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Everest Re (RE) Q1 Earnings Beat, Revenues Increase Y/Y

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Everest Re Group, Ltd. RE delivered first-quarter 2021 operating net income per share of $6.49, which beat the Zacks Consensus Estimate by 41.4%. The bottom line improved 61% year over year.

The quarter witnessed higher premiums and improved net investment income, offset by higher expenses.

Everest Re Group, Ltd. Price, Consensus and EPS Surprise

Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re Group, Ltd. Price, Consensus and EPS Surprise

Everest Re Group, Ltd. price-consensus-eps-surprise-chart | Everest Re Group, Ltd. Quote

Operational Update

Everest Re’s total operating revenues of $2.7 billion increased 22.5% year over year on the back of higher premiums earned and net investment income.

Gross written premiums improved 14% year over year to $2.9 billion. The company’s worldwide reinsurance premiums increased 15.8% year over year to $2 billion, driven by rate, increased share on profitable deals, and new opportunities in property, casualty, specialty lines, and facultative business. Direct insurance premiums increased 10% to $872.4 million, driven primarily by notable growth in specialty casualty, property/short-tail and professional liability classes of business, offset by reductions in workers’ compensation as the company sought growth in lines with more attractive pricing.

Net investment income came in at $260.4 million in the quarter under review, up 76.2% year over year.

Total claims and expenses increased 17% to $2.4 billion, attributable to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense.

Underwriting income was 45 million, which increased 58.1% year over year. The Reinsurance segment recorded underwriting income of $44.8 million, which decreased 10.5% year over year. Underwriting income in the Insurance segment was $0.4 million against the year-ago loss of $21.5 million.

Combined ratio improved 50 basis points (bps) to 98.1%. Excluding catastrophe loss, attritional combined ratio was 87.2%, up 1010 bps from the prior-year period.

Combined ratio deteriorated 90 bps to 97.5% in the Reinsurance segment while the same improved 400 bps to 99.9% in the Insurance segment.

Pre-tax catastrophe losses were $260 million, which increased more than eight-fold from the year-ago quarter.

Financial Update

Everest Re Group exited the quarter with total investments and cash of $25.9 billion, up 1.9% from 2020-end level. Shareholder equity at the end of the reported quarter remained flat from 2020-end at $9.7 billion.

Book value per share came in at $241.57 as of Mar 31, 2021, up 12.6% from 2019-end level.

Annualized net income return on equity expanded 1420 basis points to 15% in the first quarter of 2021.

Everest Re Group’s cash flow from operations was $904 million, up 78.6% year over year.

The company bought back shares worth $23.5 million in the quarter.

Zacks Rank

Everest Re Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

The Progressive Corporation’s PGR first-quarter 2021 earnings per share of $1.72 missed the Zacks Consensus Estimate of $1.78.

The Travelers Companies’ TRV first-quarter 2021 earnings per share of $2.73 beat the Zacks Consensus Estimate of $2.44.

W.R. Berkley Corporation’s WRB first-quarter 2021 earnings per share of $1.08 beat the Zacks Consensus Estimate by 21.3%.

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