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Everest Re’s Q3 losses, strong premium growth

The Everest Re Group Ltd has reported a 2021 third-quarter net loss of $73.5 million, compared with net income of $243.1 million in the same period last year.

Net operating income was a net loss of $52.6 million, compared with net operating income of $97.0 million for the same three months last year.

The global provider of reinsurance and insurance had an underwriting loss of $323.4 million, inclusive of catastrophe losses from Hurricane Ida and European Floods during the quarter, in the amount of $635 million net of recoveries and reinstatement premiums ($555 million in reinsurance and $80 million in Insurance).

The company’s GAAP combined ratio was 112.2 per cent, which includes 26.2 points of catastrophe losses versus 14 points of catastrophe losses in the same period during 2020.

Reinsurance cat losses for the quarter totalled $555 million net of recoveries and reinstatement premiums, driven by Hurricane Ida and the Berndt flooding event in Europe.

Everest Re estimates the ultimate loss from the Covid-19 pandemic at $511 million.

Operating cashflow was $1.2 billion versus $1.1 billion a year ago. Year-to-date operating cashflow was $2.8 billion versus $2.2 billion a year ago.

Everest Re Group president and CEO Juan C Andrade said: “We achieved outstanding top-line premium growth across both of our insurance and reinsurance businesses, continued to improve the attritional profitability for our insurance division, remained focused on risk appetite discipline and the diversification of our business, demonstrated strong expense management, delivered excellent investment income results, opportunistically reduced our cost of capital and returned capital to our shareholders.

“Despite the high frequency and severity of the natural catastrophe activity in the quarter, we also benefited from the de-risking of the cat portfolio and we remain on track to achieve our total shareholder return objective. We continue to consistently demonstrate our ability to relentlessly execute against our plans regardless of the external environment.”

The gross written premium grew 25 per cent year over year to $3.5 billion.

Of that, the insurance segment grew 43 per cent year over year to $1.0 billion — the second consecutive quarter above $1 billion.

Gross written premium for the reinsurance segment grew 19 per cent year over year to $2.5 billion.

The attritional combined ratio was 87.9 per cent. There was an expansion of insurance segment attritional underwriting margins, leading to a record-setting attritional combined ratio of 90.3 per cent, a 3.9-point improvement year over year.

The company suffered a pre-tax underwriting loss of $323 million inclusive of pre-tax net catastrophe losses of $635 million.

There was strong net investment income of $293 million, led by outstanding alternative asset performance of $170 million.

The company engaged in common share repurchases of $160 million during the quarter and $200 million year to date.

The annualised year to date total shareholder return is 13.2 per cent.

Everest Re had total invested assets and cash of $27.8 billion at September 30, 2021, a 9.0 per cent growth from year-end 2020.

Shareholders’ equity was at $10.0 billion, book value per diluted share was $253.40, up by just over $10 from the year before.

Further:

• Excluding unrealised gains (losses) on fixed-income investments, book value per diluted share of $242.83 at September 30, 2021, vs. $225.15 at December 31, 2020

• Common share dividends declared and paid in the quarter of $1.55 per share, equal to $61.5 million

• Common share repurchases of $160 million during the quarter, representing 625,358 shares at an average price of $255.43 per share

Juan C Andrade, president and CEO of Everest Re Group Ltd (Photograph supplied)

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Published October 28, 2021 at 2:11 pm (Updated October 28, 2021 at 8:05 pm)

Everest Re’s Q3 losses, strong premium growth

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