Everest Re Group Net Reserve Adjustments
Everest Re Group, Ltd. announced that it expects to report a charge for net reserve adjustments of approximately $250 million, after tax, for the second quarter of 2018. These reserve adjustments are related to prior year catastrophe events and include a partial offset from favorable prior year development of non-catastrophe reserves.
The prior year catastrophe adjustments primarily relate to the 2017 hurricane events – Harvey, Irma and Maria. The increase in estimates was mostly driven by re-opened claims reported in the second quarter and loss inflation from higher than expected loss adjustment expenses and, in particular, their impact on aggregate covers.
In addition, current year weather related events are expected to result in a second quarter charge of approximately $25 million, after tax.
Everest expects to report net income for the second quarter of 2018.
Commenting on these adjustments, Dom Addesso, the Company’s President and Chief Executive Officer, said “Losses from events like the industry experienced in 2017 are difficult to estimate. The number of re-opened claims and the extraordinary surge in LAE were well above the market expectation.
“Nevertheless, it is helpful to keep this loss development in context. We are in the business of absorbing volatility and over the last five years we have generated over $3.5 billion in profits from our property catastrophe portfolio.
“Our portfolio in 2018 is positioned to deliver even better margins. Additionally, the non-cat reinsurance portfolio and the insurance book continue their favorable trends and should produce an excellent result in the second half of the year.”
