Everest Re Group, Ltd. reported from its Barbados headquarters that its third quarter 2004 after-tax operating income (which excludes realized capital gains and losses) was $4.8 million, or $0.08 per diluted share, a 96.2 percent decrease compared to $126.2 million, or $2.23 per diluted share, in the third quarter of 2003.
The company’s third quarter net income decreased 88.6 percent to $11.5 million, or $0.20 per diluted share, compared to $100.3 million, or $1.77 per diluted share, in the third quarter of 2003.
For the nine months ended September 30, 2004, after-tax operating income was $330.7 million, or $5.82 per diluted share, a decrease of 2 percent compared to $337.4 million, or $6.20 per diluted share, in 2003. Net income in the first nine months of 2004 was $401.5 million, or $7.07 per diluted share, an increase of 32 percent, compared to $304.2 million, or $5.59 per diluted share, in 2003.
Everest Re reported a slight decrease – 1.8 percent – in gross premiums written for the third quarter of 2004 – $1.22 billion versus $1.24 billion in 2003. Net premiums written were $1.18 billion, a decrease of 0.3 percent from $1.18 billion for the third quarter of 2003.
The reinsurer’s GAAP combined ratio ballooned in the third quarter, primarily due to hurricane and typhoon losses, to 108.5 percent compared to 95 percent in the same period of 2003.
There was a lot of good news as well. Everest Re reported that its net investment income for the third quarter was $123.8 million compared to $100.4 million in the third quarter of 2003. Cash flow from operations for the third quarter of 2004 was $498.1 million, an increase of 1.2 percent from $492.3 million in the third quarter of 2003.
“For the nine months ended September 30, 2004, gross premiums written were $3.53 billion, a 6.6 percent increase from $3.31 billion in the first nine months of 2003,” the company reported. “Net written premiums grew 9.1 percent to $3.41 billion from $3.12 billion in 2003. The GAAP combined ratio for the first nine months of 2004 was 97.3 percent compared to 94.7 percent in 2003. Net investment income for the nine months ended September 30, 2004 was $361.5 million, an increase of 22.1 percent from $296.1 million in 2003. Cash flow from operations in the first nine months was $1.29 billion, compared to $1.17 billion in the first nine months of 2003.
“At September 30, 2004, the Company’s shareholders’ equity was $3.53 billion, or $62.98 per outstanding share. The change in book value represents an 11.7 percent increase from shareholders’ equity of $3.16 billion, or $56.84 per outstanding share, at December 31, 2003.”
Commenting on the results, Chairman and CEO Joseph V. Taranto stated: “Despite four hurricanes and two typhoons, our equity increased 5 percent in the quarter to over $3.5 billion, demonstrating the underlying strength of our company.”
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