Everest Re Group 2017 Second Quarter Results

July 26, 2017

Bermuda-based Everest Re Group, Ltd. reported second quarter 2017 net income of $245.7 million, or $5.95 per diluted common share, compared to net income of $155.7 million, or $3.67 per diluted common share, for the second quarter of 2016.

After-tax operating income, excluding realized capital gains and losses, was $227.5 million, or $5.51 per diluted common share, for the second quarter of 2017, compared to after-tax operating income of $134.2 million, or $3.17 per diluted common share, for the same period last year.

For the six months ended June 30, 2017, net income was $537.3 million, or $13.02 per diluted common share, compared to $327.4 million, or $7.68 per diluted common share, for the first six months of 2016. After-tax operating income, excluding realized capital gains and losses, was $487.0 million, or $11.80 per diluted common share, compared to $356.9 million or $8.37 per diluted common share, for the same period in 2016.

Commenting on the Company’s results, President and Chief Executive Officer, Dominic J. Addesso said, “Everest continues to generate double digit ROE’s, while steadily growing its capital base. Strong underwriting results, with an attritional combined ratio of 86.7% for the quarter, coupled with stable investment income are providing for solid growth in book value per share. We seek out opportunities for profitable growth in both our reinsurance and insurance books and have been successful as borne out by these excellent results.”

Operating highlights for the second quarter of 2017 included the following:

  • Gross written premiums for the quarter were $1.6 billion, an increase of 17% compared to the second quarter of 2016. Worldwide, reinsurance premiums were up 14%, with growth coming from the new crop reinsurance program, increased shares on property pro-rata treaties, and growth in financial lines business. Insurance premiums were up 25%, quarter over quarter, with continued growth on new initiatives. Excluding the HCI crop business that was sold in 2016, the insurance segment premium was up 41%, quarter over quarter.
  • The combined ratio for the quarter was 90.5% compared to 95.1% in the second quarter of 2016. Excluding catastrophe losses, reinstatement premiums, and nominal prior period loss development, the current quarter attritional combined ratio was 86.7% compared to 86.1% in the same period last year.
  • Catastrophe losses, net of reinsurance, amounted to $53.5 million in the quarter, with current quarter catastrophe losses from the South African [Knysna] fires, Colorado hailstorms, and Peru flooding. The net impact of these losses, after reinstatement premiums and taxes was $46.6 million.
  • Net investment income was up 1% for the quarter to $134.5 million.
  • Net after-tax realized capital gains amounted to $18.2 million and net after-tax unrealized losses were $4.1 million for the quarter.
  • Cash flow from operations was $252.6 million compared to $308.1 million for the same period in 2016.
  • Through the first six months, the annualized after-tax operating income1 return on average adjusted shareholders’ equity2 was 11.9%.
  • Shareholders’ equity ended the quarter at $8.6 billion, up 6% compared to year end 2016. Book value per share increased 6% from $197.45 at December 31, 2016 to $209.05 at June 30, 2017.
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