Catastrophes turn Everest Re to third-quarter loss of $639 millionReprints
Everest Re Group Ltd. on Tuesday said it swung to a 2017 third-quarter loss of $639.4 million compared with profit of $295.4 million a year ago, as it became the latest of several insurers and reinsurers to suffer the effects of the three hurricanes and other catastrophes in the quarter.
The loss includes catastrophe losses, net of reinstatement premiums, of $1.2 billion for hurricanes Harvey, Irma and Maria and the Mexico City earthquake, the Bermuda-based reinsurer said in a statement, with net after-tax impact on earnings from these events totaling $897.7 million.
In a research note Tuesday, Morgan Stanley said results were “largely in-line with our expectations,” but the company’s “balance sheet remains strong.”
For the nine months ended Sept. 30, Everest saw a net loss of $102.1 million compared with net income of $622.8 million for the first nine months of 2016.
Third-quarter gross written premiums rose 15% to $2.0 billion, while premiums earned grew 16.6% to $1.60 billion. For the nine months, premiums earned rose 10.3% to $4.28 billion from $3.88 billion in the year-ago period.
Net investment income for the quarter rose 11.7% to $137.0 million as nine-month investment income grew 10.0% to $393.8 million.
The company’s third-quarter combined ratio worsened to 163.6% from 85.6% in the third quarter of 2016.
“This series of natural catastrophes highlights the nature of our business model. We have consistently generated strong margins, which gives us the financial ability to respond to these events, without impairment,” Everest Re President and CEO Dominic J. Addesso said in the statement.
He joined the chorus of CEOs calling for a market change after the quarter’s extraordinary losses for the industry.
“Looking forward, market conditions are expected to be more favorable, allowing the industry to continue on a sound footing,” Mr. Addesso said, adding his voice to others.
“Management expects more favorable market conditions after recent catastrophe losses,” Morgan Stanley noted.