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Everest Re (RE) Q4 Earnings & Revenues Lag Estimates, Up Y/Y
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Everest Re Group, Ltd. reported fourth-quarter 2021 operating income per share of $9.23, missing the Zacks Consensus Estimate by 1.2%. The bottom line rebounded from the year-ago loss of $1.12.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided increased underwriting income, driving combined ratio.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re’s total operating revenues of nearly $2 billion increased 16.4% year over year on higher premiums earned. The top line missed the consensus estimate by a whisker.
Gross written premiums improved 25% year over year to $3.4 billion. The Reinsurance segment generated premiums of $2.4 billion, up 26% year over year, driven by the continued partnership with its core clients, Everest’s position as a preferred reinsurance platform and an improved rate. The Insurance segment generated a premium of $2.3 billion, up 21% year over year, driven by strong new business generation, primarily in casualty and professional liability lines, improved rates and exposure growth.
Net investment income was $171 million, down 12.4% % year over year.
Total claims and expenses decreased 0.8% to $2.6 billion primarily due to lower incurred losses and loss adjustment expenses.
Underwriting income of $228 million in the quarter rebounded from the year-ago loss of $218.7 million.
Underwriting income for the Reinsurance segment was $176.4 million, rebounding from the year-ago loss of $218.7 million. The underwriting income of the Insurance segment was $51.9 million, up nearly nine times.
The combined ratio improved1720 basis points year over year to 91.9 in the reported quarter. The combined ratio of the Reinsurance segment improved 2090 bps to 91.5 while the same improved 620 bps to 92.8 for the Insurance segment.
Full Year Update
Operating income per share of $28.97 jumped nearly four-fold year over year.
Total operating revenues of nearly $11.6 billion increased 26.1% year over year. Gross written premium increased 25% year over year, driven by a 25% rise in premium at Reinsurance, and 24% at Insurance.
Combined ratio of 97.1 improved 540 basis points.
Financial Update
Everest Re exited 2021 with total investments and cash of $29.7 billion, up 16.5% from the 2020 level. Shareholder equity at the end of the reported quarter increased 4.2% from 2020 end to about $10.1 billion.
Book value per share was $258.21 as of Dec 31, 2021, up 6.2% from the 2020-end level.
The annualized net income return on equity was 12.2% compared with 3.4% in the year-ago period.
Everest Re’s cash flow from operations was $3.8 billion in 2021, up 31% year over year.
Everest Re paid common share dividends of $246.7 million during the quarter and bought back shares worth $225 million in 2021.
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.
Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.
RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.
Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.
Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.
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Everest Re (RE) Q4 Earnings & Revenues Lag Estimates, Up Y/Y
Everest Re Group, Ltd. reported fourth-quarter 2021 operating income per share of $9.23, missing the Zacks Consensus Estimate by 1.2%. The bottom line rebounded from the year-ago loss of $1.12.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided increased underwriting income, driving combined ratio.
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 16.4% year over year on higher premiums earned. The top line missed the consensus estimate by a whisker.
Gross written premiums improved 25% year over year to $3.4 billion. The Reinsurance segment generated premiums of $2.4 billion, up 26% year over year, driven by the continued partnership with its core clients, Everest’s position as a preferred reinsurance platform and an improved rate. The Insurance segment generated a premium of $2.3 billion, up 21% year over year, driven by strong new business generation, primarily in casualty and professional liability lines, improved rates and exposure growth.
Net investment income was $171 million, down 12.4% % year over year.
Total claims and expenses decreased 0.8% to $2.6 billion primarily due to lower incurred losses and loss adjustment expenses.
Underwriting income of $228 million in the quarter rebounded from the year-ago loss of $218.7 million.
Underwriting income for the Reinsurance segment was $176.4 million, rebounding from the year-ago loss of $218.7 million. The underwriting income of the Insurance segment was $51.9 million, up nearly nine times.
The combined ratio improved1720 basis points year over year to 91.9 in the reported quarter. The combined ratio of the Reinsurance segment improved 2090 bps to 91.5 while the same improved 620 bps to 92.8 for the Insurance segment.
Full Year Update
Operating income per share of $28.97 jumped nearly four-fold year over year.
Total operating revenues of nearly $11.6 billion increased 26.1% year over year. Gross written premium increased 25% year over year, driven by a 25% rise in premium at Reinsurance, and 24% at Insurance.
Combined ratio of 97.1 improved 540 basis points.
Financial Update
Everest Re exited 2021 with total investments and cash of $29.7 billion, up 16.5% from the 2020 level. Shareholder equity at the end of the reported quarter increased 4.2% from 2020 end to about $10.1 billion.
Book value per share was $258.21 as of Dec 31, 2021, up 6.2% from the 2020-end level.
The annualized net income return on equity was 12.2% compared with 3.4% in the year-ago period.
Everest Re’s cash flow from operations was $3.8 billion in 2021, up 31% year over year.
Everest Re paid common share dividends of $246.7 million during the quarter and bought back shares worth $225 million in 2021.
Zacks Rank
Everest Re currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.
Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.
RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.
Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.
Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.