Everest Group (EG) 10-K risk factor changes: FY2013 vs FY2012

| Calendar year: | [added: |] Pre-tax catastrophe losses | | | [removed: |]

| 2012 | | [removed: $] | 410.0 | |

By way of illustration, during the past five calendar years, the reserve re-estimation process resulted in a decrease to our pre-tax net income in [removed: three] [added: two] of the years:

| Calendar year: | [added: |] Effect on pre-tax net income | | | | [removed: | |]

| (Dollars in millions) | | | | | | [removed: |]

| 2012 | | [removed: $] | 3.7 | | increase | [removed: |]

| 2011 | | | 3.7 | | decrease | [removed: |]

| 2010 | | | 30.9 | | increase | [removed: |]

| 2009 | | | 128.8 | | decrease | [removed: |]

At year-end [removed: 2012, 4.4%] [added: 2013, 4.2%] of our gross reserves were comprised of A&E reserves.

Everest Re and Bermuda Re hold an [removed: “Aa3” (“Excellent”)] [added: “A1” (“upper-medium grade”)] rating from Moody’s.

| | [removed: 2012] [added: 2013] | [added: 2012] | 2011 | [removed: |] 2010 | [removed: |] 2009 | [removed: | 2008 | |]

| Percentage of ceded written premiums to gross written premiums | [removed: 5.3%] [added: 4.1%] | [added: 5.3%] | 4.1% | [removed: |] 6.1% | [removed: |] 4.8% | [removed: | 4.7% | |]

The worldwide net premium written by the [removed: traditional] [added: Top 40 global] reinsurance [removed: market,] [added: groups,] for both life and non-life business, was estimated to be [removed: $174] [added: $185] billion in [removed: 2011] [added: 2012] according to data compiled by Standard & Poor’s.

The leaders in this market are Munich Re, Swiss Re, [removed: Berkshire Hathaway Inc.,] Hannover Ruckversicherung AG, [added: Berkshire Hathaway Inc.,] and syndicates at Lloyd’s.

In addition, the lack of strong barriers to entry into the reinsurance business and the [removed: potential for securitization] [added: entry] of [removed: reinsurance and insurance risks through] [added: alternative] capital [removed: markets] [added: market products and vehicles] provide additional sources of [removed: potential] reinsurance and insurance capacity and [added: increased] competition.

Our success has been, and will continue to be, dependent on our ability to retain the services of [removed: existing key executive officers and to attract and retain additional qualified personnel in the future.][added: our Chairman, Joseph V.]

Generally, we consider key executive officers to be those individuals who have the greatest influence in setting overall policy and controlling operations: [removed: Chairman] [added: President] and Chief Executive Officer, [removed: Joseph V.][added: Dominic J.]

Addesso (age [removed: 59) and] [added: 60),] Executive Vice President and Chief Financial Officer, Craig Howie (age [removed: 49).][added: 50), Executive Vice President and Chief Underwriting Officer, John P.]

[added: We have employment contracts with] Mr. [removed: Taranto’s contract was] [added: Addesso, Mr. Doucette and Mr. Mukherjee, which have been] filed with the SEC and [removed: provides] [added: provide] for terms of employment ending on December 31, [removed: 2013.][added: 2016 for Mr. Addesso and September 1, 2016 for Mr. Doucette and Mr. Mukherjee.]

Currently, all four of our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda government that expire at various times between [removed: September 2013] [added: February 2015] and [removed: May 2015.][added: February 2017.]

| (Dollars in millions) | | December 31, [removed: 2012] [added: 2013] | | | | % of Total | | |

| Non-agency residential | | | [removed: 8.1] [added: 4.8] | | | | 0.0 | % |

| Other asset-backed | | | [removed: 176.6] [added: 173.0] | | | | 1.1 | % |

| Total asset-backed | | | [removed: 2,657.0] [added: 2,727.4] | | | | [removed: 16.0] [added: 16.4] | % |

| Other fixed income | | | [removed: 10,484.7] [added: 9,909.5] | | | | [removed: 63.3] [added: 59.7] | % |

| Total fixed income, at market value | | | [removed: 13,141.7] [added: 12,636.9] | | | | [removed: 79.3] [added: 76.1] | % |

| Fixed maturities, at fair value | | | [removed: 41.5] [added: 19.4] | | | | [removed: 0.3] [added: 0.1] | % |

| Equity securities, at market value | | | [removed: 143.4] [added: 144.1] | | | | 0.9 | % |

| Equity securities, at fair value | | | [removed: 1,255.6] [added: 1,462.1] | | | | [removed: 7.5] [added: 8.8] | % |

| Other invested assets | | | [removed: 596.6] [added: 508.4] | | | | [removed: 3.6] [added: 3.1] | % |

| Cash and short-term investments | | | [removed: 1,397.4] [added: 1,825.6] | | | | [removed: 8.4] [added: 11.0] | % |

| Total investments and cash | | $ | [removed: 16,576.2] [added: 16,596.5] | | | | 100.0 | % |

In [removed: 2012,] [added: 2013,] we wrote approximately [removed: 31.0%] [added: 28.8%] of our coverages in non-U.S. currencies; as of December 31, [removed: 2012,] [added: 2013,] we maintained approximately [removed: 17.3%] [added: 15.7%] of our investment portfolio in investments denominated in non-U.S. currencies.

During [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010,] [added: 2011,] the impact on our quarterly pre-tax net income from exchange rate fluctuations ranged from a loss of $17.0 million to a gain of $31.8 million.

As a result of the recent dislocation of the financial markets, Congress and the Presidential administration in the United [removed: States,] [added: States] are [removed: contemplating] [added: implementing] changes in the way the financial services industry is regulated.

As of December 31, [removed: 2012,] [added: 2013,] Holdings owned 9,719,971 or [removed: 15.9%] [added: 17.0%] of the outstanding common shares of Group.

Nevertheless, Holdings, which is controlled by Group, has the ability to vote 9.9% of the total voting power of Group’s common [removed: shares, which may have an impact on securing approval of shareholder proposals that Group’s management supports.][added: shares.]

[removed: If Group was a Delaware corporation, any] business combination with an interested shareholder (which, for this purpose, would include mergers and asset sales of greater than 10% of Group’s assets that would otherwise be considered transactions in the ordinary course of business) within a period of three years from the time the person became an interested shareholder would require prior approval from shareholders holding at least 66 2/3% of Group’s outstanding common shares not owned by the interested shareholder, unless the transaction qualified for one of the exemptions in the relevant Delaware statute or Group opted out of the statute.

However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, stock repurchases or stock redemptions, or any transaction from which a director [added: derived an improper personal benefit.]

| 2013 | | $ | 195.0 | |

| --- | --- | --- | --- | --- | --- |

| 2013 | | $ | 18.2 | | increase |

| --- | --- | --- | --- | --- | --- |

Taranto (age 64) and existing key executive officers and to attract and retain additional qualified personnel in the future.

Doucette (age 48) and Executive Vice President, General Counsel, Chief Compliance Officer and Secretary, Sanjoy Mukherjee (age 47).

We currently have an agreement with Mr. Taranto to serve as a non-employee Director and Chairman of the Board through December 31, 2016, subject to Mr. Taranto’s annual election to the Board by its shareholders during its Annual General Meetings that occur over the term of the agreement.

| Commercial | | $ | 270.5 | | | | 1.6 | % |

| Agency residential | | | 2,279.1 | | | | 13.7 | % |

Some of these changes are also impacting the insurance industry.

For example, the United States Department of Treasury has recently established the Federal Insurance Office with the authority to monitor all aspects of the insurance sector, monitor the extent to which traditionally underserved communities and consumers have access to affordable non-health insurance products, to represent the United States on prudential aspects of international insurance matters, to assist with administration of the Terrorism Risk Insurance Program and to advise on important national and international insurance matters.

If Group was a Delaware corporation, any

For the year ended December 31, 2008, we incurred $695.8 million of realized investment losses and $310.4 million of unrealized investment losses.

| 2008 | | | 364.3 | |

| --- | --- | --- | --- | --- | --- | --- |

| 2008 | | | 34.9 | | decrease | |

On January 24, 2012, Moody’s affirmed the ratings of our operating subsidiaries but changed the outlook on the ratings from stable to negative reflecting their opinion of the likely direction of the ratings over the medium term (12 to 18 months).

We will continue to work with Moody’s over this time to address their concerns but it is not possible to predict the potential outcome.

On March 13, 2009, Standard & Poor’s downgraded its ratings of Everest Re, Bermuda Re and Everest National one level to “A+”.

It is possible that a further downgrade will occur in the future if we do not continue to meet the evolving criteria expected of our current rating.

In that regard, several of the rating agencies are in the process of modifying their approaches to evaluating enterprise risk management and its impact on ratings.

Therefore, we cannot predict the outcome of this reassessment or its potential impact upon our ratings.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The top twenty-five groups in our industry represent just over 90% of these revenues.

Taranto (age 63), President, Dominic J.

We currently have employment contracts with Mr. Taranto and Mr. Addesso.

Mr. Addesso’s contract was filed with the SEC and provides for terms of employment ending December 31, 2016.

| Commercial | | $ | 320.1 | | | | 1.9 | % |

| Agency residential | | | 2,152.2 | | | | 13.0 | % |

It is possible that insurance regulation will be drawn into this process, and that federal regulatory initiatives in the insurance industry could emerge.

derived an improper personal benefit.

Competition and its effect on rates, terms and conditions vary widely by market and coverage yet continued to be most prevalent in the U.S. casualty insurance and reinsurance [removed: markets.][added: markets and additional capacity from the capital markets is impacting worldwide catastrophe rates.]

| (Dollars in millions) | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2012/2011] | [added: 2013/2012] | | | [removed: 2011/2010] | [added: 2012/2011] | |

| Gross written premiums | | $ | [removed: 4,310.5] [added: 5,218.6] | | | $ | [removed: 4,286.2] [added: 4,310.5] | | | $ | [removed: 4,200.7] [added: 4,286.2] | | | | [removed: 0.6] [added: 21.1] | % | | | [removed: 2.0] [added: 0.6] | % |

| Net written premiums | | | [removed: 4,081.1] [added: 5,004.8] | | | | [removed: 4,108.9] [added: 4,081.1] | | | | [removed: 3,945.6] [added: 4,108.9] | | | | [removed: \-0.7] [added: 22.6] | % | | | [removed: 4.1] [added: \-0.7] | % |

| Premiums earned | | $ | [removed: 4,164.6] [added: 4,753.5] | | | $ | [removed: 4,101.3] [added: 4,164.6] | | | $ | [removed: 3,934.6] [added: 4,101.3] | | | | [removed: 1.5] [added: 14.1] | % | | | [removed: 4.2] [added: 1.5] | % |

| Net investment income | | | [removed: 600.2] [added: 548.5] | | | | [removed: 620.0] [added: 600.2] | | | | [removed: 653.5] [added: 620.0] | | | | [removed: \-3.2] [added: \-8.6] | % | | | [removed: \-5.1] [added: \-3.2] | % |

| Net realized capital gains (losses) | | | [removed: 164.4] [added: 300.2] | | | | [removed: 6.9] [added: 164.4] | | | | [removed: 101.9] [added: 6.9] | | | [removed: NM] | [added: 82.6] | [added: %] | | [added: NM] | [removed: \-93.2] | [removed: %] |

| Net derivative gain (loss) | | | [removed: (9.7] [added: 44.0] | [removed: )] | | | [removed: (11.3] [added: (9.7] | ) | | | [removed: (1.1] [added: (11.3] | ) | | [added: NM] | [removed: \-13.5] | [removed: %] | | [removed: NM] | [added: \-13.5] | [added: %] |

| Other income (expense) | | | [removed: 3.3] [added: (5.5] | [added: )] | | | [removed: (23.1] [added: 3.3] | [removed: )] | | | [removed: 16.9] [added: (23.1] | [added: )] | | [added: NM] | [removed: \-114.4] | [removed: %] | | | [removed: \-236.4] [added: \-114.4] | % |

| Total revenues | | | [removed: 4,922.8] [added: 5,640.8] | | | | [removed: 4,694.0] [added: 4,922.8] | | | | [removed: 4,705.8] [added: 4,694.0] | | | | [removed: 4.9] [added: 14.6] | % | | | [removed: \-0.3] [added: 4.9] | % |

| Incurred losses and loss adjustment expenses | | | [removed: 2,745.3] [added: 2,800.3] | | | | [removed: 3,726.2] [added: 2,745.3] | | | | [removed: 2,945.7] [added: 3,726.2] | | | | [removed: \-26.3] [added: 2.0] | % | | | [removed: 26.5] [added: \-26.3] | % |

| Commission, brokerage, taxes and fees | | | [removed: 952.7] [added: 977.6] | | | | [removed: 950.5] [added: 952.7] | | | | [removed: 931.9] [added: 950.5] | | | | [removed: 0.2] [added: 2.6] | % | | | [removed: 2.0] [added: 0.2] | % |

| Other underwriting expenses | | | [removed: 207.7] [added: 237.1] | | | | [removed: 182.4] [added: 207.7] | | | | [removed: 166.3] [added: 182.4] | | | | [removed: 13.8] [added: 14.2] | % | | | [removed: 9.7] [added: 13.8] | % |

| Corporate expenses | | | [removed: 24.0] [added: 24.8] | | | | [removed: 16.5] [added: 24.0] | | | | [removed: 14.9] [added: 16.5] | | | | [removed: 45.7] [added: 3.5] | % | | | [removed: 10.4] [added: 45.7] | % |

| Interest, fees and bond issue cost amortization expense | | | [removed: 53.7] [added: 46.1] | | | | [removed: 52.3] [added: 53.7] | | | | [removed: 55.8] [added: 52.3] | | | | [removed: 2.6] [added: \-14.1] | % | | | [removed: \-6.3] [added: 2.6] | % |

| Total claims and expenses | | | [removed: 3,983.3] [added: 4,085.9] | | | | [removed: 4,927.9] [added: 3,983.3] | | | | [removed: 4,114.6] [added: 4,927.9] | | | | [removed: \-19.2] [added: 2.6] | % | | | [removed: 19.8] [added: \-19.2] | % |

| INCOME (LOSS) BEFORE TAXES | | | [removed: 939.5] [added: 1,555.0] | | | | [removed: (233.9] [added: 939.5] | [removed: )] | | | [removed: 591.2] [added: (233.9] | [added: )] | | [removed: NM] | [added: 65.5] | [added: %] | | [added: NM] | [removed: \-139.6] | [removed: %] |

| Income tax expense (benefit) | | | [removed: 110.6] [added: 289.7] | | | | [removed: (153.5] [added: 110.6] | [removed: )] | | | [removed: (19.5] [added: (153.5] | ) | | | [removed: \-172.1] [added: 162.0] | % | | [removed: NM] | [added: \-172.1] | [added: %] |

| NET INCOME (LOSS) | | $ | [removed: 829.0] [added: 1,265.3] | | | $ | [removed: (80.5] [added: 829.0] | [removed: )] | | $ | [removed: 610.8] [added: (80.5] | [added: )] | | [removed: NM] | [added: 52.6] | [added: %] | | [added: NM] | [removed: \-113.2] | [removed: %] |

| Loss ratio | | | [removed: 65.9] [added: 58.9] | % | | | [removed: 90.9] [added: 65.9] | % | | | [removed: 74.9] [added: 90.9] | % | | | [removed: (25.0] [added: (7.0] | ) | | | [removed: 16.0] [added: (25.0] | [added: )] |

| Commission and brokerage ratio | | | [removed: 22.9] [added: 20.6] | % | | | [removed: 23.2] [added: 22.9] | % | | | [removed: 23.7] [added: 23.2] | % | | | [removed: (0.3] [added: (2.3] | ) | | | [removed: (0.5] [added: (0.3] | ) |

| Other underwriting expense ratio | | | 5.0 | % | | | [removed: 4.4] [added: 5.0] | % | | | [removed: 4.2] [added: 4.4] | % | | | [removed: 0.6] [added: \-] | | | | [removed: 0.2] [added: 0.6] | |

| Combined ratio | | | [removed: 93.8] [added: 84.5] | % | | | [removed: 118.5] [added: 93.8] | % | | | [removed: 102.8] [added: 118.5] | % | | | [removed: (24.7] [added: (9.3] | ) | | | [removed: 15.7] [added: (24.7] | [added: )] |

| (Dollars in millions, except per share amounts) | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | [removed: 2012/2011] | [added: 2013/2012] | | | [removed: 2011/2010] | [added: 2012/2011] | |

| Total investments and cash | | $ | [removed: 16,576.2] [added: 16,596.5] | | | $ | [removed: 15,797.4] [added: 16,576.2] | | | $ | [removed: 15,365.0] [added: 15,797.4] | | | | [removed: 4.9] [added: 0.1] | % | | | [removed: 2.8] [added: 4.9] | % |

| Total assets | | | [removed: 19,777.9] [added: 19,808.0] | | | | [removed: 18,893.6] [added: 19,777.9] | | | | [removed: 18,384.2] [added: 18,893.6] | | | | [removed: 4.7] [added: 0.2] | % | | | [removed: 2.8] [added: 4.7] | % |

| Loss and loss adjustment expense reserves | | | [removed: 10,069.1] [added: 9,673.2] | | | | [removed: 10,123.2] [added: 10,069.1] | | | | [removed: 9,340.2] [added: 10,123.2] | | | | [removed: \-0.5] [added: \-3.9] | % | | | [removed: 8.4] [added: \-0.5] | % |

| Total debt | | | [removed: 818.2] [added: 488.3] | | | | [removed: 818.1] [added: 818.2] | | | | [removed: 868.1] [added: 818.1] | | | | [removed: 0.0] [added: \-40.3] | % | | | [removed: \-5.8] [added: 0.0] | % |

| Total liabilities | | | [removed: 13,044.4] [added: 12,746.4] | | | | [removed: 12,822.2] [added: 13,044.4] | | | | [removed: 12,100.7] [added: 12,822.2] | | | | [removed: 1.7] [added: \-2.3] | % | | | [removed: 6.0] [added: 1.7] | % |

| Shareholders' equity | | | [removed: 6,733.5] [added: 6,968.3] | | | | [removed: 6,071.4] [added: 6,733.5] | | | | [removed: 6,283.5] [added: 6,071.4] | | | | [removed: 10.9] [added: 3.5] | % | | | [removed: \-3.4] [added: 10.9] | % |

| Book value per share | | | [removed: 130.96] [added: 146.57] | | | | [removed: 112.99] [added: 130.96] | | | | [removed: 115.45] [added: 112.99] | | | | [removed: 15.9] [added: 11.9] | % | | | [removed: \-2.1] [added: 15.9] | % |

[added: Eliminating the effects of reinstatement premiums, which] were higher in 2011 due to a higher level of catastrophe losses, and foreign currency fluctuations, gross written premiums were up 2% year over year.

[removed: The change in] [added: Net written] premiums [removed: earned] [added: increased by 4.3% to $765.7 million in 2013 compared to $733.8 million in 2012, which] is consistent with the [removed: increase] [added: change] in [removed: net] [added: gross] written premiums.

Net pre-tax investment income, as a percentage of average invested assets, was [removed: 4.1%] [added: 3.5%] in [removed: 2011] [added: 2013] compared to [removed: 4.5%] [added: 3.9%] in [removed: 2010.][added: 2012.]

Net realized capital gains were [removed: $164.4] [added: $300.2] million, [removed: $6.9] [added: $164.4] million and [removed: $101.9] [added: $6.9] million in [removed: 2012, 2011] [added: 2013, 2012] and [removed: 2010,] [added: 2011,] respectively.

The [added: net realized capital gains of] $164.4 million [removed: was comprised] [added: in 2012 were the result] of $118.1 million of gains from fair value re-measurements and $56.3 million of net realized capital gains from sales on our fixed maturity and equity securities, which were partially offset by $10.0 million of other-than-temporary impairments.

The [removed: net realized capital gains of $101.9] [added: $300.2] million [removed: in 2010 were the result] [added: was comprised] of [removed: $70.4] [added: $258.9] million of gains [removed: in] [added: from] fair value re-measurements and [removed: $34.5] [added: $42.4] million of net realized capital gains from sales on our fixed maturity and equity securities, which were partially offset by [removed: $3.0] [added: $1.1] million of other-than-temporary impairments.

As a result of these adjustments in value, we recognized net derivative [added: gains of $44.0 million in 2013 and net derivative] losses of $9.7 [removed: million, $11.3] million and [removed: $1.1] [added: $11.3] million in [removed: 2012, 2011] [added: 2012] and [removed: 2010,] [added: 2011,] respectively.

We recorded other [removed: income] [added: expense] of [removed: $3.3] [added: $5.5] million in [removed: 2012,] [added: 2013,] other [removed: expense] [added: income] of [removed: $23.1] [added: $3.3] million in [removed: 2011] [added: 2012] and other [removed: income] [added: expense] of [removed: $16.9] [added: $23.1] million in [removed: 2010.][added: 2011.]

| Attritional (a) | | $ | 2,338.9 | | | | 56.2 | % | | | $ | [removed: (3.8] [added: (3.7] | ) | | | \-0.1 | % | | | $ | [removed: 2,335.1] [added: 2,335.2] | | | | 56.1 | % | |

Catastrophe rates tend to fluctuate by global region, particularly areas recently impacted by large catastrophic events.

During the second and third quarters of 2013, Canada experienced historic flooding in Alberta and Toronto, which will likely result in higher future catastrophe rates.

Although there were flooding and wind storm events in Europe and Asia in the latter part of 2013, the overall 2013 catastrophe losses for the industry were lower than average.

This lower level of losses, combined with increased competition is putting downward pressure on rates in certain geographical areas.

| Net (income) loss attributable to noncontrolling interests | | | (5.9 | ) | | | \- | | | | \- | | | NM | | | | NM | | |

| NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP | | $ | 1,259.4 | | | $ | 829.0 | | | $ | (80.5 | ) | | | 51.9 | % | | NM | | |

| Redeemable noncontrolling interests - Mt. Logan Re | | | 93.4 | | | | \- | | | | \- | | | NM | | | | NM | | |

Gross written premiums increased by 21.1% to $5,218.6 million in 2013, compared to $4,310.5 million in 2012, reflecting a $692.3 million, or 21.4%, increase in our reinsurance business, a $195.6 million, or 18.2%, increase in our insurance business and $20.2 million from our new Mt.

Logan Re segment.

The increase in reinsurance premiums was mainly due to the impact of a Florida quota share reinsurance contract as well as new business, increased participations on existing business, and higher original rates on subject business.

Excluding the year over year impact of the large Florida quota share reinsurance contract, gross written premiums increased 15.0% and reinsurance premiums increased 13.4%, compared to the prior year.

The increase in insurance premiums was primarily due to the growth in California workers’ compensation, crop and non-standard auto business.

Net written premiums increased by 22.6% to $5,004.8 million in 2013 compared to $4,081.1 million in 2012, which is consistent with the increase in

gross written premiums.

Premiums earned increased by 14.1% to $4,753.5 million in 2013, compared to $4,164.6 million in 2012.

Unlike written premiums, premiums earned were minimally impacted by the Florida quota share reinsurance contract.

The change in premiums earned was comparable to net written premiums, excluding the impact of the Florida quota share reinsurance contract.

Net investment income decreased by 8.6% to $548.5 million in 2013 compared with net investment income of $600.2 million in 2012.

The decline in income and yield was primarily the result of lower reinvestment rates for the fixed income portfolios, less dividend income from equity investments and a decrease in our limited partnership income.

| 2013 | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Attritional (a) | | $ | 2,623.5 | | | | 55.2 | % | | | $ | (18.2 | ) | | | \-0.4 | % | | | $ | 2,605.3 | | | | 54.8 | % | |

| Total | | $ | 2,818.5 | | | | 59.3 | % | | | $ | (18.2 | ) | | | \-0.4 | % | | | $ | 2,800.3 | | | | 58.9 | % | |

| Variance 2013/2012 | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Attritional (a) | | $ | 284.6 | | | | (1.0 | ) | pts | | $ | (14.5 | ) | | | (0.3 | ) | pts | | $ | 270.1 | | | | (1.3 | ) | pts |

| Catastrophes | | | (215.0 | ) | | | (5.7 | ) | pts | | | \- | | | | \- | | pts | | | (215.0 | ) | | | (5.7 | ) | pts |

| Total | | $ | 69.6 | | | | (6.7 | ) | pts | | $ | (14.5 | ) | | | (0.3 | ) | pts | | $ | 55.0 | | | | (7.0 | ) | pts |

Incurred losses and LAE increased by 2.0% to $2,800.3 million for the year ended December 31, 2013 compared to $2,745.3 million for the year ended December 31, 2012, primarily due to increases in current year attritional losses, partially offset by the decline in current year catastrophe losses.

The increase in current year attritional losses of $284.6 million is primarily due to the impact of the increase in premiums earned.

Despite the increase in current year attritional losses, the current year attritional loss ratio decreased by 1.0 points due to the shift in the mix of business towards excess of loss business, which generally results in lower loss ratios.

Current year catastrophe losses for the year ended December 31, 2013 were $195.0 million, or 4.1 points, due to Canadian floods ($79.7 million), U.S. storms ($44.8 million), Typhoon Fitow ($30.0 million), German hailstorms ($20.5 million) and European floods ($20.0 million).

The increase in other underwriting expenses for 2013 compared to 2012 was mainly due to the impact of higher premiums earned and higher compensation expenses.

The decrease was primarily due to the redemption of $329.9 million of trust preferred securities in May 2013.

The year over year decrease was partially offset by $7.7 million of amortization expense on remaining capitalized issuance costs related to the redeemed securities.

The increase in the tax expense/(benefit) between 2013 and 2012, as well as 2012 versus 2011, is primarily due to higher taxable income from improved underwriting margins and capital gains in each successive year.

The changes were primarily driven by the financial component fluctuations explained above.

Net Income (Loss) Attributable to Everest Re Group.

Our net income attributable to Everest Re Group was $1,259.4 million and $829.0 million in 2013 and 2012, respectively, and our net loss attributable to Everest Re Group was $80.5 million in 2011.

The changes were primarily driven by the financial component fluctuations described above, as well as the impact of net income attributable to noncontrolling interests in 2013.

Our combined ratio decreased by 9.3 points to 84.5% in 2013 compared to 93.8% in 2012.

The loss ratio component decreased 7.0 points in 2013, over the same period last year primarily due to the $215.0 million decrease in current year catastrophe losses, which lowered the loss ratio by 5.7 points.

However, during the fourth quarter of 2012, the industry sustained significant losses from Superstorm Sandy and also sustained significant losses during 2011 from Australian floods, the New Zealand earthquake, the earthquake and tsunami in Japan, storms in the U.S., and the Thailand floods.

It is too early to determine the longer term impact on market conditions as a result of these events.

While the 2011 events have resulted in meaningful rate increases for catastrophe coverages in some global catastrophe prone regions, particularly areas impacted by these losses, whether the magnitude of these 2012 and 2011 losses is sufficient to increase rates and improve market conditions for other lines of business remains to be seen.

Eliminating the effects of reinstatement premiums, which

Gross written premiums increased by 2.0% to $4,286.2 million in 2011, compared to $4,200.7 million in 2010, reflecting a $110.3 million increase in our insurance business, partially offset by a $24.8 million decrease in our reinsurance business.

The year over year increase in insurance premiums was primarily due to the acquisition of Heartland, which provided $169.6 million of new crop insurance business, our recent initiative in primary medical stop loss insurance, which added $54.0 million of premium and improved premium rates on our California workers’ compensation business, partially offset by our reduced participation on a large casualty program.

The decrease in reinsurance premiums was due to the continued reduction in U.S. casualty business, the loss of several large crop reinsurance contracts, as well as the planned reduction of catastrophe exposed business in certain territories, partially offset by higher reinstatement premiums, $35.8 million, resulting from catastrophe losses and favorable foreign exchange impact year over year of $49.3 million.

Net written premiums increased by 4.1% to $4,108.9 million in 2011 compared to $3,945.6 million in 2010.

The larger increase in net written premiums relative to the change in gross written premiums was due to a lower level of ceded reinsurance in the Insurance segment due to the planned reduction in one casualty program.

Premiums earned increased by 4.2% to $4,101.3 million in 2011, compared to $3,934.6 million in 2010.

Net investment income decreased by 5.1% to $620.0 million in 2011 compared with net investment income of $653.5 million in 2010, primarily as a result of a $13.9 million decrease in investment income from our limited partnership investments and the effects of lower reinvestment rates in 2011.

The variance in this yield was primarily the result of fluctuations in our limited partnership income.

| A&E | | | \- | | | | 0.0 | % | | | | 0.1 | | | | 0.0 | % | | | | 0.1 | | | | 0.0 | % | |

| A&E | | | \- | | | | 0.0 | % | | | | 0.8 | | | | 0.0 | % | | | | 0.8 | | | | 0.0 | % | |

| 2010 | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Attritional (a) | | $ | 2,390.1 | | | | 60.8 | % | | | $ | (15.4 | ) | | | \-0.4 | % | | | $ | 2,374.7 | | | | 60.4 | % | |

| Catastrophes | | | 586.5 | | | | 14.9 | % | | | | (15.4 | ) | | | \-0.4 | % | | | | 571.1 | | | | 14.5 | % | |

| A&E | | | \- | | | | 0.0 | % | | | | \- | | | | 0.0 | % | | | | \- | | | | 0.0 | % | |

| Total | | $ | 2,976.6 | | | | 75.7 | % | | | $ | (30.8 | ) | | | \-0.8 | % | | | $ | 2,945.7 | | | | 74.9 | % | |

| A&E | | | \- | | | | \- | | pts | | | (0.7 | ) | | | \- | | pts | | | (0.7 | ) | | | \- | | pts |

| Attritional (a) | | $ | 32.0 | | | | (1.7 | ) | pts | | $ | 18.3 | | | | 0.5 | | pts | | $ | 50.3 | | | | (1.2 | ) | pts |

| Catastrophes | | | 713.9 | | | | 16.8 | | pts | | | 15.4 | | | | 0.4 | | pts | | | 729.3 | | | | 17.2 | | pts |

| A&E | | | \- | | | | \- | | pts | | | 0.8 | | | | \- | | pts | | | 0.8 | | | | \- | | pts |

| Total | | $ | 745.9 | | | | 15.1 | | pts | | $ | 34.5 | | | | 0.9 | | pts | | $ | 780.5 | | | | 16.0 | | pts |

Incurred losses and LAE increased by 26.5% to $3,726.2 million for the year ended December 31, 2011 compared to $2,945.7 million in 2010.

Of the $780.5 million increase, current year catastrophe losses represented $713.9 million, or 16.8 points, period over period, primarily due to the 2011 catastrophe losses discussed above.

The $586.5 million of current year catastrophe losses for 2010 related primarily to the Chile earthquake ($416.2 million), the 2010 New Zealand earthquake ($90.0 million), the 2010 Australia hailstorms and floods ($65.3 million) and the Canadian hailstorm ($15.0 million).

In addition, the overall attritional losses increased $50.3 million due, in part, to higher earned premium in the current year, which generated higher attritional losses for the current year, as well as the impact of favorable development in 2010 without comparable favorable development in 2011.

Conversely, commissions, as a percentage of earned premiums are down for the year driven by a shift in distribution channels on the insurance book, with a greater proportion of the business being accessed directly, at lower commission rates, rather than through managing general agents.

The increase in other underwriting expenses for 2011 compared to 2010 was mainly due to expenses of Heartland, which was acquired in January, 2011.

The decrease was primarily due to the maturing of debt in March, 2010.

The increase in tax expense was mainly due to the improvement in taxable income resulting from lower catastrophe losses in 2012.

The tax benefit in 2010 resulted primarily from a tax audit settlement.

The decrease was primarily driven by an increase in catastrophe losses in 2011.

Our combined ratio increased by 15.7 points to 118.5% in 2011 compared to 102.8% in 2010.

The loss ratio component increased 16.0 points in 2011 over the same period last year, principally due to higher current year catastrophe losses as a result of the Japan earthquake, New Zealand earthquake, Thailand floods, U.S. storms, the Australia floods and Hurricane Irene.

The other underwriting expense ratio component increased slightly and the commission and brokerage ratio component decreased slightly over the same period last year due to the mix of business.

Net investment income decreased by 5.1% to $620.0 million in 2011 compared to $653.5 million in 2010, primarily due to a decrease in income from our limited partnership investments and a decline in income from our fixed maturities, reflective of reducing our municipal bond exposures and declining reinvestment rates.

These decreases were partially offset by increased dividend income from equities due to our expanded public equity portfolio and emerging market debt mutual funds.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The Company had gross written premiums, in [removed: 2012,] [added: 2013,] of [removed: $4.3] [added: $5.2] billion with approximately [removed: 75%] [added: 76%] representing reinsurance and [removed: 25%] [added: 24%] representing insurance.

Shareholders’ equity at December 31, [removed: 2012] [added: 2013] was [removed: $6.7] [added: $7.0] billion.

| · | Bermuda Re, a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and long-term insurer and is authorized to write property and casualty and life and annuity business. Bermuda Re commenced business in the second half of 2000. Bermuda Re’s UK branch writes property and casualty reinsurance to the United Kingdom and European markets. At December 31, [removed: 2012,] [added: 2013,] Bermuda Re had shareholder’s equity of $3.0 billion. |

| · | Everest International Reinsurance, Ltd. (“Everest International”), a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business. Through [removed: 2012,] [added: 2013,] all of Everest International’s business has been inter-affiliate quota share reinsurance assumed from Everest Re, the UK branch of Bermuda Re and Ireland Re. At December 31, [removed: 2012,] [added: 2013,] Everest International had shareholder’s equity of [removed: $428.6] [added: $369.2] million. |

| · | Everest Re, a Delaware insurance company and a direct subsidiary of Holdings, is a licensed property and casualty insurer and/or reinsurer in all states, the District of Columbia and Puerto Rico and is authorized to conduct reinsurance business in Canada, Singapore and Brazil. Everest Re underwrites property and casualty reinsurance for insurance and reinsurance companies in the U.S. and international markets. At December 31, [removed: 2012,] [added: 2013,] Everest Re had statutory surplus of [removed: $2.6] [added: $2.8] billion. |

For the [removed: 2012] [added: 2013] calendar year, no single customer (ceding company or insured) generated more than [removed: 5.7%] [added: 4.9%] of the Company’s gross written premiums.

Approximately [removed: 63%, 25%] [added: 65%, 24%] and [removed: 12%] [added: 11%] of the Company’s [removed: 2012] [added: 2013] gross written premiums were written in the broker reinsurance, insurance markets and direct reinsurance, respectively.

The Company’s ten largest brokers accounted for an aggregate of approximately [removed: 62%] [added: 59%] of gross written premiums in [removed: 2012.][added: 2013.]

The largest broker, [removed: Aon Benfield Re,] [added: Marsh and McLennan,] accounts for approximately 21% of gross written premiums.

The second largest broker, [removed: Marsh and McLennan,] [added: Aon Benfield Re,] accounted for approximately [removed: 20%] [added: 19%] of gross written premiums.

In [removed: 2012,] [added: 2013,] Arrowhead General Insurance Agency accounted for approximately [removed: 3%] [added: 5%] of the Company’s gross written premium.

No other single general agent generated more than [removed: 2%] [added: 3%] of the Company’s gross written premiums.

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies primarily within the U.S. The International operation writes [removed: non-U.S.] [added: foreign] property and casualty reinsurance through Everest Re’s branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey.

[removed: These segments] [added: Logan Re,] are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.

For selected financial information regarding these segments, see ITEM 8, “Financial Statements and Supplementary Data” - Note [removed: 19] [added: 20] of Notes to Consolidated Financial Statements and ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation - Segment Results”.

| | | Gross Written Premiums by Segment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| | | Years Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| (Dollars in millions) | | [removed: 2012] [added: 2013] | | | | | | | [removed: 2011] | [added: 2012] | | | | | | [removed: 2010] | | [added: 2011] | | | | | [removed: 2009] | | | [added: 2010] | | | | [removed: 2008] | | | | [added: 2009] | | [added: | | | | |]

| U.S. Reinsurance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Pro Rata (1) | | $ | [removed: 313.2] [added: 631.2] | | | [removed: 7.3] | [added: 12.1 |] % | | $ | [removed: 594.9] [added: 313.2] | | | [removed: 13.9] | [added: 7.3 |] % | | $ | [removed: 698.2] [added: 594.9] | | | [removed: 16.6] | [added: 13.9 |] % | | $ | [removed: 648.2] [added: 698.2] | | | [removed: 15.7] | [added: 16.6 |] % | | $ | [removed: 551.8] [added: 648.2] | | | [removed: 15.1] | [added: 15.7 |] % |

| Excess | | | [removed: 534.8] [added: 631.7] | | | [removed: 12.4] | [added: 12.1 |] % | | | [removed: 380.6] [added: 534.8] | | | [removed: 8.9] | [added: 12.4 |] % | | | [removed: 315.9] [added: 380.6] | | | [removed: 7.5] | [added: 8.9 |] % | | | [removed: 330.5] [added: 315.9] | | | [removed: 8.0] | [added: 7.5 |] % | | | [removed: 350.6] [added: 330.5] | | | [removed: 9.5] | [added: 8.0 |] % |

| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Pro Rata (1) | | | [removed: 273.6] [added: 342.5] | | | [removed: 6.3] | [added: 6.6 |] % | | | [removed: 215.5] [added: 273.6] | | | [removed: 5.0] | [added: 6.3 |] % | | | [removed: 200.0] [added: 215.5] | | | [removed: 4.8] | [added: 5.0 |] % | | | [removed: 194.3] [added: 200.0] | | | [removed: 4.7] | [added: 4.8 |] % | | | [removed: 75.5] [added: 194.3] | | | [removed: 2.0] | [added: 4.7 |] % |

| Excess | | | [removed: 189.1] [added: 204.4] | | | [removed: 4.4] | [added: 3.9 |] % | | | [removed: 155.8] [added: 189.1] | | | [removed: 3.6] | [added: 4.4 |] % | | | [removed: 181.3] [added: 155.8] | | | [removed: 4.3] | [added: 3.6 |] % | | | [removed: 234.0] [added: 181.3] | | | [removed: 5.7] | [added: 4.3 |] % | | | [removed: 240.3] [added: 234.0] | | | [removed: 6.5] | [added: 5.7 |] % |

| Total (2) | | | [removed: 1,310.7] [added: 1,809.7] | | | [removed: 30.4] | [added: 34.7 |] % | | | [removed: 1,346.8] [added: 1,310.7] | | | [removed: 31.4] | [added: 30.4 |] % | | | [removed: 1,395.4] [added: 1,346.8] | | | [removed: 33.2] | [added: 31.4 |] % | | | [removed: 1,407.1] [added: 1,395.4] | | | [removed: 34.1] | [added: 33.2 |] % | | | [removed: 1,218.3] [added: 1,407.1] | | | [removed: 33.1] | [added: 34.1 |] % |

| International | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Pro Rata (1) | | | [removed: 630.9] [added: 673.4] | | | [removed: 14.6] | [added: 12.9 |] % | | | [removed: 713.0] [added: 630.9] | | | [removed: 16.6] | [added: 14.6 |] % | | | [removed: 701.6] [added: 713.0] | | | [removed: 16.7] | [added: 16.6 |] % | | | [removed: 670.2] [added: 701.6] | | | [removed: 16.2] | [added: 16.7 |] % | | | [removed: 535.3] [added: 670.2] | | | [removed: 14.6] | [added: 16.2 |] % |

| Excess | | | [removed: 365.9] [added: 426.5] | | | [removed: 8.5] | [added: 8.2 |] % | | | [removed: 315.7] [added: 365.9] | | | [removed: 7.4] | [added: 8.5 |] % | | | [removed: 291.6] [added: 315.7] | | | [removed: 6.9] | [added: 7.4 |] % | | | [removed: 241.9] [added: 291.6] | | | [removed: 5.9] | [added: 6.9 |] % | | | [removed: 228.3] [added: 241.9] | | | [removed: 6.2] | [added: 5.9 |] % |

| Pro Rata (1) | | | [removed: 102.6] [added: 134.4] | | | [removed: 2.4] | [added: 2.6 |] % | | | [removed: 122.2] [added: 102.6] | | | [removed: 2.9] | [added: 2.4 |] % | | | [removed: 120.3] [added: 122.2] | | | [added: |] 2.9 | % | | | [removed: 94.0] [added: 120.3] | | | [removed: 2.3] | [added: 2.9 |] % | | | [removed: 71.6] [added: 94.0] | | | [removed: 1.9] | [added: 2.3 |] % |

| Excess | | | [removed: 92.9] [added: 111.5] | | | [removed: 2.2] | [added: 2.1 |] % | | | [removed: 87.6] [added: 92.9] | | | [removed: 2.0] | [added: 2.2 |] % | | | [removed: 93.4] [added: 87.6] | | | [removed: 2.2] | [added: 2.0 |] % | | | [removed: 78.4] [added: 93.4] | | | [removed: 1.9] | [added: 2.2 |] % | | | [removed: 69.4] [added: 78.4] | | | [added: |] 1.9 | % |

| Total (2) | | | [removed: 1,192.3] [added: 1,345.8] | | | [removed: 27.7] | [added: 25.8 |] % | | | [removed: 1,238.4] [added: 1,192.3] | | | [removed: 28.9] | [added: 27.7 |] % | | | [removed: 1,207.0] [added: 1,238.4] | | | [removed: 28.7] | [added: 28.9 |] % | | | [removed: 1,084.5] [added: 1,207.0] | | | [removed: 26.3] | [added: 28.7 |] % | | | [removed: 904.7] [added: 1,084.5] | | | [removed: 24.6] | [added: 26.3 |] % |

| Bermuda | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Pro Rata (1) | | | [removed: 208.3] [added: 244.6] | | | [removed: 4.8] | [added: 4.7 |] % | | | [removed: 213.2] [added: 208.3] | | | [removed: 5.0] | [added: 4.8 |] % | | | [removed: 226.1] [added: 213.2] | | | [removed: 5.4] | [added: 5.0 |] % | | | [removed: 291.1] [added: 226.1] | | | [removed: 7.1] | [added: 5.4 |] % | | | [removed: 305.7] [added: 291.1] | | | [removed: 8.3] | [added: 7.1 |] % |

| Excess | | | [removed: 145.1] [added: 161.5] | | | [removed: 3.4] | [added: 3.1 |] % | | | [removed: 162.6] [added: 145.1] | | | [removed: 3.8] | [added: 3.4 |] % | | | [removed: 173.5] [added: 162.6] | | | [removed: 4.1] | [added: 3.8 |] % | | | [removed: 180.4] [added: 173.5] | | | [removed: 4.4] | [added: 4.1 |] % | | | [removed: 164.2] [added: 180.4] | | | [removed: 4.5] | [added: 4.4 |] % |

| Pro Rata (1) | | | [removed: 228.9] [added: 213.9] | | | [removed: 5.3] | [added: 4.1 |] % | | | [removed: 204.9] [added: 228.9] | | | [removed: 4.8] | [added: 5.3 |] % | | | [removed: 205.0] [added: 204.9] | | | [removed: 4.9] | [added: 4.8 |] % | | | [removed: 185.6] [added: 205.0] | | | [removed: 4.5] | [added: 4.9 |] % | | | [removed: 178.8] [added: 185.6] | | | [removed: 4.9] | [added: 4.5 |] % |

| Excess | | | [removed: 152.1] [added: 154.2] | | | [removed: 3.5] | [added: 3.0 |] % | | | [removed: 144.5] [added: 152.1] | | | [removed: 3.4] | [added: 3.5 |] % | | | [removed: 128.4] [added: 144.5] | | | [removed: 3.1] | [added: 3.4 |] % | | | [removed: 137.8] [added: 128.4] | | | [removed: 3.3] | [added: 3.1 |] % | | | [removed: 134.7] [added: 137.8] | | | [removed: 3.7] | [added: 3.3 |] % |

| Total (2) | | | [removed: 734.4] [added: 774.3] | | | [removed: 17.1] | [added: 14.9 |] % | | | [removed: 725.3] [added: 734.4] | | | [removed: 17.0] | [added: 17.1 |] % | | | [removed: 733.0] [added: 725.3] | | | [removed: 17.5] | [added: 17.0 |] % | | | [removed: 794.8] [added: 733.0] | | | [removed: 19.3] | [added: 17.5 |] % | | | [removed: 783.4] [added: 794.8] | | | [removed: 21.4] | [added: 19.3 |] % |

| Total Reinsurance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | |]

| Pro Rata (1) | | | [removed: 1,152.4] [added: 1,549.2] | | | [removed: 26.7] | [added: 29.7 |] % | | | [removed: 1,521.1] [added: 1,152.4] | | | [removed: 35.5] | [added: 26.7 |] % | | | [removed: 1,625.9] [added: 1,521.1] | | | [removed: 38.7] | [added: 35.5 |] % | | | [removed: 1,609.5] [added: 1,625.9] | | | [removed: 39.0] | [added: 38.7 |] % | | | [removed: 1,392.8] [added: 1,609.5] | | | [removed: 37.9] | [added: 39.0 |] % |

Effective February 27, 2013, the Company established a new subsidiary, Mt.

Logan Re Ltd. (“Mt.

Logan Re”) and effective July 1, 2013, Mt.

Logan Re established separate segregated accounts and issued non-voting redeemable preferred shares to capitalize the segregated accounts.

Accordingly, the financial position and operating results for Mt.

Logan Re are consolidated with the Company and the non-controlling interests in Mt.

Logan Re’s operating results and equity are presented as separate captions in the Company’s financial statements.

Logan Re and Mt.

| · | Mt. Logan Re, a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 3 insurer and is authorized to write property and casualty reinsurance. Through 2013, all of Mt. Logan Re’s business has been inter-affiliate reinsurance assumed from Everest Re, the UK branch of Bermuda Re and Ireland Re, and all business has been written through segregated cells. At December 31, 2013, Mt. Logan Re had shareholders’ equity of $129.0 million. |

McKinley, a Delaware insurance company and a direct subsidiary of Holdings, was acquired by Holdings in September 2000 from The Prudential.

In 1985, Mt.

McKinley ceased writing new and renewal insurance and commenced a run-off operation to service claims arising from its previously written business.

Effective September 19, 2000, Mt.

McKinley and Bermuda Re entered into a loss portfolio transfer reinsurance agreement, whereby Mt.

McKinley transferred, for arm’s-length consideration, all of its net insurance exposures and reserves to Bermuda Re.

Logan Re segment represents business written for the segregated accounts of Mt.

Logan Re, which were formed on July 1, 2013.

The Mt.

Logan Re business represents a diversified set of catastrophe exposures, diversified by risk/peril and across different geographical regions globally.

These segments, with the exception of Mt.

The Mt.

Logan Re segment is managed independently and seeks to write a diverse portfolio of catastrophe risks for each segregated account to achieve desired risk and return criteria.

We measure our underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

Logan Re’s business is sourced through operating subsidiaries of the Company; however, the activity is only reflected in the Mt.

Logan Re segment.

For other inter-affiliate reinsurance, business is generally reported within the segment in which the business was first produced, consistent with how the business is managed.

Except for Mt.

Logan Re, the Company does not maintain separate balance sheet data for its operating segments.

Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

Underwriting results include earned premium less losses and loss adjustment expenses (“LAE”) incurred, commission and brokerage expenses and other underwriting expenses.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Property | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Casualty | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- |

| · | Mt. McKinley, a Delaware insurance company and a direct subsidiary of Holdings, was acquired by Holdings in September 2000 from The Prudential. In 1985, Mt. McKinley ceased writing new and renewal insurance and commenced a run-off operation to service claims arising from its previously written business. Effective September 19, 2000, Mt. McKinley and Bermuda Re entered into a loss portfolio transfer reinsurance agreement, whereby Mt. McKinley transferred, for arm’s-length consideration, all of its net insurance exposures and reserves to Bermuda Re. |

During the quarter ended September 30, 2011, the Company realigned its reporting segments to reflect recent changes in the type and volume of business written.

The Company previously reported the results of Marine & Aviation, Surety, Accident and Health (“A&H”) Reinsurance and A&H Primary operations as a separate segment—Specialty Underwriting.

The A&H primary business, which is a relatively new line of business for the Company, has increased significantly, representing approximately 2% of premiums earned and is projected to continue to grow.

The A&H primary business is better aligned with the Insurance reporting segment based on the similarities of this business with those businesses already reflected in the Insurance segment.

The other operating units included in the Specialty Underwriting segment would have encompassed less than 5% of the Company’s premiums earned and their volume is projected to remain less than 5%.

As a result of the size of these remaining operating units and their similarity to the business reported within U.S. Reinsurance, they have been reclassified to the U.S. Reinsurance segment.

There has been no change to the International and Bermuda reporting segments.

The Company has restated all segment information for prior years to conform to the new reporting segment structure.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| _________________________________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Included in gross written premiums for U.S. treaty property business was $3.1 million related to the crop hail line of business.

| | | | | | | | | | | | | | | | | | | | | | | | | |

| Southeast U.S., Wind | | $ | 472 | | | $ | 840 | | | $ | 1,084 | | | $ | 1,358 | | | $ | 1,545 | | | $ | 1,685 | |

| California, Earthquake | | | 127 | | | | 416 | | | | 767 | | | | 1,028 | | | | 1,309 | | | | 1,572 | |

| Northeast U.S., Wind | | | 76 | | | | 305 | | | | 663 | | | | 1,014 | | | | 1,298 | | | | 1,521 | |

| Southeast U.S., Wind | | $ | 297 | | | $ | 521 | | | $ | 671 | | | $ | 835 | | | $ | 958 | | | $ | 1,045 | |

| California, Earthquake | | | 98 | | | | 289 | | | | 511 | | | | 670 | | | | 854 | | | | 1,024 | |

| Northeast U.S., Wind | | | 57 | | | | 220 | | | | 433 | | | | 643 | | | | 822 | | | | 966 | |

The Company considers purchasing retrocessional protection by evaluating the underlying exposures in comparison to the availability of cost-effective protection.

For the period from August 1, 2012 to July 31, 2013, the Company has catastrophe loss reinsurance protection in place for losses arising from earthquakes of 61% of $100 million in excess of $190 million, excluding the territories of the U.S., Japan and Europe.

The Company continues to evaluate the availability and cost of various retrocessional products and loss mitigation approaches in the marketplace.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cumulative (deficiency)/redundancy | | | $ | (1,804.1 | ) | | $ | (1,181.0 | ) | | $ | (505.3 | ) | | $ | (574.9 | ) | | $ | (320.9 | ) | | $ | 52.2 | | | $ | (193.6 | ) | | $ | 41.8 | | | $ | (6.6 | ) | | $ | (19.4 | ) | | | | |

| at December 31, 2012 | | | $ | 7,163.4 | | | $ | 7,795.0 | | | $ | 8,502.8 | | | $ | 9,855.6 | | | $ | 9,237.6 | | | $ | 8,987.9 | | | $ | 9,144.4 | | | $ | 8,998.2 | | | $ | 9,403.2 | | | $ | 10,210.6 | | | | | |

| at December 31, 2012 | | | | 1,463.6 | | | | 1,455.6 | | | | 1,230.6 | | | | 1,105.3 | | | | 837.8 | | | | 715.4 | | | | 736.2 | | | | 724.0 | | | | 745.9 | | | | 638.2 | | | | | |

| at December 31, 2012 | | | $ | 5,699.8 | | | $ | 6,339.4 | | | $ | 7,272.2 | | | $ | 8,750.3 | | | $ | 8,399.8 | | | $ | 8,272.5 | | | $ | 8,408.3 | | | $ | 8,274.1 | | | $ | 8,657.3 | | | $ | 9,572.4 | | | | | |

| (deficiency)/redundancy | | | $ | (2,177.7 | ) | | $ | (1,370.3 | ) | | $ | (616.2 | ) | | $ | (680.5 | ) | | $ | (349.6 | ) | | $ | 44.2 | | | $ | (238.6 | ) | | $ | (40.8 | ) | | $ | (63.1 | ) | | $ | (76.5 | ) | | | | |

In 2007, the Company completed a detailed study of its asbestos experience and its cedants’ asbestos exposures and also considered industry trends.

As a result of the study, the Company increased its gross reinsurance asbestos reserves by $250.0 million and increased its gross direct asbestos reserves by $75.0 million.

These reserve increases, as well as adverse development on asbestos in prior years, have a significant impact on the cumulative deficiencies.

Subsequent to the study, the Company’s loss activity has been in line with expectations per the reserves established at December 31, 2007.

The Company’s A&E reserves represent management’s best estimate of the ultimate liability, however, there can be no assurance that ultimate loss payments will not exceed such reserves, perhaps by a significant amount.

No additional gross A&E reserve strengthening was made during 2008 through 2010 and only an insignificant amount of development occurred in 2011 and 2012.

| 2002 and prior | | $ | (256.9 | ) | | $ | (482.3 | ) | | $ | (70.3 | ) | | $ | (357.2 | ) | | $ | (444.6 | ) | | $ | (37.8 | ) | | $ | (79.0 | ) | | $ | (75.1 | ) | | $ | (5.4 | ) | | $ | 4.4 | | | $ | (1,804.1 | ) |

| 2003 | | | | | | | 170.3 | | | | 133.7 | | | | 109.7 | | | | 26.0 | | | | 17.5 | | | | (54.5 | ) | | | (27.1 | ) | | | (2.0 | ) | | | (7.5 | ) | | | 366.2 | |

The decrease for 2010 was attributable to a $140.8 million decrease in non-US reinsurance business (Bermuda and International), partially offset by the $109.9 million increase in the insurance and US reinsurance business.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

PART II

For the fiscal year ended December 31, [removed: 2012][added: 2013]

[removed: |] Securities registered pursuant to Section 12(b) of the Act: [removed: | | | | | | |]

| Title of Each Class Common Shares, $.01 par value per share | | [removed: | |] Name of Each Exchange on Which Registered New York Stock Exchange | [removed: | |]

The aggregate market value on June 30, [removed: 2012,] [added: 2013,] the last business day of the registrant’s most recently completed second quarter, of the voting shares held by non-affiliates of the registrant was [removed: $5,366,686] [added: $6,231,902] thousand.

At February 1, [removed: 2013,] [added: 2014,] the number of shares outstanding of the registrant’s common shares was [removed: 51,097,630.][added: 47,374,165.]

Certain information required by Items 10, 11, 12, 13 and 14 of Form 10-K is incorporated by reference into Part III hereof from the registrant’s proxy statement for the [removed: 2012] [added: 2013] Annual General Meeting of Shareholders, which will be filed with the Securities and Exchange Commission within 120 days of the close of the registrant’s fiscal year ended December 31, [removed: 2012.][added: 2013.]

[removed: | Item] [added: Item] 1. [removed: | [Business](#business) | 1 |]

[removed: | Item] [added: Item] 1A. [removed: | [Risk Factors](#riskfactors) | 28 |]

[removed: | Item 1B. | [Unresolved] [added: Unresolved] Staff [removed: Comments](#unresolved) | 40 |][added: Comments 40]

[removed: | Item] [added: Item] 2. [removed: | [Properties](#properties) | 41 |]

[removed: | Item 3. | [Legal Proceedings](#legalproceedings) | 41 |][added: Legal Proceedings 40]

10-K 1 group10k2013.htm EVEREST RE GROUP 10-K 2013

| --- | --- | --- |

Business 1

Risk Factors 27

Item 1B.

Properties 40

Item 3.

10-K 1 group10k2012.htm EVEREST RE GROUP 10-K 2012

| --- | --- | --- | --- | --- | --- | --- |

| | | |

| Item 4. | [Mine Safety Disclosures](#minesafety) | 41 |

| PART II | | |

| Item 5. | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer](#marketforregistrants) [Purchases of Equity Securities](#marketforregistrants) | 41 |

| Item 6. | [Selected Financial Data](#selectedfinancialdata) | 44 |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of](#item7) [Operations](#item7) | 45 |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#item7a) | 83 |

| Item 8. | [Financial Statements and Supplementary Data](#item8) | 83 |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial](#item9changes) [Disclosure](#item9changes) | 83 |

| Item 9A. | [Controls and Procedures](#item9a) | 83 |

| Item 9B. | [Other Information](#item9b) | 84 |

| PART III | | |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#item10) | 84 |

| Item 11. | [Executive Compensation](#item11) | 84 |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related](#item12security) [Shareholder Matters](#item12security) | 84 |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#item13) | 84 |

| Item 14. | [Principal Accountant Fees and Services](#item14) | 84 |

| PART IV | | |

| Item 15. | [Exhibits and Financial Statement Schedules](#item15) | 84 |

PART I

Unless otherwise indicated, all financial data in this document have been prepared using accounting principles generally accepted in the United States of America (“GAAP”).

As used in this document, “Group” means Everest Re Group, Ltd.; “Holdings Ireland” means Everest Underwriting Group (Ireland) Limited; “Ireland Re” means Everest Reinsurance Company (Ireland), Limited; “Holdings” means Everest Reinsurance Holdings, Inc.; “Everest Re” means Everest Reinsurance Company and its subsidiaries (unless the context otherwise requires); and the “Company”, “we”, “us”, and “our” means Everest Re Group, Ltd. and its subsidiaries.

[added: |] PART II [added: | | |]

| | | |

| | | |

| | | |

Item 5.

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 40

Item 6.

Selected Financial Data 43

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 44

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk 81

Item 8.

Financial Statements and Supplementary Data 81

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 81

Item 9A.

Controls and Procedures 81

Not Applicable.

[added: |] PART III [added: | | |]

| | | |

| | | |

| | | |

Item 10.

Directors, Executive Officers and Corporate Governance 82

Item 11.

Executive Compensation 82

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 82

Item 13.

Certain Relationships and Related Transactions, and Director Independence 82

Item 14.

Principal Accountant Fees and Services 83

| | | |

| | | |

| PART IV | | |

| | | |

Item 15.

Exhibits and Financial Statement Schedules 83

PART I

Unless otherwise indicated, all financial data in this document have been prepared using accounting principles generally accepted in the United States of America (“GAAP”).

As used in this document, “Group” means Everest Re Group, Ltd.; “Holdings Ireland” means Everest Underwriting Group (Ireland) Limited; “Ireland Re” means Everest Reinsurance Company (Ireland), Limited; “Holdings” means Everest Reinsurance Holdings, Inc.; “Everest Re” means Everest Reinsurance Company and its subsidiaries (unless the context otherwise requires); and the “Company”, “we”, “us”, and “our” means Everest Re Group, Ltd. and its subsidiaries.

| --- | --- |

None.

The Company’s other [removed: twenty] [added: nineteen] locations occupy a total of approximately [removed: 152,300] [added: 145,300] square feet, all of which are leased.

| First Quarter | | $ | [removed: 93.87] [added: 130.64] | | | $ | [removed: 83.35] [added: 110.91] | | | $ | [removed: 90.58] [added: 93.87] | | | $ | [removed: 81.61] [added: 83.35] | |

| Second Quarter | | | [removed: 105.13] [added: 135.97] | | | | [removed: 92.45] [added: 123.65] | | | | [removed: 93.76] [added: 105.13] | | | | [removed: 80.55] [added: 92.45] | |

| Third Quarter | | | [removed: 110.89] [added: 145.51] | | | | [removed: 100.30] [added: 126.36] | | | | [removed: 83.47] [added: 110.89] | | | | [removed: 73.50] [added: 100.30] | |

| Fourth Quarter | | | [removed: 114.60] [added: 159.13] | | | | [removed: 101.72] [added: 144.81] | | | | [removed: 92.60] [added: 114.60] | | | | [removed: 76.63] [added: 101.72] | |

The number of record holders of common shares as of February 1, [removed: 2013] [added: 2014] was [removed: 92.][added: 219.]

The Company declared and paid its [removed: regular] quarterly cash dividend of $0.48 per share for each of the four quarters of 2012 and [removed: 2011.][added: for the first three quarters of 2013.]

On February [removed: 20, 2013,] [added: 26, 2014,] the Company’s Board of Directors declared a dividend of [removed: $0.48] [added: $0.75] per share, payable on or before March [removed: 20, 2013] [added: 26, 2014] to shareholders of record on March [removed: 6, 2013.][added: 12, 2014.]

See “Regulatory Matters – Dividends” and ITEM 8, “Financial Statements and Supplementary Data” - Note [removed: 15] [added: 16] of Notes to Consolidated Financial Statements.

| Issuer Purchases of Equity Securities | | | | | | | | | | | | | | [added: | | |]

| | | | | | | | | | | | | [added: | |] Maximum Number (or | | [added: |]

| | | | | | | | | [added: | |] Total Number of | | | | Approximate Dollar | | [added: |]

| | | | | | | | | [added: | |] Shares (or Units) | | | | Value) of Shares (or | | [added: |]

| | | | | | | | | [added: | |] Purchased as Part | | | | Units) that May Yet | | [added: |]

| | | Total Number of | | | | | | [added: | |] of Publicly | | | | Be Purchased Under | | [added: |]

| | | Shares (or Units) | | [added: | |] Average Price Paid | | | | Announced Plans or | | | | the Plans or | | [added: |]

| Period | | Purchased | | [added: | |] per Share (or Unit) | | | | Programs | | | | Programs (1) | | [added: |]

On July 21, [removed: 2008,] [added: 2008; February 24, 2010; February 22, 2012; and May 15, 2013,] the Company’s executive committee of the [removed: board] [added: Board] of [removed: directors] [added: Directors] approved [removed: an amendment] [added: subsequent amendments] to the [removed: September 21, 2004] share repurchase program authorizing the Company and/or its subsidiary [removed: Holdings] [added: Holdings,] to purchase up to [removed: an] [added: a current] aggregate of [removed: 10,000,000] [added: 25,000,000] of the Company’s [removed: common] shares (recognizing that the number of shares authorized for repurchase has been reduced by those shares that have already been purchased) in open market transactions, privately negotiated transactions or both.

Through February [removed: 22, 2013,] [added: 21, 2014,] the Company purchased an additional [removed: 916,993] [added: 863,673] shares [removed: as part of] [added: for $127.0 million under] the share repurchase [removed: program][added: program.]

The following Performance Graph compares cumulative total shareholder returns on the Common Shares (assuming reinvestment of dividends) from December 31, [removed: 2007] [added: 2008] through December 31, [removed: 2012,] [added: 2013,] with the cumulative total return of the Standard & Poor’s 500 Index and the Standard & Poor’s Insurance (Property and Casualty) Index.

[removed: ][added: ]

| *$100 invested on [removed: 12/31/07] [added: 12/31/08] in stock or index, including reinvestment of dividends. | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Fiscal year ending December 31. | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| Copyright© [removed: 2013] [added: 2014] S&P, a division of The McGraw-Hill Companies Inc. All rights reserved. | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| | | 2013 | | | | | | | | 2012 | | | | | | |

The Company declared and paid its quarterly cash dividend of $0.75 per share for the fourth quarter of 2013.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | (a) | | | | (b) | | | | (c) | | | | (d) | | |

| January 1 - 31, 2013 | | | 343,981 | | | $ | 109.9112 | | | | 343,981 | | | | 3,962,541 | |

| February 1 - 28, 2013 | | | 692,480 | | | $ | 122.3512 | | | | 665,512 | | | | 3,297,029 | |

| March 1 - 31, 2013 | | | 943,004 | | | $ | 126.9520 | | | | 940,814 | | | | 2,356,215 | |

| April 1 - 30, 2013 | | | 88,100 | | | $ | 129.2677 | | | | 88,100 | | | | 2,268,115 | |

| May 1 - 31, 2013 | | | 1,500,308 | | | $ | 133.4148 | | | | 1,498,607 | | | | 5,769,508 | |

| June 1 - 30, 2013 | | | \- | | | $ | \- | | | | \- | | | | 5,769,508 | |

| July 1 - 31, 2013 | | | \- | | | $ | \- | | | | \- | | | | 5,769,508 | |

| August 1 - 31, 2013 | | | 417,835 | | | $ | 138.1231 | | | | 417,835 | | | | 5,351,673 | |

| September 1 - 30, 2013 | | | 311,849 | | | $ | 137.8958 | | | | 306,819 | | | | 5,044,854 | |

| October 1 - 31, 2013 | | | 37,168 | | | $ | 150.7867 | | | | 37,168 | | | | 5,007,686 | |

| November 1 - 30, 2013 | | | 53,791 | | | $ | 152.9850 | | | | 52,655 | | | | 4,955,031 | |

| December 1 - 31, 2013 | | | 426,382 | | | $ | 152.5836 | | | | 382,614 | | | | 4,572,417 | |

| Total | | | 4,814,898 | | | $ | \- | | | | 4,734,105 | | | | 4,572,417 | |

| | 12/08 | | 12/09 | | 12/10 | | 12/11 | | 12/12 | | 12/13 |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Everest Re Group, Ltd. | 100.00 | | 115.50 | | 117.12 | | 118.75 | | 158.29 | | 227.98 |

| S&P 500 | 100.00 | | 126.46 | | 145.51 | | 148.59 | | 172.37 | | 228.19 |

| S&P Property & Casualty Insurance | 100.00 | | 112.35 | | 122.39 | | 122.08 | | 146.63 | | 202.78 |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| | | 2012 | | | | | | | | 2011 | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | (a) | | | (b) | | | | (c) | | | (d) | | |

| January 1 - 31, 2012 | | \- | | | $ | \- | | | \- | | | 2,274,947 | |

| February 1 - 29, 2012 | | 587,469 | | | $ | 89.5178 | | | 558,400 | | | 6,716,547 | |

| March 1 - 31, 2012 | | 819,029 | | | $ | 91.5741 | | | 819,029 | | | 5,897,518 | |

| April 1 - 30, 2012 | | \- | | | $ | \- | | | \- | | | 5,897,518 | |

| May 1 - 31, 2012 | | 477,098 | | | $ | 100.0171 | | | 476,000 | | | 5,421,518 | |

| June 1 - 30, 2012 | | 514,957 | | | $ | 101.7417 | | | 514,957 | | | 4,906,561 | |

| July 1 - 31, 2012 | | 74,135 | | | $ | 104.9270 | | | \- | | | 4,906,561 | |

| August 1 - 31, 2012 | | \- | | | $ | \- | | | \- | | | 4,906,561 | |

| September 1 - 30, 2012 | | 232,355 | | | $ | 109.2467 | | | 229,100 | | | 4,677,461 | |

| October 1 - 31, 2012 | | \- | | | $ | \- | | | \- | | | 4,677,461 | |

| November 1 - 30, 2012 | | 252,927 | | | $ | 107.1269 | | | 252,064 | | | 4,425,397 | |

| December 1 - 31, 2012 | | 143,507 | | | $ | 108.9761 | | | 118,875 | | | 4,306,522 | |

| Total | | 3,101,477 | | | $ | \- | | | 2,968,425 | | | 4,306,522 | |

On February 24, 2010, the Company’s executive committee of the board of directors approved an amendment to the September 21, 2004, share repurchase program and the July 21, 2008, amendment authorizing the Company and/or its subsidiary Holdings, to purchase up to 15,000,000 of the Company’s common shares (recognizing that the number of shares authorized for repurchase has been reduced by those shares that have already been purchased) in open market transactions, privately negotiated transactions or both.

On February 22, 2012, the Company’s executive committee of the Board of Directors approved an amendment to the September 21, 2004 share repurchase program, the July 21, 2008 amendment and the February 24, 2010 amendment authorizing the Company and/or its subsidiary Holdings, to purchase up to 20,000,000 of the Company’s common shares (recognizing that the number of shares authorized for repurchase has been reduced by those shares that have already been purchased) in open market transactions, privately negotiated transactions or both.

| | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | 12/07 | | | | 12/08 | | | | 12/09 | | | | 12/10 | | | | 12/11 | | | | 12/12 | | |

| Everest Re Group, Ltd. | | | 100.00 | | | | 77.67 | | | | 89.71 | | | | 90.97 | | | | 92.23 | | | | 122.94 | |

| S&P 500 | | | 100.00 | | | | 63.00 | | | | 79.67 | | | | 91.67 | | | | 93.61 | | | | 108.59 | |

| S&P Property & Casualty Insurance | | | 100.00 | | | | 70.59 | | | | 79.30 | | | | 86.39 | | | | 86.18 | | | | 103.51 | |

The following selected consolidated GAAP financial data of the Company as of and for the years ended December 31, [added: 2013,] 2012, 2011, [removed: 2010, 2009] [added: 2010] and [removed: 2008,] [added: 2009,] were derived from the audited consolidated financial statements of the Company.

| (Dollars in millions, except per share amounts) | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | | | [removed: 2008] [added: 2009] | | |

| Gross written premiums | | $ | [removed: 4,310.5] [added: 5,218.6] | | | $ | [removed: 4,286.2] [added: 4,310.5] | | | $ | [removed: 4,200.7] [added: 4,286.2] | | | $ | [removed: 4,129.0] [added: 4,200.7] | | | $ | [removed: 3,678.1] [added: 4,129.0] | |

| Net written premiums | | | [removed: 4,081.1] [added: 5,004.8] | | | | [removed: 4,108.9] [added: 4,081.1] | | | | [removed: 3,945.6] [added: 4,108.9] | | | | [removed: 3,929.8] [added: 3,945.6] | | | | [removed: 3,505.2] [added: 3,929.8] | |

| Premiums earned | | | [removed: 4,164.6] [added: 4,753.5] | | | | [removed: 4,101.3] [added: 4,164.6] | | | | [removed: 3,934.6] [added: 4,101.3] | | | | [removed: 3,894.1] [added: 3,934.6] | | | | [removed: 3,694.3] [added: 3,894.1] | |

| Net investment income | | | [removed: 600.2] [added: 548.5] | | | | [removed: 620.0] [added: 600.2] | | | | [removed: 653.5] [added: 620.0] | | | | [removed: 547.8] [added: 653.5] | | | | [removed: 565.9] [added: 547.8] | |

| Realized gain on debt repurchase | | | \- | | | | \- | | | | \- | | | | [removed: 78.3] [added: \-] | | | | [removed: \-] [added: 78.3] | |

| Net realized capital gains (losses) | | | [removed: 164.4] [added: 300.2] | | | | [removed: 6.9] [added: 164.4] | | | | [removed: 101.9] [added: 6.9] | | | | [removed: (2.3] [added: 101.9] | [removed: )] | | | [removed: (695.8] [added: (2.3] | ) |

| expenses (including catastrophes) | | | [removed: 2,745.3] [added: 2,800.3] | | | | [removed: 3,726.2] [added: 2,745.3] | | | | [removed: 2,945.7] [added: 3,726.2] | | | | [removed: 2,374.1] [added: 2,945.7] | | | | [removed: 2,439.0] [added: 2,374.1] | |

| Net catastrophe losses (1) | | | [removed: 361.1] [added: 177.7] | | | | [removed: 1,237.6] [added: 361.1] | | | | [removed: 544.1] [added: 1,237.6] | | | | [removed: 65.2] [added: 544.1] | | | | [removed: 307.2] [added: 65.2] | |

| Commission, brokerage, taxes and fees | | | [removed: 952.7] [added: 977.6] | | | | [removed: 950.5] [added: 952.7] | | | | [removed: 931.9] [added: 950.5] | | | | [removed: 928.3] [added: 931.9] | | | | [removed: 930.7] [added: 928.3] | |

| Other underwriting expenses | | | [removed: 207.7] [added: 237.1] | | | | [removed: 182.4] [added: 207.7] | | | | [removed: 166.3] [added: 182.4] | | | | [removed: 167.2] [added: 166.3] | | | | [removed: 148.5] [added: 167.2] | |

| Corporate expenses | | | [removed: 24.0] [added: 24.8] | | | | [removed: 16.5] [added: 24.0] | | | | [removed: 14.9] [added: 16.5] | | | | [removed: 17.6] [added: 14.9] | | | | [removed: 13.8] [added: 17.6] | |

| amortization expense | | | [removed: 53.7] [added: 46.1] | | | | [removed: 52.3] [added: 53.7] | | | | [removed: 55.8] [added: 52.3] | | | | [removed: 72.1] [added: 55.8] | | | | [removed: 79.2] [added: 72.1] | |

| Income (loss) before taxes | | | [added: 1,555.0 | | | |] 939.5 | | | | (233.9 | ) | | | 591.2 | | | | 939.3 | | [removed: | | (83.6 | ) |]

| Income tax expense (benefit) | | | [added: 289.7 | | | |] 110.6 | | | | (153.5 | ) | | | (19.5 | ) | | | 132.3 | | [removed: | | (64.8 | ) |]

| Net income (loss) (2) | | | [added: 1,265.3 | | | |] 829.0 | | | | (80.5 | ) | | | 610.8 | | | | 807.0 | | [removed: | | (18.8 | ) |]

| EARNINGS PER COMMON [removed: SHARE:] [added: SHARE ATTRIBUTABLE TO EVEREST RE:] | | | | | | | | | | | | | | | | | | | | |

| Basic (3) | | $ | [removed: 15.85] [added: 25.67] | | | $ | [removed: (1.49] [added: 15.85] | [removed: )] | | $ | [removed: 10.73] [added: (1.49] | [added: )] | | $ | [removed: 13.26] [added: 10.73] | | | $ | [removed: (0.30] [added: 13.26] | [removed: )] |

| Diluted (4) | | $ | [removed: 15.79] [added: 25.44] | | | $ | [removed: (1.49] [added: 15.79] | [removed: )] | | $ | [removed: 10.70] [added: (1.49] | [added: )] | | $ | [removed: 13.22] [added: 10.70] | | | $ | [removed: (0.30] [added: 13.22] | [removed: )] |

| Dividends declared | | $ | [removed: 1.92] [added: 2.19] | | | $ | 1.92 | | | $ | 1.92 | | | $ | 1.92 | | | $ | 1.92 | |

| Loss ratio | | | [removed: 65.9] [added: 58.9] | % | | | [removed: 90.9] [added: 65.9] | % | | | [removed: 74.9] [added: 90.9] | % | | | [removed: 61.0] [added: 74.9] | % | | | [removed: 66.0] [added: 61.0] | % |

| Other underwriting expense ratio | | | [removed: 27.9] [added: 25.6] | % | | | [removed: 27.6] [added: 27.9] | % | | | [removed: 27.9] [added: 27.6] | % | | | [removed: 28.1] [added: 27.9] | % | | | [removed: 29.2] [added: 28.1] | % |

| Combined ratio (2) | | | [removed: 93.8] [added: 84.5] | % | | | [removed: 118.5] [added: 93.8] | % | | | [removed: 102.8] [added: 118.5] | % | | | [removed: 89.1] [added: 102.8] | % | | | [removed: 95.2] [added: 89.1] | % |

| Total investments and cash | | $ | [removed: 16,576.2] [added: 16,596.5] | | | $ | [removed: 15,797.4] [added: 16,576.2] | | | $ | [removed: 15,365.0] [added: 15,797.4] | | | $ | [removed: 14,918.8] [added: 15,365.0] | | | $ | [removed: 13,714.3] [added: 14,918.8] | |

| Total assets | | | [removed: 19,777.9] [added: 19,808.0] | | | | [removed: 18,893.6] [added: 19,777.9] | | | | [removed: 18,384.2] [added: 18,893.6] | | | | [removed: 17,970.9] [added: 18,384.2] | | | | [removed: 16,814.3] [added: 17,970.9] | |

| Loss and LAE reserves | | | [removed: 10,069.1] [added: 9,673.2] | | | | [removed: 10,123.2] [added: 10,069.1] | | | | [removed: 9,340.2] [added: 10,123.2] | | | | [removed: 8,937.9] [added: 9,340.2] | | | | [removed: 8,840.7] [added: 8,937.9] | |

| Total debt | | | [removed: 818.2] [added: 488.3] | | | | [removed: 818.1] [added: 818.2] | | | | [removed: 868.1] [added: 818.1] | | | | [removed: 1,018.0] [added: 868.1] | | | | [removed: 1,179.1] [added: 1,018.0] | |

| Total liabilities | | | [removed: 13,044.4] [added: 12,746.4] | | | | [removed: 12,822.2] [added: 13,044.4] | | | | [removed: 12,100.7] [added: 12,822.2] | | | | [removed: 11,869.2] [added: 12,100.7] | | | | [removed: 11,853.9] [added: 11,869.2] | |

| Shareholders' equity | | | [removed: 6,733.5] [added: 6,968.3] | | | | [removed: 6,071.4] [added: 6,733.5] | | | | [removed: 6,283.5] [added: 6,071.4] | | | | [removed: 6,101.7] [added: 6,283.5] | | | | [removed: 4,960.4] [added: 6,101.7] | |