Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q4 2015 Earnings Presentation
21 slides from Everest's earnings presentation, 2016
Slide 1: Investor Presentation Fourth Quarter 2015
INVESTOR PRESENTATION Fourth Quarter 2015 EVEREST RE GROUP, LTD • SEON PLACE, 141 FRONT STREET, 4TH FLOOR • HAMILTON HM 19, 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: The Everest Franchise – Well Positioned for Success
THE EVEREST FRANCHISE – Well Positioned for Success A BUSINESS MODEL THAT IS NOT EASILY REPLICATED TOP TIER REINSURER SIGNIFICANT SCALE $5.9B 2015 Gross Written Premiums $10.6B Capacity Everest + Mt. Logan + Cat Bonds GLOBAL REACH LONG TERM MARKET PRESENCE 14 Reinsurance offices,* 10 outside the US
Slide 5: Generating Shareholder Value
Generating Shareholder Value TOTAL SHAREHOLDER RETURN Total Value Creation, defined as growth in book value per share + dividends, has averaged 12% annually over the last 10 years Book Value per Share Accumulated Dividends to Shareholders $202.51 $187.05 $163.67 $145.87 $126.52 $125.98 $112.02 $95.7
Slide 6: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2015 Gross Written Premium • Strong Brand Recognition $5.9 Billion • Top ratings (A.M. Best A+; S&P A+; Moody’s A1) Insurance • Experienced Management Team and Board of Directors 26% • Winning Culture – disciplined, focused on profitab
Slide 7: Financial Highlights
Financial Highlights For the year ended December 31, ($ in millions) 2015 2014 2013 2012 2011 Income Statement Data: Gross Premiums Written $ 5,876.3 $ 5,749.0 $ 5,218.6 $ 4,310.5 $ 4,286.2 Net Premiums Earned 5,481.5 5,169.1 4,753.5 4,164.6 4,101.3 Net Investment Income 473.8 530.6 548.5 600.2 620.
Slide 8: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures (Compound Annual Growth Rate) 2011-2015 2006-2015 1996-2015 Combined Ratio* 91.4% 92.3% 96.3% Pretax Operating ROR 17.2% 18.2% 15.1% Operating ROE 11.7% 12.5% 11.7% Shareholder Value 10.6% 12.0%
Slide 9: Multiple Distribution Channels
Multiple Distribution Channels ABILITY TO RESPOND TO GLOBAL OPPORTUNITIES Key Operating Subsidiaries in the United States, Ireland, and Bermuda REINSURANCE LOCATIONS: United States Bermuda Chicago, IL Belgium Liberty Corner, NJ Brazil Miami, FL Canada New York, NY Ireland Oakland
Slide 10: Everest Re – A Premier Global Brand
Everest Re – A Premier Global Brand FOR OVER 40 YEARS, ONE OF THE TOP GLOBAL REINSURERS ACROSS THE GLOBE Map Color Key Color Mkt Share % Global platform provides 0.1% - 1.0% geographic reach across 1.0% - 1.5% virtually all property and 1.5% - 2.0% casualty lines of 2.0% - 5.0% business 5.0% - 6.0%
Slide 11: Everest Reinsurance
Everest Reinsurance AMONGST THE MOST DIVERSIFIED REINSURANCE ORGANIZATIONS Reinsurance Premium by Geography Reinsurance Premium by Line of Business Europe/UK 19% Property Casualty Catastrophe Middle 27% XOL East/Africa 27% 5% USA Worldwide 50% 2% Latin America 16% Other Asia/ Property 46% Australia
Slide 12: Everest Insurance
Everest Insurance A GLOBAL SPECIALTY INSURANCE COMPANY WITH DISTINCT UNDERWRITING EXPERIENCE % Gross WP 2015 100% A&H, 8% 90% Canada, 4% 80% 35% 36% 40% 36% Workers 41% Compensation, 70% 63% 27% 60% Crop, 16% 21% 18% 22% 50% 23% 27% 40% 30% 27% 44% 46% 42% 20% 37% 32% Professional 10% Other Short- L
Slide 13: 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 9/30/15 As of 09/30/15 LRE.L AHL VR RNR XL AXS ENH AWH PRE AHL LRE.LN ENH AWH AXS CB RE* ACGL PRE XL A
Slide 14: Operating With Significant Scale
Operating With Significant Scale HAVING $11 BILLION OF CAPACITY 10,620 9,728 1,575 950 7,827 689 799 7,152 7,552 638 6,889 818 370 638 868 818 488 6,968 7,451 7,609 6,284 6,071 6,733 2010 2011 2012 2013 2014 2015 Common Equity Total Debt Mt. Logan AUM Cat Bonds 1,074 110 625 0 10,620 14 9,728 175 40
Slide 15: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 12/31/15 - INVESTABLE ASSETS OF $17.7 BILLION Capitalization Liquidity 100% 15.0 90% Cash & Government 80% Short Term 5% 11.9 12% 70% 11.5 Mortgage/ Other Asset 10.8 60% 4% Backed 17% 50% 10.0 40% Non U.S. 7.9 7.7 23% 30% 20% 6.5 Corporate 10% 27% Mu
Slide 16: Accident Year Loss Development
Accident Year Loss Development 10 YEAR LOSS RESERVING EXPERIENCE – INITIAL TO ULTIMATE 94.6% 93.8% 90.8% 90.7% 100.0% 90.0% 75.7% 73.3% 68.0% 80.0% 66.7% 66.0% 65.1% 64.6% 60.8% 59.7% 59.3% 59.3% 59.0% 58.6% 57.7% 57.0% 57.0% 70.0% 56.3% 55.5% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2005 2006 2007
Slide 17: Strong and Consistent Operating Cash Flows
Strong and Consistent Operating Cash Flows ADD TO STRONG LIQUIDITY PROFILE $7.0 $2.5 $5.9 $6.0 2004 FL 2008-2009 $5.7 Hurricane Financial $5.2 $2.0 2005 Crisis/ KRW Recession $5.0 $4.7 Hurricanes $4.6 Operating Cash Flow ($B) $4.3 $4.3 $4.1 $4.2 $4.1 $4.1 $4.0 $1.5 $4.0 $3.7 2011 Japan EQ & Thai $2.
Slide 18: Active Capital Management Improves Shareholder Value
Active Capital Management Improves Shareholder Value BOOK VALUE PER SHARE INCREASES 2.3x SINCE 2006 $178.21 Capital Management: $166.75 $146.57 • Everest historically $130.96 addresses excess $115.45 $112.99 capital through share $102.87 10,620 buybacks $90.43 9,728 $78.53 $80.77 950 1575 • Since 20
Slide 19: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 1,053.7% 600.0% Everest S&P 500 500.0% 412.3% 400.0% 300.0% 200.0% 138.3% 121.7% 102.3% 100.0% 80.6% 9.9% 1.4% 0.0% 1 Year 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2014-2015 2010 - 2015 2005 - 2015
Slide 20: 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 21: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Seon Place, 141 Front Street, 4th Floor, P. O. Box 845, Hamilton, HM DX, Bermuda