Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Investor Presentation (2013)
20 slides from Everest's investor presentation, 2013
Slide 1: Second Quarter 2013 Investor Presentation
SECOND QUARTER 2013 INVESTOR PRESENTATION EVEREST RE GROUP, LTD • WESSEX HOUSE, 45 REID STREET, 2ND FLOOR • HAMILTON HM DX, BERMUDA
Slide 2: Cautionary note on forward-looking statements
Cautionary note on forward-looking statements This presentation 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 securi
Slide 3: Corporate Objectives
Corporate Objectives Everest Re Group is a worldwide multi-line reinsurance and insurance organization. Our key objectives are to: Maximize book value per common share over time, and Achieve returns that provide a mid-teens compound annual growth rate in shareholder value. 3 EVEREST RE GROUP, LT
Slide 4: Investor Value Proposition
Investor Value Proposition $152.18 TOTAL SHAREHOLDER RETURN (Growth in BVPS + Dividends) $145.87 $126.52 $125.98 BOOK VALUE PER SHARE ACCUMULATED DIVIDENDS $112.02 $95.74 $88.00 $81.92 $68.44 $66.83 $58.79 $48.14 $38.46 $35.39 $30.10 $29.32 $26.21 $21.66 $19.39 1995 1996 1997 1998 1999 2000 2001 200
Slide 5: The Everest Advantage
The Everest Advantage WELL POSITIONED TO CONTINUE TO BUILD VALUE 2012 Gross Written Premium Strong Brand Recognition $4.3 Billion Top ratings (A.M. Best A+; S&P A+; Moody’s A1, Fitch Insurance AA-) 25% Experienced Management Team and Board of Directors Winning Culture – disciplined, focused
Slide 6: Financial Highlights
Financial Highlights For the year ended December 31, ($ in millions) 2008 2009 2010 2011 2012 2013YTD Income Statement Data: Gross Premiums Written $ 3,678.1 $ 4,129.0 $ 4,200.7 $ 4,286.2 $ 4,310.5 $ 2,441.0 Net Premiums Earned 3,694.3 3,894.1 3,934.6 4,101.3 4,164.6 2,240.3 Net Investment Income 56
Slide 7: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures 2008-2012 2003-2012 1996-2012 Combined Ratio 99.9% 99.3% 101.3% Combined Ratio excluding A&E 99.9% 97.4% 99.0% Pretax Operating ROR 13% 13% 14% Pretax Operating ROR excluding A&E 13% 15% 16% Oper
Slide 8: Multiple Distribution Channels
Multiple Distribution Channels ABILITY TO RESPOND TO GLOBAL OPPORTUNITIES Key Operating Subsidiaries in the United States, Ireland and Bermuda REINSURANCE LOCATIONS INSURANCE LOCATIONS United States Bermuda London United States Canada • Chicago, IL Belgium Singapore • Atlanta, GA • British Columbia,
Slide 9: Geographical Diversity in Reinsurance Book
Geographical Diversity in Reinsurance Book AMONGST THE MOST INTERNATIONALLY DIVERSIFIED REINSURANCE ORGANIZATIONS Europe/UK 18% Middle East / Africa 5% USA 44% Worldwide 2% Latin America 17% Asia/Australia Canada 9% 5% 9 EVEREST RE GROUP, LTD.
Slide 10: Strategic Management of the Reinsurance Portfolio
Strategic Management of the Reinsurance Portfolio ACTIVE PORTFOLIO MANAGEMENT IN RESPONSE TO MARKET CONDITIONS 2012 2004 By Line of Business 32% Property Property 40% 60% 68% Casualty Casualty By Class of Business Pro Rata 30% Pro Rata 46% 54% Excess 70% Excess 10 EVEREST RE GROUP, LTD.
Slide 11: Product Diversity in Insurance Book
Product Diversity in Insurance Book ACTIVE EXPANSION INTO SHORT-TAIL LINES LEADING TO A STRATEGIC TRANSFORMATION OF THE BOOK 2012 2010 Other Short Tail, 11% Other Short Tail, 19% Workers Workers Comp, 27% Comp, 29% A&H, 8% A&H, 2% Crop, 0% Crop, 26% Prof Liability, Prof 13% Liability, Other 18% Liab
Slide 12: Strong Risk Management Culture
Strong Risk Management Culture WITH CONSIDERABLE FINANCIAL FLEXIBILITY AND CONSERVATIVE PROPERTY CATASTROPHE EXPOSURE PML as Percent of Shareholders' Equity Debt + Preferred Equity to Capital As of 1/1/13 As of 12/31/12 VR ENH LR… MRH MRH AHL AHL PRE ENH AXS AWH RNR AWH ALTE LRE.L PRE ACE AXS VR ACG
Slide 13: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 6/30/13 - INVESTABLE ASSETS OF $16.0 BILLION Capitalization Liquidity 22.0 100% 19.2 90% Cash & Short Government 17.0 Term 7% 2% Mortgage/ 80% 14.3 Asset Backed Other 3% 18% 70% 11.9 11.5 10.8 12.0 60% 50% 6.9 7.0 Non U.S. 40% 30% 30% 2.0 Corporate 2
Slide 14: Calendar Year Loss Development
Calendar Year Loss Development DEMONSTRATES STRENGTH IN CORE RESERVES For the y ear ended December 31, 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 10-Year 3-Year Net Earned Premium 3,737.9 4,425.1 3,963.1 3,853.2 3,997.5 3,694.3 3,894.1 3,934.6 4,101.3 4,164.6 39,765.7 12,200.5 Loss Dev elopme
Slide 15: Accident Year Loss Development
Accident Year Loss Development 10 YEAR LOSS RESERVING EXPERIENCE – INITIAL TO ULTIMATE 94.6% 93.0% 91.0% 90.8% 100.0% 90.0% 75.7% 74.7% 70.2% 68.7% 80.0% 68.0% 66.0% 66.0% 66.0% 65.1% 64.3% 60.5% 59.7% 59.4% 58.6% 70.0% 58.0% 57.7% 56.2% 54.5% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2003 2004 2005
Slide 16: Attractive Valuation Creates Buying Opportunity
Attractive Valuation Creates Buying Opportunity RECORD LOW WITH SHARES TRADING AT A DISCOUNT TO BOOK Everest Historical Price-to-Book Valuation - 1998 to 2013* 2.50 2.00 1.50 Average 1.22x 1.00 0.50 0.00 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Everest has take
Slide 17: Active Capital Management
Active Capital Management DRIVES SHAREHOLDER RETURNS Dividends & Share $550,000 Shares repurchased ($) Dividends paid to shareholders Repurchases $350,000 Common shares issued $150,000 $ thousands -$50,000 Common Equity Raised -$250,000 -$450,000 -$650,000 -$850,000 1995 1996 1997 1998 1999 2000 200
Slide 18: Significant Total Return to Shareholders
Significant Total Return to Shareholders RE SHARES OUTPERFORM S&P 500 800.00% 700.00% 668.62% Everest 600.00% S&P 500 500.00% 400.00% 285.25% 300.00% 200.00% 131.52% 98.48% 100.00% 33.25% 22.57% 15.99% 8.59% 0.00% 1 Year 5 Years 10 Years Inception to Date Everest Re total return* over S&P 500: 2011
Slide 19: Conclusion
Conclusion ■ Strong franchise that has successfully weathered numerous market cycles ■ Seasoned management team focused on building long term value for our shareholders ■ Disciplined underwriting culture – profitability before growth – supported by a strong risk management framework ■ Conservative,
Slide 20: Everest Re Group, Ltd.
EVEREST RE GROUP, LTD. Wessex House, 45 Reid Street, 2nd Floor, P. O. Box 845, Hamilton, HM DX, Bermuda