Bermuda
|
1-15731
|
98-0365432
|
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
Seon Place, 4TH Floor
141 Front Street
PO Box HM 845
Hamilton, HM 19, Bermuda
|
Not Applicable
|
|
(Address of principal executive offices)
|
(Zip Code)
|
ITEM 2.02
|
DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
(c)
|
Exhibits
|
||
Exhibit No.
|
Description
|
||
99.1
|
News Release of the registrant,
|
||
dated February 11, 2019
|
EVEREST RE GROUP, LTD.
|
||||
By:
|
/S/ CRAIG HOWIE
|
|||
Craig Howie
|
||||
Executive Vice President and
|
||||
Chief Financial Officer
|
EXHIBIT INDEX
|
Exhibit
|
|||
Number
|
Description of Document
|
Page No.
|
|
99.1
|
News Release of the registrant,
|
||
dated February 11, 2019
|
5
|
NEWS RELEASE
|
|
·
|
Gross written premiums for the quarter were $2.3 billion, an increase of 18% compared to the fourth quarter of 2017. Worldwide
reinsurance premiums were up 26% to $1.7 billion with growth across each segment including increased casualty and property pro-rata premium, increased shares on existing business and profitable new growth.
|
·
|
The combined ratio was 134.1% for the quarter and 108.8% for the year, compared to 70.0% and 103.5% for the same periods in 2017.
Excluding catastrophe losses, reinstatement premiums and the favorable prior period loss development, the current attritional combined ratio was 90.4% for the quarter and 87.0% for the year, compared to 83.7% and 85.0% for the same
periods in 2017.
|
·
|
Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $875.0 million in the quarter, primarily related to losses
from Hurricane Michael, the California Camp and Woolsey wildfires and an Australia hailstorm event.
|
·
|
Net investment income amounted to $140.2 million for the quarter and $581.2 million for the full year 2018, up 7% over the full year 2017
results.
|
·
|
Net after-tax realized losses amounted to $143.9 million for the quarter. For the full year, net after-tax realized capital losses were
$109.1 million, while net after-tax unrealized capital losses were $228.2 million.
|
·
|
Cash flow from operations was $66.4 million for the quarter and $610.1 million for the full year 2018. This compared to $118.5 million
and $1.2 billion for the same period, respectively, in 2017.
|
·
|
Although no shares were repurchased during the quarter, the Company repurchased 342,179 shares at a total cost of $75.3 million for the
year 2018. The repurchases were made pursuant to a share repurchase authorization, provided by the Company’s Board of Directors, under which there remains 1.4 million shares available.
|
·
|
Shareholders’ equity ended the year at $7.9 billion compared to $8.4 billion at year end 2017. Book value per share was down from $204.95
at December 31, 2017 to $194.43 at December 31, 2018.
|
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||||||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||||||||||||||||
|
(unaudited)
|
(unaudited)
|
||||||||||||||||||||||||||||||
|
Per Diluted
|
Per Diluted
|
Per Diluted
|
|||||||||||||||||||||||||||||
|
Per Common
|
Common
|
Common
|
Common
|
||||||||||||||||||||||||||||
|
Amount
|
Share
|
Amount
|
Share
|
Amount
|
Share
|
Amount
|
Share
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Net income (loss)
|
$
|
(382,274
|
)
|
$
|
(9.50
|
)
|
$
|
571,025
|
$
|
13.85
|
$
|
103,552
|
$
|
2.53
|
$
|
468,968
|
$
|
11.36
|
||||||||||||||
After-tax net realized capital gains (losses)
|
(143,870
|
)
|
(3.58
|
)
|
23,226
|
0.56
|
(109,149
|
)
|
(2.66
|
)
|
101,806
|
2.47
|
||||||||||||||||||||
After-tax net foreign exchange income (expense)
|
(2,235
|
)
|
(0.06
|
)
|
20,595
|
0.50
|
21,289
|
0.52
|
(37,194
|
)
|
(0.90
|
)
|
||||||||||||||||||||
Impact of TCJA enactment
|
703
|
0.02
|
(8,246
|
)
|
(0.20
|
)
|
703
|
0.02
|
(8,246
|
)
|
(0.20
|
)
|
||||||||||||||||||||
After-tax operating income (loss)
|
$
|
(236,872
|
)
|
$
|
(5.89
|
)
|
$
|
535,450
|
$
|
12.98
|
$
|
190,709
|
$
|
4.65
|
$
|
412,602
|
$
|
10.00
|
||||||||||||||
|
||||||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
|
EVEREST RE GROUP, LTD.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
AND COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
Three Months Ended
|
Twelve Months Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
(Dollars in thousands, except per share amounts)
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
REVENUES:
|
||||||||||||||||
Premiums earned
|
$
|
1,850,975
|
$
|
1,657,187
|
$
|
6,931,699
|
$
|
5,937,840
|
||||||||
Net investment income
|
140,204
|
149,128
|
581,183
|
542,898
|
||||||||||||
Net realized capital gains (losses):
|
||||||||||||||||
Other-than-temporary impairments on fixed maturity securities
|
(3,327
|
)
|
(1,905
|
)
|
(8,110
|
)
|
(7,093
|
)
|
||||||||
Other-than-temporary impairments on fixed maturity securities
|
||||||||||||||||
transferred to other comprehensive income (loss)
|
-
|
-
|
-
|
-
|
||||||||||||
Other net realized capital gains (losses)
|
(169,488
|
)
|
35,568
|
(119,026
|
)
|
160,287
|
||||||||||
Total net realized capital gains (losses)
|
(172,815
|
)
|
33,663
|
(127,136
|
)
|
153,194
|
||||||||||
Net derivative gain (loss)
|
(4,965
|
)
|
3,529
|
520
|
9,581
|
|||||||||||
Other income (expense)
|
(18,702
|
)
|
23,704
|
(9,060
|
)
|
(35,442
|
)
|
|||||||||
Total revenues
|
1,794,697
|
1,867,211
|
7,377,206
|
6,608,071
|
||||||||||||
CLAIMS AND EXPENSES:
|
||||||||||||||||
Incurred losses and loss adjustment expenses
|
2,001,054
|
680,436
|
5,651,403
|
4,522,581
|
||||||||||||
Commission, brokerage, taxes and fees
|
396,588
|
388,625
|
1,519,030
|
1,303,963
|
||||||||||||
Other underwriting expenses
|
84,216
|
90,916
|
371,541
|
318,817
|
||||||||||||
Corporate expenses
|
7,153
|
4,615
|
30,672
|
25,923
|
||||||||||||
Interest, fees and bond issue cost amortization expense
|
7,984
|
7,314
|
31,031
|
31,603
|
||||||||||||
Total claims and expenses
|
2,496,995
|
1,171,906
|
7,603,677
|
6,202,887
|
||||||||||||
INCOME (LOSS) BEFORE TAXES
|
(702,298
|
)
|
695,305
|
(226,471
|
)
|
405,184
|
||||||||||
Income tax expense (benefit)
|
(320,024
|
)
|
124,280
|
(330,023
|
)
|
(63,784
|
)
|
|||||||||
NET INCOME (LOSS)
|
$
|
(382,274
|
)
|
$
|
571,025
|
$
|
103,552
|
$
|
468,968
|
|||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
|
(974
|
)
|
(83,093
|
)
|
(255,656
|
)
|
(64,348
|
)
|
||||||||
Reclassification adjustment for realized losses (gains) included in net income (loss)
|
34,602
|
9,779
|
27,496
|
(6,950
|
)
|
|||||||||||
Total URA(D) on securities arising during the period
|
33,628
|
(73,314
|
)
|
(228,160
|
)
|
(71,298
|
)
|
|||||||||
Foreign currency translation adjustments
|
(24,933
|
)
|
(3,207
|
)
|
(76,816
|
)
|
121,917
|
|||||||||
Benefit plan actuarial net gain (loss) for the period
|
(510
|
)
|
1,027
|
(510
|
)
|
1,027
|
||||||||||
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
|
(425
|
)
|
100
|
5,021
|
5,477
|
|||||||||||
Total benefit plan net gain (loss) for the period
|
(935
|
)
|
1,127
|
4,511
|
6,504
|
|||||||||||
Total other comprehensive income (loss), net of tax
|
7,760
|
(75,394
|
)
|
(300,465
|
)
|
57,123
|
||||||||||
COMPREHENSIVE INCOME (LOSS)
|
$
|
(374,514
|
)
|
$
|
495,631
|
$
|
(196,913
|
)
|
$
|
526,091
|
||||||
EARNINGS PER COMMON SHARE:
|
||||||||||||||||
Basic
|
$
|
(9.50
|
)
|
$
|
13.92
|
$
|
2.54
|
$
|
11.43
|
|||||||
Diluted
|
(9.50
|
)
|
13.85
|
2.53
|
11.36
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
December 31,
|
||||||||
(Dollars and share amounts in thousands, except par value per share)
|
2018
|
2017
|
||||||
(unaudited)
|
||||||||
ASSETS:
|
||||||||
Fixed maturities - available for sale, at market value
|
$
|
15,225,263
|
$
|
14,756,834
|
||||
(amortized cost: 2018, $15,406,572; 2017, $14,689,598)
|
||||||||
Fixed maturities - available for sale, at Fair value
|
2,337
|
-
|
||||||
Equity securities, at market value (cost: 2018, $0; 2017, $130,287)
|
-
|
129,530
|
||||||
Equity securities, at fair value
|
716,639
|
963,572
|
||||||
Short-term investments (cost: 2018, $241,010; 2017, $509,682)
|
240,987
|
509,682
|
||||||
Other invested assets (cost: 2018, $1,591,745; 2017, $1,628,753)
|
1,591,745
|
1,631,850
|
||||||
Cash
|
656,095
|
635,067
|
||||||
Total investments and cash
|
18,433,066
|
18,626,535
|
||||||
Accrued investment income
|
104,619
|
97,704
|
||||||
Premiums receivable
|
2,218,283
|
1,844,881
|
||||||
Reinsurance receivables
|
1,787,648
|
1,348,226
|
||||||
Funds held by reinsureds
|
445,040
|
292,927
|
||||||
Deferred acquisition costs
|
511,573
|
411,587
|
||||||
Prepaid reinsurance premiums
|
343,343
|
288,211
|
||||||
Income taxes
|
592,385
|
299,438
|
||||||
Other assets
|
358,042
|
382,283
|
||||||
TOTAL ASSETS
|
$
|
24,793,999
|
$
|
23,591,792
|
||||
LIABILITIES:
|
||||||||
Reserve for losses and loss adjustment expenses
|
$
|
13,119,090
|
$
|
11,884,321
|
||||
Future policy benefit reserve
|
46,778
|
51,014
|
||||||
Unearned premium reserve
|
2,517,612
|
2,000,556
|
||||||
Funds held under reinsurance treaties
|
13,099
|
18,030
|
||||||
Other net payable to reinsurers
|
218,439
|
218,017
|
||||||
Senior notes due 6/1/2044
|
396,954
|
396,834
|
||||||
Long term notes due 5/1/2067
|
236,659
|
236,561
|
||||||
Accrued interest on debt and borrowings
|
3,093
|
2,727
|
||||||
Equity index put option liability
|
11,958
|
12,477
|
||||||
Unsettled securities payable
|
51,112
|
38,743
|
||||||
Other liabilities
|
275,401
|
363,280
|
||||||
Total liabilities
|
16,890,195
|
15,222,560
|
||||||
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; (2018) 69,202
|
||||||||
and (2017) 69,044 outstanding before treasury shares
|
692
|
691
|
||||||
Additional paid-in capital
|
2,188,777
|
2,165,768
|
||||||
Accumulated other comprehensive income (loss), net of deferred income tax expense
|
||||||||
(benefit) of ($20,697) at 2018 and $9,356 at 2017
|
(462,557
|
)
|
(160,891
|
)
|
||||
Treasury shares, at cost; 28,551 shares (2018) and 28,208 shares (2017)
|
(3,397,548
|
)
|
(3,322,244
|
)
|
||||
Retained earnings
|
9,574,440
|
9,685,908
|
||||||
Total shareholders' equity
|
7,903,804
|
8,369,232
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
24,793,999
|
$
|
23,591,792
|
EVEREST RE GROUP, LTD.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
Twelve Months Ended
|
||||||||
December 31,
|
||||||||
(Dollars in thousands)
|
2018
|
2017
|
||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$
|
103,552
|
$
|
468,968
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Decrease (increase) in premiums receivable
|
(392,981
|
)
|
(338,335
|
)
|
||||
Decrease (increase) in funds held by reinsureds, net
|
(159,344
|
)
|
(31,104
|
)
|
||||
Decrease (increase) in reinsurance receivables
|
(511,592
|
)
|
(238,485
|
)
|
||||
Decrease (increase) in income taxes
|
(263,865
|
)
|
(114,521
|
)
|
||||
Decrease (increase) in prepaid reinsurance premiums
|
(65,925
|
)
|
(86,049
|
)
|
||||
Increase (decrease) in reserve for losses and loss adjustment expenses
|
1,377,711
|
1,376,321
|
||||||
Increase (decrease) in future policy benefit reserve
|
(4,236
|
)
|
(4,060
|
)
|
||||
Increase (decrease) in unearned premiums
|
542,023
|
401,174
|
||||||
Increase (decrease) in other net payable to reinsurers
|
12,276
|
10,071
|
||||||
Increase (decrease) in losses in course of payment
|
123,209
|
(105,371
|
)
|
|||||
Change in equity adjustments in limited partnerships
|
(102,052
|
)
|
(82,713
|
)
|
||||
Distribution of limited partnership income
|
84,623
|
50,825
|
||||||
Change in other assets and liabilities, net
|
(322,107
|
)
|
(66,998
|
)
|
||||
Non-cash compensation expense
|
32,369
|
30,297
|
||||||
Amortization of bond premium (accrual of bond discount)
|
29,272
|
45,867
|
||||||
Net realized capital (gains) losses
|
127,136
|
(153,194
|
)
|
|||||
Net cash provided by (used in) operating activities
|
610,069
|
1,162,693
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds from fixed maturities matured/called - available for sale, at market value
|
1,973,652
|
2,160,298
|
||||||
Proceeds from fixed maturities sold - available for sale, at market value
|
3,148,428
|
2,401,844
|
||||||
Proceeds from fixed maturities sold - available for sale, at fair value
|
1,751
|
-
|
||||||
Proceeds from equity securities sold, at market value
|
-
|
19,574
|
||||||
Proceeds from equity securities sold, at fair value
|
1,199,409
|
631,859
|
||||||
Distributions from other invested assets
|
3,102,018
|
5,579,043
|
||||||
Cost of fixed maturities acquired - available for sale, at market value
|
(5,909,504
|
)
|
(5,131,098
|
)
|
||||
Cost of fixed maturities acquired - available for sale, at fair value
|
(4,381
|
)
|
-
|
|||||
Cost of equity securities acquired, at market value
|
-
|
(22,033
|
)
|
|||||
Cost of equity securities acquired, at fair value
|
(921,937
|
)
|
(438,641
|
)
|
||||
Cost of other invested assets acquired
|
(3,370,455
|
)
|
(5,829,271
|
)
|
||||
Net change in short-term investments
|
455,350
|
(73,923
|
)
|
|||||
Net change in unsettled securities transactions
|
46,048
|
(30,229
|
)
|
|||||
Net cash provided by (used in) investing activities
|
(279,621
|
)
|
(732,577
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Common shares issued during the period for share-based compensation, net of expense
|
(8,157
|
)
|
(5,310
|
)
|
||||
Purchase of treasury shares
|
(75,304
|
)
|
(50,000
|
)
|
||||
Dividends paid to shareholders
|
(216,221
|
)
|
(207,242
|
)
|
||||
Cost of shares withheld on settlements of share-based compensation awards
|
(16,912
|
)
|
(12,906
|
)
|
||||
Net cash provided by (used in) financing activities
|
(316,594
|
)
|
(275,458
|
)
|
||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
7,174
|
(1,513
|
)
|
|||||
Net increase (decrease) in cash
|
21,028
|
153,145
|
||||||
Cash, beginning of period
|
635,067
|
481,922
|
||||||
Cash, end of period
|
$
|
656,095
|
$
|
635,067
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Income taxes paid (recovered)
|
$
|
(65,064
|
)
|
$
|
53,743
|
|||
Interest paid
|
30,447
|
32,194
|
||||||
NON-CASH TRANSACTIONS:
|
||||||||
Reclassification of investment balances due to prospective consolidation of private placement
|
||||||||
liquidity sweep facility effective July 1, 2018
|
||||||||
Fixed maturities - available for sale, at market value
|
$
|
143,656
|
$
|
-
|
||||
Short-term investments
|
243,864
|
-
|
||||||
Other invested assets
|
(387,520
|
)
|
-
|