Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q4 2016 Earnings Presentation
21 slides from Everest's earnings presentation, 2017
Slide 1: Investor Presentation: Fourth Quarter 2016
6. Everest Re Group, Ltd. Everest Re Group, Ltd. INVESTOR PRESENTATION: FOURTH 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 double-digit compound annual growth rate in shareholder value. 3 EVEREST RE GROUP,
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 $6.0B $11.2B 14 Reinsurance Offices,* 9 outside the US 2016 Gross Written Premiums Everest + Mt. Logan + Cat Bonds 15 Insurance Offices,* 3 outside the U
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 14% annually over the last 5 years TOTAL SHAREHOLDER RETURN Book Value per Share Accumulated Dividends to Shareholders $226.45 $202.51 $187.05 $163.67 $145.
Slide 6: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2016 Gross Written Premium Strong Brand Recognition $6.0 Billion Top ratings (A.M. Best A+; S&P A+; Moody’s A1) Insurance Experienced Management Team and Board of Directors 30% Winning Culture – disciplined, focused on profitab
Slide 7: Financial Highlights
Financial Highlights $ IN MILLIONS For the year ended December 31, ($ in millions) 2016 2015 2014 2013 2012 Income Statement Data: Gross Premiums Written $ 6,033.9 $ 5,891.7 $ 5,762.9 $ 5,220.4 $ 4,310.5 Net Premiums Earned 5,320.5 5,292.8 5,043.7 4,736.3 4,164.6 Net Investment Income 473.1 473.5 53
Slide 8: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures (Compound Annual Growth Rate) 2012-2016 2007-2016 1996-2016 Combined Ratio* 86.6% 92.4% 95.8% Pretax Operating ROR 21.5% 17.7% 15.2% Operating ROE 14.6% 11.9% 11.8% Shareholder Value 13.6% 11.0%
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 Canada Chicago, IL Belgium London Avon, CT Los Angeles
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 * 2016 2016 Gross Written Premium $4,246.9 Europe/UK 17% Combined Ratio 77.6% Middle East/Africa 5% Attritional Combined Ratio 81.1% USA Worldwide 4% 52% * Net of cessions to Mt. Logan Latin America Rank among the top 10 reinsurers worldwide 15% G
Slide 12: Building a Premier Global Specialty Insurance Operation
Building a Premier Global Specialty Insurance Operation Everest Insurance Ops 2016 2016 A&H 10% Gross Written Premium $1,787.0 Canada Workers 4% Compensation 22% Combined Ratio 116.5% Crop 13% Attritional Combined Ratio* 97.9% * Excluding Heartland Crop Insurance Lloyd's UK Professional Branch Liabi
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 9/30/16 As of 12/31/16 Rank based on 1-100 AHL* VR AXS XL LRE.L VR AHL RNR AXS CB ENH ACGL* AWH LRE* R
Slide 14: 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 2014 2015 MT LOGAN KILIMANJARO RE LTD. KILIMANJARO RE LTD. KILIMANJARO RE LTD. (SERIES 2014-1) (SERIES 2014-2) (SERIES 2015-1) Covered Perils: diversified cat exposures
Slide 15: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 12/31/16 - INVESTABLE ASSETS OF $17.5 BILLION Capitalization Liquidity 100% 15.0 90% Cash & Short Term 5% Government 80% 7% Other 11.7 70% 8% Mortgage/ 10.7 60% Asset Backed 18% 50% 10.0 Non U.S. 40% 22% 7.8 7.7 30% 7.3 6.5 20% 10% Municipal Corporat
Slide 16: 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 17: 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 $7.0 GWP '05 Financial '12 Hurricane $2.5 KRW Hurricanes Crisis/ Sandy Cash Flow $6.0 $6.0 $5.7 $5.9 Operating Cash Flows $5.2 $2.0 Gross Written Premi
Slide 18: Active Capital Management Improves Shareholder Value
Active Capital Management Improves Shareholder Value BOOK VALUE PER SHARE INCREASES 2.5x SINCE 2006 Capital Management: $197.45 $178.21 $166.75 Everest historically $146.57 addresses excess $130.96 capital through share $115.45 $112.99 buybacks $102.87 11,150 10,615 $90.43 9,722 1,575 Since 2006
Slide 19: Significant Total Return to Shareholders
Significant Total Return to Shareholders 1,297.0% 600.0% 500.0% 473.4% Everest S&P 500 400.0% 300.0% 288.8% 200.0% 164.0% 172.9% 95.6% 100.0% 21.1% 11.9% 0.0% 1 Year 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2015-2016 2011 - 2016 2006 - 2016 ITD 9 points 125 points 77
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