Everest Re (RE) Q1 Earnings Top Estimates, Premiums Rise

Everest Re Group, Ltd . RE delivered first-quarter 2018 operating earnings of $5.34 per share, surpassing the Zacks Consensus Estimate of $5.29 by 0.95%. The bottom line declined 17.6% from the year-ago quarter.

Everest Re Group, Ltd. Price, Consensus and EPS Surprise

Everest Re Group, Ltd. Price, Consensus and EPS Surprise | Everest Re Group, Ltd. Quote

The quarter witnessed increase in premiums and net investment income. Return on equity improved in double digits. Claims and expenses also escalated in the quarter.

Including after-tax net realized capital losses of 47 cents and foreign exchange income of 24 cents, net income came in at $5.11 per share, down 27.7% from the prior-year quarter.

Operational Update

Everest Re Group's total operating revenues of $1.8 billion increased nearly 23.9% year over year. Moreover, the top line beat the Zacks Consensus Estimate by 6.8%.

Gross written premiums grew 21% year over year to $1.9 billion. The company's worldwide reinsurance premiums surged 22% while direct insurance premiums improved 16% for the quarter.

Net investment income came in at $138.3 million in the quarter, up 13% year over year.

Total claims and expenses increased 33.2% to $1.5 million, attributable to higher incurred losses and loss adjustment expenses, increase in commission, brokerage, taxes and fees, higher other underwriting expenses as well as corporate expenses.

Combined ratio deteriorated 730 basis points (bps) to 93.3% from 86% in the year-ago quarter. Excluding catastrophe losses, net operating income improved 5%, underwriting income was more than $200 million and combined ratio was 87.1%.

Financial Update

Everest Re Group exited the quarter with total assets of $23.5 billion, decreasing 0.3% from $21.6 billion at the end of 2017. Shareholder equity at the end of the reported quarter dipped 0.3% to $8.3 billion from the level of $8.4 billion at 2017-end.

Total cash balance at the end of the quarter under review increased 10.3% to $700.6 million from end of 2017.

Book value per share came in at $203.62 as of Mar 31, 2018, down 0.6% from the 2017-end level.

Return on equity was 10.5%.

Everest Re Group's cash flow from operations was $195.6 million, plunging nearly 49% year over year.

Zacks Rank

Everest Re Group carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Performance of Other Insurers

The bottom line of Torchmark Corporation TMK , The Progressive Corporation PGR and RLI Corp. RLI surpassed their respective Zacks Consensus Estimate in the first quarter of 2018.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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