Everest Re Group Q1 net income plunges to $16.6 million

CEO, however, states there is underlying strength and sustainable profitability

Everest Re Group Q1 net income plunges to $16.6 million

Insurance News

By Terry Gangcuangco

Results season continues, and among the latest to publish their first quarter numbers is Everest Re Group – which has remained profitable during this particularly challenging time.

In the first three months of 2020, the global reinsurance and insurance provider posted a net income of $16.6 million. The figure represents a decline from the $354.6 million net income enjoyed by Everest in the same period last year.

President and chief executive Juan C. Andrade, however, remains upbeat.

“Everest wrote nearly $2.6 billion in gross written premiums for the quarter, an increase of 21% as compared to a year ago,” noted Andrade. “Our reinsurance segment grew 16% while the insurance segment was up 33%.

“These results continue to demonstrate the value of the Everest franchise to our broker partners and customers.”

The Everest boss went on to report: “Our combined ratio for the quarter was 98.6%, which includes $150 million in net pre-tax IBNR (incurred but not reported) losses related to the COVID-19 pandemic (91.2% combined ratio excluding these losses).

“The IBNR loss is attributed $110 million to reinsurance and $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, highlighting the underlying strength and sustainable profitability of the franchise.”

Meanwhile the Bermuda-headquartered group’s catastrophe losses – net of reinsurance and reinstatement premiums – amounted to $30.0 million in the period. The sum related to losses from Australian wildfires, Australian East Coast storms, and the Nashville tornadoes in the US. 

With subsidiaries in Europe, Singapore, Canada, Bermuda, the US, and other territories, Everest recorded an after-tax operating income of $164.4 million in the quarter ended March 31.

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