Bermuda
|
1-15731
|
98-0365432
|
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
Seon Place, 4TH Floor
141 Front Street
PO Box HM 845
Hamilton, HM 19, Bermuda
|
Not Applicable
|
|
(Address of principal executive offices)
|
(Zip Code)
|
ITEM 2.02
|
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
(c)
|
Exhibits
|
||
Exhibit No.
|
Description
|
||
99.1
|
News Release of the registrant,
|
||
dated May 6, 2019
|
EVEREST RE GROUP, LTD.
|
||||
By:
|
/S/ CRAIG HOWIE
|
|||
Craig Howie
|
||||
Executive Vice President and
|
||||
Chief Financial Officer
|
EXHIBIT INDEX
|
Exhibit
|
|||
Number
|
Description of Document
|
Page No.
|
|
99.1
|
News Release of the registrant,
|
||
dated May 6, 2019
|
5
|
NEWS RELEASE
|
|
·
|
Gross written premiums for the quarter were $2.1 billion, an increase of 10% compared to the first quarter of 2018. Worldwide
reinsurance premiums were up 7% to $1.5 billion, with growth primarily driven by increased casualty and property pro-rata premium, increased shares on existing business and profitable new growth. Direct insurance premiums were up
18%, from first quarter 2018, to $595.1 million, continuing with the diversified growth trends noted in recent years.
|
·
|
The combined ratio was 88.7% for the quarter compared to 93.3% in the first quarter of 2018. Excluding catastrophe losses,
reinstatement premiums and the favorable prior period loss development, the current quarter attritional combined ratio was 87.4% compared to 87.1% in the same period last year.
|
·
|
Current year catastrophe losses, net of reinsurance, amounted to $25 million in the quarter, related to the Townsville monsoon in
Australia. There was no change in total prior year catastrophe loss estimates. Estimated net favorable prior year catastrophe development was offset by $24 million of adverse development on the third quarter 2018 Japan loss events.
|
·
|
Net investment income increased 1.9% for the quarter to $141.0 million.
|
·
|
Net after-tax realized capital gains amounted to $73.9 million for the quarter compared to realized capital losses of $19.4 million
during the first quarter of 2018.
|
·
|
Cash flow from operations was $459.8 million compared to $195.6 million for the same period in 2018.
|
·
|
During the quarter, the Company purchased 75,193 shares at a total cost of $16.2 million. The repurchases were made pursuant to a share
repurchase authorization, provided by the Company’s Board of Directors, under which there remains 1.4 million shares available.
|
·
|
Shareholders’ equity ended the quarter at $8.4 billion compared to $7.9 billion at year end 2018. Book value per share was up from
$194.43 at December 31, 2018 to $206.68 at March 31, 2019.
|
|
Three Months Ended
|
|||||||||||||||
|
March 31,
|
|||||||||||||||
(Dollars in thousands, except per share amounts)
|
2019
|
2018
|
||||||||||||||
|
(unaudited)
|
|||||||||||||||
|
||||||||||||||||
|
Per Diluted
|
Per Diluted
|
||||||||||||||
|
Common
|
Common
|
||||||||||||||
|
Amount
|
Share
|
Amount
|
Share
|
||||||||||||
|
||||||||||||||||
Net income (loss)
|
$
|
348,900
|
$
|
8.54
|
$
|
210,318
|
$
|
5.11
|
||||||||
After-tax net realized capital gains (losses)
|
73,905
|
1.81
|
(19,355
|
)
|
(0.47
|
)
|
||||||||||
After-tax net foreign exchange income (expense)
|
(7,373
|
)
|
(0.18
|
)
|
9,933
|
0.24
|
||||||||||
|
||||||||||||||||
After-tax operating income (loss)
|
$
|
282,368
|
$
|
6.91
|
$
|
219,740
|
$
|
5.34
|
||||||||
|
||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
AND COMPREHENSIVE INCOME (LOSS)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Dollars in thousands, except per share amounts)
|
2019
|
2018
|
||||||
(unaudited)
|
||||||||
REVENUES:
|
||||||||
Premiums earned
|
$
|
1,732,697
|
$
|
1,619,427
|
||||
Net investment income
|
140,976
|
138,294
|
||||||
Net realized capital gains (losses):
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
(2,933
|
)
|
(70
|
)
|
||||
Other-than-temporary impairments on fixed maturity securities
|
||||||||
transferred to other comprehensive income (loss)
|
-
|
-
|
||||||
Other net realized capital gains (losses)
|
95,165
|
(24,831
|
)
|
|||||
Total net realized capital gains (losses)
|
92,232
|
(24,901
|
)
|
|||||
Net derivative gain (loss)
|
3,231
|
273
|
||||||
Other income (expense)
|
(9,053
|
)
|
12,064
|
|||||
Total revenues
|
1,960,083
|
1,745,157
|
||||||
CLAIMS AND EXPENSES:
|
||||||||
Incurred losses and loss adjustment expenses
|
1,048,550
|
1,057,177
|
||||||
Commission, brokerage, taxes and fees
|
389,474
|
357,639
|
||||||
Other underwriting expenses
|
98,985
|
96,284
|
||||||
Corporate expenses
|
6,652
|
8,996
|
||||||
Interest, fees and bond issue cost amortization expense
|
7,631
|
7,418
|
||||||
Total claims and expenses
|
1,551,292
|
1,527,514
|
||||||
INCOME (LOSS) BEFORE TAXES
|
408,791
|
217,643
|
||||||
Income tax expense (benefit)
|
59,891
|
7,325
|
||||||
NET INCOME (LOSS)
|
$
|
348,900
|
$
|
210,318
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
|
233,065
|
(190,624
|
)
|
|||||
Reclassification adjustment for realized losses (gains) included in net income (loss)
|
(1,822
|
)
|
(8,772
|
)
|
||||
Total URA(D) on securities arising during the period
|
231,243
|
(199,396
|
)
|
|||||
Foreign currency translation adjustments
|
14,052
|
17,699
|
||||||
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
|
1,151
|
1,815
|
||||||
Total benefit plan net gain (loss) for the period
|
1,151
|
1,815
|
||||||
Total other comprehensive income (loss), net of tax
|
246,446
|
(179,882
|
)
|
|||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
595,346
|
$
|
30,436
|
||||
EARNINGS PER COMMON SHARE:
|
||||||||
Basic
|
$
|
8.57
|
$
|
5.14
|
||||
Diluted
|
8.54
|
5.11
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
March 31,
|
December 31,
|
|||||||
(Dollars and share amounts in thousands, except par value per share)
|
2019
|
2018
|
||||||
(unaudited)
|
||||||||
ASSETS:
|
||||||||
Fixed maturities - available for sale, at market value
|
$
|
15,513,287
|
$
|
15,225,263
|
||||
(amortized cost: 2019, $15,440,999; 2018, $15,406,572)
|
||||||||
Fixed maturities - available for sale, at fair value
|
2,350
|
2,337
|
||||||
Equity securities, at fair value
|
883,191
|
716,639
|
||||||
Short-term investments (cost: 2019, $597,107; 2018, $241,010)
|
597,138
|
240,987
|
||||||
Other invested assets (cost: 2019, $1,644,004; 2018, $1,591,745)
|
1,644,004
|
1,591,745
|
||||||
Cash
|
583,974
|
656,095
|
||||||
Total investments and cash
|
19,223,944
|
18,433,066
|
||||||
Accrued investment income
|
105,859
|
104,619
|
||||||
Premiums receivable
|
2,392,094
|
2,218,283
|
||||||
Reinsurance receivables
|
1,785,052
|
1,787,648
|
||||||
Funds held by reinsureds
|
432,736
|
445,040
|
||||||
Deferred acquisition costs
|
528,491
|
511,573
|
||||||
Prepaid reinsurance premiums
|
360,136
|
343,343
|
||||||
Income taxes
|
475,851
|
592,385
|
||||||
Other assets
|
326,344
|
358,042
|
||||||
TOTAL ASSETS
|
$
|
25,630,507
|
$
|
24,793,999
|
||||
LIABILITIES:
|
||||||||
Reserve for losses and loss adjustment expenses
|
$
|
13,247,102
|
$
|
13,119,090
|
||||
Future policy benefit reserve
|
46,881
|
46,778
|
||||||
Unearned premium reserve
|
2,666,339
|
2,517,612
|
||||||
Funds held under reinsurance treaties
|
9,759
|
13,099
|
||||||
Other net payable to reinsurers
|
287,807
|
218,439
|
||||||
Senior notes due 6/1/2044
|
396,984
|
396,954
|
||||||
Long term notes due 5/1/2067
|
236,684
|
236,659
|
||||||
Accrued interest on debt and borrowings
|
7,515
|
3,093
|
||||||
Equity index put option liability
|
8,727
|
11,958
|
||||||
Unsettled securities payable
|
110,723
|
51,112
|
||||||
Other liabilities
|
185,357
|
275,401
|
||||||
Total liabilities
|
17,203,878
|
16,890,195
|
||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Preferred shares, par value: $0.01; 50,000 shares authorized;
|
||||||||
no shares issued and outstanding
|
-
|
-
|
||||||
Common shares, par value: $0.01; 200,000 shares authorized; (2019) 69,396
|
||||||||
and (2018) 69,202 outstanding before treasury shares
|
694
|
692
|
||||||
Additional paid-in capital
|
2,189,544
|
2,188,777
|
||||||
Accumulated other comprehensive income (loss), net of deferred income tax expense
|
||||||||
(benefit) of $4,562 at 2019 and ($20,697) at 2018
|
(216,111
|
)
|
(462,557
|
)
|
||||
Treasury shares, at cost; 28,626 shares (2019) and 28,551 shares (2018)
|
(3,413,701
|
)
|
(3,397,548
|
)
|
||||
Retained earnings
|
9,866,203
|
9,574,440
|
||||||
Total shareholders' equity
|
8,426,629
|
7,903,804
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
25,630,507
|
$
|
24,793,999
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Dollars in thousands)
|
2019
|
2018
|
||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
348,900
|
$
|
210,318
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Decrease (increase) in premiums receivable
|
(163,108
|
)
|
(56,826
|
)
|
||||
Decrease (increase) in funds held by reinsureds, net
|
9,837
|
95,416
|
||||||
Decrease (increase) in reinsurance receivables
|
34,556
|
236
|
||||||
Decrease (increase) in income taxes
|
91,754
|
55,905
|
||||||
Decrease (increase) in prepaid reinsurance premiums
|
(11,677
|
)
|
(32,194
|
)
|
||||
Increase (decrease) in reserve for losses and loss adjustment expenses
|
58,073
|
(121,415
|
)
|
|||||
Increase (decrease) in future policy benefit reserve
|
103
|
(1,907
|
)
|
|||||
Increase (decrease) in unearned premiums
|
135,157
|
85,598
|
||||||
Increase (decrease) in other net payable to reinsurers
|
63,326
|
24,410
|
||||||
Increase (decrease) in losses in course of payment
|
(66,714
|
)
|
45,919
|
|||||
Change in equity adjustments in limited partnerships
|
(8,079
|
)
|
(24,596
|
)
|
||||
Distribution of limited partnership income
|
14,799
|
15,524
|
||||||
Change in other assets and liabilities, net
|
30,152
|
(142,935
|
)
|
|||||
Non-cash compensation expense
|
9,056
|
8,336
|
||||||
Amortization of bond premium (accrual of bond discount)
|
5,899
|
8,950
|
||||||
Net realized capital (gains) losses
|
(92,232
|
)
|
24,901
|
|||||
Net cash provided by (used in) operating activities
|
459,802
|
195,640
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from fixed maturities matured/called - available for sale, at market value
|
460,537
|
512,384
|
||||||
Proceeds from fixed maturities sold - available for sale, at market value
|
1,798,226
|
364,288
|
||||||
Proceeds from equity securities sold, at fair value
|
69,500
|
199,875
|
||||||
Distributions from other invested assets
|
54,692
|
1,061,894
|
||||||
Cost of fixed maturities acquired - available for sale, at market value
|
(2,249,663
|
)
|
(1,150,718
|
)
|
||||
Cost of fixed maturities acquired - available for sale, at fair value
|
-
|
(1,836
|
)
|
|||||
Cost of equity securities acquired, at fair value
|
(146,435
|
)
|
(310,426
|
)
|
||||
Cost of other invested assets acquired
|
(115,028
|
)
|
(947,290
|
)
|
||||
Net change in short-term investments
|
(354,388
|
)
|
169,705
|
|||||
Net change in unsettled securities transactions
|
49,809
|
46,708
|
||||||
Net cash provided by (used in) investing activities
|
(432,750
|
)
|
(55,416
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Common shares issued during the period for share-based compensation, net of expense
|
(8,288
|
)
|
(9,383
|
)
|
||||
Purchase of treasury shares
|
(16,153
|
)
|
-
|
|||||
Dividends paid to shareholders
|
(57,137
|
)
|
(53,240
|
)
|
||||
Cost of shares withheld on settlements of share-based compensation awards
|
(11,443
|
)
|
(14,245
|
)
|
||||
Net cash provided by (used in) financing activities
|
(93,021
|
)
|
(76,868
|
)
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(6,152
|
)
|
2,163
|
|||||
Net increase (decrease) in cash
|
(72,121
|
)
|
65,519
|
|||||
Cash, beginning of period
|
656,095
|
635,067
|
||||||
Cash, end of period
|
$
|
583,974
|
$
|
700,586
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Income taxes paid (recovered)
|
$
|
(90,846
|
)
|
$
|
(51,253
|
)
|
||
Interest paid
|
3,154
|
2,422
|