Everest Re 2015 1st Quarter Earnings: $323M

April 28, 2015

Bermuda-based Everest Re Group, Ltd. reported net income of $323.0 million, or $7.19 per diluted common share, for the first quarter of 2015, compared to net income of $293.9 million, or $6.21 per diluted common share, for the first quarter of 2014.

Excluding realized capital gains and losses, after-tax operating income1 was $329.9 million, or $7.34 per diluted common share, for the first quarter 2015, compared to after-tax operating income1 of $281.0 million, or $5.93 per diluted common share, for the same period last year.

Commenting on the Company’s results, President and Chief Executive Officer, Dominic J. Addesso said, “This was another record quarter for Everest with operating earnings per share up 24% to $7.34, resulting in an 18% annualized operating return on equity and 4% growth in book value per share.

“Despite foreign currency headwinds, premium continued to rise, up 14% on a constant dollar basis, largely driven by growth in our insurance segment. We are pleased with the trajectory of our premium and operating earnings, which continues to drive growth in shareholder value. Our broadly diversified underwriting platform, and the capacity and flexibility we provide our clients, positions us well in this challenging market.”

Operating highlights for the first quarter of 2015 included the following:

  • Gross written premiums increased 12% to $1.4 billion compared to the first quarter of 2014 with worldwide reinsurance premiums, including the Mt. Logan Re segment, up 4% and insurance premiums up 48%. Given greater utilization of retrocessional capacity, including Mt. Logan, to support the reinsurance segments, the pace of growth for net written premiums is lower. On a net basis, premiums increased 5% for the group, while the Total Reinsurance segment premium was down 7%. Net written premium for the Insurance segment increased 43% due to higher premium for crop business and continued strong momentum in targeted classes of business.
  • The combined ratio was 81.9% for the quarter compared to 80.0% in the first quarter of 2014. Excluding catastrophe losses, reinstatement premiums, and prior year development, which was minimal in both quarters, the attritional combined ratio was 82.0%, up modestly from first quarter 2014, but consistent with the full year 2014 results.
  • Net investment income for the quarter was $122.6 million, including limited partnership income of $7.0 million.
  • Net after-tax realized capital losses were $6.9 million, while net after-tax unrealized capital gains totaled $105.4 million, for the quarter.
  • Cash flow from operations was $455.1 million compared to $367.1 million for the same period in 2014
  • For the quarter, the annualized after-tax operating income¹ return on average adjusted shareholders’ equity² was 18.1%.
  • During the quarter, the Company repurchased 434,878 of its common shares at an average price of $172.53 and a total cost of $75.0 million. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 5.9 million shares available.
  • Shareholders’ equity ended the quarter at $7.7 billion, up 3% compared to year end 2014. Book value per share increased 4% from $166.75 at December 31, 2014 to $172.63 at March 31, 2015.
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