Everest Re Group Ltd. (RE) reported third quarter 2013 operating earnings of $4.20 per share, substantially missing the Zacks Consensus Estimate of $4.69 per share. Earnings were also up 3.7% year over year.
Everest Re's results were adversely affected by an increase in annualized effective tax rate.
Including after tax net realized capital gains and loss, the company reported net income of $4.81 per share, a penny down compared to the year ago quarter.
Operational Updates
Everest Re reported total revenue for the quarter came in at $1.40 billion, up 15.0% year over year. The increase was due to higher premium earned which increased 21.4% year over year to $1.23 billion.
Gross written premiums were $1.5 billion, an increase of 22% year over year.
Net investment income decreased 15.9% year over year to $127.9 million.
Total claims and expenses were up 21.2% year over year to $1.09 billion, primarily due to higher incurred losses and loss adjustment expenses, underwriting and interest expenses and commission brokerage.
The combined ratio in the quarter deteriorated 80 basis points year over year to 88.0%.
During the reported quarter, Everest Re suffered cat loss of $75.0 million because of German hailstorms and flood events in Canada.
Segment Results
The company’s Reinsurance segment reported net premium written of $1.07 billion, up 23.5% year over year. The segment reported underwriting gain of $142.5 million, down 9.3% year over year. Combined ratio deteriorated 480 basis points year over year to 84.9%.
The Insurance segment reported premium written of $304.8 million, up 32% year over year. The segment reported an underwriting loss of $0.2 million, significantly better from the underwriting loss of $28.2 million in the year ago quarter.
Financial Update
Everest Re's cash flow from operations was $380.4 million compared to $174.9 million in the year ago quarter.
Shareholders’ equity as of the end of the reported quarter was $6.7 billion, unchanged relative to Dec 31, 2012.
Book value per share increased to $140.2 as on Sep 30, 2013 from $130.96 as of Dec 31, 2012.
Share Repurchase Update
During the quarter under review, Everest Re spent $100.0 million on share repurchase.
Everest Re currently retains a Zacks Rank #2 (Buy). Other companies in the same industry ?? RLI Corp. (RLI) with Zacks Rank #1 (Strong Buy), The Travelers Companies Inc. (TRV), and Assurant Inc. (AIZ) both with Zacks Rank #2 (Buy), all reported third quarter 2013 earnings ahead of the Zacks Consensus Estimate.
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