Everest Re Q1 Profit Up 32.5%

NU Online News Service, April 20, 10:10 a.m.EDT?Bermuda-based reinsurer Everest Re Group Ltd. reporteda 32.5 percent increase in its quarterly income, but some analystsexpressed concerns yesterday over the reinsurer's diminishedwritten premium figures.[@@]

The company posted $167.1 million for its 2005 first-quarterprofit, up from $126.1 million one year ago, boosted by favorablecapital gains and higher investment income.

Everest Re's after-tax operating income was $165.2 million, up 9percent from $151.5 million last year. One year ago, the companysuffered $34.9 million in realized capital losses, while this yearit booked $2.5 million realized capital gains.

The reinsurer's underwriting remained profitable even as itscombined ratio deteriorated slightly. Everest Re's combined ratiofor the first quarter was 91.4, compared to 90.8 one year ago. Netinvestment income still made up the bulk of the reinsurer's overallprofit. Everest Re said its investment income for the quarter was$132.9 million, improving from $100.9 million last year.

"We are pleased with the results achieved this quarter. Oursuperior existing portfolio of business, our ratings, ourdiversified operating platform, our people and our culture positionus well in this changing market," said Everest Re Chief ExecutiveOfficer Joseph Taranto.

But William Wilt, insurance analyst at New York-based investmentresearch firm Morgan Stanley, warned that he is keeping a"cautionary tone" because of the reinsurer's noticeably lowerwritten premium figures. Everest Re said its net premiums writtenfor the quarter were $1.01 billion, a 14.1 percent tumble from$1.18 billion one year ago.

"Investors will, and should, focus on the meaningfullylower-than-expected written premium figure as it is a harbinger offuture earnings power," Mr. Wilt cautioned. Mr. Wilt said he wasexpecting a written premium decline of 5 percent compared with the14.1 percent fall reported. But Everest Re's U.S reinsurance stillcame in "near expectations," he added.

Everest Re's net written premium figures also fell short ofanother analyst's expectation. Jay Gelb from investment firm LehmanBrothers in New York stated he was expecting $1.2 billion inquarterly net written premiums from the reinsurer.