Crop losses hit Everest Re profit

Lee Koch holds up a damaged corn leaf Monday, July 28, 2014 at his farm in Beaver Township, Michigan. Crop damage from severe thunderstorms that dropped hail on parts of Michigan caused some harvests / AP

Everest Re Group Ltd. reported fourth-quarter net income of $340.1 million, off 6.7% from the same quarter last year as the company took an underwriting loss for the year due to crop losses.

Gross written premiums written totaled $1.70 billion for the quarter, up 7.0% from last year as growth came from all reinsurance segments, said John Doucette, the Hamilton, Bermuda-based reinsurer's executive vice president and chief underwriting officer, on a call with analysts Thursday.

Net investment for the quarter was $134.0 million, up 6.3% from the year-ago period, while total revenues grew 0.09% to $1.52 billion.

The company's combined ratio for the fourth quarter improved to 80.5% from 81.5% in the year-ago period.

Mr. Doucette said on the analyst call that rates were off broadly between 5% and 15% during Jan. 1 renewals.

President and CEO Dominic Addesso added that “reinsurance continues to be the main engine” in a year that benefited from a lack of major catastrophes.

For the full year, net income dropped 4.8% to $1.20 billion as gross written premiums grew 10% to $5.7 billion.

Results were hit by a $64 million loss in the company's crop book due mainly to crop hail losses and falling commodity prices, said Mr. Addesso, leading to an underwriting loss for the year.

He pointed out, however, that excluding the crop loss, the company showed a $15 million underwriting profit for the year.

Full-year net investment income fell 3.2% to $530.5 million, while revenues grew 2.6% to $5.80 billion.

The company's combined ratio for the year improved to 82.8% from 84.5% in 2013.