RE - Earnings call transcript Q4 2017 | Everest Re Group, Ltd.

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Operator

Good day everyone. Welcome to the Fourth Quarter 2017 Earnings Call of Everest Re Group. Today's conference is being recorded. And at this time for opening remarks and introductions, I would like to turn the conference over to Ms. Beth Farrell, Vice President of Investor Relations. ahead. go Please

Elizabeth Farrell

Good fourth Derrick. welcome Everest to Thank and morning full-year Group's quarter call. XXXX Re you, and earnings conference

call Doucette, Operations. Zaffino, President President are today CEO of and Craig with CEO and the and Chief the Jon Operations; Howie, John President Officer; Chief of Dom Officer; Financial and Reinsurance company's Executive On Addesso, me the Insurance

that filings to preface in begin, comments about by which In SEC I forward-looking various the our and respect with will call, our estimates, are I projections, statements include we nature, that disclosures risks. subject Before that extensive today's statements note made to regard, statements. noting like, expectations such during as forward-looking are

or As expectations. you actual current could know, results differ materially projections from

listing have risks connection SEC the in consider a that such should Our statements. with full of investors filings

to Now, call Dom. let the me turn over

Dom Addesso

welcome Good morning, Beth. morning. this Thanks, and the to meeting

to yet for cycle. fourth of an performance demonstrates the year of you that of the an We to of today year full noteworthy report industry. pleased on a the It experienced able that comes maintain above of our excellent level an through X% ability catastrophe the course this average were level is return to periodic record strength we’re report and and for sustain losses profit the are a events This losses, the level quarter. year industry despite of for This fourth ROE result. of the to platform during able that quarter we the

we capital, acquisitions. the the to allows are today be build advantage and admit readily us that competition, succeed. risk And No take such value rates, while diversification continue market day, proposition us certainly there'll and positioned we've of of about beyond and to is value dynamics. of proposition Our return and scale our issues questions management has these doubt

are existing a for our today colleagues revenue quarter. U.S. business, the releases Crop, continue growth And The in the as casualty, that combined portfolio under and come and year. from Those property growth much growth, billion trends due over lines exhibited U.S. reserve we our the control, is growth in my coverage, and in non PML expected. financial for year to expect thereby total XX%, credit with quite growth or ratio earnings the than have hear cap the that is strength having an $X in part reached a In achieving crop continuing in XXXX, scope, continue. up with ones. grew offset of scale each grew we're to premium our in profitable business has to and Logan. mortgage XX% the and attritional from of in insurance continued XX% important cap. XX% reinstatement improvement of Tribute franchise. property, is more heard growth us the to other our profit and a ones in products Further diversification related the during of attritional business adjusting by year due through great and our of U.S. to and cap. for the sale reinsurance there encouraging over all will this for back the than year-over-year. the resiliency past written We the portfolio All we billion points other legacy with this you've both and and will speak sessions premiums bonds that success coming on reinsurance cat More exposure becoming capitalized Mt. providing ratio was company. to and stable was in diversified we to fourth that executed brand, material $X If no growth record Therefore, gross true and in XXXX. which every relative issue combined change is to was to year, new meaningful the

part results investment or asset income operating and without the in believe the capital dividends changing outstanding coupled to of allocation by for our results an the with tax rose larger XX%. repurchases. weather a share the investment of resulted during was Combination year return during to our but underlying came per is reflecting $XXX profile. shareholders after on of given our is events contributor from growth in results our contribution Another made year growth Certainly, share decisions X%, the an basis factor result. asset profit, the strong through meaningfully of and duration year we the million which value Book risk both

the move as So and we so end XXXX, I do with year into optimism.

never platform better. Our have been talent, execution and

dynamics culture We must a the dictate have market opportunities be to nimble, new what have. take current and which we is on

on the direction. U.S. PMLs evolving the are. lines risk reinsurance margins adjusted the based in year-over-year book a best property reinsurance heavy right where are continually in returns Our moving X/X, in up. absolute in reinsurance down and are particular is risk Pricing are the insurance but both At and appetite date renewal

likely Capital grow. continue. still to are We expect a continue and that to to markets factor

both success This while is been will be to the capacity. real Equally upside platform. appeal is Furthermore, and as degrees will feel portfolio. reinsurance been has space, standard beyond. time, continued greater all between we some and to growth, crab diversify factors risk with has are And on encouraging we from further casualty needs growth of the offerings, However, there continue but now for also opportunities expanded reinsurance greater expand greater into benefit team our product for growing all us benefit losses operations. newer most closing varying XXXX continue our privatization will the and These towards more to which will out have which leads economic economic not insurance the to side, to for RE, the firming offerings expect And contribute development do to our as insured the soft we the movement and lines will public scale insurance we margins. this as in gap our which with will greater lines.

to turn our I for and Now, our financial it further And colleagues report. details will journey. about my over Craig you. results the for to first Thank

Craig Howie

of XXXX. aided of Thank years. you, net for underline releases current of for Act Everest $XXX million of the reserve XXXX. quarter good loss for This capital everyone. Cuts impacted the Jobs net tax both $XXX million with quarter Net to of by in million strong for the income compared $XXX million fourth and had losses operating income was $XXX $XXX Dom to of dollars the and was XXXX and year gains income the and prior realized morning the million and tax Tax in XXXX After compared performance, excludes income to enactment charge that of the to compares the Operating $XXX XXXX. quarter million XXXX. related fourth fourth

by reflected wildfire. Everest losses We The $XXX operating $XXX California for net net Therefore, quarter quarter from Net was $XXX amounted $X.X related year catastrophe third pretax year. estimates $XX XXXX XXXX million. $XXX XXXX. For our catastrophe related in The year, the a gross reductions in to for current the cap catastrophe on catastrophe about lowered the difference fourth the to billion of catastrophe of to of million. the earthquake of largely XXXX. pre-tax primarily income the the quarter for Hurricane. This and losses losses of in year third the of included events $XX losses, On current reinsurance, catastrophe XXXX. losses compared fourth to Mexico prior In losses million was the in $XXX XXXX million. quarter $XXX quarter primary million XXXX basis, the saw quarter, development million million higher results was compared to were year-to-date also favorable in million

quarter, reported catastrophe included and events, prior insurance related ratio of This the year we The in the of development, reinsurance reserve $XXX current development asbestos both the million $XX XX.X% by for continues year prior overall down remained of year partially with combined position completed premiums we its reserve the the reserves favorable casualty results reflecting the favorable prior development, States perform $XXX $XXX The becomes mature. quarter, replenish year These development last our favorable The segments million well $XX indicated but reinsurance for the which period that our million developed $XXX year. was the an year. at to underlying the reserve attritional XX% during over segment Excluding from loss and million during increase the related and adequate. to of of reserves, in beginning don't compensation million overall fourth reported the segment. On have The workers’ position In prior business, development. the segment book of annual period booked reserve largely reinstatement to study. the favorable favorable and prior insurance development a quarter studies million reserves to favorable until of reinsurance development, offset year, business. react of we United both internationally. redundancies time, more the property

We years. continue recent to more our the for loss hold estimates reserve

XX% income the for was portfolio. $XXX investment for from million billion the investments, Investment by in our for limited dramatic million income, portfolio. partnership on pre-tax and For yield income year year been $XX.X year maintain ago. over quarter one million a $XXX the overall up driven without The result was was investment the investment investment $XX increase We've was up in to able primarily which XXXX. shift the

expense million remained increase Act a releases the fourth and The million quarter year, loss yield allocations Shareholders' company's bucket Jobs the income The XXXX, of losses over earnings equity, to exchange exchange three also the buybacks year gradually more year On into the and group taxes, and after million $XXX public for the account yield and end net for income included was This enactment fees the higher Logan tax compared losses the share investment and associated level duration the deferred tax company region taking corporate and represents up result for equity and in shifted just million Re of included of our benefit of income The quarterly $XX the X% $X $XX associated However, over from $XX $X.XX of was the compared the in pretax losses or the to losses the decline reducing paid XXXX. return at limited this Other X.X% fourth income foreign expense have high related to This of for $X.X investments. million of paid the the assets. of foreign of catastrophe geographic in committing and with $XXX announced was the dividends on towards is in portfolio partnership amount Cuts essentially reserve $XX acquired billion Tax included capital we XXXX. tax of end and fourth overall rate the to charge in debt at dividend through regular exposure of XXXX its the years. XXXX. of of catastrophes XXXX of XXXX XXXX. per quarter XXXX. million share tax year X.X% within in the to Mt. and alternative change a charge with the quarter. related the while by in XXXX. million XXXX. $X million primarily for Other loss The tax

balance you. a review capital reinsurance John business well will leaves operations. provide Doucette, Our the positioned strong now, of Thank us opportunities. And for

John Doucette

Good you, Thank morning. Craig.

Miami team by investors the and adaptability promise-to-pay our security, resilient, Resilience and renewals operating is of through billion had on has deployed our protect years, is even and on partnership. need. and by our the expected Hurricane as they to our sheet faithfully XXXX. on extreme whether losses events withstand us Both Our years our of events includes losses with catastrophe $X conservative times for its seen directly Mt. over Xst are cat hit our worse following shock and such billion hedges as and our last more promise catastrophes XXXX rely clients many capital actual further extreme promise levels our bonds XXXX. depend our Supporting Irma strong especially losses a in balance of or from industry sheet, cat evergreen protecting than January $X.X of in who are capital to is sides claims, clients. This in Logan, five. XXXX the kept built from XX balance valued Everest financial hypothetical unexhausted position

pleased profit; are results in year the million we million QX, $XX catastrophes quarter. overall quarter, for the of underwriting our in major fourth In $XXX XXXX. several in Following book million by by with development favorable this from reinsurance losses strong catastrophe QX, prior reinsurance generated profitability and generated offset $XXX the net

million, wildfire catastrophes, QX, were California prior period offset losses For by on $XXX including caps. releases QX

of withstood net pre-tax catastrophe losses. For XXXX, $X.X billion reinsurance

Our points risk highlighting XX XXXX management. diversified underwriting strategy, of including combined ratio cat was our XXX%, losses, robust portfolio and strong broadly

reinstatement cats, year development, quota multiline Excluding our new QX combined premium remained premiums increased at capital covers ratio favorable attritional XX% from deals. backup and Globally, prior XX%. some relief and gross flat shares and written

XXXX, XX% increased with to up reinsurance was crop, line premium writings and mortgage. billion For financial property, $X.X in

in reinstatement shares XXXX increases premium premiums, quota XX% segment. on was color $X.X of up crop cats ratio was This was property points, from writings, driven some XXXX covers, million for and back-up at increased billion for relatively XX Now, profit produced XXXX million by flat $XXX ratio property losses. the our attritional XXXX to reinsurance combined by mortgage. the segment $XX in U.S. despite XX.X%. The up underwriting combined In catastrophe while segment,

For X% growth up but with billion, XXXX dollar basis. premium on only a was constant regions, X% $X.X several up our international segment, in

an XXXX, underwriting losses about For in $XXX were cat resulting million, loss.

but However, the to XX% Bermuda points by the combined increased points ratio lower higher commission loss from property growth a In deals. and excessive was increased XX.X% cats and up was XX.X%. structured lines ratio down combined segment, reinsurance $X.X new higher about attritional ratio premium X increased billion, our to with The from XXXX attritional ratio multiline to financial XXXX combined modestly writings. due XX

As any that those renewal. opportunity execution, disruption, well post was for and us major with for follows positioned this for true loss

of need these marketplace holders be; risk With market market. governments purely to or the velocity staggering valued somewhere bringing was capital understand between. markets to exposure During sensitivity and large what impacting five, season, market capital complex go and and participants; that it market reinsurance contravening one, three, buyers’ X/X all accumulations, a and other; losses across forces, reinsurers amounts at and non-traditional new this each sellers’ two, or on of and market and or several boards it economic views new of were relationships rates reevaluation In their of between four, of and of trapped lines decide sessions a business, tried that as ceded to exposures that of longstanding other and pivotal X/X loss. disruptive new tail strategies trading after was de-risking end, reinsurance transactional impacted relationships of significant cases, the in renewal earnings placement treaties reinsurance forces; lines; some both sellers in managements there the capital; increased and ERM; and renewal what capital formation a all with continuity several across clients, of to alternative pricing, it up of agreed large risk, of clients, and of a buyers was reloading to wanted capital several

pronounced Although, after hard years truly the market rate than was rebound in must realized losses, several markets, and increase. decreases rates of less many industry meaningful past clients

few to risk and our in adjusted re-underwrote the several the our While movement But At business, with double-digits. liked. and rates was excess And as better better Xst, improvement. increases reallocated capitalized a property number Short and unacceptable rates with wrote deals wrote several global our we around other The in expand of the and we book a re-under terms. terms, client books. digit that one of declines retro client's expected, less throughout was We XXXX. continue the renewal, And above four only to stabilization decreased affected portfolio. shares differentiation our We around and market such times, and and manifested to performing in improvements them, returns, and were treaties clients global clients broker with January we globe. deals our clients. deals core property our of and relationships. outcome on points reinsurers, the increased most portions with into needs. solutions achieved with Everest, globe, and market than new a improved superior capacity rate of or effective a opportunities then than franchise three in were many for business. better had reinsurers loss long-standing and ultimate wrote Ceding And average. well opportunities, which loss lines showed to also cat trend meeting tail and overall also a on as commissions layers leadership worst the approached of market, bright we able particularly These pleased casualty opportunities to economic discipline achieved across loss solve with we core reinsurance this meaningfully between relationships spot expect our property market originally underwriting We areas some significantly all result, mid-single we lines highlight access are the accounts, business X/X seek

Our to creative excel clients' needs. empowered understanding markets, local their listening underwriters as in experts reinsurance their and nimble,

of direct successful. Lloyd’s. interaction division, a This risk including clients was to in while Our X/X is underwriters our adhering access insurance our across all done brokers decision end, the benefit risk. every decentralized with from makers model the consistent In and and within the global to Everest view renewal

competition premium capital January combined lower enduring and on highlighting impact January reloading January had traditional from profits by expected Xst some alternative XXXX. higher dollars, in compared Xst our are a several to that Xst. capital, is renewals, reality. are The of our this to become and in up million ratios last has muting Our hundred addition alternative players, And

addressing the Everest reinsurance successfully for challenges way capital capital between several markets years. and and business threatened historical by under relationships Everest risk been alternative evolution is this repositioning ultimately to innovation, trading opportunity, has leverage models, best match Everest Recognizing strategic some While benefit utilizing these well market to shareholders. capital new traditional

capital diversification In We strong risk on and continue forward Jon dynamic long in the solutions look as infrastructure strong ever global adaptable property our now market develop insurance competitive to other robust a adapting capital client Zaffino With into the power strategies lines resilient, Logan, relevance ratio, changes. term management capital I billion summary, as to hedges, you. advantage positioned leading portfolio market. structures, this further around a changing market on reinsurer, leading and of this traditional earnings ideally we we our globe, while capitalize debt, equity, efficient reinsurer waters navigate bonds across XXXX. have building resources $XX approximately remain to industry Mt. Thank expense casualty the and successfully and turn best-in-class and future, through focused to and partnerships, our delivering our review to it of operations. the over a to utilizing cat And will

Jon Zaffino

and you, John good morning. Thank

finished quarter. terms fourth profitability importantly, insurance on and in operations the global of note, more strong Our growth XXXX a in

shared plan, global prior calls, insurance in executing our As strategic we have dimension a multifaceted of consistently on every encompassing organization. been

XX in are across products disciplines have offices with execute this our U.S., the deepest XXX of Europe business progress of record levels measured written and gross highest premium, specialty who for geographic of metrics, broadest the performance from, insurance key and the operating making happen. concluded with and history, our our platform diversity As the are growing books Canada, associated number our specialty us underwritten all actively of and made to the and reach, across depth by expanded business. our teammates of XXXX pleased roster considerable and we counting,

many global actions written the over are testament growth Everest At XX% gross ratio Insurance and combined quarter's reserving upon $X.X underwriting corrective portfolio. XXXX and further across to past This set global onset. billion positioned firmly our we We the successfully XXXX. the maturing years remain is it's carriers. growing our opportunities forward lead specialty conservative several executed look globally and for as XX% position the the and to insurance premium, top in about the table at envisioned ahead of had underwriting opportunity And XX the of within us platform encouraged specialty the

growth Turning record insurance in the global The increase the $XXX growth over consistent of written fourth premium continue million new This generally gross to experience several quarter their produced quarter the make an XX% results. a addition as the talented fourth dozens profile quarters quarter million of of XXXX. or $XXX products many XXXX. managing over operations underwriters our with The the is is thoughtful of and impact. to financial fourth in last their

particular A achieved XX% is from in inclusive our billion of years, in increasingly gross characteristics we portfolio. diversified in million year-to-date $X.X of new the record growth premium over in $XXX percentage increasingly incepted over eclipsed three another these written and or Each chosen an is mentioned, which This operation, this premium, return gross As significant important of XXXX. products performance. represents role relevant written risk past XXXX. our of $XXX million businesses again growth for Lloyd’s products emanating playing

written net quarter increases XX% $X.X XXXX, increased in million. million prior $XX are $XXX earned premiums for quarter billion premium XX% to or represent respectively XX% Net the by in and period. of $XXX year the the over million which and Our

combined earned of $XXX these or for provide development, net foundation XX% million discuss which remarks. in are by for premium of The I For points year insurance operations the the XX period, of on for and prior record was solid $X.X billion increased from XXXX. year-to-date into quarter ratio later favorable XXXX. the a highs growth Each GAAP over benefited XX.X%, will my

improve across combined losses wildfires fourth global the Year-to-date, the XXXX. in from the attritional instituted XX.X% full minor hurricane in which from was X.X combined the quarter experienced The also GAAP in recent along X.X the in the XX continues third The attritional XX.X% points to and the the emanating XX.X% quarter the XXX.X, improvement. over from our XXXX a underwriting fourth improved the included fourth XXXX, combined in in activity quarter in result or improved mainly previously the ratio the a points combined disclosed ratio XX.X% many million as quarter. year, just $XXX California initiatives of of from contribution attritional a portfolio ratio of to For years. cat with

we of continues level as the of XXXX year-over-year, to businesses impact improving X or non-renewed While lessen. additional improvement points over anticipate around an so

to attritional Turning loss which and of insurance the quarter. ratio XX.X% the from experienced quarter the expense loss fourth XX.X%, slightly in has produced operations for fourth XXXX. the improved global The

results also point improved despite This nearly non-cat X and in improved the by related from nearly Year-to-date, to a from quarter's ratio from year. third in attritional This the XXXX. activity also X.X points quarter experienced expense storm XX% convective attritional XX.X%. impact loss of points XX.X% nearly the of loss

So launches. implemented continue as see and business over strategic from a loss of new the increased improved the steady the ratio benefits of in to past three downward result drift scale continued the of attritional years, actions our business underwriting again, we and mix

benefit our such now As Hartland, increases, of portfolio. the of to businesses realize divested we impact newer as expect further

at in Looking the year quarter expenses, expense XX.X%, a improvement point ratio fourth quarter at fourth came the in prior of X XX.X%. nearly the

totaling and year-to-date favorable the quarter accident for million roughly from approximately of specialty XX% XXXX. reviews ratio very the And quarter With $XX expense the our releases the XX.X%, in XX.X% to development, the prior. reserve competitive For flat expense insurance reserve the with ratio XXXX fourth was respect customary years conclusion of remains in segment. essentially resulted fourth period,

to California over position this some materially to the as it particularly overall our reserve compensation of has reserve On favorably We the last concentrated for development been remain insurance million. favorable taken a in light predominantly workers in book actions years. several $XX confident in portfolio, basis, year-to-date equates across contributed prior period developing time. Our

Turning the some Overall, the particularly environment. in operating experienced three momentum quarters first line. trends property fourth rate to the the in quarter, from gained

Excluding for North and accident P&C book compensation X%. at our majority rate the American portfolios, health plus resides, XXXX ended and overall where of insurance our operations overwhelming renewal workers’ the change

of This first negative it in fourth in essentially into positive, experienced decisions the was slightly our time quarters the property overall is X%, line. X% that and only reserving plus minus position portfolio, business. While of X% several indicating improvement fully mid compensation where the compensation years XQ to have rates aggregate across slightly flat turned the in continued have plus the change the a experienced lines our material pressure and workers’ and Inclusive we work the rate outcome from non-workers’ rates respectively. anticipated rate we single-digit and the portfolio pricing factored for and moved year. comp in Further, third in XQ to

business cat As to part you our wholesale heavier and quarter the of renew and exposed many have these from know, influence XXXX the of rate first see meaningful books renewals. of second of book property in we the thus yet

achieved meaningful book rate that's auto several quarters. for we XX%. Additionally, the positive commercial to now segment continues this delivering across of our actions, trend a in plus Overall, portfolio receive XXXX, corrective persisted rate

and markets, quarter. we As with liability general rate also the in fourth excess, primary positive achieved

throughout movement corrective stabilize continue XXXX lagging is Although, broader rate they signs this our with that condition are as to roughly Overall, trend the anticipate further improved across portfolio, we of flat need for pockets and rate market this there're action. some operating year, positive moderately expected. in

global encouraged We colleagues. and will appropriate to deeply year, continue our a conclusion, presented by to adjusted insurer resources lines and our cat risk difficult progress build specialty returns. Despite is motivating that In XX results. pleased organically encouraging are with XXXX efforts top focus those a we our made the have of we on and business areas

has underlying growth our diversification our improved portfolio Our enforced business book in and strategies of as resilience basis continue an on building meaningfully and increased we anticipate traction.

for future capabilities forward range is brand we look on updating are positioned well strong in and insurance of platform and Our progress growing The calls. future our growth. you to Everest

Beth to for back Now, Q&A.

Elizabeth Farrell

Derrick, open Thanks, we Jon. questions. for are now

Operator

our Please first Fargo. ahead. go Greenspan comes And from Instructions]. Wells question with [Operator you Thank Elyse

Elyse Greenspan

to reinstatement PML first My this the the at Is taxes? after figures? U.S. of that PMLs I went mentioned in know disclosure, PML of in question terms the disclosed you and top down reinsurance. you guys your guys call,

Craig Howie

this Elyse would stay our a expect same capital. that the reinstatement PMLs net typically to in be taxes. basis, it and to we Yes, disclosed on relation would them our is economic be We overall do Craig. after that so basis after

We expect them to stay relatively slightly flat or down. even

Elyse Greenspan

you down. So I what were following the PML, reform there had done have just reform? that your then to PMLs as changed could keep we're how of net your on get to tax that you to impact you more about can thinking tax your PMLs net retro talk go PMLs, guess to if purchasing on to and Was your

Craig Howie

as will After know, go tax down. the you tax reform, rate

So benefit longer for return depends the tax on the the of some bill period.

tax return less longer lower types will can reinsurance cover loss. we the with other purchases of and So benefit, that but periods get catastrophe

Dom Addesso

Elyse, also, to about relative that our similar position. about capital PML suggesting be necessarily, the down And we capital relative stable, we would were go was it said that which so is to PML would what

Elyse Greenspan

And rate with about taxes XXXX? tax then as How we modeling a for your sticking we about should think second. think in

Dom Addesso

overall a around coming points. U.S., with tax the we So rate globally overall tax in the tax rate world as But expect we States, do down in many our down business different the in come couple the United of down you about the know, with rate to jurisdictions. coming

Elyse Greenspan

excess the where the covering own more so to impact view the we as year, come think as as a you then market for of we two last of impact and an see can both do a your well think so the obviously I the the that do guys down. as well capital in part on than more have for reloaded guess, alternative June insured question your for the of of renewals? quarter we the think at of you third How it’s level balance market vehicle the to outlook about events July that Logan, it's losses. losses How year, And you alternative capital

Dom Addesso

frankly loss those I still perhaps feel in have some on of wild particularly are trending they up it. property capital but deserve market been areas impact seeking think some alternative effective and the in markets that And space, we generally increase swings was the of loss affected. rates the rate not anticipating in we’re level having that areas, those

decrease to reloaded do So expect the we capital not is of entirely to if a or it reloading even have impact alternative effect. rate

Elyse Greenspan

And then written coverage bigger multiyear to How mentioned your quarter. multiyear coverage in in reinsurance question, fourth that the or I book? believe last proportion you one some

John Doucette

of the premium, of net classes our some But entire things business, material. incrementally couple did of premium, of not is billion it's different of of lines property part for deals. mean the very overall, across one a $X different business, and mortgage it's on there that in book. the a I That's accounted not does meaningful -- we credit, It it's

Operator

comes question Stanley. next Kai from with Morgan Our Pan

Kai Pan

of First do you question terms improved renewal, Could that in follow-up much returns had that quantify the you adjusted guys January on John how market. the would risk New just just mentioned market would how market your above that the improve the -- coming the that Year yours? in see increase dynamics renewals? is play sustain And or out versus you would at -- rate renewals, increase

John Doucette

know market. of we we don't is the that And on or ultimate we we that price rate agree rate I There's the parts. the or overall lot And with flat than know moving there's we a increase of know or one positions get they the don't with decrease don't that that lot the maintain results better underwriting a ways loss condition. the are don't given agree happened deals that's market or the our the discipline that done So were what absolute with that market done that declined, at. think and we what in market I deals exactly of

that of it's around lot frankly our us we a different us Miami, fantastic as increasing interesting think in us portfolio to participation saw one the of for of to this business. our footprint, portfolio, be Bermuda, our are the our we London, trading continue, and are whole very Xst with across globe. market the quantify that their many U.S., that's as is operations, clients we we many across relevant partners. So comfortable And our lines continue saw and broad we our And we a build diversified us. things global that to exists overall of given better but it Canada, ratings, lot helps Zurich, I building January underwriters of relationships our a helps mentioned, are hard I that, And just

particularly of one most things -- most Everest. saw demand the reinsurance, the that's in with So the for we increase probably optimistic just is

very the think the rates, we're we on that. it'll know Dom we be. pleased given happened upward Again, be. forecast We it's So what think don't alluded mid-year don't but to and what that be should have we to with going renewals rate decreases losses, pressure the there

to conditions able execute confident We that of the we'll irrespective market are are. what be

Kai Pan

at a more quarter, question segment, look the insurance first in meaningful fourth that's than release second If -- your decade. My you especially

the much if So going accident for regarding And guys see we more instituted last how year a give of much comp you to legacy has reserve XXXX in given detail can reserve has workers’ coming book years? since those releases just Will developed, -- the what that forward, release been. how more year. you conservative wonder more

Dom Addesso

say first had I'm the they’ve of Craig that in control going But of it you're I'll the reserve to it’s quite that let been we it. insurance the book, and the lines question. they just the specifics specifics get through let which portfolio net we have have more in overall our for in legacy that has now release to we for reserve on Craig some time. due some highlight business we that fact varying me into net your because But me and get legacy overwhelmed basis, the haven't come haven't been let issues, an let net about insurance to with of releases feel that. had correct

Craig Howie

didn't year. insurance any is as year the in the We comment, and good this well. business comment run segment drag Dom's prior a see correct off It's from

the Primarily lines come So from in net area actual seeing well. you're mostly compensation what workers’ basis, you're seeing as XXXX on development. some and from is the favorable other but Zaffino through a prior small and it's mentioned, results John as

but as take even early and that since that go overtime as So process you become change mentioned mature. release hasn’t through year. to they've we redundancies time and to We that's don’t more each continue and process same to that that react we our the development favorable until those difference conservative process developed our major year-over-year, XXXX, remains effect in

Kai Pan

one if I Last on rate. may tax the

points. What a are said ceding guys of the U.S. be you it about your affiliates? going change will You are And program, about to to starting reduction points? which couple XX% a premiums of currently sitting offshore is

Craig Howie

you had tax to the This we benefit the last tax was the the we year XXXX forward. year, exposure was for going that we be a losses about so going first the it So our know, in number high-single answer that year. about all, that's of was starting that, point XX% that the actual what rate we as overall catastrophe But digit had question year. are And your one. expect doing the to for after do is forward,

our be canceled that, is will share have economical cancelling not or us already, for to it We do going forward. quota because

Operator

comes Our next from Jay with Barclays. question Gelb

Jay Gelb

just that note going to it want people to was thought than lot First, tax that think is I rate better be.

strategy be should in protection Everest How thinking Second retrocessional XXXX. on on we reinsurance about outbound and that?

John Doucette

cetera time-to-time, or do. traditional bonds, that we So we continue probably retro use, business cat we non-traditional structures look buy at going and buy at I different have the Logan, to reinsurance, we and we to from to cede have capital et think traditional we’re looked

is And insurance couple share. change we as quota PML the capital thinking ideas. reasonably I yet over reinsurance in I consistent. some gross those still in the still ratios the way management, risk the the of management, on the decided in think about think look process we with process Craig management. years. haven't last the at of have probably internal and would of it everything And We're metric We're stay for should both said

sessions the do be across portfolio, we tail the in that that result percentage. whole may but additional larger that won't So

the that today exist good. net to ratios gross So probably pretty think are I

Dom Addesso

that which though And it’s numbers is just is that under a also business front X%, that so was an coming depends a expected part be it's it we see were you absolute down go that to our to different one little of is somewhat strategy where anticipating give because if Jay on at. difficult strategy. if that, are in door, be property our the into drop that answer entirely on point or What is might up traditional forward about from would we XXXX capital what

Jay Gelb

merger Final opportunities. is question the acquisition and and environment on

terms market? of attractive So within Validus all-cash reinsurance announced what light for multiple. pretty acquisition have influence Everest’s acquisitions consolidation in forward as a of going any Does can of or on AIG's in that be the viewed thinking

Dom Addesso

whatsoever. None

that's an multiple reinsurance an that And build more the am maybe us. organic been we we've sure the from insurance that team I strategy. that for to in demonstrated both is think that bit fact, -- not we've the successful efficient we forward even a a In little detract and on more lot I would extent go the acquisitions side think that

Operator

Our question of Bank. next comes Deutsche from Shanker Josh

Josh Shanker

there are terms in timeline track? your and insurance timing the reserve you to I departments I both different about nine in on in the almost order reserving the the is just of getting priorities, and releases. the bit firm. question a a at want look like? And to Dom, the think same nine on or reinsurance same the you're on techniques reserve situation Kai's came different on When years years add up what the little did ago,

Dom Addesso

Josh you position. I I we as good demonstrated in adequate to memory Well, be said a that’s what thought at timeline. time an think I accurate. I reserve is I But have had when the think first came And to that

I history one. accident developed you look think if we number favorably, so at the years, through various the have that's

developed prove been years, a conservative that. the various over But again somewhat have able than to way current that reflective first nevertheless, frankly we've more did think the bit more and institute that favorably. more I in just established our been of years. conservative prior at harvest than couple and I of probably came past. slightly through reserves And all have perhaps when last a the is favorably than to number, has some we developed favorably change But I accident develop that the in have accident philosophy others, we had What year different. may but reserves did notwithstanding what history it's would be years proven time reserving I think to changes it Some

John Doucette

second did and reinsurance both the same and of process that process the Josh part And the was question the insurance. for

Josh Shanker

back you with brought And the then in quarter. in peers fourth stock usual your

a You obviously the the Depending Why how buy more, why you on was behind capital have and ratio lower else than does. share not stock. how bolts in raise What's talk Can terms about need time, new view debt business? debt to decision all between everyone decision? right repurchase it trade-off of the at to capital nuts financing that this much point? you the you the

Dom Addesso

bought something because all, Well stock we that time value as to The of enormous we that felt somewhat amount opposed it more. to opposed of it the the in. first was was to why contained coming was as numbers how with at was in an I it bought we think close XX up

meant where the We financial have third to capital our closer getting the were to total we’re that to relative position. mindful quarter position, what fact our be comfortable with that to of year-end. the And we events

if because to if we saw flexibility tremendous we it preference weren’t will and/or for us So reserve extent the you like flexibility. a some that opportunity either my that gave concerned acquisition the did contingency some about that debt-to-equity, what build. If is market we'd that number in we And an it's we despite particularly position. again to our stated gave opportunity organic conservative some we see keep past relative capital that an made sense saw to us

to we So max. the view leveraging as one us that gives flexibility as up to tend that's to debt the made opposed capacity

Operator

Our next of from KBW. question Shields comes Meyer

Meyer Shields

that about modeled couple rate the catastrophes I'm there’s rational with any I is a and most third loss well response being a in there companies expectations or line put points. And has fair as we're surprises. trying that bigger One quarter increases that -- second I'm having is the the on major together data opportunity asking Everest is that is Is a observation accounts. there? an to of and talked in fact seeing whether affected think instead of

Dom Addesso

is there rate that increases affected…. response, rational loss what on Is

Meyer Shields

underwriting increases if more impacted reflection loss on was rate lower a of luck that accounts profitability? Bigger than

Dom Addesso

recognize than a events rate nature. market are somewhat the on all, less declines for in of a the other through market the increases of First that have of anticipating that people several been similar rate has market years. were based probably And come

the as response, it to even rational rational get the the to a though it increases described extent I it But a as needed I think as were as whether rational expected, be. closing think And response. perspective, was was losses rate you absolutely from So perhaps the nevertheless, reasonable of the return relative capital. our us to last below in Whereas many to point there back it's operating a risk taking results many were you at markets at industry look a cases that three if of where in I the we’re on. think the cost years were

business I rational that you’re So is level response. might loss, absolutely think your expected capital of of though then a an cost it below been absolutely if riding have even

Meyer Shields

opportunity were the XXXX increases -- there is rate are than there impact impacted catastrophes bigger wondering, that target Is because accounts elsewhere? opportunity by there -- I'm an to

Dom Addesso

rate. in because and the right think cases, what X/X And an we that's and where was each every think instances we inappropriate We risk. the there many saw we’ll the instances it’s were rate and appropriate got the it's And share. or increase it off to of do we as Well, we course. day, rate certain businesses, where are defined relative

and they other the sometimes opportunities opportunities, yes, don't. times, So these always create events make sense

John Doucette

want little to add I that. to color more a

event, fires buyers of there's think back a -- the some a event. psychology the California would completely the -- that sure I that highlight Harvey it's in the were one of have sure like am think part question, going losses to certainly also then results your Houston not happened. people I flooding expected. thought it losses in and of happened by everybody at and I in even this that when and type being I you am also impacted modeled got And there. first of agree to thousand if think market largest sellers these thousand time. not are terms as I one wildfires, look across of all I all that the your

wildfires to it sellers to a the for lot Puerto about think major the hit Maria all Rico was is model. model, managements Cat the $XXX losses. As am heading that. looked market and recall, Florida, could going not I I hit since a you the just certainly Miami like of to was first a was was of about direct hurricane it and and to boards things challenge, think be there's dynamics But billion and flooding a -- Irma what about always Rico think and a buyers in and heading and while XXXX. like while the talking but billion, may And that the of the be and $XXX And buyers market a that insured as impacts five sure Puerto what

I of and think the surprised that losses the some of people aggregation outcomes there's them. some these with -- the maybe of some happened, were and accumulation and of

moving So I parts think a there's beyond what model a lot of say. did

Meyer Shields

is property as year? because you is of results ultimate to the report plan the question, Second seasonality to profit recognized book grows, back any at how so the insurance half the of there much

Craig Howie

much a loss that pretty pick ratio think keep I year. we we throughout fixed the have

Dom Addesso

book. that the And on the less it’s seasonal that -- now it book than reinsurance it's we insurance it when on was do was

Operator

Meredith today go Please Brian question UBS. final our And for with from comes ahead.

Dom Addesso

than we -- in there questions perhaps for Let were more opening usual interrupt are our just little There minute. remarks. me longer a a

additional questions over I of given in you've it's given the the queue, nature So don't results. the if bit and end going a year mind some

ahead So anyway, go Brian.

Brian Meredith

growth of types give up coverage those much you was sense us of how one-off back a could the John, things? fourth quarter of

John Doucette

So back was covers, in million total. reinstatements it and up $XXX across about

Brian Meredith

curious your I with workers’ and regulators on to pushback Do comp any anticipate tax am question, in respect reform? from rate pricing just given California. Second business you

Jon Zaffino

Very watch risk we see continue on carefully underlying We're to at based moment. obviously to the going return and as react uncertain the what market characteristic.

that information and now. other becomes same certainly we’ll an in So closely as California but not stage, at early this we anything better on we’ll jurisdictions keep seen commentary we’re following the But and have different eye be watching that.

Dom Addesso

that, get that issue kind regulators commercial than more more sometimes a that And in of think likely be will of Brian, will can to help personal it’s likely think sure involved to I I will be lines overtime need lines the not I'm necessarily a itself activity. themselves issue. market particular necessarily self-correct

Brian Meredith

bit And then question bigger a here. little picture

you’re of you you both assumptions, forward. some in it? pricing you As trend of going your side, Would all loss could two? type and reinsurance business are trend build either think business obviously, have how pricing inflation the the you kind the are for on upside reserving And and year next which or insurance thinking over the loss

Dom Addesso

of Well, across lines that business. various varies

we work financial for build a what matter. what for or model lines in comp different excess casualty were is that in for property, or liability, So we than it's

also pricing question, one but to all -- to activities. reserving So only to how building suffice that there to that say isn’t in trend answer we’re not our but our

Brian Meredith

it's about, in infrastructure your expenses, growth thoughts on. relatively type question you on the up Any about going this more of handle be been would last of then curious lot And growth platform? growth whether modestly. thoughts you've the could to current just going got and Any put

Dom Addesso

or reinsurance insurance question Is that or a both? about

Brian Meredith

sides. I would say, on both

Dom Addesso

lot of platform. generate technical We've certainly, reinsurance been those talk keep adding added and them. resources, piece been reinsurance resources underwrite business diversifying our frankly with side, we resources not reinsurance of And resources. to deal comes And the given point so accounts. to have at in I up we business premium about an the that don’t with as that talk particularly actually and the to problem types first. on of and infrastructure of And an debt or issue Well the to that from see adding I'll new adding properly those We side have management opportunities nature both a the lines reinsurance we've the on view, the all.

insurance add out, On our Jonathan up as we continue slightly as invest just ratio the that to year-over-year resources, expense well also scenario to in as fiscals. pointed and continue side,

within that team, the maintain rest to to our to insurance attribute I the of that well organization ratio, Jonathan that we're provide is as think as operation. units services his and fact able support expense So the

the premium build do to -- the to continue we on So earned insurance operation. continues

able same to ratio that time, the make we where proper properly the need expense investments think I we’re and at to. manage

Operator

ahead. Barclays. have And a follow-up Please from go we did with question Jay Gelb

Jay Gelb

questions My been Thank have you. answered.

Operator

this at there the time, And queue. are in further you. questions Thank no

Dom Addesso

questions much and very good. your for call Well, all in for your Thank the normal. participation you this as morning

summarize, has Just of catastrophe this to level losses. been record

it's that side we we year, we've demonstrates than the of to had we respectable in the we've on and clients Everest, reinsurance to the that and the And that insurance more 'XX experienced continue value and to success our had that growth demonstrated XXXX. result brokers. For we side, expect continue diversity add the customers, into both in think

this for questions you Thank forward thank We might much. to participation after your So and you look your interest any morning. so you follow-up this have call.

Operator

participation. for you. thank We once you Thank again, today's that conclude does call. And your

You may disconnect. now

Everest Re (EG) 6 Feb 182017 Q4 Earnings call transcript