Everest Re’s Q2 results down as FX moves and cat losses take their toll
Everest Re reported a fall in second-quarter results as unfavourable foreign exchange movements and an increase in catastrophe losses impaired its performance.
The Bermuda-based group’s net income declined to $155.7 million in the second quarter compared to $209.1 million in the same period of 2015. Similarly, after-tax operating income, excluding realised capital gains and losses, fell to $134.2 million compared to $224.5 million in the same period a year ago.
The combined ratio for the quarter was 95.1 percent compared to 88 percent in the second quarter of 2015. Excluding catastrophe losses, reinstatement premiums, and prior period loss development, the current quarter attritional combined ratio was 86.1 percent compared to 85.9 percent in the same period of 2015.
“Everest’s six month annualised operating return on equity of 9.4 percent is an excellent result given the number of catastrophe loss events, the impact of foreign currency movements around the world, and the continued low interest rate environment. It remains a challenging environment but the strategic actions we have taken to position Everest for continued success are borne out by these results,” president and chief executive officer Dominic Addesso said,
Catastrophe losses, net of reinsurance, amounted to $123.8 million in the second quarter, with current quarter catastrophe losses for the Fort McMurray wildfires in Canada, the Ecuador earthquake and Texas hailstorms totaling $149.1 million, offset by reserve releases on several 2011 events. The net impact of these losses, after reinstatement premiums and taxes, was $105.4 million.
Gross written premiums for the quarter were $1.4 billion, an increase of 8 percent compared to the second quarter of 2015. According to the company after eliminating the unfavorable effects of foreign currency fluctuations, premiums were up 10 percent for the quarter. Worldwide, reinsurance premiums were up 1 percent, on a constant dollar basis, and insurance premiums were up 32 percent, quarter over quarter.
