Fitch Affirms Everest Re ‘A-‘ Debt Ratings, Assigns ‘AA-‘ IFS Ratings

September 24, 2003

Fitch Ratings announced that it has affirmed the ‘A-‘ long-term issuer and senior debt ratings of Everest Reinsurance Holdings, Ltd., a subsidiary of the Bermuda-based Everest Re Group, and its trust preferred rating of Everest Re Holdings as well at ‘BBB+.’

Fitch also announced that it has assigned an insurer financial strength rating of ‘AA-‘ to Everest Re’s insurance operations and listed the companies affected. The announcement stated, that “the Rating Outlook on all ratings is Stable.”

The rating agency said its ratings were based “on Everest Re’s consistent performance and good market position since its spin-off from Prudential Insurance Company in 1995. The company has demonstrated sound underwriting results relative to peers as reflected in the company’s GAAP combined ratio of 94.5% for the six months ending June 30, 2003. Additionally, Everest Group maintains good capitalization and balance sheet quality. Hardening market conditions have led to a sound improvement in results during 2002 and into 2003.”

The announcement noted that “Everest Holdings is a wholly owned subsidiary of Everest Re Group, Ltd. (Everest Group), a Bermuda based reinsurance holding company. The company provides a wide range of property and casualty reinsurance coverage on a treaty and facultative basis in the U.S. and certain international markets. The company also has primary insurance operations that are concentrated in workers’ compensation insurance in California. Gross written premium volume in 2002 was split 71% reinsurance and 29% primary insurance due to strong growth in the CA workers compensation business segment.”

Fitch indicated that the group had “total assets of $11.4 billion and total shareholder equity of $3.1 billion, as of June 30, 2003. The company had net written premiums of $1.9 billion for the six months ending June 30, 2003, reflecting a 66% increase over 2002 six month results. This growth is attributable to rate increases in a hardening market environment as well as unit growth. Everest Group’s net income for the first six months of 2003 was $203.9 million, up 78% from six months 2002 results.

“Total capital for Everest Group was $3.8 billion as of June 30, 2003. The corporation’s debt to adjusted capital represented 18.4% of total capital, as of second quarter-end 2003, giving equity credit for a portion of this trust preferred securities issuance and adjusting for FASB115. Interest coverage for the six months ending 6/30/2003, was a sound 13.3 times.”

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