Business Wire | Feb 8, 2021 04:15PM EST

Everest Re Group Reports Fourth Quarter and Full Year 2020 Results: Full Year Net Income of $514 Million

Feb. 08, 2021

HAMILTON, Bermuda--(BUSINESS WIRE)--Feb. 08, 2021--Everest Re Group, Ltd. ("Everest" or the "Company") today reported its 2020 fourth quarter and year end results.

Fourth Quarter 2020 Highlights

* Net income of $64 million equal to $1.59 per share * Net operating loss of $(44) million, $(1.12) per common share * Gross written premium growth of 13% * Attritional combined ratio of 86.3%, a 4 point improvement year over year * Pre-tax net catastrophe losses of $70 million, Covid-19 Pandemic ("Pandemic") losses of $76 million, and a prior year reserve strengthening of $400 million

Full Year 2020 Highlights

* Net income of $514 million, $12.78 per diluted common share * Net operating income of $300 million, $7.46 per diluted common share * Growth in diluted book value per share of 11.4% inclusive of dividends * Gross written premium growth of 15% * Attritional combined ratio of 87.5%, ~ 1 point improvement year over year * 2020 cash flow from operations of $2.9 billion

The following table summarizes the Company's net income and related financial metrics and provides details on shareholders' equity and book value per share.

Net income and operating income Q4 Full Year Q4 Full Year

All values in USD millions except for 2020 2020 2019 2019per share amounts and percentagesEverest Re GroupNet income 63.6 514.2 217.6 1,009.5

Net operating income (loss) (44.2 ) 300.1 130.8 872.4

Net income per diluted common share 1.59 12.78 5.32 24.70

Net operating income (loss) per diluted (1.12 ) 7.46 3.20 21.34 common share Net income annualized return on average 2.8 % 5.8 % 10.0 % 12.0 %equityNet operating income annualized return -2.0 % 3.4 % 6.0 % 10.3 %on average equity Year end equity and book valueShareholders' equity 9,726.2 9,132.9

Book value per share 243.25 223.85

Growth in bvps adjusted for dividends 11.4 % 18.7 %

Notes1/ Refer to the reconciliation of net income to net operating income foundlater in this release Everest Re Group President & CEO Juan C. Andrade commented: "We are relentlessly executing our strategies from a position of strength in this robust market as evidenced by 2020 growth in gross written premiums of 15% and net written premiums of 17% and improvement in underlying underwriting profitability. Our attritional combined ratio improved approximately one point to 87.5% versus the prior year, with our Insurance segment improving 2.3 points to 94.2%. Despite the $511 million Pandemic loss provision and a $400 million prior accident year reserve strengthening, we delivered $300 million in operating income and $514 million in net income providing a return on equity of 5.8%. Everest's investment income remained resilient at $642 million despite the Pandemic's impact on financial markets and the sharp decline in interest rates. Our total shareholders' equity grew to a record $9.7 billion from $9.1 billion during the year, representing net book value per share growth of 11.4% including dividends. Everest has a strong capital position bolstered by the $1.0 billion senior notes offering and a leading global franchise with great momentum entering 2021."

The following information summarizes the Company's underwriting results, on a consolidated basis and also by segment - Reinsurance and Insurance, with selected commentary on results by segment.

Underwriting Q4 Full Year Q4 Full Year Year on yearinformation - changeEverest Re GroupAll values in USD 2020 2020 2019 2019 Q4 Fullmillions except for YearpercentagesGross written 2,750.5 10,482.4 2,436.3 9,133.4 12.9 % 14.8 %premiumNet written premium 2,449.3 9,117.0 2,120.2 7,824.4 15.5 % 16.5 %

Combined ratio 109.1 % 102.9 % 101.5 % 95.5 % 7.6 7.4 pts ptsAttritional combined 86.3 % 87.5 % 90.3 % 88.4 % -4.0 -0.9ratio pts pts Pre-tax net 70.0 425.0 225.0 575.5 catastrophe lossesPre-tax net covid 76.1 511.1 - - lossesPre-tax net prior 400.0 401.4 (19.2 ) (93.6 )year reservedevelopmentNotes1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemicimpacts, catastrophe losses, and reinstatement premiums Reinsurance segment

* The reinsurance segment achieved strong growth with gross written premiums up 12% for the quarter and 15% for the year, driven by new business opportunities, growth with existing customers, and improved rates and terms and conditions. * The combined ratio for the quarter and full year 2020 reflected the impact of catastrophe losses, Covid-19 pandemic losses, and a reserve adjustment in the amount of $400 million. * We have a more profitable portfolio driven by the consistent execution of our underwriting initiatives.

Underwriting Q4 Full Year Q4 Full Year Year on yearinformation - changeReinsurance segmentAll values in USD 2020 2020 2019 2019 Q4 Fullmillions except for YearpercentagesGross written premium 1,878.6 7,281.7 1,677.6 6,355.9 12.0 % 14.6 %

Net written premium 1,793.5 6,767.6 1,519.3 5,732.3 18.0 % 18.1 %

Combined ratio 112.4 % 103.0 % 103.9 % 95.4 % 8.5 7.6 pts ptsAttritional combined 83.9 % 85.2 % 87.4 % 85.5 % -3.5 -0.3ratio pts pts Pre-tax net 60.0 357.0 225.0 574.8 catastrophe lossesPre-tax net covid 56.1 407.1 - - lossesPre-tax net prior 400.0 396.9 (2.7 ) (77.2 )year reservedevelopmentNotes1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemicimpacts, catastrophe losses, and reinstatement premiums Insurance segment

* The Company's insurance segment achieved strong growth with gross written premiums up 15% for the quarter and 15% for the year, driven primarily by new business opportunities, strong renewal retention, and rate improvement. * The combined ratio for the quarter and full year 2020 reflected the impact of catastrophe losses and Covid-19 pandemic losses. * We achieved record renewal rate increases of +21% in the fourth quarter excluding workers compensation, and up 14% including workers compensation where we are seeing rates flatten.

Underwriting information Q4 Full Year Q4 Full Year Year on year- Insurance segment change

All values in USD 2020 2020 2019 2019 Q4 Fullmillions except for YearpercentagesGross written premium 871.9 3,200.6 758.7 2,777.5 14.9 % 15.2 %

Net written premium 655.8 2,349.4 600.9 2,092.2 9.1 % 12.3 %

Combined ratio 99.0 % 102.6 % 95.1 % 95.8 % 3.9 6.8 pts ptsAttritional combined 93.8 % 94.2 % 98.1 % 96.5 % -4.3 -2.3ratio pts pts Pre-tax net catastrophe 10.0 68.0 0.0 0.7 lossesPre-tax net covid losses 20.0 104.0 - -

Pre-tax net prior year - 4.6 (16.4 ) (16.4 )reserve developmentNotes1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemicimpacts, catastrophe losses, and reinstatement premiums Investments and capital

* Net investment income of $222 million for the quarter and $647 million for the year, including limited partnership gains of $91 million for the quarter and $113 million for the year * Total invested assets and cash of $25.5 billion at December 31, 2020, 23% growth year over year * Shareholders' equity increased to a record $9.7 billion at December 31, 2020 * Book value per diluted share at December 31, 2020 of $243.25, up 11.4% on a dividend adjusted basis since year end 2019 * Common share dividends declared and paid of $1.55 per share, equal to $62 million for the quarter * The Company repurchased no common shares in the quarter

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 and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemic, 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.

About Everest Re Group, Ltd.

Everest Re Group, Ltd. ("Everest") is a leading global provider of reinsurance and insurance, operating for close to 50 years through subsidiaries in the U.S., Europe, Singapore, Canada, Bermuda, and other territories.

Everest offers property, casualty, and specialty products through its various operating affiliates located in key markets around the world.

Everest common stock (NYSE:RE) is a component of the S&P 500 index.

Additional information about Everest, our people, and our products can be found on our website at www.everestre.com.All issuing companies may not do business in all jurisdictions.

A conference call discussing the second quarter results will be held at 8:00 a.m. Eastern Time on February 9, 2021. The call will be available on the Internet through the Company's web site at everestre.com/investors.

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 "Investors/Financial Reports/Quarterly Reports" section of the website. The supplemental financial information may also be obtained by contacting the Company directly.

_______________________________________________

The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance. After-tax operating income (loss) consists of net income (loss) excluding after-tax net realized capital gains (losses) and after-tax net foreign exchange income (expense) as the following reconciliation displays:

Three Months Ended Twelve Months Ended December 31, December 31,(Dollarsinthousands, 2020 2019 2020 2019except pershareamounts) (unaudited) (unaudited)

Per Per Per Per Diluted Diluted Diluted Diluted Common Common Common Common Amount Share Amount Share Amount Share Amount Share Net income $ 63,601 $ 1.59 $ 217,644 $ 5.32 $ 514,151 $ 12.78 $ 1,009,461 $ 24.70 (loss)After-taxnetrealized 149,950 3.74 61,052 1.49 217,017 5.39 150,808 3.69 capitalgains(losses)After-taxnetforeign (42,165 ) (1.05 ) 25,763 0.63 (2,932 ) (0.07 ) (13,767 ) (0.34 )exchangeincome(expense) After-taxoperating $ (44,184 ) $ (1.12 ) $ 130,828 $ 3.20 $ 300,066 $ 7.46 $ 872,420 $ 21.34 income(loss) (Some amounts may not reconcile due to rounding.) Although net realized capital gains (losses) and net foreign exchange income (expense) are an integral part of the Company's insurance operations, the determination of net realized capital gains (losses) and foreign exchange income (expense) is independent of the insurance underwriting process. The Company believes that the level of net realized capital gains (losses) and net foreign exchange income (expense) 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 (loss) 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 (loss) in their analyses for the reasons discussed above. The Company provides after-tax operating income (loss) to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company's performance.

--Financial Details Follow--

EVEREST RE GROUP,LTD.CONSOLIDATEDSTATEMENTS OFOPERATIONSAND COMPREHENSIVEINCOME (LOSS) Three Months Ended Twelve Months Ended

December 31, December 31,

(Dollars in 2020 2019 2020 2019 thousands, exceptper share amounts) (unaudited) (unaudited)

REVENUES:Premiums earned $ 2,396,483 $ 1,948,071 $ 8,681,513 $ 7,403,686

Net investment 222,349 146,077 642,465 647,139 incomeNet realized capitalgains (losses):Credit allowances on 17,896 - (1,745 ) - fixed maturitysecuritiesOther-than-temporary (5,495 ) - (20,899 )impairments on fixedmaturity securitiesOther net realized 165,490 80,938 269,394 205,903 capital gains(losses)Total net realized 183,386 75,443 267,649 185,004 capital gains(losses)Other income (40,819 ) 44,495 6,487 (4,660 )(expense)Total revenues 2,761,399 2,214,086 9,598,114 8,231,169

CLAIMS AND EXPENSES:Incurred losses and 1,976,771 1,407,794 6,550,837 4,922,898 loss adjustmentexpensesCommission, 513,080 450,226 1,873,250 1,703,726 brokerage, taxes andfeesOther underwriting 125,372 118,923 511,237 440,899 expensesCorporate expenses 11,934 10,344 41,118 32,966

Interest, fees and 14,847 7,721 36,323 31,693 bond issue costamortization expenseTotal claims and 2,642,004 1,995,008 9,012,765 7,132,182 expenses INCOME (LOSS) BEFORE 119,395 219,078 585,349 1,098,987 TAXESIncome tax expense 55,794 1,434 71,198 89,526 (benefit) NET INCOME (LOSS) $ 63,601 $ 217,644 $ 514,151 $ 1,009,461

Other comprehensiveincome (loss), netof tax:Unrealizedappreciation(depreciation) ("URA 87,375 (28,159 ) 423,210 496,430 (D)") on securitiesarising during theperiodReclassificationadjustment for (16,165 ) (8,393 ) (3,476 ) (12,613 )realized losses(gains) included innet income (loss)Total URA(D) on 71,210 (36,552 ) 419,734 483,817 securities arisingduring the period Foreign currency 55,937 29,235 86,327 14,030 translationadjustments Benefit planactuarial net gain (5,615 ) (12,591 ) (5,615 ) (12,591 )(loss) for theperiodReclassificationadjustment for 1,768 1,788 6,300 5,453 amortization of net(gain) loss includedin net income (loss)Total benefit plan (3,847 ) (10,803 ) 685 (7,138 )net gain (loss) forthe periodTotal other 123,300 (18,120 ) 506,746 490,709 comprehensive income(loss), net of tax COMPREHENSIVE INCOME $ 186,901 $ 199,524 $ 1,020,897 $ 1,500,170 (LOSS) EARNINGS PER COMMONSHARE:Basic $ 1.59 $ 5.34 $ 12.81 $ 24.77

Diluted 1.59 5.32 12.78 24.70

EVEREST RE GROUP, LTD.CONSOLIDATED BALANCE SHEETSDecember 31,(Dollars and share amounts in thousands, except par value per share)2020

2019

(unaudited)ASSETS:Fixed maturities - available for sale, at market value$

20,040,173

$

16,824,944

(amortized cost: 2020, $19,225,068; 2019, $16,473,491, credit allowances: 2020, ($1,745); 2019, $0)Fixed maturities - available for sale, at fair value-

5,826

Equity securities, at fair value1,472,236

931,457

Short-term investments (cost: 2020, $1,135,088; 2019, $414,639)1,134,950

414,706

Other invested assets (cost: 2020, $2,012,581; 2019, $1,763,531)2,012,581

1,763,531

Cash801,651

808,036

Total investments and cash25,461,591

20,748,500

Accrued investment income141,304

116,804

Premiums receivable2,680,562

2,259,088

Reinsurance receivables1,994,555

1,763,471

Funds held by reinsureds716,655

489,901

Deferred acquisition costs622,053

581,863

Prepaid reinsurance premiums412,015

445,716

Income taxes17,253

305,711

Other assets742,369

612,997

TOTAL ASSETS$

32,788,357

$

27,324,051

LIABILITIES:Reserve for losses and loss adjustment expenses16,398,997

13,611,313

Future policy benefit reserve37,723

42,592

Unearned premium reserve3,501,359

3,056,735

Funds held under reinsurance treaties15,807

10,668

Other net payable to reinsurers294,347

291,660

Losses in course of payment127,971

51,950

Senior notes due 6/1/2044397,194

397,074

Senior notes due 10/1/2050979,524

-

Long term notes due 5/1/2067223,674

236,758

Borrowings from FHLB310,000

-

Accrued interest on debt and borrowings10,460

2,878

Unsettled securities payable206,693

30,650

Other liabilities558,432

458,848

Total liabilities23,062,181

18,191,126

SHAREHOLDERS' EQUITY:Preferred shares, par value: $0.01; 50,000 shares authorized;no shares issued and outstanding-

-

Common shares, par value: $0.01; 200,000 shares authorized; (2020) 69,620and (2019) 69,464 outstanding before treasury shares696

694

Additional paid-in capital2,245,301

2,219,660

Accumulated other comprehensive income (loss), net of deferred income tax expense(benefit) of $80,451 at 2020 and $30,996 at 2019534,899

28,152

Treasury shares, at cost; 29,636 shares (2020) and 28,665 shares (2019)(3,622,172

)

(3,422,152

)

Retained earnings10,567,452

10,306,571

Total shareholders' equity9,726,176

9,132,925

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$

32,788,357

$

27,324,051

EVEREST RE GROUP, LTD. CONSOLIDATED BALANCE SHEETS December 31,(Dollars and share amounts in thousands, 2020 2019 except par value per share) (unaudited)ASSETS: Fixed maturities - available for sale, at $ 20,040,173 $ 16,824,944 market value(amortized cost: 2020, $19,225,068; 2019,$16,473,491, credit allowances: 2020, ($1,745); 2019, $0)Fixed maturities - available for sale, at fair - 5,826 valueEquity securities, at fair value 1,472,236 931,457

Short-term investments (cost: 2020, 1,134,950 414,706 $1,135,088; 2019, $414,639)Other invested assets (cost: 2020, $2,012,581; 2,012,581 1,763,531 2019, $1,763,531)Cash 801,651 808,036

Total investments and cash 25,461,591 20,748,500

Accrued investment income 141,304 116,804

Premiums receivable 2,680,562 2,259,088

Reinsurance receivables 1,994,555 1,763,471

Funds held by reinsureds 716,655 489,901

Deferred acquisition costs 622,053 581,863

Prepaid reinsurance premiums 412,015 445,716

Income taxes 17,253 305,711

Other assets 742,369 612,997

TOTAL ASSETS $ 32,788,357 $ 27,324,051

LIABILITIES: Reserve for losses and loss adjustment 16,398,997 13,611,313 expensesFuture policy benefit reserve 37,723 42,592

Unearned premium reserve 3,501,359 3,056,735

Funds held under reinsurance treaties 15,807 10,668

Other net payable to reinsurers 294,347 291,660

Losses in course of payment 127,971 51,950

Senior notes due 6/1/2044 397,194 397,074

Senior notes due 10/1/2050 979,524 -

Long term notes due 5/1/2067 223,674 236,758

Borrowings from FHLB 310,000 -

Accrued interest on debt and borrowings 10,460 2,878

Unsettled securities payable 206,693 30,650

Other liabilities 558,432 458,848

Total liabilities 23,062,181 18,191,126

SHAREHOLDERS' EQUITY: Preferred shares, par value: $0.01; 50,000 shares authorized;no shares issued and outstanding - -

Common shares, par value: $0.01; 200,000 shares authorized; (2020) 69,620and (2019) 69,464 outstanding before treasury 696 694 sharesAdditional paid-in capital 2,245,301 2,219,660

Accumulated other comprehensive income (loss), net of deferred income tax expense(benefit) of $80,451 at 2020 and $30,996 at 534,899 28,152 2019Treasury shares, at cost; 29,636 shares (2020) (3,622,172 ) (3,422,152 )and 28,665 shares (2019)Retained earnings 10,567,452 10,306,571

Total shareholders' equity 9,726,176 9,132,925

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 32,788,357 $ 27,324,051

EVEREST RE GROUP, LTD.CONSOLIDATED STATEMENTS OF CASH FLOWSTwelve Months EndedDecember 31,(Dollars in thousands)2020

2019

(unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)$

514,151

$

1,009,461

Adjustments to reconcile net income to net cash provided by operating activities:Decrease (increase) in premiums receivable(387,123

)

(62,018

)

Decrease (increase) in funds held by reinsureds, net(219,321

)

(56,722

)

Decrease (increase) in reinsurance receivables(150,753

)

67,444

Decrease (increase) in income taxes239,883

237,479

Decrease (increase) in prepaid reinsurance premiums55,334

(95,207

)

Increase (decrease) in reserve for losses and loss adjustment expenses2,627,813

402,380

Increase (decrease) in future policy benefit reserve(4,869

)

(4,186

)

Increase (decrease) in unearned premiums404,049

521,709

Increase (decrease) in other net payable to reinsurers(24,163

)

66,477

Increase (decrease) in losses in course of payment74,759

(33,557

)

Change in equity adjustments in limited partnerships(103,772

)

(108,332

)

Distribution of limited partnership income122,326

81,300

Change in other assets and liabilities, net(95,968

)

(54,176

)

Non-cash compensation expense39,209

34,018

Amortization of bond premium (accrual of bond discount)49,673

30,936

Net realized capital (gains) losses(267,649

)

(185,004

)

Net cash provided by (used in) operating activities2,873,579

1,852,002

CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from fixed maturities matured/called - available for sale, at market value2,586,405

2,302,299

Proceeds from fixed maturities sold - available for sale, at market value1,945,867

3,280,237

Proceeds from fixed maturities sold - available for sale, at fair value4,907

2,917

Proceeds from equity securities sold, at fair value376,347

283,965

Distributions from other invested assets309,912

284,558

Cost of fixed maturities acquired - available for sale, at market value(7,189,301

)

(6,613,917

)

Cost of fixed maturities acquired - available for sale, at fair value-

(4,243

)

Cost of equity securities acquired, at fair value(637,082

)

(329,417

)

Cost of other invested assets acquired(557,473

)

(425,438

)

Net change in short-term investments(717,527

)

(167,290

)

Net change in unsettled securities transactions194,574

(26,163

)

Net cash provided by (used in) investing activities(3,683,371

)

(1,412,492

)

CASH FLOWS FROM FINANCING ACTIVITIES:Common shares issued during the period for share-based compensation, net of expense(13,566

)

(3,134

)

Purchase of treasury shares(200,020

)

(24,604

)

Dividends paid to shareholders(249,056

)

(234,322

)

Proceeds from issuance of senior notes979,417

-

Cost of debt repurchase(10,647

)

-

FHLB advances (repayments)310,000

-

Cost of shares withheld on settlements of share-based compensation awards(15,908

)

(13,627

)

Net cash provided by (used in) financing activities800,220

(275,687

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH3,187

(11,882

)

Net increase (decrease) in cash(6,385

)

151,941

Cash, beginning of period808,036

656,095

Cash, end of period$

801,651

$

808,036

SUPPLEMENTAL CASH FLOW INFORMATION:Income taxes paid (recovered)$

(169,748

)

$

(148,585

)

Interest paid33,570

31,689

View source version on businesswire.com: https://www.businesswire.com/news/home/20210208005816/en/

CONTACT: Media: Dane Lopes Chief Communications Officer Everest Global Services, Inc. 203.388.3977 Investors: Jon Levenson Head of Investor Relations Everest Global Services, Inc. 908.604.3169