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Everest Re (RE) Q3 Loss Wider than Expected on Huge Cat Loss
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Everest Re Group Ltd reported third-quarter 2017 operating loss of $16.43 per share, wider than the Zacks Consensus Estimate of a loss of $15.86. The bottom line compared unfavorably with $6.53 per share earned in the year-ago quarter.
Loss largely stemmed from a huge cat loss in the quarter and dragged the bottom line by $22.09 per share.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Including net realized capital gains of 70 cents, net loss came in at $15.73 per share, which compared unfavorably with $7.06 per share earned in the year-ago quarter.
Operational Update
Everest Re Group’s total operating revenue of $1.7 million increased nearly 11.3% year over year. Revenues beat the Zacks Consensus Estimate by 6.3%.
Gross written premiums grew 15% year over year to $2 billion. The company’s worldwide reinsurance premiums increased 25%, primarily owing to new crop reinsurance program, growing premium from financial business lines and increased shares on existing business. Insurance premiums also declined 10%. However, excluding the HCI crop business divested in 2016, insurance premiums increased 30% on continued growth in new initiatives.
Net investment income came in at $137 million in the quarter, up 12% year over year.
Total claims and expenses more than doubled year over year to $2.6 million largely due to higher incurred losses and loss adjustment expenses.
The quarter suffered catastrophe losses, net of reinstatement premiums, of $1.2 billion from hurricanes Harvey, Irma, Maria and the Mexico tremors. Combined ratio deteriorated to 163.6% from 85.6% in the year-ago quarter.
Financial Update
Everest Re Group exited the quarter with total assets of $23.9 billion, up about 12.2% from $21.3 billion at the end of 2016. Shareholder equity at the end of the reported quarter declined 2.5% to $7.9 billion from the 2016-end level of $8 billion.
Total cash balance at the end of the quarter increased 21.5% to $585.4 million from $481.9 million at the end of 2016. Everest Re Group’s cash flow from operations was $409.9 million, having surged 48% year over year.
Book value per share increased 6% to $194.05 as of Sep 30, 2017, down 1.7% from the 2016-end level.
Dividend Update
The company paid out a dividend of $1.25 per share in the quarter, up 10 cents year over year.
Zacks Rank
Currently, Everest Re Group holds a Zacks Rank #4 (Sell).
Among other players from the insurance industry that have reported third-quarter earnings so far, the bottom line at The Progressive Corp. (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
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Everest Re (RE) Q3 Loss Wider than Expected on Huge Cat Loss
Everest Re Group Ltd reported third-quarter 2017 operating loss of $16.43 per share, wider than the Zacks Consensus Estimate of a loss of $15.86. The bottom line compared unfavorably with $6.53 per share earned in the year-ago quarter.
Loss largely stemmed from a huge cat loss in the quarter and dragged the bottom line by $22.09 per share.
Everest Re Group, Ltd. Price, Consensus and EPS Surprise
Everest Re Group, Ltd. Price, Consensus and EPS Surprise | Everest Re Group, Ltd. Quote
Including net realized capital gains of 70 cents, net loss came in at $15.73 per share, which compared unfavorably with $7.06 per share earned in the year-ago quarter.
Operational Update
Everest Re Group’s total operating revenue of $1.7 million increased nearly 11.3% year over year. Revenues beat the Zacks Consensus Estimate by 6.3%.
Gross written premiums grew 15% year over year to $2 billion. The company’s worldwide reinsurance premiums increased 25%, primarily owing to new crop reinsurance program, growing premium from financial business lines and increased shares on existing business. Insurance premiums also declined 10%. However, excluding the HCI crop business divested in 2016, insurance premiums increased 30% on continued growth in new initiatives.
Net investment income came in at $137 million in the quarter, up 12% year over year.
Total claims and expenses more than doubled year over year to $2.6 million largely due to higher incurred losses and loss adjustment expenses.
The quarter suffered catastrophe losses, net of reinstatement premiums, of $1.2 billion from hurricanes Harvey, Irma, Maria and the Mexico tremors. Combined ratio deteriorated to 163.6% from 85.6% in the year-ago quarter.
Financial Update
Everest Re Group exited the quarter with total assets of $23.9 billion, up about 12.2% from $21.3 billion at the end of 2016. Shareholder equity at the end of the reported quarter declined 2.5% to $7.9 billion from the 2016-end level of $8 billion.
Total cash balance at the end of the quarter increased 21.5% to $585.4 million from $481.9 million at the end of 2016. Everest Re Group’s cash flow from operations was $409.9 million, having surged 48% year over year.
Book value per share increased 6% to $194.05 as of Sep 30, 2017, down 1.7% from the 2016-end level.
Dividend Update
The company paid out a dividend of $1.25 per share in the quarter, up 10 cents year over year.
Zacks Rank
Currently, Everest Re Group holds a Zacks Rank #4 (Sell).
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 third-quarter earnings so far, the bottom line at The Progressive Corp. (PGR - Free Report) , The Travelers Companies, Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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