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Everest Re (RE) Q2 Earnings Top Estimates, Revenues Miss

Zacks Equity Research

Everest Re Group, Ltd. RE delivered second-quarter 2019 operating net income per share of $7.85, beating the Zacks Consensus Estimate by 17.9%. The bottom line improved more than eightfold year over year.

Both its reinsurance and insurance businesses witnessed growth in the quarter.

Operational Update

Everest Re’s total operating revenues of nearly $2 billion increased 6.1% year over year. However, the top line missed the Zacks Consensus Estimate by 4.8%.

Gross written premiums improved 5% year over year to $2.2 billion. The company’s worldwide reinsurance premiums remained flat year over year at $1.4 billion. Direct insurance premiums grew 17% to $757.1 million.

Net investment income came in at $179 million in the quarter under review, up 27% year over year.

Total claims and expenses decreased 10.6% to $1.6 billion, attributable to lower losses and loss adjustment expenses.

Combined ratio improved 1590 basis points (bps) to 89.2%. Excluding catastrophe loss, attritional combined ratio was 88.6%, a deterioration of 510 bps from the prior-year period.

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

Financial Update

Everest Re Group exited the quarter with total investments and cash of $19.8 billion, up 7.4% from 2018 level. Shareholder equity at the end of the reported quarter increased 6.6% from 2018 end to $8.9 billion.

Book value per share came in at $218.07 as of Jun 30, 2019, up 12.2% from 2018-end level.

Annualized net income return on equity was 16.1%.

Everest Re Group’s cash flow from operations was $853.5 million in the first half of 2019, up more than sixfold year over year.

The company bought back shares worth $8.5 million in the quarter. The company still has 1.3 million shares remaining under its authorization.

Zacks Rank

Everest Re Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Of the insurance industry players that have reported second-quarter results so far, The Progressive Corporation PGR and RLI Corp. RLI beat the respective Zacks Consensus Estimate for earnings. However, The Travelers Companies TRV missed the same.

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