Everest Re posted strong fourth-quarter 2013 earnings. Both bottom
line as well as top line faired well year over year and also
surpassed the Zacks Consensus Estimate. Several strategic
initiatives and significantly higher underwriting income boosted
the 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 reinsurance and 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 the
breakeven levels which signify its underwriting profitability. It
has also been generating stable cash flows from operations.
However, the company has exposure to catastrophes that causes
volatility to its earnings. Also, declining net investment income
due to low interest rate environment and decreasing limited
partnership income remain as primary concerns. Everest Re presently
has a Neutral recommendation.
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 had 995 employees worldwide as of Apr 1, 2011. 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.
U.S. Reinsurance (generated 31% of premium written in 2012) 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.
U.S. Insurance (23%) 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.
International (29) This segment writes non-U.S. property and
casualty reinsurance through Everest Re's branches in Canada and
Singapore, as well as through offices in Miami and New Jersey.
Bermuda (17%) The Bermuda operation provides reinsurance and
insurance to worldwide property and casualty markets reinsurance to
life insurers through brokers and directly with ceding companies
from its Bermuda office and reinsurance to the United Kingdom and
other European markets through its U.K. branch.
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, 2012, shareholders' equity was $6.7 billion up 11%
from $6.1 billion at year-end 2011.
Everest Re Group Ltd. (RE): Read the Full Research
EVEREST RE LTD (RE): Free Stock Analysis Report
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