Everest Re Posts 38.8% Increase in Q3 Net Income

October 21, 2003

Everest Re Group, Ltd. reported from the Barbados that its third quarter 2003 net income increased 38.8 percent to $100.3 million, or $1.77 per diluted share, compared to $61.3 million, or $1.19 per diluted share, in the third quarter of 2002.

Operating income, which excludes gains and losses on investments, did even better, rising to $126.2 million, or $2.23 per diluted share, a 47.3 percent increase compared to $66.5 million, or $1.29 per diluted share, in the third quarter of 2002.

“For the nine months ended September 30, 2003, after-tax operating income was $337.4 million, or $6.20 per diluted share, an increase of 66.9% compared to $202.2 million, or $3.97 per diluted share, in 2002,” said the company’s announcment. “Net income in the first nine months of 2003 was $304.2 million, or $5.59 per diluted share, an increase of 73.1% compared to $175.7 million, or $3.45 per diluted share, in 2002.”

“Gross premiums written for the third quarter of 2003 were $1.24 billion, a 75.1% increase compared to $708.0 million in 2002. Net premiums written were $1.18 billion, an increase of 79.2% from $660.6 million for the third quarter of 2002,” it continued.

Everest Re said its “GAAP combined ratio in the third quarter fell to 95.0 percent compared to 96.7 percent in 2002, while net investment income for the third quarter was $100.3 million compared to $86.4 million in the third quarter of 2002. Cash flow from operations for the third quarter of 2003 was $492.3 million, an increase of 173.6% from $179.9 million in the third quarter of 2002.

“For the nine months ended September 30, 2003, gross premiums written were $3.31 billion, a 71.1% increase from $1.93 billion in the first nine months of 2002. Net premiums written grew 71.1% to $3.12 billion from $1.83 billion in 2002. The GAAP combined ratio for the first nine months of 2003 was 94.7% compared to 97.8% in 2002. Net investment income for the nine months ended September 30, 2003 was $295.7 million, an increase of 12.5% from $262.8 million in 2002. Cash flow from operations in the first nine months was $1.17 billion, compared to $455.0 million in the first nine months of 2002,” said the announcement.

The good results increased shareholder value by 17 percent to a total $3.03 billion, or $54.47 per outstanding share. The Company also increased its estimate of 2004 operating earnings to $10.00 – $11.00 per diluted share, absent any unusual losses or market developments.

The bulletin also noted an internal sale of subsidiaries and a new California office. “Everest Reinsurance Company has reached agreement, subject to regulatory approval, to sell its United Kingdom branch to another of the Company’s subsidiaries, Everest Reinsurance (Bermuda) Ltd. The Company further announced that another of its subsidiaries, Everest National Insurance Company, has opened a regional office in California to better serve its western United States businesses.”

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