Everest Re Group Reports 23% Increase in Book Value in Q2 Earnings

Everest Re Group, Ltd. reported second quarter 2003 after-tax operating income, which excludes realized capital gains and losses, of $107.1 million, or $1.94 per diluted share, a 53.7 percent increase compared to $69.7 million, or $1.34 per diluted share, in the second quarter of 2002.

Net income increased 105.1 percent to $109.6 million, or $1.99 per diluted share, compared to $53.4 million, or $1.02 per diluted share,in the second quarter of 2002, which was affected by investment losses relating to the WorldCom bankruptcy. Operating income differs from net income only by the exclusion of realized gains and losses on investments.

For the six months ended June 30, 2003, after-tax operating income was $211.2 million, or $3.96 per diluted share, an increase of 55.6 percent compared to $135.7 million, or $2.68 per diluted share, in 2002. Net income in the first six months of 2003 was $203.9 million, or $3.82 per diluted share, an increase of 78.1 percent compared to $114.5 million, or $2.26 per diluted share, in 2002.

Gross premiums written for the second quarter of 2003 were $1.07 billion, a 69.6 percent increase compared to $630 million in 2002. Net premiums written were $988 million, an increase of 64.6 percent from $601 million for the second quarter of 2002. The company’s GAAP combined ratio in the second quarter was 95.5 percent compared to 97.6% in 2002. Net investment income for the second quarter was $102.1 million compared to $90.8 million in the second quarter of 2002. Cash flow from operations for the quarter was $353.2 million, an increase of 108.3 percent from $169.6 million in the second quarter of 2002.

For the six months ended June 30, 2003, gross premiums written were $2.07 billion, a 68.8 percent increase from $1.23 billion in the first six months of 2002. Net written premiums grew 66.5 percent to $1.94 billion from $1.17 billion in 2002. The GAAP combined ratio for the first six months of 2003 was 94.5 percent compared to 98.4 percent in 2002. Net investment income for the six months ended June 30, 2003 was $195.4 million, an increase of 10.8 percent from $176.4 million in 2002. Cash flow from operations in the first six months was $680.9 million, compared to $275.1 million in the first six months of 2002.

At June 30, 2003, the company’s shareholders’ equity was $3.06 billion or $55.09 per outstanding share. This represents a 29 percent increase from shareholders’ equity of $2.37 billion or $46.55 per share at Dec. 31, 2002.

The company also reaffirmed its estimate of 2003 operating earnings at $7.75 – $8.25 per diluted share, and its estimate of 2004 operating earnings at $9.50 – $10.50 per diluted share, both absent any unusual losses or market developments.