Everest Re 8K Group Reports Second Quarter 2022 Results | EG 27 Jul 22

EWS

ELEASE

EVEREST RE GROUP,

LTD.

Seon Place, 141 Front Street, 4

Floor, Hamilton HM 19, Bermuda

Contacts

Media: Dawn Lauer

Investors: Matt Rohrmann

Chief Communications Officer

Head of Investor Relations

Everest Global Services, Inc.

908.300.7670

908.604.7343

Everest Re Group Reports Second Quarter 2022 Results

$386 Million of Net Operating Income and 15.3% Annualized Operating

ROE

$123 Million of Net Income and 91.8% Combined Ratio

HAMILTON,

Bermuda --

(BUSINESS WIRE)

– July

27, 2022

– Everest Re Group, Ltd. (“Everest”

or the

“Group”)

today reported its second quarter 2022 results.

Second Quarter 2022 Highlights

●

$386

Million

Net

Operating

Income,

15.3%

annualized

Operating

ROE,

and

Net

Income

$123 Million

●

$3.4 billion in

gross written premium (“GWP”)

with year over

year growth of

8.1% for the

Group

(10.3%

constant

dollars),

19.6%

for

Insurance

(20.5%

constant

dollars),

and

2.5%

for

Reinsurance (5.2% in constant dollars)

●

Combined ratios of 91.8% for the Group, 91.8% for Reinsurance and 91.5%

for Insurance

●

Attritional

combined

ratios

87.2%

for

the

Group,

86.0%

for

Reinsurance

and

90.2%

for

Insurance

●

Pre-tax

underwriting

income

$240

million

including

$85

million

catastrophe

losses

net

recoveries

and

reinstatement

premiums.

Catastrophe

events

comprised

South

Africa

flood

losses, Canadian and European storms, and 2Q events in the United

States

●

Everest posted

a $45M

estimate for

the Russia/Ukraine

war.

have limited

direct exposure

the Russia/Ukraine war but, significant uncertainty regarding

market and industry losses remains

●

Net

investment income

$226

million, balanced

between fixed

income and

strong alternative

investments performance

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

Company’s results:

“Everest’s

solid

second

quarter

results

reflect

the

successful

execution

our

strategy

with

strong

momentum across our key performance objectives. Our focus

on underwriting profitability and operational

efficiency,

supported

our

investment

portfolio

delivered

$386

million

net

operating

income

and

$15.3%

operating

ROE.

expanded

margins

across

our

insurance

and

reinsurance

businesses

with

disciplined

growth,

continued

scale

our

insurance

platform

and

reinsurance

capitalized

strategic

market

opportunities

that

improved

the

diversity

and

economics

our

book,

while

reducing

volatility.

Everest’s

breadth

global

talent,

disciplined

underwriting

and

market

leadership

provide

strength

and

stability to

our customers

in the

increasingly complex

environment. Entering

the second

half of

the year,

we are well-positioned to continue executing our strategy and providing

attractive shareholder returns.”

Summary of Second Quarter 2022 Net Income and Other Items

●

Net income of $123 million, equal to $3.11 per diluted share vs. second quarter 2021 net income of

$680 million, equal to $16.95 per diluted share

●

Net operating income of $386 million, equal to

$9.79 per diluted share vs. second quarter 2021 net

operating income of $587 million, equal to $14.63 per diluted

●

GAAP combined

ratio of

91.8% including

2.9 points

of catastrophe

losses vs.

the second

quarter

2021 figures of 89.3% including 1.8 points of catastrophe losses

●

Operating

cashflow

for

the

quarter

$715

million

vs.

the

second

quarter

2021

figure

$724

million

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 amounts

2022

2021

Everest Re Group

Net income

123

420

680

1,022

Net operating income (loss)

386

792

587

847

Net income per diluted common share

3.11

10.67

16.95

25.47

Net operating income per diluted common share

9.79

20.10

14.63

21.12

Net income annualized return on average equity

4.8%

8.4%

28.4%

21.6%

Net operating income annualized return on average equity

15.3%

15.8%

24.5%

17.9%

Notes

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

found on page 6 of this press release

Equity and Book Value per Share

Year to

Date

Year to

Date

All values in USD millions except for per share amounts

2022

2021

Beginning shareholders' equity

9,528

10,139

9,683

9,726

Net income

123

420

680

1,022

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

(717)

(1,528)

(207)

Dividends to shareholders

(65)

(126)

(62)

(124)

Purchase of treasury shares

(1)

(17)

(40)

Other

(16)

(52)

Ending shareholders' equity

8,853

10,417

Common shares outstanding

39.42

40.02

Book value per common share outstanding

224.59

260.32

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

(32.68)

12.93

Book value excl. URAD per common share outstanding

257.27

247.39

Change in BVPS adjusted for dividends

-11.8%

Total Shareholder Return ("TSR") - Annualized

6.6%

Common share dividends paid - last 12 months

6.30

6.20

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

Change

All values in USD millions except for percentages

2022

2021

Year to Date

Gross written premium

3,447

6,633

3,190

6,122

8.1%

8.4%

Net written premium

3,022

5,834

2,809

5,363

7.5%

8.8%

Loss ratio

64.3%

64.2%

62.0%

66.7%

2.3 pts

(2.5) pts

Commission and brokerage ratio

21.6%

21.8%

21.2%

(0.2) pts

0.4 pts

Other underwriting expenses

5.8%

5.5%

5.7%

0.3 pts

0.1 pts

Combined ratio

91.8%

91.7%

89.3%

93.6%

2.5pts

(1.9) pts

Attritional combined ratio

87.2%

87.3%

87.6%

87.4%

(0.4) pts

(0.1) pts

Pre-tax net catastrophe losses

200

305

Pre-tax net covid losses

Pre-tax net Russian / Ukraine War

losses

Pre-tax net prior year reserve development

(1)

(2)

(3)

(4)

Notes

1/ Attritional combined ratio excludes catastrophe losses,

reinstatement premiums, prior year development, Covid-19 losses,

CECL, and losses from the

Russian/Ukraine war.

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

reinstatement premiums

Reinsurance Segment – Quarterly Highlights

●

Gross

written

premiums

$2.2

billion

for

the

quarter.

The

June

and

July

renewals

were

successful

continue

write

stronger,

less

volatile,

diversified,

and

profitable

book of business.

●

Improved

risk-adjusted

profitability

the

portfolio

driven

targeted

underwriting

actions,

resulting in a 30-basis point

improvement in the attritional loss

ratio for the quarter vs. the

prior year

(58.8% vs. 59.1%) and an attritional combined ratio of 86.0%

●

Continued expense discipline resulting in an operating expense ratio for the quarter of 2.4%, and a

combined ratio of 91.8%

Underwriting information - Reinsurance segment

Year to Date

Year on Year

Change

All values in USD millions except for percentages

2022

2021

Year to Date

Gross written premium

2,201

4,387

2,148

4,207

2.5%

4.3%

Net written premium

2,122

4,204

2,060

3,973

3.0%

5.8%

Loss ratio

64.6%

64.4%

60.8%

66.0%

3.8 pts

(1.6) pts

Commission and brokerage ratio

24.8%

24.6%

23.8%

0.2 pts

1.0 pts

Other underwriting expenses

2.4%

2.5%

2.7%

(0.1) pts

(0.3) pts

Combined ratio

91.8%

91.6%

87.9%

92.5%

3.9 pts

(0.9) pts

Attritional combined ratio

86.0%

86.1%

85.8%

(0.1) pts

0.3 pts

Pre-tax net catastrophe losses

190

248

Pre-tax net covid losses

Pre-tax net Russian / Ukraine War

losses

Pre-tax net prior year reserve development

(1)

(2)

(1)

(3)

Notes

1/ Attritional combined ratio excludes catastrophe losses,

reinstatement premiums, prior year development, Covid-19 losses,

CECL, and losses from the

Russian/Ukraine war.

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

reinstatement premiums

Insurance Segment – Quarterly Highlights

●

Gross

written

premiums

$1.2

billion

reflecting

19.6%

increase

year

over

year,

driven

balanced and

diversified growth

across most

lines of

business and

geographies, partially

offset

by our

continued focus

reduce exposure in property CAT

●

Excellent profitability with a 91.5% combined ratio and 90.2% attritional combined ratio (a 1.9

points improvement compared to 2Q 2021)

●

Rate increases remain solid and above loss trend

Underwriting information - Insurance segment

Year to Date

Year on Year

Change

All values in USD millions except for percentages

2022

2021

Year to Date

Gross written premium

1,246

2,247

1,042

1,914

19.6%

17.4%

Net written premium

899

1,630

749

1,390

20.0%

17.2%

Loss ratio

63.6%

63.9%

65.6%

68.7%

(2.0) pts

(4.8) pts

Commission and brokerage ratio

12.8%

12.7%

13.3%

13.2%

(0.5) pts

Other underwriting expenses

15.1%

15.2%

14.6%

14.8%

0.5 pts

0.4 pts

Combined ratio

91.5%

91.7%

93.5%

96.7%

(2.0) pts

(5.0) pts

Attritional combined ratio

90.2%

90.6%

92.1%

92.2%

(1.9) pts

(1.6) pts

Pre-tax net catastrophe losses

Pre-tax net covid losses

Pre-tax net Russian / Ukraine War

losses

Pre-tax net prior year reserve development

(1)

Notes

1/ Attritional combined ratio excludes catastrophe losses,

reinstatement premiums, prior year development, Covid-19 losses,

CECL, and losses from the

Russian/Ukraine war.

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

reinstatement premiums

Investments and Shareholders’ Equity at June 30, 2022

●

Total invested assets and cash of $28.7 billion versus the year end 2021 value of $29.7 billion

●

Shareholders’

equity

$8.9

billion

vs.

$10.1

billion

year

end

2021,

largely

driven

$1.5

billion

unrealized net losses on fixed maturity investments

●

Book value per diluted share of $224.59 vs. $258.21 at year end 2021

●

Book value per diluted share excluding unrealized gains (losses) on fixed maturity investments of $257.27 vs.

$252.12 at year end 2021

●

Common share dividends declared and paid in the quarter of $1.65 per share

equal to $65 million

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

close to

50 years through subsidiaries in the U.S., Europe, Singapore, Canada, Bermuda,

and other territories.

Everest

offers

property,

casualty,

and

specialty

products

through

its

various

operating

affiliates

located

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 results will

be held at 8:00 a.m. Eastern

Time on July 28, 2022.

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),

non-GAAP

financial

measure,

evaluate

its

performance.

After-tax

operating income

(loss) consists

of net

income (loss)

excluding after-tax

net gains

(losses)

on investments and after-tax net foreign exchange income (expense) as the following

reconciliation displays:

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in thousands, except per share amounts)

2022

2021

2022

2021

(unaudited)

Per Diluted

Amount

Net income (loss)

$122,630

$3.11

$679,982

$16.95

$420,381

$10.67

$1,021,844

$25.47

After-tax net gains (losses) on investments

($189,060)

($4.79)

$83,752

$2.09

($312,429)

($7.93)

$113,787

$2.84

After-tax net foreign exchange income (expense)

($74,217)

($1.88)

$9,222

$0.23

($58,879)

($1.49)

$60,840

$1.52

After-tax operating income (loss)

$385,907

$9.79

$587,008

$14.63

$791,689

$20.10

$847,217

$21.12

(Some amounts may not reconcile due to rounding.)

Although

net

gains

(losses)

investments

and

net

foreign

exchange

income

(expense)

are

integral

part

the

Company’s insurance operations, the determination of

net gains (losses) on investments and foreign exchange income

(expense)

independent

the

insurance

underwriting process.

The

Company believes

that

the

level

net

gains

(losses) on investments and net foreign exchange income (expense) for

any particular period is not

indicative

the

performance

the

underlying

business

that

particular

period.

Providing

only

GAAP

presentation

net

income

(loss)

makes

difficult

for

users

the

financial

information

evaluate

the

Company’s

success

failure

its

basic

business

and

may

lead

incorrect

misleading

assumptions

and

conclusions.

The Company understands that the equity analysts who follow the Company focus on after-tax

operating

income (loss)

their analyses

for the

reasons discussed

above.

The Company

provides after-tax

operating income

(loss)

investors

that

they

have

what

management

believes

useful

supplement

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)

2022

2021

2022

2021

(unaudited)

REVENUES:

Premiums earned

$2,916,237

$2,558,372

$5,708,003

$4,946,237

Net investment income

225,978

407,095

468,808

667,508

Net gains (losses) on investments:

Credit allowances on fixed maturity securities

(1,490)

(15,927)

(13,343)

(22,904)

Gains (losses) from fair value adjustments

(188,924)

103,525

(325,784)

132,581

Net realized gains (losses) from dispositions

(45,851)

16,511

(50,765)

33,334

Total net gains (losses) on investments

(236,265)

104,109

(389,892)

143,011

Other income (expense)

(71,337)

7,114

(55,977)

63,707

Total revenues

2,834,613

3,076,690

5,730,942

5,820,463

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

1,876,247

1,586,141

3,666,110

3,297,560

Commission, brokerage, taxes and fees

630,294

557,749

1,235,523

1,046,760

Other underwriting expenses

169,533

140,844

330,826

283,075

Corporate expenses

15,018

16,168

29,038

28,546

Interest, fees and bond issue cost amortization expense

24,398

15,607

48,476

31,246

Total claims and expenses

2,715,490

2,316,509

5,309,973

4,687,187

INCOME (LOSS) BEFORE TAXES

119,123

760,181

420,969

1,133,276

Income tax expense (benefit)

(3,507)

80,199

588

111,432

NET INCOME (LOSS)

$122,630

$679,982

$420,381

$1,021,844

Other comprehensive income (loss), net of tax:

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

on securities arising

during the period

(732,364)

84,171

(1,547,540)

(204,444)

Reclassification adjustment for realized losses (gains) included

in net

income (loss)

15,841

1,590

20,019

(2,076)

Total URA(D) on securities arising during the period

(716,523)

85,761

(1,527,521)

(206,520)

Foreign currency translation adjustments

(28,269)

34,295

(62,371)

24,713

Reclassification adjustment for amortization of net (gain)

loss included in

net income (loss)

758

2,043

1,515

4,086

Total benefit plan net gain (loss) for the period

758

2,043

1,515

4,086

Total other comprehensive income (loss), net of tax

(744,034)

122,099

(1,588,377)

(177,721)

COMPREHENSIVE INCOME (LOSS)

$(621,404)

$802,081

$(1,167,996)

$844,123

EARNINGS PER COMMON SHARE:

Basic

$3.11

$16.97

$10.67

$25.50

Diluted

3.11

16.95

10.67

25.47

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

(Dollars and share amounts in thousands, except par value

per share)

2022

2021

(unaudited)

ASSETS:

Fixed maturities - available for sale, at fair value

$21,880,443

$22,308,272

(amortized cost: 2022, $23,408,417; 2021, $22,063,592, credit

allowances: 2022, ($42,714); 2021,

($29,738))

Fixed maturities - held to maturity, at amortized cost, net of credit allowances

(fair value: 2022, $71,245, credit allowances: 2022, ($366))

71,390

Equity securities, at fair value

1,299,221

1,825,908

Short-term investments (cost: 2022, $300,854; 2021, $1,178,386)

300,840

1,178,337

Other invested assets

3,055,356

2,919,965

Cash

2,116,049

1,440,861

Total investments and cash

28,723,299

29,673,343

Accrued investment income

178,123

149,105

Premiums receivable

3,406,564

3,293,598

Reinsurance recoverables

2,096,968

2,053,354

Funds held by reinsureds

909,454

868,601

Deferred acquisition costs

836,496

872,289

Prepaid reinsurance premiums

562,550

515,445

Income taxes

336,646

2,381

Other assets

857,550

757,167

TOTAL ASSETS

$37,907,650

$38,185,283

LIABILITIES:

Reserve for losses and loss adjustment expenses

19,993,054

19,009,486

Future policy benefit reserve

33,580

35,669

Unearned premium reserve

4,681,010

4,609,634

Funds held under reinsurance treaties

12,658

18,391

Other net payable to reinsurers

492,556

449,723

Losses in course of payment

79,549

260,684

Senior notes

2,346,495

2,345,800

Long term notes

223,824

223,774

Borrowings from FHLB

519,000

Accrued interest on debt and borrowings

16,664

17,348

Unsettled securities payable

66,150

16,698

Other liabilities

590,244

539,896

Total liabilities

29,054,784

28,046,103

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; (2022)

69,947

and (2021) 69,790 outstanding before treasury shares

700

698

Additional paid-in capital

2,283,513

2,274,431

Accumulated other comprehensive income (loss), net of deferred

income tax expense

(benefit) of ($208,066) at 2022 and $26,781 at 2021

(1,576,854)

11,523

Treasury shares, at cost; 30,529 (2022) and 30,524 shares (2021)

(3,848,630)

(3,847,308)

Retained earnings

11,994,137

11,699,836

Total shareholders' equity

8,852,866

10,139,180

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$37,907,650

$38,185,283

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$420,381

$1,021,844

Adjustments to reconcile net income to net cash provided

by operating activities:

Decrease (increase) in premiums receivable

(223,030)

(499,647)

Decrease (increase) in funds held by reinsureds, net

(51,451)

(79,485)

Decrease (increase) in reinsurance recoverables

(236,849)

15,836

Decrease (increase) in income taxes

(100,230)

76,452

Decrease (increase) in prepaid reinsurance premiums

(109,716)

(71,566)

Increase (decrease) in reserve for losses and loss adjustment

expenses

1,360,076

1,139,879

Increase (decrease) in future policy benefit reserve

(2,089)

(1,226)

Increase (decrease) in unearned premiums

176,631

500,077

Increase (decrease) in other net payable to reinsurers

119,858

72,850

Increase (decrease) in losses in course of payment

(178,091)

70,653

Change in equity adjustments in limited partnerships

(156,868)

(377,120)

Distribution of limited partnership income

105,452

49,053

Change in other assets and liabilities, net

(11,031)

(206,994)

Non-cash compensation expense

23,919

22,439

Amortization of bond premium (accrual of bond discount)

35,052

37,928

Net (gains) losses on investments

389,892

(143,011)

Net cash provided by (used in) operating activities

1,561,906

1,627,962

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from fixed maturities matured/called/repaid - available for

sale

1,661,128

1,897,536

Proceeds from fixed maturities matured/called/repaid - held to

maturity

333

Proceeds from fixed maturities sold - available for sale

772,148

599,737

Proceeds from equity securities sold, at fair value

437,815

474,663

Distributions from other invested assets

204,790

112,398

Cost of fixed maturities acquired - available for sale

(4,070,949)

(3,949,973)

Cost of fixed maturities acquired - held to maturity

(72,061)

Cost of equity securities acquired, at fair value

(283,352)

(360,016)

Cost of other invested assets acquired

(307,525)

(309,691)

Net change in short-term investments

878,360

506,285

Net change in unsettled securities transactions

22,512

(103,527)

Net cash provided by (used in) investing activities

(756,801)

(1,132,588)

CASH FLOWS FROM FINANCING ACTIVITIES:

Common shares issued during the period for share-based

compensation, net of expense

(14,835)

(11,349)

Purchase of treasury shares

(1,322)

(40,328)

Dividends paid to shareholders

(126,079)

(124,274)

Cost of shares withheld on settlements of share-based compensation

awards

(17,352)

(13,713)

Net cash provided by (used in) financing activities

(159,588)

(189,664)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

29,671

(1,016)

Net increase (decrease) in cash

675,188

304,694

Cash, beginning of period

1,440,861

801,651

Cash, end of period

$2,116,049

$1,106,345

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

$100,506

$34,780

Interest paid

31,835

31,695

Everest Re (EG) 8-KEverest Re Group Reports Second Quarter 2022 Results