W. Robert Berkley
President and Chief Executive Officer at W. R. Berkley
Rich, thank you very much. So let me just offer a few comments, I promise I'll keep it on the brief side, though I think I say that every time, and I rarely do, but I guess it depends on your definition of brief.
So the marketplace overall remains a very interesting one from our perspective. There are pockets of market that remain extremely attractive and there are others that is surprising the level of competition. One of the observations that we have shared in the past, and we continue to see a very much a reality is how the market is still as cyclical as ever that having been said, different product lines are marching not in lockstep, but very much to the beat of their own drum, which translates to they are at different points in the cycle at any moment in time.
I would tell you that the specialty space in particular, the E&S space remains, very attractive. In addition to that. I would tell you that if it is a piece of business that falls within the appetite of the standard market particularly a national carrier and some regional carriers, it is shocking to us how competitive some participants are willing to be.
That having been said if you have an opportunity to look at our release and you look at Page Seven, you would have seen the different product lines and where the growth is coming from. Certainly, in our opinion is a leading indicator is if we are growing at a healthy rate, it means that we think there's margin there and we are leaning into it.
When you look at the various product lines certainly short-tail lines in particular, property, as of late is demonstrating more opportunity. In addition to that when you look at the reinsurance space, we are seeing a similar opportunity and it is likely you'll see us leaning into that even more.
On the other hand, you have professional liability with particularly public D&O standing out, as a product line that has become increasingly competitive and workers' compensation that is a product line that we've been talking to those that are willing to listen for an extended period of time that we've been surprised by the level of competition. You might say, how do you reconcile that with the growth rate that you have in the product line during the period to make a long-story short, it's just exposure, if you will, growth in payroll.
Overall, we as an organization benefit from the diversity of our product offering as, a result of that at any moment in time, there are parts of our portfolio that are shrinking and there are parts of our portfolio that are growing and growing dramatically. We are in the marketplace every day trying to optimize. The market may move towards us, it may move away from us, but we are consistently there at a rate that we think is appropriate or then some.
When you look at the growth that Rich talked about in the quarter approximately 11% we think is reasonably healthy. Again, the discipline on the professional liability that I alluded to a few moments ago, I think has created a little bit of a headwind. That having been said, our discipline remains with our renewal retention ratio remaining at approximately 80%, and we're getting a bit of a premium on new business relative to our existing portfolio, which as we've discussed in the past we think makes sense because you know more about your renewal book and your new book.
As you would have also picked up during somewhere in the release we made some good progress on the rate front coming in at 7.3% ex workers' comp and at that pace we're quite comfortable that in the aggregate we are keeping up of trend.
I think another data point that's important particularly in an inflationary market and that is audit premiums to what extent if the exposure is growing, are you capturing that and making sure after the policy incepts that you're going back to collect everything you should of. And we were pleased to see the growth in our audit premiums over the corresponding period last year up 42%.
Rich walked through the loss ratio with you all the 64.1%. For those that subscribe to [Indecipherable] 4 model, it's a 58.6%, the 64.1% when the day is all done in my opinion that is reality. That having been said breaking it down Rich walked you through the cats of 3.9% [Phonetic].
And the last piece, as far as the development goes was essentially entirely related to two what I would define as isolated and unique events stemming from COVID. And to the best of our knowledge, and as clearly as we can see it we do not envision this being an ongoing issue. Again, we view it as isolated to two unique situations and that's how it looks to us at this point. So that's the best of our knowledge.
With the 58.6% [Phonetic] as Rich flagged bit of a small step in the right direction and improvement of, call it 30 basis points on the ex-cat accident year. Look when the days all done, we are pushing on the rate, and we are not going to declare victory prematurely. I understand some people have done the math and said, why isn't your ex-cat accident year loss ratio improving more and it's because of something called inflation that comes in two different flavors that we are exposed to both financial or economic, as well as social.
Expense ratio at 28%, we think that is pretty healthy by any measure, particularly for a specialty writer. Some of the realities that we had talked about during COVID and the COVID benefit on expenses, those are starting to dissipate, as people are traveling and entertainment is coming back to be part of our business. That having been said also costs are going up. We're not just focused on inflation as far as raising our rates, and what it means for our loss costs and how w've responded [Phonetic] to that with rate increases also it impacts our operational costs and making whether it'd be remuneration or any other expenses that we have.
Rich touched on the investments, I'm just going to, I guess echo a couple of his comments. Long story short, I think we are very much being rewarded for the discipline.
I have made the comment in the past how we went for many years keeping our duration short and not compromising on quality and quite frankly that came at a cost. There were others that were compromising on quality and taking the duration out, and they serve themselves well for that day, but did not positioned themselves particularly well for tomorrow and, guess what, tomorrow is here.
As a result of that foresight and that discipline, we are enjoying the benefits, as to what the impact has been on our book value as far as the unrealized or some perhaps other organizations maybe are realizing it. And in addition to that we have the benefit of being able to put money to work at higher rates, much more quickly than others.
You would -- as Rich flagged for you our book yield ticked up considerably in a 90 day period going from about 2.6 to 3 [Phonetic]. And obviously you all can do the math as easily as we can as to where the new money rate is likely going given where interest rates are today and it would seem as though they're headed tomorrow. So we have a lot of room to push the duration out a bit if we think it makes sense, if we are getting paid for it, and we think that we're very well-positioned.
So long-story short and I guess desperately trying to live up to my word that I would keep it short, what's the punch line. The punch line is that we are an organization that has is and will continue to be very focused on risk-adjusted return. When we think about risk-adjusted return we clearly take volatility into account. We have the ability to pivot from one product line to another emphasizing and de-emphasizing products, as we see fit depending on-market conditions. Certainly, it is very possible for example, that you will see us participate more significantly in the property cat space. It would be my expectation to the extent we chose to participate depending on how attractive the market gets that we would probably participate for a year or two unlikely, more than three in a significant way.
We are going to deploy capital with an eye towards risk-adjusted return, and we are not going to be shy to let that business go when we don't think it makes sense anymore. That same focus on risk-adjusted return that applies to underwriting also as I mentioned a moment or two ago applies to our investment activities. We are disciplined. We are focused on the idea of how much risk we're taking on and are we getting paid appropriately for it. When the days all done we are in business to build book value for shareholders, and we think that we have been able to do that again because our eye towards risk-adjusted return.
So let me pause there, and Bao, we would like to open it up for questions if we could, please.
