First quarter 2006 operating income for Everest Re Group, Ltd. declined 4.5 percent on higher catastrophe loss estimates from the hurricanes that walloped the US last year.

The Bermuda-based reinsurer posted operating income of $157.9 million in the first quarter of 2006 compared with $165.2 million in the first quarter 2005.

First quarter 2006 income increased only slightly to $168.4 million in the first quarter of 2006 compared to $167.1 million in the same period 2005.

Broken down, earnings were $2.57 per share in the 2006 first quarter compared to $2.93 in the year ago quarter.

The increased catastrophe loss estimates include $70.8 million of reinstatement premiums which the Bermuda-based reinsurer said were largely driven by changes in estimates for the 2005 hurricanes, compared to catastrophe losses in the same period of 2005 of $13.2 million.

On an after-tax basis, these changes in estimates affected 2006 and 2005 results by $50.6 million and $9.9 million, respectively, the company said yesterday in its earnings statement.

?Although changes in estimates for the 2005 hurricanes substantially reduced first quarter earnings, we still posted a 15.7 percent ROE, demonstrating the strength of our worldwide operation,? said chairman and chief executive officer Joseph V. Taranto.

Reinsurance business grew eight percent for the quarter due to ? new quality opportunities, particularly for property reinsurance.? he said.

While insurance premiums were down from less California workers comp business and less credit business, Mr. Taranto said the company has recently added new programmes that should result in quality growth for the second half of the year.

?Accordingly, we remain positive with regard to our overall prospects for 2006,? he said.