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)

April 28, 2021

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.)

Seon Place – 4th Floor

141 Front Street

PO Box HM 845

Hamilton

HM 19

,

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))

Securities registered pursuant to Section 12(b) of the Act: 

Class

Trading Symbol(s)

Name of Exchange where registered

Common Shares, $0.01 par value

RE

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of

1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act. 

☐

ITEM 2.02

DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On April 28, 2021, the registrant issued a news release announcing its first quarter 2021 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 (loss). 

Operating income (loss) differs from net income (loss) attributable to Everest Re Group, the most directly comparable

generally accepted accounting principle financial measure, by the exclusion of realized capital gains (losses) on

investments and net foreign exchange income (expense). Management believes that presentation of operating income

(loss) provides useful information to investors because it more accurately measures and predicts the registrant’s

results of operations by removing the variability arising from both the management of the registrant’s investment

portfolio and the fluctuations of foreign currency exchange rates. In addition, management, analysts and investors use

operating income (loss) 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 April 28, 2021

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/ KEITH SHOEMAKER

Keith Shoemaker

Senior Vice President and Comptroller

Dated: April 28, 2021

EXHIBIT INDEX

Exhibit

Number

Description of Document

Page No.

99.1

News Release of registrant,

dated April 28, 2021

5

EX-99.1

 

NEWS RELEASE 

EVEREST RE GROUP, LTD.

Seon Place, 141 Front Street, 4^th Floor, Hamilton HM 19, Bermuda

Contacts

Media:Dane Lopes                                                                  Investors: JonLevenson 

Group Head of Marketing& Communications                            Head of InvestorRelations 

Everest GlobalServices, Inc.                                                     Everest Global Services, Inc.

203.388.3977                                                                           908.604.3169

For Immediate Release

Everest Re Group Reports First Quarter 2021 Results

Net Income of $342 Million Including $260 Million of Net Operating Income

14% Growth in Gross Written Premium with

Continued Attritional Underwriting Margin Improvement                                        

HAMILTON, Bermuda -- (BUSINESS WIRE) – April 28, 2021 – Everest Re Group, Ltd. (“Everest” or the “Company”) today reported its 2021 first quarter results.

First Quarter 2021 Highlights

• Net income of $342 million equal to $8.52 per share
• Net operating income of $260 million, equal to $6.49 per share
• Gross written premium growth of 14% and net written premium growth of 16%
• Attritional combined ratio of 87.3%, a 2.5-point improvement year over year
• Underwriting income of $45 million inclusive of pre-tax net catastrophe losses of $270 million ($260 million net of reinstatement premiums)
• No change to the Covid-19 Pandemic (“Pandemic”) loss provision
• Combined ratio of 98.1%
• Operating cashflow of $904 million for the quarter

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The following table summarizes the Company’s net income and related financial metrics.

Net income and operating income	Q1	Year to Date	Q1	Year to Date
All values in USD millions except for per share amounts and percentages	2021	2021	2020	2020
Everest Re Group
Net income	341.9	341.9	16.6	16.6
Net operating income (loss)	260.2	260.2	164.4	164.4
Net income per diluted common share	8.52	8.52	0.41	0.41
Net operating income per diluted common share	6.49	6.49	4.03	4.03
Net income annualized return on average equity	15.0%	15.0%	0.8%	0.8%
Net operating income annualized return on average equity	11.4%	11.4%	7.6%	7.6%
Notes
1/ Refer to the reconciliation of net income to net operating income found later in this release

Everest Re Group President & CEO Juan C. Andrade commented on the Company’s results:

“Firstly, our thoughts are with those impacted by the U.S. winter storms and the flooding in Australia. I am very proud of the work our claims team is doing on the ground to help those affected rebuild their lives.

Everest had a strong start to 2021 with robust growth, strong overall profitability, continued improvement in attritional underwriting margins, and excellent investment performance. Our first quarter results further illustrate the earnings power of Everest and our success in implementing our strategy to build a broadly diversified company with a relentless focus on strong operational performance and disciplined underwriting.”

The following information summarizes the Company’s underwriting results, on a consolidated basis and also by segment – Reinsurance and Insurance, with selected commentary on results by segment.

2

Underwriting information - Everest Re Group	Q1	Year to Date	Q1	Year to Date	Year on Year
All values in USD millions except for percentages	2021	2021	2020	2020	Q1	Year to Date
Gross written premium	2,931.4	2,931.4	2,570.9	2,570.9	14.0%	14.0%
Net written premium	2,553.9	2,553.9	2,201.5	2,201.5	16.0%	16.0%
Combined ratio	98.1%	98.1%	98.6%	98.6%	-0.5 pts	-0.5 pts
Attritional combined ratio	87.3%	87.3%	89.8%	89.8%	-2.5 pts	-2.5 pts
Pre-tax net catastrophe losses	260.0	260.0	30.0	30.0
Pre-tax net covid losses	-	-	150.0	150.0
Pre-tax net prior year reserve development	-	-	(2.6)	(2.6)
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Reinsurance segment

• The Reinsurance segment achieved strong growth with gross written premiums up 16% for the quarter, driven by a successful January 1 renewal season. The targeted and disciplined growth was driven by rate, increased shares on profitable deals, and new opportunities in property, casualty, specialty lines, and facultative business.

• The improved attritional combined ratio for the quarter included proactive underwriting actions to improve risk adjusted returns and achieve a lower loss ratio, while the acquisition expense ratio declined primarily due to changes in business mix. We continue to write a stronger, more diversified, and more profitable book.

• The April renewal season was successfully completed with the Reinsurance segment capturing rate increases on Japanese and retrocessional business and pro-rata busines benefitting from primary rate improvement.

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Underwriting information - Reinsurance segment	Q1	Year to Date	Q1	Year to Date	Year on Year
All values in USD millions except for percentages	2021	2021	2020	2020	Q1	Year to Date
Gross written premium	2,059.0	2,059.0	1,777.8	1,777.8	15.8%	15.8%
Net written premium	1,912.9	1,912.9	1,613.1	1,613.1	18.6%	18.6%
Combined ratio	97.5%	97.5%	96.6%	96.6%	0.9 pts	0.9 pts
Attritional combined ratio	85.5%	85.5%	87.8%	87.8%	-2.3 pts	-2.3 pts
Pre-tax net catastrophe losses	212.5	212.5	24.5	24.5
Pre-tax net covid losses	-	-	110.0	110.0
Pre-tax net prior year reserve development	(1.8)	(1.8)	(2.6)	(2.6)
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Insurance segment

• The Company’s Insurance segment achieved strong growth with gross written premiums, up 10% for the quarter (20% excluding worker’s compensation) with notable growth in specialty casualty, property/short-tail and professional liability classes of business, offset by reductions in workers’ compensation as we purposely sought growth in lines with more attractive pricing.

• The improved attritional combined ratio for the quarter reflected a more profitable mix of business resulting from continued disciplined cycle management, with reductions in both the loss and expense ratios.

• Continued strong rate growth in excess of trend with renewal rate increases of 16% in the quarter excluding workers compensation, and up 10% including workers compensation.

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Underwriting information - Insurance segment	Q1	Year to Date	Q1	Year to Date	Year on Year
All values in USD millions except for percentages	2021	2021	2020	2020	Q1	Year to Date
Gross written premium	872.4	872.4	793.1	793.1	10.0%	10.0%
Net written premium	641.0	641.0	588.4	588.4	8.9%	8.9%
Combined ratio	99.9%	99.9%	103.9%	103.9%	-4.0pts	-4.0pts
Attritional combined ratio	92.2%	92.2%	94.9%	94.9%	-2.7 pts	-2.7 pts
Pre-tax net catastrophe losses	47.5	47.5	5.5	5.5
Pre-tax net covid losses	-	-	40.0	40.0
Pre-tax net prior year reserve development	-	-	-	-
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums

Investments and Shareholders’ Equity

• Net investment income of $260.4 million for the quarter including alternative investment gains of $120.3 million for the quarter

• Total invested assets and cash of $25.9 billion at March 31, 2021, 1.9% growth versus year end 2020
• Shareholders’ equity remained flat at $9.7 billion as of March 31, 2021, versus year end 2020
• Book value per diluted share of $241.57 at March 31, 2021
• Common share dividends declared and paid in the quarter of $1.55 per share, equal to $62.2 million
• Common share repurchases of $23.5 million during the quarter, representing 97,462 shares at an average price of $241.58 per share

Equity and Book Value per Share	Q1	Q1
All values in USD millions except per share amounts	2021	2020
Beginning shareholders' equity	9,726.2	9,132.9
Net income	341.9	16.6
Change in investment unrealized gains (URAD)	(292.3)	(248.0)
Dividends to shareholders	(62.2)	(63.3)
Purchase of treasury shares	(23.5)	(200.0)
Other	(7.2)	(57.3)
Ending shareholders' equity	9,682.9	8,580.9
Diluted common shares outstanding	40.1	40.0
Book value per diluted common share	241.57	214.59
Common share dividends paid - last 12 months	6.20	5.90
Dividend adjusted growth in BVPS - last 12 months	15.5%	7.2%

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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 and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemic, 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.

About Everest Re Group,Ltd. 

Everest Re Group, Ltd. (“Everest”) is a leading global provider of reinsurance and insurance, operating for close to 50 years through subsidiaries in the U.S., Europe, Singapore, Canada, Bermuda, and otherterritories. 

Everest offers property, casualty, and specialty products through its various operating affiliates located in key markets around the world.

Everest common stock (NYSE:RE) is a component of the S&P 500 index.

Additional information about Everest, our people, and our products can be found on our website at www.everestre.com. All issuing companies may not do business in all jurisdictions.

A conference call discussing the second quarter results will be held at 8:00 a.m. Eastern Time on April 29, 2021.  The call will be available on the Internet through the Company’s web site at everestre.com/investors. 

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 “Investors/Financial Reports/Quarterly Reports” section of the website.  The supplemental financial

6

information may also be obtained by contacting the Company directly.

_______________________________________________

The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance.  After-tax operating income (loss) consists of net income (loss) excluding after-tax net realized capital gains (losses) and after-tax net foreign exchange income (expense) as the following reconciliation displays:

	Three Months Ended March 31,
(Dollars in thousands, except per share amounts)	2021			2020
			(unaudited)
			Per Diluted		Per Diluted
			Common		Common
	Amount		Share	Amount	Share
Net income (loss)	$341,862		$8.52	$16,612	$0.41
After-tax net realized capital gains (losses)	30,035	-	0.75	(172,364)	(4.22)
After-tax net foreign exchange income (expense)	51,618		1.29	24,604	0.60
After-tax operating income (loss)	$260,209		$6.49	$164,372	$4.03
(Some amounts may not reconcile due to rounding.)

Although net realized capital gains (losses) and net foreign exchange income (expense) are an integral part of the Company’s insurance operations, the determination of net realized capital gains (losses) and foreign exchange income (expense) is independent of the insurance underwriting process.  The Company believes that the level of net realized capital gains (losses) and net foreign exchange income (expense) 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 (loss) 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 (loss) in their analyses for the reasons discussed above.  The Company provides after-tax operating income (loss) 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--

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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
	Three Months Ended
	March 31,
(Dollars in thousands, except per share amounts)	2021	2020
	(unaudited)
REVENUES:
Premiums earned	$2,387,865	$2,036,814
Net investment income	260,413	147,800
Net realized capital gains (losses):
Credit allowances on fixed maturity securities	(6,977)	(21,774)
Other-than-temporary impairments on fixed maturity securities	-	-
Other net realized capital gains (losses)	45,879	(188,814)
Total net realized capital gains (losses)	38,902	(210,588)
Other income (expense)	56,593	7,990
Total revenues	2,743,773	1,982,016
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	1,711,419	1,430,840
Commission, brokerage, taxes and fees	489,011	448,522
Other underwriting expenses	142,231	128,860
Corporate expenses	12,378	9,833
Interest, fees and bond issue cost amortization expense	15,639	7,583
Total claims and expenses	2,370,678	2,025,638
INCOME (LOSS) BEFORE TAXES	373,095	(43,622)
Income tax expense (benefit)	31,233	(60,234)
NET INCOME (LOSS)	$341,862	$16,612
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period	(288,615)	(279,398)
Reclassification adjustment for realized losses (gains) included in net income (loss)	(3,666)	31,399
Total URA(D) on securities arising during the period	(292,281)	(247,999)
Foreign currency translation adjustments	(9,582)	(50,824)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)	2,043	920
Total benefit plan net gain (loss) for the period	2,043	920
Total other comprehensive income (loss), net of tax	(299,820)	(297,903)
COMPREHENSIVE INCOME (LOSS)	$42,042	$(281,291)
EARNINGS PER COMMON SHARE:
Basic	$8.53	$0.41
Diluted	8.52	0.41

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EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
	March 31,	December 31,
(Dollars and share amounts in thousands, except par value per share)	2021	2020
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value	$20,407,480	$20,040,173
(amortized cost: 2021, $19,932,190;  2020, $19,225,067, credit allowances: 2021, ($8,723); 2020, ($1,745))
Equity securities, at fair value	1,400,674	1,472,236
Short-term investments (cost: 2021, $826,777; 2020, $1,135,088)	826,769	1,134,950
Other invested assets (cost: 2021, $2,173,221; 2020, $2,012,581)	2,173,221	2,012,581
Cash	1,132,660	801,651
Total investments and cash	25,940,804	25,461,591
Accrued investment income	156,330	141,304
Premiums receivable	2,789,602	2,680,562
Reinsurance receivables	2,029,734	1,994,555
Funds held by reinsureds	740,554	716,655
Deferred acquisition costs	663,560	622,053
Prepaid reinsurance premiums	441,606	412,015
Income taxes	31,738	17,253
Other assets	801,424	742,369
TOTAL ASSETS	$33,595,352	$32,788,357
LIABILITIES:
Reserve for losses and loss adjustment expenses	17,090,644	16,398,997
Future policy benefit reserve	37,561	37,723
Unearned premium reserve	3,704,189	3,501,359
Funds held under reinsurance treaties	13,875	15,807
Other net payable to reinsurers	402,379	294,347
Losses in course of payment	139,382	127,971
Senior notes due 6/1/2044	397,224	397,194
Senior notes due 10/1/2050	979,654	979,524
Long term notes due 5/1/2067	223,699	223,674
Borrowings from FHLB	310,000	310,000
Accrued interest on debt and borrowings	24,035	10,460
Unsettled securities payable	151,174	206,693
Other liabilities	438,654	558,432
Total liabilities	23,912,470	23,062,181
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; (2021) 69,816
and (2020) 69,620 outstanding before treasury shares	698	696
Additional paid-in capital	2,245,737	2,245,301
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $41,161 at 2021 and $80,451 at 2020	235,079	534,899
Treasury shares, at cost; 29,734 shares (2021) and 29,636 shares (2020)	(3,645,717)	(3,622,172)
Retained earnings	10,847,085	10,567,452
Total shareholders' equity	9,682,882	9,726,176
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$33,595,352	$32,788,357

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EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three Months Ended
	March 31,
(Dollars in thousands)	2021	2020
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$341,862	$16,612
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable	(105,460)	(119,548)
Decrease (increase) in funds held by reinsureds, net	(25,584)	(28,973)
Decrease (increase) in reinsurance receivables	(14,518)	(130,593)
Decrease (increase) in income taxes	24,908	(65,114)
Decrease (increase) in prepaid reinsurance premiums	(27,071)	(10,572)
Increase (decrease) in reserve for losses and loss adjustment expenses	655,054	406,257
Increase (decrease) in future policy benefit reserve	(162)	(915)
Increase (decrease) in unearned premiums	196,631	158,744
Increase (decrease) in other net payable to reinsurers	105,390	95,555
Increase (decrease) in losses in course of payment	11,980	(1,422)
Change in equity adjustments in limited partnerships	(116,767)	(8,512)
Distribution of limited partnership income	18,125	11,108
Change in other assets and liabilities, net	(149,464)	(45,259)
Non-cash compensation expense	11,021	9,393
Amortization of bond premium (accrual of bond discount)	17,323	8,640
Net realized capital (gains) losses	(38,902)	210,588
Net cash provided by (used in) operating activities	904,366	505,989
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value	818,352	656,070
Proceeds from fixed maturities sold - available for sale, at market value	228,278	501,953
Proceeds from equity securities sold, at fair value	281,313	112,841
Distributions from other invested assets	52,211	104,085
Cost of fixed maturities acquired - available for sale, at market value	(1,776,730)	(1,359,281)
Cost of equity securities acquired, at fair value	(174,981)	(76,513)
Cost of other invested assets acquired	(98,939)	(152,269)
Net change in short-term investments	308,585	(27,882)
Net change in unsettled securities transactions	(93,610)	(17,185)
Net cash provided by (used in) investing activities	(455,521)	(258,181)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period for share-based compensation, net of expense	(10,583)	(12,573)
Purchase of treasury shares	(23,545)	(200,020)
Dividends paid to shareholders	(62,229)	(63,277)
Proceeds from revolving credit borrowings	-	50,000
Cost of debt repurchase	-	(1,198)
Cost of shares withheld on settlements of share-based compensation awards	(12,507)	(13,982)
Net cash provided by (used in) financing activities	(108,864)	(241,050)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(8,972)	2,832
Net increase (decrease) in cash	331,009	9,590
Cash, beginning of period	801,651	808,036
Cash, end of period	$1,132,660	$817,626
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$6,417	$4,920
Interest paid	1,880	2,817

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XML

Document And Entity Information	Apr. 28, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Apr. 28, 2021
Entity File Number	1-15731
Entity Registrant Name	Everest Re Group, Ltd.
Entity Central Index Key	0001095073
Entity Incorporation State Country Code	D0
Entity Tax Identification Number	98-0365432
Entity Address Address Line 1	Seon Place – 4th Floor
Entity Address Address Line 2	141 Front Street
Entity Address Address Line 3	PO Box HM 845
Entity Address City Or Town	Hamilton
Entity Address Postal Zip Code	HM 19
Entity Address Country	BM
City Area Code	441
Local Phone Number	295-0006
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Security 12b Title	Common Shares, $0.01 par value
Trading Symbol	RE
Security Exchange Name	NYSE