Message #6 From:
NewsBot Date: October 23, 2006 01:13:00 PM
RE News Everest Re Group Reports Another Quarter of Record Earnings
HAMILTON, Bermuda--(BUSINESS WIRE)--
Everest Re Group, Ltd. (NYSE: RE) reported third quarter 2006 after-tax
operating income1, which excludes realized
capital gains and losses, of $240.2 million, or $3.68 per diluted share,
as compared to an after-tax operating loss of $438.9 million, or ($7.79)
per share, in the third quarter of 2005. Net income for the third
quarter 2006 of $245.7 million, or $3.76 per diluted share, also
compares favorably to the third quarter of 2005 which had a net loss of
$417.7 million, or ($7.41) per share. Operating income differs from net
income only by the exclusion of realized gains and losses on investments.
For the nine months ended September 30, 2006, after-tax operating income
was $616.8 million, or $9.44 per diluted share, as compared to an
after-tax operating loss of $100.3 million, or ($1.78) per share, in
2005. Net income in the first nine months of 2006 was $634.5 million, or
$9.71 per diluted share in contrast to the net loss of $56.5 million, or
($1.00) per share, in 2005.
Operating highlights for the third quarter of 2006 included the
following:
The GAAP combined ratio in the third quarter was 83.1% compared to
162.3% in the same period last year. While 2005 was impacted by
significant catastrophe losses from Hurricanes Katrina, Rita, and
Wilma, 2006 has been a relatively benign period for such event losses.
Favorable market conditions, particularly in the U.S. Reinsurance
segment, as well as net favorable reserve development on 2005 and
prior accident years of $29.0 million also benefited the current
period.
Gross premiums written were $1.05 billion, a 3.0% decline compared to
$1.08 billion in the third quarter of 2005. Our global reinsurance
writings were down 8.2% from 2005 but up 11.7% sequentially as our
reinsurance portfolio continues to transition. Our U.S. insurance
writings were up 18.3% generally reflecting the expected contribution
from new programs.
Net investment income increased by 25.5% to $147.5 million as compared
to $117.5 million in 2005.
Cash flow from operations amounted to $180.9 million for the period as
compared to $377.2 million in 2005. These include catastrophe loss
payouts of $202.2 million and $61.7 million, respectively, for the
three months ended September 30, 2006 and 2005.
The annualized return on average shareholders’
equity was 21.5% for the quarter and 19.3% for the first nine months
of 2006; and
Shareholders’ equity was up $444.8 million
for the quarter to $4.82 billion or $74.26 per outstanding share
representing a 16.5% increase from shareholders’
equity of $4.14 billion, or $64.04 per outstanding share at December
31, 2005.
Commenting on the Company’s results, Chairman
and Chief Executive Officer, Joseph V. Taranto said, “Our
strong performance trend continues with quarterly earnings again
reaching new levels and shareholder equity up over 10% for the quarter.
This is a reflection of the underlying strength of our diversified
business platform as well as still favorable market conditions,
particularly in the U.S. While top line continues to lag last year’s
volume, the gap is closing and we still expect strong production in the
fourth quarter to further close this gap.”
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 fluctuations, trends in insured and paid
losses, catastrophes, 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.
Everest Re Group, Ltd. is a Bermuda holding company that operates
through the following subsidiaries: Everest Reinsurance Company provides
reinsurance to property and casualty insurers in both the U.S. and
international markets. Everest Reinsurance (Bermuda), Ltd., including
through its branch in the United Kingdom, provides reinsurance and
insurance to worldwide property and casualty markets and reinsurance to
life insurers. Everest National Insurance Company and Everest Security
Insurance Company provide property and casualty insurance to
policyholders in the U.S. Everest Indemnity Insurance Company offers
excess and surplus lines insurance in the U.S. Additional information on
Everest Re Group companies can be found at the Group’s
web site at www.everestre.com.
A conference call discussing the third quarter results will be held at
8:30 a.m. Eastern Time on October 24, 2006. The call will be available
on the Internet through the Company’s web site
or at www.streetevents.com.
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 “Financial Reports”
section of the “Investor Center”.
The supplemental financial information may also be obtained by
contacting the Company directly.
1The Company generally uses after-tax operating
income, a non-GAAP financial measure, to evaluate its performance.
After-tax operating income consists of net income excluding after-tax
realized gains (losses) as the following reconciliation displays:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(Dollars in thousands, except per share amounts)
2006
2005
2006
2005
(unaudited)
(unaudited)
amount
per diluted share
amount
per diluted share
amount
per diluted share
amount
per diluted share
Net income
$245,678
$3.76
($417,745)
($7.41)
$634,477
$9.71
($56,470)
($1.00)
After-tax realized gains
5,493
0.08
21,147
0.38
17,717
0.27
43,868
0.78
After-tax operating income
$240,185
$3.68
($438,892)
($7.79)
$616,760
$9.44
($100,338)
($1.78)
Although realized capital gains (losses) are an integral part of the
Company’s insurance operations, the
determination of realized capital gains (losses) is independent of the
insurance underwriting process. The Company believes that the level of
realized gains (losses) 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 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 in their analyses for the reasons discussed above. The Company
provides after-tax operating income to investors so that they have what
management believes to be a useful supplement to GAAP information
concerning the Company’s performance.
