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Everest Re Earnings Beats Estimates

Zacks Equity Research

Everest Re Group Ltd. ( RE) reported first quarter 2013 operating earnings of $5.88 per share, substantially beating the Zacks Consensus Estimate of $4.32 per share. Earnings were also up 31.3% year over year. 


Including after tax net realized capital gains and loss, the company reported net income of $7.50 per share against $5.68 per share reported in the year-ago quarter.


Operational Update


Total revenue for the quarter came in at $1.37 billion, up 9.5% year over year. 


Premiums earned were up 9.1% year over year to $1.09 billion, led by higher premium in both its operating segments. 


Net investment income decreased 4.4% over the prior-year quarter to $145.8 million.


Total claims and expenses were down 1% year over year to $897 million, primarily due to lower incurred losses and loss adjustment expenses.


The combined ratio was 80.7% compared with 89.0% in the year-ago period. 


Segment Results


The company’s Reinsurance segment reported net premium written of $924.4 million, up 11.0% year over year. The segment reported underwriting loss of $209.9 million up 88% year over year. Combined ratio was 76.4%, compared with 86.4% in the year-ago quarter.


The Insurance segment reported premium written of $225.2 million, up 23.7% year over year. The segment reported an underwriting profit of $193.0 million, compared with an underwriting loss of $2.1 million in the year-ago quarter.


Financial update


Shareholders’ equity as of the end of the reported quarter was $6.8 billion, up 1.2% from the $6.7 billion at Dec 31, 2012. 


Book value per share increased to $136.43 as on Mar 31, 2013 from to $120.30 as of Mar 31, 2012. 


Share Repurchase Update


During the quarter under review, Everest Re spent $238.6 million on share repurchase.


Everest Re currently retains a Zacks Rank #2 (Buy).  Other companies in the same industry The Travelers Companies Inc. ( TRV), ACE Limited ( ACE also reported first quarter 2013 earnings ahead of the Zacks Consensus Estimate. However, RLI Corporation ( RLI) reported first-quarter below the Zacks Consensus Estimate.

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