Everest Re Group Ltd. (RE)
Q3 FY08 Earnings Call
October 21, 2008, 08:30 AM ET
Elizabeth B. Farrell - VP of IR
Joseph V. Taranto - Chairman and CEO
Thomas J. Gallagher - President and COO
Craig E. Eisenacher - EVP and CFO
Joshua Shanker - Citigroup
Susan Spivak - Wachovia Capital Markets
Jay H. Gelb - Barclays Capital Inc.
Thomas V. Cholnoky - Goldman Sachs
Matthew G. Heimermann - JPMorgan
Vinay Misquith - Credit Suisse
Previous Statements by RE
» Everest Re Group, Ltd. Q3 2009 Earnings Call Transcript
» Everest Re Group, Ltd. Q1 2009 Earnings Call Transcript
» Everest Re Group Q4 2008 Earnings Call Transcript
Elizabeth B. Farrell - Vice President of Investor Relations
Thank you, Mark. Good morning and welcome to Everest Re's third quarter 2008 earnings conference call. Joining me today are Joe Taranto, our Chief Executive Officer; Tom Gallagher, our President; and Craig Eisenacher, our Chief Financial Officer.
Before we begin, I will start with our comments by noting that SEC filings include extensive disclosures with respect to forward-looking statements. In that regard, I note that statements made during today's call, which are forward-looking in nature such as statements about projection, estimates, expectations and the like are subject to various risks.
As you know, actual results could differ materially from current projections or expectations. Our SEC filings have a full listing of the risks that investor should consider in connection with such statements.
Now, let me turn the call over to Joe Taranto.
Joseph V. Taranto - Chairman and Chief Executive Officer
Thanks, Beth. Good morning. Normally on the quarterly calls, we go right into what's happening in the insurance world and I will shortly ask Tom to do just that and have Craig follow with the financials.
However, there seems to be little that's normal about this quarter, as the central issue seems to be more of the chaos in the worldwide financial system. It's easy to get down, when you consider the meltdown of the system, the destruction of value, the loss of many companies that were household names, and the many economic close that are still to come.
Perhaps, there were many excesses that needed to be running out of the system. I trust they have been and we can now move forward. At Everest, despite the blood in the Street, we have remained strong with our client base intact, our employees committed and our ratings among the highest in the business.
Going forward, I expect the world will be very different and that these changes will work to our benefit. As a reinsurer, we are capacity provider. Well, many of our clients are suddenly in need of more capacity, we'll try to help.
As a reinsurer, we mitigate our clients' risk. Again, many of our clients as most of the world will be more risk-averse and looking for more partners to sharing their risk, again, we'll try to help.
As a reinsurer and an insurer, we have extremely strong financials and financial ratings. Well again, the world is looking more closely at the credit quality of its partners than ever before and paying more for credit quality than ever before, which works well for Everest.
Some of our competition has lost strength and as a result will lose business. There will be opportunities for us to pick up business, people and perhaps other companies.
Much of the money that so easily came into our space from hedge funds and other sources has dried up. The staying power of many of the smaller companies in our sector will be questioned more than ever, again this will work to the advantage of Everest.
The insurance market has been softening; in past cycles it had taken many years of deteriorating rates and conditions before the market turns up. At the beginning of the quarter, I thought we had years to go before better days appear.
Now I see that timeframe dramatically reduced and expect the portions of the reinsurance and insurance market to improve by the one-month renewal season.
In summary, it's been a rough three months but I see change coming and much will work to our company's benefit. Tom?
Thomas J. Gallagher - President and Chief Operating Officer
Hi, thanks Joe. Well, I'll continue what Joe, said about in his comments. It's been quite challenging in the last nine months.
But as Joe said, we are entering a changed world. And we are well positioned to take full advantage of these changes. Let me make some brief comments on each segment of our portfolio which is a reflection of where the overall market has been in the first nine months of '08.
Recognizing that third quarter has continued to perform generally as it has to the first six months of the year.
Our international business including London and European ops represent almost 38% of our worldwide portfolio. We continue to see the treaty reinsurers being disciplined in their approach.
Fortunate programs have remained stable with some price reductions on excess programs with good results both for our cat as well as per risk. And increases in areas where loses have impacted programs such as China, Chile, Australia and Peru. We have been able to increase our premium volume through new business as well as increased participations on existing programs in Latin America, Asia, Middle East as well as Brazil due to the recent opening of the reinsurance market in that country.