Everest Re’s Drop in 2ndQ Net Income Due to WorldCom

Bermuda-based Everest Re Group Ltd. reported a decrease in second quarter 2002 net income, affected by the previously disclosed investment losses from exposure to WorldCom, of 6.8 percent to $53.4 million, or $1.02 per diluted share compared to $57.3 million, or $1.22 per diluted share, in the second quarter of 2001.

The company’s after-tax operating income, which excludes realized capital gains and losses, of $69.7 million, or $1.34 per diluted share, a 27.0 percent increase, however, compared to $54.9 million, or $1.17 per diluted share, in the second quarter of 2001.

For the six months ended June 30, 2002, after-tax operating income was $135.7 million, or $2.68 per diluted share, an increase of 25.3 percent compared to $108.3 million, or $2.30 per diluted share, in 2001. Net income in the first six months of 2002 was $114.5 million, or $2.26 per diluted share, an increase of 6.6 percent compared to $107.4 million, or $2.28 per diluted share, in 2001.

Gross premiums written for the second quarter of 2002 were $630.1 million, a 30.1 percent increase compared to $484.3 million in 2001. Net written premiums were $600.7 million, an increase of 43.5 percent from $418.4 million for the second quarter of 2001. The company’s GAAP combined ratio in the second quarter was 97.6 percent compared to 102.7 percent in 2001.

For the six months ended June 30, 2002, gross premiums written were $1.23 billion, a 35.7 percent increase from $903.7 million in the first six months of 2001. Net written premiums grew 44.7 percent to $1.17 billion from $805.8 million in 2001. The GAAP combined ratio for the first six months of 2002 was 98.4 percent compared to 102.8 percent in 2001.

Subsequent to the quarter close, the company repurchased 100,000 common shares at an average price of $52.50. As of June 30, 2002, approximately 2.2 million shares remained authorized under the company share repurchase program.

Everest Re also announced that it intends to replace its existing common equity- only shelf registration statement with an expanded universal shelf registration statement which will give it and its affiliate, Everest Reinsurance Holdings Inc., additional capital and financing flexibility.