Everest Re 8K Group Reports Third Quarter 2021 Results | EG 28 Oct 21

EWS

ELEASE

EVEREST RE GROUP,

LTD.

Seon Place, 141 Front Street, 4

Floor, Hamilton HM 19, Bermuda

Contacts

Media: Dawn Lauer

Investors: Jon Levenson

Chief Communications Officer

Head of Investor Relations

Everest Global Services, Inc.

908.300.7670

908.604.3169

Everest Re Group Reports Third Quarter 2021 Results

25% Growth in Gross Written Premium with an 87.9% Attritional Combined Ratio

On Track to Achieve Strategic Plan Objectives

HAMILTON,

Bermuda --

(BUSINESS WIRE)

– October

27, 2021

– Everest Re Group, Ltd. (“Everest”

the “Company”)

today reported its 2021 third quarter results.

Third Quarter 2021 Highlights

●

Gross written premium (“GWP”) growth of 25% year over year to $3.5 billion

●

Insurance

segment

GWP

growth

43%

year

over

year

$1.0

billion.

The

second

consecutive

quarter above $1.0 billion GWP

●

Reinsurance segment GWP growth of 19% year over year to $2.5 billion

●

Attritional combined ratio of 87.9%

●

Excellent

Insurance

segment

attritional

combined

ratio

90.3%,

3.9-point

improvement

year

over year

●

Pre-tax

Underwriting

loss

$323

million

inclusive

pre-tax

net

catastrophe

losses

$635

million

●

Robust net investment income of $293 million, led

by outstanding alternative asset performance of

$170 million

●

Common share repurchases of $160 million during the quarter

and $200 million year to date

●

Annualized year to date Total Shareholder Return of 13.2%

Everest Re Group President & CEO Juan C. Andrade commented on the

Company’s results:

“During the third quarter of 2021, Everest made significant progress toward

the strategic plan objectives

detailed in the June investor day presentation.

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.”

Summary of Third Quarter 2021 Net Income and Other Items

●

Net income

(loss) of

$(73.5) million,

equal to

$(1.88) per

share vs.

net income

of $243.1

million,

equal to $6.07 per share in the same period during 2020

●

Net operating income (loss)

of $(52.6) million, equal to

$(1.34) per share vs.

net operating income

of $97.0 million, equal to $2.42 per share in the same period during 2020

●

Underwriting

loss

$323.4

million

inclusive

catastrophe

losses

from

Hurricane

Ida

and

European

Floods

during

the

quarter,

the

amount

$635

million

net

recoveries

and

reinstatement premiums ($555 million in reinsurance and $80 million in Insurance)

●

GAAP combined

ratio of

112.2% which

includes 26.2 points

of catastrophe

losses vs.

14.0 points

of catastrophe losses in the same period during 2020

●

No change to Covid-19 Pandemic (“Pandemic”) ultimate loss estimates

of $511 million

●

Operating cashflow

was $1.2

billion vs

$1.1 billion

a year

ago.

Year

to date

operating cashflow

was $2.8 billion vs $2.2 billion a year ago.

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

(73.5)

948.4

243.1

450.5

Net operating income (loss)

(52.6)

794.7

97.0

344.2

Net income per diluted common share

(1.88)

23.72

6.07

11.18

Net operating income per diluted common share

(1.34)

19.87

2.42

8.54

Net income annualized return on average equity

(3.0%)

13.6%

11.0%

6.8%

Net operating income annualized return on average equity

(2.2%)

11.4%

4.4%

5.2%

Period end equity and book value

Q3 2021

Year to

Date

Shareholders' equity

9,978.6

Book value per share

253.40

Change in BVPS adjusted for dividends

6.1%

Total Shareholder Return ("TSR") - Annualized

13.2%

Notes

1/ Refer to the reconciliation of net income to net operating income

found on page 7 of this

press release

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

3,497.6

9,619.2

2,791.6

7,731.8

25.3%

24.4%

Net written premium

3,025.8

8,389.1

2,448.7

6,667.6

23.6%

25.8%

Loss ratio

85.6%

73.3%

78.7%

72.8%

6.9 pts

0.5 pts

Commission and brokerage ratio

21.2%

20.2%

21.7%

1.0 pts

(0.5) pts

Other underwriting expenses

5.3%

5.6%

6.3%

6.1%

(1.0) pts

(0.5) pts

Combined ratio

112.2%

100.1%

105.2%

100.6%

7.0 pts

(0.5) pts

Attritional combined ratio

87.9%

87.6%

85.8%

88.0%

2.1 pts

(0.4) pts

Pre-tax net catastrophe losses

635.0

940.0

300.0

345.0

Pre-tax net covid losses

124.9

434.9

Pre-tax net prior year reserve development

(1.6)

(6.1)

(1.3)

1.4

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

●

Reinsurance achieved excellent

growth in the

quarter, growing

premium 19% year

over year to

$2.5

billion.

The growth was driven by continued partnership with our core clients

and Everest’s position

as a preferred reinsurance platform.

All target classes of business and geographies saw growth in the

quarter,

and

our

portfolio

benefiting

from

improved

economic

conditions

and

strong

rate

performance by our cedants.

●

The attritional combined ratio for the quarter of

87.1% reflects the deliberate and targeted

shaping of

our

portfolio

maximize

long

term

results

with

higher

mix

pro

rata

structures,

improved

balance

property

and

casualty

exposures,

prudence

loss

ratio

selections,

and

continuous

expense

discipline.

The

operating

expense

ratio

2.3%

world

class

and

demonstrates

the

scalability of our franchise.

●

Reinsurance

CAT

losses

for

the

quarter

totaled

$555

million

net

recoveries

and

reinstatement

premiums,

driven

Hurricane

Ida

and

the

Berndt

flooding

event

Europe.

The

cumulative,

deliberate,

and

purposeful

actions

have

taken

reduce

volatility

have

reduced

our

company’s

risk profile.

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

2,488.3

6,695.6

2,087.0

5,403.1

19.2%

23.9%

Net written premium

2,293.0

6,265.8

1,936.9

4,974.0

18.4%

26.0%

Loss ratio

89.4%

74.1%

80.0%

72.2%

9.4 pts

1.9 pts

Commission and brokerage ratio

23.8%

22.3%

24.3%

1.5 pts

(0.5) pts

Other underwriting expenses

2.3%

2.5%

3.1%

2.9%

(0.8) pts

(0.4) pts

Combined ratio

115.5%

100.5%

105.4%

99.4%

10.1 pts

1.1 pts

Attritional combined ratio

87.1%

86.3%

83.0%

85.7%

4.1 pts

0.6 pts

Pre-tax net catastrophe losses

555.0

802.5

262.5

287.0

Pre-tax net covid losses

109.9

351.0

Pre-tax net prior year reserve development

(1.6)

(4.9)

(1.3)

(3.1)

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

another

outstanding

premium

quarter

with

record

quarterly

growth

43%

driving

over

$1.0

billion

gross

written

premium

for

second

consecutive

quarter.

The

exceptional growth

in Q3

was driven

by increasingly

favorable economic

conditions,

new business

growth,

and

the

combined

impact

strong

renewal

retention

and

continuing

favorable

rate

environment.

●

The Insurance segment

also continues

to expand

attritional underwriting

margins with

improvement

in the loss and expense ratio and delivered a record-setting attritional combined ratio of 90.3%.

●

These results reflect

our relentless focus

on execution

and the success

of our

nimble and disciplined

underwriting,

which

reacts

quickly

market

conditions

and

best

positions

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

1,009.3

2,923.6

704.6

2,328.7

43.2%

25.5%

Net written premium

732.8

2,123.3

511.8

1,693.6

43.2%

25.4%

Loss ratio

74.7%

70.8%

74.8%

74.6%

(0.1) pts

(3.8) pts

Commission and brokerage ratio

13.7%

13.4%

14.0%

0.3 pts

(0.6) pts

Other underwriting expenses

14.1%

14.5%

16.3%

15.4%

(2.2) pts

(0.9) pts

Combined ratio

102.5%

98.7%

104.5%

104.0%

(2.0) pts

(5.3) pts

Attritional combined ratio

90.3%

91.5%

94.2%

94.3%

(3.9) pts

(2.8) pts

Pre-tax net catastrophe losses

80.0

137.5

37.5

58.0

Pre-tax net covid losses

15.0

84.0

Pre-tax net prior year reserve development

(1.2)

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

●

Total

invested assets

and cash of

$27.8 billion

at September 30,

2021, 9.0%

growth versus year

end

2020

●

Shareholders’ equity of $10.0 billion as of September 30, 2021

●

Book value per diluted share of $253.40 at September 30, 2021 vs. $243.25 at December 31, 2020

●

Excluding

unrealized

gains

(losses)

fixed

income

investments,

book

value

per

diluted

$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

repurchases

$160

million

during

the

quarter,

representing

625,358

average price of $255.43 per share

Equity and Book Value per Share

Year to

Date

Year to

Date

All values in USD millions except for per share

2021

2020

Beginning shareholders' equity

10,416.8

9,726.2

9,286.3

9,132.9

Net income

(73.5)

948.4

243.1

450.5

Change- unrealized gains (losses) - Fixed inc. investments

(101.4)

(307.9)

52.0

348.5

Dividends to shareholders

(61.5)

(185.7)

(61.9)

(187.1)

Purchase of treasury shares

(159.7)

(200.1)

(200.0)

Other

(42.1)

(2.3)

71.8

46.5

Ending shareholders' equity

9,978.6

9,591.3

Common shares outstanding

39.38

39.97

Book value per common share outstanding

253.40

239.98

Less: Unrealized on fixed inc. investments ("URAD")

10.57

16.34

Book value excl. URAD per common share outstanding

242.83

223.64

Common share dividends paid - last 12 months

6.20

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 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

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.

conference call discussing the third

quarter results will be

held at

8:00 a.m.

Eastern Time

on October 28,

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

located

www.everestre.com

the

“Investors/Financials/Quarterly

Results” section of the

website.

The supplemental financial information

may

also be

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 September 30,

Nine Months Ended September 30,

(Dollars in thousands, except per share amounts)

2021

2020

2021

2020

(unaudited)

Per Diluted

Amount

Net income (loss)

($73,468)

($1.88)

$243,057

$6.07

$948,376

$23.72

$450,549

$11.18

After-tax net realized capital gains (losses)

($2,591)

($0.07)

$88,911

$2.22

$111,196

$2.78

$67,067

$1.66

After-tax net foreign exchange income (expense)

($18,314)

($0.47)

$57,157

$1.43

$42,526

$1.06

$39,233

$0.97

After-tax operating income (loss)

($52,563)

($1.34)

$96,989

$2.42

$794,654

$19.87

$344,249

$8.54

(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

Nine Months Ended

September 30,

(Dollars in thousands, except per share amounts)

2021

2020

2021

2020

(unaudited)

REVENUES:

Premiums earned

$2,656,403

$2,205,811

$7,602,640

$6,285,030

Net investment income

292,759

234,233

960,267

420,116

Net realized capital gains (losses):

Credit allowances on fixed maturity securities

(7,329)

6,196

(30,234)

(19,641)

Other net realized capital gains (losses)

3,107

104,007

169,023

103,904

Total net realized capital gains (losses)

(4,222)

110,203

138,789

84,263

Other income (expense)

(19,517)

59,937

44,190

47,306

Total revenues

2,925,423

2,610,184

8,745,886

6,836,715

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

$2,274,301

$1,736,210

$5,571,861

$4,574,066

Commission, brokerage, taxes and fees

564,335

445,332

1,611,095

1,360,170

Other underwriting expenses

141,150

138,875

424,225

385,865

Corporate expenses

17,817

10,618

46,363

29,184

Interest, fees and bond issue cost amortization expense

15,539

6,641

46,785

21,477

Total claims and expenses

3,013,142

2,337,676

7,700,329

6,370,762

INCOME (LOSS) BEFORE TAXES

(87,719)

272,508

1,045,557

465,953

Income tax expense (benefit)

(14,251)

29,451

97,181

15,404

NET INCOME (LOSS)

$(73,468)

$243,057

$948,376

$450,549

Other comprehensive income (loss), net of tax:

Unrealized appreciation (depreciation) ("URA(D)")

on securities arising

during the period

(100,021)

63,480

(304,465)

335,835

Reclassification adjustment for realized losses (gains) included

in net

income (loss)

(1,388)

(11,453)

(3,464)

12,689

Total URA(D) on securities arising during the period

(101,409)

52,027

(307,929)

348,524

Foreign currency translation adjustments

(53,599)

60,628

(28,886)

30,390

Reclassification adjustment for amortization of net (gain)

loss included in

net income (loss)

1,563

1,806

5,649

4,532

Total benefit plan net gain (loss) for the period

1,563

1,806

5,649

4,532

Total other comprehensive income (loss), net of tax

(153,445)

114,461

(331,166)

383,446

COMPREHENSIVE INCOME (LOSS)

$(226,913)

$357,518

$617,210

$833,995

EARNINGS PER COMMON SHARE:

Basic

$(1.88)

$6.08

$23.74

$11.20

Diluted

(1.88)

6.07

23.72

11.18

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

September 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, $21,182,756;

2020, $19,225,067, credit allowances: 2021, ($31,980);

2020,

($1,745))

$21,623,119

$20,040,173

Equity securities, at fair value

1,523,595

1,472,236

Short-term investments (cost: 2021, $713,144; 2020, $1,135,088)

713,144

1,134,950

Other invested assets

2,855,372

2,012,581

Cash

1,068,441

801,651

Total investments and cash

27,783,671

25,461,591

Accrued investment income

170,364

141,304

Premiums receivable

3,408,338

2,680,562

Reinsurance recoverables

2,215,380

1,994,555

Funds held by reinsureds

811,269

716,655

Deferred acquisition costs

797,735

622,053

Prepaid reinsurance premiums

552,468

412,015

Income taxes net recoverable

17,253

Other assets

866,872

742,369

TOTAL ASSETS

$36,606,097

$32,788,357

LIABILITIES:

Reserve for losses and loss adjustment expenses

18,956,953

16,398,997

Future policy benefit reserve

36,533

37,723

Unearned premium reserve

4,421,098

3,501,359

Funds held under reinsurance treaties

18,279

15,807

Other net payable to reinsurers

485,682

294,347

Losses in course of payment

150,784

127,971

Senior notes due 6/1/2044

397,284

397,194

Senior notes due 10/1/2050

979,915

979,524

Long term notes due 5/1/2067

223,749

223,674

Borrowings from FHLB

310,000

Accrued interest on debt and borrowings

23,267

10,460

Unsettled securities payable

83,626

206,693

Income taxes net payable

4,074

Other liabilities

536,218

558,432

Total liabilities

26,627,462

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)

69,806

and (2020) 69,620 outstanding before treasury shares

698

696

Additional paid-in capital

2,266,342

2,245,301

Accumulated other comprehensive income (loss), net of deferred

income tax expense

(benefit) of $44,338 at 2021 and $80,451 at 2020

203,733

534,899

Treasury shares, at cost; 30,427 shares (2021) and 29,636 shares (2020)

(3,822,235)

(3,622,172)

Retained earnings

11,330,097

10,567,452

Total shareholders' equity

9,978,635

9,726,176

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$36,606,097

$32,788,357

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

Nine Months Ended

September 30,

(Dollars in thousands)

2021

2020

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$948,376

$450,549

Adjustments to reconcile net income to net cash provided

by operating activities:

Decrease (increase) in premiums receivable

(736,614)

(357,162)

Decrease (increase) in funds held by reinsureds, net

(92,512)

(53,878)

Decrease (increase) in reinsurance recoverables

(230,593)

(172,454)

Decrease (increase) in income taxes

57,270

184,311

Decrease (increase) in prepaid reinsurance premiums

(146,639)

(7,963)

Increase (decrease) in reserve for losses and loss adjustment

expenses

2,576,049

1,665,982

Increase (decrease) in future policy benefit reserve

(1,189)

(2,218)

Increase (decrease) in unearned premiums

927,524

392,904

Increase (decrease) in other net payable to reinsurers

198,954

68,784

Increase (decrease) in losses in course of payment

23,661

132,208

Change in equity adjustments in limited partnerships

(543,401)

(12,475)

Distribution of limited partnership income

105,571

55,576

Change in other assets and liabilities, net

(247,615)

(131,224)

Non-cash compensation expense

33,199

29,337

Amortization of bond premium (accrual of bond discount)

57,289

32,594

Net realized capital (gains) losses

(138,789)

(84,263)

Net cash provided by (used in) operating activities

2,790,541

2,190,608

CASH FLOWS FROM INVESTING ACTIVITIES:

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

at market value

2,756,963

1,781,821

Proceeds from fixed maturities sold - available for sale,

at market value

883,149

1,390,747

Proceeds from fixed maturities sold - available for sale,

at fair value

2,054

Proceeds from equity securities sold, at fair value

578,894

329,750

Distributions from other invested assets

216,573

210,527

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

value

(5,670,636)

(3,874,890)

Cost of equity securities acquired, at fair value

(507,862)

(460,953)

Cost of other invested assets acquired

(604,180)

(392,650)

Net change in short-term investments

422,643

(804,744)

Net change in unsettled securities transactions

(177,259)

89,064

Net cash provided by (used in) investing activities

(2,101,715)

(1,729,274)

CASH FLOWS FROM FINANCING ACTIVITIES:

Common shares issued during the period for share-based

compensation, net of expense

(12,156)

(13,617)

Purchase of treasury shares

(200,064)

(200,020)

Dividends paid to shareholders

(185,731)

(187,110)

Cost of debt repurchase

(10,647)

FHLB borrowings (repayments)

90,000

Cost of shares withheld on settlements of share-based compensation

awards

(15,133)

(15,298)

Net cash provided by (used in) financing activities

(413,084)

(336,691)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(8,952)

6,203

Net increase (decrease) in cash

266,790

130,845

Cash, beginning of period

801,651

808,036

Cash, end of period

$1,068,441

$938,881

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

$39,767

$(169,149)

Interest paid

33,422

16,731

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