William Berkley
Executive Chairman at W. R. Berkley
Rich, thank you very much. Very helpful. So Look, I think the market continues to not operate in any type of lockstep where major lines, as we've discussed in the past continue to somewhat march to the beat of their own drum. In addition to that, we continue to see the marketplace struggling with trying to strike the balance between rate need and keeping up with loss cost trend. On the other hand, a desire to grow.
This is an industry where you can, practically speaking, grow as quickly as you want to. It really becomes a much more challenging exercise though when you were looking to achieve a certain loss ratio, which will deliver a return that is acceptable in the end. For us, rate adequacy to support a reasonable loss ratio and deliver an acceptable return has, is and will remain a priority for us. I believe that this has been demonstrated over time through our results and obviously, our continued focus on making sure that we are keeping up with trend comfortably.
A couple of soundbites on the marketplace and major product lines. And I would hope it will dovetail in with some of Rich's comments and where we have been growing and parts of the marketplace that we find less attractive and we're playing a bit more defense. For starters, speaking of defense, I think public D&O within the professional line space is clearly a place that one needs to pause and tread carefully. We are seeing the pricing erode at a very rapid pace. Clearly, there has been good margin in the business, but that seems to be whittling away quite quickly.
As far as liability lines and maybe under the umbrella of social inflation, we continue particularly in the auto space, especially commercial auto, to see great challenge. That's also spilling over into GL and ultimately, umbrella. And what I mean by that is the plaintiff bar is very aggressive, and they are taking a variety of new tactics. We think that we are able to keep up with it appropriately through terms, conditions, attachment points, and of course, pricing but it is not lost on us that it is a challenging moment and requires one pay close attention.
In addition to that, there is growing evidence that the tail associated with some of these product lines maybe extending a little bit, particularly on the claims -- excuse me, on the occurrence front and to a certain extent on certain aspects of the claims made front.
Property, I think it has finally come into focus what needed to happen as it relates to cat-exposed properties and that seems to be spilling over into the non-cat or risk property account where additional rate is required. The other piece that's worth mentioning, at least through, in my opinion, is Tier 2 cat, which I would define as severe convective storm, wildfire winter storm, etc. These are things that were a bit of an afterthought. And I think after the past several years, they are becoming much more front of mind.
Last comment as it relates to market conditions would be workers' compensation, certainly a topic we have discussed on these calls in the past. There was a period of time during COVID, where clearly, there was a break that was caught on the frequency front for the industry. Frequency has returned to a more traditional norm, but one of the things that we've been waiting for, and we're starting to finally see rear its head is medical inflation. It is our expectation that you are going to see more medical inflation coming through to all payers, including the workers' comp space.
And as a reminder, slightly over 50% of every claims dollar associated with workers' compensation stems from medical. So again, we can get into more details on that to the extent people are interested later on.
Last comment on the marketplace. There continues to be this bifurcation between where the standard market, particularly national carriers have an appetite. They seem to be very aggressive. But where they don't have an appetite, that is creating great opportunity for the specialty, in particular, the E&S space. The submission flow that we continue to see remains robust, and we are very encouraged with what the balance of the year likely holds and beyond. And certainly, the early returns on July are positive.
Rich talked about the top line. Obviously, we benefited from the rate increases that we continue to get, the ex comp rate increase during the quarter was 8.2%, which was reasonably consistent with what we saw earlier this year. I think the loss ratio demonstrates yet again, our strategy around how we manage exposure, how we have balance in the portfolio and how we think about risk and return and certainly volatility is folded into that and, in our opinion, is a key component in building book value.
As far as the expenses go, Rich touched on that as well. We remain very focused on making sure we're thoughtful about the dollars that we spend, and there's nothing that leads us to believe that, that number won't remain comfortably below 30.
And pivoting over to the investment portfolio, we remain -- we continue, I should say, excuse me, to be rewarded for the position that we took as it relates to duration. Obviously, as we've discussed in the past, we benefited in having less of an adverse impact on our book value as rates moved up. And in addition to that, we were able to put money to work at higher rates more quickly than many of our peers.
The new money rate in the quarter was probably around 5.25 plus and as you would gather relative to the book yield at 4.2%, that would suggest we still have significant upside, and that will come into focus over some period of time. Rich mentioned the duration at 2.3, I think it was at 2.4 last quarter. Just to clarify that, that was really as much as anything, just rounding. That having been said, we are paying close attention, as you would expect, for the window of opportunity and when it presents itself, likely you'll see that duration start to push out again.
So all things being equal, I think a very solid quarter for us on virtually every front. I think when you take into account the cat activity that the industry faced, we fared particularly well. And in spite of that, our ability to generate a 21% return, I think, is really a great positive and a tribute to our colleagues and to our strategy and how effectively they are executing.
When the day is all done, the goal of the exercise is to build book value. There is no question that is the goal. Ultimately, it's when building book value, it is not just about the steps you take forward. It is also about the steps take -- that you avoid taking backwards.
So with that, Brianna, we'd be very pleased to open it up for questions. Thank you.
