Posted on 29 Apr 2010
Everest Re Group Ltd. (RE) swung to a first-quarter loss as the reinsurer was stung by losses tied to the Chile earthquake and European windstorm.
Catastrophe losses were a record $275.6 million, after Everest warned last month it expected about $250 million in losses from a large Chilean earthquake and windstorms in Europe. The company said Wednesday the addditional losses were tied to Australian storms in Melbourne and Perth. Other catastrophe-prone insurers have taken big hits in the first quarter because of disasters such as the earthquake, windstorms and storms on the U.S. East Coast.
Like others in its sector, Everest had benefited in recent quarters from a mild hurricane season and a rally in equities. It has been shifting its mix toward property and international business and away from U.S. casualty.
Everest Re posted a loss of $22.7 million, or 38 cents a share, compared with a year-earlier profit of $108.6 million, or $1.76 a share. For the latest period, the operating loss, which remove investment gains and losses, was $1.25 a share, compared with income of $1.72.
Total revenue increased 18% to $1.17 billion.
Premiums earned climbed 0.5%, while investment income more than doubled.
Reinsurance premiums were down 5% when adjusting for foreign currency and other items, while insurance premiums climbed 11%.
Combined ratio, the percentage of premiums the company paid out in claims and expenses, was 124.9% from 89.3%.
Everest Re shares were unchanged at $80.86 after hours. The stock has risen 11% over the last year, weaker growth than the broader market.