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Everest Re Group Ltd. on Tuesday reported 2017 fourth-quarter net income of $571.0 million, up 52.8% from the same quarter a year ago, the Hamilton, Bermuda-based reinsurer said, partially due to prior-year reserve releases.
For the year ended Dec. 31, net income was $469.0 million, down 52.9% from 2016.
The combined ratio was 70% for the quarter and 103.5% for the year, Everest said in a statement, compared with 82.1% and 87%, respectively, for the same periods in 2016.
The quarter benefitted from net prior-year reserve releases of $262.1 million, Everest said, and a net reduction to prior-period catastrophe loss estimates of $132.7 million, including a $102.7 million reduction in the catastrophe loss estimates for events in the third quarter of 2017.
This was offset by $161.5 million for catastrophe losses that occurred in the quarter, Everest said, including both the Northern and Southern California wildfires.
For the full year, catastrophe losses, net of reinstatement premiums, totaled $1.3 billion. Excluding catastrophe losses, reinstatement premiums and favorable prior-year loss development, the calendar year attritional combined ratio was 85 % compared with 85.5% for 2016.
Gross written premiums for the quarter were $1.9 billion, up 26% from the fourth quarter of 2016, Everest Re said in its earnings report. For the full year, gross written premiums grew 19% to $7.2 billion.
Everest said the enactment of the Tax Cuts and Jobs Act of 2017, which President Donald Trump signed into law in December, resulted in a charge of $8.2 million in the quarter.
The Financial Accounting Standards Board, which establishes financial accounting and reporting standards, has proposed a change in accounting standards that, if adopted, would require certain income tax effects of the TCJA to be reclassified from other comprehensive income to retained earnings, Everest Re said.
Everest Re said if the board adopts that proposal prior to the filing of its Form 10-K, the company intends to “early adopt” the updated accounting standard and reflect it in the financial statements filed with the 10-K, resulting in an estimated $1.3 million decline in other comprehensive income with a corresponding increase in retained earnings.
Dominic J. Addesso, Everest president and CEO, said in a statement that the company “experienced an exceptional quarter … despite 2017 being one of the most costly catastrophe loss years on record.”
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.