Global re/insurer Everest Re Group has reported a net income for the first quarter of $16.6 million, down from $354.6 million in the prior year quarter.
After-tax operating income for the quarter was $164.4 million, compared to $282.4 million in 2019.
Much like with other players in the re/insurance space, COVID-19 related expenses are the driving force behind these results.
The combined ratio was 98.6% for the first quarter of 2020 compared with 88.7% for the first quarter of 2019.
Excluding the impacts of catastrophe losses, reinstatement premiums, and the 7.4% impact of COVID-19 pandemic the comparable combined ratios are 89.9% for the first quarter of 2020 and 87.4% for the first quarter of 2019.
The increase in these comparable combined ratios is primarily attributable to the continued business mix shift toward more pro-rata business in Reinsurance.
Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $30 million in the quarter, related to losses from Australian wildfires, Australian East Coast storms and the Nashville, US tornadoes.
Cash flow from operations was $506.0 million for the quarter compared to $459.8 million for 2019.
Net investment income of $147.8 million for the quarter including limited partnership income of $21.6 million. Note that net investment income from limited partnerships is generally subject to a reporting lag averaging one quarter.
“Our thoughts and sympathies go out to all those directly affected by the coronavirus. We would like to offer our sincere gratitude and thanks to those on the front lines who are putting themselves at risk to keep everyone safe. Additionally, we’d like to share our tremendous appreciation to all of those who are working hard to keep the supply chains going,” said Juan C. Andrade, President and Chief Executive Officer.
“Everest continues to do its part by successfully operating remotely to serve all of our customers and stakeholders without interruption. Our diversified global platform with its broad mix of products, distribution and geography is an important source of stable capacity to our broker partners and customers.
“Our capital position remains a source of strength, with high quality invested assets, significant liquidity and low financial leverage. Our well-diversified investment portfolio is resilient, and we have taken additional steps to reposition it by moving up in credit quality and further reducing equity exposure.
“Above all it is the ingenuity, perseverance and dedication of our employees during these unique times that allows us to operate our business without interruption. Despite the impacts of the pandemic, Everest remains profitable and resilient with a strong capital base.
“Turning to the Company’s results, Everest wrote nearly $2.6 billion in gross written premiums for the quarter, an increase of 21% as compared to a year ago.
“Our Reinsurance segment grew 16% while the Insurance segment was up 33%. These results continue to demonstrate the value of the Everest franchise to our broker partners and customers.”