Bermuda-based insurer and reinsurer, Everest Re Group, Ltd., has reported net income of $342 million and underwriting income of $45 million for the first quarter of 2021, despite pre-tax net catastrophe losses of $260 million for the period.
The reinsurer pre-announced $260 million of cat losses earlier in April, stating at the time that losses primarily relate to the impacts of the Texas winter storms, alongside a minimal amount from the flooding in New South Wales.
In comparison, Everest Re reported pre-tax net catastrophe losses of just $30 million in Q1 2020, although that period did also include $150 million of pre-tax net COVID-19-related losses.
For Q1 2021, Everest Re has announced that its COVID-19 pandemic loss provision remains unchanged.
The majority, or $212.5 million of the reinsurer’s Q1 2021 catastrophe loss experience impacted the reinsurance segment, while the remaining $47.5 million hit the firm’s insurance operation.
Within its reinsurance business in Q1 2021, Everest Re has reported 15.8% growth in gross written premium (GWP) to $2.1 billion and 18.6% growth in net written premium (NWP) to $1.9 billion.
Despite $212.5 million of cat losses, the reinsurance segment has recorded a combined ratio of 97.5% for the period, representing a slight deterioration from the 96.6% a year earlier.
“The Reinsurance segment achieved strong growth with gross written premiums up 16% for the quarter, driven by a successful January 1 renewal season. The targeted and disciplined growth was driven by rate, increased shares on profitable deals, and new opportunities in property, casualty, specialty lines, and facultative business,” says Everest Re.
“The April renewal season was successfully completed with the Reinsurance segment capturing rate increases on Japanese and retrocessional business and pro-rata business benefitting from primary rate improvement.”
In the company’s insurance business, GWP increased 10 % in Q1 2021 to $872.4 million, while NWP jumped by 8.9% to $641 million, when compared with the prior year quarter.
Despite $47.5 million of cat losses, the segment’s combined ratio strengthened year-on-year by 4 percentage points to 99.9%.
“Continued strong rate growth in excess of trend with renewal rate increases of 16% in the quarter excluding workers compensation, and up 10% including workers compensation,” says the company.
All in all, Everest Re has announced GWP of $2.9 billion for the first-quarter of 2021, which represents growth of 14% from the $2.57 billion posted a year earlier. NWP increased by 16% year-on-year to $2.6 billion.
In spite of the higher loss experience during the opening quarter of the year, Everest Re has reported a combined ratio of 98.1%, which represents a slight improvement from the 98.6% in Q1 2020.
Net income of $341.9 million in Q1 2021 is a huge improvement on the $16.6 million in Q1 last year. Additionally, operating income increased from $164.4 million in Q1 2020 to $260.2 million in Q1 2021.
“Firstly, our thoughts are with those impacted by the U.S. winter storms and the flooding in Australia. I am very proud of the work our claims team is doing on the ground to help those affected rebuild their lives” said Everest Re Group President & Chief Executive Officer (CEO), Juan C. Andrade.
“Everest had a strong start to 2021 with robust growth, strong overall profitability, continued improvement in attritional underwriting margins, and excellent investment performance. Our first quarter results further illustrate the earnings power of Everest and our success in implementing our strategy to build a broadly diversified company with a relentless focus on strong operational performance and disciplined underwriting,” he added.