Everest Re reports second quarter earnings

Everest Re Group, Ltd. (NYSE: RE) recently reported second quarter 2005 after-tax operating income, which excludes realized capital gains and losses, of $173.3 million, or $3.03 per diluted share, a nominal decrease compared to $174.4 million, or $3.07 per diluted share, in the second quarter of 2004. Second quarter 2005 net income decreased 26.4% to $194.2 million, or $3.40 per diluted share, compared to $264.0 million, or $4.64 per diluted share, in the second quarter of 2004. Operating income differs from net income only by the exclusion of realized gains and losses on investments.
For the six months ended June 30, 2005, after-tax operating income was $338.6 million, or $5.93 per diluted share, an increase of 3.9% compared to $325.9 million, or $5.73 per diluted share, in 2004. Net income in the first six months of 2005 was $361.3 million, or $6.33 per diluted share, a decrease of 7.4% compared to $390.1 million, or $6.86 per diluted share, in 2004.
Gross premiums written for the second quarter of 2005 were $1.11 billion, a 2.2% increase compared to $1.09 billion in 2004. Net premiums written were $1.07 billion, an increase of 2.2% from $1.05 billion for the second quarter of 2004. The Company’s GAAP combined ratio in the second quarter was 91.3% compared to 91.5% in 2004. Net investment income for the second quarter was $137.4 million compared to $136.8 million in the second quarter of 2004. Cash flow from operations for the second quarter of 2005 was $291.1 million, a decrease of 25.9% from $392.9 million in the second quarter of 2004.
For the six months ended June 30, 2005, gross premiums written were $2.16 billion, a 6.6% decrease from $2.31 billion in the first six months of 2004. Net premiums written for the same period decreased 6.4% to $2.09 billion from $2.23 billion in 2004. The GAAP combined ratio for the first six months of 2005 was 91.3% compared to 91.1% in 2004. Net investment income for the six months ended June 30, 2005 was $270.3 million, an increase of 13.7% from $237.7 million in 2004. Cash flow from operations in the first six months was $616.3 million, compared to $792.5 million in the first six months of 2004.
At June 30, 2005, the Company’s shareholders’ equity was $4.08 billion, or $72.37 per outstanding share. The change in book value represents a 9.9% increase from shareholders’ equity of $3.71 billion, or $66.09 per outstanding share, at December 31, 2004.
Chairman and Chief Executive Officer Joseph V. Taranto says, “We have reached yet another milestone with shareholders’ equity now in excess of $4 billion and continue our disciplined pursuit of opportunities to keep this capital effectively deployed.”