Everest Re Bermuda reinsurance segment profitability improves despite wider dip
The profitability of Everest Re Group's Bermuda reinsurance segment increased in 2018, however a challenging fourth quarter caused the company's wider profits to dip and combined ratio worsen year-on-year.
Everest Re's Bermuda reinsurance segment combined ratio improved 10 percentage points to 88.5 percent in 2018 from 98.5 percent in 2017.
The Bermuda reinsurance segment grew its gross written premiums to $1.67 billion at the end of 2018, up from $1.2 billion year-on-year.
Gross written premiums for the entire reinsurance segment rose to to $6.2 billion for the year compared with $5.1 billion in 2017.
Everest Re's overall gross written premiums increased to $8.4 billion compared with $7.1 billion in 2017.
The company made a net profit of $103.6 million last year compared with $469.0 million a year earlier. Its combined ratio was 108.8 percent for the year, compared to 103.5 percent in 2017.
Everest Re suggested that excluding catastrophe losses, reinstatement premiums and the favourable prior period loss development, the combined ratio would have been 87 percent for the year, and 85 percent in 2017.
In the fourth quarter alone, catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $875 million in the quarter, primarily related to losses from Hurricane Michael, the California Camp and Woolsey wildfires and an Australia hailstorm event.
“During 2018 there were nearly $90 billion of insured industry losses, the fourth highest on record," said dominic Addesso, president and chief executive of Everest Re. "Despite these events, Everest had both positive net income and operating income for the year. This result is testament to the diversification of our business across geographies, classes of business, and sources of capital. Everest’s long-term returns remain impressive, with 5 and 10 year average returns on equity still in excess of 10 percent.”