Everest Re Report Q2 Net Income Of $69.9M
Bermuda-based Everest Re Group, Ltd. reported second quarter 2018 net income of $69.9 million, or $1.70 per diluted common share, compared to net income of $245.7 million, or $5.95 per diluted common share for the second quarter of 2017.
After-tax operating income was $40.4 million, or $0.98 per diluted common share, for the second quarter of 2018, compared to after-tax operating income¹ of $233.7 million, or $5.66 per diluted common share, for the same period last year.
For the six months ended June 30, 2018, net income was $280.2 million, or $6.81 per diluted common share, compared to net income of $537.3 million, or $13.02 per diluted common share, for the six months ended June 30, 2017. After-tax operating income was $260.1 million, or $6.32 per diluted common share, compared to after-tax operating income¹ of $500.8 million or $12.13 per diluted common share, for the same period in 2017.
Commenting on the Company’s results, President and Chief Executive Officer, Dominic J. Addesso said, “Everest generated an annualized, net income return on equity of 7%, despite the previously announced charge for net reserve adjustments.
“The underlying results were quite strong with an attritional combined ratio of 85.3% year to date. We continue to see positive momentum across the underwriting operations, with profitable growth opportunities materializing for both our insurance and reinsurance segments.”
Operating highlights for the second quarter of 2018 included the following:
- Gross written premiums for the quarter were $2.1 billion, an increase of 29% compared to the second quarter of 2017. Worldwide reinsurance premiums were up 38% to $1.4 billion, with growth across each segment primarily driven by increased casualty and property pro-rata premium, rate improvement, increased shares on existing business and profitable new opportunities. Direct insurance premiums were up 13%, from second quarter 2017, to $645.9 million, continuing with the growth trends noted in recent years.
- The combined ratio was 105.1% for the quarter compared to 90.5% in the second quarter of 2017. Excluding catastrophe losses, reinstatement premiums and the favorable prior period loss development, the current quarter attritional combined ratio was 83.5% compared to 86.7% in the same period last year.
- Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $464.8 million in the quarter, with $399.8 million primarily related to the 2017 storm events and $65.0 million of current year catastrophe losses from Cyclone Mekunu in Oman and Yemen and late winter storms in the United States.
- Net investment income increased 5% for the quarter to $141.3 million.
- Net after-tax realized gains amounted to $10.5 million and net after-tax unrealized capital losses were $41.5 million, for the quarter.
- Cash flow from operations was $132.6 million for the six months ended June 30, 2018 compared to $634.4 million for the same period in 2017.
- During the second quarter, the Company purchased 112,747 shares at a total cost of $25.3 million. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 1.7 million shares available.
- Shareholders’ equity ended the quarter at $8.2 billion compared to $8.4 billion at year end 2017. Book value per share was down from $204.95 at December 31, 2017 to $201.70 at June 30, 2018.
