Everest Re Q1 Operating Income Falls 4.5% to $157.9 Million

The Bermuda-based Everest Re Group, Ltd. reported first quarter 2006 after-tax operating income, which excludes realized capital gains and losses, of $157.9 million, or $2.41 per diluted share, a 4.5 percent decrease compared to $165.2 million, or $2.90 per diluted share, in the first quarter of 2005.

First quarter 2006 net income increased to $168.4 million, or $2.57 per diluted share, compared to $167.1 million, or $2.93 per diluted share, in the first quarter of 2005.

The report noted: “On a pre-tax basis, first quarter results for 2006 were impacted by increased catastrophe loss estimates, including reinstatement premiums, of $70.8 million, largely driven by changes in estimates for the 2005 hurricanes, compared to catastrophe losses in the same period of 2005 of $13.2 million. On an after-tax basis, these changes in estimates affected 2006 and 2005 results by $50.6 million and $9.9 million, respectively.”

Everest Re reported gains, however, in premium income with Q1 gross premiums written of $1.06 billion compared to $1.05 billion in 2005. Net premiums written were $1.02 billion, an increase of 1.1 percent from $1.01 billion for the first quarter of 2005.

The Company’s GAAP combined ratio in the first quarter 2006 was 94.5 percent compared to 91.6 percent in 2005. Net investment income for the first quarter was $145.0 million compared to $132.9 million in the first quarter of 2005. Cash flow from operations for the first quarter of 2006 was $159.8 million, a decrease of 50.9 percent from $325.2 million in the first quarter of 2005.

At March 31, 2006, the Company’s shareholders’ equity was $4.27 billion, or $65.72 per outstanding share. The change in book value represents a 3.1 percent increase from shareholders’ equity of $4.14 billion, or $64.04 per outstanding share, at December 31, 2005.

Commenting on the Company’s results, Chairman and CEO Joseph V. Taranto stated: “Although changes in estimates for the 2005 hurricanes substantially reduced first quarter earnings, we still posted a 15.7 percent ROE, demonstrating the strength of our worldwide operation. Our reinsurance business grew 8 percent for the quarter, as we continue to see new quality opportunities, particularly for property reinsurance. Whereas our insurance premiums were down from less California workers comp business and less credit business, we have recently added new programs that should result in quality growth for the second half of the year. Accordingly, we remain positive with regard to our overall prospects for 2006.”

The entire report and further comments may be obtained on the Company’s Website at: www.everestregroup.com.

Topics Profit Loss