Catastrophes hurt Everest Re

The Chile earthquake and the European windstorm Xynthia caused Everest Re to report a Q1 net loss of $22.7m, compared to Q1 2009 net income of $108.6m. The after-tax operating loss was $73.8m, compared with and income of $106.1m last year.

Additional catastrophe losses in the quarter, specifically the Australian storms in Melbourne and Perth, further contributed to these losses. Overall, catastrophe losses, net of reinstatement premiums and taxes, were $275.6m, it said.

Chairman and chief executive officer, Joseph Taranto said: "As an industry, we experienced record catastrophe losses in the first quarter compared to the same period in any other year.

“While this had a significant impact on the quarterly results, our return to shareholders, including dividends paid, was slightly positive, attesting to the overall strength of our organisation."

Financial Highlights

• GWP up 2% to $1,021m (flat after the effects of foreign exchange)
• The loss and combined ratios were 97.8% (61.1%) and 124.9% (89.3%)
• Excluding catastrophe losses, the attritional loss ratio was 59.5% (55.7%)
• Net investment income was $161.5m ($68.8m).
• Net after-tax realised capital gains totalled $51.1m (-$48.5m)
• Net after-tax unrealised capital gains increased $34.6m during the quarter, driven by changes in interest rates.
• Cash flow from operations was $271.3m ($180.5m)

Everest said reinsurance premiums were about even with last year but adjusting for foreign currency movements and reinstatement premiums for the Chile earthquake, reinsurance premiums were down 5%.

Lower premium from US casualty, crop reinsurance, marine, and European business offset the continued strong growth in US property, South America and Asia-Pacific markets.

Insurance premiums, which are entirely derived from the US markets, were up 11% as specialty markets continued to provide growth opportunities.