Everest Re (RE) Tops Q4 EPS by 42c, Revenues Beat

Everest Re (NYSE: RE) reported Q4 EPS of ($5.89), $0.42 better than the analyst estimate of ($6.31). Revenue for the quarter came in at $1.85 billion versus the consensus estimate of $1.83 billion.

Operating highlights for the fourth quarter of 2018 included the following:

• Gross written premiums for the quarter were $2.3 billion, an increase of 18% compared to the fourth quarter of 2017. Worldwide reinsurance premiums were up 26% to $1.7 billion with growth across each segment including increased casualty and property pro-rata premium, increased shares on existing business and profitable new growth.
• The combined ratio was 134.1% for the quarter and 108.8% for the year, compared to 70.0% and 103.5% for the same periods in 2017. Excluding catastrophe losses, reinstatement premiums and the favorable prior period loss development, the current attritional combined ratio was 90.4% for the quarter and 87.0% for the year, compared to 83.7% and 85.0% for the same periods in 2017.
• Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $875.0 million in the quarter, primarily related to losses from Hurricane Michael, the California Camp and Woolsey wildfires and an Australia hailstorm event.
• Net investment income amounted to $140.2 million for the quarter and $581.2 million for the full year 2018, up 7% over the full year 2017 results.
• Net after-tax realized losses amounted to $143.9 million for the quarter. For the full year, net after-tax realized capital losses were $109.1 million, while net after-tax unrealized capital losses were $228.2 million.
• Cash flow from operations was $66.4 million for the quarter and $610.1 million for the full year 2018. This compared to $118.5 million and $1.2 billion for the same period, respectively, in 2017.
• Although no shares were repurchased during the quarter, the Company repurchased 342,179 shares at a total cost of $75.3 million for the year 2018. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 1.4 million shares available.
• Shareholders’ equity ended the year at $7.9 billion compared to $8.4 billion at year end 2017. Book value per share was down from $204.95 at December 31, 2017 to $194.43 at December 31, 2018.

Commenting on the Company’s results, President and Chief Executive Officer, Dominic J. Addesso said, “During 2018 there were nearly $90 billion of insured industry losses, the fourth highest on record. Despite these events, Everest had both positive net income and operating income for the year. This result is testament to the diversification of our business across geographies, classes of business, and sources of capital. Everest’s long term returns remain impressive, with 5 and 10 year average returns on equity still in excess of 10%.”

For earnings history and earnings-related data on Everest Re (RE) click here.

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