Everest Re Group Announces Second Quarter Earnings

Bermuda-based Everest Re Group Ltd. reported a second quarter 2004 after-tax operating income, which excludes realized capital gains and losses, of $174.4 million, or $3.07 per diluted share, a 62.8 percent increase compared to $107.1 million, or $1.94 per diluted share, in the second quarter of 2003. Second quarter 2004 net income increased 140.9 percent to $264 million, or $4.64 per diluted share, compared to $109.6 million, or $1.99 per diluted share, in the second quarter of 2003. Operating income differs from net income only by the exclusion of realized gains and losses on investments.

For the six months ended June 30, 2004, after-tax operating income was $325.9 million, or $5.73 per diluted share, an increase of 54.3 percent compared to $211.2 million, or $3.96 per diluted share, in 2003. Net income in the first six months of 2004 was $390.1 million, or $6.86 per diluted share, an increase of 91.3 percent compared to $203.9 million, or $3.82 per diluted share, in 2003.

Gross premiums written for the second quarter of 2004 were $1.09 billion, a 1.6 percent increase compared to $1.07 billion in 2003. Net premiums written were $1.05 billion, an increase of 6.3 percent from $988.4 million for the second quarter of 2003. The Company’s GAAP combined ratio in the second quarter was 91.5 percent compared to 95.5 percent in 2003. Net investment income for the second quarter was $136.8 million compared to $102.2 million in the second quarter of 2003. Cash flow from operations for the second quarter of 2004 was $392.9 million, an increase of 11.2 percent from $353.2 million in the second quarter of 2003.

For the six months ended June 30, 2004, gross premiums written were $2.31 billion, an 11.6 percent increase from $2.07 billion in the first six months of 2003. Net written premiums grew 14.9 percent to $2.23 billion from $1.94 billion in 2003. The GAAP combined ratio for the first six months of 2004 was 91.1 percent compared to 94.5 percent in 2003. Net investment income for the six months ended June 30, 2004 was $237.7 million, an increase of 21.5 percent from $195.7 million in 2003. Cash flow from operations in the first six months was $792.5 million, compared to $680.9 million in the first six months of 2003.

At June 30, 2004, the Company’s shareholders’ equity was $3.36 billion, or $60.02 per outstanding share. The change in book value represents a 6.3 percent increase from shareholders’ equity of $3.16 billion, or $56.84 per outstanding share, at December 31, 2003.

The Company also increased its estimate of 2004 operating earnings to $10.50 – $11.50 per diluted share, absent unusual loss activity.

Commenting on the company’s results, Chairman and Chief Executive Officer Joseph V. Taranto said, “The company generated record earnings for the quarter driven largely by strong operating fundamentals and a continued favorable, although changing, market environment. We believe the company is well positioned to continue its strong performance.”