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Everest Re (RE) Earnings Miss Estimates in Q2, Plunge Y/Y

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Everest Re Group, Ltd. (RE - Free Report) delivered second-quarter 2018 operating earnings of 98 cents per share, missing the Zacks Consensus Estimate of $1.01 by 2.9%. Moreover, the bottom line plunged 82.7% from the year-ago quarter.

Everest Re Group, Ltd. Price, Consensus and EPS Surprise


Everest Re Group, Ltd. Price, Consensus and EPS Surprise | Everest Re Group, Ltd. Quote

The reported quarter witnessed an increase in premiums and net investment income. The company saw solid underlying results with continued positive momentum across the underwriting operations. However, claims and expenses escalated in the period under review.

Including after-tax net realized capital loss of 26 cents and a foreign exchange income of 46 cents, net income came in at $1.70 per share, down 71.4% from the prior-year quarter.

Operational Update

Everest Re Group’s total operating revenues of $1.9 billion increased nearly 24.6% year over year. Also, the top line beat the Zacks Consensus Estimate by 9%.

Gross written premiums jumped 29% year over year to $2.1 billion. The company’s worldwide reinsurance premiums surged 38% while direct insurance premiums improved 13% for the second quarter.

Net investment income came in at $141.3 million in the quarter, up 5.1% year over year.

Total claims and expenses increased nearly 46% to $1.8 million, attributable to higher incurred loss and loss adjustment expenses, commission, brokerage, taxes and fees as well as other underwriting expenses.

Combined ratio deteriorated 1460 basis points (bps) to 105.1% from 90.5% in the year-ago quarter. Excluding catastrophe loss, attritional combined ratio was 83.5% with an improvement of 320 bps from the prior-year period.

Financial Update

Everest Re Group exited the quarter with total assets of $23.9 billion, up 1.2% from $23.6 billion at the end of 2017. Shareholder equity at the end of the reported quarter slid 1.5% to $8.2 billion from the level of $8.4 billion at 2017 end.

Total cash balance at the end of the quarter under review decreased 2.5% to $619.5 million from the end of 2017.

Book value per share came in at $201.70 as of Jun 30, 2018, down 1.6% from the 2017-end level.

Return on equity was 7%.

Everest Re Group’s cash flow from operations for the six months having ended Jun 30, 2018, was $132.6 million, slumping nearly 79.1% year over year.

Zacks Rank

Everest Re Group carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the insurance industry, which have already reported second-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) and RLI Corp. (RLI - Free Report) outpaced the respective Zacks Consensus Estimate while The Travelers Companies, Inc.’s (TRV - Free Report) earnings missed the same.

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