EXHIBIT 99.1
NEWS RELEASE
EVEREST RE GROUP, LTD.
c/o ABG Financial & Management Services, Inc.
Parker House, Wildey Business Park, Wildey Road, St. Michael, Barbados
Contact:
James H. Foster
Senior Vice President, Investor Relations
Everest Global Services, Inc.
908.604.3169 For Immediate Release
Everest Re Group Announces First Quarter Earnings
ST. MICHAEL, Barbados - April 21, 2003 -- Everest Re Group, Ltd. (NYSE: RE)
reported first quarter 2003 after-tax operating income of $104.1 million, or
$2.02 per diluted share, a 58% increase compared to $66.1 million, or $1.35 per
diluted share in the first quarter of 2002. Operating income differs from net
income only by the exclusion of realized gains and losses on investments. Net
income was $94.4 million, or $1.83 per diluted share, a 55% increase compared to
$61.1 million, or $1.24 per diluted share, in the first quarter of 2002.
Gross premiums written for the first quarter were $1.002 billion in 2003, a 68%
increase compared to $596 million in 2002. The Company's GAAP combined ratio was
93.5% for this quarter compared to 99.3% in 2002. Net investment income for the
first quarter was $93.4 million compared to $85.5 million in the first quarter
of 2002. Cash flow from operations for the quarter was $327.7 million, an
increase of 211% compared to $105.5 million in the first quarter of 2002.
Commenting on the Company's results, Chairman and Chief Executive Officer Joseph
V. Taranto said, "I am extremely pleased that, for the first time in each case,
it took 9 digits to describe our quarterly earnings, 10 digits to describe our
quarterly gross written premium and 11 digits to describe our total assets. We
continue to receive excellent business opportunities; accordingly, we are
increasing 2003 earnings guidance to $7.75 -- $8.25 per share and providing 2004
guidance of $9.50-- $10.50 per share, absent any unusual losses".
At March 31, 2003, the Company's shareholders' equity was $2.49 billion (a book
value per share of $48.90), compared to shareholders' equity of $2.37 billion
($46.55 per share) at December 31, 2002.
The Company also announced that Mr. Taranto's employment agreement has been
extended to March 31, 2006.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF 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. IN PARTICULAR, OUR FORECASTS OF FUTURE EARNINGS ARE
FORWARD LOOKING STATEMENTS. 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 FLUCTUATIONS,
TRENDS IN INSURED AND PAID LOSSES, CATASTROPHES, 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.
Everest Re Group, Ltd. is a Bermuda holding company that operates through the
following subsidiaries: Everest Reinsurance Company provides reinsurance to
property and casualty insurers in both the US and international markets. Everest
Reinsurance (Bermuda), Ltd. provides reinsurance to property and casualty and
life insurers in both the Bermuda and international markets. Everest National
Insurance Company and Everest Security Insurance Company provide property and
casualty insurance to policyholders in the United States. Everest Indemnity
Insurance Company offers excess and surplus lines insurance in the United
States. Additional information on Everest Re Group companies can be found at the
Group's web site at WWW.EVERESTRE.COM.
A conference call discussing the first quarter results will be held at 8:30 a.m.
Eastern Standard Time on April 22, 2003. The call will be available on the
Internet through the Group's web site or at WWW.STREETEVENTS.COM.
Anyone receiving this release by wire or through the Internet may visit the
Group's web site to view supplemental financial information on the Group's
results. The supplemental information is located at WWW.EVERESTRE.COM in the
"Financials/Financial Reports" section. The supplemental financial information
may also be obtained by contacting the Company directly.
-- Financial Details Follow - -
2
EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)
Three Months Ended
March 31,
--------------------------
2003 2002
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(unaudited)
REVENUES:
Premiums earned $ 744,870 $ 491,208
Net investment income 93,377 85,540
Net realized capital (loss) (13,235) (3,855)
Net derivative (expense) (2,700) (250)
Other (expense) income (1,147) 1,337
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Total revenues 821,165 573,980
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CLAIMS AND EXPENSES:
Incurred loss and loss adjustment expenses 513,471 352,506
Commission, brokerage, taxes and fees 162,805 121,009
Other underwriting expenses 19,864 14,125
Distributions related to trust preferred securities 4,121 -
Interest expense on senior notes 9,731 9,728
Interest expense on credit facility 360 909
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Total claims and expenses 710,352 498,277
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INCOME BEFORE TAXES 110,813 75,703
Income tax expense 16,446 14,642
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NET INCOME $ 94,367 $ 61,061
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Other comprehensive income (loss), net of tax 29,988 (68,126)
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COMPREHENSIVE INCOME (LOSS) $ 124,355 $ (7,065)
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PER SHARE DATA:
Average shares outstanding (000's) 50,897 48,108
Net income per common share - basic $ 1.85 $ 1.27
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Average diluted shares outstanding (000's) 51,521 49,087
Net income per common share - diluted $ 1.83 $ 1.24
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EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value per share)
March 31, December 31,
----------- -----------
2003 2002
----------- -----------
(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value
(amortized cost: 2003, $6,727,217; 2002, $6,460,839) $ 7,083,954 $ 6,779,858
Equity securities, at market value (cost: 2003,
$56,779; 2002, $56,841) 45,382 47,473
Short-term investments 242,237 169,116
Other invested assets 57,779 53,856
Cash 153,721 208,830
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Total investments and cash 7,583,073 7,259,133
Accrued investment income 101,569 85,959
Premiums receivable 816,053 673,377
Reinsurance receivables 1,097,016 1,116,362
Funds held by reinsureds 134,595 121,308
Deferred acquisition costs 245,588 207,416
Prepaid reinsurance premiums 75,420 63,437
Deferred tax asset 143,409 139,176
Other assets 173,605 198,435
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TOTAL ASSETS $10,370,328 $ 9,864,603
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LIABILITIES:
Reserve for losses and adjustment expenses $ 5,100,240 $ 4,905,582
Future policy benefit reserve 224,716 227,925
Unearned premium reserve 1,092,548 872,340
Funds held under reinsurance treaties 346,103 347,360
Losses in the course of payment 64,282 45,511
Contingent commissions (2,477) 1,932
Other net payable to reinsurers 70,934 61,244
Current federal income taxes 9,607 (16,696)
8.5% Senior notes due 3/15/2005 249,803 249,780
8.75% Senior notes due 3/15/2010 199,179 199,158
Revolving credit agreement borrowings 70,000 70,000
Accrued interest on debt and borrowings 3,744 13,481
Other liabilities 242,321 308,340
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Total liabilities 7,671,000 7,285,957
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COMPANY-OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY
TRUSTS HOLDING SOLELY SUBORDINATED
DEBENTURES ("TRUST PREFERRED SECURITIES") 210,000 210,000
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SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50 million
shares authorized; no shares issued and outstanding - -
Common shares, par value: $0.01; 200 million
shares authorized; 50.9 million shares issued
in 2003 and 50.9 million shares issued in 2002 514 513
Additional paid-in capital 619,407 618,521
Unearned compensation (319) (340)
Accumulated other comprehensive income, net of
deferred income taxes of $85.5 million in 2003 and
$74.4 million in 2002 251,530 221,542
Retained earnings 1,641,146 1,551,360
Treasury shares, at cost; 0.5 million shares in 2003
and 0.5 million shares in 2002 (22,950) (22,950)
----------- -----------
Total shareholders' equity 2,489,328 2,368,646
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TOTAL LIABILITIES, TRUST PREFERRED SECURTIES
AND SHAREHOLDERS' EQUITY $10,370,328 $ 9,864,603
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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended
March 31,
----------------------------
2003 2002
--------- ---------
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES: $ 327,655 $ 105,501
CASH FLOWS FROM INVESTING ACTIVITIES :
Proceeds from investments sold 465,809 444,082
Proceeds from investments maturing or called 196,985 147,594
Cost of investments acquired (967,282) (868,615)
Net (purchases) of short-term investments (72,283) (137,219)
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Net cash (used in) investing activities (376,771) (414,158)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period 887 346,613
Dividends paid to shareholders (4,581) (4,102)
Borrowings on revolving credit agreement - 20,000
Repayments on revolving credit agreement - (20,000)
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Net cash (used in) provided by financing activities (3,694) 342,511
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (2,299) (3,979)
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Net (decrease) increase in cash (55,109) 29,875
Cash, beginning of period 208,830 71,878
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Cash, end of period $ 153,721 $ 101,753
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