm going to read off our over the past couple of years for the first quarter of what the paid loss ratio was and I want to give it to you for the corresponding periods because that way, we're getting is close to apples to apples as possible. No, it's not a perfect comparison because of mix of business, et cetera. But we again -- 2022 for the quarter, it came in at a 45.3, so lets go back to 2017. If you go back to 2017, Q1 paid loss ratio 55.5, 2018 Q1 paid loss ratio 58.8, 2019 paid loss ratio of 54.2, 2020 paid loss ratio 56.1, 2021 paid loss ratio for the first quarter 48.2. So I flagged it because it's one of the first things that my father taught me about the insurance business. The paid loss ratio there is really not much room for gray, it's a black and white number, it's a real number and again I think that it is one data point which people can interpret anyway they want, but I think it's -- in my opinion a helpful indicator or trend as to where things are going. Rich talked about the expenses, obviously, there are two things that were experienced -- three things that we're experiencing in there. A, as earned premium continues to grow, we're getting a benefit there, going the other way, T&E, is starting to pick up again as fortunately knock onward COVID is hopefully in the rearview mirror and shrinking. And then lastly, we have one new operation, which now is feeding into the reported expense ratio and it takes time for us to scale, as we've discussed in the past, and we're confident it will be accretive over time.
Let me offer a couple of quick soundbites on the investment portfolio and then I promise I'll be finishing up and it will be the participant's turn. The investment portfolio, I think is a great example of some of the comments that I offered earlier around a focus towards discipline, a focus out the front windshield, not just the rear-view mirror. And quite frankly, I think we started to see some benefit really towards the end of last year and that benefit is really starting to crystallize and likely more to come. So, as Rich mentioned duration for the portfolio at the end of the quarter with 2.4 years, another data point, the book yield on the portfolio was 2.2%. Given where interest rates have gone, our new money rate in the quarter is approximately 100 basis points above that.
So, as they say, you can do the math and figure out what does a 100 basis points benefit mean for our investment income on our fixed -- for our investment income given the movement in rates that we're seeing on the fixed income portfolio. So when we talk about the table being set for the future and the opportunities coming our way and what this means for our economic model and the earnings power of the business, I think that's an important data point for people to be considering again in my opinion.
Another point that I'd like to make, and quite frankly, it's a little bit of a pet peeve around here has to do with gains. Certainly, we've noticed that people have a tenancy to back gains out of our results. And quite frankly, people can look at the numbers any way they want, but from our perspective, we think that that's just not appropriate. We give up a fair amount of operating income if you will to invest in alternatives, particularly some of the activities that have a focus towards gain. We are focused on total return and we think that is what is in the best interest of the shareholders. And again, obviously, we taken an approach, very focused on risk-adjusted return.
So I think that we are already benefiting from the discipline that we had exercised over the past several years keeping that duration short. I think that benefit is going to become more and more into focus over the coming quarters and years, and quite frankly, I think it was a few quarters ago we talked about how quite frankly if rates move up, we didn't think that we were getting paid enough by taking the duration out, I think that reality has come into focus and I think in part that was demonstrated as Rich referenced few moments ago, but if you look at our book value and even if you chose, which I do not agree with, but even if you chose to back out the gain from the building that we sold in London. Our book value, in spite of what happened with interest rates still went up, which I think given what has happened in the bond market is pretty outstanding. So again congratulations, job well done to my colleagues on the investment side.
So that was probably a lot more than anyone was looking for or bargain for, but thank you for your patience and for listening to me and Emma why don't I pause there and let's open it up for questions.
