Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q4 2014 Earnings Presentation
20 slides from Everest's earnings presentation, 2015
Slide 1: Everest Re Group, Ltd. Fourth Quarter 2014 Investor Presentation
Everest Re Group, Ltd. FOURTH QUARTER 2014 INVESTOR PRESENTATION 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. PAGE 3 EVEREST RE GROU
Slide 4: Investor Value Proposition
Investor Value Proposition TOTAL SHAREHOLDER RETURN (Growth in BVPS, adjusted for dividends) $187.05 Shareholder Value Creation has averaged 12% annually over the last 5 years BOOK VALUE PER SHARE ACCUMULATED DIVIDENDS $163.67 $145.87 $126.52 $125.98 $112.02 $95.74 $88.00 $81.92 $68.44 $66.83 $58.79
Slide 5: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2014 Gross Written Premium Strong Brand Recognition $5.7 Billion Top ratings (A.M. Best A+; S&P A+; Moody’s A1) Insurance 21% Experienced Management Team and Board of Directors Winning Culture – disciplined, focused on profitab
Slide 6: Financial Highlights
Financial Highlights For the year ended December 31, ($ in millions) 2010 2011 2012 2013 2014 Income Statement Data: Gross Premiums Written $ 4,200.7 $ 4,286.2 $ 4,310.5 $ 5,218.6 $ 5,749.0 Net Premiums Earned 3,934.6 4,101.3 4,164.6 4,753.5 5,169.1 Net Investment Income 653.5 620.0 600.2 548.5 530.
Slide 7: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT (Compound Annual Growth Rate) 5 Year 10 Year ITD Key Profitability Measures 2010-2014 2005-2014 1996-2014 Combined Ratio* 95.4% 96.1% 97.5% Pretax Operating ROR 15% 15% 15% Operating ROE 11% 10% 12% Shareholder Value 12% 11% 13% * Weighted a
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 United States • Tampa, FL • Chicago, IL Belgium • Amarillo, TX • Topeka, KS • Liberty Corner
Slide 9: Diversity in Reinsurance Book
Diversity in Reinsurance Book AMONGST THE MOST DIVERSIFIED REINSURANCE ORGANIZATIONS Reinsurance Premium by Geography Reinsurance Premium by Line of Business Europe/UK 16% Property Middle Catastrophe East/Africa Casualty XOL 4% 27% 23% Worldwide 2% USA 49% Latin America 20% Other Asia/Australi Prope
Slide 10: Product Diversity in Insurance Book
Product Diversity in Insurance Book ACTIVE EXPANSION INTO SHORT-TAIL LINES LEADING TO A STRATEGIC TRANSFORMATION OF THE BOOK 2014 % Gross WP 100% 90% 80% 38.7% 38.4% 43.6% Other Short Workers 70% Tail, 22% 66.0% 64.6% Comp, 32% 60% 50% 22.6% 19.4% 40% 29.2% A&H, 7% 30% Prof 20% 26.7% 27.1% 42.2% Cro
Slide 11: Strong Risk Management Culture
Strong Risk Management Culture WITH CONSIDERABLE FINANCIAL FLEXIBILITY AND CONSERVATIVE PROPERTY CATASTROPHE EXPOSURE PML as Percent of Shareholders' Equity Debt + Preferred Equity to Capital As of 12/31/13 As of 12/31/13 VR AHL LR… ENH AHL MRH MRH AXS AWH PRE ACGL PRE LRE… AXS AWH XL ACE ACGL XL EN
Slide 12: Mt Logan Re
Mt Logan Re THIRD PARTY CAPITAL STRATEGY TOTAL CAPACITY OF $8.1 BILLION Mt Logan AUM of approximately $690m Launched in July 2013 with strong investor interest Mt. Logan Allows Everest to extend market share utilizing non-dilutive capital Provides increased capacity to our clients Everest
Slide 13: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 12/31/14 - INVESTABLE ASSETS OF $17.4 BILLION Capitalization Liquidity 100% 15.0 90% Government 80% Cash & Short 1% Mortgage/ 11.9 Term 12% Asset Backed 70% 11.5 15% 10.8 Other 4% 60% 50% 10.0 40% 7.9 Non U.S. 30% 26% Corporate 20% 6.5 27% 10% 0% 5.0
Slide 14: Calendar Year Loss Development
Calendar Year Loss Development DEMONSTRATES STRENGTH IN CORE RESERVES 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 10-Year 4-Year Net Earned Premium 4,425.1 3,963.1 3,853.2 3,997.5 3,694.3 3,894.1 3,934.6 4,101.3 4,164.6 4,753.5 40,781.4 16,954.1 Loss Developm ent 249.4 (26.4) 135.6 206.5 34.9
Slide 15: Accident Year Loss Development
Accident Year Loss Development 10 YEAR LOSS RESERVING EXPERIENCE – INITIAL TO ULTIMATE 94.6% 93.7% 90.8% 90.5% 100.0% 90.0% 75.7% 75.5% 69.5% 68.7% 68.0% 80.0% 66.0% 65.4% 65.1% 65.0% 60.8% 59.7% 59.3% 59.3% 59.1% 58.6% 70.0% 57.7% 57.1% 55.6% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2004 2005 2006
Slide 16: 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 2014 2.50 2.00 1.50 Average 1.2x 1.00 0.50 0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Everest has t
Slide 17: Active Capital Management
Active Capital Management DRIVES SHAREHOLDER RETURNS Dividends & Share $550 Shares repurchased ($) Repurchases Dividends paid to shareholders $350 Common shares issued $150 $ millions -$50 Common Equity Raised 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 18: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 949.52% 600.00% 500.00% Everest 405.34% S&P 500 400.00% 300.00% 200.00% 119.84% 127.07% 104.96% 109.35% 100.00% 0.00% 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2009 - 2014 2004 - 2014 1996 - 2014 15
Slide 19: 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 20: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Wessex House, 45 Reid Street, 2nd Floor, P. O. Box 845, Hamilton, HM DX, Bermuda