Everest Re 8K Results of Operations and Financial Condition | EG 9 Feb 21

EWS

ELEASE

EVEREST RE GROUP,

LTD.

Seon Place, 141 Front Street, 4

Floor, Hamilton HM 19, Bermuda

Contacts

Media:

Dane

Lopes

Investors: Jon

Levenson

Group Head of Marketing

Communications

Head of Investor

Relations

Everest Global

Services,

Inc.

Everest Global Services, Inc.

203.388.3977

908.604.3169

For Immediate Release

Everest Re Group Reports Fourth Quarter and Full Year

2020 Results:

Full Year

Net Income of $514 Million

15% Growth in Full Year

Gross Written Premium with Underlying Profit Improvement

11.4% Year

on Year

Growth in Book Value

Per Share Inclusive of Dividends

HAMILTON,

Bermuda

(BUSINESS

WIRE)

–

February

2021

–

Everest

Group,

Ltd.

(“Everest”

or the

“Company”)

today reported its 2020 fourth quarter and year end results.

Fourth Quarter 2020 Highlights

●

Net income of $64 million equal to $1.59 per share

●

Net operating loss of $(44) million, $(1.12) per common share

●

Gross written premium growth of 13%

●

Attritional combined ratio of 86.3%, a 4 point improvement year over year

●

Pre-tax net

catastrophe losses

of $70

million, Covid-19

Pandemic (“Pandemic”)

losses of

$76 million, and a prior year reserve strengthening of $400 million

Full Year

2020 Highlights

●

Net income of $514 million, $12.78 per diluted common share

●

Net operating income of $300 million, $7.46 per diluted common share

●

Growth in diluted book value per share of 11.4% inclusive of dividends

●

Gross written premium growth of 15%

●

Attritional combined ratio of 87.5%, ~ 1 point improvement year over year

●

2020 cash flow from operations of $2.9 billion

The

following

table

summarizes

the

Company’s

net

income

and

financial

metrics

and

provides

details

shareholders’

equity

and

book

value

per

share.

Net income and operating income

Full Year

All values in USD millions except for per share amounts and percentages

2020

2019

Everest Re Group

Net income

63.6

514.2

217.6

1,009.5

Net operating income (loss)

(44.2)

300.1

130.8

872.4

Net income per diluted common share

1.59

12.78

5.32

24.70

Net operating income (loss) per diluted common share

(1.12)

7.46

3.20

21.34

Net income annualized return on average equity

2.8%

5.8%

10.0%

12.0%

Net operating income annualized return on average equity

-2.0%

3.4%

6.0%

10.3%

Year

end equity and book value

Shareholders' equity

9,726.2

9,132.9

Book value per share

243.25

223.85

Growth in bvps adjusted for dividends

11.4%

18.7%

Notes

1/ Refer to the reconciliation of net income to net operating income found later in this release

Everest

Group

President

CEO

Juan

Andrade

commented:

“We

are

relentlessly

executing

our

strategies

from

position

strength

this

robust

market

evidenced

2020

growth

gross

written

premiums

15%

and

net

written

premiums

17%

and

improvement

underlying

underwriting

profitability.

Our

attritional

combined

ratio

improved

approximately

one

point

87.5%

versus

the

prior

year,

with our

Insurance segment

improving 2.3

points to

94.2%.

Despite the

$511

million Pandemic

loss

provision

and

$400

million

prior

accident

year

reserve

strengthening,

delivered

$300

million

operating

income

and

$514

million

net

income

providing

return

equity

5.8%.

Everest’s

investment

income

remained

resilient

$642

million

despite

the

Pandemic’s

impact

financial

markets

and the sharp decline in interest rates.

Our total shareholders’ equity grew to a record $9.7 billion from $9.1

billion during the year,

representing net book value per share growth

of 11.4% including dividends.

Everest

has a strong capital position bolstered by the $1.0 billion senior notes offering and a leading

global franchise

with great momentum entering 2021.”

The

following

information

summarizes

the

Company’s

underwriting

results,

consolidated

basis

and

also by segment – Reinsurance and Insurance, with selected commentary on results by segment.

Underwriting information - Everest Re Group

Full Year

Year on year

change

All values in USD millions except for percentages

2020

2019

Full Year

Gross written premium

2,750.5

10,482.4

2,436.3

9,133.4

12.9%

14.8%

Net written premium

2,449.3

9,117.0

2,120.2

7,824.4

15.5%

16.5%

Combined ratio

109.1%

102.9%

101.5%

95.5%

7.6 pts

7.4 pts

Attritional combined ratio

86.3%

87.5%

90.3%

88.4%

-4.0 pts

-0.9 pts

Pre-tax net catastrophe losses

70.0

425.0

225.0

575.5

Pre-tax net covid losses

76.1

511.1

Pre-tax net prior year reserve development

400.0

401.4

(19.2)

(93.6)

Notes

1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums

Reinsurance segment

●

The

reinsurance

segment

achieved

strong

growth

with

gross

written

premiums

12%

for

the

quarter and 15% for

the year,

driven by new business

opportunities, growth with existing

customers,

and improved rates and terms and conditions.

●

The

combined

ratio

for

the

quarter

and

full

year

2020

reflected

the

impact

catastrophe

losses,

Covid-19 pandemic losses, and a reserve adjustment in the amount of $400 million.

●

have

profitable

portfolio

driven

the

consistent

execution

our

underwriting

initiatives.

Underwriting information - Reinsurance segment

Full Year

Year on year change

All values in USD millions except for percentages

2020

2019

Full Year

Gross written premium

1,878.6

7,281.7

1,677.6

6,355.9

12.0%

14.6%

Net written premium

1,793.5

6,767.6

1,519.3

5,732.3

18.0%

18.1%

Combined ratio

112.4%

103.0%

103.9%

95.4%

8.5 pts

7.6 pts

Attritional combined ratio

83.9%

85.2%

87.4%

85.5%

-3.5 pts

-0.3 pts

Pre-tax net catastrophe losses

60.0

357.0

225.0

574.8

Pre-tax net covid losses

56.1

407.1

Pre-tax net prior year reserve development

400.0

396.9

(2.7)

(77.2)

Notes

1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums

Insurance segment

●

The Company’s

insurance segment achieved strong

growth with gross written

premiums up 15% for

the

quarter

and

15%

for

the

year,

driven

primarily

new

business

opportunities,

strong

renewal

retention, and

rate improvement.

●

The combined

ratio for

the quarter

and full

year 2020

reflected the

impact of

catastrophe losses

and

Covid-19 pandemic losses.

●

achieved

record

renewal

rate

increases

+21%

the

fourth

quarter

excluding

workers

compensation, and up 14% including workers compensation where we are seeing rates flatten.

Underwriting information - Insurance segment

Full Year

Year on year change

All values in USD millions except for percentages

2020

2019

Full Year

Gross written premium

871.9

3,200.6

758.7

2,777.5

14.9%

15.2%

Net written premium

655.8

2,349.4

600.9

2,092.2

9.1%

12.3%

Combined ratio

99.0%

102.6%

95.1%

95.8%

3.9 pts

6.8 pts

Attritional combined ratio

93.8%

94.2%

98.1%

96.5%

-4.3 pts

-2.3 pts

Pre-tax net catastrophe losses

10.0

68.0

0.0

0.7

Pre-tax net covid losses

20.0

104.0

Pre-tax net prior year reserve development

4.6

(16.4)

Notes

1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums

Investments and capital

●

Net

investment

income

$222

million

for

the

quarter

and

$647

million

for

the

year,

including

limited partnership gains of $91 million for the quarter and $113 million for the year

●

Total invested assets and cash of $25.5 billion at December 31, 2020, 23% growth year over year

●

Shareholders’ equity increased to a record $9.7 billion at December 31, 2020

●

Book

value

per

diluted

December

31,

2020

$243.25,

11.4%

dividend

adjusted

basis since year end 2019

●

Common share dividends declared and paid of $1.55 per share, equal to $62 million for the quarter

●

The Company repurchased no common shares in the quarter

This news release contains forward-looking statements within the meaning of the

U.S. federal securities

laws.

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

years

through

subsidiaries

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

found

our

website

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 8:00 a.m. Eastern Time

on February 9,

2021.

The call

will be

available

on the

Internet

through

the Company’s

web site

at everestre.com/investors.

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 “Investors/Financial

Reports/Quarterly Reports”

section

the

website.

The

supplemental financial

information

may

also

obtained

by contacting

the Company

directly.

_______________________________________________

The Company

generally uses

after-tax operating

income (loss),

a non-GAAP

financial measure,

to evaluate

its

performance.

After-tax

operating

income

(loss)

consists

net

income

(loss)

excluding

after-tax

net

realized

capital

gains

(losses)

and

after-tax

net

foreign

exchange

income

(expense)

the

following

reconciliation displays:

Three Months Ended

Twelve Months Ended

December 31,

(Dollars in thousands, except per share amounts)

2020

2019

2020

2019

(unaudited)

Per Diluted

Common

Amount

Net income (loss)

$63,601

$1.59

$217,644

$5.32

$514,151

$12.78

$1,009,461

$24.70

After-tax net realized capital gains (losses)

149,950

3.74

61,052

1.49

217,017

5.39

150,808

3.69

After-tax net foreign exchange income (expense)

(42,165)

(1.05)

25,763

0.63

(2,932)

(0.07)

(13,767)

(0.34)

After-tax operating income (loss)

$(44,184)

$(1.12)

$130,828

$3.20

$300,066

$7.46

$872,420

$21.34

(Some amounts may not reconcile due to rounding.)

Although net

realized capital

gains (losses)

and net

foreign exchange

income (expense)

are an

integral part

of the

Company’s

insurance operations,

the determination

of net

realized capital

gains (losses)

and foreign

exchange

income (expense)

is independent

of the

insurance underwriting

process.

The Company

believes

that

the

level

net

realized

capital

gains

(losses)

and

net

foreign

exchange

income

(expense)

for

any

particular

period

not

indicative

the

performance

the

underlying

business

that

particular

period.

Providing only

a GAAP

presentation of

net income

(loss) makes

it more

difficult for

users of

the financial

information to

evaluate the

Company’s

success or

failure in

its basic

business and

may lead

to incorrect

misleading assumptions and conclusions.

The Company understands that the equity analysts who follow the

Company focus

on after-tax

operating income

(loss) in

their analyses

for the

reasons discussed

above.

The

Company

provides

after-tax

operating

income

(loss)

investors

that

they

have

what

management

believes to be a useful supplement to GAAP information concerning the Company’s performance.

--Financial

Details

Follow--

EVEREST RE GROUP,

LTD.

CONSOLIDATED

STATEMENTS

OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

Twelve Months Ended

December 31,

(Dollars in thousands, except per share amounts)

2020

2019

2020

2019

(unaudited)

REVENUES:

Premiums earned

$2,396,483

$1,948,071

$8,681,513

$7,403,686

Net investment income

222,349

146,077

642,465

647,139

Net realized capital gains (losses):

Credit allowances on fixed maturity securities

17,896

(1,745)

Other-than-temporary impairments on fixed maturity securities

(5,495)

(20,899)

Other net realized capital gains (losses)

165,490

80,938

269,394

205,903

Total net realized capital gains (losses)

183,386

75,443

267,649

185,004

Other income (expense)

(40,819)

44,495

6,487

(4,660)

Total revenues

2,761,399

2,214,086

9,598,114

8,231,169

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

1,976,771

1,407,794

6,550,837

4,922,898

Commission, brokerage, taxes and fees

513,080

450,226

1,873,250

1,703,726

Other underwriting expenses

125,372

118,923

511,237

440,899

Corporate expenses

11,934

10,344

41,118

32,966

Interest, fees and bond issue cost amortization expense

14,847

7,721

36,323

31,693

Total claims and expenses

2,642,004

1,995,008

9,012,765

7,132,182

INCOME (LOSS) BEFORE TAXES

119,395

219,078

585,349

1,098,987

Income tax expense (benefit)

55,794

1,434

71,198

89,526

NET INCOME (LOSS)

$63,601

$217,644

$514,151

$1,009,461

Other comprehensive income (loss), net of tax:

Unrealized appreciation (depreciation) ("URA(D)") on securities arising

during the period

87,375

(28,159)

423,210

496,430

Reclassification adjustment for realized losses (gains) included in net

income (loss)

(16,165)

(8,393)

(3,476)

(12,613)

Total URA(D) on securities arising during

the period

71,210

(36,552)

419,734

483,817

Foreign currency translation adjustments

55,937

29,235

86,327

14,030

Benefit plan actuarial net gain (loss) for the period

(5,615)

(12,591)

(5,615)

(12,591)

Reclassification adjustment for amortization of net (gain) loss included

in net income (loss)

1,768

1,788

6,300

5,453

Total benefit plan net gain (loss) for the period

(3,847)

(10,803)

685

(7,138)

Total other comprehensive income (loss), net of tax

123,300

(18,120)

506,746

490,709

COMPREHENSIVE INCOME (LOSS)

$186,901

$199,524

$1,020,897

$1,500,170

EARNINGS PER COMMON SHARE:

Basic

$1.59

$5.34

$12.81

$24.77

Diluted

1.59

5.32

12.78

24.70

EVEREST RE GROUP,

LTD.

CONSOLIDATED

BALANCE SHEETS

December 31,

(Dollars and share amounts in thousands, except par value per share)

2020

2019

(unaudited)

ASSETS:

Fixed maturities - available for sale, at market value

$20,040,173

$16,824,944

(amortized cost: 2020, $19,225,068; 2019, $16,473,491, credit allowances: 2020,

($1,745); 2019, $0)

Fixed maturities - available for sale, at fair value

5,826

Equity securities, at fair value

1,472,236

931,457

Short-term investments (cost: 2020, $1,135,088; 2019, $414,639)

1,134,950

414,706

Other invested assets (cost: 2020, $2,012,581; 2019, $1,763,531)

2,012,581

1,763,531

Cash

801,651

808,036

Total investments and cash

25,461,591

20,748,500

Accrued investment income

141,304

116,804

Premiums receivable

2,680,562

2,259,088

Reinsurance receivables

1,994,555

1,763,471

Funds held by reinsureds

716,655

489,901

Deferred acquisition costs

622,053

581,863

Prepaid reinsurance premiums

412,015

445,716

Income taxes

17,253

305,711

Other assets

742,369

612,997

TOTAL ASSETS

$32,788,357

$27,324,051

LIABILITIES:

Reserve for losses and loss adjustment expenses

16,398,997

13,611,313

Future policy benefit reserve

37,723

42,592

Unearned premium reserve

3,501,359

3,056,735

Funds held under reinsurance treaties

15,807

10,668

Other net payable to reinsurers

294,347

291,660

Losses in course of payment

127,971

51,950

Senior notes due 6/1/2044

397,194

397,074

Senior notes due 10/1/2050

979,524

Long term notes due 5/1/2067

223,674

236,758

Borrowings from FHLB

310,000

Accrued interest on debt and borrowings

10,460

2,878

Unsettled securities payable

206,693

30,650

Other liabilities

558,432

458,848

Total liabilities

23,062,181

18,191,126

SHAREHOLDERS' EQUITY:

Common shares, par value: $0.01; 200,000 shares authorized; (2020) 69,620

and (2019) 69,464 outstanding before treasury shares

696

694

Additional paid-in capital

2,245,301

2,219,660

Accumulated other comprehensive income (loss), net of deferred income tax expense

'(benefit) of $80,451 at 2020 and $30,996 at 2019

534,899

28,152

Treasury shares, at cost; 29,636 shares (2020) and 28,665 shares (2019)

(3,622,172)

(3,422,152)

Retained earnings

10,567,452

10,306,571

Total shareholders' equity

9,726,176

9,132,925

TOTAL LIABILITIES AND SHAREHOLDERS'

EQUITY

$32,788,357

$27,324,051

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

Twelve Months Ended

December 31,

(Dollars in thousands)

2020

2019

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$514,151

$1,009,461

Adjustments to reconcile net income to net cash provided by operating activities:

Decrease (increase) in premiums receivable

(387,123)

(62,018)

Decrease (increase) in funds held by reinsureds, net

(219,321)

(56,722)

Decrease (increase) in reinsurance receivables

(150,753)

67,444

Decrease (increase) in income taxes

239,883

237,479

Decrease (increase) in prepaid reinsurance premiums

55,334

(95,207)

Increase (decrease) in reserve for losses and loss adjustment expenses

2,627,813

402,380

Increase (decrease) in future policy benefit reserve

(4,869)

(4,186)

Increase (decrease) in unearned premiums

404,049

521,709

Increase (decrease) in other net payable to reinsurers

(24,163)

66,477

Increase (decrease) in losses in course of payment

74,759

(33,557)

Change in equity adjustments in limited partnerships

(103,772)

(108,332)

Distribution of limited partnership income

122,326

81,300

Change in other assets and liabilities, net

(95,968)

(54,176)

Non-cash compensation expense

39,209

34,018

Amortization of bond premium (accrual of bond discount)

49,673

30,936

Net realized capital (gains) losses

(267,649)

(185,004)

Net cash provided by (used in) operating activities

2,873,579

1,852,002

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from fixed maturities matured/called - available for sale, at market value

2,586,405

2,302,299

Proceeds from fixed maturities sold - available for sale, at market value

1,945,867

3,280,237

Proceeds from fixed maturities sold - available for sale, at fair value

4,907

2,917

Proceeds from equity securities sold, at fair value

376,347

283,965

Distributions from other invested assets

309,912

284,558

Cost of fixed maturities acquired - available for sale, at market value

(7,189,301)

(6,613,917)

Cost of fixed maturities acquired - available for sale, at fair value

(4,243)

Cost of equity securities acquired, at fair value

(637,082)

(329,417)

Cost of other invested assets acquired

(557,473)

(425,438)

Net change in short-term investments

(717,527)

(167,290)

Net change in unsettled securities transactions

194,574

(26,163)

Net cash provided by (used in) investing activities

(3,683,371)

(1,412,492)

CASH FLOWS FROM FINANCING ACTIVITIES:

Common shares issued during the period for share-based compensation, net of expense

(13,566)

(3,134)

Purchase of treasury shares

(200,020)

(24,604)

Dividends paid to shareholders

(249,056)

(234,322)

Proceeds from issuance of senior notes

979,417

Cost of debt repurchase

(10,647)

FHLB advances (repayments)

310,000

Cost of shares withheld on settlements of share-based compensation awards

(15,908)

(13,627)

Net cash provided by (used in) financing activities

800,220

(275,687)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

3,187

(11,882)

Net increase (decrease) in cash

(6,385)

151,941

Cash, beginning of period

808,036

656,095

Cash, end of period

$801,651

$808,036

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

$(169,748)

$(148,585)

Interest paid

33,570

31,689

Everest Re (EG) 8-KResults of Operations and Financial Condition