Everest Re Group Announces Fourth Quarter Earnings

Business Wire, Feb 10, 2003

Business Editors

ST. MICHAEL, Barbados--(BUSINESS WIRE)--Feb. 10, 2003

Everest Re Group, Ltd. (NYSE: RE) reported fourth quarter 2002 after-tax operating income of $60.6 million, or $1.17 per diluted share, an increase of 33.7% compared to $45.3 million, or $0.96 per diluted share, in the fourth quarter of 2001.

Operating income differs from net income only by the exclusion of realized gains and losses on investments. Fourth quarter 2002 net income was $55.6 million or $1.08 per diluted share, an increase of 57.1% compared to $35.4 million, or $0.75 per diluted share, in the fourth quarter of 2001.

For the year ended December 31, 2002, after-tax operating income for the year was $262.8 million, or $5.14 per diluted share, an increase of 126.9% compared to $115.8 million, or $2.46 per diluted share, in 2001. Net income was $231.3 million, or $4.52 per diluted share, an increase of 133.6% compared to $99.0 million, or $2.10 per diluted share, in 2001.

Gross premiums written for the fourth quarter of 2002 were $912.2 million, a 94.5% increase compared to $469.0 million in 2001. Net written premiums were $811.3 million, an increase of 116.0% from $375.5 million for the fourth quarter of 2001. The Company's combined ratio in the fourth quarter was 101.6% compared to 108.7% in 2001. Net investment income for the fourth quarter was $87.8 million compared to $83.2 million in the fourth quarter of 2001. Cash flow from operations for the quarter was $281.2 million, an increase of 47.5% from $190.6 million in the fourth quarter of 2001.

For the year ended December 31, 2002, gross premiums written were $2.85 billion, a 51.8% increase from $1.87 billion in 2001. Net written premiums grew 69.1% to $2.64 billion in 2002 from $1.56 billion in 2001. The combined ratio for 2002 was 99.0% compared to 113.5% in 2001. Net investment income for the year was $350.6 million, an increase of 3.0% from $340.4 million in 2001. Cash flow from operations for the year was $736.1 million compared to $406.0 million in 2001, an increase of 81.3%.

At December 31, 2002, the Company's shareholders' equity was $2.37 billion (a book value per share of $46.55). This represents a 37.7% increase from shareholders' equity of $1.72 billion ($37.19 per share) at December 31, 2001.

Commenting on the Company's results, Chairman and Chief Executive Officer Joseph V. Taranto said, "With our diverse underwriting platform, the Company took full advantage of the opportunities presented to us in 2002, delivering exceptional top-line growth, solid earnings and record cash flow. We expect continued improvement in premium growth, underwriting margins and bottom-line results in 2003. Accordingly, we are revising our estimate for 2003 operating earnings and net income per share to a range of $6.70 - $7.30, absent unusual loss activity."

This press 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. In particular, our statements regarding our expectations for 2003 premium growth, underwriting margins and bottom-line results and our estimated 2003 earnings per share are forward looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. 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 fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our Registration Statement on Form S-3 (Registration No. 333-97367) and 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.

Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the US and international markets. Everest Reinsurance (Bermuda), Ltd. provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the United States. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the United States. Additional information on Everest Re Group companies can be found at the Group's web site at www.everestre.com.

A conference call discussing the fourth quarter results will be held at 8:30 a.m. Eastern Time on February 11, 2003. The call will be available on the Internet through the Group's web site or at www.streetevents.com.