Strong Q4 props Everest Re’s 2017 results
A significant increase in operating profit in the fourth quarter of 2017 helped to prop up Everest Re’s 2017 full year results which were impacted by severe natural catastrophes in North America.
Net income in the fourth quarter of 2017 increased to $571.0 million from $373.6 million in the same period a year ago. The combined ratio was 70.0 percent for the quarter compared to 82.1 percent in the fourth quarter of 2016. The quarter benefitted from net prior year reserve releases of $262.1 million and a net reduction to prior period catastrophe loss estimates of $132.7 million, including a $102.7 million reduction in the catastrophe loss estimates for the third quarter 2017 events. This was offset by $161.5 million for catastrophe losses that occurred in the quarter, including both the Northern and Southern California wildfires.
Nevertheless, for the full year ended December 31, 2017, net income fell to $469.0 million from $996.3 million in 2016. The combined ratio deteriorated to 103.5 percent from 87.0 percent over the period.
“Everest experienced an exceptional quarter with $556 million of net operating income, giving rise to a respectable year of earnings, despite 2017 being one of the most costly catastrophe loss years on record,” said Everest Re CEO Dominic Addesso. “The underlying results were quite strong with an attritional combined ratio for the year of 85.0 percent. More importantly is that all segments contributed to these positive results. For the full year, Everest generated a 6 percent return on equity (ROE) and reached a new milestone with premium of $7.2 billion.”
For the full year, gross written premiums grew 19 percent year on year to $7.2 billion. Eliminating reinstatement premiums and the effects of foreign currency fluctuations, total premiums were up 16 percent for the year. Worldwide reinsurance premiums grew 17 percent, on this same basis, while direct insurance premiums were up 15 percent for the year.
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