Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q4 2012 Earnings Presentation
18 slides from Everest's earnings presentation, 2013
Slide 1: Investor Presentation Fourth Quarter 2012
INVESTOR PRESENTATION FOURTH QUARTER 2012 EVEREST RE GROUP, LTD • WESSEX HOUSE, 45 REID STREET, 2ND FLOOR • HAMILTON HM DX, BERMUDA
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securi
Slide 3: Corporate Objectives
Corporate Objectives Everest Re Group is a worldwide multi-line reinsurance and insurance organization. Our key objectives are to: Maximize book value per common share over time, and Achieve returns that provide a mid-teens compound annual growth rate in shareholder value. 3 EVEREST RE GROUP, LT
Slide 4: Investor Value Proposition
Investor Value Proposition TOTAL SHAREHOLDER RETURN (Growth in BVPS + Dividends) $145.87 $126.52 $125.98 BOOK VALUE PER SHARE DIVIDENDS $112.02 $95.74 $88.00 $81.92 $68.44 $66.83 $58.79 $48.14 $38.46 $35.39 $30.10 $29.32 $26.21 $21.66 $19.39 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 200
Slide 5: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE Strong Brand Recognition 2012 Gross Written Premium $4.3 Billion Top ratings (A.M. Best A+; S&P A+; Moody’s Aa3, Fitch Insurance 25% AA-) Experienced Management Team and Board of Directors Winning Culture – disciplined, focused
Slide 6: Financial Highlights
Financial Highlights For the year ended December 31, ($ in millions) 2008 2009 2010 2011 2012 Income Statement Data: Gross Premiums Written $ 3,678.1 $ 4,129.0 $ 4,200.7 $ 4,286.2 $ 4,310.5 Net Premiums Earned 3,694.3 3,894.1 3,934.6 4,101.3 4,164.6 Net Investment Income 565.9 547.8 653.5 620.0 600.
Slide 7: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures 2008-2012 2003-2012 1996-2012 Combined Ratio 99.9% 99.3% 101.3% Combined Ratio excluding A&E 99.9% 97.4% 99.0% Pretax Operating ROR 13% 13% 14% Pretax Operating ROR excluding A&E 13% 15% 16% Oper
Slide 8: Multiple Distribution Channels
Multiple Distribution Channels ABILITY TO RESPOND TO GLOBAL OPPORTUNITIES Key Operating Subsidiaries in the United States, Ireland and Bermuda REINSURANCE LOCATIONS INSURANCE LOCATIONS United States Bermuda London United States Canada • Chicago, IL Belgium Singapore • Atlanta, GA • British Columbia,
Slide 9: Geographical Diversity in Reinsurance Book
Geographical Diversity in Reinsurance Book AMONGST THE MOST INTERNATIONALLY DIVERSIFIED REINSURANCE ORGANIZATIONS Worldwide, 2% Middle East/Africa, 5% Latin America, 17% Europe/UK, 18% Asia/Australia, 9% Canada, 5% USA, 44% 9 EVEREST RE GROUP, LTD.
Slide 10: Strategic Management of the Reinsurance Portfolio
Strategic Management of the Reinsurance Portfolio ACTIVE PORTFOLIO MANAGEMENT IN RESPONSE TO MARKET CONDITIONS 2012 2004 By Line of Business 32% Property Property 40% 60% 68% Casualty Casualty By Class of Business 30% Pro Rata Pro Rata 46% 54% Excess 70% Excess 10 EVEREST RE GROUP, LTD.
Slide 11: Product Diversity in Insurance Book
Product Diversity in Insurance Book ACTIVE EXPANSION INTO SHORT-TAIL LINES LEADING TO A STRATEGIC TRANSFORMATION OF THE BOOK 2012 2010 Other Short Tail, 11% Other Short Tail, 19% Workers Workers Comp, 27% Comp, 29% A&H, 8% A&H, 2% Crop, 0% Crop, 26% Prof Liability, Prof 13% Liability, Other Other 18
Slide 12: Strong Risk Management Culture
Strong Risk Management Culture WITH CONSIDERABLE FINANCIAL FLEXIBILITY PML as Percent of Shareholders' Debt + Preferred Equity to Capital As of 10/1/12 As of 9/30/12 VR ENH LRE.L MRH ENH AHL MRH PRE AHL RNR FSR AXS AWH AWH AXS ACGL XL XL PTP ACE RE ALTE ALTE VR PRE PTP ACGL RE ACE LRE.L 0% 20% 40% 6
Slide 13: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 12/31/12 - INVESTABLE ASSETS OF $16.6 BILLION Capitalization Liquidity 100% 25.0 90% Cash & Short Government Mortgage/ 80% 19.2 20.0 Term 8% 2% Asset Backed Other 4% 16% 70% 60% 14.3 15.0 50% 11.5 11.9 10.8 40% 10.0 Non U.S. 30% 29% Corporate 20% 5.0
Slide 14: Attractive Valuation Creates Buying Opportunity
Attractive Valuation Creates Buying Opportunity RECORD LOW WITH SHARES TRADING AT A DISCOUNT TO BOOK Everest Historical Price-to-Book Valuation - 1998 to 2013* 2.50 2.00 1.50 Average 1.22x .92x 1.00 0.50 0.00 Everest has taken advantage of this opportunity, and since 2006 has repurchased 23% of its
Slide 15: Active Capital Management
Active Capital Management DRIVES SHAREHOLDER RETURNS $550,000 Dividends & Share Shares repurchased ($) Dividends paid to shareholders Repurchases $350,000 Common shares issued $150,000 $ thousands -$50,000 Common Equity Raised -$250,000 -$450,000 -$650,000 -$850,000 1995 1996 1997 1998 1999 2000 200
Slide 16: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 600.00% 554.02% 500.00% Everest S&P 500 400.00% 300.00% 236.26% 200.00% 131.52% 98.48% 100.00% 33.25% 15.99% 22.57% 8.59% 0.00% 1 Year 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2011-2012 2007-2012 2
Slide 17: Conclusion
Conclusion ■ Strong franchise that has successfully weathered numerous market cycles ■ Seasoned management team focused on building long term value for our shareholders ■ Disciplined underwriting culture – profitability before growth – supported by a strong risk management framework ■ Conservative,
Slide 18: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Wessex House, 45 Reid Street, 2nd Floor, P. O. Box 845, Hamilton, HM DX, Bermuda