Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q4 2017 Earnings Presentation
22 slides from Everest's earnings presentation, 2018
Slide 1: Everest Re Group, Ltd. Investor Presentation Fourth Quarter 2017
EVEREST RE GROUP, LTD. I N V E S T O R P R E S E N TAT I O N FOURTH QUARTER 2017 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 double-digit compound annual growth rate in shareholder value. 3 EVEREST RE GROUP,
Slide 4: 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 business 2.0% - 5.0% 5.0% - 6.0%
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 11% annually over the last 5 years Book Value Per Share Accumulated Dividends 239.00 226.45 $202.51 187.05 163.67 145.87 126.52 125.98 112.02 95.74 88.00 81
Slide 6: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2017 Gross Written Premium Strong Brand Recognition $7.2 Billion Top ratings (A.M. Best A+; S&P A+; Moody’s A1) Insurance Experienced Management Team and Board of Directors 29% Winning Culture – disciplined, focused on profitab
Slide 7: Experienced Management Team
Experienced Management Team Dominic Addesso President and Chief Executive Officer John Doucette Jonathan Zaffino Craig Howie Mike Kerner Sanjoy Mukherjee Daryl Bradley Ralph Groce Gail Van Beveren EVP and President EVP and President EVP and Chief EVP and Head of EVP, General Counsel Executive Vice S
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 Ireland United States Los Angeles, CA Bermuda Chicago, IL Belgium London A
Slide 9: Resulting in Strong Momentum
Resulting in Strong Momentum 5-YEAR GROWTH FROM 2012 TO 2017 Gross Written Premium Non-Cat Underwriting Income Book Value Per Share 8,000 7,174 2,000 260.00 83% 7,000 66% 1,500 1,132 57% 204.95 1,000 620 210.00 6,000 500 5,000 4,311 0 160.00 130.96 -361 4,000 -500 -1,339 110.00 3,000 -1,000 -1,500 2
Slide 10: Financial Highlights
Financial Highlights $ IN MILLIONS For the year ended December 31, (in millions) 2017 2016 2015 2014 2013 Income Statement Data: Gross Premiums Written $ 7,173.9 $ 6,033.9 $ 5,891.7 $ 5,762.9 $ 5,220.4 Net Premiums Earned 5,937.8 5,320.5 5,292.8 5,043.7 4,736.3 Net Investment Income 542.9 473.1 473.
Slide 11: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures 2013-2017 2008-2017 1996-2017 Combined Ratio* 89.3% 93.9% 96.4% Pretax Operating ROR 18.9% 15.9% 14.7% Operating ROE 13.0% 10.9% 11.5% Shareholder Value (Compound Annual Growth Rate) 11.3% 10.0%
Slide 12: Leading Global Reinsurer
Leading Global Reinsurer Everest Reinsurance Ops 2017 2017 Europe/UK 17% Gross Written Premium $5,114.7 Middle East/Africa Combined Ratio 103.1% 5% Attritional Combined Ratio 81.1% Worldwide 4% USA 55% Latin America Rank among the top 10 reinsurers worldwide 11% Asia / Global footprint with a 40
Slide 13: Building a Premier Global Specialty Insurance Operation
Building a Premier Global Specialty Insurance Operation Everest Insurance Ops 2017 2017 Lloyd's Gross Written Premium $2,059.2 6% Canada 4% Combined Ratio 104.8% Prop / Short A&H Tail 12% 28% Attritional Combined Ratio 96.9% Prof Liability 11% Selective expansion of the portfolio towards Workers C
Slide 14: Strong Risk Management Culture
Strong Risk Management Culture WITH CONSIDERABLE FINANCIAL FLEXIBILITY AND CONSERVATIVE PROPERTY CATASTROPHE EXPOSURE PML as Percent of Total Shareholders' Equity Debt + Preferred Equity to Capital As of 10/1/17 As of 9/30/17 Ranked by 1-250 AHL VR AXS XL ACGL LRE.L RNR AHL VR RE* LRE AXS XL ACGL RE
Slide 15: Favorable Accident Year Loss Development
Favorable Accident Year Loss Development 10 YEAR LOSS RESERVING EXPERIENCE – INITIAL TO ULTIMATE 90.8% 100.0% 86.8% 90.0% 75.7% 74.2% 80.0% 66.0% 65.7% 65.1% 65.0% 64.6% 64.6% 62.1% 59.7% 59.4% 59.1% 58.6% 70.0% 57.8% 57.7% 56.9% 56.9% 56.6% 53.3% 51.3% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2007
Slide 16: A Strategy That Embraces Alternative Capital Paradigm
A Strategy That Embraces Alternative Capital Paradigm CAPITAL MARKETS ADD TO EVEREST’S CAPACITY AND INCREASE NET MARGINS 2013 2014 2015 2017 MT LOGAN KILIMANJARO RE LTD. KILIMANJARO RE LTD. KILIMANJARO RE LTD. (SERIES 2014 - 1&2) (SERIES 2015-1) (SERIES 2017- 1&2) Covered Perils: diversified cat exp
Slide 17: Active Capital Management Improves Shareholder Value
Active Capital Management Improves Shareholder Value BOOK VALUE PER SHARE INCREASES 2.6x SINCE 2006 Capital Management: $204.95 $197.45 $178.21 Everest historically $166.75 addresses excess $146.57 capital through share 12,856 $130.96 buybacks $115.45 $112.99 11,152 2,825 $102.87 10,615 Since 20
Slide 18: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 12/31/17 - INVESTABLE ASSETS OF $18.6 BILLION Capitalization Liquidity 100% 15.0 90% Cash & Short Term Government 80% 6% 8% Other 70% 9% Mortgage/ 10.7 60% Asset Backed 50% 10.0 16% Non U.S. 40% 7.8 21% 7.7 30% 7.3 7.0 20% 6.5 10% Municipal Corporate
Slide 19: Strong and Consistent Operating Cash Flows
Strong and Consistent Operating Cash Flows ADD TO STRONG LIQUIDITY PROFILE '01 '04 '08 '11 '17 Hurricanes WTC FL Hurricanes Hurr Ike Japan EQ & Thai HIM, Mexico EQs Attack Floods & CA fires '05 '08-'09 $8.0 GWP '12 Hurricane $2.5 KRW Hurricanes Financial Sandy Cash Flow Crisis/ $7.2 $7.0 Recession O
Slide 20: Significant Total Return to Shareholders
Significant Total Return to Shareholders 1,359.5% 700.0% 598.4% 600.0% Everest S&P 500 500.0% 416.7% 400.0% 312.7% 300.0% 201.4% 200.0% 146.2% 123.2% 107.9% 100.0% 39.1% 38.2% 0.0% 3 Years 5 Years 7 Years 15 Years Inception to Date Everest Re total return* over S&P 500: 2014-2017 2012-2017 2010-2017
Slide 21: 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 Global Reach $7.2B $12.9B 14 Reinsurance Offices,* 9 outside the US 2017 Gross Written Premiums Everest + Mt. Logan + Cat Bonds 18 Insurance Offices,* 4 outside the U
Slide 22: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Seon Place, 141 Front Street, 4th Floor, P. O. Box 845, Hamilton, HM DX, Bermuda