Everest Re Group’s 2016 Second Quarter Results
Bermuda-based Everest Re Group, Ltd. reported second quarter 2016 net income of $155.7 million, or $3.67 per diluted common share, compared to net income of $209.1 million, or $4.68 per diluted common share, for the second quarter of 2015.
After-tax operating income, excluding realized capital gains and losses, was $134.2 million, or $3.17 per diluted common share, for the second quarter of 2016, compared to after-tax operating income of $224.5 million, or $5.03 per diluted common share, for the same period last year.
For the six months ended June 30, 2016, net income was $327.4 million, or $7.68 per diluted common share, compared to $532.0 million, or $11.88 per diluted common share, for the first six months of 2015.
After-tax operating income, excluding realized capital gains and losses, was $356.9 million, or $8.37 per diluted common share, compared to $554.4 million or $12.38 per diluted common share, for the same period in 2015.
Commenting on the Company’s results, President and Chief Executive Officer, Dominic J. Addesso said, “Everest’s six month annualized operating return on equity of 9.4% is an excellent result given the number of catastrophe loss events, the impact of foreign currency movements around the world, and the continued low interest rate environment.
“It remains a challenging environment but the strategic actions we have taken to position Everest for continued success are borne out by these results.”
Operating highlights for the second quarter of 2016 included the following:
- Gross written premiums for the quarter were $1.4 billion, an increase of 8% compared to the second quarter of 2015. Eliminating the unfavorable effects of foreign currency fluctuations, premiums were actually up 10% for the quarter. Worldwide, reinsurance premiums were up 1%, on a constant dollar basis, and insurance premiums were up 32%, quarter over quarter.
- The combined ratio for the quarter was 95.1% compared to 88.0% in the second quarter of 2015. Excluding catastrophe losses, reinstatement premiums, and prior period loss development, the current quarter attritional combined ratio was 86.1% compared to 85.9% in the same period last year.
- Catastrophe losses, net of reinsurance, amounted to $123.8 million in the quarter, with current quarter catastrophe losses for the Fort McMurray, Canada wildfires, Ecuador earthquake, and Texas hailstorms totaling $149.1 million, offset by reserve releases on several 2011 events. The net impact of these losses, after reinstatement premiums and taxes was $105.4 million.
- Net investment income for the quarter was $132.7 million, including income of $23.0 million on limited partnership investments.
- Net after-tax realized and unrealized capital gains amounted to $21.5 million and $122.9 million, respectively, for the quarter.
- Cash flow from operations was $307.3 million compared to $181.1 million for the same period in 2015.
- Through the first six months, the annualized after-tax operating income¹ return on average adjusted shareholders’ equity² was 9.4%.
- During the quarter, the Company repurchased 544,728 of its common shares at an average price of $184.37 and a total cost of $100.4 million. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 3.1 million shares available.
- Shareholders’ equity ended the quarter at $8.0 billion, up 5% compared to year end 2015. Book value per share increased 7% from $178.21 at December 31, 2015 to $190.66 at June 30, 2016.
