Everest Re Q1 Earnings Report; Conference Call Today, Details

April 24, 2007

The Bermuda-based Everest Re Group reported record first quarter after-tax operating income, which excludes realized capital gains and losses, of $267.9 million, or $4.13 per diluted share, a 69.7 percent increase compared to $157.9 million, or $2.41 per diluted share, in the first quarter of 2006.

First quarter 2007 net income increased 76.7 percent to $297.6 million, or $4.59 per diluted share, compared to $168.4 million, or $2.57 per diluted share in the first quarter of 2006. Operating income differs from net income only by the exclusion of realized gains and losses on investments.

Everest Re also gave the following “operating highlights:”
— The GAAP combined ratio in the first quarter was 82.4 percent compared to 94.5 percent in the same period last year. Pre-tax catastrophe losses totaled $34.0 million for the first quarter of 2007 compared to $68.4 million in the first quarter of last year.
—The Company recorded $7.8 million of net favorable prior year loss reserve development during the first quarter of 2007 compared to $80.4 million of net prior year adverse loss development in the first quarter of 2006.
— Gross premiums written were $1.02 billion, a 3.6 percent decline compared to $1.06 billion in the first quarter of 2006. The decline was largely driven by reduced writings in the U.S. casualty and specialty reinsurance classes of business mitigated somewhat by continued growth in the U.S. property reinsurance book.
— Net investment income increased by 7.4 percent to $155.8 million as compared to $145.0 million in 2006.
— Cash flow from operations was $162.3 million for the period as compared to $161.6 million in 2006. These include catastrophe loss payouts of $141.2 million and $264.9 million, respectively, for the three months ended March 31, 2007 and 2006.
— The annualized operating income return on average shareholders’ equity was 21.0 percent and the annualized net income return was 23.3 percent.
— Despite $181 million of share repurchases, shareholders equity grew from $5.1 billion to $5.2 billion during the quarter. Book value per share stood at $82.18 as of March 31 up from $78.53 as of year end 2006, an increase of 4.6 percent for the quarter.
— Since year end 2006, the Company has repurchased 2.1 million shares at an average price of $95.32. The total cost of the repurchased shares is $200 million, $19 million of which was purchased after the close of the quarter. The repurchases were made pursuant to a 5 million share repurchase authorization provided by the Company’s Board of Directors, leaving 2.9 million shares available under the authorization.

Chairman and CEO Joseph V. Taranto commented: “We are extremely pleased with the results we have achieved thus far this year. The strength of our operations affords us the flexibility to sustain the financial strength of the organization while also returning cash to our shareholders in the form of increased dividends and share repurchases. During the quarter, we repurchased 3 percent of our outstanding shares underscoring our commitment to increasing shareholder value.”

For more information, or to access today’s conference call, scheduled for 8:30 a.m. Eastern Time, go to the Company’s web site at: www.everestre.com, or www.streetevents.com.

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