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Everest Re (RE) Q1 Earnings and Revenues Beat Estimates

Zacks Equity Research

Everest Re Group, Ltd. RE delivered first-quarter 2020 operating net income per share of $4.03, which beat the Zacks Consensus Estimate by 6.9%. The bottom line however deteriorated 41.7% year over year.

The company witnessed higher premiums and improved net investment income, offset by higher expenses.

Everest Re Group Ltd Price, Consensus and EPS Surprise

Everest Re Group Ltd Price, Consensus and EPS Surprise

Everest Re Group Ltd price-consensus-eps-surprise-chart | Everest Re Group Ltd Quote

Operational Update

Everest Re’s total operating revenues of $2.2 billion increased 18.4% year over year on the back of higher premiums earned and net investment income. Moreover, the top line beat the Zacks Consensus Estimate by 3.6%. Gross written premiums improved 21% year over year to $2.6 billion.

Net investment income came in at $147.8 million in the quarter under review, up 4.8% year over year.

Total claims and expenses increased 30.6% to $2 billion, attributable to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses and corporate expenses.

Combined ratio deteriorated 990 basis points (bps) to 98.6%. Excluding catastrophe loss, attritional combined ratio was 97.3%, deteriorated 990 bps from the prior-year period.

Financial Update

Everest Re Group exited the quarter with total investments and cash of $20.3 billion, down 2% from 2019-end level. Shareholder equity at the end of the reported quarter decreased 5.5% from 2019-end to $8.6 billion.

Book value per share came in at $214.59 as of Mar 31, 2020, down 4.1% from 2019-end level.

Annualized net income return on equity was 0.8% in the first quarter of 2020.
Everest Re Group’s cash flow from operations was $506 million, up 10% year over year.

The company bought back shares worth $200 million in the quarter. The company still has 0.4 million shares remaining under its authorization.

Zacks Rank

Everest Re Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry that have reported first-quarter earnings so far, the bottom line of Brown & Brown, Inc. BRO and Assurant, Inc. AIZ beat the Zacks Consensus Estimate while that of RLI Corp. RLI missed the same.

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