Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q3 2011 Earnings Presentation
20 slides from Everest's earnings presentation, 2011
Slide 1: Investor Presentation 2011
INVESTOR PRESENTATION 2011 EVEREST RE GROUP, LTD. I WESSEX HOUSE 45 REID STREET, 2ND FLOOR I 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 Earn a mid-teens ROE over each market cycle. PAGE 3 EVEREST RE GROUP, LTD.
Slide 4: Investor Value Proposition
Investor Value Proposition TOTAL SHAREHOLDER RETURN (Growth in BVPS + Dividends) $126.52 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 $19.39 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 5: Leading Business Franchise
Leading Business Franchise RECOGNIZED INDUSTRY LEADER Strong Brand Recognition Top ratings (A.M. Best A+; S&P A+; Moody’s Aa3, Fitch AA-) Experienced Management Team and Board of Directors Winning Culture – disciplined, focused on profitable growth, accountable – results oriented, flat and n
Slide 6: Financial Highlights
Financial Highlights For the year ended December 31, YTD ($ in millions) 2006 2007 2008 2009 2010 2011 Income Statement Data: Gross Premiums Written $ 4,000.9 $ 4,077.6 $ 3,678.1 $ 4,129.0 $ 4,200.7 $ 3,181.3 Net Premiums Earned 3,853.2 3,997.5 3,694.3 3,894.1 3,934.6 3,095.6 Net Investment Income 6
Slide 7: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures 2006-2010 2001 -2010 1996-2010 Combined Ratio 93.8% 98.7% 99.4% Pretax Operating ROR 18.8% 13.5% 14.2% Operating ROE 13.3% 11.2% 11.8% BVPS CAGR 12.5% 12.9% 12.6% Shareholder Value 13.6% 13.6% 13
Slide 8: Key Strategy Drivers
Key Strategy Drivers FOCUS ON BUILDING SHAREHOLDER VALUE Emphasize underwriting profitability, not volume Understand and control risks Provide top quality client service Operate efficiently and effectively Attract and retain high quality staff Maintain superior financial strength PAGE 8
Slide 9: Experienced Management Team
Experienced Management Team FLAT ORGANIZATIONAL STRUCTURE ENSURES SUCCESSFUL EXECUTION OF THE STRATEGY JOSEPH TARANTO Chairman Chief Executive Officer DOM ADDESSO President Chief Financial Officer David Schmitt John Doucette Daryl Bradley Lou Monteagudo Robert Capicchioni Mark De Saram Barry Smith J
Slide 10: Strategic Management of the Portfolio
Strategic Management of the Portfolio ACTIVE PORTFOLIO MANAGEMENT IN RESPONSE TO MARKET CONDITIONS 2010 2004 21% 25% US Reins US Reins By Segment 33% Intl 42% Intl 17% Bermuda Bermuda 19% Insurance Insurance 29% 14% By Line of Business 17% 22% Reins Property Reins Property 3% Reins Casualty 3% 45% R
Slide 11: Competitive Positioning
Competitive Positioning PRODUCT, DISTRIBUTION AND GEOGRAPHICAL DIVERSITY 100% 80% of our book is Reinsurance, where there is more 90% 80% control over pricing and it is easier to exit poorly 70% performing business 60% Life 50% Insurance 60% of the overall book is in Property/Short-tail lines 40
Slide 12: Multiple Distribution Channels
Multiple Distribution Channels GLOBAL FOOTPRINT WITH OPERATIONS THROUGHOUT THE WORLD Key Operating Subsidiaries are located in the United States, Ireland and Bermuda. BERMUDA BRAZIL International Operations are conducted through BRUSSELS London, Ireland, Toronto, Brussels, Cologne, Brazil and Sing
Slide 13: Geographical Diversity in Reinsurance Book
Geographical Diversity in Reinsurance Book AMONGST THE MOST INTERNATIONALLY DIVERSIFIED REINSURANCE ORGANIZATIONS Worldwide, 2% Middle East/Africa, 6% Latin America, 15% Europe/UK, 17% Asia/Australia, 9% Canada, 6% USA, 45% PAGE 13 EVEREST RE GROUP, LTD.
Slide 14: Product Diversity in Insurance Book
Product Diversity in Insurance Book ACTIVE EXPANSION INTO SHORT-TAIL LINES LEADING TO A STRATEGIC TRANSFORMATION OF THE BOOK 2011 2010 Nonstandard Nonstandard Auto, 3% Auto, 3% Property, 3% Property, 4% Calif Workers Calif Workers Prof Liability, Comp, 24% Comp, 24% Prof Liability, 13% 18% Other Oth
Slide 15: Calendar Year Loss Development
Calendar Year Loss Development DEMONSTRATES STRENGTH IN CORE RESERVES For the y ear ended December 31, 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 10-Year 5-Year Net Earned Premium 1,467.5 2,273.7 3,737.9 4,425.1 3,963.1 3,853.2 3,997.5 3,694.3 3,894.1 3,934.6 35,241.0 19,373.7 Loss Dev elopme
Slide 16: Capital Management Objectives
Capital Management Objectives FOCUS ON PRESERVING BALANCE SHEET STRENGTH WHILE REWARDING SHAREHOLDERS Maintain capital at levels in excess of those required to retain ratings Target mid-teens ROE over the cycle Optimize capital structure; conservatively leverage the balance sheet Manage capi
Slide 17: Driving Shareholder Returns Through Buybacks
Driving Shareholder Returns Through Buybacks A STRATEGY OF ACTIVE CAPITAL MANAGEMENT OVER TIME $550,000 Shares repurchased ($) Dividends & Share Dividends paid to shareholders Repurchases $350,000 Common shares issued $150,000 $ thousands -$50,000 Common Equity Raised -$250,000 -$450,000 -$650,000 -
Slide 18: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 9/30/11 – INVESTABLE ASSETS OF $15.7 BILLION Capitalization Liquidity 100% Cash & Short Mortgage/ 90% Term 8% Asset Backed, 17% 80% Other 4% 70% 60% Junior Sub-Debt Long-Term Sub-Notes Non U.S. 50% 25% Senior Debt Corporate 40% Common Equity 23% 30%
Slide 19: In Summary
In Summary … Recognized balance sheet strength – flight to quality Global franchise – expansive distribution platform Experienced management team – seasoned & opportunistic Diversified risk profile – prudent risk management Disciplined underwriting approach – profitability before growth Efficient op
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