Bermuda-based reinsurer, Everest Re Group, Ltd. has announced a significantly improved net income for both the second-quarter of 2021 and the first half the year, of $680 million and $1 billion, respectively.
Everest Re’s Q2 net income increased by a massive 256% when compared with the prior year period, while net income for H1 2021 jumped by 392%, year-over-year.
Net operating income also improved for the carrier in both periods, reaching $587 million in the second quarter, against $82.9 million in the prior year, and for the half year increasing to $847.2 million, versus $247.3 million a year earlier.
The reinsurer has also secured solid premium growth during 2021, with quarterly gross written premium (GWP) increasing by almost 35% to $3.2 billion, as H1 2021 GWP increased by nearly 24% to $6.1 billion.
Net written premium (NWP) also improved year-on-year, increasing by 39% in Q2 to $2.8 billion, as H1 NWP swelled by over 27% to $5.4 billion.
For both periods, Everest Re has reported a lower loss ratio as pre-tax net catastrophe losses reached $45 million in Q2 and $305 million in H1 2021.
In comparison, the reinsurer reported pre-tax net cat losses of $15 million for Q2 2020 and $45 million for H1 2020. Although, in 2020 these periods also experienced $160 million and $310 million of losses related to the COVID-19 pandemic, respectively.
The carrier says in its results announcement that its COVID-19 loss provision of $511 million is unchanged.
Overall, Everest Re has produced an underwriting gain of $274 million for the second quarter of 2021 and a combined ratio of 89.3%, versus 97.5% a year earlier.
For H1, the company’s combined ratio has strengthened from 98.1% in 2020 to 93.6% in H1 2021.
Everest Re Group President & Chief Executive Officer (CEO) Juan C. Andrade, commented: “Everest had an excellent quarter across the board with very strong growth and outstanding underwriting and investment performance. These results serve as the foundation for our exceptional net income result of $1.02 billion through the first half of 2021 and are another important step toward achieving our strategic plan objectives.
“Everest achieved an annualized Total Shareholder Return (“TSR”) of 22.5% through the first half of 2021, exceeding our strategic plan target of 13.0%. Everest capitalized on market opportunities to expand our franchises in both reinsurance and insurance, driven by the relentless execution of our strategies and the valuable risk solutions provided to our customers and broker partners. Our focus on disciplined underwriting drove strong profitability in both reinsurance and insurance across our global operations.
“Finally, the standout performance this quarter demonstrates the quality of Everest’s diversified earnings, and it is an important step toward achieving our strategic objectives and the commitments made to our shareholders.”
In its reinsurance segment, Everest Re grew GWP by 40% for the second quarter, as the carrier highlights broad demand for its solutions in the US, Europe, Bermuda, London, and Latin America.
The reinsurer also had a favourable renewals at both April 1st and June 1st, and continues to underwrite a stronger, less volatile, and more diversified book of business.
A look at the performance of the reinsurance segment in 2021 shows that this part of the business has assumed the majority of the firm’s cat losses in Q2 and H1, at $35 million and $247.5 million, respectively.
All in all, the reinsurance segment recorded a combined ratio of 87.9% for Q2 2021 and 92.5% for H1 2021, versus 95.4% and 96% for the same period in 2020, respectively.
In its primary insurance arm, Everest Re has reported GWP growth of 25%, with new business in North America being the main driver of this growth.
The unit produced a combined ratio of 93.5% for Q2 2021 and 96.7% for H1 2021, compared with 103.4% and 103.7% in 2020, respectively.
Finally, the Bermuda domiciled firm has reported net investment income of $407 million for the quarter.