1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.Business and Basis of Presentation.

Everest Re Group, Ltd. (Group), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets.As used in this document, Company means Group and its subsidiaries.

Effective February 27, 2013, the Company established a new subsidiary, Mt. Logan Re Ltd. (Mt. Logan Re) and effective July 1, 2013, Mt. Logan Re established separate segregated accounts and issued non-voting redeemable preferred shares to capitalize the segregated accounts.Accordingly, the financial position and operating results for Mt. Logan Re are consolidated with the Company and the non-controlling interests in Mt. Logan Res operating results and equity are presented as separate captions in the Companys financial statements.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The statements include all of the following domestic and foreign direct and indirect subsidiaries of Group: Everest International Reinsurance, Ltd. ("Everest International"), Everest Global Services, Inc. ("Global Services"), Mt. Logan Re, Ltd., Everest Reinsurance (Bermuda), Ltd. ("Bermuda Re"), Everest Re Advisors, Ltd., Everest Advisors (UK), Ltd., Everest Underwriting Group (Ireland), Limited ("Holdings Ireland"), Everest Reinsurance Company (Ireland) Limited ("Ireland Re"), Everest Insurance Company of Canada ("Everest Canada"), Premiere Insurance Underwriting Services ("Premiere"), Everest Reinsurance Holdings, Inc. ("Holdings"), Heartland Crop Insurance, Inc. ("Heartland"), Specialty Insurance Group, Inc. ("Specialty"), Specialty Insurance Group - Leisure and Entertainment Risk Purchasing Group LLC ("Specialty RPG"), Mt. McKinley Insurance Company ("Mt. McKinley"), Mt. McKinley Managers, L.L.C., Workcare Southeast, Inc., Workcare Southeast of Georgia, Inc., Everest Reinsurance Company ("Everest Re"), Everest National Insurance Company ("Everest National"), Everest Reinsurance Company Ltda. (Brazil), Mt. Whitney Securities, Inc., Everest Indemnity Insurance Company ("Everest Indemnity") and Everest Security Insurance Company ("Everest Security"). All amounts are reported in U.S. dollars.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior years' amounts to conform to the 2014 presentation. One reclassification relates to a correction in the manner in which the Company reports distributions received from limited partnership investments in the consolidated Statements of Cash Flows. Prior to the fourth quarter of 2013, the Company incorrectly reflected all distributions as cash flows from investing activities in its Consolidated Statements of Cash Flows. Starting with the fourth quarter of 2013, cash distributions from the limited partnerships that represent net investment income are reflected as cash flows from operating activities and distributions that represent the return of capital contributions are reflected as cash flows from investing activities. For the year ended December 31, 2012, $30,718 thousand has been reclassified from "Distributions from other invested assets" included in cash flows from investing activities to "Distribution of limited partnership income" included in cash flows from operations. The Company has determined that this error is not material to the financial statements of any prior period.

B.Investments.

Fixed maturity and equity security investments available for sale, at market value, reflect unrealized appreciation and depreciation, as a result of temporary changes in market value during the period, in shareholders equity, net of income taxes in accumulated other comprehensive income (loss) in the consolidated balance sheets.Fixed maturity and equity securities carried at fair value reflect fair value re-measurements as net realized capital gains and losses in the consolidated statements of operations and comprehensive income (loss). The Company records changes in fair value for its fixed maturities available for sale, at market value through shareholders equity, net of taxes in accumulated other comprehensive income (loss) since cash flows from these investments will be primarily used to settle its reserve for losses and loss adjustment expense liabilities. The Company anticipates holding these investments for an extended period as the cash flow from interest and maturities will fund the projected payout of these liabilities. Fixed maturities carried at fair value represent a portfolio of convertible bond securities, which have characteristics similar to equity securities and at times, designated foreign denominated fixed maturity securities, which will be used to settle loss and loss adjustment reserves in the same currency.The Company carries all of its equity securities at fair value except for mutual fund investments whose underlying investments are comprised of fixed maturity securities. For equity securities, available for sale, at fair value, the Company reflects changes in value as net realized capital gains and losses since these securities may be sold in the near term depending on financial market conditions.Interest income on all fixed maturities and dividend income on all equity securities are included as part of net investment income in the consolidated statements of operations and comprehensive income (loss). Unrealized losses on fixed maturities, which are deemed other-than-temporary and related to the credit quality of a security, are charged to net income (loss) as net realized capital losses.Short-term investments are stated at cost, which approximates market value. Realized gains or losses on sales of investments are determined on the basis of identified cost. For non-publicly traded securities, market prices are determined through the use of pricing models that evaluate securities relative to the U.S. Treasury yield curve, taking into account the issue type, credit quality, and cash flow characteristics of each security.For publicly traded securities, market value is based on quoted market prices or valuation models that use observable market inputs. When a sector of the financial markets is inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. Retrospective adjustments are employed to recalculate the values of asset-backed securities. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition.Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used to effect the calculation of projected and prepayments for pass-through security types. Other invested assets include limited partnerships and rabbi trusts. Limited partnerships are accounted for under the equity method of accounting, which can be recorded on a monthly or quarterly lag.

C.Uncollectible Receivable Balances.

The Company provides reserves for uncollectible reinsurance recoverable and premium receivable balances based on managements assessment of the collectability of the outstanding balances.Such reserves are presented in the table below for the periods indicated.


	Years Ended December 31,
(Dollars in thousands)	2014		2013
Reinsurance receivables and premium receivables	$	29,497	$	29,905

D.Deferred Acquisition Costs.

Acquisition costs, consisting principally of commissions and brokerage expenses and certain premium taxes and fees incurred at the time a contract or policy is issued and that vary with and are directly related to the Companys reinsurance and insurance business, are deferred and amortized over the period in which the related premiums are earned.Deferred acquisition costs are limited to their estimated realizable value by line of business based on the related unearned premiums, anticipated claims and claim expenses and anticipated investment income.Deferred acquisition costs amortized to income are presented in the table below for the periods indicated.


	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Deferred acquisition costs	$	1,135,586	$	977,558	$	952,701

E.Reserve for Losses and Loss Adjustment Expenses.

The reserve for losses and loss adjustment expenses (LAE) is based on individual case estimates and reports received from ceding companies.A provision is included for losses and LAE incurred but not reported (IBNR) based on past experience.A provision is also included for certain potential liabilities relating to asbestos and environmental (A&E) exposures, which liabilities cannot be estimated using traditional reserving techniques.See also Note 3.The reserves are reviewed periodically and any changes in estimates are reflected in earnings in the period the adjustment is made.The Companys loss and LAE reserves represent managements best estimate of the ultimate liability.Loss and LAE reserves are presented gross of reinsurance receivables and incurred losses and LAE are presented net of reinsurance.

Accruals for commissions are established for reinsurance contracts that provide for the stated commission percentage to increase or decrease based on the loss experience of the contract.Changes in estimates for such arrangements are recorded as commission expense.Commission accruals for contracts with adjustable features are estimated based on expected loss and LAE.

F.Future Policy Benefit Reserve.

Liabilities for future policy benefits on annuity policies are carried at their accumulated values.Reserves for policy benefits include mortality claims in the process of settlement and IBNR claims.Actual experience in a particular period may fluctuate from expected results.

G.Premium Revenues.

Written premiums are earned ratably over the periods of the related insurance and reinsurance contracts.Unearned premium reserves are established relative to the unexpired contract period.Such reserves are established based upon reports received from ceding companies or estimated using pro rata methods based on statistical data.Reinstatement premiums represent additional premium received on reinsurance coverages, most prevalently catastrophe related, when limits have been depleted under the original reinsurance contract and additional coverage is granted.Written and earned premiums and the related costs, which have not yet been reported to the Company, are estimated and accrued.Premiums are net of ceded reinsurance.

Payout annuity premiums are recognized as revenue over the premium-paying period of the policies.

H.Prepaid Reinsurance Premiums.

Prepaid reinsurance premiums represent unearned premium reserves ceded to other reinsurers.Prepaid reinsurance premiums for any foreign reinsurers comprising more than 10% of the outstanding balance at December 31, 2014 were secured either through collateralized trust arrangements, rights of offset or letters of credit, thereby limiting the credit risk to the Company.

I.Income Taxes.

Holdings and its wholly-owned subsidiaries file a consolidated U.S. federal income tax return.Foreign branches of subsidiaries file local tax returns as required.Group and subsidiaries not included in Holdings consolidated tax return file separate company U.S. federal income tax returns as required.Holdings Ireland files an Irish income tax return.The UK branch of Bermuda Re files a UK income tax return.Deferred income taxes have been recorded to recognize the tax effect of temporary differences between the financial reporting and income tax bases of assets and liabilities, which arise because of differences between GAAP and income tax accounting rules.

J.Foreign Currency.

Assets and liabilities relating to foreign operations are translated into U.S. dollars at the exchange rates in effect at the balance sheet date; revenues and expenses are translated into U.S. dollars using average exchange rates in effect during the reporting period.Gains and losses resulting from translating foreign currency financial statements, net of deferred income taxes, are excluded from net income (loss) and accumulated in shareholders equity.Gains and losses resulting from foreign currency transactions, other than debt securities available for sale, are recorded through the consolidated statements of operations and comprehensive income (loss) in other income (expense).Gains and losses resulting from changes in the foreign currency exchange rates on debt securities, available for sale at market value, are recorded in the consolidated balance sheets in accumulated other comprehensive income (loss) as unrealized appreciation (depreciation) and any losses which are deemed other-than-temporary are charged to net income (loss) as net realized capital loss.

K.Earnings Per Common Share.

Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding.Diluted earnings per share reflect the potential dilution that would occur if options granted under various share-based compensation plans were exercised resulting in the issuance of common shares that would participate in the earnings of the entity.

Net income (loss) attributable to Everest Re Group per common share has been computed as per below, based upon weighted average common basic and dilutive shares outstanding.


		Years Ended December 31,
(Dollars in thousands, except per share amounts)		2014			2013			2012
Net income (loss) attributable to Everest Re Group per share:
	Numerator
	Net income (loss) attributable to Everest Re Group	$	1,199,156		$	1,259,382		$	828,954
	Less: dividends declared-common shares and nonvested common shares		(145,913	)		(106,681	)		(100,402	)
	Undistributed earnings		1,053,243			1,152,701			728,552
	Percentage allocated to common shareholders (1)		99.0	%		99.1	%		99.2	%
			1,042,423			1,142,386			722,717
	Add: dividends declared-common shareholders		144,447			105,689			99,576
	Numerator for basic and diluted earnings per common share	$	1,186,870		$	1,248,075		$	822,293

	Denominator
	Denominator for basic earnings per weighted-average common shares		45,377			48,619			51,894
	Effect of dilutive securities:
	Options		425			437			173
	Denominator for diluted earnings per adjusted weighted-average common shares		45,802			49,056			52,067

	Per common share net income (loss)
	Basic	$	26.16		$	25.67		$	15.85
	Diluted	$	25.91		$	25.44		$	15.79

(1)	Basic weighted-average common shares outstanding		45,377			48,619			51,894
	Basic weighted-average common shares outstanding and nonvested common shares expected to vest		45,848			49,058			52,313
	Percentage allocated to common shareholders		99.0	%		99.1	%		99.2	%
(Some amounts may not reconcile due to rounding.)

The table below presents the options to purchase common shares that were outstanding, but were not included in the computation of earnings per diluted share as they were anti-dilutive, for the periods indicated:


	Years Ended December 31,
	2014	2013	2012
Anti-dilutive options	-	-	894,704

All outstanding options expire on or between September 21, 2015 and September 19, 2022.

L.Segmentation.

The Company, through its subsidiaries, operates in five segments:U.S. Reinsurance, International, Bermuda, Insurance and Mt. Logan Re.See also Note 20.

M.Derivatives.

The Company sold seven equity index put option contracts, based on two indices, in 2001 and 2005, which remain outstanding.The Company sold these equity index put options as insurance products with the intent of achieving a profit.These equity index put option contracts meet the definition of a derivative under FASB guidance and the Companys position in these equity index put option contracts is unhedged.Accordingly, these equity index put option contracts are carried at fair value in the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations and comprehensive income (loss).

The fair value of the equity index put options can be found in the Companys consolidated balance sheets as follows:


(Dollars in thousands)
Derivatives not designated as	Location of fair value	At December 31,
hedging instruments	in balance sheets	2014		2013

Equity index put option contracts	Equity index put option liability	$	47,022	$	35,423
Total		$	47,022	$	35,423

The change in fair value of the equity index put option contracts can be found in the Companys statement of operations and comprehensive income (loss) as follows:


(Dollars in thousands)
Derivatives not designated as	Location of gain (loss) in statements of	For the Years Ended December 31,
hedging instruments	operations and comprehensive income (loss)	2014			2013		2012

Equity index put option contracts	Net derivative gain (loss)	$	(11,599	)	$	44,044	$	(9,738	)
Total		$	(11,599	)	$	44,044	$	(9,738	)

N.Deposit Assets and Liabilities.

In the normal course of its operations, the Company may enter into contracts that do not meet risk transfer provisions.Such contracts are accounted for using the deposit accounting method and are included in other liabilities in the Companys consolidated balance sheets.For such contracts, the Company originally records deposit liabilities for an amount equivalent to the assets received.Actuarial studies are used to estimate the final liabilities under such contracts with any change reflected in the consolidated statements of operations and comprehensive income (loss).

O.Share-Based Compensation.

Share-based compensation option or restricted share awards are fair valued at the grant date and expensed over the vesting period of the award.The tax benefit on the recorded expense is deferred until the time the award is exercised or vests (becomes unrestricted).See Note 18.

P.Application of Recently Issued Accounting Standard Changes.

Presentation of Comprehensive Income. In June 2011, FASB issued amendments to existing guidance to provide two alternatives for the presentation of comprehensive income. Components of net income and comprehensive income can either be presented within a single, continuous financial statement or be presented in two separate but consecutive financial statements.The Company has chosen to present the components of net income and comprehensive income in a single, continuous financial statement.The guidance is effective for reporting periods beginning after December 15, 2011.The Company implemented this guidance as of January 1, 2012.In February, 2013, the FASB issued an additional amendment for the presentation of amounts reclassified out of accumulated other comprehensive income by component.The Company implemented the proposed guidance as of January 1, 2013.

Treatment of Insurance Contract Acquisition Costs. In October 2010, the FASB issued authoritative guidance for the accounting for costs associated with acquiring or renewing insurance contracts.The guidance identifies the incremental direct costs of contract acquisition and costs directly related to acquisition activities that should be capitalized.This guidance is effective for reporting periods beginning after December 15, 2011.The Company implemented this guidance as of January 1, 2012 and determined that $13,492 thousand of previously deferrable acquisition costs would be expensed, including $10,876 thousand and $2,616 thousand expensed in the years ended December 31, 2012 and 2013, respectively.No additional expense will be incurred related to this guidance implementation in future periods.