RE - Earnings call transcript Q1 2018 | Everest Re Group, Ltd.

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Operator

Good day and welcome to the Everest Re Group First Quarter 2018 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Beth Farrell, Vice President of Investor Relations. Ma’am, please go ahead.

Beth Farrell

[ph]. Derek you, Thank welcome Call. Re and XXXX First Earnings Conference to morning, Group’s Everest Quarter Good

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

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

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

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

the Now, over let to turn call me Dom.

Dom Addesso

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

the in operating strong. the continue favorable. be the quite published noted reported As quarter, attritional catch financials, company the is results quite to of XX.X% year this despite of And core prior ROE the

reinsurance underwriting the insurance This million our a margins. quarter. casually, writings a and get double for respect effort profit more back diversification expanded to in classes structured the consequence have to million our also that segment, adequate book, produced and due is With in business book continuing than I’ll which $XX.X to minute, products. of profit quarter in underwriting underwriting franchise reinsurance the property a this reflects in improving the margins mortgage a of profit Our to $XX but

is to company’s on than finding in margin, due expected improvement the have business. products structured now While less mortgage and excellent had property part we’re general perhaps market firm in margins casualty generally

in prominent is demand the more casualty the However side. market

can solutions. casualty volatility Industry under portfolio, account for been the more driving underwriting a plays part tuned reducing demand results, support our buyers certain consolidation the due to large a reducing to become due needed the to in has respect expectation. renewal capacity us market to in and below better general, market primary reinsurance and terms, somewhat across property With property that. in resulted generally their for buyers participation This that As offered have season areas. markets pressure whole more that quality but was our income and oddly in entire

the but increase markets, our first and a to year PML select is prior which factors, were rates, Asia opportunities. and the market dollar April for Caribbean hurdles, in of two enough premiums the the business On that balance, there the a property These is to and inconsistent above rate bright our slight saw to However, margin allowed quarter year-over-year. us year-over-year. new Japan of margin course that spot current increase renewals, affected. loss course, that due but less reinsurance improvement was needs our per renewal of which key need return were remains

point attachment been the expansion, the Our different of means cycle point approach in the at capacity parts capital the That tend whatever in here of period that in first cetera time over particular market. et the the the that quarter. think continue trend reinsurance you to change period has to most curve. to suits Consequently focus market. match of efficient the in contraction, We outperform

its insurance continues Our operation progress. tremendous

the the is combined which the course, of not plan. quarter. The ratio a North was attritional year-over-year it the American similar combined international While insurance in obvious ratio XX.X operation given in be fact build may produced the in out, headwind,

creates healthy, Insurance the premium on this required. investment lags premium we growth but XXXX, international of earned operation there growth balance a we as substantially to the see expect our investments the improve are earnings to resource remains pull During beginning as payoff.

yet not offerings product newer ratios build have impact as have is fully still In addition our earned of developing. some lower their with premium the loss expected

growth our becomes As improve expect progresses, loss expense a ratio accelerated the as year to resource we earned and premium more in normalized in ratio growth. the conjunction with

the this will of likely quite level the group ability The optimistic a to market profitability. increase insurance of We make objective. challenging about are that

we product and reinsurance regarding management. allows find However, what scale that is right us is our and one have to I demonstrated that cycle described the unlike This opportunities. the diversity not operation

quarter. want I comments Before the about losses booked surely my wildfire operations, you the my end underwriting comments regarding this

reinsurer, say me especially than so further evaluate was step much a moved. late let devastating year as that event it hard These more was events First this record to people imagine. one we obviously tragic last were

our when for clients’ loss. wildfire various for a estimates the placed insights expected and on highest outlooks and we of were modeled estimated Our establishing that their our events. client catastrophe any the loss, reserves approach on prolonged into estimates greater based loss based models selection into Generally, the three for believed largely on a The lowest industry weight particular takes discussions. these event consideration the consequence the were events reserves as is

we many due you our various estimate methodologies, know our to reserving was our that As believe of philosophy, conservative.

cover to continue in prove and to overall prior, losses While position expect including our reserve the year XXXX this that case, be turned occurred adequate than that will more we to out all end XXXX to cats. be not

of interest allocation touch income, asset equity me our markets. is and which coupled low in evaluation the a environment strong volatility rate increasing reflective and continual with of but investment on a Finally, remains let rising

what portfolio This three Nevertheless, the these thereby was market bias to private of from equities relatively portfolio allocation growth we that market ahead, is financial optimistic grade rates produce with to remain including values, ROE benefit a continue a the higher a means first our investment rise on as in will going we our challenge up we recent forward. to in towards pick quarter see based constraining now duration portfolio for our resulted rates and quite diversified rotation expect summary affected in short-term par has solid income well to position slight a equity our fixed core and the later is an naturally result end investment to accrete double-digit negatively expected years. In in will cat load. and book a public from a would with with course our shorter report. sheet. participation the over of remains to balance bonds forward is Craig for on time Thanks look This strong the discussion and markets I your as and as value. Our and in morning. income. of this the This

Craig Howie

million the equity million tax on net $XXX million value morning of losses represents operating another of income gains for compared $XX This XXXX. for year. $XX After annualized portfolio. quarter income to had of compared and net for of good Everest earnings of first compares was to The in quarter quarter losses solid million Net capital quarter capital the results an realized million fair the in on you, million return Dom, first Thank everyone. the of The attributable with to last XX%. $XXX income XXXX capital first XXXX adjustments net XXXX. XXXX. the net tax public equity after of income $XXX were quarter the included of income primarily first $XXX

year no which quarter quarter during for million from little XXXX, any and with XXXX. estimates to loss the to reported income million the changes underwriting retrocession Doucette California of for higher than million more events mix first XXXX, first John aggregate the by on million losses. losses XXXX. these $XXX except first The loss announced, the primarily wildfires events year. attritional event of the loss XXXX, loss catastrophe of for excludes announced. less was arising explain catastrophe breached of of the of therefore was as million the California covers events to last losses the saw our reported the quarter ratio $XX $XXX than a and specific current losses and compared overall same company’s estimates estimates, events, from wildfires revised threshold catastrophe and gain in more covered the exchange in change prior first compared $XXX foreign XXXX in quarter attritional operating include impact XX.X%, $XX will million. attachment in related to underwriting business In now estimates group The comparing of to and comments. we period changes other In in against gains reporting our were in of due the by an previously No previously our quarter gain these about XX.X% the in As ultimate overall year costs up Everest $XX of overall combined losses the segment his

the higher catastrophe of ratio first higher quarter year, in last primarily to combined XXXX. reported than XX% Our due losses was reported

first of portfolio The three duration our overall This result for For base on had the income asset on portfolio. primarily was over this million year. year. yield billion years. $XX grade higher $XX with was a which quarter partnership investment was was our income income portfolio the $XXX and investments, Investment the investment income XXXX last increase from investment pretax fixed XX% the up million above quarter in of the which by limited pretax driven was X% just

is income. reported another exchange Foreign

first the is full fees than XXXX. from For through effective income for capital in X% million, million that included exchange rate end million On losses were Other Shareholders’ to the of paid mark-to-market $X the tax The be on flat, in losses it compared of impact in was the the the million for billion and of of catastrophe of This in includes is operating after portfolio investment range of up. quarter, first low year. XXXX. $XX estimate, our go the the at effective the of rate $X.X quarter relatively XXXX Mt. lower first Logan end into of income expected year. last planned year. $X annualized at taking would catastrophe X% also Re, expected tax than foreign income quarter an earnings group the first come to for on of this dividend that rate Should return $XX account the the losses year-end tax to of million X% would XXXX. the compared $X the quarter less to calculation equity the rest and of quarter taxes, was gains first compared income

very Our strong. remains capital you. Thank position

Now reinsurance John review will the of operations. Doucette provide a

John Doucette

up a our diversification its including this renewal, geography. by At on line the improving XXXX, portfolio, in business last quarter. of To indicated this focused as we rates with $XX of we Thank risk pivotal XXXX. the loss as and X/X premium were were we XX% profit of record compared end you, Reinsurance The quality quarter successful. activity adjusted Good first underwriting of QX better growth and a Division After morning. Craig. to delivered million strong portfolio

Our provides distracted competitors partner. increasing M&A brokers customer. gravitate as clients of enduring, Everest increasingly long-term who relevant, an uncertainty by stability backdrop activity, for are Everest to of and this our trading focus and to the Against some

broad capabilities, growing number organization. position industry-leading and Our growing market. with strategic of and distribution partnerships is global across that product disruption us to we and the of born franchise capabilities This hedging adding further are sophisticated from entire our expense enhanced the continued reinsurance advantage and evolution opportunities reinsurance the and capital developing and maximize by

edge positioned niche the well specialized Our beyond the distribution and execution, these Staffed strategic underwriting Combining is and global MTAs from with These with diversifying including where capital know partners various brokers the asset and clients we cutting enhanced blurred. extend landscape. thrive underwriters risks, core we our managers come relationships deepening insurance our and upcoming investors. continuum accessing partnerships to unique P&C relationships in capabilities, respect organization. nimble alternative derived continue of better risk asset capabilities with businesses quality highly and are specialized and forms, clients, accompanying, risk with insurers, and traditional

East XXXX. from Before rate here both on of first showed including pro-rata increase broad growth increases is of renewals, America driven Africa, at Reinsurance premium and higher of an Overall, recent the growth was quarter across This a operations, European Middle I the comment volume $X.X and from Latin U.S., XX% strong contracts. Division’s the by Reinsurance an results. and overview billion,

the attritional to California Our was these loss casualty catastrophe X.X ratio to long-tail Adjusting a share losses retrocessional property business of pro-rata with compared business due million the and from prior in portfolio XXXX. emanating loss mix the loss treaties, costs points, and due wildfire elevated the is points higher in transfer up to U.S. points of development, year for operations. and ratio by X.X loss X.X with wildfires our $XXX higher additional opportunities, QX new quarter, some

the for Irma and the in estimates group. Maria Harvey, unchanged total Our across losses remain

across more we has differently on event upward saw However, and became development by allocated the earthquake increased on due movement Directionally, estimates loss Mexican as and have estimates been significant saw as we as estimated. to data our adjustment available. reductions while losses not as been both business expenses, segments initially Maria

by additional the cost segments. benefiting additional is point on comments up pro-rata Reinsurance and aforementioned between Division, we our loss X.X the business professional first improvement increase to recorded million, ratio for primarily the increased increases, the segment property some segment XX% and improvement segment reallocation from The Division. Reinsurance quarter retrocession impact seen our Now mix. rate in in International loss liability due The In to losses cat writing. to higher attritional this saw premium are $XXX corporate year and XX loss of Bermuda to due structured of products post year business and our ratio U.S. XX-point

Bermuda Our a $XXX XX% U.S. segment and in XX% premium million dollar constant reinsurance grew basis. to dollars on

the recognition was of capital and from Some relief opportunities. of underwriting liability share growth supported years by professional quota the trades new with casualty business, prior and balance premiums reinsurance written

year adjustments increased was Lloyd’s their cats ratio about for hedging strategies. markets. reinsurance business America, prior underwriting points, activity, Canada, mix. loss broad five to and million. many The amidst segment Africa, East international was Adjusting Middle mostly their and based the to the across up to up XX% Singapore Premium due was growth attritional premium As and $XXX Latin facultative markets development,

was Some to premiums timing due on accounts. certain of growth

However, to attritional underwriting compared XXXX. stable year largely the QX was current result

Canada bonds In terms and cat retro overall This hurricanes million, in in of annual recently executed split total Kilimanjaro capital reinsurance provide additional with appetite year. us the are on maturities our year-over-year, insurance issued cat aggregate along bonds, additional $XXX protection. all and Mt. from allowing of and five-year we and catastrophe the because II Kilimanjaro The segments. manage into all The in hedges retrocessional Logan supported group’s areas traditional within us cat capacity to and risk costs U.S., two some earthquakes expiring replace last protect were across PML These reinsurance up holistically, reinsurance by management, new the protection new bonds. four-year terms of our bonds and that prudently coverage are QX with Caribbean. and protecting cat

down commissions our Now rises focused reward in corrective affected I ILS on the lead with property we brief rate renewal market will update resent from captured further improving deal, provide increases risk while up we as operations, stable finding as best markets, prevented renewals largely our double-digit rates. there activity. particularly the access modest in firming have larger on ceding ceding In At a attractive Japan. increases and be where Competition new companies such described the U.S. loss from In casualty we single-digit Casualty on stable. markets, while ceding rate is opportunities. pricing and although as Capital would Everest, commissions in balance stable. increase are reinsurance in rates generally a in demand terms. X mutual internationally for the with are in deal, Asia April commissions our some

the also were loss loss we have up, able same a and where presence We areas capital reflective capacity our at to In renewed deploy Alternative XXXX is more activity. prices the been as of rates. some the in such increase areas, business. these affected M&A Caribbean or

some deals opportunity of through reinsurance attractively full signings increasingly partner, this taken in markets. capable private good This priced to resulted shown on step Given including to navigating access a the has Everest the dynamic up not we as market. layers increase to found reality business the better reinsurance stable

and key across subpar while to years. rely our global understood We on offset to new customized our some flat also capabilities clients continue this underappreciated, business, nimble developing structuring advanced develop through size hedging bonds be tailored but must in products, an address trade execution A and the markets disruption capital lesson I’ll maintain expansion leveraging empowered for over its evolving All review to case deliver time, our meaningful provide our clients, Having industry you. traditional assistance and to classes of franchises to ultimately hard now capacity capabilities Everest Thank long-term. namely to experiencing well Zaffino insurance ILWs. creative will capabilities turn so to major and to is be retro Logan, that some our solutions to reinsurers cannot the and ability to of XXXX structure by Sustainable in forward to efficient maintain that And structured territorial solutions various cat already Kilimanjaro and reinsurance expense in by Jon perhaps the of profitability far successful in losses relevance organization. breadth the operational supported to continuing relevance both through Mt. operations. traditional known, it and results non-loss supported and to is and needs.

Jon Zaffino

you, good and Thank John, morning.

the start We’re report insurance pleased to of operations. solid for our year global

As benefits Everest many production our This to years increase of strong as consistent beginning across million portfolio. was first steadily tactical growth operations of over for to Globally include are the of premium several over written expanding and underwriting quarter, for first the taken realize of measured the insurance Insurance. achievement XXXX sustainable of the our in we the metrics, profits have experienced $XXX course, the quarter XX% we the success. quarter as across history strategic completion past numerous actions and

the quarter to testament value thoughtful to class our toward our net a We the record specialty underwriting continue Further, earned across more migration quarter’s our higher diversified ahead. $X.X the XX% establish vision organically resulted operations only expense XX.X%, These double loss global in insurance and continue segments the focused of than premium business results organization chosen our to earned this realized. the growth million in invest this adjustment our the and and that. for in ratio premium portfolios the of improve more recently in first attritional being businesses diversified Most continued product to a the a P&L. into within that books from to the in quarter, impact growth quarters in world remain XXXX. profit loss We importantly points of build of X.X are $XX.X profit underwriting these reflecting confident million quarter will of is expand accounted specialty and

our As calls, we place mandates. in continue to underwriting execute in and individual have prior the reported leadership across and collective teams on globe their

by teams measured focused to and robust Our remain of submission set lines opportunity flows business across continues our our grow.

build momentum year. the look will this throughout We to on

Turning to the financial highlights.

another As the solid premium market. quarter first global relevance growing specialty in our in produced $XXX the $XX written increase million quarter, of steady evidence and insurance the improvement over XX% an operations showing or growth in quarter of XXXX, first million insurance mentioned

in group a represents underwriting property insurance contributions prior operations. of global diverse As in consecutive this and casualty the health of and XXth remain Further, within our organization. divisions the growth across across acted quarters insurance balanced quarter

net to premiums. Turning

to divisions. our reinsurance underwriting quarter XX%. quarter conservative net increase XX% Net will position, XXXX which premium million, an as to fairly growth we Net For lag in we premium the million take $XXX million. first $XX grew growth believe was supports or of of our premium a continue written earned across written the by $XXX premiums

loss which was the of combined GAAP combined attritional first combined favorably compares of the XXXX ratio quarter were quarter X.X attritional of year’s X.X expense along for with ratio XX.X%. adjustment was ratio ratio the fourth the quarter XXXX quarter over That points resided first quarter the year first achieved XX.X%. improvement and reported over of loss for with stated first American XX.X%, of quarter, in The XX.X% and reported attritional roughly an the quarter, Our XXXX. improvement the GAAP is this in ratio. to operations of XX% of XX.X% of line attritional points improving was North X premium point The volume loss a XX% last a XX.X%, overall XXXX ratio combined in

the X.X impacted reserving our attritional ratio activity, XXXX prior conservative cat position again favorable these to the on of events. improvement addition beneficially was development In reflecting loss by points year from

drift this the As and launched from anticipated, underwriting strategic and improved ratio new the of past Again of is benefits attritional a loss continues. a an of the actions is many the business, three business downward mix years. result the

items the and to the from the timing up ratio from Due earned first of of from in new the quarter the expense businesses, XX.X%, XX.X% was expense expense Turning lag in out the to the ratio. of certain build premium our same period XXXX. one-time

to all expense continue It’s our and maintaining We invest patterns expect discipline. to remain ratio year of that in competitive a throughout range. to improve the underwriting we remember organization, our while in important to

written result, fluctuate quarter-to-quarter expense may ratio. a As well from somewhat as premiums the

be rate However, our we and conditions the some annual within expectations. anticipate turn offer I’ll the particular commentary market on to in the expense environment. ratio now to

levels As for X.X the in Overall the we by rate pricing quarter organization. improved were negative slightly quarter. the progressed, points decreasing trend Insurance P&C Everest thought across

by led had auto. However, basis notably our same lines deliberate on derived influenced retention. rate lighter as ten authority being from the by commercial level rate on If be organization than study number rates a each the a The double highest delegated in exclude property from usual the that we softness change the of our XXXX, X% planned partners. underwriting This the impacting is plus across progressing price of more achieved increase X.X% change and result was the quarters. fourth steadily and portfolio for this for was quarter it aggregate U.S. quarter, we that business, a Everest retention month. underwriting operation various of lines experience book noted lower comp and should renewal a based the of property increase first we book, was than was This the was actions where experienced with work the

book, experiencing property the the experienced retail minute it one across degree underwrite adjusted We transition. channels. we property plus a U.S. basis. the first the of six wholesale portfolios and Let our portfolio, XX% on notable concentration property rate months area positive market now of market, at consecutive on of globe both as a through a quarter have change the market But currently in in with the me spend U.S. a is in ending risk

As HIM of rate across exposed renewals we pricing further come there do the need property firming improvement second and we similar is in up the quarter, expect within market magnitude. cat Overall, a continued other a for markets well. believe and non-cat alike as

other continues portfolios. meaningful Turning various auto to our commercial double-digit see range low the to increases, again, lines, in across

see continued continue rate in We being is in moderating March. this with common. continued rate the positive decreases in professional And rate lines, Various to moment XXXX. lines quarter are although single-digit some competitive first GL excess as to see comp pressure, slightly rate particularly markets registering quarter, believe rate moved to areas trend for needed these within work remain changes adjustments we positive the we and each to

the feel to composition associated forward. workers’ comfortable margin and strategies of We our it in continue underwriting going with with comp our book

alongside adequate to many continue. that technical market achieve to The market this is rate specialty global achieved growth profitability view being diligently any solid line has continued pricing portfolio and focused across in we Strong are need conclusion, should for area will in that across objective been premium our the XXXX. everyday. have insurance continued and continued into investments established We this in working of the bottom the In operations a cautious momentum and our years on toward or across platform. pressures are our XXXX we for are us take

our We look resiliency back profitably and business. quarter. you we to to capabilities to resources forward our continue talents, the We ensure invest to our momentum increased in while have franchise, reporting building and expand across thoughtfully continuing next to

to for Q&A. Now back Beth

Beth Farrell

Travis, we open for questions. are now Yes,

Operator

[Operator Instructions] first comes Yes, Deutsche Bank. Shanker, from Joshua question Our ma’am.

Joshua Shanker

The would weakest you’re United reform, business thought the you there the facts that on in there’s Thank way I’m much. than that in more some growths Bermuda. you maybe onshore in international if incorrect of in that means not. disabuse can very have this stagnant greatest Yes. wondering Post something I’m we seems reporting reinsurance. they if wondering have and I work, that my that, a mind or to what States. is were tax me that it’s reinsurance are U.S.

Craig Howie

the geographic coming this this Howie. is is is development Josh, the as and from. on where any on tax, based have losses you had and we tax region year rate What throughout way what But emanating includes for the segment. we including were the in is the coming saw rate the lower and the from the income that tax other that a fact quarter reason releases of States reserve Craig based were catastrophe majority first the and those catastrophes Bermuda from the that operating United segments, and done Technically well. the by

Joshua Shanker

clients reinsurance the United where business incorrect much way Or business written more not tax about so post on their tax of forward just going in is thinking is States reform. which put can Well about be in is that and general things.

John Doucette

John. is Josh, Hi, this

segment What because couple and of like things, to business it’s underwriting connection clients we – And it a be the and going where continue reinsurers of U.S. brokers really try But fair both U.S. reinsurance to the the our going and on or will so really think we in think we’re be based opportunity part different capital of if the have I know other capital we it most for and Bermuda are. the based to in things a going capital. bit of as segment, the in speak access to business, to can is function a our expertise, international outside of we’re that. to the U.S. the that on way people, see I it’s I dependent going – to don’t structures the that write whether reinsurance segment to the advantageous

Joshua Shanker

will And I to moment? be had your do year U.S. into on Do is the as we was property the compared What’s to deployment on one-one that Okay. mid-year we trend beginning about saw we the way go? the International the of year. guess, renewals at this that think of sort what think and What property, at same. that the you thing

John Doucette

I So about really drive what impact quarter, That specific talked loss are as and forward. would business. the lot the think depends going last discussions of a it by where the was we on what the business rate geographically, is

affected been no surprise one-one. HIM more saw So that increase areas the at California losses or had wildfires the rate by

a to have we a it As see stable. when that came closer in Caribbean is rate big of in losses. the to And, lot we renewal Japan, earlier it April did was X, which mentioned our areas the increases script, Asia did some particularly but

adjusted I the terms think the of we’ll true does would loss of upward to environment what that also areas try losses and it would events, where sometimes most sometimes we��re advantage where you at rates. based it we product. going excess this that be will what see had the hold we upcoming talked that about happens it’s directionally So it think what products risk and more loss irrespective renewals, sometimes pressure of to saw positioned proportional, it’ll take go be on follow best And have rating we’re the be in and on is we think capture reinsurance, think quarter, the as sometimes getting or we retro. And will And that we the in to is really attractive. be that’ll that return,

or of the to quarter. that, where not. no changes and changes rate we the you be matter able are some comfortable But And trends will that And that. are in results rate capture the saw so in this pressures

Craig Howie

our I And well. opening improving comments in casualty mentioned as there’s I’ll add as to that, in an trend well as that

margin our to there opportunity requirements. increased meet So

Joshua Shanker

Thank good year. for you very rest the the and of luck

Craig Howie

Thank you, Josh.

Operator

Stanley. Our from Kai next Pan, Morgan question comes

Kai Pan

Thank you, good and morning.

you wonder, So as retro mix down just year-over-year. the change points about from well deterioration combined attritional impact high ratio XXX The break could basis I of cost. the as both retro –

or of could dragging rest are Just the year. this wonder, the of on what the for be onetime sort impact

John Doucette

the The impact onetime attritional. from in change the

Kai Pan

Yes.

John Doucette

for that of business. pro-rata business at attritional. to of my mean, Well the but But the margin. change that the me a that lot be well, But might just that influx will ratios largely as business even premium was driving of will the the therefore and an mix to comment the books I first premium as overall though remember in colleague’s quarter increased is the served year first be the contribute and coming in overall our more will make pro-rata up, balance of let margin. going our due on the has in increase attritional comment because And underwriting

whether ratios So we about to margin. careful we’re be have about or talking

So…

Kai Pan

Okay.

Dom Addesso

may Wonder comment well. that a as here John have

John Doucette

color Kai. little on Yeah, just a that. more

a but it you in times, called to also what – – we We bond. issued if XXXX, we recall was couple II of won QX we alluded catastrophe Kilimanjaro

of now. was the because So of that quarter elevated, of last the year not That’s that in comparison back not It first. part QX second in reflects it from and effect remains but in that. and was why in bond the issuance that in XXXX additional that’s second catastrophe QX-to-QX quarter,

Dom Addesso

the point full in that’s And quarter. one about

Kai Pan

year-over-year quarter easier? in comparison will thing the be one So, second point

John Doucette

more it be in It of comparative quarter, the second issued was year. last April in because would

Kai Pan

Got Okay. it.

John Doucette

quarter the last of year. In second

Kai Pan

Okay.

grow but margin ratio change, So the amounts commodity margin, revenue attritional expiry because higher. ratio, will but mix margin, that the the the of faster, underwriting dollar would will go net, be the point is higher,

John Doucette

belief. our That’s

Kai Pan

Okay, about then the the great. utilized. cost especially loss that can cash talk trend, in And you

Dom Addesso

the But it’s a direct heavily I’ll ask reinsurance. insurance book. of carry-over Jon impacted course, to Zaffino, in because that’s

So Jon, can of some seeing. trends the maybe you highlight we’re

Jon Zaffino

Kai. Sure, Dom. Thanks. Good morning,

from structure. consistent the program of a lines, quarters. do you X.X% usual in aggregate line-to-line, few And book trends caveat, that we’re If prior lower premium tell in to we we vary geography-to-geography, relatively X% X% general, the about be and cost a long picture structure-to-program in higher see loss think of the over on our As I sort short, from tail from widely it’d range, would could based certain feel weightings, areas. medium, we I’ll be

we For running think instance, commercial is that. above auto,

expected we comp our and below. on Some it anticipated, business of are and that. certainly studies lines keeping one eye But looking the severity geography various year what of frequency territory; be books it’s the an we depend we could on and various been of conduct quarter-to-quarter each little trends that a bit throughout relatively at

of line pricing we we in on early expectations. – based kind what point where expected thought been books, would on for we this our it’s at our be So, reserve our based as

Dom Addesso

of excess to the be or as So, I out in that economy. really see think summarize the across nothing inflation relative way we bounds to general what would entire

Kai Pan

I on last one just see any Okay, opportunities do great. may if And you the industry consolidation, Everest for Re?

Dom Addesso

generally operation in think at a marketplace, that This all importantly, these challenges probably speak knowing opportunities an of comes I liking relative will we that bit while got that potentially successfully particular but be of mentioned the exactly have are do properties. can something in challenge shape towards as there look we the and all that you of today. integration included the and in because mold many what you around demonstrated I’ve integrating times, having part, can apart. build of And expense and We because your to you’ve to and of tilt the organic up these frequently, we’ve certainly and build. operations. probably we the that of I many nothing more in tear to And price end and – can to organic opportunity we of opposed up the generally, think

but So that’s it. for – our area something would that’s so wouldn’t along in us think about that if fully I would that mean yet strategically come preference, developed, doesn’t an that not fit it how move

Kai Pan

so you Thank great. much. It’s

John Doucette

more, of to that some buying And activity his strong that to consolidation global over the results companies is Dom alluded we they reinsurance more and some seen and opening little side. us does there and fact comments, the sheet, a of in right have and discussion, add balance the we’ve from present like the and buy to of the M&A as lines question, all world. particularly the lot of outside want Just a Everest a business opportunities color, large M&A, that of on P&C think for

large demands some And and insurers professional more of so the seeing global casualty we’re are and capacity buying increasing lines. and their buying the more in

had we in that part reason the we that so why the And QX. had was of growth

Kai Pan

John. you, Thank

Operator

[Operator Instructions] Meyer from our Shields, next Our comes question KBW.

Meyer Shields

bit book that to as morning. John sort in if to I implying little Am interpret in want I on rapidly I dig comment of a Thanks. more reinsurance? oversimplifying good relevance. Doucette’s a increase casualty desire your to

Dom Addesso

In reinsurance or insurance?

Meyer Shields

In reinsurance.

John Doucette

lines think where global – think most we portfolio don’t I we the – the make business, it on want I more we to we that causality start I think that’s, across the sense can as with write don’t makes Meyer, and footprint build can. don’t So a best portfolio it’s We business. diversified of many start with, we risk-adjusted

seeing in are than We had. opportunities more the space we causality

the and a We years have last on several we negative think fairly opportunities. ahead curve. And for the been and call, are more casualty professional was now seeing of little the maybe bit liability right and we that

it’s we as with clients the the function more expertise, property But deploy to So, is the think see, all and alternative in have the And be we risk-adjusted market point the think more capital we along capacity the of ability, helps to the we and use in relationships to casualty that to to deploy underwriting have us that us need our clients. helps in We able a the with brokers the have space. the And and relevant property local buy. we that can the we have globe. line pricing we more is. clients our witness any be of relevance what think we around markets expertise the

Dom Addesso

But again, time, we’re the too. mean, diversification reinsurance the whether we At business operation line-by-line. management to on it’s cycle insurance of in riding to get suggest cost. it are at necessarily any trying back that operation, achieve or applies the the I heavy emphasis that same and doesn’t greater

stable a we’ll to group, so. do things the for I that all are these and to So result continue think have more led

Meyer Shields

just didn’t whether price you I volumes strategically to clients just premium on to more were would recognize in that wanted themselves the underwriting accepting maybe I expertise there’s mean know business, than Okay. Everest suggest?

Dom Addesso

case Well, clearly more the brand fully absolutely the developed. that’s case, in being is more fully I where and – importantly, the even that’s insurance, think

Meyer Shields

the maybe customer an deal to helpful. for that’s global more And second are looking can, question with on if I larger looking because at comments specification? reinsurance, just of tougher a Okay, they additional insurers

John Doucette

from and London. is America again, have are with North I and we minuses a buying They Asia, of that in America, type This bring John; bring to in they diversity, Latin to with. obviously every know trying have and point diverse they stability, portfolio think they Europe and client there’s our us you pluses of trade in bring in Bermuda they

reinsurance some you structure other across that of much, more allows a clients end that to dependent – writings. less them it the smaller are dependent given the very again, so have us reinsurance their much go if more relationship. spectrum And But stable and their there’s of are relationship or than capital of to

clients So there’s pluses and minuses of we of types with. all trade that

Dom Addesso

is really don’t sophisticated to believe have negative – I trading Meyer, partner. this it’s a a

quite it they the the think and are be bring transaction. Everest positive, strength more fact, the value to recognized because I In a can easily that would

John the tend you tends but to any as was we and more positive tilted sideways to area, a account, the stability. in highlighting, to having relationships bit, a that entire as those greater across have margin. tend be and broader it you view I one So larger we overtime; really I a think have stable find might

Meyer Shields

you much. helpful. very that’s Thank Okay, so

Dom Addesso

Meyer. Thanks,

Operator

Our next Wells Elyse Fargo. Greenspan, question comes from

Elyse Greenspan

in to being Hi, same – premium level good is guess see that do couple tied question morning. you growth A questions. of to I terms guys in this the saw the reinsurance, of my growth, we first quarter. first specifically maintain you able

first by a could crop and is line geographically. segments, highlighted little even get really the the that in about And that new your think within seeing how the you more credit business saw much color bit balance the the growing and quarter? where you’re we mortgage more then if we you growth of also you’re just year. most As color from these opportunities for of

John Doucette

It’s Elyse. John. morning, Good

we in kind of So of growth, We at including more, growth the next the rode issue. I that earn-in several would we and of part the see is proportional one-one terms quarters. over a rode a two-pronged business so and mean, business

it’s the had of so, expand on that. business you we around the opportunities crop. fairly put know try books. the a to growth the that, put that, business that predict it’s we quarters, when crop many the been think that mentioned incept therefore example, books. new out going see to think that at some seen in have and our we opportunity in build do trade we growth to we’ve terms doing So but more. future to there we don’t the our we that lot embedded already of for same we’ve been rate set group will our harder we’ve flat. in that expanding Zurich see tied to on from that be just we’ve We for is that if the us operation; far. was so opportunity political to the and risk one examples credit grow it’s gives developing whether

So their growth coming isn’t there. really

continue several as U.S., are we’ve more some we the Bermuda account the in operation whole are and seeing last in Bermuda said in and We London, both professional and our more we seeing opportunities, casualty quarters. on

GSEs be up little you able the capacity an or mortgage do recall, think I deals attractive to business and there, are writing as with space lot on a We in mortgage flat, opportunities the or adjusted basis are bit we and a new of the may deploy but see the mortgage multi-year that’s risk continue to deals. to that close we’ll done

years effectively have the already in for deals we that IBNR over on premium books. many the put we’ve next coming So,

Elyse Greenspan

the How segment businesses much within today? Reinsurance mortgage

John Doucette

of about business the We give-or-take have $XXX new run rate a shows a million $XXX origination. to million that

Elyse Greenspan

that’s an And number? annual

John Doucette

Yeah.

Elyse Greenspan

any in of kind within neutral development in all there was Okay. And of didn’t terms from movements see the net then the quarter? segments cat. reserve or you the Was just any guys – quarterly

Dom Addesso

develop know, along the the are that reserve as quarter. of bulk that our way part But of reserves studies studies fourth in to quarter-end. metrics to latter the reserve in the you our – at year the other do evaluate we of each we the use Elyse, we

use wait all we those all metrics. – adjustments quite Something based expected a actual that we don’t that’s on are the make But trends, for favorable. trending it’s the versus we call We favorable. reserve – reserves but and the were metrics consequence don’t we

Elyse Greenspan

guys ratio remarks, said Okay, the of the the Don, I we great. kind business, the in back year in think And would you within primary guess when will be insurance that primary then one your last initial overall margin and low as terms of loss modeling the that you in quarters improve insurance question XXs you goal, three business. is about that expense the should progresses. ratio for – underlying

Dom Addesso

give in improvement you said a is. certainly over improvement have We to a It’s over XXs low-to-mid the it year. last be last – a quarter’s what kind target an measurable of number, our call, little is difficult precise would but

Elyse Greenspan

Okay, great. Thank you very much.

Dom Addesso

you. Thank Thank Elyse. you,

Operator

Thank you.

queue. We further the in questions have no

Dom Addesso

me you thank much. All right. let very

me thoughts. Let conclude just a with few

fully casualty to attritional We you’ve we overall to heard changing difficult, up talked rates develops. from allow margin areas The year produce our as total a in the of who and will both returns overall increase ROEs. business, will about to are property the class our sufficient colleagues the us in expect for and quantity and impact be certainly again, We’re being the confident year. improving my mix, great here to as dollar ratios, the an fact already start the certainly which increase we’ve about will

a after the valuable me. Finally, one she who with if those appreciate colleague me second, to XX is plus like giving I’d you in years certainly the our May to she know just give I Farrell, been early Beth close I to on is a retiring call. Everest. tribute support has with resource

her, Thank wish you full her husband her and and miss will so Beth. enjoyable but We a much, retirement.

Beth Farrell

you. Thank

Dom Addesso

for forward you. discussions over all look our the to morning Thank thank ahead. and again, this future your you weeks interest And

Operator

you, concludes ladies This today’s and teleconference. gentlemen. Thank

disconnect. now may You

Everest Re (EG) 26 Apr 182018 Q1 Earnings call transcript