8-K
Everest Group, Ltd. (EG)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
Current Report Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
February 9, 2022
Everest Re Group, Ltd.
(Exact name of registrant as specified in its charter)
Bermuda
1-15731
98-0365432
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification No.)
Seon Place – 4th Floor
141 Front Street
PO Box HM 845
Hamilton
HM 19
,
Bermuda
Not Applicable
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code
441
-
295-0006
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Class
Trading Symbol(s)
Name of Exchange where registered
Common Shares, $0.01 par value
RE
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 12(a) of the Exchange Act.
☐
ITEM 2.02
DISCLOSURE OF RESULTS
OF OPERATIONS
AND FINANCIAL CONDITION
On February
9, 2022,
the registrant
issued a
news release
announcing its
fourth quarter
2021 results.
A copy
of that
news release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The
news
release
furnished
herewith
contains
information
regarding
the
registrant’s
operating
income
(loss).
Operating income (loss) differs
from net income (loss) attributable
to Everest Re Group, the most
directly comparable
generally
accepted
accounting
principle
financial
measure,
by
the
exclusion
of
realized
capital
gains
(losses)
on
investments and
net foreign
exchange income
(expense). Management
believes that
presentation of
operating income
(loss)
provides
useful
information
to
investors
because
it
more
accurately
measures
and
predicts
the
registrant’s
results
of
operations
by
removing
the
variability
arising
from
both
the
management
of
the
registrant’s
investment
portfolio and the fluctuations
of foreign currency exchange
rates. In addition, management,
analysts and investors use
operating income (loss) to evaluate the financial performance of the registrant and the insurance industry in general.
In accordance with general instruction B.2
of Form 8-K, the information in
this report, including exhibits, is furnished
pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of
1934, or otherwise subject to the liability of that section.
ITEM 9.01
FINANCIAL STATEMENTS
AND EXHIBITS
(c)
Exhibits
Exhibit No.
Description
99.1
News Release of the registrant,
dated February 9, 2022
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
EVEREST RE GROUP,
LTD.
By:
/S/ ROBERT J. FREILING
Robert J. Freiling
Senior Vice President and
Chief Accounting Officer
Dated:
February 9, 2022
EXHIBIT INDEX
Exhibit
Number
Description of Document
Page No.
5
104
Cover Page Interactive Data File (embedded
within the Inline XBRL document
ex991
1
N
EWS
R
ELEASE
EVEREST RE GROUP,
LTD.
Seon Place, 141 Front Street, 4
th
Floor, Hamilton HM 19, Bermuda
Contacts
Media: Dawn Lauer
Investors: Jon Levenson
Chief Communications Officer
Head of Investor Relations
Everest Global Services, Inc.
Everest Global Services, Inc.
908.300.7670
908.604.3169
Everest Re Group Reports Fourth Quarter and Full Year
2021 Results
25% Growth in Gross Written Premium
and a 91.9% Combined Ratio for the Quarter
$431 Million of Net Income for the Quarter and a 14.7% Total
Shareholder Return for the Year
HAMILTON,
Bermuda --
(BUSINESS WIRE)
– February
9, 2022
– Everest Re Group, Ltd. (“Everest” or
the “Group”)
today reported its fourth quarter and full year 2021 results.
Fourth Quarter 2021 Highlights
●
Year
over
year
gross
written
premium
(“GWP”)
growth
of
25%
for
the
Group,
26%
for
Reinsurance and 21% for Insurance
●
Combined ratio of 91.9% for the Group, 91.5% for Reinsurance and 92.8% for Insurance
●
Attritional combined ratios of 87.4% for the Group,
86.4% for the Reinsurance segment and 90.4%
for Insurance
●
Pre-tax
underwriting
income
of
$228
million
including
pre-tax
catastrophe
losses
net
of
reinsurance and reinstatement premiums of $125 million
●
Pre-tax
net
investment
income
of
$205
million,
well
balanced
between
fixed
income
and
limited
partnership returns
●
$1.0 billion in 31-year, 3.125% coupon senior notes issued on October 4,
2021
2
Full Year
2021 Highlights
●
Net income of $1.380 billion representing a total shareholder return of 14.7%
●
Pre-tax net
investment income
of $1.165
billion, well
balanced between
fixed income
and limited
partnership returns
●
Pre-tax
underwriting
income
of
$224
million
inclusive
of
pre-tax
catastrophe
losses
net
of
reinsurance and reinstatement premiums of $1.065 billion
●
$13.0 billion in total 2021 GWP.
$9 billion reinsurance and $4 billion insurance
●
Year
over
year
gross
written
premium
(“GWP”)
growth
of
25%
for
the
Group,
25%
for
Reinsurance, and 24% for Insurance
●
Attritional combined ratios of 87.6% for the Group,
86.3% for the Reinsurance segment and 91.2%
for Insurance.
●
Operating cash flow of $3.8 billion
●
Common
share
repurchases
of
$25
million
during
the
quarter
and
$225
million
for
the
full
year
2021
Everest Re Group President & CEO Juan C. Andrade commented on the Company’s
results:
“2021 was a pivotal year of continued profitable growth and momentum for Everest. We
finished the year
with a strong quarter and achieved record growth in both our underwriting businesses, drove expanding
margins, solid underwriting profitability in an elevated natural catastrophe year,
and generated exceptional
investment income. These results led to $1.4 billion in net income for the year,
and a milestone 14.7% total
shareholder return. 2021 demonstrated the strong earnings power of our diversified franchises to create
value for our shareholders.
With a more profitable book of business coming out of a well-executed
January 1 reinsurance renewal season, an expanding global value proposition, a strong balance sheet, and
exceptional talent, we enter 2022 well-positioned to deliver on our long-term strategic objectives.”
Summary of Fourth Quarter 2021 Net Income and Other Items
●
Net income of $431
million, equal to $10.94
per diluted share vs.
net income of $64
million, equal
to $1.59 per diluted share in the fourth quarter 2020
●
Net operating income $359 million, equal to $9.12 per diluted
share vs. net operating income (loss)
of $(44) million, equal to $(1.12) per share in the fourth quarter 2020
●
Underwriting
gain of
$228 million
including $125
million of
catastrophe
losses net
of recoveries
and
reinstatement
premiums.
Catastrophe
events
comprised
of
Canadian
drought
losses
of
$80
million and
3
quad-state tornado losses of $45 million.
●
GAAP combined
ratio of
91.9% which
includes 4.5
points
of catastrophe
losses vs.
2.9 points
of
catastrophe losses in the same period during 2020
●
No change to Covid-19 Pandemic (“Pandemic”) ultimate loss provision of $511 million
●
Operating cashflow for the quarter of $1.04 billion vs $683 million in the same period during 2020.
The following table summarizes the Company’s net income and related financial
metrics.
Net income and operating income
Q4
Year
to Date
Q4
Year
to Date
All values in USD millions except for per share
2021
2021
2020
2020
Everest Re Group
Net income
430.7
1,379.1
63.6
514.1
Net operating income (loss)
359.2
1,153.9
(44.2)
300.1
Net income per diluted common share
10.94
34.62
1.59
12.78
Net operating income per diluted common share
9.12
28.97
(1.12)
7.46
Net income annualized return on average equity
17.7%
14.6%
2.8%
5.8%
Net operating income annualized return on average equity
14.8%
12.2%
-2.0%
3.4%
Period end equity and book value
Q4 2021
Year
to Date
Shareholders' equity
10,139.2
Book value per share
258.21
Change in BVPS adjusted for dividends
8.7%
Total Shareholder Return ("TSR") - Annualized
14.7%
Notes
1/ Refer to the reconciliation of net income to net operating income found on page 8 of this press release
4
The following information summarizes the Company’s underwriting results, on a consolidated basis and by
segment – Reinsurance and Insurance, with selected commentary on results by segment.
Underwriting information - Everest Re Group
Q4
Year to Date
Q4
Year to Date
Year on Year
Change
All values in USD millions except for percentages
2021
2021
2020
2020
Q4
Year to Date
Gross written premium
3,430.6
13,049.8
2,750.5
10,482.4
24.7%
24.5%
Net written premium
3,056.4
11,445.5
2,449.3
9,117.0
24.8%
25.5%
Loss ratio
64.9%
71.0%
82.5%
75.5%
(17.6) pts
(4.5) pts
Commission and brokerage ratio
21.3%
21.2%
21.4%
21.6%
(0.1) pts
(0.4) pts
Other underwriting expenses
5.7%
5.6%
5.2%
5.8%
0.5 pts
(0.2) pts
Combined ratio
91.9%
97.8%
109.1%
102.9%
(17.2) pts
(5.1) pts
Attritional combined ratio
87.4%
87.6%
86.3%
87.5%
1.1 pts
0.1 pts
Pre-tax net catastrophe losses
125.0
1,065.0
70.0
415.0
Pre-tax net covid losses
-
-
76.1
511.1
Pre-tax net prior year reserve development
(3.0)
(9.1)
400.0
401.4
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Reinsurance Segment – Quarterly Highlights
●
Reinsurance
achieved
excellent
growth
in
the
quarter,
up
26%
year
over
year
to
$2.4
billion.
The
growth
was
driven
by
continued
partnership
with
our
core
clients
and
Everest’s
position
as
a
preferred
reinsurer,
accelerated
by
strong
underlying
rate
movement.
Our
international
operations,
notably Europe, lead the growth
this quarter as we saw
increased demand for casualty and
multi-line
quota share treaties in those territories.
●
The attritional combined ratio for the quarter of 86.4% reflects the continued strong performance of
our portfolio, the successful execution of our strategy to participate in growth and margin
improvement in the casualty market, and our continued expense discipline
●
Canada suffered a widespread drought causing one of the largest P&C losses in Canadian history,
nearly $6B USD, resulting in an $80 million net catastrophe impact to our reinsurance segment
results.
Everest is a leading reinsurer in Canada, and we have profitably underwritten the Canadian
crop market for years. We view
this as an attractive long-term business.
5
Underwriting information - Reinsurance segment
Q4
Year to Date
Q4
Year to Date
Year on Year
Change
All values in USD millions except for percentages
2021
2021
2020
2020
Q4
Year to Date
Gross written premium
2,371.7
9,067.3
1,878.6
7,281.7
26.2%
24.5%
Net written premium
2,269.8
8,535.6
1,793.5
6,767.6
26.6%
26.1%
Loss ratio
64.8%
71.6%
86.9%
76.3%
(22.1) pts
(4.7) pts
Commission and brokerage ratio
24.1%
23.9%
23.3%
24.0%
0.8 pts
(0.1) pts
Other underwriting expenses
2.6%
2.6%
2.2%
2.7%
0.4 pts
(0.1) pts
Combined ratio
91.5%
98.1%
112.4%
103.0%
(20.9) pts
(4.9) pts
Attritional combined ratio
86.4%
86.3%
83.9%
85.2%
2.5 pts
1.1 pts
Pre-tax net catastrophe losses
110.0
912.5
60.0
347.0
Pre-tax net covid losses
-
-
56.1
407.1
Pre-tax net prior year reserve development
(3.0)
(7.9)
400.0
396.9
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Insurance Segment – Quarterly Highlights
●
Everest Insurance delivered strong growth during the fourth quarter of 2021, with the third
consecutive quarter of gross written premium above $1.0 billion. This growth was driven primarily
by strong new business generation, notably in casualty and professional liability lines. Exposure
growth from the economic recovery and continued double digit rate increases also contributed
meaningfully to growth in the quarter.
●
Underwriting margins improved year over year with a combined ratio of 92.8% and an attritional
combined ratio of 90.4% (the lowest achieved to date). The loss ratio, commission ratio and expense
ratio all improved year over year, reflecting disciplined execution and intentional portfolio
management
●
Insurance
segment
catastrophe
losses
totaled
$15
million
net
of
recoveries
and
reinstatement
premiums for the quarter, all from the quad-state tornados.
6
Underwriting information - Insurance segment
Q4
Year to Date
Q4
Year to Date
Year on Year
Cgange
All values in USD millions except for percentages
2021
2021
2020
2020
Q4
Year to Date
Gross written premium
1,058.9
3,982.5
871.9
3,200.6
21.4%
24.4%
Net written premium
786.6
2,909.9
655.8
2,349.4
19.9%
23.9%
Loss ratio
65.1%
69.3%
68.9%
73.0%
(3.8) pts
(3.7) pts
Commission and brokerage ratio
13.4%
13.4%
15.6%
14.5%
(2.2) pts
(1.1) pts
Other underwriting expenses
14.4%
14.5%
14.5%
15.1%
(0.1) pts
(0.6) pts
Combined ratio
92.8%
97.1%
99.0%
102.6%
(6.1) pts
(5.4) pts
Attritional combined ratio
90.4%
91.2%
93.8%
94.2%
(3.4) pts
(3.0) pts
Pre-tax net catastrophe losses
15.0
152.5
10.0
68.0
Pre-tax net covid losses
-
-
20.0
104.0
Pre-tax net prior year reserve development
-
(1.2)
-
4.6
Notes
1/ Attritional ratios exclude prior year reserve development, Covid-19 pandemic impacts, catastrophe losses, and reinstatement premiums
2/Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Investments and Shareholders’ Equity
●
Total
invested assets and cash of $29.7 billion
at December 31, 2021 reflecting 16.5% growth versus
the year end 2020 value of $25.5 billion
●
Shareholders’ equity of $10.1 billion at December 31, 2021 vs. $9.7 billion at year end 2020
●
Book value per diluted share of $258.21 at December 31, 2021 vs. $243.25 at year end 2020
●
Book
value
per
diluted
share
excluding
unrealized
gains
(losses)
on
fixed
income
investments
of
$252.12 at December 31, 2021 vs. $225.15 at year end 2020
●
Common
share
dividends declared
and paid
in
the quarter
of $1.55
per share
equal to
$61
million,
and $6.20 for the year equal to $247 million
●
Common
share
repurchases
of
$25
million
during
the
quarter,
representing
96,702
shares
at
an
average
price
of
$259.28
per
share.
For
the
full
year
2021,
common
share
repurchases
of
$225
million representing 887,622 shares at an average price of $253.64.
7
Equity and Book Value per Share
Q4
Year
to Date
Q4
Year
to Date
All values in USD millions except for per share amounts
2021
2021
2020
2020
Beginning shareholders' equity
9,978.6
9,726.2
9,591.3
9,132.9
Net income
430.7
1,379.1
63.6
514.2
Change-
unrealized gains (losses) - Fixed inc. investments
(176.8)
(484.8)
71.2
419.7
Dividends to shareholders
(61.0)
(246.7)
(61.9)
(249.1)
Purchase of treasury shares
(25.1)
(225.1)
-
(200.0)
Other
(7.2)
(9.5)
62.0
108.5
Ending shareholders' equity
10,139.2
10,139.2
9,726.2
9,726.2
Common shares outstanding
39.27
39.98
Book value per common share outstanding
258.21
243.25
Less: Unrealized on fixed inc. investments ("URAD")
6.09
18.10
Book value excl. URAD per common share outstanding
252.12
225.15
Common share dividends paid - last 12 months
6.20
6.20
This
news
release
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 securities laws.
These statements involve risks
and uncertainties that
could cause
actual results
to differ
materially from
those contained
in forward-looking
statements made
on
behalf of the Company. These risks and uncertainties include the impact of general economic conditions and
conditions
affecting
the
insurance
and
reinsurance
industry,
the
adequacy
of
our
reserves,
our
ability
to
assess underwriting
risk, trends
in rates
for property
and casualty
insurance and
reinsurance,
competition,
investment
market
and
investment
income
fluctuations,
trends
in
insured
and
paid
losses,
catastrophes,
pandemic,
regulatory
and
legal
uncertainties
and
other
factors
described
in
our
latest
Annual
Report
on
Form
10-K.
The
Company
undertakes
no
obligation
to
publicly
update
or
revise
any
forward-looking
statements, whether as a result of new information, future events or otherwise.
About Everest Re Group, Ltd.
Everest Re Group, Ltd.
(“Everest”) is a leading
global provider of reinsurance
and insurance, operating for
close
to
50
years
through
subsidiaries
in
the
U.S.,
Europe,
Singapore,
Canada,
Bermuda,
and
other
territories.
Everest offers
property,
casualty,
and specialty
products through
its various
operating affiliates
located in
key markets around the world.
Everest common stock (NYSE:RE) is a component of the S&P 500 index.
8
Additional
information
about
Everest,
our
people,
and
our
products
can
be
found
on
our
website
at
www.everestre.com
. All issuing companies may not do business in all jurisdictions.
A conference call discussing
the fourth quarter results will be held at 8:00 a.m. Eastern Time on February 10,
2022.
The call
will be
available
on the
Internet
through
the Company’s
web site
at everestre.com/investors.
Recipients are encouraged
to visit the Company’s
web site to view
supplemental
financial information
on the
Company’s
results.
The
supplemental
information
is
located
at
www.everestre.com
in
the
“Investors/Financials/Quarterly
Results” section of the
website.
The supplemental financial information
may
also be
obtained
by contacting
the Company
directly.
_______________________________________________
The Company
generally uses
after-tax operating
income (loss),
a non-GAAP
financial measure,
to evaluate
its
performance.
After-tax
operating
income
(loss)
consists
of
net
income
(loss)
excluding
after-tax
net
realized
capital
gains
(losses)
and
after-tax
net
foreign
exchange
income
(expense)
as
the
following
reconciliation displays:
Three Months Ended December 31,
Twelve Months Ended December 31,
(Dollars in thousands, except per share amounts)
2021
2020
2021
2020
(unaudited)
(unaudited)
Per Diluted
Per Diluted
Per Diluted
Per Diluted
Amount
Share
Amount
Share
Amount
Share
Amount
Share
Net income (loss)
$430,707
$10.94
$63,601
$1.59
$1,379,083
$34.62
$514,151
$12.78
After-tax net realized capital gains (losses)
$90,306
$2.29
$149,950
$3.74
$201,503
$5.06
$217,017
$5.39
After-tax net foreign exchange income (expense)
($18,819)
($0.48)
($42,165)
($1.05)
$23,707
$0.60
($2,932)
($0.07)
After-tax operating income (loss)
$359,220
$9.12
($44,184)
($1.12)
$1,153,873
$28.97
$300,066
$7.46
(Some amounts may not reconcile due to rounding.)
Although net
realized capital
gains (losses)
and net
foreign exchange
income (expense)
are an
integral part
of the
Company’s
insurance operations,
the determination
of net
realized capital
gains (losses)
and foreign
exchange
income (expense)
is independent
of the
insurance underwriting
process.
The Company
believes
that
the
level
of
net
realized
capital
gains
(losses)
and
net
foreign
exchange
income
(expense)
for
any
particular
period
is
not
indicative
of
the
performance
of
the
underlying
business
in
that
particular
period.
Providing only
a GAAP
presentation of
net income
(loss) makes
it more
difficult
for users
of the
financial
information to
evaluate the
Company’s
success or
failure in
its basic
business and
may lead
to incorrect
or
misleading assumptions and conclusions.
The Company understands that the equity analysts who follow the
Company focus
on after-tax
operating income
(loss) in
their analyses
for the
reasons discussed
above.
The
Company
9
provides after-tax
operating income (loss)
to investors so
that they have
what management believes
to be a
useful supplement to GAAP information concerning the Company’s performance.
--Financial
Details
Follow--
10
EVEREST RE GROUP,
LTD.
CONSOLIDATED
STATEMENTS
OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
(Dollars in thousands, except per share amounts)
2021
2020
2021
2020
(unaudited)
(unaudited)
REVENUES:
Premiums earned
$2,803,801
$2,396,483
$10,406,441
$8,681,513
Net investment income
204,625
222,349
1,164,892
642,465
Net realized capital gains (losses):
Credit allowances on fixed maturity securities
2,242
17,896
(27,992)
(1,745)
Other net realized capital gains (losses)
116,912
165,490
285,935
269,394
Total net realized capital gains (losses)
119,154
183,386
257,943
267,649
Other income (expense)
(7,203)
(40,819)
36,987
6,487
Total revenues
3,120,377
2,761,399
11,866,263
9,598,114
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
$1,819,392
$1,976,771
$7,391,253
$6,550,837
Commission, brokerage, taxes and fees
597,671
513,080
2,208,766
1,873,250
Other underwriting expenses
158,422
125,372
582,647
511,237
Corporate expenses
21,464
11,934
67,827
41,118
Interest, fees and bond issue cost amortization expense
23,364
14,847
70,149
36,323
Total claims and expenses
2,620,313
2,642,004
10,320,642
9,012,765
INCOME (LOSS) BEFORE TAXES
500,064
119,395
1,545,621
585,349
Income tax expense (benefit)
69,357
55,794
166,538
71,198
NET INCOME (LOSS)
$430,707
$63,601
$1,379,083
$514,151
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising
during the period
(183,914)
87,375
(488,378)
423,210
Reclassification adjustment for realized losses (gains) included in net
income (loss)
7,080
(16,165)
3,616
(3,476)
Total URA(D) on securities arising during
the period
(176,834)
71,210
(484,762)
419,734
Foreign currency translation adjustments
(33,204)
55,937
(62,091)
86,327
Benefit plan actuarial net gain (loss) for the period
6,250
(5,615)
6,250
(5,615)
Reclassification adjustment for amortization of net (gain) loss included
in net income (loss)
11,579
1,768
17,228
6,300
Total benefit plan net gain (loss) for the period
17,829
(3,847)
23,478
685
Total other comprehensive income (loss), net of tax
(192,209)
123,300
(523,375)
506,746
COMPREHENSIVE INCOME (LOSS)
$238,498
$186,901
$855,708
$1,020,897
EARNINGS PER COMMON SHARE:
Basic
$10.95
$1.59
$34.66
$12.81
Diluted
10.94
1.59
34.62
12.78
11
EVEREST RE GROUP,
LTD.
CONSOLIDATED
BALANCE SHEETS
December 31,
December 31,
(Dollars and share amounts in thousands, except par value per share)
2021
2020
(unaudited)
ASSETS:
Fixed maturities - available for sale, at market value
(amortized cost: 2021, $22,063,592; 2020, $19,225,067, credit allowances: 2021, ($29,738); 2020,
($1,745))
$22,308,272
$20,040,173
Equity securities, at fair value
1,825,908
1,472,236
Short-term investments (cost: 2021, $1,178,386; 2020, $1,135,088)
1,178,337
1,134,950
Other invested assets
2,919,965
2,012,581
Cash
1,440,861
801,651
Total investments and cash
29,673,343
25,461,591
Accrued investment income
149,105
141,304
Premiums receivable
3,293,598
2,680,562
Reinsurance recoverables
2,053,354
1,994,555
Funds held by reinsureds
868,601
716,655
Deferred acquisition costs
872,289
622,053
Prepaid reinsurance premiums
515,445
412,015
Income taxes
2,381
17,253
Other assets
757,167
665,515
TOTAL ASSETS
$38,185,283
$32,711,503
LIABILITIES:
Reserve for losses and loss adjustment expenses
19,009,486
16,322,143
Future policy benefit reserve
35,669
37,723
Unearned premium reserve
4,609,634
3,501,359
Funds held under reinsurance treaties
18,391
15,807
Other net payable to reinsurers
449,723
294,347
Losses in course of payment
260,684
127,971
Senior notes
2,345,800
1,376,718
Long term notes
223,774
223,674
Borrowings from FHLB
519,000
310,000
Accrued interest on debt and borrowings
17,348
10,460
Unsettled securities payable
16,698
206,693
Other liabilities
539,896
558,432
Total liabilities
28,046,103
22,985,327
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50,000 shares authorized;
no shares issued and outstanding
-
-
Common shares, par value: $0.01; 200,000 shares authorized; (2021) 69,790
and (2020) 69,620 outstanding before treasury shares
698
696
Additional paid-in capital
2,274,431
2,245,301
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $26,781 at 2021 and $80,451 at 2020
11,523
534,899
Treasury shares, at cost; 30,524 shares (2021) and 29,636 shares (2020)
(3,847,308)
(3,622,172)
Retained earnings
11,699,836
10,567,452
Total shareholders' equity
10,139,180
9,726,176
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$38,185,283
$32,711,503
12
EVEREST RE GROUP,
LTD.
CONSOLIDATED
STATEMENTS
OF CASH FLOWS
Twelve Months Ended
December 31,
(Dollars in thousands)
2021
2020
(unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)
$1,379,083
$514,151
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable
(648,735)
(387,123)
Decrease (increase) in funds held by reinsureds, net
(151,028)
(219,321)
Decrease (increase) in reinsurance recoverables
(124,796)
(150,753)
Decrease (increase) in income taxes
68,148
239,883
Decrease (increase) in prepaid reinsurance premiums
(127,792)
55,334
Increase (decrease) in reserve for losses and loss adjustment expenses
2,805,064
2,631,016
Increase (decrease) in future policy benefit reserve
(2,054)
(4,869)
Increase (decrease) in unearned premiums
1,145,512
404,049
Increase (decrease) in other net payable to reinsurers
185,764
(24,163)
Increase (decrease) in losses in course of payment
133,700
74,759
Change in equity adjustments in limited partnerships
(612,569)
(103,772)
Distribution of limited partnership income
211,367
122,326
Change in other assets and liabilities, net
(289,562)
(99,171)
Non-cash compensation expense
43,406
39,209
Amortization of bond premium (accrual of bond discount)
75,777
49,673
Net realized capital (gains) losses
(257,943)
(267,649)
Net cash provided by (used in) operating activities
3,833,342
2,873,579
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value
3,892,918
2,586,405
Proceeds from fixed maturities sold - available for sale, at market value
1,915,916
1,945,867
Proceeds from fixed maturities sold - available for sale, at fair value
-
4,907
Proceeds from equity securities sold, at fair value
990,376
376,347
Distributions from other invested assets
257,233
309,912
Cost of fixed maturities acquired - available for sale, at market value
(8,825,315)
(7,189,301)
Cost of equity securities acquired, at fair value
(1,097,886)
(637,082)
Cost of other invested assets acquired
(756,560)
(557,473)
Net change in short-term investments
(42,630)
(717,527)
Net change in unsettled securities transactions
(203,016)
194,574
Net cash provided by (used in) investing activities
(3,868,964)
(3,683,371)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period for share-based compensation, net of expense
(14,275)
(13,566)
Purchase of treasury shares
(225,136)
(200,020)
Dividends paid to shareholders
(246,699)
(249,056)
Proceeds from issuance of senior notes
968,357
979,417
Cost of debt repurchase
-
(10,647)
Net FHLB borrowings (repayments)
209,000
310,000
Cost of shares withheld on settlements of share-based compensation awards
(17,054)
(15,908)
Net cash provided by (used in) financing activities
674,193
800,220
EFFECT OF EXCHANGE RATE
CHANGES ON CASH
639
3,187
Net increase (decrease) in cash
639,210
(6,385)
Cash, beginning of period
801,651
808,036
Cash, end of period
$1,440,861
$801,651
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$98,030
$(169,748)
Interest paid
62,369
33,570