Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q2 2015 Earnings Presentation
20 slides from Everest's earnings presentation, 2015
Slide 1: Investor Presentation Second Quarter 2015
INVESTOR PRESENTATION Second 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 $5.7B 2014 Gross Written $10.1B Capacity Premiums Everest + Mt. Logan + Cat Bonds GLOBAL REACH LONG TERM MARKET PRESENCE 13 Reinsurance offices, 8 outside the US 40
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 5 years Book Value per Share Accumulated Dividends to Shareholders $197.04 $187.05 $163.67 $145.87 $126.52 $125.98 $112.02 $95.74
Slide 6: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2014 Gross Written Premium • Strong Brand Recognition $5.7 Billion • Top ratings (A.M. Best A+; S&P A+; Moody’s A1) Insurance 21% • Experienced Management Team and Board of Directors • Winning Culture – disciplined, focused on profitab
Slide 7: Financial Highlights
Financial Highlights YTD For the year ended December 31, ($ in millions) 2015 2014 2013 2012 2011 2010 Income Statement Data: Gross Premiums Written $ 2,672.3 $ 5,749.0 $ 5,218.6 $ 4,310.5 $ 4,286.2 $ 4,200.7 Net Premiums Earned 2,639.5 5,169.1 4,753.5 4,164.6 4,101.3 3,934.6 Net Investment Income 2
Slide 8: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures (Compound Annual Growth Rate) 2010-2014 2005-2014 1996-2014 Combined Ratio 95.4% 96.1% 97.5% Pretax Operating ROR 15% 15% 15% Operating ROE 11% 10% 12% Shareholder Value 12% 11% 13% * Weighted av
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 Reinsurance
Everest Reinsurance AMONGST THE MOST DIVERSIFIED REINSURANCE ORGANIZATIONS Reinsurance Premium by Geography Reinsurance Premium by Line of Business Europe/UK 16% Property Middle Catastrophe East/Africa Casualty XOL 4% 27% 23% Worldwide 2% USA 49% Latin America 20% Other Asia/ Property Australia Cana
Slide 11: Everest Insurance
Everest Insurance A GLOBAL SPECIALTY INSURANCE COMPANY WITH DISTINCT UNDERWRITING EXPERIENCE 2014 % Gross WP 100% 90% Other Short Tail, 22% Workers Comp, 80% 38.7% 38.4% 43.6% 43.1% 32% 70% 64.6% 60% 50% 22.6% 19.4% 24.8% A&H, 7% 40% 29.2% 30% 20% 27.1% 42.2% 38.7% Prof Liability, 32.1% 15% 27.2% Cr
Slide 12: 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 12/31/14 As of 12/31/14 AHL AHL VR ENH LRE.L MRH AXS MRH PRE AWH LRE.… AXS AWH XL ACE ENH RNR RE VR PR
Slide 13: Operating With Significant Scale
Operating With Significant Scale HAVING $10 BILLION OF CAPACITY 9,728 10,144 950 950 7,827 829 7,152 7,552 689 638 6,889 370 638 818 868 818 488 6,968 7,451 7,727 6,284 6,071 6,733 2010 2011 2012 2013 2014 2Q2015 Common Equity Total Debt Mt. Logan AUM Cat Bonds 950 149 9,728 1,258 319 18 147 146 7,8
Slide 14: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 6/30/15 - INVESTABLE ASSETS OF $18.0 BILLION Capitalization Liquidity 100% 15.0 90% Cash & Government 80% Short Term 2% 12% Mortgage/ 11.9 Asset 70% 11.5 Other Backed 60% 10.8 4% 17% 50% 10.0 40% 7.9 7.6 Non U.S. 30% 24% 20% 6.5 Corporate 10% 28% 0%
Slide 15: 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 16: Strong and Consistent Operating Cash Flows
Strong and Consistent Operating Cash Flows ADD TO STRONG LIQUIDITY PROFILE 1,800,000 2004 FL Hurricane 1,600,000 2008-2009 Financial Crisis/ Recession 1,400,000 2005 KRW 2011 Hurricanes Japan EQ & Thai 1,200,000 Floods 1,000,000 2012 2008 Hurr Hurr Sandy 800,000 Ike Bottom WTC of the Attack 600,000
Slide 17: Drives Shareholder Returns
DRIVES SHAREHOLDER RETURNS • Everest historically addresses excess capital through share buybacks • Since 2006, Everest has repurchased 37% of its outstanding shares, returning $2.6 billion of capital to shareholders • Share repurchase authorization increased by 5 million in 4Q2014; 5.6m shares rema
Slide 18: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 1,033.7% 600.0% Everest 500.0% S&P 500 411.6% 400.0% 300.0% 200.0% 119.8% 127.1% 105.0% 109.4% 100.0% 0.0% 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2009 - 2014 2004 - 2014 ITD 15 points 18 points 6
Slide 19: 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 20: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Seon Place, 141 Front Street, 4th Floor, P. O. Box 845, Hamilton, HM DX, Bermuda