Everest Re: Best market in almost a generation
Bermuda’s international re/insurers are leveraging the market cycle and expanding their franchises considerably in a period of optimism.
Several companies are active in share repurchases already, or resolving to buy back stock with accumulated cash as a way of reinvesting in themselves and improving the stake of existing investors.
And a top executive at global provider of reinsurance and insurance, Everest Re, put it bluntly in addressing his own company.
Executive vice-president and group chief financial officer Mark Kociancic said: “We're in the best market in almost a generation.”
He was speaking at an earnings call after Everest announced 2nd quarter gross written premium of $3.2 billion – a 35 per cent growth over the same quarter a year ago ($6.12 billion for the half year).
The company’s reinsurance business had grown 40 per cent for that period up to $2.1 billion and its insurance business had registered top line growth of 25 per cent – a first ever billion dollar quarter. The combined ratio was a substantially improved 89.3 per cent.
Net income for the three months was $680 million ($1.02 billion for the first six months).
Total shareholder return on an annualised basis was 22.5 per cent.
There were common share repurchases of $16.8 million during the quarter, representing 68,100 shares at an average price of $246.44 per share.
But in responding to an analyst regarding the efficacies of share buybacks, Mr Kociancic conceded the growth period, and that some Bermuda reinsurers had more momentum in share repurchasing.
“You're seeing very strong top line growth on both segments: reinsurance and insurance.
“Having said that, (in terms of) capital management we've been active. We can certainly be more active (in share buybacks). I don't see any hesitation on our side to do that. I think you will see that in the future. And we can complete both sides of that equation grow strongly without any constraints and manage our capital even more efficiently.”