Everest Re Group Ltd. reported second-quarter 2014 operating
earnings of $5.41 per share, missed the Zacks Consensus Estimate of
$5.75. Earnings were, however, up 6.1% year over year. Several
strategic initiatives and significantly higher underwriting income
boosted year over year results. Additionally, the company has a
strong balance sheet profile, a seasoned management team and huge
market share in the insurance and reinsurance industry. Everest Re
is witnessing improving rates in its insurance lines of businesses.
The company's overseas business is also performing strongly and the
trend is expected to continue in the future. Everest Re's 10-year
average combined ratio has remained below break-even levels leading
to underwriting profitability. It has also been generating stable
cash flows from operations. However, the company has exposure to
catastrophes that lend volatility to its earnings. Also, declining
net investment income due to low interest rate environment, and
decreasing limited partnership income and low reinsurance rates
remain primary concerns. Everest Re presently has a Neutral
Based in Hamilton, Bermuda, Everest Re Group Ltd. writes
property and casualty (P&C) reinsurance and insurance in the
United States, Bermuda and the international markets. The company
also offers other innovative products such as excess and surplus
lines of insurance. Everest Re virtually underwrites all classes
and categories of business in treaty, facultative, and specialty
lines both through brokers and directly with ceding companies.
Incorporated in 1999 as a wholly owned subsidiary of Everest
Reinsurance Holdings, Everest Re Group, Ltd. now operates as the
parent company. However, Everest Reinsurance Holdings continues to
be the parent organization for the company's U.S. based operations.
The company is rated 'A+' by both A.M. Best and S&P.
In the beginning of the third quarter of 2011, Everest Re
consolidated its Specialty segment partly with the Insurance
segment and partly with Reinsurance. The company now reports
primary accident and health (A&H) as a part of Insurance, while
A&H Reinsurance, Surety and Marine & Aviation are now in
the U.S. Reinsurance segment.
Reinsurance (generated 78% of net premium written in 2013) This
segment writes property and casualty reinsurance on both a treaty
and a facultative basis, through reinsurance brokers as well as
directly with ceding companies within the U.S. It also includes
marine, aviation as well as surety business within the U.S. and
worldwide through brokers and directly with ceding companies.
Insurance (22%) This segment writes property and casualty
insurance primarily through general agents and surplus lines
brokers within the U.S. One-third of this business comprises
short-tail specialty components led by Heartland, its Crop
Insurance Company. Another third of the business is workers'
compensation, mostly compensation for California workers.
Approximately 15% of the U.S insurance segment comprises Director s
& Officer s insurance written out of New York and Canada, and
the remaining 20% of the segment s book is general casualty. It
also includes accident and health (A&H) business.
Mt. Logan Re is the special purpose reinsurer formed in early
2013 to provide collateralized capacity to the worldwide property
catastrophe reinsurance market.
Everest Re Group operates through the following
Everest Reinsurance Company provides reinsurance to property and
casualty insurers in both the U.S. and international markets.
Everest Reinsurance (Bermuda) Ltd., including its branch in the
United Kingdom, provides reinsurance and insurance to worldwide
property and casualty markets as well as reinsurance to life
insurers. Everest Reinsurance Company (Ireland) Limited provides
reinsurance to non-life insurers in Europe. 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.
As of Dec 31, 2013, shareholders' equity was $7.0 billion up
3.5% from $6.7 billion at year-end 2012.
Everest Re Group Ltd. (RE): Read the Full Research
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