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Everest Re (RE) Q2 Earnings Top Estimates, Revenues Up Y/Y
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Everest Re Group, Ltd. delivered second-quarter 2020 operating net income per share of $2.07, beating the Zacks Consensus Estimate by 10.1%. The bottom line declined 73.6% year over year.
The quarter witnessed higher premiums across its reinsurance and insurance businesses, offset by higher expenses and lower net investment income.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re’s total operating revenues of nearly $2 billion increased 3.5% year over year on higher premiums earned.
Gross written premiums improved 9.4% year over year to $2.4 billion. Worldwide reinsurance premiums grew 9.1% year over year at $1.5 billion. Direct insurance premiums grew 9.8% to $830.9 million.
Net investment income was $38.1 million in the quarter under review, down 78.7% year over year due to limited partnership losses of $88.3 million.
Total claims and expenses increased 22.7% to $2 billion primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, and corporate expenses.
Underwriting profit decreased 74.1% to $50.9 million in the quarter.
Underwriting profit for the Reinsurance segment decreased 60.9% to $69.5 million and the Insurance segment incurred an underwriting loss of $18.6 million against the year-ago profit of $19 million.
Combined ratio deteriorated 830 basis points (bps) to 97.5%. Excluding the pandemic’s impacts, attritional combined ratio was 88.5%, improving 10 bps from the prior-year period.
Combined ratio deteriorated 860 bps to 95.4% in the Reinsurance segment, whereas it deteriorated 740bps to 103.4% in the Insurance segment.
Financial Update
Everest Re exited the quarter with total investments and cash of $21.6 billion, up 4.1% from the 2019 level. Shareholder equity at the end of the reported quarter increased 1.7% from 2019 end to $9.3 billion.
Book value per share was $232.32 as of Jun 30, 2020, up 3.8% from the 2019-end level.
Annualized net income return on equity was 4.7%, reflecting a contraction of 1180 bps from the year-ago period.
Everest Re’s cash flow from operations was $598.6 million in the second quarter, up 52% year over year.
The company paid common share dividends of $61.9 million during the quarter.
Of the insurance industry players that have reported second-quarter results so far, earnings of Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) and Palomar Holdings, Inc. (PLMR - Free Report) beat the Zacks Consensus Estimate.
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Everest Re (RE) Q2 Earnings Top Estimates, Revenues Up Y/Y
Everest Re Group, Ltd. delivered second-quarter 2020 operating net income per share of $2.07, beating the Zacks Consensus Estimate by 10.1%. The bottom line declined 73.6% year over year.
The quarter witnessed higher premiums across its reinsurance and insurance businesses, offset by higher expenses and lower net investment income.
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 nearly $2 billion increased 3.5% year over year on higher premiums earned.
Gross written premiums improved 9.4% year over year to $2.4 billion. Worldwide reinsurance premiums grew 9.1% year over year at $1.5 billion. Direct insurance premiums grew 9.8% to $830.9 million.
Net investment income was $38.1 million in the quarter under review, down 78.7% year over year due to limited partnership losses of $88.3 million.
Total claims and expenses increased 22.7% to $2 billion primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, and corporate expenses.
Underwriting profit decreased 74.1% to $50.9 million in the quarter.
Underwriting profit for the Reinsurance segment decreased 60.9% to $69.5 million and the Insurance segment incurred an underwriting loss of $18.6 million against the year-ago profit of $19 million.
Combined ratio deteriorated 830 basis points (bps) to 97.5%. Excluding the pandemic’s impacts, attritional combined ratio was 88.5%, improving 10 bps from the prior-year period.
Combined ratio deteriorated 860 bps to 95.4% in the Reinsurance segment, whereas it deteriorated 740bps to 103.4% in the Insurance segment.
Financial Update
Everest Re exited the quarter with total investments and cash of $21.6 billion, up 4.1% from the 2019 level. Shareholder equity at the end of the reported quarter increased 1.7% from 2019 end to $9.3 billion.
Book value per share was $232.32 as of Jun 30, 2020, up 3.8% from the 2019-end level.
Annualized net income return on equity was 4.7%, reflecting a contraction of 1180 bps from the year-ago period.
Everest Re’s cash flow from operations was $598.6 million in the second quarter, up 52% year over year.
The company paid common share dividends of $61.9 million during the quarter.
Zacks Rank
Everest Re 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
Of the insurance industry players that have reported second-quarter results so far, earnings of Arthur J. Gallagher & Co. (AJG - Free Report) , Reinsurance Group of America, Incorporated (RGA - Free Report) and Palomar Holdings, Inc. (PLMR - Free Report) beat the Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>