Everest Group, Ltd. · NYSE:EG
Everest — Everest Re Group — Q1 2012 Earnings Presentation
20 slides from Everest's earnings presentation, 2012
Slide 1: Investor Presentation First Quarter 2012
INVESTOR PRESENTATION FIRST QUARTER 2012 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 TOTAL SHAREHOLDER RETURN INCLUDING 1Q12 (Growth in BVPS + Dividends) $133.77 $126.52 $125.98 BOOK VALUE PER SHARE 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 $19.39 1995 1996 1997 1998 1999 2000 2001 2002 200
Slide 5: Leading Business Franchise
Leading Business Franchise RECOGNIZED INDUSTRY LEADER Strong Brand Recognition Top ratings (A.M. Best A+; S&P A+; Moody’s Aa3, Fitch AA-) Experienced Management Team and Board of Directors Winning Culture – disciplined, focused on profitable growth, accountable – results oriented, flat and n
Slide 6: Financial Highlights
Financial Highlights For the year ended December 31, YTD ($ in millions) 2007 2008 2009 2010 2011 2012 Income Statement Data: Gross Premiums Written $ 4,077.6 $ 3,678.1 $ 4,129.0 $ 4,200.7 $ 4,286.2 $ 1,046.5 Net Premiums Earned 3,997.5 3,694.3 3,894.1 3,934.6 4,101.3 998.0 Net Investment Income 682
Slide 7: Long Term Performance
Long Term Performance DEMONSTRATES STRONG CYCLE MANAGEMENT 5 Year 10 Year ITD Key Profitability Measures 2007-2011 2002 -2011 1996-2011 Combined Ratio 99.4% 99.8% 101.8% Combined Ratio excluding A&E 97.4% 97.8% 99.3% Pretax Operating ROR 13.8% 12.5% 13.2% Pretax Operating ROR excluding A&E 15.1% 14.
Slide 8: Key Strategy Drivers
Key Strategy Drivers FOCUS ON BUILDING SHAREHOLDER VALUE Emphasize underwriting profitability, not volume Understand and control risks Provide top quality client service Operate efficiently and effectively Attract and retain high quality staff Maintain superior financial strength 8 EVERE
Slide 9: Experienced Management Team
Experienced Management Team FLAT ORGANIZATIONAL STRUCTURE ENSURES SUCCESSFUL EXECUTION OF THE STRATEGY JOSEPH TARANTO Chairman Chief Executive Officer DOM ADDESSO President Chief Financial Officer John Doucette Daryl Bradley Ronald Diaz Lou Monteagudo Robert Capicchioni Mark De Saram Barry Smith Jam
Slide 10: Strategic Management of the Portfolio
Strategic Management of the Portfolio ACTIVE PORTFOLIO MANAGEMENT IN RESPONSE TO MARKET CONDITIONS 2011 2004 23% US Reins 25% US Reins 31% By Segment Intl 42% Intl Bermuda Bermuda 17% 19% Insurance Insurance 29% 14% 15% Reins Property 22% By Line of Business Reins Property 8% Reins Casualty Reins Ca
Slide 11: Competitive Positioning
Competitive Positioning PRODUCT, DISTRIBUTION AND GEOGRAPHICAL DIVERSITY 100% 90% 77% of our book is Reinsurance, where 80% there is more control over pricing and it is 70% easier to exit poorly performing business 60% Life 50% Insurance 64% of the overall book is in 40% 30% Reinsurance Property
Slide 12: Multiple Distribution Channels
Multiple Distribution Channels ABILITY TO RESPOND TO GLOBAL OPPORTUNITIES Key Operating Subsidiaries are located in BERMUDA the United States, Ireland and Bermuda. BRAZIL ■ International Operations are conducted through BRUSSELS London, Ireland, Toronto, Brussels, Cologne, Brazil and Singapore CANAD
Slide 13: Geographical Diversity in Reinsurance Book
Geographical Diversity in Reinsurance Book AMONGST THE MOST INTERNATIONALLY DIVERSIFIED REINSURANCE ORGANIZATIONS Worldwide, 2% Middle East/Africa, 7% Latin America, 15% Europe/UK, 18% Asia/Australia, 9% Canada, 6% USA, 43% 13 EVEREST RE GROUP, LTD.
Slide 14: Transitioning Insurance Book
Transitioning Insurance Book INCREASING PROPORTION OF SHORT-TAIL BUSINESS 1,000,000 Net Written Premium by Line of Business 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 47 100,000 26 0 2010 2011 2012 Heartland A&H Primary Short-Tail/Package Workers Comp Prof Liab Other Casualty/Ru
Slide 15: Calendar Year Loss Development
Calendar Year Loss Development DEMONSTRATES STRENGTH IN CORE RESERVES For the y ear ended December 31, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 10-Year 5-Year Net Earned Premium 2,273.7 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 37,874.8 19,621.8 Loss Dev elopme
Slide 16: Capital Management Objectives
Capital Management Objectives FOCUS ON PRESERVING BALANCE SHEET STRENGTH WHILE REWARDING SHAREHOLDERS Maintain capital at levels in excess of those required to retain ratings Target mid-teens ROE over the cycle Optimize capital structure; conservatively leverage the balance sheet Manage capital
Slide 17: Driving Shareholder Returns Through Buybacks
Driving Shareholder Returns Through Buybacks A STRATEGY OF ACTIVE CAPITAL MANAGEMENT OVER TIME $550,000 Dividends & Share Shares repurchased ($) Dividends paid to shareholders Repurchases $350,000 Common shares issued $150,000 $ thousands -$50,000 Common Equity Raised -$250,000 -$450,000 -$650,000 -
Slide 18: Conservative Leverage and Liquidity
Conservative Leverage and Liquidity FIGURES AS OF 3/31/12 – INVESTABLE ASSETS OF $16.1 BILLION Capitalization Liquidity 100% Cash & Short Government Mortgage/ 90% Term 9% 2% Asset Backed Other 4% 18% 80% 70% 60% Junior Sub-Debt Long-Term Sub-Notes Non U.S. 50% 25% Senior Debt 40% Common Equity Corpo
Slide 19: In Summary
In Summary … ■ Recognized balance sheet strength – flight to quality ■ Global franchise – expansive distribution platform ■ Experienced management team – seasoned & opportunistic ■ Diversified risk profile – prudent risk management ■ Disciplined underwriting approach – profitability before growth ■
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