Bermuda-based reinsurer Everest Re Group, Ltd. has reported underwriting income of $50.9 million for the second-quarter of 2020, despite incurring $160 million in net pre-tax losses related to the ongoing COVID-19 pandemic.
The reinsurer says that its underwriting result highlights the underlying strength and sustainable profitability of the franchise.
Underwriting income of $50.9 million reflects a combined ratio of 97.5% for the second-quarter of the year, 95.4% in reinsurance somewhat offset by a 103.4% combined ratio in the firm’s insurance division.
This includes the $160 million of COVID-19-related losses announced for Q2 2020, attributed $130 million to reinsurance and $30 million to insurance. In addition, Everest Re booked $15 million of catastrophe losses from civil unrest in the U.S. in the second-quarter.
All in all, Everest Re’s net income fell by almost 43% in Q2 2020 to $190.9 million compared with $332.9 million recorded in the same period in 2019. After-tax operating income also fell in the period, from $320.9 million in Q2 2019 to $82.9 million in Q2 2020.
The reinsurer wrote almost $2.4 billion in gross written premium for Q2 2020, up 9.4% on the same period in 2019. The firm’s reinsurance segment recorded growth of 9.1% and the insurance segment grew by 9.8%.
Everest Re notes that within its reinsurance operation it continues to see “excellent opportunities in several areas”, including facultative risk and property, and in a number of regions. In insurance, the main drivers of growth continue to be the strength of the Excess & Surplus business, alongside “strong and widespread” rate momentum, and a high renewal retention across the business.
The company’s President and Chief Executive Officer (CEO), John C. Andrade, said: “Despite the current challenging and uncertain public health, economic, and social environment, Everest reported another solid quarter and first half of 2020 results. Our ability to successfully leverage our capital position, our global platform, and our success in executing against our objectives – even under adverse conditions – drive our results.
“Our people continue to demonstrate the passion and resilience to differentiate Everest and deliver value to our customers. We have strong forward momentum across our Reinsurance and Insurance Segments.”
Adding: “Our balance sheet and capital position remain a fundamental source of strength for Everest. This quarter reported record shareholder’s equity of $9.3 billion; combined with our low financial leverage and top tier ratings we have more than ample capital to take advantage of current and future opportunities in the global reinsurance and insurance market.”
