Form 8-K EVEREST RE GROUP LTD For: Oct 26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 26, 2015

Everest Re Group, Ltd.

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(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code 441-295-0006

 

Not Applicable

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(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

On October 26, 2015, the registrant issued a news release announcing its third quarter 2015 results. A copy of that news release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The news release furnished herewith contains information regarding the registrant's operating income (loss).  Operating income (loss) differs from net income (loss) attributable to Everest Re Group, the most directly comparable generally accepted accounting principle financial measure, only by the exclusion of realized capital gains (losses) on investments.  Management believes that presentation of operating income (loss) provides useful information to investors because it more accurately measures and predicts the registrant's results of operations by removing the variability arising from the management of the registrant's investment portfolio.  In addition, management, analysts and investors use operating income (loss) to evaluate the financial performance of the registrant and the insurance industry in general.

In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 2.02 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  October 26, 2015

 

 

EVEREST RE GROUP, LTD.

Seon Place, 141 Front Street, 4^th Floor, Hamilton HM DX, Bermuda

Contact:  Elizabeth B. Farrell

Vice President, Investor Relations

Everest Global Services, Inc.

908.604.3169

For Immediate Release

Everest Re Group Reports Third Quarter Results;

14% Annualized Operating Return on Equity

HAMILTON, Bermuda – October 26, 2015 -- Everest Re Group, Ltd. (NYSE: RE) today reported third quarter 2015 after-tax operating income¹available to common shareholders of $200.2 million, or $4.53 per diluted common share, compared to after-tax operating income¹ of $280.5 million, or $6.12 per diluted common share, for the third quarter of 2014. Net income available to common shareholders was $88.6 million, or $2.00 per diluted common share, for the third quarter of 2015, compared to net income of $274.9 million, or $6.00 per diluted common share, for the same period last year.

For the nine months ended September 30, 2015, after-tax operating income¹available to common shareholders was $754.6 million, or $16.92 per diluted common share, compared to $812.2 million or $17.46 per diluted common share, for the first nine months of 2014. Net income available to common shareholders through nine months of 2015 was $620.6 million, or $13.92 per diluted common share, compared to $859.0 million, or $18.47 per diluted common share, for the same period in 2014.

Commenting on the Company's results, President and Chief Executive Officer, Dominic J. Addesso said, "We are pleased with the results that Everest has achieved thus far this year considering the challenging market dynamics – both on the underwriting and investment fronts.  After-tax operating income totaled $755 million through the first nine months of the year, despite a number of industry events, leading to a 14% annualized operating return on equity and a 4% growth in book value per share. Premium, on a constant dollar basis, was up 4% for the year, as we continue to seek out opportunities for profitable growth."

 

Operating highlights for the third quarter of 2015 included the following:

·

Gross written premiums were $1.7 billion, an increase of 3% compared to the third quarter of 2014. Eliminating the unfavorable effects of foreign currency fluctuations, total premiums were actually up 6%. Worldwide reinsurance premiums, including the Mt. Logan Re segment, were down 2%, on a constant dollar basis, while insurance premiums were up 34%, quarter over quarter.

·

The combined ratio for the quarter was 89.0% compared to 85.7% in the third quarter of 2014. During the quarter, the Company had incurred losses of $40 million for the Chile earthquake and $60 million for the explosion in the port of Tianjin, China. Excluding these events and related reinstatement premiums, the current quarter's normalized attritional combined ratio was 82.1% compared to 83.7% for the same period last year.

·	Net investment income for the quarter was $115.5 million, down from last year largely due to lower limited partnership income.

·	Net after-tax realized and unrealized capital losses amounted to $111.7 million and $66.5 million, respectively, for the quarter.

·	Cash flow from operations was $304.5 million compared to $335.5 million for the same period in 2014.

·	Through nine months, the annualized after-tax operating income1 return on average adjusted shareholders' equity2 was 13.8% compared to 15.6% in 2014.

·

During the quarter, the Company repurchased 1.1 million of its common shares at an average price of $175.81 and a total cost of $200.0 million. For the year, the Company repurchased 1.8 million of its common shares for a total cost of $325.0 million. The repurchases were made pursuant to a share repurchase authorization, provided by the Company's Board of Directors, under which there remains 4.5 million shares available.

·	Shareholders' equity ended the quarter at $7.5 billion. Book value per share increased 4% from $166.75 at December 31, 2014 to $173.76 at September 30, 2015.

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws.  We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company.  These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest Reinsurance Company (Ireland), Limited provides reinsurance to non-life insurers in Europe. Mt. Logan Re, a segregated cell company, capitalized by the Company and third party investors, is a specialty reinsurer of catastrophe risks. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the U.S. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the U.S. Everest Insurance Company of Canada provides property and casualty insurance to policyholders in Canada. Additional information on Everest Re Group companies can be found at the Group's web site at www.everestregroup.com.

A conference call discussing the third quarter results will be held at 10:30 a.m. Eastern Time on October 27, 2015. The call will be available on the Internet through the Company's web site or at www.streetevents.com.

Recipients are encouraged to visit the Company's web site to view supplemental financial information on the Company's results. The supplemental information is located at www.everestregroup.com in the "Financial Reports" section of the "Investor Center". The supplemental financial information may also be obtained by contacting the Company directly.

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¹The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance.  After-tax operating income (loss) consists of net income (loss) excluding after-tax net realized capital gains (losses) as the following reconciliation displays:

Although net realized capital gains (losses) are an integral part of the Company's insurance operations, the determination of net realized capital gains (losses) is independent of the insurance underwriting process.  The Company believes that the level of net realized capital gains (losses) for any particular period is not indicative of the performance of the underlying business in that particular period.  Providing only a GAAP presentation of net income (loss) makes it more difficult for users of the financial information to evaluate the Company's success or failure in its basic business, and may lead to incorrect or misleading assumptions and

conclusions.  The Company understands that the equity analysts who follow the Company focus on after-tax operating income (loss) in their analyses for the reasons discussed above.  The Company provides after-tax operating income (loss) to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company's performance.

²Adjusted shareholders' equity excludes net after-tax unrealized (appreciation) depreciation of investments

--Financial Details Follow--