Everest Re 8K Group Reports Second Quarter 2021 Results | EG 28 Jul 21

EWS

ELEASE

EVEREST RE GROUP,

LTD.

Seon Place, 141 Front Street, 4

Floor, Hamilton HM 19, Bermuda

Contacts

Investors and Media:

Jon Levenson

Head of Investor Relations

Everest Global Services, Inc.

908.604.3169

For Immediate Release

Everest Re Group Reports Second Quarter 2021 Results

Net Income of $680 Million

35% Growth in Gross Written Premium

with an 89.3% Combined Ratio

HAMILTON,

Bermuda --

(BUSINESS WIRE)

– July

28, 2021

– Everest Re Group, Ltd. (“Everest” or the

“Company”)

today reported its 2021 second quarter results.

Second Quarter 2021 Highlights

●

Net income of $680 million equal to $16.95 per share

●

Net operating income of $587 million, equal to $14.63 per share

●

Gross written premium growth of 35% and net written premium growth of 39%

●

GAAP

calendar

year

combined

ratio

89.3%,

8-point

improvement

year

over

year,

and

attritional combined ratio of 87.6%, a 0.9 point improvement year over year

●

Underwriting

income

$274

million

inclusive

pre-tax

net

catastrophe

losses

$45

million

primarily from several global events in the Quarter.

●

No change to Covid-19 Pandemic (“Pandemic”) loss provision of $511 million

●

Operating cashflow of $724 million for the quarter

The following table summarizes the Company’s net income and related financial

metrics.

Net income and operating income

Year

to Date

Year

to Date

All values in USD millions except for per share

2021

2020

Everest Re Group

Net income

680.0

1,021.8

190.9

207.5

Net operating income (loss)

587.0

847.2

82.9

247.3

Net income per diluted common share

16.95

25.47

4.77

5.13

Net operating income per diluted common share

14.63

21.12

2.07

6.12

Net income annualized return on average equity

28.4%

21.6%

8.9%

4.7%

Net operating income annualized return on average equity

24.5%

17.9%

3.9%

5.6%

Period end equity and book value

Q2 2021

Year

to Date

Q4 2020

Shareholders' equity

10,416.8

9,726.2

Book value per share

260.32

243.25

Change in BVPS adjusted for dividends

8.3%

Total Shareholder Return ("TSR") - Annualized

22.5%

Notes

1/ Refer to the reconciliation of net income to net operating income found on page 6 of this

press release

Everest Re Group President & CEO Juan C. Andrade commented on the Company’s results:

“Everest

had

excellent

quarter

across

the

board

with

very

strong

growth

and

outstanding

underwriting and

investment performance.

These results

serve as

the foundation

for our

exceptional

net

income

result

$1.02

billion

through

the

first

half

2021

and

are

another

important

step

toward

achieving

our

strategic

plan

objectives.

Everest

achieved

annualized

Total

Shareholder

Return

(“TSR”)

22.5%

through

the

first

half

2021,

exceeding

our

strategic

plan

target

13.0%. Everest capitalized

on market opportunities

to expand our

franchises in both

reinsurance and

insurance,

driven

the

relentless

execution

our

strategies

and

the

valuable

risk

solutions

provided to

our customers

and broker

partners. Our

focus on

disciplined underwriting

drove strong

profitability

both

reinsurance

and

insurance

across

our

global

operations.

Finally,

the

standout

performance

this

quarter

demonstrates

the

quality

Everest’s

diversified

earnings,

and

important

step

toward

achieving

our

strategic

objectives

and

the

commitments

made

our

shareholders.”

The following information summarizes the Company’s underwriting results, on a consolidated basis and by

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

Underwriting information - Everest Re Group

Year to Date

Year on Year

All values in USD millions except for percentages

2021

2020

Year to Date

Gross written premium

3,190.1

6,121.6

2,369.3

4,940.2

34.6%

23.9%

Net written premium

2,809.4

5,363.3

2,017.5

4,219.0

39.3%

27.1%

Loss ratio

62.0%

66.7%

68.9%

69.6%

-6.9 pts

-2.9 pts

Commission and brokerage ratio

21.8%

21.2%

22.8%

22.4%

-1.0 pts

-1.2 pts

Other underwriting expenses

5.5%

5.7%

5.8%

6.1%

-0.3 pts

-0.4 pts

Combined ratio

89.3%

93.6%

97.5%

98.1%

-8.2 pts

-4.5 pts

Attritional combined ratio

87.6%

87.4%

88.5%

89.1%

-0.9 pts

-1.7 pts

Pre-tax net catastrophe losses

45.0

305.0

15.0

45.0

Pre-tax net covid losses

160.0

310.0

Pre-tax net prior year reserve development

(2.6)

(4.5)

5.3

2.7

Notes

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

2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Reinsurance segment

●

The reinsurance segment recorded 40% growth in gross written premiums for the quarter. This

growth reflects the strength of the Everest global franchise, as we saw broad demand for our

reinsurance solutions in the US and across the world, notably in Europe, Bermuda, London, and

Latin America.

●

Our

growth

was

well

balanced

product

line

and

geography

and

illustrates

our

ability

deploy

capital strategically in attractive markets and in attractive and diversifying product lines.

●

had favorable

renewals at

April 1

and June

1 and

we continue

to write

a stronger,

less volatile,

more diversified, and more profitable book on a risk adjusted basis.

Underwriting information - Reinsurance segment

Year to Date

Year on Year

All values in USD millions except for percentages

2021

2020

Year to Date

Gross written premium

2,148.2

4,207.3

1,538.3

3,316.1

39.6%

26.9%

Net written premium

2,059.9

3,972.9

1,424.1

3,037.2

44.6%

30.8%

Loss ratio

60.8%

66.0%

67.0%

67.8%

-6.2 pts

-1.8 pts

Commission and brokerage ratio

24.6%

23.8%

25.8%

25.4%

-1.2 pts

-1.6 pts

Other underwriting expenses

2.5%

2.7%

2.6%

2.8%

-0.1 pts

Combined ratio

87.9%

92.5%

95.4%

96.0%

-7.5 pts

-3.5 pts

Attritional combined ratio

86.1%

85.8%

86.7%

87.2%

-0.6 pts

-1.4 pts

Pre-tax net catastrophe losses

35.0

247.5

24.5

Pre-tax net covid losses

131.0

241.0

Pre-tax net prior year reserve development

(1.4)

(3.3)

0.8

(1.8)

Notes

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

2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Insurance segment

●

Everest

Insurance

reported

our

first

ever

quarter

with

over

$1.0

billion

gross

written

premium,

reflecting

25%

growth

year

over

year.

New

business

North

America

was

the

most

significant

contributor

this

growth,

the

economy

regains

momentum

and

our

responsive

and

focused

product offerings continue to resonate with our broker partners and insureds.

●

continue to expand our margins

and the attritional loss ratio

improvement for the quarter reflects

the

continuing

success

our

nimble

and

disciplined

underwriting

process,

reacting

quickly

market conditions to best position our portfolio for long term profitability.

Underwriting information - Insurance segment

Year to Date

Year on Year

All values in USD millions except for percentages

2021

2020

Year to Date

Gross written premium

1,041.9

1,914.3

831.0

1,624.1

25.4%

17.9%

Net written premium

749.5

1,390.5

593.4

1,181.8

26.3%

17.7%

Loss ratio

65.6%

68.7%

74.3%

-8.7 pts

-5.6 pts

Commission and brokerage ratio

13.3%

13.2%

14.6%

14.4%

-1.3 pts

-1.2 pts

Other underwriting expenses

14.6%

14.8%

14.5%

15.0%

0.1 pts

-0.2 pts

Combined ratio

93.5%

96.7%

103.4%

103.7%

-9.9 pts

-7.0 pts

Attritional combined ratio

92.1%

92.2%

93.7%

94.3%

-1.6 pts

-2.1 pts

Pre-tax net catastrophe losses

10.0

57.5

15.0

20.5

Pre-tax net covid losses

29.0

69.0

Pre-tax net prior year reserve development

(1.2)

4.5

4.6

Notes

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

2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Investments and Shareholders’ Equity

●

Net investment income

of $407 million

for the quarter

including alternative investment

gains of $266

million

for the quarter

●

Total invested assets and cash of $27.1

billion at June 30, 2021, 6.3% growth versus year end 2020

●

Shareholders’ equity of $10.4 billion as of June 30, 2021

●

Book value per diluted share of $260.32 at June 30, 2021

●

Common share dividends declared and paid in the quarter of $1.55 per share, equal to $62.0 million

●

Common share repurchases of $16.8 million during the quarter,

representing 68,100 shares at an average price

of $246.44 per share

Equity and Book Value per Share

Year

to Date

Year

to Date

All values in USD millions

2021

2020

Beginning shareholders' equity

9,682.9

9,726.2

8,580.9

9,132.9

Net income

680.0

1,021.8

190.9

207.5

Change in investment unrealized gains (URAD)

85.8

(206.5)

544.5

296.5

Dividends to shareholders

(62.0)

(124.3)

(61.9)

(125.2)

Purchase of treasury shares

(16.8)

(40.3)

(200.0)

Other

46.9

39.9

31.9

(25.4)

Ending shareholders' equity

10,416.8

9,286.3

Diluted common shares outstanding

40.0

Book value per diluted common share

260.32

232.32

Common share dividends paid - last 12 months

6.20

6.05

This

news

release

contains

forward-looking

statements

within

the

meaning

the

U.S.

federal

securities

laws. We

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

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

our

reserves,

our

ability

assess underwriting

risk, trends

in rates

for property

and casualty

insurance and

reinsurance,

competition,

investment

market

and

investment

income

fluctuations,

trends

insured

and

paid

losses,

catastrophes,

pandemic,

regulatory

and

legal

uncertainties

and

other

factors

described

our

latest

Annual

Report

Form

10-K.

The

Company

undertakes

obligation

publicly

update

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 July

29, 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 June 30,

Six Months Ended June 30,

(Dollars in thousands, except per share amounts)

2021

2020

2021

2020

(unaudited)

Per Diluted

Common

Amount

Net income (loss)

$679,982

$16.95

$190,880

$4.77

$1,021,844

$25.47

$207,492

$5.13

After-tax net realized capital gains (losses)

$83,752

$2.09

$150,519

$3.76

$113,787

$2.84

($21,844)

($0.54)

After-tax net foreign exchange income (expense)

$9,222

$0.23

($42,528)

($1.06)

$60,840

$1.52

($17,924)

($0.44)

After-tax operating income (loss)

$587,008

$14.63

$82,889

$2.07

$847,217

$21.12

$247,260

$6.12

(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

Six Months Ended

June 30,

(Dollars in thousands, except per share amounts)

2021

2020

2021

2020

(unaudited)

REVENUES:

Premiums earned

$2,558,372

$2,042,405

$4,946,237

$4,079,219

Net investment income

407,095

38,083

667,508

185,883

Net realized capital gains (losses):

Credit allowances on fixed maturity securities

(15,927)

(4,063)

(22,904)

(25,837)

Other net realized capital gains (losses)

120,036

188,711

165,915

(103)

Total net realized capital gains (losses)

104,109

184,648

143,011

(25,940)

Other income (expense)

7,114

(20,621)

63,707

(12,631)

Total revenues

3,076,690

2,244,515

5,820,463

4,226,531

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

$1,586,141

$1,407,016

$3,297,560

$2,837,856

Commission, brokerage, taxes and fees

557,749

466,316

1,046,760

914,838

Other underwriting expenses

140,844

118,130

283,075

246,990

Corporate expenses

16,168

8,733

28,546

18,566

Interest, fees and bond issue cost amortization expense

15,607

7,253

31,246

14,836

Total claims and expenses

2,316,509

2,007,448

4,687,187

4,033,086

INCOME (LOSS) BEFORE TAXES

760,181

237,067

1,133,276

193,445

Income tax expense (benefit)

80,199

46,187

111,432

(14,047)

NET INCOME (LOSS)

$679,982

$190,880

$1,021,844

$207,492

Other comprehensive income (loss), net of tax:

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

during the period

84,171

551,753

(204,444)

272,354

Reclassification adjustment for realized losses (gains) included in net

income (loss)

1,590

(7,257)

(2,076)

24,142

Total URA(D) on securities arising during

the period

85,761

544,496

(206,520)

296,496

Foreign currency translation adjustments

34,295

20,586

24,713

(30,238)

Reclassification adjustment for amortization of net (gain) loss included in

net income (loss)

2,043

1,806

4,086

2,726

Total benefit plan net gain (loss) for the period

2,043

1,806

4,086

2,726

Total other comprehensive income (loss), net of tax

122,099

566,888

(177,721)

268,984

COMPREHENSIVE INCOME (LOSS)

$802,081

$757,768

$844,123

$476,476

EARNINGS PER COMMON SHARE:

Basic

$16.97

$4.78

$25.50

$5.14

Diluted

16.95

4.77

25.47

5.13

EVEREST RE GROUP,

LTD.

CONSOLIDATED

BALANCE SHEETS

June 30,

December 31,

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

2021

2020

(unaudited)

ASSETS:

Fixed maturities - available for sale, at market value (amortized cost: 2021, $20,718,717;

2020,

$19,225,067, credit allowances: 2021, ($24,650); 2020, ($1,745))

$21,275,199

$20,040,173

Equity securities, at fair value

1,485,833

1,472,236

Short-term investments (cost: 2021, $629,943; 2020, $1,135,088)

629,943

1,134,950

Other invested assets (cost: 2021, $2,558,631; 2020, $2,012,581)

2,558,631

2,012,581

Cash

1,106,345

801,651

Total investments and cash

27,055,951

25,461,591

Accrued investment income

170,907

141,304

Premiums receivable

3,199,024

2,680,562

Reinsurance receivables

2,032,363

1,994,555

Funds held by reinsureds

798,780

716,655

Deferred acquisition costs

748,897

622,053

Prepaid reinsurance premiums

495,657

412,015

Income taxes net recoverable

17,253

Other assets

868,477

742,369

TOTAL ASSETS

$35,370,056

$32,788,357

LIABILITIES:

Reserve for losses and loss adjustment expenses

17,645,762

16,398,997

Future policy benefit reserve

36,497

37,723

Unearned premium reserve

4,024,050

3,501,359

Funds held under reinsurance treaties

17,520

15,807

Other net payable to reinsurers

379,524

294,347

Losses in course of payment

198,352

127,971

Senior notes due 6/1/2044

397,254

397,194

Senior notes due 10/1/2050

979,784

979,524

Long term notes due 5/1/2067

223,724

223,674

Borrowings from FHLB

310,000

Accrued interest on debt and borrowings

9,641

10,460

Unsettled securities payable

124,559

206,693

Income taxes net payable

35,089

Other liabilities

571,511

558,432

Total liabilities

24,953,267

23,062,181

SHAREHOLDERS' EQUITY:

Preferred shares, par value: $0.01; 50,000 shares authorized;

no shares issued and outstanding

Common shares, par value: $0.01; 200,000 shares authorized; (2021) 69,817

and (2020) 69,620 outstanding before treasury shares

698

696

Additional paid-in capital

2,256,390

2,245,301

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

(benefit) of $56,797 at 2021 and $80,451 at 2020

357,178

534,899

Treasury shares, at cost; 29,802 shares (2021) and 29,636 shares (2020)

(3,662,499)

(3,622,172)

Retained earnings

11,465,022

10,567,452

Total shareholders' equity

10,416,789

9,726,176

TOTAL LIABILITIES AND SHAREHOLDERS'

EQUITY

$35,370,056

$32,788,357

EVEREST RE GROUP,

LTD.

CONSOLIDATED

STATEMENTS

OF CASH FLOWS

Six Months Ended

June 30,

(Dollars in thousands)

2021

2020

(unaudited)

CASH FLOWS FROM OPERATING

ACTIVITIES:

Net income (loss)

$1,021,844

$207,492

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

Decrease (increase) in premiums receivable

(499,647)

(252,609)

Decrease (increase) in funds held by reinsureds, net

(79,485)

(23,498)

Decrease (increase) in reinsurance receivables

15,836

(147,515)

Decrease (increase) in income taxes

76,452

(25,000)

Decrease (increase) in prepaid reinsurance premiums

(71,566)

(29,699)

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

1,144,620

800,816

Increase (decrease) in future policy benefit reserve

(1,226)

(1,933)

Increase (decrease) in unearned premiums

500,077

159,744

Increase (decrease) in other net payable to reinsurers

72,850

89,499

Increase (decrease) in losses in course of payment

70,653

147,427

Change in equity adjustments in limited partnerships

(377,120)

84,066

Distribution of limited partnership income

49,053

40,447

Change in other assets and liabilities, net

(211,735)

(10,313)

Non-cash compensation expense

22,439

19,175

Amortization of bond premium (accrual of bond discount)

37,928

20,547

Net realized capital (gains) losses

(143,011)

25,940

Net cash provided by (used in) operating activities

1,627,962

1,104,586

CASH FLOWS FROM INVESTING ACTIVITIES:

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

1,897,536

1,261,650

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

599,737

990,273

Proceeds from equity securities sold, at fair value

474,663

213,185

Distributions from other invested assets

112,398

164,975

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

(3,949,973)

(2,301,701)

Cost of equity securities acquired, at fair value

(360,016)

(224,086)

Cost of other invested assets acquired

(309,691)

(343,332)

Net change in short-term investments

506,285

(439,457)

Net change in unsettled securities transactions

(103,527)

49,504

Net cash provided by (used in) investing activities

(1,132,588)

(628,989)

CASH FLOWS FROM FINANCING ACTIVITIES:

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

(11,349)

(12,841)

Purchase of treasury shares

(40,328)

(200,019)

Dividends paid to shareholders

(124,274)

(125,205)

Cost of debt repurchase

(10,647)

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

(13,713)

(14,141)

Net cash provided by (used in) financing activities

(189,664)

(362,853)

EFFECT OF EXCHANGE RATE

CHANGES ON CASH

(1,016)

1,699

Net increase (decrease) in cash

304,694

114,443

Cash, beginning of period

801,651

808,036

Cash, end of period

$1,106,345

$922,479

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

$34,780

$10,895

Interest paid

31,695

14,992

Everest Re (EG) 8-KEverest Re Group Reports Second Quarter 2021 Results