The Bermuda-based Everest Re Group, Ltd. reported fourth quarter 2012 net income of $58.8 million, or $1.13 per diluted common share, compared to net income of $41.0 million, or $0.76 per diluted common share, for the fourth quarter of 2011.
After-tax operating income, excluding realized capital gains and losses, was $41.7 million, or $0.80 per diluted common share, for the fourth quarter of 2012, compared to an after-tax operating loss of $50.7 million, or $0.94 per common share, for the same period in 2011.
For the year ended December 31, 2012, net income was $829.0 million, or $15.79 per diluted common share, compared to a net loss of $80.5 million, or $1.49 per common share, for 2011.
After-tax operating income, excluding realized capital gains and losses, was $715.2 million, or 13.62 per diluted common share, for the full year 2012, compared to an after-tax operating loss of $93.6 million or $1.73 per common share, for 2011.
Chairman and CEO Joseph V. Taranto commented: “Despite losses from Sandy and the industry suffering record crop losses, Everest had $1.0 billion in comprehensive income for 2012 and increased shareholder value by 18 percent. These results demonstrate the strength of our organization. We are pleased with how our portfolio is positioned post January renewals and expect another strong year in 2013.”
Operating highlights for the fourth quarter and full year of 2012 included the following:
• Gross written premiums were $1.15 billion, an increase of 4 percent compared to the fourth quarter of 2011. Worldwide reinsurance premiums were generally flat while direct insurance premiums were up 21 percent in the period. For the full year, gross written premiums totaled $4.3 billion and, after adjusting for the impact of foreign exchange and reinstatement premiums, were up 2 percent compared to last year.
• The combined ratio was 108.4 percent for the quarter and 93.8 percent for the year, compared to 130.3 percent and 118.5 percent, respectively, for the same periods in 2011. As previously announced, the fourth quarter included losses for Superstorm Sandy, which, on a net pre-tax basis, after reinstatement premiums, amounted to $287 million. For the full year, net pre-tax catastrophe losses totaled $361 million. Excluding catastrophe losses, reinstatement premiums and nominal favorable prior year loss development, the calendar year attritional combined ratio improved 3 points to 85.0 percent for 2012.
• Net investment income amounted to $146 million for the quarter and $600 million for the full year 2012. This included limited partnership income of $17 million and $65 million in each period, respectively.
• Net after-tax realized capital gains totaled $17 million for the quarter. For the full year, net after-tax realized and unrealized capital gains totaled $114 million and $154 million, respectively.
• Cash flow from operations was $184 million for the quarter and $664 million for the full year 2012. This compared to $113 million and $660 million for the same periods, respectively, in 2011.
• For the year, the after-tax operating income1 return on average adjusted shareholders’ equity was 12 percent and net income return on equity was 14 percent.
• During the quarter, the Company repurchased 370,939 of its common shares at an average price of $107.72 and a total cost of $40 million. For the year, the Company repurchased 3.0 million of its common shares for a total cost of $290 million. During January, the Company repurchased an additional 343,981 shares for a total cost of $38 million, which will be reflected in first quarter 2013 reporting. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 4.0 million shares available.
• Shareholders’ equity ended the year at $6.7 billion, up 11 percent from the $6.1 billion at December 31, 2011. Book value per share increased 16 percent from $112.99 at year-end 2011 to $130.96 at December 31, 2012.
Source: Everest Re