Everest Re posts $290m profit
Bermuda reinsurer Everest Re Group Ltd reported that second-quarter profits rose by more than five percent from the same period last year to $290.2 million, or $6.26 per diluted common share.
After-tax operating income, excluding realised capital gains and losses, was $250.8 million, or $5.41 per diluted common share, for the second quarter, falling short of the $5.89 per share consensus of Wall Street analysts.
This compared to operating earnings of $253.2 million, or $5.10 per share, for the same period last year.
For the first six months of the year, net income was $584.1 million, or $12.46 per diluted common share, compared to $660 million, or $13.09 per share in 2013.
Everest CEO Dominic Addesso said: “Everest continues to generate strong earnings, despite a challenging marketplace. We are seeing select market opportunities, which is driving top-line growth and producing excellent underwriting margins and double-digit returns on equity.
“This is driving growth in shareholder value with book value per share, adjusted for dividends, up more than ten percent through the first six months of the year. We continue to strategically manoeuvre our underwriting portfolio to find the best opportunities and look forward to continuing this strong pace through the remainder of the year.”
The company wrote more business as gross written premiums increased 12 percent to $1.4 billion compared to the second quarter of 2013.
Worldwide, reinsurance premiums, including the Mt Logan Re segment, were up 16 percent while insurance premiums were flat, quarter over quarter. Growth opportunities in US property and specialty lines continue to drive the growth in the reinsurance book.
The combined ratio — reflecting the proportion of premium dollars spent on claims and expenses — improved to 84.7 percent from 87.6 percent in the second quarter of 2013. Excluding catastrophe losses, reinstatement premiums, and prior period loss development, the current quarter attritional combined ratio was 81.4 percent compared to 80.2 percent in the same period last year.
Catastrophe losses amounted to $45 million in the quarter, arising from the Chile earthquake that occurred during the quarter and late reported losses from severe snowstorms in Japan during February. The net impact of these losses, after reinstatement premiums, taxes, and non-controlling interest, was $32.1 million.
Everest's net investment income for the quarter was $131.2 million, including limited partnership income of $6.2 million.
For the quarter, the annualised after-tax operating income return on average adjusted shareholders' equity was 14.6%.
During the quarter, the Company repurchased 475,092 of its common shares at an average price of $157.78 and a total cost of $75 million.
Shareholders' equity ended the quarter at $7.3 billion. Book value per share increased 9.3 percent from $146.57 at December 31, 2013 to $160.27 at June 30, 2014.