Everest Re Group Reports Second Quarter 2020 Results

• Shareholders’ equity increased to a record $9.3 billion, with book value per share of 232.32, up 3.8% compared to $223.85 at year-end 2019.
• Gross written premium of $2.4 billion, reflecting growth of 9.4% (10.7% excluding the impact of foreign exchange).
• Strong renewal rate change in Everest Insurance, up 18% excluding workers’ compensation and up over 12% including workers’ compensation.
• Combined ratio of 97.5% and $50.9 million of underwriting income, inclusive of $160 million of Covid-19 Pandemic (“Pandemic”) losses and $15 million of catastrophe losses.
• Attritional combined ratio excluding the Pandemic impacts improved to 88.5% vs. 88.6% in the same period last year.
• Net income of $190.9 million, net operating income of $82.9 million.

 

HAMILTON, Bermuda -- (BUSINESS WIRE) – August 5, 2020 – Everest Re Group, Ltd. (“Everest” or the “Company”) today reported that for the three months ended June 30, 2020, net income was $190.9 million, or $4.77 per diluted common share, compared to net income of $332.9 million, or $8.15 per diluted common share, for the three months ended June 30, 2019. After-tax operating income¹ for the quarter was $82.9 million, or $2.07 per diluted common share, compared to after-tax operating income¹ of $320.9 million, or $7.85 per diluted common share, for the same period in 2019.

Everest Re Group President & CEO Juan C. Andrade commented: “Despite the current challenging and uncertain public health, economic, and social environment, Everest reported another solid quarter and first half of 2020 results. Our ability to successfully leverage our capital position, our global platform, and our success in executing against our objectives - even under adverse conditions - drive our results. Our people continue to demonstrate the passion and resilience to differentiate Everest and deliver value to our customers. We have strong forward momentum across our Reinsurance and Insurance Segments.

Turning to the Company’s results, Everest wrote nearly $2.4 billion in gross written premiums for the quarter, an increase of 9.4% as compared to a year ago, 10.7% excluding the impact of foreign exchange. Our Reinsurance Segment (“Reinsurance”) grew 9.1% while the Insurance Segment (“Insurance”) was up 9.8% (11.0% and 10.0% respectively excluding the impact of foreign exchange). In Reinsurance, we continue to see excellent opportunities in several areas such as facultative risk, property and in certain territories including the US, Canada, Latin America and Asia, with an overall environment that gives us the opportunity to better shape our book towards deals with much better terms and pricing. In Insurance, the main growth drivers were continued strength in the Excess & Surplus business, strong and widespread rate momentum (excluding workers compensation up 18% and up over 12% including workers compensation) and high renewal retention across all of our businesses.

Insurance written rate also continues to exceed loss trend across our core P&C lines of business.

Our combined ratio for the quarter was 97.5%, 95.4% for Reinsurance and 103.4% for Insurance, resulting in $50.9 million of underwriting income and highlighting the underlying strength and sustainable profitability of the franchise. These results include $160 million in net pre-tax losses related to the Covid-19 Pandemic (“Pandemic”), attributed $130 million to Reinsurance and $30 million to Insurance. The Company also recorded $15 million of catastrophe losses from civil unrest in the United States. The attritional combined ratio excluding Pandemic impacts was 88.5%, 86.7% for Reinsurance and 93.7% for Insurance.

Our balance sheet and capital position remain a fundamental source of strength for Everest. This quarter reported record shareholder’s equity of $9.3 billion; combined with our low financial leverage and top tier ratings we have more than ample capital to take advantage of current and future opportunities in the global reinsurance and insurance market.”

Other operating highlights for the second quarter of 2020 included the following:

• Net written premium of $2.0 billion reflecting growth of 13.1%
• Cash flow from operations was $598.6 million for the quarter compared to $393.7 million for 2019.
• Net investment income of $38.1 million for the quarter including limited partnership losses of ($88.3) million. Note that net investment income from limited partnerships is generally subject to a quarterly reporting lag, which indicates that limited partnership losses in the first quarter of 2020 are reflected in our net investment income for the second quarter of 2020.
• Net after-tax realized gains amounted to $150.5 million for the quarter, while net after- tax unrealized gains were $544.5 million for the quarter.
• Shareholders’ equity at quarter end was $9.3 billion vs. $9.1 billion at year end 2019.
• The Company has paid $61.9 million in common share dividends during the quarter and $125.2 million thus far in 2020.

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemic, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

About Everest Re Group, Ltd.

Everest Re Group, Ltd. (“Everest”) is a leading global provider of reinsurance and insurance, operating for close to 50 years through subsidiaries in the U.S., Europe, Singapore, Canada, Bermuda and other territories.

Everest offers property, casualty, and specialty products through its various operating affiliates located in key markets around the world.

 

Everest common stock (NYSE:RE) is a component of the S&P 500 index.

 

Additional information about Everest, our people, and our products can be found on our website at www.everestre.com.

 

All issuing companies may not do business in all jurisdictions.

 

A conference call discussing the second quarter results will be held at 10:30 a.m. Eastern Time on August 6, 2020. The call will be available on the Internet through the Company’s web site at everestre.com/investors.

 

Additional information about Everest, our people, and our products can be found on our website at www.everestre.com. All issuing companies may not do business in all jurisdictions.

 

Recipients are encouraged to visit the Company’s web site to view supplemental financial information on the Company’s  results. The supplemental information is located at www.everestre.com in the “Financial Reports” section of the “Investor Center”. The supplemental financial information may also be obtained by contacting the Company directly.