Bermuda-based Everest Re Group Ltd. reported fourth quarter 2014 net income available to common shareholders of $340.1 million, or $7.47 per diluted common share, compared to net income of $364.6 million, or $7.54 per diluted common share, for the fourth quarter of 2013. After-tax operating income available to common shareholders, excluding realized capital gains and losses, was $331.5 million, or $7.28 per diluted common share, for the fourth quarter of 2014, compared to $303.4 million, or $6.28 per diluted common share, for the same period in 2013.
For the year ended December 31, 2014, net income available to common shareholders was $1.2 billion, or $25.91 per diluted common share, compared to net income of $1.3 billion, or $25.44 per diluted common share, for 2013. After-tax operating income available to common shareholders, excluding realized capital gains and losses, was $1.1 billion, or $24.71 per diluted common share, for the full year 2013, compared to $1.1 billion or $21.47 per diluted common share, for 2013.
Commenting on the company’s results, President and Chief Executive Officer Dominic J. Addesso said, “Everest has had another stellar year with 10 percent growth in premium, 15 percent growth in operating earnings per share, and 16 percent growth in book value per share, adjusted for dividends. While it is a challenging marketplace, Everest continues to find and create opportunities for profitable growth due to our broadly diversified platform. Post January renewals, we remain confident in our ability to continue to generate strong returns for our shareholders.”
Operating highlights for the fourth quarter and full year of 2014 included the following:
- Gross written premiums for the quarter were $1.4 billion, an increase of 7 percent compared to the fourth quarter of 2013. For the full year, gross written premiums grew 10 percent to $5.7 billion with worldwide reinsurance premiums, including the Mt. Logan Re segment, up 15 percent. Direct insurance premiums were down 4 percent for the year.
- The combined ratio was 80.5 percent for the quarter and 82.8 percent for the year, compared to 81.5 percent and 84.5 percent, respectively, for the same periods in 2013. The quarter included $15.0 million of catastrophe losses for the Brisbane, Australia hail storm that occurred in November, offset by reserve take downs on prior year catastrophe loss events. For the full year, catastrophe losses, net of reinstatement premiums totaled $56.0 million. Excluding catastrophe losses, reinstatement premiums and favorable prior year loss development, the calendar year attritional combined ratio was 82.0 percent compared to 81.0 percent for 2013.
- Net investment income amounted to $134.0 million for the quarter and $530.6 million for the full year 2014. This included limited partnership income of $15.2 million and $40.9 million in each period, respectively.
- Net after-tax realized capital gains totaled $8.7 million for the quarter and $55.5 million for the full year. Unrealized capital gains, net of tax, amounted to $22.1 million for the full year, largely driven by changes in interest rates.
- Cash flow from operations was $387.9 million for the quarter and $1.3 billion for the full year 2014. This compared to $273.3 million and $1.1 billion for the same periods, respectively, in 2013.
- For the year, the after-tax operating income1return on average adjusted shareholders’ equity2 was 16.3 percent and net income return on equity was 17.1 percent.
- During the quarter, the company repurchased 590,791 of its common shares at an average price of $169.38 and a total cost of $100.1 million. For the year, the company repurchased 3.2 million of its common shares for a total cost of $500.0 million. During January, the company repurchased an additional 213,754 shares for a total cost of $36.0 million, which will be reflected in first quarter 2015 reporting. The repurchases were made pursuant to a share repurchase authorization, provided by the company’s board of directors, under which there remains 6.1 million shares available.
- Shareholders’ equity ended the year at $7.5 billion, up 7 percent from the $7.0 billion at December 31, 2013. Book value per share increased 14 percent from $146.57 at year-end 2013 to $166.75 at December 31, 2014.
Source: Everest Re
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