Everest Re 1Q2020 preliminary figures, y-o-y changes
- Premiums earned: USD 2,037 million (+18%)
- Net investment income: USD 148 million (+5%)
- Incurred losses: USD 1,431 million (+36%)
- Commissions, taxes, fees: USD 449 million (+15%)
- Net income: USD 17 million (-95%)
The company wrote nearly USD 2.6 billion in gross written premiums for the quarter, an increase of 21% as compared to a year ago. The Reinsurance segment grew 16% while the Insurance segment was up 33%.
The combined ratio was 98.6% for the first quarter of 2020 (+9.9 pp.). The ratio includes USD 150 million in net pre-tax IBNR losses related to the Covid-19 pandemic (91.2% combined ratio excluding these losses). The IBNR loss is attributed USD 110 million to Reinsurance and USD 40 million to Insurance.
Excluding catastrophe and pandemic IBNR, the underlying combined ratio was 89.9% (87.7% for Reinsurance and 95.6% for Insurance) versus 87.4% for the same period of 2019. The increase in these comparable combined ratios is primarily attributable to the continued business mix shift toward more pro-rata business in Reinsurance.
Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to USD 30.0 million in the quarter, related to losses from Australian wildfires, Australian East Coast storms and the Nashville, U.S. tornadoes.
Cash flow from operations was USD 506.0 million for the quarter of 2020 (+10.0%).
Net income of USD 16.6 million included a USD 31.0 million tax benefit from the CARES Act, which extended the carry back period for tax losses.
Net investment income of USD 147.8 million for the quarter including limited partnership income of USD 21.6 million. Note that net investment income from limited partnerships is generally subject to a reporting lag averaging one quarter.
Net after-tax realized losses amounted to USD 172.4 million for the quarter, while net after-tax unrealized losses were USD 248.0 million for the quarter. Since the end of the quarter, the unrealized loss position has substantially recovered.
"Our diversified global platform with its broad mix of products, distribution and geography is an important source of stable capacity to our broker partners and customers. Our capital position remains a source of strength, with high quality invested assets, significant liquidity and low financial leverage. Our well-diversified investment portfolio is resilient, and we have taken additional steps to reposition it by moving up in credit quality and further reducing equity exposure. (...) Above all it is the ingenuity, perseverance and dedication of our employees during these unique times that allows us to operate our business without interruption. Despite the impacts of the pandemic, Everest remains profitable and resilient with a strong capital base."
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