Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q1 2016 Earnings Presentation
22 slides from Everest's earnings presentation, 2016
Slide 1: Investor Presentation: First Quarter 2016
6. Everest Re Group, Ltd. Everest Re Group, Ltd. INVESTOR PRESENTATION: FIRST QUARTER 2016 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. 3 EVEREST RE GROUP, LT
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 Global Reach $5.9B $10.9B 14 Reinsurance Offices,* 10 outside the US 2015 Gross Written Premiums Everest + Mt. Logan + Cat Bonds 16 Insurance Offices,* 3 outside the
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 $210.36 $202.51 $187.05 $163.67 $145.87 $126.52 $125.98 $112.
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 26% Experienced Management Team and Board of Directors Winning Culture – disciplined, focused on profitab
Slide 7: Financial Highlights
Financial Highlights $ IN MILLIONS For the year ended December 31, YTD 2016 2015 2014 2013 2012 2011 Income Statement Data: Gross Premiums Written $1,353.2 $5,891.7 $5,762.9 $5,220.4 $4,310.5 $4,286.2 Net Premiums Earned 1,218.9 5,292.8 5,043.7 4,736.3 4,164.6 4,101.3 Net Investment Income 102.5 473
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* 92.2% 92.8% 96.6% Pretax Operating ROR 16.9% 18.0% 15.0% 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: INSURANCE LOCATIONS: United States Bermuda Ireland United States Liberty Corner, NJ Canada Chicago, IL Belgium London A
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 business 2.0% - 5.0% 5.0% - 6.0%
Slide 11: Leading Global Reinsurer
Leading Global Reinsurer Everest Reinsurance Ops 2015 Gross Written Premium $4,359.4 Europe/UK 19% Combined Ratio 78.5% Middle East/Africa 5% Attritional Combined Ratio 81.8% USA Worldwide 50% 2% Rank among the top 10 reinsurers worldwide Latin America 16% Global footprint with a 40-year history
Slide 12: Building a Premier Global Specialty Insurance Operation
Building a Premier Global Specialty Insurance Operation Everest Insurance Ops 2015 Gross Written Premium $1,532.3 Canada A&H 8% 4% Workers Combined Ratio 106.3% Comp 27% Crop Attritional Combined Ratio 94.3% 16% Other Professional Short-Tail Liability Selective expansion of the portfolio towards 1
Slide 13: Strong Risk Management Culture
Strong Risk Management Culture WITH CONSIDERABLE FINANCIAL FLEXIBILITY AND CONSERVATIVE PROPERTY CATASTROPHE EXPOSURE PML as Percent of Shareholders' Debt + Preferred Equity to Capital As of 12/31/15 As of 1/1/16 LRE.L AHL VR CB XL AWH RNR AWH AXS AXS PRE RE* LRE.LN AHL ENH ENH ACGL PRE VR CB XL ACG
Slide 14: A Strategy That Embraces Alternative Capital Paradigm
A Strategy That Embraces Alternative Capital Paradigm UTILIZE CAPITAL MARKETS TO ADD TO EVEREST’S CAPACITY AND TO ALLOW TO WRITE CAT RISK AT BETTER MARGINS 2013 2014 2014 2015 MT LOGAN KILIMANJARO RE LTD. KILIMANJARO RE LTD. KILIMANJARO RE LTD. (SERIES 2014-1) (SERIES 2014-2) (SERIES 2015-1) Covered
Slide 15: Operating With Significant Scale
Operating With Significant Scale HAVING $11 BILLION OF CAPACITY 10,620 10,907 9,728 1,575 1,575 950 853 7,827 689 799 7,552 638 638 6,889 370 638 818 818 488 7,451 7,609 7,840 6,733 6,968 6,071 2011 2012 2013 2014 2015 1Q2016 Common Equity Total Debt Mt. Logan AUM Cat Bonds 1,074 110 625 0 10,620 14
Slide 16: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 3/31/16 - INVESTABLE ASSETS OF $17.1 BILLION Capitalization Liquidity 100% 15.0 Cash & 90% Short Term 5% Government 80% 5% Other 11.9 7% 70% Mortgage/ 10.8 Asset 60% Backed 19% 50% 10.0 Non U.S. 24% 40% 7.9 7.9 30% 7.5 20% 6.5 10% Municipal Corporate
Slide 17: Accident Year Loss Development
Accident Year Loss Development 10 YEAR LOSS RESERVING EXPERIENCE – INITIAL TO ULTIMATE 90.8% 100.0% 87.4% 90.0% 75.7% 73.6% 80.0% 66.0% 65.3% 65.1% 64.3% 62.5% 61.2% 60.1% 59.7% 59.3% 58.6% 58.2% 57.8% 57.8% 70.0% 57.7% 57.0% 56.5% 56.5% 53.1% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2006 2007 2008
Slide 18: Strong and Consistent Operating Cash Flows
Strong and Consistent Operating Cash Flows ADD TO STRONG LIQUIDITY PROFILE '01 '04 '08 '11 WTC FL Hurricanes Hurr Ike Japan EQ & Thai Floods '08-'09 '05 Financial '12 Hurricane $7.0 GWP $2.5 KRW Hurricanes Crisis/ Sandy Cash Flow Recession $6.0 $5.7 $5.9 Operating Cash Flows $5.2 $2.0 Gross Written
Slide 19: Active Capital Management Improves Shareholder Value
Active Capital Management Improves Shareholder Value BOOK VALUE PER SHARE INCREASES 2.4x SINCE 2006 $184.91 $178.21 $166.75 Capital Management: $146.57 Everest historically $130.96 addresses excess $115.45 $112.99 capital through share $102.87 $90.43 10,620 10,907 buybacks $78.53 $80.77 9,728 1,57
Slide 20: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 1,151.3% 600.0% 500.0% Everest 419.2% S&P 500 400.0% 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 21: 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 22: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Seon Place, 141 Front Street, 4th Floor, P. O. Box 845, Hamilton, HM DX, Bermuda