8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 18, 2004

Everest Re Group, Ltd.

(Exact name of registrant as specified in its charter)

Bermuda	1-15731	Not Applicable
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
c/o ABG Financial & Management Services, Inc.
Parker House, Wildey Road
St. Michael, Barbados		Not Applicable
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code 246-228-7398

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02      DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

                       On October 18, 2004, the registrant issued a news release announcing its third quarter 2004 results. A copy of that news release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

                       The news release furnished herewith contains information regarding the registrant’s operating income. Operating income differs from net income, the most directly comparable generally accepted accounting principle financial measure, only by the exclusion of realized capital gains and losses on investments. Management believes that presentation of operating income provides useful information to investors because it more accurately measures and predicts the registrant’s results of operations by removing the variability arising from the management of the registrant’s investment portfolio. In addition, management, analysts and investors use operating income to evaluate the financial performance of the registrant and the insurance industry in general.

                       In accordance with general instruction B.2 of Form 8-K, the information in this report, including exhibits, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section.

Item 9.01      FINANCIAL STATEMENTS AND EXHIBITS

(c)	Exhibits
	Exhibit No.	Description
	99.1	News Release of the registrant,
		dated October 18, 2004

SIGNATURES

                       Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EVEREST RE GROUP, LTD.

By: /s/ STEPHEN L. LIMAURO       

Stephen L. Limauro

   Executive Vice President and

  Chief Financial Officer

Dated: October 18, 2004

EXHIBIT INDEX

Exhibit
Number	Description of Document	Page No.
99.1	News Release of the registrant, dated	5
	October 18, 2004

EX-99.1

NEWS RELEASE

EVEREST RE GROUP, LTD.
c/o ABG Financial &Management Services, Inc.
Parker House, Wildey Business Park, Wildey Road, St. Michael, Barbados

Contact:
Elizabeth B. Farrell
Vice President, Investor Relations
Everest Global Services, Inc.
908.604.3169

For Immediate Release

Everest Re Group Announces Third Quarter Earnings

        ST. MICHAEL, Barbados – October 18, 2004 — Everest Re Group, Ltd. (NYSE: RE) reported third quarter 2004 after-tax operating income¹, which excludes realized capital gains and losses, of $4.8 million, or $0.08 per diluted share, a 96.2% decrease compared to $126.2 million, or $2.23 per diluted share, in the third quarter of 2003. Third quarter 2004 net income decreased 88.6% to $11.5 million, or $0.20 per diluted share, compared to $100.3 million, or $1.77 per diluted share, in the third quarter of 2003. Operating income differs from net income only by the exclusion of realized gains and losses on investments.

        For the nine months ended September 30, 2004, after-tax operating income was $330.7 million, or $5.82 per diluted share, a decrease of 2.0% compared to $337.4 million, or $6.20 per diluted share, in 2003. Net income in the first nine months of 2004 was $401.5 million, or $7.07 per diluted share, an increase of 32.0% compared to $304.2 million, or $5.59 per diluted share, in 2003.

        Gross premiums written for the third quarter of 2004 were $1.22 billion, a 1.8% decrease compared to $1.24 billion in 2003. Net premiums written were $1.18 billion, a decrease of 0.3% from $1.18 billion for the third quarter of 2003. The Company’s GAAP combined ratio in the third quarter was 108.5% compared to 95.0% in 2003. Net investment income for the third quarter was $123.8 million compared to $100.4 million in the third quarter of 2003. Cash flow from operations for the third quarter of 2004 was $498.1 million, an increase of 1.2% from $492.3 million in the third quarter of 2003.

        For the nine months ended September 30, 2004, gross premiums written were $3.53 billion, a 6.6% increase from $3.31 billion in the first nine months of 2003. Net written premiums grew 9.1% to $3.41 billion from $3.12 billion in 2003. The GAAP combined ratio for the first nine months of 2004 was 97.3% compared to 94.7% in 2003. Net investment income for the nine months ended September 30, 2004 was $361.5 million, an increase of 22.1% from $296.1 million in 2003. Cash flow from operations in the first nine months was $1.29 billion, compared to $1.17 billion in the first nine months of 2003.

        At September 30, 2004, the Company’s shareholders’ equity was $3.53 billion, or $62.98 per outstanding share. The change in book value represents a 11.7% increase from shareholders’ equity of $3.16 billion, or $56.84 per outstanding share, at December 31, 2003.

        Commenting on the Company’s results, Chairman and Chief Executive Officer, Joseph V. Taranto said, “Despite four hurricanes and two typhoons, our equity increased 5% in the quarter to over $3.5 billion, demonstrating the underlying strength of our company”.

        This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

        Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the U.S. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the U.S. Additional information on Everest Re Group companies can be found at the Group’s web site at www.everestre.com.

        A conference call discussing the second quarter results will be held at 8:30 a.m. Eastern Time on October 19, 2004. The call will be available on the Internet through the Company’s web site or at www.streetevents.com.

        Anyone receiving this release by wire or through the Internet may visit the Company’s web site to view supplemental financial information on the Company’s results. The supplemental information is located at www.everestre.com in the “Financial Reports” section of the “Investor Center”. The supplemental financial information may also be obtained by contacting the Company directly.

1 The company generally uses after-tax operating income, a non-GAAP financial measure, to evaluate its performance. After-tax operating income consists of net income excluding after-tax realized gains (losses) as the following reconciliation displays:

	Three Months Ended								Nine Months Ended
	September 30,									September 30,
(Dollars in thousands,
except per share amounts)		2004			2003				2004		2003
		amt	pds	amt			pds		amt	pds	amt		pds
		(unaudited)							(unaudited)
Net income/per diluted
share		$11,463	$0.20		$100,326		$1.77		$401,531	$7.07	$304,248		$5.59
After-tax realized gains
(losses)/per diluted share		6,697	0.12		(25,913	)	(0.46	)	70,839	1.25	(33,174	)	(0.61	)
After-tax operating
income/per diluted share		$4,766	$0.08		$126,239		$2.23		$330,692	$5.82	$337,422		$6.20

Although realized capital gains (losses) are an integral part of the Company’s insurance operations, the determination of realized capital gains (losses) is independent of the insurance underwriting process. The Company believes that the level of realized gains (losses) for any particular period is not indicative of the performance of the underlying business in that particular period. Providing only a GAAP presentation of net income makes it more difficult for users of the financial information to evaluate the Company’s success or failure in its basic business, and may lead to incorrect or misleading assumptions and conclusions. The Company understands that the equity analysts who follow the Company focus on after-tax operating income in their analyses for the reasons discussed above. The Company provides after-tax operating income to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company’s performance.

      — Financial Details Follow —

EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
	Three Months Ended						Nine Months Ended
		September 30,					September 30,
(Dollars in thousands, except per share amounts)		2004			2003			2004			2003
		(unaudited)						(unaudited)
REVENUES:
Premiums earned	$	1,139,862		$	1,046,353		$	3,199,185		$	2,643,211
Net investment income		123,784			100,411			361,526			296,103
Net realized capital gains (losses)		10,125			(30,055	)		91,898			(41,543	)
Net derivative (expense) income		(6,595	)		3,784			(5,965	)		2,389
Other expense		(3,582	)		(424	)		(171	)		(6,024	)
Total revenues		1,263,594			1,120,069			3,646,473			2,894,136
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		962,590			738,254			2,349,631			1,836,767
Commission, brokerage, taxes and fees		248,068			232,548			685,733			599,762
Other underwriting expenses		25,729			22,933			77,696			66,717
Interest expense on senior notes		9,737			9,733			29,209			29,197
Interest expense on junior subordinated debt		9,363			4,249			23,030			12,747
Interest expense on credit facility		339			327			997			1,035
Total claims and expenses		1,255,826			1,008,044			3,166,296			2,546,225
INCOME BEFORE TAXES		7,768			112,025			480,177			347,911
Income tax (benefit) expense		(3,695	)		11,699			78,646			43,663
NET INCOME	$	11,463		$	100,326		$	401,531		$	304,248
Other comprehensive income (loss), net of tax		162,138			(126,705	)		(37,466	)		45,544
COMPREHENSIVE INCOME (LOSS)	$	173,601		$	(26,379	)	$	364,065		$	349,792
PER SHARE DATA:
Average shares outstanding (000's)		55,991			55,499			55,898			53,514
Net income per common share - basic	$	0.20		$	1.81		$	7.18		$	5.69
Average diluted shares outstanding (000's)		56,712			56,562			56,798			54,408
Net income per common share - diluted	$	0.20		$	1.77		$	7.07		$	5.59

EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
	September 30,		December 31,
(Dollars in thousands, except par value per share)	2004		2003
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value
(amortized cost: 2004, $9,427,646; 2003, $8,357,723)	$    9,733,298		$    8,726,886
Equity securities, at market value (cost: 2004, $437,372; 2003, $146,407)	455,306		154,381
Short-term investments	526,173		151,853
Other invested assets (cost: 2004, $132,956; 2003, $102,742)	133,659		103,359
Cash	178,966		184,859
Total investments and cash	11,027,402		9,321,338
Accrued investment income	129,743		113,989
Premiums receivable	1,250,007		1,047,856
Reinsurance receivables	1,246,842		1,284,139
Funds held by reinsureds	191,741		157,364
Deferred acquisition costs	354,018		333,214
Prepaid reinsurance premiums	75,806		98,384
Deferred tax asset	213,689		145,271
Other assets	215,126		187,981
TOTAL ASSETS	$   14,704,374		$   12,689,536
LIABILITIES:
Reserve for losses and adjustment expenses	$     7,517,472		$     6,361,245
Future policy benefit reserve	155,119		205,275
Unearned premium reserve	1,680,912		1,499,640
Funds held under reinsurance treaties	321,755		385,768
Losses in the course of payment	37,541		11,133
Contingent commissions	3,452		2,135
Other net payable to reinsurers	36,139		46,037
Current federal income taxes	65,030		41,308
8.5% Senior notes due 3/15/2005	249,949		249,874
8.75% Senior notes due 3/15/2010	199,317		199,245
Junior subordinated debt securities payable	546,393		216,496
Revolving credit agreement borrowings	70,000		70,000
Accrued interest on debt and borrowings	4,028		13,695
Other liabilities	283,501		222,785
Total liabilities	11,170,608		9,524,636
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50 million shares authorized;
no shares issued and outstanding	--		--
Common shares, par value: $0.01; 200 million shares authorized;
(2004) 56.1 million and (2003) 55.7 million issued and outstanding	566		561
Additional paid-in capital	978,612		954,658
Unearned compensation	(7,610	)	(5,257	)
Accumulated other comprehensive income, net of deferred income taxes of
$99.6 million at 2004 and $117.5 million at 2003	242,611		280,077
Retained earnings	2,342,537		1,957,811
Treasury shares, at cost; 0.5 million shares (2004 and 2003)
	(22,950	)	(22,950	)
Total shareholders' equity	3,533,766		3,164,900
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$    14,704,374		$    12,689,536

EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended					Nine Months Ended
		September 30,				September 30,
(Dollars in thousands)		2004		2003			2004		2003
	(unaudited)						(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:		$     498,065		$     492,282			$     1,290,580		$     1,173,147
CASH FLOWS FROM INVESTING ACTIVITIES :
Proceeds from investments sold		146,308		354,750			1,278,400		973,973
Proceeds from investments maturing or called		151,995		266,219			511,876		668,164
Cost of investments acquired		(1,003,089	)	(914,343	)		(3,022,004	)	(2,969,313	)
Net sales (purchases) of short-term investments		306,441		(182,587	)		(373,806	)	(224,051	)
Net cash used in investing activities		(398,345	)	(475,961	)		(1,605,534	)	(1,551,227	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period		703		3,028			20,733		323,104
Dividends paid to shareholders		(5,608	)	(4,996	)		(16,805	)	(14,567	)
Net proceeds from issuance of junior subordinated notes		--		--			319,997		--
Net cash (used in) provided by financing activities		(4,905	)	(1,968	)		323,925		308,537
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(20,436	)	(7,625	)		(14,864	)	2,350
Net increase (decrease) in cash		74,379		6,728			(5,893	)	(67,193	)
Cash, beginning of period		104,587		134,909			184,859		208,830
Cash, end of period		$     178,966		$     141,637			$     178,966		$     141,637