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)

February 10, 2010

Everest Re Group, Ltd.

(Exact name of registrant as specified in its charter)

Bermuda	1-15731	98-0365432
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
Wessex House – 2nd Floor 45 Reid Street PO Box HM 845 Hamilton HM DX, Bermuda		Not Applicable
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 441-295-0006

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 February 10, 2010, the registrant issued a news release announcing its fourth quarter and full year 2009 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 and gains on debt repurchase.  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 February 10, 2010

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/ DOMINIC J. ADDESSO
	Dominic J. Addesso
	Executive Vice President and
	Chief Financial Officer

Dated:  February 10, 2010

EXHIBIT INDEX

Exhibit Number	Description of Document	Page No.
99.1	News Release of the registrant, dated February 10, 2010	5

EX-99.1

        NEWS RELEASE

EVEREST RE GROUP, LTD.

Wessex House, 45 Reid Street, 2nd Floor, Hamilton HM DX, Bermuda

Contact:  Elizabeth B. Farrell

Vice President, Investor Relations

Everest Global Services, Inc.

908.604.3169

For Immediate Release

Everest Re Group Reports Fourth Quarter and Full Year 2009 Earnings

HAMILTON, Bermuda – February 10, 2010 -- Everest Re Group, Ltd. (NYSE: RE) reported fourth quarter 2009 net income of $197.2 million, or $3.28 per diluted common share, compared to a net loss of $16.6 million, or $0.27 per common share, for the fourth quarter of 2008. After-tax operating income1, excluding realized capital gains and losses, was $192.0 million, or $3.19 per diluted common share, for the fourth quarter 2009, compared to after-tax operating income1 of $179.5 million, or $2.92 per common share, for the same period last year, a 9% increase in after-tax operating earnings1 per share.

For the year ended December 31, 2009, net income was $807.0 million, or $13.22 per diluted common share, compared to a net loss of $18.8 million or $0.30 per common share, for 2008. After-tax operating income1, excluding realized capital gains and losses and the gain on the first quarter’s debt repurchase, was $763.7 million for the full year 2009, or $12.51 per diluted common share, compared to $562.7 million, or $9.10 per common share, for 2008. This represents an increase of 37% in after-tax operating earnings1 per share, period over period.

Commenting on the Company’s results, Chairman and Chief Executive Officer, Joseph V. Taranto said, “We are pleased to have grown premium 12%, achieved a 15% return on equity and increased book value per share by 27% in 2009.  Our performance demonstrates the strength of the Everest franchise.”

Operating highlights for the fourth quarter and full year of 2009 included the following:

·   Gross written premiums were $1.0 billion for the quarter, an increase of 15% compared to the same period in 2008. Worldwide reinsurance premiums increased 16% while insurance premiums were up 10%. This is consistent with the trend

1

seen throughout the year, with international business driving much of this growth.  For the year, gross written premiums totaled $4.1 billion, an increase of 12% compared to last year, but adjusting for the effect of foreign exchange, grew by approximately 14%.

·   The loss and combined ratios were 63.1% and 91.7%, respectively, for the quarter compared to 52.3% and 83.5%, respectively, in the fourth quarter of 2008. Excluding prior year development and catastrophe losses, the current quarter attritional loss ratio was 54.0%, down slightly from the 54.7% reported for last year’s fourth quarter. For the full year, the attritional loss ratio increased to 56.0% from 55.5% in 2008. The combined ratio for the full year 2009 was 89.6% compared to 95.6% for 2008.

·   Net investment income was $146.4 million, up significantly from the fourth quarter of 2008, which had been impacted by large reported losses on limited partnerships. For the fourth quarter of 2009, results for the limited partnerships were positive. Investment income totaled $547.8 million for the full year 2009, a 3% decline compared to 2008 as yields declined, particularly for short-term investments.

·   After-tax net realized capital gains totaled $5.3 million in the fourth quarter of 2009 compared to after-tax net realized capital losses of $196.1 million in the same period last year. The 2008 loss was primarily the result of realized losses from the equity portfolio during the period.

·   Cumulative net after-tax unrealized capital gains declined by $45.8 million during the quarter, driven by an increase in short duration taxable and municipal bond interest rates.

·   Cash flow from operations was $186.1 million in 2009 compared to cash flows of $55.3 million in the same quarter last year. Lower catastrophe loss payments and reduced settlement activity in the quarter for asbestos claims contributed to this favorable variance. For the year, cash flow from operations totaled $784.7 million.

·   After-tax operating income1 return on average adjusted shareholders’ equity2 was 14.0% in 2009 compared to 10.5% in 2008.

·   Shareholders’ equity ended the year at $6.1 billion, up 23% from year-end 2008. Accordingly, book value per share increased 27% to $102.87 of December 31, 2009 from $80.77 at year-end 2008.

·   The Company repurchased 1.2 million of its common shares during the quarter and 2.4 million of its common shares for the year. In 2009, the total cost of the repurchased shares under this program was $190.6 million, representing an average purchase price of $80.65 per share. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 3.5 million shares available.

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

2

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 Reinsurance Company (Ireland), Limited provides reinsurance to non-life insurers in Europe. 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 fourth quarter results will be held at 1:00 p.m. Eastern Time on February 11, 2010. The call will be available on the internet through the Company’s web site or at www.streetevents.com.

Recipients are encouraged to 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.

___________________________

1The 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 net realized capital gains (losses) as the following reconciliation displays:

	Three Months Ended										Twelve Months Ended
	December 31,										December 31,
(Dollars in thousands, except per share amounts)	2009				2008						2009						2008
			(unaudited)											(unaudited)
			Per Diluted					Per						Per Diluted						Per
			Common					Common						Common						Common
	Amount		Share		Amount			Share			Amount			Share			Amount			Share
Net income (loss)	$	197,227	$	3.28	$	(16,591	)	$	(0.27	)	$	806,989		$	13.22		$	(18,758	)	$	(0.30	)
After-tax net realized capital gains/(losses)		5,272		0.09		(196,084	)		(3.19	)		(7,594	)		(0.12	)		(581,490	)		(9.40	)
After-tax gain on tender of debt		-		-		-			-			50,876			0.83			-			-
After-tax operating income	$	191,955	$	3.19	$	179,493		$	2.92		$	763,707		$	12.51		$	562,732		$	9.10

3

Although net realized capital gains (losses) are an integral part of the Company’s insurance operations, the determination of net realized capital gains (losses) is independent of the insurance underwriting process.  The Company believes that the level of net realized capital 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.

2Adjusted shareholders’ equity excludes net after-tax unrealized (appreciation) depreciation of investments.

--Financial Details Follow--

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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(Dollars in thousands, except per share amounts)	2009			2008			2009			2008
	(unaudited)						(unaudited)
REVENUES:
Premiums earned	$	1,029,520		$	908,374		$	3,894,098		$	3,694,301
Net investment income		146,443			75,360			547,793			565,887
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities		-			(16,535	)		(13,210	)		(176,470	)
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income		-			-			-			-
Other net realized capital gains (losses)		8,300			(217,981	)		10,898			(519,360	)
Total net realized capital gains (losses)		8,300			(234,516	)		(2,312	)		(695,830	)
Realized gain on debt repurchase		-			-			78,271			-
Net derivative gain (loss)		3,674			(34,128	)		3,204			(20,900	)
Other (expense) income		(6,481	)		7,691			(22,476	)		(15,879	)
Total revenues		1,181,456			722,781			4,498,578			3,527,579
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		650,121			475,212			2,374,058			2,438,972
Commission, brokerage, taxes and fees		243,824			240,789			928,333			930,694
Other underwriting expenses		50,376			42,042			184,785			162,349
Interest, fees and bond issue cost amortization expense		17,447			19,795			72,081			79,171
Total claims and expenses		961,768			777,838			3,559,257			3,611,186
INCOME (LOSS) BEFORE TAXES		219,688			(55,057	)		939,321			(83,607	)
Income tax expense (benefit)		22,461			(38,466	)		132,332			(64,849	)
NET INCOME (LOSS)	$	197,227		$	(16,591	)	$	806,989		$	(18,758	)
Other comprehensive (loss) income, net of tax		(60,526	)		(33,292	)		621,201			(455,006	)
COMPREHENSIVE INCOME (LOSS)	$	136,701		$	(49,883	)	$	1,428,190		$	(473,764	)
EARNINGS PER COMMON SHARE:
Basic	$	3.29		$	(0.27	)	$	13.26		$	(0.30	)
Diluted	$	3.28		$	(0.27	)	$	13.22		$	(0.30	)
Dividends declared	$	0.48		$	0.48		$	1.92		$	1.92

EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
	December 31,
(Dollars in thousands, except par value per share)	2009			2008
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value	$	13,005,949		$	10,759,612
(amortized cost: 2009, $12,614,742; 2008, $10,932,076)
Fixed maturities - available for sale, at fair value		50,528			43,090
Equity securities - available for sale, at market value (cost: 2009, $13,970; 2008, $14,915)		16,301			16,900
Equity securities - available for sale, at fair value		380,025			119,829
Short-term investments		673,131			1,889,799
Other invested assets (cost: 2009, $546,158; 2008, $687,265)		545,284			679,356
Cash		247,598			205,694
Total investments and cash		14,918,816			13,714,280
Accrued investment income		158,886			149,215
Premiums receivable		978,847			908,110
Reinsurance receivables		636,375			657,169
Funds held by reinsureds		379,864			331,817
Deferred acquisition costs		362,346			354,992
Prepaid reinsurance premiums		108,029			79,379
Deferred tax asset		174,170			442,367
Federal income taxes recoverable		144,903			32,295
Other assets		139,076			176,966
TOTAL ASSETS	$	18,001,312		$	16,846,590
LIABILITIES:
Reserve for losses and loss adjustment expenses	$	8,937,858		$	8,840,660
Future policy benefit reserve		64,536			66,172
Unearned premium reserve		1,415,402			1,335,511
Funds held under reinsurance treaties		91,893			83,431
Losses in the course of payment		39,766			45,654
Commission reserves		55,579			52,460
Other net payable to reinsurers		53,014			51,138
8.75% Senior notes due 3/15/2010		199,970			199,821
5.4% Senior notes due 10/15/2014		249,769			249,728
6.6% Long term notes due 5/1/2067		238,348			399,643
Junior subordinated debt securities payable		329,897			329,897
Accrued interest on debt and borrowings		9,885			11,217
Equity index put option liability		57,349			60,552
Other liabilities		156,324			160,351
Total liabilities		11,899,590			11,886,235
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; (2009) 65.8 million and
(2008) 65.6 million issued		658			656
Additional paid-in capital		1,845,181			1,824,552
Accumulated other comprehensive income (loss), net of deferred income tax expense
of $101.0 million at 2009 and tax benefit of $16.5 million at 2008		272,038			(291,851	)
Treasury shares, at cost; 6.5 million shares (2009) and 4.2 million shares (2008)		(582,926	)		(392,329	)
Retained earnings		4,566,771			3,819,327
Total shareholders' equity		6,101,722			4,960,355
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	18,001,312		$	16,846,590

EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(Dollars in thousands)	2009			2008			2009			2008
	(unaudited)						(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	197,227		$	(16,591	)	$	806,989		$	(18,758	)
Adjustments to reconcile net income to net cash provided by operating activities:
(Increase) decrease in premiums receivable		(4,597	)		12,924			(52,966	)		36,119
(Increase) decrease in funds held by reinsureds, net		(1,944	)		6,674			(25,271	)		(26,826	)
(Increase) decrease in reinsurance receivables		(23,761	)		(69,364	)		54,674			(82,241	)
Decrease (increase) in deferred tax asset		87,082			(79,233	)		147,071			(110,848	)
Increase (decrease) in reserve for losses and loss adjustment expenses		86,367			(137,282	)		(66,177	)		220,324
Decrease in future policy benefit reserve		(1,616	)		(720	)		(1,636	)		(12,244	)
(Decrease) increase in unearned premiums		(49,141	)		(62,277	)		64,892			(199,673	)
Change in equity adjustments in limited partnerships		(9,389	)		95,359			20,575			100,812
Change in other assets and liabilities, net		(108,346	)		62,587			(133,165	)		28,760
Non-cash compensation expense		3,057			2,794			13,347			16,305
Amortization of bond premium		19,379			5,875			32,172			15,256
Amortization of underwriting discount on senior notes		50			46			192			179
Realized gain on debt repurchase		-			-			(78,271	)		-
Net realized capital (gains) losses		(8,300	)		234,516			2,312			695,830
Net cash provided by operating activities		186,068			55,308			784,738			662,995
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		278,550			267,651			1,203,548			968,789
Proceeds from fixed maturities matured/called - available for sale, at fair value		9,788			1,900			15,358			1,900
Proceeds from fixed maturities sold - available for sale, at market value		71,652			54,079			311,273			279,526
Proceeds from fixed maturities sold - available for sale, at fair value		2,765			-			14,777			-
Proceeds from equity securities sold - available for sale, at market value		16			-			24,159			-
Proceeds from equity securities sold - available for sale, at fair value		19,948			765,547			43,496			1,439,844
Distributions from other invested assets		132,361			55,083			182,952			121,009
Cost of fixed maturities acquired - available for sale, at market value		(847,208	)		(255,995	)		(3,051,012	)		(2,691,857	)
Cost of fixed maturities acquired - available for sale, at fair value		(8,454	)		(31,970	)		(27,555	)		(43,414	)
Cost of equity securities acquired - available for sale, at market value		-			(582	)		-			(1,038	)
Cost of equity securities acquired - available for sale, at fair value		(233,028	)		(201,795	)		(265,275	)		(532,584	)
Cost of other invested assets acquired		(25,930	)		(22,917	)		(62,554	)		(247,349	)
Net change in short-term securities		666,868			(708,508	)		1,228,032			311,322
Net change in unsettled securities transactions		(146,985	)		62,390			10,445			3,828
Net cash used in investing activities		(79,657	)		(15,117	)		(372,356	)		(390,024	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period, net		5,782			352			7,284			2,405
Purchase of treasury shares		(100,102	)		-			(190,597	)		(150,745	)
Net cost of debt repurchase		-			-			(83,026	)		-
Dividends paid to shareholders		(28,668	)		(29,483	)		(116,857	)		(118,616	)
Net cash used in financing activities		(122,988	)		(29,131	)		(383,196	)		(266,956	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(900	)		(28,996	)		12,718			(50,888	)
Net (decrease) increase in cash		(17,477	)		(17,936	)		41,904			(44,873	)
Cash, beginning of period		265,075			223,630			205,694			250,567
Cash, end of period	$	247,598		$	205,694		$	247,598		$	205,694
SUPPLEMENTAL CASH FLOW INFORMATION
Cash transactions:
Income taxes paid	$	41,069		$	7,669		$	111,831		$	10,955
Interest paid	$	20,136		$	25,136		$	72,454		$	78,140