Everest Re Posts $94.7 Million Q4 Operating Income; $425.3 Million Full Year

The Bermuda-based Everest Re Group, Ltd. reported fourth quarter 2004 after-tax operating income – which excludes realized capital gains and losses – of $94.7 million, or $1.66 per diluted share, a 20.2 percent decrease compared to $118.6 million, or $2.09 per diluted share, in the fourth quarter of 2003.

Fourth quarter 2004 net income also decreased by 23.4 percent to $93.3 million, or $1.64 per diluted share, compared to $121.8 million, or $2.15 per diluted share, in the fourth quarter of 2003.

For the year ended December 31, 2004, after-tax operating income was $425.3 million, or $7.48 per diluted share, a decrease of 6.7 percent compared to $456.0 million, or $8.29 per diluted share, in 2003. The company’s overall net income, however, increased to $494.9 million, or $8.71 per diluted share, up 16.2 percent compared to $426 million, or $7.74 per diluted share, in 2003.

Other highlights in the report for the fourth quarter were as follows:
— Gross premiums written 2004 were $1.18 billion, a 6.9 percent decrease compared to $1.26 billion in 2003.
— Net premiums written were $1.12 billion, a decrease of 5.7 percent from $1.19 billion for the fourth quarter of 2003.
— The Company’s GAAP combined ratio was 102.8 percent compared to 96.4 percent in 2003.
— Net investment income was $134.4 million compared to $106.5 million in the fourth quarter of 2003.
— Cash flow from operations was $197 million, a decrease of 59 percent from $480.7 million in the fourth quarter of 2003.

Highlights of the full year results included the following:
— Gross premiums written were $4.70 billion, a 2.8 percent increase from $4.57 billion in 2003.
— Net written premiums grew 5. Percent to $4.53 billion from $4.32 billion in 2003.
— The GAAP combined ratio for 2004 was 98.8 percent compared to 95.2 percent in 2003.
— Net investment income for the year was $495.9 million, an increase of 23.2 percent from $402.6 million in 2003.
— Cash flow from operations for 2004 was $1.49 billion, compared to $1.65 billion in 2003.

The bulletin noted that “shareholders’ equity was $3.71 billion, or $66.09 per outstanding share. The change in book value represents a 17.3 percent increase from shareholders’ equity of $3.16 billion, or $56.84 per outstanding share, at December 31, 2003.”

Commenting on the results, Chairman and CEO Joseph V. Taranto stated: “In 2004, despite unusually high catastrophe losses, we achieved a 13.5 percent ROE and grew total capital by 29.4 percent. We begin 2005 with a strong balance sheet, a high quality underwriting portfolio and a determination to continue to deliver excellent shareholder returns.”