Everest Second-Quarter Income Soars 141%

By Susanne Sclafane

NU Online News Service, July 20, 11:02 a.m. EDT?Bermuda-based Everest Re Group, Ltd. reported a 141 percent jump in second-quarter income to $264 million, or $4.64 per share, yesterday, crediting "strong operating fundamentals" for the result.[@@]

Chairman and Chief Executive Officer Joseph V. Taranto also said that a "continued favorable, although changing, market environment" helped the company turn in its strong performance.

After-tax operating income, which excludes realized capital gains and losses, was $174.4 million, or $3.07 per share?a 63 percent jump over last year's second quarter.

In yesterday afternoon's announcement, the company increased its estimate of 2004 operating earnings to $10.50-$11.50 per share, absent unusual loss activity. Prior guidance was $10-11 per share.

Net premiums written for the quarter topped $1 billion?at $1.05 billion?increasing 6.3 percent from second-quarter 2003. At the same time, the company's second-quarter combined ratio improved four points to 91.5, compared to 95.5 in second-quarter 2003.

Net investment income for the second quarter rose 34 percent to $136.8 million.

During the first half (a period which includes the Jan. 1 reinsurance renewal period), the company posted $2.23 billion in net written premiums, 14.9 percent higher than $1.94 billion recorded in the first six months of 2003.

Net investment income for the six months ended June 30, 2004 was $237.7 million, an increase of 21.5 percent from first-half 2003.

For the six-month period, operating income was $5.73 per share.

The company said that the increased range of operating earnings estimates for the year?$10.50-$11.50 per share?is the range of earnings that the company estimates assuming there is no unusual loss activity.

In late June, the company indicated that an increase from prior guidance might be forthcoming because of continued strong performance of its underlying operations, including investments.

The June statement was released with an announcement that the company had received notice of termination of a contract with an insurance agency that produced the majority of Everest Re Group's California workers' compensation business. At that point, the company also indicated that it had developed contingency plans for writing California workers' compensation business and that it intends to remain an active participant in this market.

A ranking of California workers' comp market participants compiled by National Underwriter Insurance Data Services (which excludes the California State Insurance Fund) ranks Everest National Insurance Company as the largest individual insurer and Everest Re Group as the second largest group with $629 million in direct written premiums in 2003.

On a separate ranking of U.S. reinsurers, based on net written premiums, Everest Reinsurance Company came in as the second largest U.S. reinsurer in 2003, with nearly $3 billion in net premiums.

Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company, Everest Reinsurance (Bermuda), Ltd., Everest National Insurance Company, Everest Security Insurance Company and Everest Indemnity Insurance Company.

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Everest Second-Quarter Income Soars 141%

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