26 January 2021News

Everest Re estimates full year profit of around $500m for 2020

Everest Re Group expects to report full year net profit of $475-$525 million for 2020, when it makes its full quarterly and full year earnings on February 8, 2021.

Everest estimates pre-tax net catastrophe losses for Q4 2020 of $70 million, net of reinsurance and reinstatement premiums. The estimate includes the impact of Hurricanes Delta, Zeta, Eta, Iota, and the Queensland Australia Hailstorm.

The catastrophe losses include $60 million in its reinsurance segment and $10 million in the insurance segment.

Meanwhile, it expects pre-tax net COVID-19 pandemic losses of $76 million in Q4 2020, primarily for third-party lines. This includes $56 million in the reinsurance business and $20 million in the insurance business. The loss will be in addition to the $435 million of pandemic losses estimated in the first nine months of 2020.

For the full year 2020, the total pandemic loss provision is $511 million, and over 80 percent is incurred but not reported.

Everest is increasing prior year loss reserves by $400 million, or 3 percent of net loss reserves as of September 30, 2020, all in the reinsurance segment. The increase covers predominantly long-tail classes for the 2015-2018 accident years, notably general liability, professional lines, and auto liability. It also includes actions on non-CAT property lines, primarily for the 2017-2019 accident years, driven by a few large losses to aggregate programmes.

Juan Andrade, group president and chief executive officer at Everest Re, stressed the strength of the fundamentals of the business, arguing it is well positioned to succeed in any market conditions. The reserving actions respond to the social inflation trends affecting the overall US casualty market, he said.

“We have proactively acted on the affected portfolios and we have confidence in our in-force book. We are bullish about our future and the earnings generating power of our franchise,” he added.