Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements and Schedules.

The financial statements and schedules listed in the accompanying Index to Financial Statements and Schedules on page F-1 are filed as part of this report.

Exhibits.

The exhibits listed on the accompanying Index to Exhibits on page E-1 are filed as part of this report except that the certifications in Exhibit 32 are being furnished to the SEC, rather than filed with the SEC, as permitted under applicable SEC rules.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 2, 2015.

	EVEREST RE GROUP, LTD.


	By:	/S/ DOMINIC J. ADDESSO
		Dominic J. Addesso
		(President and Chief Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/S/ DOMINIC J. ADDESSO	President and Chief Executive Officer and Director (Principal Executive Officer)	March 2, 2015
Dominic J. Addesso

/S/ CRAIG HOWIE	Executive Vice President and Chief Financial Officer	March 2, 2015
Craig Howie

/S/ KEITH T. SHOEMAKER	Comptroller (Principal Accounting Officer)	March 2, 2015
Keith T. Shoemaker

/S/ JOSEPH V. TARANTO	Chairman	March 2, 2015
Joseph V. Taranto

/S/ JOHN J. AMORE	Director	March 2, 2015
John J. Amore

/S/ JOHN R. DUNNE	Director	March 2, 2015
John R. Dunne

/S/ WILLIAM F. GALTNEY, JR.	Director	March 2, 2015
William F. Galtney, Jr.

/S/ GERALDINE LOSQUADRO	Director	March 2, 2015
Geraldine Losquadro

/S/ ROGER M. SINGER	Director	March 2, 2015
Roger M. Singer

/S/ JOHN A. WEBER	Director	March 2, 2015
John A. Weber

INDEX TO EXHIBITS

Exhibit No.

		2.1	Agreement and Plan of Merger among Everest Reinsurance Holdings, Inc., Everest Re Group, Ltd. and Everest Re Merger Corporation, incorporated herein by reference to Exhibit 2.1 to the Registration Statement on Form S-4 (No. 333-87361)

		3.1	Memorandum of Association of Everest Re Group, Ltd., incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form S-4 (No. 333-87361)

		3.2	Bye-Laws of Everest Re Group, Ltd., incorporated herein by reference to exhibit 3.2 to the Everest Re Group, Ltd., Quarterly Report for Form 10-Q for the quarter ended June 30, 2011 (the “second quarter 2011 10-Q”)

		4.1	Specimen Everest Re Group, Ltd. common share certificate, incorporated herein by reference to Exhibit 4.1 of the Registration Statement on Form S-4 (No. 333-87361)

		4.2	Indenture, dated March 14, 2000, between Everest Reinsurance Holdings, Inc. and The Chase Manhattan Bank (now known as JPMorgan Chase Bank), as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on March 15, 2000

		4.3	Junior Subordinated Indenture, dated November 14, 2002, between Everest Reinsurance Holdings, Inc. and JPMorgan Chase Bank as Trustee, incorporated herein by reference to Exhibit 4.5 to the Registration Statement on Form S-3 (No. 333-106595)

		4.4	Second Supplemental Indenture relating to Holdings 6.20% Junior Subordinated Debt Securities due March 29, 2034, dated as of March 29, 2004, among Holdings, Group and JPMorgan Chase Bank, as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on March 30, 2004 (the “March 30, 2004 8-K”)

		4.5	Amended and Restated Trust Agreement of Everest Re Capital Trust II, dated as of March 29, 2004, incorporated herein by reference to Exhibit 4.2 to the March 30, 2004 8-K

		4.6	Guarantee Agreement, dated as of March 29, 2004, between Holdings and JPMorgan Chase Bank, incorporated herein by reference to Exhibit 4.3 to the March 30, 2004 8-K

		4.7	Expense Agreement, dated as of March 29, 2004, between Holdings and Everest Re Capital Trust, incorporated herein by reference to Exhibit 4.4 to the March 30, 2004 8-K

		4.8	Third Supplemental Indenture relating to Holdings 5.40% Senior Notes due October 15, 2014, dated as of October 12, 2004, among Holdings and JPMorgan Chase Bank, as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on October 12, 2004

		4.9	Fourth Supplemental Indenture relating to Holdings $400.0 million 4.868% Senior Notes due June 1, 2044, dated June 5, 2014, between Holdings and The Bank of New York Mellon, as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on June 5, 2014

	*	10.1	Everest Re Group, Ltd. Annual Incentive Plan effective January 1, 1999, incorporated herein by reference to Exhibit 10.1 to Everest Reinsurance Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 1998 (the “1998 10-K”)

E-1

	*	10.2		Everest Re Group, Ltd. 1995 Stock Option Plan for Non-Employee Directors, incorporated herein by reference to Exhibit 4.3 to the Registration Statement on Form S-8 (No. 333-05771)

	*	10.3		Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan, incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-8 (No. 333-105483)

*	10.4	Form of Non-Qualified Stock Option Award Agreement under the Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan, incorporated herein by reference to Exhibit 10.47 to Everest Re Group, Ltd., Report on Form 10-K for the year ended December 31, 2004
*	10.5	Amendment of Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan adopted by shareholders at the annual general meeting on May 25, 2005, incorporated herein by reference to Appendix B to the 2005 Proxy Statement filed on April 14, 2005
*	10.6	Form of Restricted Stock Award Agreement under the Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan, incorporated by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on September 22, 2005

	10.7	Completion of Tender Offer relating to Everest Reinsurance Holdings, Inc. 6.60% Fixed to Floating Rate Long Term Subordinated Notes (LoTSSM) dated March 19, 2009, incorporated herein by reference to Exhibit 99.1 to Everest Re Group, Ltd. Form 8-K filed on March 31, 2009

*	10.8	Everest Re Group, Ltd. 2009 Stock Option and Restricted Stock Plan for Non-Employee Directors incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. second quarter 2009 10-Q

*	10.9	Everest Re Group, Ltd. 2010 Stock Incentive Plan for employees is incorporated herein by reference to exhibit 10.2 to Everest Re Group, Ltd. Form S-8 filed on September 30, 2010

*	10.10	Amendment of Executive Performance Annual Incentive Plan adopted by shareholders at the annual general meeting on May 18, 2011, incorporated herein by reference to Appendix B to the 2011 Proxy Statement filed on April 15, 2011

*	10.11	Employment Agreement between Everest Global Services, Inc., Everest Reinsurance Holdings, Inc. and Dominic J. Addesso, dated June 16, 2011, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on June 20, 2011

*	10.12	Employment Agreement between Everest Global Services, Inc., Everest Reinsurance Holdings, Inc. and Joseph V. Taranto, dated January 1, 2011, This employment supersedes the prior agreement between registrant and Joseph V. Taranto dated March 25, 2011. This new agreement dated January 1, 2011, incorporated herein by reference to Exhibit 10.2 to Everest Re Group, Ltd. Form 8-K filed on June 20, 2011

	10.13	Credit Agreement, dated August 15, 2011, between Everest Reinsurance Holdings, Inc., the lenders named therein and Citibank, National Association, as administrative agent, providing for a $150.0 million three year revolving credit facility, filed herewith. This new agreement replaces the August 23, 2006 five year senior revolving credit facility

E-2

	10.14	Credit Agreement, dated June 22, 2012, between Everest Re Group, Ltd., Everest Reinsurance (Bermuda), Ltd. and Everest International Reinsurance, Ltd., certain lenders party thereto and Wells Fargo Bank, N.A. as administrative agent, providing for an $800.0 million four year senior credit facility, incorporated herein by reference to Exhibit 10.31 to Everest Re Group, Ltd. Form 10-Q filed on August 9, 2012. This new agreement replaces the July 27, 2007 five year, $850.0 million senior credit facility

*	10.15	Employment agreement between Everest Global Services, Inc., Everest Reinsurance Holdings, Inc. and Dominic J. Addesso, dated July 1, 2012, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on July 20, 2012

*	10.16	Employment agreement between Everest Global Services, Inc., Everest Reinsurance Holdings, Inc. and Joseph V. Taranto, dated July 1, 2012, incorporated herein by reference to Exhibit 10.2 to Everest Re Group, Ltd. Form 8-K filed on July 20, 2012

*	10.17	Change of Control Agreement between and among Everest Reinsurance Company, Everest Reinsurance Holdings, Inc., Everest Re Group, Ltd., Everest Global Services, Inc. and Joseph V. Taranto, dated January 1, 2012, incorporated herein by reference to Exhibit 10.3 to Everest Re Group, Ltd. Form 8-K filed on July 20, 2012

*	10.18	Employment agreement between Everest Reinsurance (Bermuda), Ltd. and Mark S. deSaram, dated September 13, 2012, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on December 4, 2012

*	10.19	Chairmanship agreement between Everest Re Group, Ltd. and Joseph V. Taranto, dated June 19, 2013 and effective January 1, 2014, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on June 24, 2013.

*	10.20	Employment agreement between Everest Global Services, Inc., and Sanjoy Mukherjee, dated September 1, 2013, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on August 16, 2013

*	10.21	Employment agreement between Everest Global Services, Inc., and John P. Doucette, dated September 1, 2013, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on September 13, 2013

*	10.22	Employment agreement between Everest Reinsurance (Bermuda), Ltd. and Mark S. deSaram, dated September 24, 2014, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on September 29, 2014.

	21.1	Subsidiaries of the registrant, filed herewith

	23.1	Consent of PricewaterhouseCoopers LLP, filed herewith

31.1		Section 302 Certification of Dominic J. Addesso, filed herewith

31.2		Section 302 Certification of Craig Howie, filed herewith

32.1		Section 906 Certification of Dominic J. Addesso and Craig Howie, furnished herewith

E-3


	101.INS	XBRL Instance Document

	101.SCH	XBRL Taxonomy Extension Schema

	101.CAL	XBRL Taxonomy Extension Calculation Linkbase

	101.DEF	XBRL Taxonomy Extension Definition Linkbase

	101.LAB	XBRL Taxonomy Extension Label Linkbase

	101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Management contract or compensatory plan or arrangement.

E-4

EVEREST RE GROUP, LTD.


INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

			Pages

Report of Independent Registered Public Accounting Firm			F-2

Consolidated Balance Sheets at December 31, 2014 and 2013			F-4

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended
	December 31, 2014, 2013 and 2012		F-5

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended
	December 31, 2014, 2013 and 2012		F-6

Consolidated Statements of Cash Flows for the Years Ended
	December 31, 2014, 2013, and 2012		F-7

Notes to Consolidated Financial Statements			F-8

Schedules

I	Summary of Investments Other Than Investments in Related Parties at December 31, 2014		S-1

II	Condensed Financial Information of Registrant:

		Balance Sheets as of December 31, 2014 and 2013	S-2

		Statements of Operations for the Years Ended December 31, 2014, 2013 and 2012	S-3

		Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012	S-4

		Notes to Condensed Financial Information	S-5

III	Supplementary Insurance Information for the Years Ended
		December 31, 2014, 2013 and 2012	S-6

IV	Reinsurance for the Years Ended December 31, 2014, 2013 and 2012		S-7

Schedules other than those listed above are omitted for the reason that they are not applicable or the information is otherwise contained in the Financial Statements.

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Everest Re Group, Ltd.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Everest Re Group, Ltd. and its subsidiaries (the “Company”) at December 31, 2014 and 2013 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014 based on criteria established in Internal Control - Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedules, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedules, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PricewaterhouseCoopers, LLP

New York, New York

March 2, 2015

F-3

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

	December 31,
(Dollars and share amounts in thousands, except par value per share)	2014			2013

ASSETS:
Fixed maturities - available for sale, at market value	$	13,101,067		$	12,636,907
(amortized cost: 2014, $12,831,159; 2013, $12,391,164)
Fixed maturities - available for sale, at fair value		1,509			19,388
Equity securities - available for sale, at market value (cost: 2014, $148,326; 2013, $148,342)		140,210			144,081
Equity securities - available for sale, at fair value		1,447,820			1,462,079
Short-term investments		1,705,932			1,214,199
Other invested assets (cost: 2014, $601,925; 2013, $508,447)		601,925			508,447
Cash		437,474			611,382
Total investments and cash		17,435,937			16,596,483
Accrued investment income		111,075			119,058
Premiums receivable		1,397,983			1,453,114
Reinsurance receivables		670,854			540,883
Funds held by reinsureds		228,192			228,000
Deferred acquisition costs		398,408			363,721
Prepaid reinsurance premiums		154,177			81,779
Income taxes		184,762			178,334
Other assets		236,436			246,664
TOTAL ASSETS	$	20,817,824		$	19,808,036

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	9,720,813		$	9,673,240
Future policy benefit reserve		59,820			59,512
Unearned premium reserve		1,728,745			1,579,945
Funds held under reinsurance treaties		3,932			2,692
Commission reserves		87,990			66,160
Other net payable to reinsurers		139,841			116,387
Losses in course of payment		157,527			332,631
4.868% Senior notes due 6/1/2044		400,000			-
5.4% Senior notes due 10/15/2014		-			249,958
6.6% Long term notes due 5/1/2067		238,364			238,361
Accrued interest on debt and borrowings		3,537			4,781
Equity index put option liability		47,022			35,423
Unsettled securities payable		41,092			53,867
Other liabilities		316,469			333,425
Total liabilities		12,945,152			12,746,382

NONCONTROLLING INTERESTS:
Redeemable noncontrolling interests - Mt. Logan Re		421,552			93,378

Commitments and contingencies (Note 17)

SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50,000 shares authorized;
no shares issued and outstanding		-			-
Common shares, par value: $0.01; 200,000 shares authorized; (2014) 68,336
and (2013) 67,965 outstanding before treasury shares		683			680
Additional paid-in capital		2,068,807			2,029,774
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $20,715 at 2014 and $57,661 at 2013		48,317			157,728
Treasury shares, at cost; 23,650 shares (2014) and 20,422 shares (2013)		(2,485,897	)		(1,985,873	)
Retained earnings		7,819,210			6,765,967
Total shareholders' equity attributable to Everest Re Group		7,451,120			6,968,276
TOTAL LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY	$	20,817,824		$	19,808,036

The accompanying notes are an integral part of the consolidated financial statements.

F-4

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
(Dollars in thousands, except per share amounts)	2014			2013			2012

REVENUES:
Premiums earned	$	5,169,135		$	4,753,543		$	4,164,628
Net investment income		530,570			548,509			600,202
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities		(39,502	)		(1,052	)		(10,022	)
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income (loss)		-			-			-
Other net realized capital gains (losses)		123,548			301,279			174,422
Total net realized capital gains (losses)		84,046			300,227			164,400
Net derivative gain (loss)		(11,599	)		44,044			(9,738	)
Other income (expense)		18,437			(5,487	)		3,318
Total revenues		5,790,589			5,640,836			4,922,810

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		2,906,534			2,800,251			2,745,265
Commission, brokerage, taxes and fees		1,135,586			977,558			952,701
Other underwriting expenses		240,400			237,126			207,659
Corporate expenses		23,421			24,817			23,976
Interest, fees and bond issue cost amortization expense		38,533			46,118			53,683
Total claims and expenses		4,344,474			4,085,870			3,983,284

INCOME (LOSS) BEFORE TAXES		1,446,115			1,554,966			939,526
Income tax expense (benefit)		187,652			289,706			110,572

NET INCOME (LOSS)	$	1,258,463		$	1,265,260		$	828,954
Net (income) loss attributable to noncontrolling interests		(59,307	)		(5,878	)		-
NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP	$	1,199,156		$	1,259,382		$	828,954

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		704			(395,797	)		174,025
Reclassification adjustment for realized losses (gains) included in net income (loss)		21,392			(6,977	)		(19,676	)
Total URA(D) on securities arising during the period		22,096			(402,774	)		154,349

Foreign currency translation adjustments		(95,417	)		(162	)		22,698

Benefit plan actuarial net gain (loss) for the period		(39,110	)		17,837			(11,771	)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		3,020			5,778			4,795
Total benefit plan net gain (loss) for the period		(36,090	)		23,615			(6,976	)
Total other comprehensive income (loss), net of tax		(109,411	)		(379,321	)		170,071
Other comprehensive (income) loss attributable to noncontrolling interests		-			-			-
Total other comprehensive income (loss), net of tax attributable to Everest Re Group		(109,411	)		(379,321	)		170,071

COMPREHENSIVE INCOME (LOSS)	$	1,089,745		$	880,061		$	999,025

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO EVEREST RE GROUP:
Basic	$	26.16		$	25.67		$	15.85
Diluted		25.91			25.44			15.79
Dividends declared		3.20			2.19			1.92

The accompanying notes are an integral part of the consolidated financial statements.

F-5

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY

	Years Ended December 31,
(Dollars in thousands, except share and dividends per share amounts)	2014			2013			2012

COMMON SHARES (shares outstanding):
Balance, beginning of period		47,543,132			51,417,962			53,735,551
Issued during the period, net		371,359			859,275			650,836
Treasury shares acquired		(3,228,854	)		(4,734,105	)		(2,968,425	)
Balance, end of period		44,685,637			47,543,132			51,417,962

COMMON SHARES (par value):
Balance, beginning of period	$	680		$	671		$	665
Issued during the period, net		3			9			6
Balance, end of period		683			680			671

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period		2,029,774			1,946,439			1,892,988
Share-based compensation plans		39,033			83,335			53,451
Balance, end of period		2,068,807			2,029,774			1,946,439

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, beginning of period		157,728			537,049			366,978
Net increase (decrease) during the period		(109,411	)		(379,321	)		170,071
Balance, end of period		48,317			157,728			537,049

RETAINED EARNINGS:
Balance, beginning of period		6,765,967			5,613,266			4,884,714
Net income (loss) attributable to Everest Re Group		1,199,156			1,259,382			828,954
Dividends declared ($3.20 per share in 2014, $2.19 per share in
2013 and $1.92 per share in 2012)		(145,913	)		(106,681	)		(100,402	)
Balance, end of period		7,819,210			6,765,967			5,613,266

TREASURY SHARES AT COST:
Balance, beginning of period		(1,985,873	)		(1,363,958	)		(1,073,970	)
Purchase of treasury shares		(500,024	)		(621,915	)		(289,988	)
Balance, end of period		(2,485,897	)		(1,985,873	)		(1,363,958	)

TOTAL SHAREHOLDERS' EQUITY, END OF PERIOD	$	7,451,120		$	6,968,276		$	6,733,467

The accompanying notes are an integral part of the consolidated financial statements.

F-6

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,258,463		$	1,265,260		$	828,954
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		45,282			(217,678	)		(153,694	)
Decrease (increase) in funds held by reinsureds, net		(1,835	)		162			42,298
Decrease (increase) in reinsurance receivables		(186,014	)		118,963			(55,274	)
Decrease (increase) in income taxes		31,340			213,848			38,078
Decrease (increase) in prepaid reinsurance premiums		(79,086	)		(12,777	)		16,358
Increase (decrease) in reserve for losses and loss adjustment expenses		195,524			(374,027	)		(169,595	)
Increase (decrease) in future policy benefit reserve		308			(6,595	)		(1,080	)
Increase (decrease) in unearned premiums		161,149			261,959			(98,418	)
Increase (decrease) in other net payable to reinsurers		29,410			(45,043	)		100,566
Increase (decrease) in losses in course of payment		(174,206	)		142,192			173,232
Change in equity adjustments in limited partnerships		(39,464	)		(45,905	)		(63,779	)
Distribution of limited partnership income		51,120			56,982			30,718
Change in other assets and liabilities, net		35,419			(57,212	)		76,788
Non-cash compensation expense		21,197			31,844			31,984
Amortization of bond premium (accrual of bond discount)		49,214			66,461			61,844
Amortization of underwriting discount on senior notes		46			54			52
Net realized capital (gains) losses		(84,046	)		(300,227	)		(164,400	)
Net cash provided by (used in) operating activities		1,313,821			1,098,261			694,632

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		2,142,693			2,415,730			1,830,582
Proceeds from fixed maturities matured/called - available for sale, at fair value		875			7,213			1,300
Proceeds from fixed maturities sold - available for sale, at market value		1,811,801			1,092,387			913,139
Proceeds from fixed maturities sold - available for sale, at fair value		36,467			21,573			84,917
Proceeds from equity securities sold - available for sale, at market value		16,901			46,142			280,807
Proceeds from equity securities sold - available for sale, at fair value		584,069			705,831			558,740
Distributions from other invested assets		115,482			100,081			53,736
Cost of fixed maturities acquired - available for sale, at market value		(4,672,633	)		(3,543,776	)		(3,328,409	)
Cost of fixed maturities acquired - available for sale, at fair value		(24,098	)		(6,196	)		(7,955	)
Cost of equity securities acquired - available for sale, at market value		(18,016	)		(59,756	)		(26,571	)
Cost of equity securities acquired - available for sale, at fair value		(446,457	)		(621,038	)		(426,507	)
Cost of other invested assets acquired		(224,740	)		(21,935	)		(58,369	)
Net change in short-term investments		(497,983	)		(357,451	)		(175,043	)
Net change in unsettled securities transactions		(4,433	)		(2,808	)		35,085
Net cash provided by (used in) investing activities		(1,180,072	)		(224,003	)		(264,548	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period, net		17,839			51,500			21,473
Purchase of treasury shares		(500,024	)		(621,915	)		(289,988	)
Net cost of junior subordinated debt securities redemption		-			(329,897	)		-
Net cost of senior notes maturing		(250,000	)		-			-
Proceeds from issuance of senior notes		400,000			-			-
Third party investment in redeemable noncontrolling interest		136,200			87,500			-
Subscription advances for third party redeemable noncontrolling interest		40,000			143,000			-
Dividends paid to shareholders		(145,913	)		(106,681	)		(100,402	)
Dividends paid on third party investment in redeemable noncontrolling interest		(10,334	)		-			-
Net cash provided by (used in) financing activities		(312,232	)		(776,493	)		(368,917	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		4,575			(23,433	)		27,232

Net increase (decrease) in cash		(173,908	)		74,332			88,399
Cash, beginning of period		611,382			537,050			448,651
Cash, end of period	$	437,474		$	611,382		$	537,050

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	153,455		$	69,302		$	59,754
Interest paid		39,424			38,390			53,008

Non-cash transaction:
Conversion of equity securities - available for sale, at market value, to fixed maturity securities -
available for sale, at market value, including accrued interest at time of conversion		-			-			92,981


The accompanying notes are an integral part of the consolidated financial statements.

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2014, 2013 and 2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Business and Basis of Presentation.

Everest Re Group, Ltd. (“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets. As used in this document, “Company” means Group and its subsidiaries.

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.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The statements include all of the following domestic and foreign direct and indirect subsidiaries of Group: Everest International Reinsurance, Ltd. (“Everest International”), Everest Global Services, Inc. (“Global Services”), Mt. Logan Re, Ltd., Everest Reinsurance (Bermuda), Ltd. (“Bermuda Re”), Everest Re Advisors, Ltd., Everest Advisors (UK), Ltd., Everest Underwriting Group (Ireland), Limited (“Holdings Ireland”), Everest Reinsurance Company (Ireland) Limited (“Ireland Re”), Everest Insurance Company of Canada (“Everest Canada”), Premiere Insurance Underwriting Services (“Premiere”), Everest Reinsurance Holdings, Inc. (“Holdings”), Heartland Crop Insurance, Inc. (“Heartland”), Specialty Insurance Group, Inc. (“Specialty”), Specialty Insurance Group - Leisure and Entertainment Risk Purchasing Group LLC (“Specialty RPG”), Mt. McKinley Insurance Company (“Mt. McKinley”), Mt. McKinley Managers, L.L.C., Workcare Southeast, Inc., Workcare Southeast of Georgia, Inc., Everest Reinsurance Company (“Everest Re”), Everest National Insurance Company (“Everest National”), Everest Reinsurance Company Ltda. (Brazil), Mt. Whitney Securities, Inc., Everest Indemnity Insurance Company (“Everest Indemnity”) and Everest Security Insurance Company (“Everest Security”). All amounts are reported in U.S. dollars.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.

All intercompany accounts and transactions have been eliminated.

Certain reclassifications and format changes have been made to prior years’ amounts to conform to the 2014 presentation. One reclassification relates to a correction in the manner in which the Company reports distributions received from limited partnership investments in the consolidated Statements of Cash Flows. Prior to the fourth quarter of 2013, the Company incorrectly reflected all distributions as cash flows from investing activities in its Consolidated Statements of Cash Flows. Starting with the fourth quarter of 2013, cash distributions from the limited partnerships that represent net investment income are reflected as cash flows from operating activities and distributions that represent the return of capital contributions are reflected as cash flows from investing activities. For the year ended December 31, 2012, $30,718 thousand has been reclassified from “Distributions from other invested assets” included in cash flows from investing activities to “Distribution of limited partnership income” included in cash flows from operations. The Company has determined that this error is not material to the financial statements of any prior period.

F-8

B. Investments.

Fixed maturity and equity security investments available for sale, at market value, reflect unrealized appreciation and depreciation, as a result of temporary changes in market value during the period, in shareholders’ equity, net of income taxes in “accumulated other comprehensive income (loss)” in the consolidated balance sheets. Fixed maturity and equity securities carried at fair value reflect fair value re-measurements as net realized capital gains and losses in the consolidated statements of operations and comprehensive income (loss). The Company records changes in fair value for its fixed maturities available for sale, at market value through shareholders’ equity, net of taxes in accumulated other comprehensive income (loss) since cash flows from these investments will be primarily used to settle its reserve for losses and loss adjustment expense liabilities. The Company anticipates holding these investments for an extended period as the cash flow from interest and maturities will fund the projected payout of these liabilities. Fixed maturities carried at fair value represent a portfolio of convertible bond securities, which have characteristics similar to equity securities and at times, designated foreign denominated fixed maturity securities, which will be used to settle loss and loss adjustment reserves in the same currency. The Company carries all of its equity securities at fair value except for mutual fund investments whose underlying investments are comprised of fixed maturity securities. For equity securities, available for sale, at fair value, the Company reflects changes in value as net realized capital gains and losses since these securities may be sold in the near term depending on financial market conditions. Interest income on all fixed maturities and dividend income on all equity securities are included as part of net investment income in the consolidated statements of operations and comprehensive income (loss). Unrealized losses on fixed maturities, which are deemed other-than-temporary and related to the credit quality of a security, are charged to net income (loss) as net realized capital losses. Short-term investments are stated at cost, which approximates market value. Realized gains or losses on sales of investments are determined on the basis of identified cost. For non-publicly traded securities, market prices are determined through the use of pricing models that evaluate securities relative to the U.S. Treasury yield curve, taking into account the issue type, credit quality, and cash flow characteristics of each security. For publicly traded securities, market value is based on quoted market prices or valuation models that use observable market inputs. When a sector of the financial markets is inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. Retrospective adjustments are employed to recalculate the values of asset-backed securities. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used to effect the calculation of projected and prepayments for pass-through security types. Other invested assets include limited partnerships and rabbi trusts. Limited partnerships are accounted for under the equity method of accounting, which can be recorded on a monthly or quarterly lag.

C. Uncollectible Receivable Balances.

The Company provides reserves for uncollectible reinsurance recoverable and premium receivable balances based on management’s assessment of the collectability of the outstanding balances. Such reserves are presented in the table below for the periods indicated.

		Years Ended December 31,
(Dollars in thousands)		2014				2013
Reinsurance receivables and premium receivables		$	29,497			$	29,905

F-9

D. Deferred Acquisition Costs.

Acquisition costs, consisting principally of commissions and brokerage expenses and certain premium taxes and fees incurred at the time a contract or policy is issued and that vary with and are directly related to the Company’s reinsurance and insurance business, are deferred and amortized over the period in which the related premiums are earned. Deferred acquisition costs are limited to their estimated realizable value by line of business based on the related unearned premiums, anticipated claims and claim expenses and anticipated investment income. Deferred acquisition costs amortized to income are presented in the table below for the periods indicated.

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Deferred acquisition costs		$	1,135,586			$	977,558			$	952,701

E. Reserve for Losses and Loss Adjustment Expenses.

The reserve for losses and loss adjustment expenses (“LAE”) is based on individual case estimates and reports received from ceding companies. A provision is included for losses and LAE incurred but not reported (“IBNR”) based on past experience. A provision is also included for certain potential liabilities relating to asbestos and environmental (“A&E”) exposures, which liabilities cannot be estimated using traditional reserving techniques. See also Note 3. The reserves are reviewed periodically and any changes in estimates are reflected in earnings in the period the adjustment is made. The Company’s loss and LAE reserves represent management’s best estimate of the ultimate liability. Loss and LAE reserves are presented gross of reinsurance receivables and incurred losses and LAE are presented net of reinsurance.

Accruals for commissions are established for reinsurance contracts that provide for the stated commission percentage to increase or decrease based on the loss experience of the contract. Changes in estimates for such arrangements are recorded as commission expense. Commission accruals for contracts with adjustable features are estimated based on expected loss and LAE.

F. Future Policy Benefit Reserve.

Liabilities for future policy benefits on annuity policies are carried at their accumulated values. Reserves for policy benefits include mortality claims in the process of settlement and IBNR claims. Actual experience in a particular period may fluctuate from expected results.

G. Premium Revenues.

Written premiums are earned ratably over the periods of the related insurance and reinsurance contracts. Unearned premium reserves are established relative to the unexpired contract period. Such reserves are established based upon reports received from ceding companies or estimated using pro rata methods based on statistical data. Reinstatement premiums represent additional premium received on reinsurance coverages, most prevalently catastrophe related, when limits have been depleted under the original reinsurance contract and additional coverage is granted. Written and earned premiums and the related costs, which have not yet been reported to the Company, are estimated and accrued. Premiums are net of ceded reinsurance.

Payout annuity premiums are recognized as revenue over the premium-paying period of the policies.

H. Prepaid Reinsurance Premiums.

Prepaid reinsurance premiums represent unearned premium reserves ceded to other reinsurers. Prepaid reinsurance premiums for any foreign reinsurers comprising more than 10% of the outstanding balance at December 31, 2014 were secured either through collateralized trust arrangements, rights of offset or letters of credit, thereby limiting the credit risk to the Company.

I. Income Taxes.

Holdings and its wholly-owned subsidiaries file a consolidated U.S. federal income tax return. Foreign branches of subsidiaries file local tax returns as required. Group and subsidiaries not included in Holdings’ consolidated tax return file separate company U.S. federal income tax returns as required. Holdings Ireland files an Irish income tax return. The UK branch of Bermuda Re files a UK income tax return. Deferred income taxes have been recorded to recognize the tax effect of temporary differences between the financial

F-10

reporting and income tax bases of assets and liabilities, which arise because of differences between GAAP and income tax accounting rules.

J. Foreign Currency.

Assets and liabilities relating to foreign operations are translated into U.S. dollars at the exchange rates in effect at the balance sheet date; revenues and expenses are translated into U.S. dollars using average exchange rates in effect during the reporting period. Gains and losses resulting from translating foreign currency financial statements, net of deferred income taxes, are excluded from net income (loss) and accumulated in shareholders’ equity. Gains and losses resulting from foreign currency transactions, other than debt securities available for sale, are recorded through the consolidated statements of operations and comprehensive income (loss) in other income (expense). Gains and losses resulting from changes in the foreign currency exchange rates on debt securities, available for sale at market value, are recorded in the consolidated balance sheets in accumulated other comprehensive income (loss) as unrealized appreciation (depreciation) and any losses which are deemed other-than-temporary are charged to net income (loss) as net realized capital loss.

K. Earnings Per Common Share.

Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that would occur if options granted under various share-based compensation plans were exercised resulting in the issuance of common shares that would participate in the earnings of the entity.

Net income (loss) attributable to Everest Re Group per common share has been computed as per below, based upon weighted average common basic and dilutive shares outstanding.

		Years Ended December 31,
(Dollars in thousands, except per share amounts)		2014			2013			2012
Net income (loss) attributable to Everest Re Group per share:
	Numerator
	Net income (loss) attributable to Everest Re Group	$	1,199,156		$	1,259,382		$	828,954
	Less: dividends declared-common shares and nonvested common shares		(145,913	)		(106,681	)		(100,402	)
	Undistributed earnings		1,053,243			1,152,701			728,552
	Percentage allocated to common shareholders (1)		99.0	%		99.1	%		99.2	%
			1,042,423			1,142,386			722,717
	Add: dividends declared-common shareholders		144,447			105,689			99,576
	Numerator for basic and diluted earnings per common share	$	1,186,870		$	1,248,075		$	822,293

	Denominator
	Denominator for basic earnings per weighted-average common shares		45,377			48,619			51,894
	Effect of dilutive securities:
	Options		425			437			173
	Denominator for diluted earnings per adjusted weighted-average common shares		45,802			49,056			52,067

	Per common share net income (loss)
	Basic	$	26.16		$	25.67		$	15.85
	Diluted	$	25.91		$	25.44		$	15.79

(1)	Basic weighted-average common shares outstanding		45,377			48,619			51,894
	Basic weighted-average common shares outstanding and nonvested common shares expected to vest		45,848			49,058			52,313
	Percentage allocated to common shareholders		99.0	%		99.1	%		99.2	%

(Some amounts may not reconcile due to rounding.)

The table below presents the options to purchase common shares that were outstanding, but were not included in the computation of earnings per diluted share as they were anti-dilutive, for the periods indicated:

	Years Ended December 31,
	2014		2013		2012
Anti-dilutive options	-		-		894,704

F-11

All outstanding options expire on or between September 21, 2015 and September 19, 2022.

L. Segmentation.

The Company, through its subsidiaries, operates in five segments: U.S. Reinsurance, International, Bermuda, Insurance and Mt. Logan Re. See also Note 20.

M. Derivatives.

The Company sold seven equity index put option contracts, based on two indices, in 2001 and 2005, which remain outstanding. The Company sold these equity index put options as insurance products with the intent of achieving a profit. These equity index put option contracts meet the definition of a derivative under FASB guidance and the Company’s position in these equity index put option contracts is unhedged. Accordingly, these equity index put option contracts are carried at fair value in the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations and comprehensive income (loss).

The fair value of the equity index put options can be found in the Company’s consolidated balance sheets as follows:

(Dollars in thousands)
Derivatives not designated as	Location of fair value	At December 31,
hedging instruments	in balance sheets	2014		2013

Equity index put option contracts	Equity index put option liability	$	47,022	$	35,423
Total		$	47,022	$	35,423

The change in fair value of the equity index put option contracts can be found in the Company’s statement of operations and comprehensive income (loss) as follows:

(Dollars in thousands)
Derivatives not designated as	Location of gain (loss) in statements of	For the Years Ended December 31,
hedging instruments	operations and comprehensive income (loss)	2014			2013		2012

Equity index put option contracts	Net derivative gain (loss)	$	(11,599	)	$	44,044	$	(9,738	)
Total		$	(11,599	)	$	44,044	$	(9,738	)

N. Deposit Assets and Liabilities.

In the normal course of its operations, the Company may enter into contracts that do not meet risk transfer provisions. Such contracts are accounted for using the deposit accounting method and are included in other liabilities in the Company’s consolidated balance sheets. For such contracts, the Company originally records deposit liabilities for an amount equivalent to the assets received. Actuarial studies are used to estimate the final liabilities under such contracts with any change reflected in the consolidated statements of operations and comprehensive income (loss).

O. Share-Based Compensation.

Share-based compensation option or restricted share awards are fair valued at the grant date and expensed over the vesting period of the award. The tax benefit on the recorded expense is deferred until the time the award is exercised or vests (becomes unrestricted). See Note 18.

P. Application of Recently Issued Accounting Standard Changes.

Presentation of Comprehensive Income. In June 2011, FASB issued amendments to existing guidance to provide two alternatives for the presentation of comprehensive income. Components of net income and comprehensive income can either be presented within a single, continuous financial statement or be presented in two separate but consecutive financial statements. The Company has chosen to present the components of net income and comprehensive income in a single, continuous financial statement. The guidance is effective for reporting periods beginning after December 15, 2011. The Company implemented this guidance as of January 1, 2012. In February, 2013, the FASB issued an additional amendment for the presentation of amounts reclassified out of accumulated other comprehensive income by component. The Company implemented the proposed guidance as of January 1, 2013.

F-12

Treatment of Insurance Contract Acquisition Costs. In October 2010, the FASB issued authoritative guidance for the accounting for costs associated with acquiring or renewing insurance contracts. The guidance identifies the incremental direct costs of contract acquisition and costs directly related to acquisition activities that should be capitalized. This guidance is effective for reporting periods beginning after December 15, 2011. The Company implemented this guidance as of January 1, 2012 and determined that $13,492 thousand of previously deferrable acquisition costs would be expensed, including $10,876 thousand and $2,616 thousand expensed in the years ended December 31, 2012 and 2013, respectively. No additional expense will be incurred related to this guidance implementation in future periods.

INVESTMENTS

The amortized cost, market value and gross unrealized appreciation and depreciation of available for sale, fixed maturity, equity security investments, carried at market value and other-than-temporary impairments (“OTTI”) in accumulated other comprehensive income (“AOCI”) are as follows for the periods indicated:

	At December 31, 2014
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	221,052	$	10,290	$	(304	)	$	231,038	$	-
Obligations of U.S. states and political subdivisions		783,129		41,969		(626	)		824,472		-
Corporate securities		4,626,002		143,889		(62,906	)		4,706,985		(6,910	)
Asset-backed securities		340,761		1,691		(1,230	)		341,222		-
Mortgage-backed securities
Commercial		231,439		10,675		(429	)		241,685		-
Agency residential		2,157,182		37,555		(11,573	)		2,183,164		-
Non-agency residential		2,734		54		(57	)		2,731		-
Foreign government securities		1,488,144		71,177		(26,866	)		1,532,455		-
Foreign corporate securities		2,980,716		109,673		(53,074	)		3,037,315		-
Total fixed maturity securities	$	12,831,159	$	426,973	$	(157,065	)	$	13,101,067	$	(6,910	)
Equity securities	$	148,326	$	3,831	$	(11,947	)	$	140,210	$	-

	At December 31, 2013
	Amortized		Unrealized		Unrealized			Market		OTTI in AOCI
(Dollars in thousands)	Cost		Appreciation		Depreciation			Value		(a)
Fixed maturity securities
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	160,013	$	2,690	$	(1,678	)	$	161,025	$	-
Obligations of U.S. states and political subdivisions		970,735		40,815		(9,022	)		1,002,528		-
Corporate securities		3,950,887		155,619		(27,090	)		4,079,416		3,169
Asset-backed securities		169,980		3,485		(422	)		173,043		-
Mortgage-backed securities
Commercial		254,765		16,683		(1,007	)		270,441		-
Agency residential		2,294,719		34,509		(50,175	)		2,279,053		-
Non-agency residential		4,816		229		(226	)		4,819		-
Foreign government securities		1,740,337		69,779		(29,347	)		1,780,769		-
Foreign corporate securities		2,844,912		86,529		(45,628	)		2,885,813		-
Total fixed maturity securities	$	12,391,164	$	410,338	$	(164,595	)	$	12,636,907	$	3,169
Equity securities	$	148,342	$	4,336	$	(8,597	)	$	144,081	$	-

(a)	Represents the amount of OTTI recognized in AOCI. Amount includes unrealized gains and losses on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

F-13

The amortized cost and market value of fixed maturity securities are shown in the following table by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

	At December 31, 2014				At December 31, 2013
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale:
Due in one year or less	$	1,183,247	$	1,189,416	$	1,059,052	$	1,067,799
Due after one year through five years		5,646,466		5,726,277		5,565,112		5,740,662
Due after five years through ten years		2,270,073		2,313,672		2,081,908		2,101,234
Due after ten years		999,257		1,102,900		960,812		999,856
Asset-backed securities		340,761		341,222		169,980		173,043
Mortgage-backed securities:
Commercial		231,439		241,685		254,765		270,441
Agency residential		2,157,182		2,183,164		2,294,719		2,279,053
Non-agency residential		2,734		2,731		4,816		4,819
Total fixed maturity securities	$	12,831,159	$	13,101,067	$	12,391,164	$	12,636,907

The changes in net unrealized appreciation (depreciation) for the Company’s investments are derived from the following sources for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	34,245		$	(449,456	)
Fixed maturity securities, other-than-temporary impairment		(10,078	)		(1,579	)
Equity securities		(3,855	)		(16,124	)
Change in unrealized appreciation (depreciation), pre-tax		20,312			(467,159	)
Deferred tax benefit (expense)		(1,623	)		64,245
Deferred tax benefit (expense), other-than-temporary impairment		3,407			140
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in shareholders’ equity	$	22,096		$	(402,774	)

The Company frequently reviews all of its fixed maturity, available for sale securities for declines in market value and focuses its attention on securities whose fair value has fallen below 80% of their amortized cost at the time of review. The Company then assesses whether the decline in value is temporary or other-than-temporary. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. Generally, a change in a security’s value caused by a change in the market, interest rate or foreign exchange environment does not constitute an other-than-temporary impairment, but rather a temporary decline in market value. Temporary declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss). If the Company determines that the decline is other-than-temporary and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the carrying value of the investment is written down to fair value. The fair value adjustment that is credit or foreign exchange related is recorded in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss). The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the Company’s consolidated balance sheets. The Company’s assessments are based on the issuers current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

F-14

The majority of the Company’s equity securities available for sale at market value are primarily comprised of mutual fund investments whose underlying securities consist of fixed maturity securities. When a fund’s value reflects an unrealized loss, the Company assesses whether the decline in value is temporary or other-than-temporary. In making its assessment, the Company considers the composition of its portfolios and their related markets, reports received from the portfolio managers and discussions with portfolio managers. If the Company determines that the declines are temporary and it has the ability and intent to continue to hold the investments, then the declines are recorded as unrealized losses in accumulated other comprehensive income (loss). If declines are deemed to be other-than-temporary, then the carrying value of the investment is written down to fair value and recorded in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the Company’s asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity and equity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

	Duration of Unrealized Loss at December 31, 2014 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	13,187	$	(20	)	$	26,897	$	(284	)	$	40,084	$	(304	)
Obligations of U.S. states and political subdivisions		20,428		(242	)		18,199		(384	)		38,627		(626	)
Corporate securities		1,245,830		(55,388	)		362,320		(7,518	)		1,608,150		(62,906	)
Asset-backed securities		192,253		(1,230	)		-		-			192,253		(1,230	)
Mortgage-backed securities
Commercial		28,191		(123	)		9,777		(306	)		37,968		(429	)
Agency residential		141,807		(172	)		678,972		(11,401	)		820,779		(11,573	)
Non-agency residential		-		-			266		(57	)		266		(57	)
Foreign government securities		235,725		(15,415	)		139,200		(11,451	)		374,925		(26,866	)
Foreign corporate securities		567,905		(36,926	)		290,234		(16,148	)		858,139		(53,074	)
Total fixed maturity securities	$	2,445,326	$	(109,516	)	$	1,525,865	$	(47,549	)	$	3,971,191	$	(157,065	)
Equity securities		50,285		(4,068	)		73,994		(7,879	)		124,279		(11,947	)
Total	$	2,495,611	$	(113,584	)	$	1,599,859	$	(55,428	)	$	4,095,470	$	(169,012	)

	Duration of Unrealized Loss at December 31, 2014 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	98,021	$	(5,166	)	$	80,002	$	(8,174	)	$	178,023	$	(13,340	)
Due in one year through five years		1,233,244		(68,124	)		518,613		(12,761	)		1,751,857		(80,885	)
Due in five years through ten years		679,374		(28,529	)		187,717		(10,734	)		867,091		(39,263	)
Due after ten years		72,436		(6,172	)		50,518		(4,116	)		122,954		(10,288	)
Asset-backed securities		192,253		(1,230	)		-		-			192,253		(1,230	)
Mortgage-backed securities		169,998		(295	)		689,015		(11,764	)		859,013		(12,059	)
Total fixed maturity securities	$	2,445,326	$	(109,516	)	$	1,525,865	$	(47,549	)	$	3,971,191	$	(157,065	)

F-15

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2014 were $4,095,470 thousand and $169,012 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2014, did not exceed 0.2% of the overall market value of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $109,516 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, as well as foreign government securities. The majority of these unrealized losses are attributable to unrealized losses in the energy sector, $58,891 thousand, as falling oil prices disrupted the market values for this sector, particularly for oil exploration, production and servicing companies during the fourth quarter of 2014 and unrealized foreign exchange losses, $34,687 thousand, as the U.S. dollar has strengthened against other currencies. The $47,549 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to foreign and domestic corporate securities, foreign government securities and agency residential mortgage-backed securities. Of these unrealized losses, $42,884 thousand related to securities that were rated investment grade by at least one nationally recognized statistical rating organization. The gross unrealized depreciation for mortgage-backed securities included $15 thousand related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

	Duration of Unrealized Loss at December 31, 2013 By Security Type
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	74,847	$	(1,033	)	$	8,751	$	(645	)	$	83,598	$	(1,678	)
Obligations of U.S. states and political subdivisions		92,760		(4,852	)		39,689		(4,170	)		132,449		(9,022	)
Corporate securities		959,396		(22,331	)		75,946		(4,759	)		1,035,342		(27,090	)
Asset-backed securities		5,494		(6	)		1,128		(416	)		6,622		(422	)
Mortgage-backed securities
Commercial		51		-			11,353		(1,007	)		11,404		(1,007	)
Agency residential		1,220,845		(40,420	)		264,640		(9,755	)		1,485,485		(50,175	)
Non-agency residential		1,758		(22	)		1,541		(204	)		3,299		(226	)
Foreign government securities		409,252		(20,350	)		85,029		(8,997	)		494,281		(29,347	)
Foreign corporate securities		872,907		(34,819	)		151,748		(10,809	)		1,024,655		(45,628	)
Total fixed maturity securities	$	3,637,310	$	(123,833	)	$	639,825	$	(40,762	)	$	4,277,135	$	(164,595	)
Equity securities		127,030		(8,597	)		-		-			127,030		(8,597	)
Total	$	3,764,340	$	(132,430	)	$	639,825	$	(40,762	)	$	4,404,165	$	(173,192	)

F-16

	Duration of Unrealized Loss at December 31, 2013 By Maturity
	Less than 12 months					Greater than 12 months					Total
			Gross					Gross					Gross
			Unrealized					Unrealized					Unrealized
(Dollars in thousands)	Market Value		Depreciation			Market Value		Depreciation			Market Value		Depreciation
Fixed maturity securities
Due in one year or less	$	143,098	$	(3,503	)	$	46,691	$	(5,330	)	$	189,789	$	(8,833	)
Due in one year through five years		1,125,680		(25,365	)		204,779		(11,279	)		1,330,459		(36,644	)
Due in five years through ten years		810,969		(35,169	)		48,064		(3,844	)		859,033		(39,013	)
Due after ten years		329,415		(19,348	)		61,629		(8,927	)		391,044		(28,275	)
Asset-backed securities		5,494		(6	)		1,128		(416	)		6,622		(422	)
Mortgage-backed securities		1,222,654		(40,442	)		277,534		(10,966	)		1,500,188		(51,408	)
Total fixed maturity securities	$	3,637,310	$	(123,833	)	$	639,825	$	(40,762	)	$	4,277,135	$	(164,595	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2013 were $4,404,165 thousand and $173,192 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2013, did not exceed 0.4% of the overall market value of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $123,833 thousand of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, foreign government securities and agency residential mortgage-backed securities. Of these unrealized losses, $112,658 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating organization. The $40,762 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, foreign government securities, municipal securities and agency residential mortgage-backed securities. Of these unrealized losses, $38,964 thousand related to securities that were rated investment grade by at least one nationally recognized statistical rating organization. The gross unrealized depreciation for mortgage-backed securities included $273 thousand related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The components of net investment income are presented in the table below for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Fixed maturities	$	462,757		$	473,493		$	489,801
Equity securities		47,193			45,387			59,156
Short-term investments and cash		1,635			1,295			1,252
Other invested assets
Limited partnerships		40,868			46,921			64,896
Other		3,619			7,329			3,851
Gross investment income before adjustments		556,072			574,425			618,956
Funds held interest income (expense)		9,471			10,613			10,580
Future policy benefit reserve income (expense)		(1,686	)		(2,770	)		(2,902	)
Gross investment income		563,857			582,268			626,634
Investment expenses		(33,287	)		(33,759	)		(26,432	)
Net investment income	$	530,570		$	548,509		$	600,202

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

F-17

The Company had contractual commitments to invest up to an additional $403,003 thousand in limited partnerships at December 31, 2014. These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2020.

The components of net realized capital gains (losses) are presented in the table below for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Fixed maturity securities, market value:
Other-than-temporary impairments	$	(39,502	)	$	(1,052	)	$	(10,022	)
Gains (losses) from sales		4,408			6,792			14,708
Fixed maturity securities, fair value:
Gains (losses) from sales		(3,137	)		201			5,675
Gains (losses) from fair value adjustments		(1,498	)		307			1,941
Equity securities, market value:
Gains (losses) from sales		426			2,648			14,920
Equity securities, fair value:
Gains (losses) from sales		156			32,747			21,031
Gains (losses) from fair value adjustments		123,196			258,569			116,163
Short-term investments gain (loss)		(3	)		15			(16	)
Total net realized capital gains (losses)	$	84,046		$	300,227		$	164,400

The Company recorded as net realized capital gains (losses) in the consolidated statements of operations and comprehensive income (loss) both fair value re-measurements and write-downs in the value of securities deemed to be impaired on an other-than-temporary basis as displayed in the table above. The Company had no other-than-temporary impaired securities where the impairment had both a credit and non-credit component.

The proceeds and split between gross gains and losses, from sales of fixed maturity and equity securities, are presented in the table below for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Proceeds from sales of fixed maturity securities	$	1,848,268		$	1,113,960		$	998,056
Gross gains from sales		37,427			38,141			38,144
Gross losses from sales		(36,156	)		(31,148	)		(17,761	)

Proceeds from sales of equity securities	$	600,970		$	751,973		$	839,547
Gross gains from sales		20,900			44,703			57,814
Gross losses from sales		(20,318	)		(9,308	)		(21,863	)

During 2012, the Company redeemed one of its mutual fund investments reflected on the balance sheet as an equity security – available for sale, at market value. As part of the redemption settlement, the Company received its proportionate share of the fund’s fixed maturities and related accrued interest in the amount of $92,981 thousand. The Company has categorized the fixed maturities as available for sale, at market value.

Securities with a carrying value amount of $1,434,105 thousand at December 31, 2014 were on deposit with various state or governmental insurance departments in compliance with insurance laws.

F-18

RESERVE FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

Reserves for losses and LAE.

Activity in the reserve for losses and LAE is summarized for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013			2012
Gross reserves at January 1	$	9,673,240		$	10,069,055		$	10,123,215
Less reinsurance recoverables		(473,866	)		(602,750	)		(580,998	)
Net reserves at January 1		9,199,374			9,466,305			9,542,217

Incurred related to:
Current year		2,946,396			2,818,490			2,748,925
Prior years		(39,862	)		(18,239	)		(3,660	)
Total incurred losses and LAE		2,906,534			2,800,251			2,745,265

Paid related to:
Current year		761,788			664,719			633,894
Prior years		2,089,734			2,353,817			2,220,202
Total paid losses and LAE		2,851,522			3,018,536			2,854,096

Foreign exchange/translation adjustment		(160,655	)		(48,646	)		32,919

Net reserves at December 31		9,093,731			9,199,374			9,466,305
Plus reinsurance recoverables		627,082			473,866			602,750
Gross reserves at December 31	$	9,720,813		$	9,673,240		$	10,069,055

Incurred prior years’ reserves decreased by $39,862 thousand, $18,239 thousand and $3,660 thousand for the years ended December 31, 2014, 2013 and 2012, respectively. The decrease for 2014 was attributable to favorable development in the reinsurance segments of $202,418 thousand related to treaty casualty, treaty property and catastrophe reserves, partially offset by $137,769 thousand development on A&E reserves and $186 thousand of favorable development related to Mt. Logan reserves and $24,973 thousand of unfavorable development in the insurance segment primarily related to construction liability and umbrella business.

The decrease for 2013 was attributable to a $148,788 thousand decrease in reinsurance business, primarily related to favorable development on treaty property reserves, partially offset by a $130,548 thousand increase in insurance business, primarily related to development on contractors’ liability, umbrella and workers compensation reserves.

The decrease for 2012 was attributable to a $57,205 thousand decrease in reinsurance business, primarily related to favorable development on treaty casualty reserves, partially offset by a $53,545 thousand increase in insurance business, primarily related to development on contractors’ liability and workers compensation reserves.

The Company continues to receive claims under expired insurance and reinsurance contracts asserting injuries and/or damages relating to or resulting from environmental pollution and hazardous substances, including asbestos. Environmental claims typically assert liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damage caused by the release of hazardous substances into the land, air or water. Asbestos claims typically assert liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos.

The Company’s reserves include an estimate of the Company’s ultimate liability for A&E claims. The Company’s A&E liabilities emanate from Mt. McKinley’s direct insurance business and Everest Re’s assumed reinsurance business. All of the contracts of insurance and reinsurance under which the Company has received claims during the past three years expired more than 20 years ago. There are significant uncertainties surrounding the Company’s reserves for its A&E losses.

F-19

A&E exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The following table summarizes incurred losses with respect to A&E reserves on both a gross and net of reinsurance basis for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013			2012
Gross basis:
Beginning of period reserves	$	402,461		$	442,821		$	499,911
Incurred losses		142,233			5,599			132
Paid losses		(68,489	)		(45,959	)		(57,222	)
End of period reserves	$	476,205		$	402,461		$	442,821

Net basis:
Beginning of period reserves	$	386,677		$	425,691		$	480,160
Incurred losses		137,769			5,400			124
Paid losses		(66,235	)		(44,414	)		(54,593	)
End of period reserves	$	458,211		$	386,677		$	425,691

Reinsurance Receivables. Reinsurance receivables for both paid and recoverable on unpaid losses totaled $670,854 thousand at December 31, 2014 and $540,883 thousand at December 31, 2013. At December 31, 2014, $102,284 thousand, or 15.2%, was receivable from C.V. Starr (Bermuda) (“C.V. Starr”); $74,960 thousand, or 11.2%, was receivable from Resolution Group Reinsurance (Barbados) Limited (“Resolution Group”); $64,591 thousand, or 9.6%, was receivable from Federal Crop Insurance Company; $60,680 thousand, or 9.0%, was receivable from Zurich Vericherungs Gesellschaft; $39,467 thousand, or 5.9%, was receivable from Transatlantic Reinsurance Company; $37,224 thousand, or 5.5%, was receivable from Hannover Rueck SE; $35,198 thousand, or 5.2%, was receivable from Axis Reinsurance Company and $33,903 thousand, or 5.1%, was receivable from Axa Seguros Gen SA De Seguros Y Reaseguros. The receivables from C.V. Starr and Resolution Group are fully collateralized by individual trust agreements. No other retrocessionaire accounted for more than 5% of our receivables.

Future Policy Benefit Reserve.

Activity in the reserve for future policy benefits is summarized for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013			2012
Balance at beginning of year	$	59,512		$	66,107		$	67,187
Liabilities assumed		250			103			126
Adjustments to reserves		4,724			(3,066	)		2,365
Benefits paid in the current year		(4,667	)		(3,632	)		(3,571	)
Balance at end of year	$	59,820		$	59,512		$	66,107

(Some amounts may not reconcile due to rounding.)

FAIR VALUE

The Company’s fixed maturity and equity securities are primarily managed by third party investment asset managers. The investment asset managers obtain prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. They use pricing applications that vary by asset class and incorporate available market information and when fixed maturity securities do not trade on a daily basis the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

F-20

In limited instances where prices are not provided by pricing services or in rare instances when a manager may not agree with the pricing service, price quotes on a non-binding basis are obtained from investment brokers. The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers. In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. In addition, the Company continually performs analytical reviews of price changes and tests the prices on a random basis to an independent pricing source. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. The Company made no such adjustments at December 31, 2014 and 2013.

The Company internally manages a small public equity portfolio which had a fair value at December 31, 2014 and December 31, 2013 of $196,980 thousand and $174,628 thousand, respectively, and all prices were obtained from publically published sources.

Equity securities in U.S. denominated currency are categorized as Level 1, Quoted Prices in Active Markets for Identical Assets, since the securities are actively traded on an exchange and prices are based on quoted prices from the exchange. Equity securities traded on foreign exchanges are categorized as Level 2 due to potential foreign exchange adjustments to fair or market value.

Fixed maturity securities are generally categorized as Level 2, Significant Other Observable Inputs, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk) are categorized as Level 3, Significant Unobservable Inputs. These securities include broker priced securities and the Company’s equity index put option contracts.

At December 31, 2014 and 2013, all Level 3 fixed maturity securities, were priced using single non-binding broker quotes since prices for these securities were not provided by normal pricing service companies. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third party asset managers and the Company.

The Company sold six equity index put option contracts, based on the Standard & Poor’s 500 (“S&P 500”) index, for total consideration, net of commissions, of $22,530 thousand. At December 31, 2014, fair value for these equity index put option contracts was $38,063 thousand. Based on historical index volatilities and trends and the December 31, 2014 S&P 500 index value, the Company estimates the probability that each equity index put option contract of the S&P 500 index falling below the strike price on the exercise date to be less than 19%. The theoretical maximum payouts under these six equity index put option contracts would occur if on each of the exercise dates the S&P 500 index value were zero. At December 31, 2014, the present value of these theoretical maximum payouts using a 3% discount factor was $420,013 thousand. Conversely, if the contracts had all expired on December 31, 2014, with the S&P index at $2,058.90, there would have been no settlement amount.

F-21

The Company sold one equity index put option contract based on the FTSE 100 index for total consideration, net of commissions, of $6,706 thousand. At December 31, 2014, fair value for this equity index put option contract was $8,959 thousand. Based on historical index volatilities and trends and the December 31, 2014 FTSE 100 index value, the Company estimates the probability that the equity index put option contract of the FTSE 100 index will fall below the strike price on the exercise date to be less than 44%. The theoretical maximum payout under the equity index put option contract would occur if on the exercise date the FTSE 100 index value was zero. At December 31, 2014, the present value of the theoretical maximum payout using a 3% discount factor and current exchange rate was $43,334 thousand. Conversely, if the contract had expired on December 31, 2014, with the FTSE index at ₤6,566.10, there would have been no settlement amount.

The fair value of the equity put option contract is calculated using an industry accepted option pricing model, Black-Scholes. The inputs and assumptions for the model are updated on a quarterly basis.

The following table presents the fair value measurement levels for all assets and liabilities, which the Company has recorded at fair value (fair and market value) as of the periods indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	231,038	$	-	$	231,038	$	-
Obligations of U.S. States and political subdivisions		824,472		-		824,472		-
Corporate securities		4,706,985		-		4,706,985		-
Asset-backed securities		341,222		-		341,222		-
Mortgage-backed securities
Commercial		241,685		-		233,088		8,597
Agency residential		2,183,164		-		2,183,164		-
Non-agency residential		2,731		-		2,731		-
Foreign government securities		1,532,455		-		1,532,455		-
Foreign corporate securities		3,037,315		-		3,030,149		7,166
Total fixed maturities, market value		13,101,067		-		13,085,304		15,763

Fixed maturities, fair value		1,509		-		1,509		-
Equity securities, market value		140,210		124,295		15,915		-
Equity securities, fair value		1,447,820		1,337,396		110,424		-

Liabilities:
Equity index put option contracts	$	47,022	$	-	$	-	$	47,022

There were no transfers between Level 1 and Level 2 for the twelve months ended December 31, 2014.

F-22

The following table presents the fair value measurement levels for all assets and liabilities, which the Company has recorded at fair value (fair and market value) as of the periods indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	161,025	$	-	$	161,025	$	-
Obligations of U.S. States and political subdivisions		1,002,528		-		1,002,528		-
Corporate securities		4,079,416		-		4,079,416		-
Asset-backed securities		173,043		-		167,744		5,299
Mortgage-backed securities
Commercial		270,441		-		270,441		-
Agency residential		2,279,053		-		2,279,053		-
Non-agency residential		4,819		-		4,472		347
Foreign government securities		1,780,769		-		1,780,769		-
Foreign corporate securities		2,885,813		-		2,885,332		481
Total fixed maturities, market value		12,636,907		-		12,630,780		6,127

Fixed maturities, fair value		19,388		-		19,388		-
Equity securities, market value		144,081		127,030		17,051		-
Equity securities, fair value		1,462,079		1,342,278		119,801		-

Liabilities:
Equity index put option contracts	$	35,423	$	-	$	-	$	35,423

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs by asset type, for the periods indicated:

	December 31, 2014																					December 31, 2013
	Corporate			Asset-backed						Foreign			Non-agency			Agency						Asset-backed			Foreign			Foreign			Non-agency			Agency
(Dollars in thousands)	Securities			Securities			CMBS			Corporate			RMBS			RMBS			Total			Securities			Corporate			Government			RMBS			RMBS			Total
Beginning balance	$	-		$	5,299		$	-		$	481		$	347		$	-		$	6,127		$	4,849		$	11,913		$	-		$	426		$	34,842		$	52,030
Total gains or (losses) (realized/unrealized)
Included in earnings		-			1,259			-			73			329			-			1,661			258			(738	)		(112	)		161			-			(431	)
Included in other comprehensive income (loss)		42			(126	)		(426	)		(5,221	)		(138	)		-			(5,869	)		(717	)		(587	)		(179	)		(38	)		-			(1,521	)
Purchases, issuances and settlements		1,274			21,303			9,023			4,038			(538	)		29,845			64,945			(624	)		2,858			516			(317	)		-			2,433
Transfers in and/or (out) of Level 3		(1,316	)		(27,735	)		-			7,795			-			(29,845	)		(51,101	)		1,533			(12,965	)		(225	)		115			(34,842	)		(46,384	)
Ending balance	$	-		$	-		$	8,597		$	7,166		$	-		$	-		$	15,763		$	5,299		$	481		$	-		$	347		$	-		$	6,127

The amount of total gains or losses for the period included
in earnings (or changes in net assets) attributable to the
change in unrealized gains or losses relating to assets
still held at the reporting date	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-

(Some amounts may not reconcile due to rounding.)

The transfers from level 3, fair value measurements using significant unobservable inputs, of $51,101 thousand and $46,384 thousand of investments for the years ended December 31, 2014 and December 31, 2013, respectively, primarily relate to securities that were priced using single non-binding broker quotes as of December 31, 2013 and December 31, 2012, respectively. The securities were subsequently priced using a recognized pricing service as of December 31, 2014 and 2013, and were classified as level 2 as of those dates.

F-23

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs for equity index put option contracts, for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014		2013
Liabilities:
Balance, beginning of period	$	35,423	$	79,467
Total (gains) or losses (realized/unrealized)
Included in earnings		11,599		(44,044	)
Included in other comprehensive income (loss)		-		-
Purchases, issuances and settlements		-		-
Transfers in and/or (out) of Level 3		-		-
Balance, end of period	$	47,022	$	35,423

The amount of total gains or losses for the period included in earnings
(or changes in net assets) attributable to the change in unrealized
gains or losses relating to liabilities still held at the reporting date	$	-	$	-

(Some amounts may not reconcile due to rounding.)

REDEEMABLE NONCONTROLLING INTERESTS – MT. LOGAN RE

Mt. Logan Re is a Class 3 insurer registered in Bermuda effective February 27, 2013 under The Segregated Accounts Companies Act 2000 and 100% of the voting common shares are owned by Group. Separate segregated accounts have been established effective July 1, 2013 and non-voting, redeemable preferred shares have been issued to capitalize the segregated accounts. Each segregated account will invest in a diversified set of catastrophe exposures, diversified by risk/peril and across different geographic regions globally. The financial statements for Mt. Logan Re are consolidated with the Company with adjustments reflected for the third party noncontrolling interests reflected as separate captions in the Company’s financial statements.

The following table presents the activity for redeemable noncontrolling interests in the consolidated balance sheets for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Redeemable noncontrolling interests - Mt. Logan Re, beginning of period	$	93,378		$	-
Unaffiliated third party investments during period, net		279,200			87,500
Net income (loss) attributable to noncontrolling interests		59,307			5,878
Dividends paid on third party investment in redeemable noncontrolling interest		(10,334	)		-
Redeemable noncontrolling interests - Mt. Logan Re, end of period	$	421,552		$	93,378

(Some amounts may not reconcile due to rounding.)

In addition, the Company has invested $50,000 thousand in the segregated accounts from inception to date.

Effective January 1, 2015, unaffiliated third parties have invested an additional $271,848 thousand in the segregated accounts. Part of these third party investments were received prior to December 31, 2014 and are reflected as subscription advances.

The Company expects its participation level in the segregated funds to fluctuate over time.

F-24

CREDIT FACILITIES

The Company has two active credit facilities for a total commitment of up to $1,100,000 thousand, providing for the issuance of letters of credit and/or unsecured revolving credit lines. The following table presents the costs incurred in connection with the three credit facilities for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Credit facility fees incurred		$	659			$	964			$	3,519

The terms and outstanding amounts for each facility are discussed below:

Group Credit Facility

Effective June 22, 2012, Group, Bermuda Re and Everest International entered into a four year, $800,000 thousand senior credit facility with a syndicate of lenders, which amended and restated in its entirety the July 27, 2007, five year, $850,000 thousand senior credit facility. Both the June 22, 2012 and July 27, 2007 senior credit facilities, which have similar terms, are referred to as the “Group Credit Facility”. Wells Fargo Corporation (“Wells Fargo Bank”) is the administrative agent for the Group Credit Facility, which consists of two tranches. Tranche one provides up to $200,000 thousand of unsecured revolving credit for liquidity and general corporate purposes, and for the issuance of unsecured standby letters of credit. The interest on the revolving loans shall, at the Company’s option, be either (1) the Base Rate (as defined below) or (2) an adjusted London Interbank Offered Rate (“LIBOR”) plus a margin. The Base Rate is the higher of (a) the prime commercial lending rate established by Wells Fargo Bank, (b) the Federal Funds Rate plus 0.5% per annum or (c) the one month LIBOR Rate plus 1.0% per annum. The amount of margin and the fees payable for the Group Credit Facility depends on Group’s senior unsecured debt rating. Tranche two exclusively provides up to $600,000 thousand for the issuance of standby letters of credit on a collateralized basis.

The Group Credit Facility requires Group to maintain a debt to capital ratio of not greater than 0.35 to 1 and to maintain a minimum net worth. Minimum net worth is an amount equal to the sum of $4,249,963 thousand plus 25% of consolidated net income for each of Group’s fiscal quarters, for which statements are available ending on or after January 1, 2012 and for which consolidated net income is positive, plus 25% of any increase in consolidated net worth during such period attributable to the issuance of ordinary and preferred shares, which at December 31, 2014, was $5,115,795 thousand. As of December 31, 2014, the Company was in compliance with all Group Credit Facility covenants.

The following table summarizes the outstanding letters of credit and/or borrowings for the periods indicated:

(Dollars in thousands)		At December 31, 2014					At December 31, 2013
Bank		Commitment		In Use		Date of Expiry	Commitment		In Use		Date of Expiry
Wells Fargo Bank Group Credit Facility	Tranche One	$	200,000	$	-		$	200,000	$	-
	Tranche Two		600,000		444,012	12/31/2015		600,000		502,059	12/31/2014
Total Wells Fargo Bank Group Credit Facility		$	800,000	$	444,012		$	800,000	$	502,059

Bermuda Re Letter of Credit Facility

Effective December 31, 2014, Bermuda Re renewed its $300,000 thousand letter of credit issuance facility with Citibank N.A. referred to as the “Bermuda Re Letter of Credit Facility”, which commitment is reconfirmed annually with updated fees. The Bermuda Re Letter of Credit Facility provides for the issuance of up to $300,000 thousand of secured letters of credit to collateralize reinsurance obligations as a non-admitted reinsurer. The interest on drawn letters of credit shall be (A) 0.35% per annum of the principal amount of issued standard letters of credit (expiry of 15 months or less) and (B) 0.45% per annum of the principal amount of issued extended tenor letters of credit (expiry maximum of up to 60 months). The commitment fee on undrawn credit shall be 0.15% per annum.

F-25

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in thousands)	At December 31, 2014					At December 31, 2013
Bank	Commitment		In Use		Date of Expiry	Commitment		In Use		Date of Expiry
Citibank Bilateral Letter of Credit Agreement	$	300,000	$	112	8/30/2015	$	300,000	$	119	8/30/2014
				3,672	11/24/2015				3,672	11/24/2014
				70,922	12/31/2015				79,336	12/31/2014
				2,014	12/31/2016				1,045	12/31/2015
				149,353	12/30/2018				22,800	12/31/2017
				-					129,147	3/30/2018
Total Citibank Bilateral Agreement	$	300,000	$	226,073		$	300,000	$	236,119

Holdings Credit Facility - Expired

Effective August 15, 2011, the Company entered into a three year, $150,000 thousand unsecured revolving credit facility, referred to as the “Holdings Credit Facility”, which expired on August 15, 2014. The Company decided not to renew the Holdings Credit Facility at expiration.

The following table summarizes outstanding letters of credit and/or borrowings for the periods indicated:

(Dollars in thousands)	At December 31, 2014						At December 31, 2013
Bank	Commitment		In Use		Date of Loan	Maturity/Expiry Date	Commitment		In Use		Date of Loan	Maturity/Expiry Date
Citibank Holdings Credit Facility	$	-	$	-			$	150,000	$	-
Total revolving credit borrowings				-						-
Total letters of credit				-						851		12/31/2014

Total Citibank Holdings Credit Facility	$	-	$	-			$	150,000	$	851

SENIOR NOTES

The table below displays Holdings’ outstanding senior notes. Market value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

					December 31, 2014				December 31, 2013
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
5.40% Senior notes	10/12/2004	10/15/2014	$	250,000	$	-	$	-	$	249,958	$	259,130
4.868% Senior notes	06/05/2014	06/01/2044		400,000		400,000		404,892		-		-

On June 5, 2014, Holdings issued $400,000 thousand of 30 year senior notes at 4.868%, which will mature on June 1, 2044. Interest will be paid semi-annually on June 1 and December 1 of each year. The proceeds from the issuance have been used in part to pay off the $250,000 thousand of 5.40% senior notes which matured on October 15, 2014.

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Interest expense incurred		$	21,818			$	13,551			$	13,548

F-26

LONG TERM SUBORDINATED NOTES

The table below displays Holdings’ outstanding fixed to floating rate long term subordinated notes. Market value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

				Maturity Date		December 31, 2014				December 31, 2013
		Original				Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Principal Amount		Scheduled	Final	Sheet Amount		Market Value		Sheet Amount		Market Value
6.6% Long term subordinated notes	04/26/2007	$	400,000	05/15/2037	05/01/2067	$	238,364	$	246,312	$	238,361	$	233,292

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest will be at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded semi-annually for periods prior to May 15, 2017, and compounded quarterly for periods from and including May 15, 2017.

Holdings can redeem the long term subordinated notes prior to May 15, 2017, in whole but not in part at the applicable redemption price, which will equal the greater of (a) 100% of the principal amount being redeemed and (b) the present value of the principal payment on May 15, 2017 and scheduled payments of interest that would have accrued from the redemption date to May 15, 2017 on the long term subordinated notes being redeemed, discounted to the redemption date on a semi-annual basis at a discount rate equal to the treasury rate plus an applicable spread of either 0.25% or 0.50%, in each case plus accrued and unpaid interest. Holdings may redeem the long term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes. Effective upon the maturity of the Company’s 5.40% senior notes on October 15, 2014, the Company’s 4.868% senior notes, due on June 1, 2044, have become the Company’s long term indebtedness that ranks senior to the long term subordinated notes.

On March 19, 2009, Group announced the commencement of a cash tender offer for any and all of the 6.60% fixed to floating rate long term subordinated notes. Upon expiration of the tender offer, the Company had reduced its outstanding debt by $161,441 thousand.

Interest expense incurred in connection with these long term subordinated notes is as follows for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Interest expense incurred		$	15,749			$	15,748			$	15,748

F-27

JUNIOR SUBORDINATED DEBT SECURITIES PAYABLE

In accordance with the provisions of the junior subordinated debt securities which were issued on March 29, 2004, Holdings elected to redeem the $329,897 thousand of 6.2% junior subordinated debt securities outstanding on May 24, 2013. As a result of the early redemption, the Company incurred pre-tax expense of $7,282 thousand related to the immediate amortization of the remaining capitalized issuance costs on the trust preferred securities.

Interest expense incurred in connection with these junior subordinated debt securities is as follows for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Interest expense incurred		$	-			$	8,181			$	20,454

Holdings considered the mechanisms and obligations relating to the trust preferred securities, taken together, constituted a full and unconditional guarantee by Holdings of Capital Trust II’s payment obligations with respect to their trust preferred securities.

REINSURANCE AND TRUST AGREEMENTS

Certain subsidiaries of Group have established trust agreements, which effectively use the Company’s investments as collateral, as security for assumed losses payable to certain non-affiliated ceding companies. At December 31, 2014, the total amount on deposit in trust accounts was $322,285 thousand.

On April 24, 2014, the Company entered into two collateralized reinsurance agreements with Kilimanjaro Re Limited (“Kilimanjaro”), a Bermuda based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover specified named storm and earthquake events. The first agreement provides up to $250,000 thousand of reinsurance coverage from named storms in specified states of the Southeastern United States. The second agreement provides up to $200,000 thousand of reinsurance coverage from named storms in specified states of the Southeast, Mid-Atlantic and Northeast regions of the United States and Puerto Rico as well as reinsurance coverage from earthquakes in specified states of the Southeast, Mid-Atlantic, Northeast and West regions of the United States, Puerto Rico and British Columbia.

On November 18, 2014, the Company entered into a collateralized reinsurance agreement with Kilimanjaro Re to provide the Company with catastrophe reinsurance coverage. This agreement is a multi-year reinsurance contract which covers specified earthquake events. The agreement provides up to $500,000 thousand of reinsurance coverage from earthquakes in the United States, Puerto Rico and Canada.

Kilimanjaro has financed the various property catastrophe reinsurance coverage by issuing catastrophe bonds to unrelated, external investors. On April 24, 2014, Kilimanjaro issued $450,000 thousand of variable rate notes (“Series 2014-1 Notes”). On November 18, 2014, Kilimanjaro issued $500,000 thousand of variable rate notes (“Series 2014-2 Notes”). The proceeds from the issuance of the Series 2014-1 Notes and the Series 2014-2 Notes are held in reinsurance trust throughout the duration of the applicable reinsurance agreements and invested solely in US government money market funds with a rating of at least “AAAm” by Standard & Poor’s.

F-28

OPERATING LEASE AGREEMENTS

The future minimum rental commitments, exclusive of cost escalation clauses, at December 31, 2014, for all of the Company’s operating leases with remaining non-cancelable terms in excess of one year are as follows:

(Dollars in thousands)
2015	$	13,370
2016		13,975
2017		12,776
2018		12,573
2019		12,392
Thereafter		20,676
Net commitments	$	85,762

All of these leases, the expiration terms of which range from 2015 to 2024, are for the rental of office space. Rental expense was $15,519 thousand, 14,407 thousand and $14,169 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.

INCOME TAXES

Under Bermuda law, no income or capital gains taxes are imposed on Group and its Bermuda Subsidiaries. The Minister of Finance of Bermuda has assured Group and its Bermuda subsidiaries that, pursuant to The Exempted Undertakings Tax Protection Amendment Act of 2011, they will be exempt until 2035 from imposition of any such taxes.

All of the income of Group's non-Bermuda subsidiaries is subject to the applicable federal, foreign, state and local taxes on corporations. Additionally, the income of foreign branches of the Company's insurance operating companies, in particular the UK branch of Bermuda Re, is subject to various rates of income tax. Group's U.S. subsidiaries conduct business in and are subject to taxation in the U.S. Should the U.S. subsidiaries distribute current or accumulated earnings and profits in the form of dividends or otherwise, the Company would be subject to an accrual of 5% withholding taxes. Currently, however, no withholding taxes are accrued with respect to such un-remitted earnings as management has no intention of remitting them. The cumulative amount that would be subject to withholding tax, if distributed, is not practicable to compute. The provision for income taxes in the consolidated statement of operations and comprehensive income (loss) has been determined in accordance with the individual income of each entity and the respective applicable tax laws. The provision reflects the permanent differences between financial and taxable income relevant to each entity. The significant components of the provision are as follows for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Current tax expense (benefit):
U.S.	$	143,297	$	116,829	$	46,723
Non-U.S.		22,575		18,219		14,131
Total current tax expense (benefit)		165,872		135,048		60,854
Total deferred U.S. tax expense (benefit)		21,780		154,658		49,718
Total income tax expense (benefit)	$	187,652	$	289,706	$	110,572

(Some amounts may not reconcile due to rounding.)

F-29

The weighted average expected tax provision has been calculated using the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction's applicable statutory tax rate. Reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate for the periods indicated is provided below:

	Years Ended December 31,
(Dollars in thousands)	2014						2013						2012
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Underwriting gain (loss)	$	228,194		$	658,421		$	246,699		$	491,909		$	42,775		$	216,228
Net investment income		260,501			270,069			274,920			273,589			287,382			312,820
Net realized capital gains (losses)		78,006			6,040			295,814			4,413			143,326			21,073
Net derivative gain (loss)		-			(11,599	)		-			44,044			-			(9,738	)
Corporate expenses		(7,252	)		(16,169	)		(8,262	)		(16,555	)		(8,764	)		(15,211	)
Interest, fee and bond issue cost amortization expense		(37,970	)		(563	)		(45,452	)		(665	)		(50,746	)		(2,936	)
Other income (expense)		(1,561	)		19,998			(7,086	)		1,598			18,360			(15,042	)
Pre-tax income (loss)	$	519,918		$	926,197		$	756,633		$	798,333		$	432,332		$	507,194

Expected tax provision at the applicable statutory rate(s)		181,972			21,279			264,822			16,279			151,316			11,012
Increase (decrease) in taxes resulting from:
Tax exempt income		(12,231	)		-			(15,038	)		-			(20,623	)		-
Dividend received deduction		(5,910	)		-			(7,809	)		-			(8,351	)		-
Proration		1,835			-			2,274			-			3,138			-
Tax audit settlement		-			-			-			-			(2,508	)		-
Uncertain tax position release		-			-			-			-			(31,912	)		-
Other		(588	)		1,296			27,238			1,940			5,381			3,119
Total income tax provision	$	165,077		$	22,575		$	271,487		$	18,219		$	96,441		$	14,131

(Some amounts may not reconcile due to rounding.)

During 2012 the Internal Revenue Service ("IRS") completed its audit of the Company for the 2007 and 2008 tax years. At the conclusion of the audit, the Company paid additional federal income taxes of $12,747 thousand plus interest of $1,702 thousand. The additional tax liability resulted primarily from adjustments to timing of the Company's utilization of foreign tax credits and, therefore, including interest but net of a permanent benefit from previously unrecorded tax exempt income, this resulted in a $354 thousand income tax benefit. Also as a result of closing the IRS audit, the Company was able to re-measure its exposure and take down its reserve for uncertain tax positions by $31,912 thousand and related interest of $2,154 thousand, resulting in an income tax benefit of $34,067 thousand.

The Company identified net understatements in its Deferred tax asset account of $17,520 thousand during 2012. The understatements resulted from differences between filed and recorded amounts that had accumulated over several prior periods. The Company corrected these understatements, resulting in a $17,520 thousand income tax benefit included in the income tax expense (benefit) caption in the Consolidated Statements of Operations and Comprehensive Income (Loss) and increased net income by the same amount. The Company also increased its Deferred tax asset in its Consolidated Balance Sheets by $17,520 thousand. The Company believes that the out of period adjustments are immaterial to these financial statements and to all prior periods. As such, the Company has not restated any prior period amounts.

F-30

Deferred Income taxes reflect the tax effect of the temporary differences between the value of assets and liabilities for financial statement purposes and such values as measured by the U.S. tax laws and regulations. The principal items making up the net deferred income tax assets are as follows for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Deferred tax assets:
Loss reserve	$	153,978		$	146,781
Foreign tax credits		64,902			74,255
Alternative minimum tax credits		44,954			93,336
Unearned premium reserve		44,582			45,368
Net unrecognized losses on benefit plans		40,377			20,944
Investment impairments		13,841			2,485
Benefit plan liability		9,873			7,968
Uncollectible reinsurance reserve		5,237			5,534
Net operating loss carryforward		3,296			3,805
Deferred expenses		3,076			2,695
Other assets		21,048			12,306
Total deferred tax assets		405,164			415,477

Deferred tax liabilities:
Net fair value income		128,856			121,784
Deferred acquisition costs		38,636			39,344
Net unrealized investment gains		28,108			40,396
Net unrealized foreign currency gains		-			28,098
Gain on tender of debt		21,916			27,395
Other liabilities		15,379			8,374
Total deferred tax liabilities		232,895			265,391

Net deferred tax assets		172,269			150,086
Less: Valuation allowance		(3,296	)		(3,805	)
Total net deferred tax assets	$	168,973		$	146,281

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(Dollars in thousands)	2014		2013		2012
Balance at January 1	$	-	$	-	$	31,912
Additions based on tax positions related to the current year		-		-		-
Additions for tax positions of prior years		-		-		-
Reductions for tax positions of prior years		-		-		(31,912	)
Settlements with taxing authorities		-		-		-
Lapses of applicable statutes of limitations		-		-		-
Balance at December 31	$	-	$	-	$	-

As a result of closing the 2007 and 2008 IRS audit during 2012, the Company was able to re-measure its exposure and take down its reserve for uncertain tax positions by $31,912 thousand and accrued interest of $2,154 thousand. Thus, the entire amount of unrecognized tax benefits at January 1, 2012 was recognized and beneficially affected the effective tax rate in 2012. The Company is longer subject to IRS audit of years before 2009.

The Company recognized accrued interest related to the net unrecognized tax benefits and penalties in income taxes. During the year ended December 31, 2012, the Company accrued and recognized a net expense/(benefit) of approximately $(2,154) thousand, in interest and penalties.

F-31

For U.S. income tax purposes at December 31, 2014, the Company has foreign tax credit carry forwards of $64,902 thousand that begin to expire in 2017. In addition, the Company has $44,954 thousand of Alternative Minimum Tax credits that do not expire. Management believes that it is more likely than not that the Company will realized the benefits of the majority of its net deferred tax assets, however, a valuation allowance of $3,269 thousand and $3,805 thousand has been recorded in 2014 and 2013, respectively, against the deferred tax assets in its Everest Canada subsidiary.

The Company has recorded tax benefits related to share-based compensation deductions for dividends on restricted stock, vestings of restricted stock and exercised stock options in 2014 and 2013, respectively of $6,603 thousand and $4,562 thousand to additional paid-in capital in the shareholders' equity section of the consolidated balance sheets.

REINSURANCE

The Company utilizes reinsurance agreements to reduce its exposure to large claims and catastrophic loss occurrences. These agreements provide for recovery from reinsurers of a portion of losses and LAE under certain circumstances without relieving the ceding company of its obligations to the policyholders. Losses and LAE incurred and premiums earned are reported after deduction for reinsurance. In the event that one or more of the reinsurers were unable to meet their obligations under these reinsurance agreements, the Company would not realize the full value of the reinsurance recoverable balances. The Company may hold partial collateral, including letters of credit and funds held, under these agreements. See also Note 1C, Note 3 and Note 10.

Premiums written and earned and incurred losses and LAE are comprised of the following for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Written premiums:
Direct	$	1,227,645		$	1,268,698		$	1,074,206
Assumed		4,521,342			3,949,936			3,236,331
Ceded		(492,084	)		(213,813	)		(229,466	)
Net written premiums	$	5,256,903		$	5,004,821		$	4,081,071

Premiums earned:
Direct	$	1,183,498		$	1,207,833		$	1,054,707
Assumed		4,405,253			3,748,824			3,353,667
Ceded		(419,616	)		(203,114	)		(243,746	)
Net premiums earned	$	5,169,135		$	4,753,543		$	4,164,628

Incurred losses and LAE:
Direct	$	1,100,037		$	1,173,177		$	926,364
Assumed		2,160,663			1,833,055			2,017,526
Ceded		(354,166	)		(205,981	)		(198,625	)
Net incurred losses and LAE	$	2,906,534		$	2,800,251		$	2,745,265

F-32

COMPREHENSIVE INCOME (LOSS)

The following table presents the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:

	Years Ended December 31,
	2014									2013									2012
(Dollars in thousands)	Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax			Before Tax			Tax Effect			Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - temporary	$	(4,278	)	$	11,653		$	7,375		$	(457,192	)	$	62,834		$	(394,358	)	$	178,405		$	(6,644	)	$	171,761
URA(D) on securities - OTTI		(10,078	)		3,407			(6,671	)		(1,579	)		140			(1,439	)		2,181			83			2,264
Reclassification of net realized losses (gains) included in net income (loss)		34,668			(13,276	)		21,392			(8,388	)		1,411			(6,977	)		(19,606	)		(70	)		(19,676	)
Foreign currency translation adjustments		(111,145	)		15,728			(95,417	)		(10,462	)		10,300			(162	)		26,484			(3,786	)		22,698
Benefit plan actuarial net gain (loss)		(60,169	)		21,059			(39,110	)		27,442			(9,605	)		17,837			(18,109	)		6,338			(11,771	)
Reclassification of benefit plan liability amortization included in net income (loss)		4,647			(1,627	)		3,020			8,889			(3,111	)		5,778			7,377			(2,582	)		4,795
Total other comprehensive income (loss)	$	(146,355	)	$	36,944		$	(109,411	)	$	(441,290	)	$	61,969		$	(379,321	)	$	176,732		$	(6,661	)	$	170,071

The following table presents details of the amounts reclassified from AOCI for the periods indicated:

	Years Ended December 31,						Affected line item within the statements of
AOCI component	2014			2013			operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities	$	34,668		$	(8,388	)	Other net realized capital gains (losses)
		(13,276	)		1,411		Income tax expense (benefit)
	$	21,392		$	(6,977	)	Net income (loss)

Benefit plan net gain (loss)	$	4,647		$	8,889		Other underwriting expenses
		(1,627	)		(3,111	)	Income tax expense (benefit)
	$	3,020		$	5,778		Net income (loss)

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Beginning balance of URA (D) on securities	$	201,154		$	603,928
Current period change in URA (D) of investments - temporary		28,767			(401,335	)
Current period change in URA (D) of investments - non-credit OTTI		(6,671	)		(1,439	)
Ending balance of URA (D) on securities		223,250			201,154

Beginning balance of foreign currency translation adjustments		(4,530	)		(4,368	)
Current period change in foreign currency translation adjustments		(95,417	)		(162	)
Ending balance of foreign currency translation adjustments		(99,947	)		(4,530	)

Beginning balance of benefit plan net gain (loss)		(38,896	)		(62,511	)
Current period change in benefit plan net gain (loss)		(36,090	)		23,615
Ending balance of benefit plan net gain (loss)		(74,986	)		(38,896	)

Ending balance of accumulated other comprehensive income (loss)	$	48,317		$	157,728

F-33

EMPLOYEE BENEFIT PLANS

Defined Benefit Pension Plans.

The Company maintains both qualified and non-qualified defined benefit pension plans for its U.S. employees employed prior to April 1, 2010. Generally, the Company computes the benefits based on average earnings over a period prescribed by the plans and credited length of service. The Company’s non-qualified defined benefit pension plan, affected in October 1995, provides compensating pension benefits for participants whose benefits have been curtailed under the qualified plan due to Internal Revenue Code limitations.

Although not required to make contributions under IRS regulations, the following table summarizes the Company’s contributions to the defined benefit pension plans for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Company contributions		$	16,484			$	22,536			$	267

The following table summarizes the Company’s pension expense for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Pension expense		$	18,543			$	19,348			$	16,542

The following table summarizes the status of these defined benefit plans for U.S. employees for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	214,059		$	212,159
Service cost		10,015			11,182
Interest cost		10,474			8,511
Actuarial (gain)/loss		55,107			(12,742	)
Benefits paid		(19,588	)		(5,052	)
Projected benefit obligation at end of year		270,065			214,059

Change in plan assets:
Fair value of plan assets at beginning of year		152,446			114,807
Actual return on plan assets		7,747			20,155
Actual contributions during the year		16,484			22,536
Benefits paid		(19,588	)		(5,052	)
Fair value of plan assets at end of year		157,090			152,446

Funded status at end of year	$	(112,976	)	$	(61,613	)

(Some amounts may not reconcile due to rounding.)

Amounts recognized in the consolidated balance sheets for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Other assets (due beyond one year)	$	-		$	-
Other liabilities (due within one year)		(5,469	)		(17,000	)
Other liabilities (due beyond one year)		(107,507	)		(44,613	)
Net amount recognized in the consolidated balance sheets	$	(112,976	)	$	(61,613	)

F-34

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Prior service cost	$	(21	)	$	(70	)
Accumulated income (loss)		(102,671	)		(53,318	)
Accumulated other comprehensive income (loss)	$	(102,692	)	$	(53,387	)

(Some amounts may not reconcile due to rounding.)

Other changes in other comprehensive income (loss) for the periods indicated are as follows:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Other comprehensive income (loss) at December 31, prior year	$	(53,387	)	$	(85,939	)
Net gain (loss) arising during period		(58,647	)		24,402
Recognition of amortizations in net periodic benefit cost:
Prior service cost		49			49
Actuarial loss		9,294			8,101
Other comprehensive income (loss) at December 31, current year	$	(102,692	)	$	(53,387	)

(Some amounts may not reconcile due to rounding.)

Net periodic benefit cost for U.S. employees included the following components for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Service cost	$	10,015		$	11,182		$	9,370
Interest cost		10,474			8,511			7,971
Expected return on assets		(11,288	)		(8,495	)		(7,743	)
Amortization of actuarial loss from earlier periods		4,341			8,101			6,896
Amortization of unrecognized prior service cost		49			49			49
Settlement		4,953			-			-
Net periodic benefit cost	$	18,543		$	19,348		$	16,542

Other changes recognized in other comprehensive income (loss):
Other comprehensive income (loss) attributable to change from prior year		49,305			(32,552	)

Total recognized in net periodic benefit cost and other
comprehensive income (loss)	$	67,847		$	(13,204	)

(Some amounts may not reconcile due to rounding.)

The estimated transition obligation, actuarial loss and prior service cost that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next year are $0 thousand, $9,005 thousand and $21 thousand, respectively.

The weighted average discount rates used to determine net periodic benefit cost for 2014, 2013 and 2012 were 5.00%, 4.00% and 4.60%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2014, 2013 and 2012 was 4.0%. The expected long-term rate of return on plan assets for 2014, 2013 and 2012 was 7.50%, 7.50% and 7.75%, respectively, and was based on expected portfolio returns and allocations.

The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation for year end 2014, 2013 and 2012 were 4.00%, 5.00% and 4.00%, respectively.

F-35

The following table summarizes the accumulated benefit obligation for the periods indicated:

	At December 31,
(Dollars in thousands)	2014		2013
Qualified Plan	$	200,205	$	147,803
Non-qualified Plan		19,167		29,774
Total	$	219,371	$	177,577

(Some amounts may not reconcile due to rounding.)

The following table displays the plans with projected benefit obligations in excess of plan assets for the periods indicated:

	At December 31,
(Dollars in thousands)	2014		2013
Qualified Plan
Projected benefit obligation	$	243,525	$	179,512
Fair value of plan assets		157,090		152,446
Non-qualified Plan
Projected benefit obligation	$	26,540	$	34,547
Fair value of plan assets		-		-

The following table displays the plans with accumulated benefit obligations in excess of plan assets for the periods indicated:

	At December 31,
(Dollars in thousands)	2014		2013
Qualified Plan
Accumulated benefit obligation	$	200,205		N/A
Fair value of plan assets		157,090		N/A
Non-qualified Plan
Accumulated benefit obligation	$	19,167	$	29,774
Fair value of plan assets		-		-

(N/A, not applicable)

The following table displays the expected benefit payments in the periods indicated:

(Dollars in thousands)
2015	$	9,683
2016		6,297
2017		7,619
2018		9,120
2019		11,350
Next 5 years		63,370

Plan assets consist of shares in investment trusts with approximately 76%, 15% and 9% of the underlying assets consisting of equity securities, fixed maturities and cash, respectively. The Company manages the qualified plan investments for U.S. employees. The assets in the plan consist of debt and equity mutual funds. Due to the long term nature of the plan, the target asset allocation has historically been 70% equities and 30% bonds.

F-36

The following tables present the fair value measurement levels for the qualified plan assets at fair value for the periods indicated:

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2014		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash	$	-	$	-	$	-	$	-
Short-term investments, which approximates fair value (a)		14,328		14,328		-		-
Mutual funds, fair value
Fixed income (b)		23,948		23,948		-		-
Equities (c)		96,762		96,762		-		-
Multi-strategy equity fund, fair value (d)		10,629		-		-		10,629
Private equity limited partnerships (e)		11,423		-		-		11,423
Total	$	157,090	$	135,037	$	-	$	22,053

(Some amounts may not reconcile due to rounding.)

(a)	This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars.

(b)	This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 50% in U.S. securities and 50% in international securities.

(c)	This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 90% in U.S. equities and 10% in international equities.

(d)	This category consists of a privately held fund of U.S. and international equity funds and may include currency hedges for the foreign funds. The fair value is provided by the external investment manager.

(e)	This category consists of private equity limited partnerships.

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2013		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash	$	-	$	-	$	-	$	-
Short-term investments, which approximates fair value (a)		10,590		10,590		-		-
Mutual funds, fair value
Fixed income (b)		24,630		24,630		-		-
Equities (c)		97,305		97,305		-		-
Multi-strategy equity fund, fair value (d)		10,765		-		-		10,765
Private equity limited partnerships (e)		9,156		-		-		9,156
Total	$	152,446	$	132,525	$	-	$	19,921

(Some amounts may not reconcile due to rounding.)

(a)	This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars.

(b)	This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 50% in U.S. securities and 50% in international securities.

(c)	This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 90% in U.S. equities and 10% in international equities.

(d)	This category consists of a privately held fund of U.S. and international equity funds and may include currency hedges for the foreign funds. The fair value is provided by the external investment manager.

(e)	This category consists of private equity limited partnerships.

F-37

The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturity investments, for the period indicated:

	Year Ended December 31,
(Dollars in thousands)	2014			2013
Assets:
Balance, beginning of period	$	19,921		$	14,616
Actual return on plan assets:
Realized gains (losses) relating to assets sold during the period		75			7
Unrealized gains (losses) relating to assets still held at the reporting date		331			2,589
Purchases and capital contributions		3,390			2,951
Investment income earned on assets		-			-
Sales and capital distributions		(1,664	)		(242	)
Transfers in and/or (out) of Level 3		-			-
Balance, end of period	$	22,053		$	19,921

The amount of total gains (losses) for the period included in changes in
net assets attributable to the change in unrealized gains (losses)
relating to assets still held at the reporting date	$	256		$	2,582

(Some amounts may not reconcile due to rounding.)

The Company does not expect to make any contributions to the qualified plan in 2015.

Defined Contribution Plans.

The Company also maintains both qualified and non-qualified defined contribution plans (“Savings Plan” and “Non-Qualified Savings Plan”, respectively) covering U.S. employees. Under the plans, the Company contributes up to a maximum 3% of the participants’ compensation based on the contribution percentage of the employee. The Non-Qualified Savings Plan provides compensating savings plan benefits for participants whose benefits have been curtailed under the Savings Plan due to Internal Revenue Code limitations. In addition, effective for new hires (and rehires) on or after April 1, 2010, the Company will contribute between 3% and 8% of an employee’s earnings for each payroll period based on the employee’s age. These contributions will be 100% vested after three years.

The following table presents the Company’s incurred expenses related to these plans for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Incurred expenses		$	4,676			$	3,903			$	3,209

In addition, the Company maintains several defined contribution pension plans covering non-U.S. employees. Each non-U.S. office (Brazil, Canada, London, Belgium, Singapore, Ireland and Bermuda) maintains a separate plan for the non-U.S. employees working in that location. The Company contributes various amounts based on salary, age and/or years of service. The contributions as a percentage of salary for the branch offices range from 3.2% to 14.6%. The contributions are generally used to purchase pension benefits from local insurance providers. The following table presents the Company’s incurred expenses related to these plans for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Incurred expenses		$	1,387			$	1,195			$	1,064

F-38

Post-Retirement Plan.

The Company sponsors a Retiree Health Plan for employees employed prior to April 1, 2010. This plan provides healthcare benefits for eligible retired employees (and their eligible dependants), who have elected coverage. The Company anticipates that most covered employees will become eligible for these benefits if they retire while working for the Company. The cost of these benefits is shared with the retiree. The Company accrues the post-retirement benefit expense during the period of the employee’s service.

The following medical cost trend rates were used to determine net cost and benefit obligations: a healthcare inflation rate for pre-Medicare claims of 7.2% in 2014 was assumed to decrease gradually to 4.5% in 2027 and then remain at that level; and a healthcare inflation rate for post-Medicare claims of 6.3% in 2014 was assumed to decrease gradually to 4.5% in 2027 and then remain at that level.

Changes in the assumed healthcare cost trend can have a significant effect on the amounts reported for the healthcare plans. A one percent change in the rate would have the following effects on:

	Percentage		Percentage
	Point Increase		Point Decrease
(Dollars in thousands)	($ Impact)		($ Impact)
a. Effect on total service and interest cost components	$	674	$	(518	)
b. Effect on accumulated post-retirement benefit obligation		8,442		(6,426	)

The following table presents the post-retirement benefit expenses for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
Post-retirement benefit expenses		$	3,196			$	3,801			$	3,141

The following table summarizes the status of this plan for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	27,594		$	27,938
Service cost		1,619			1,899
Interest cost		1,320			1,164
Actuarial loss		6,475			(3,040	)
Benefits paid		(502	)		(366	)
Benefit obligation at end of year		36,506			27,594

Change in plan assets:
Fair value of plan assets at beginning of year		-			-
Employer contributions		502			366
Benefits paid		(502	)		(366	)
Fair value of plan assets at end of year		-			-

Funded status at end of year	$	(36,506	)	$	(27,594	)

Amounts recognized in the consolidated balance sheets for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Other liabilities (due within one year)	$	(639	)	$	(463	)
Other liabilities (due beyond one year)		(35,867	)		(27,130	)
Net amount recognized in the consolidated balance sheets	$	(36,506	)	$	(27,594	)

F-39

Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:

	At December 31,
(Dollars in thousands)	2014			2013
Accumulated income (loss)	$	(12,670	)	$	(6,452	)
Accumulated other comprehensive income (loss)	$	(12,670	)	$	(6,452	)

Other changes in other comprehensive income (loss) for the periods indicated are as follows:

	Years Ended December 31,
(Dollars in thousands)	2014			2013
Other comprehensive income (loss) at December 31, prior year	$	(6,452	)	$	(10,231	)
Net gain (loss) arising during period		(6,475	)		3,040
Recognition of amortizations in net periodic benefit cost:
Actuarial loss (gain)		257			739
Other comprehensive income (loss) at December 31, current year	$	(12,670	)	$	(6,452	)

Net periodic benefit cost included the following components for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014		2013			2012
Service cost	$	1,619	$	1,899		$	1,677
Interest cost		1,320		1,164			1,033
Net loss recognition		257		739			432
Net periodic cost	$	3,196	$	3,801		$	3,142

Other changes recognized in other comprehensive income (loss):
Other comprehensive gain (loss) attributable to change from prior year		6,218		(3,779	)

Total recognized in net periodic benefit cost and
other comprehensive income (loss)	$	9,414	$	22

(Some amounts may not reconcile due to rounding.)

The estimated transition obligation, actuarial loss and prior service cost that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year are $0 thousand, $843 thousand and $0 thousand, respectively.

The weighted average discount rates used to determine net periodic benefit cost for 2014, 2013 and 2012 were 5.00%, 4.00% and 4.60%, respectively.

The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2014, 2013 and 2012 were 4.00%, 5.00% and 4.00%, respectively.

The following table displays the expected benefit payments in the years indicated:

(Dollars in thousands)
2015	$	639
2016		738
2017		794
2018		926
2019		1,054
Next 5 years		7,802

F-40

DIVIDEND RESTRICTIONS AND STATUTORY FINANCIAL INFORMATION

Group and its operating subsidiaries are subject to various regulatory restrictions, including the amount of dividends that may be paid and the level of capital that the operating entities must maintain. These regulatory restrictions are based upon statutory capital as opposed to GAAP basis equity or net assets. Group and one of its primary operating subsidiaries, Bermuda Re, are regulated by Bermuda law and its other primary operating subsidiary, Everest Re, is regulated by Delaware law. Bermuda Re is subject to the Bermuda Solvency Capital Requirement (“BSCR”) administered by the Bermuda Monetary Authority (“BMA”) and Everest Re is subject to the Risk-Based Capital Model (“RBC”) developed by the National Association of Insurance Commissioners (“NAIC”). These models represent the aggregate regulatory restrictions on net assets and statutory capital and surplus.

Dividend Restrictions.

Under Bermuda law, Group is prohibited from declaring or paying a dividend if such payment would reduce the realizable value of its assets to an amount less than the aggregate value of its liabilities and its issued share capital and share premium (additional paid-in capital) accounts. Group’s ability to pay dividends and its operating expenses is dependent upon dividends from its subsidiaries.

Under Bermuda law, Bermuda Re is prohibited from declaring or making payment of a dividend if it fails to meet its minimum solvency margin or minimum liquidity ratio. As a long term insurer, Bermuda Re is also unable to declare or pay a dividend to anyone who is not a policyholder unless, after payment of the dividend, the value of the assets in their long term business fund, as certified by their approved actuary, exceeds their liabilities for long term business by at least the $250 thousand minimum solvency margin. Prior approval of the BMA is required if Bermuda Re’s dividend payments would exceed 25% of their prior year-end total statutory capital and surplus.

Bermuda Re prepares its statutory financial statements in conformity with the accounting principles set forth in Bermuda in The Insurance Act 1978, amendments thereto and related regulations. The general business statutory capital and surplus of Bermuda Re was $2,748,030 thousand and $2,712,184 thousand at December 31, 2014 and 2013, respectively. The general business statutory net income of Bermuda Re was $698,834 thousand, $634,147 thousand and $475,909 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.

Delaware law provides that an insurance company which is a member of an insurance holding company system and is domiciled in the state shall not pay dividends without giving prior notice to the Insurance Commissioner of Delaware and may not pay dividends without the approval of the Insurance Commissioner if the value of the proposed dividend, together with all other dividends and distributions made in the preceding twelve months, exceeds the greater of (1) 10% of statutory surplus or (2) net income, not including realized capital gains, each as reported in the prior year’s statutory annual statement. In addition, no dividend may be paid in excess of unassigned earned surplus. At December 31, 2014, Everest Re has $357,297 thousand available for payment of dividends in 2015 without the need for prior regulatory approval.

Everest Re prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the NAIC and the Delaware Insurance Department. Prescribed statutory accounting practices are set forth in the NAIC Accounting Practices and Procedures Manual. The capital and statutory surplus of Everest Re was $2,892,999 thousand and $2,814,337 thousand at December 31, 2014 and 2013, respectively. The statutory net income of Everest Re was $357,298 thousand, $540,020 thousand and $359,816 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.

There are certain regulatory and contractual restrictions on the ability of Holdings’ operating subsidiaries to transfer funds to Holdings in the form of cash dividends, loans or advances. The insurance laws of the State of Delaware, where Holdings’ direct insurance subsidiaries are domiciled, require regulatory approval before those subsidiaries can pay dividends or make loans or advances to Holdings that exceed certain statutory thresholds.

F-41

Capital Restrictions.

In Bermuda, Bermuda Re is subject to the BSCR administered by the BMA. No regulatory action is taken if an insurer’s capital and surplus is equal to or in excess of their enhanced capital requirement determined by the BSCR model. In addition, the BMA has established a target capital level for each insurer, which is 120% of the enhanced capital requirement.

In the United States, Everest Re is subject to the RBC developed by the NAIC which determines an authorized control level risk-based capital. As long as the total adjusted capital is 200% or more of the authorized control level capital, no action is required by the Company.

The regulatory targeted capital and the actual statutory capital for Bermuda Re and Everest Re were as follows:

	Bermuda Re (1)				Everest Re (2)
	At December 31,				At December 31,
(Dollars in thousands)	2014 (3)		2013 (3)		2014		2013
Regulatory targeted capital	$	-	$	2,154,553	$	1,209,601	$	1,094,605
Actual capital	$	2,748,030	$	2,712,184	$	2,892,999	$	2,814,337

(1) Regulatory targeted capital represents the target capital level from the applicable year's BSCR calculation.

(2) Regulatory targeted capital represents 200% of the RBC authorized control level calculation for the applicable year.

(3) The 2014 BSCR calculation is not yet due to be completed; however, the Company anticipates that Bermuda Re's December 31, 2014 actual capital will exceed the targeted capital level.

CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and loss adjustment expenses.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

The Company has entered into separate annuity agreements with The Prudential Insurance of America (“The Prudential”) and an additional unaffiliated life insurance company in which the Company has either purchased annuity contracts or become the assignee of annuity proceeds that are meant to settle claim payment obligations in the future. In both instances, the Company would become contingently liable if either The Prudential or the unaffiliated life insurance company were unable to make payments related to the respective annuity contract.

The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:

	At December 31,
(Dollars in thousands)	2014		2013
The Prudential Insurance Company of America	$	142,653	$	144,734
Unaffiliated life insurance company	$	31,964	$	30,664

F-42

SHARE-BASED COMPENSATION PLANS

The Company has a 2010 Stock Incentive Plan (“2010 Employee Plan”), a 2009 Non-Employee Director Stock Option and Restricted Stock Plan (“2009 Director Plan”) and a 2003 Non-Employee Director Equity Compensation Plan (“2003 Director Plan”).

Under the 2010 Employee Plan, 4,000,000 common shares have been authorized to be granted as non-qualified share options, incentive share options, share appreciation rights or restricted share and share awards to officers and key employees of the Company. At December 31, 2014, there were 2,751,801 remaining shares available to be granted under the 2010 Employee Plan. The 2010 Employee Plan replaced a 2002 Employee Plan, which replaced a 1995 Employee Plan; therefore, no further awards will be granted under the 2002 Employee Plan or the 1995 Employee Plan. Through December 31, 2014, only non-qualified share options and restricted share awards had been granted under the employee plans. Under the 2009 Director Plan, 37,439 common shares have been authorized to be granted as share options or restricted share awards to non-employee directors of the Company. At December 31, 2014, there were 35,215 remaining shares available to be granted under the 2009 Director Plan. The 2009 Director Plan replaced a 1995 Director Plan, which expired. Under the 2003 Director Plan, 500,000 common shares have been authorized to be granted as share options or share awards to non-employee directors of the Company. At December 31, 2014 there were 391,487 remaining shares available to be granted under the 2003 Director Plan.

Options and restricted shares granted under the 2010 Employee Plan and the 2002 Employee Plan vest at the earliest of 20% per year over five years or in accordance with any applicable employment agreement. Options granted under the 1995 Director Plan vested at 50% per year over two years. Options and restricted shares granted under the 2003 Director Plan generally vest at 33% per year over three years, unless an alternate vesting period is authorized by the Board. Options and restricted shares granted under the 2009 Director Plan will vest as provided in the award agreement. All options are exercisable at fair market value of the stock at the date of grant and expire ten years after the date of grant.

For share options and restricted shares granted under the 2010 Employee Plan, the 2002 Employee Plan, the 2009 Director Plan, the 2003 Director Plan and the 1995 Director Plan, share-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) was $21,196 thousand, $31,844 thousand and $31,984 thousand for the years ended December 31, 2014, 2013 and 2012, respectively. The corresponding income tax benefit recorded in the consolidated statements of operations and comprehensive income (loss) for share-based compensation was $5,819 thousand, $5,458 thousand and $2,792 thousand for the years ended December 31, 2014, 2013 and 2012, respectively.

For the year ended December 31, 2014, share-based compensation awards granted were 176,159 restricted shares, granted on February 26, 2014, May 14, 2014 and November 19, 2014, with a fair value of $147.035, $157.940 and $170.435 per share, respectively. No share options were granted during the years ended December 31, 2014 and 2013. For share options granted during previous years, the fair value per option was calculated on the date of the grant using the Black-Scholes option valuation model. The following assumptions were used in calculating the fair value of the options granted:

	Years Ended December 31,
	2014	2013	2012
Weighted-average volatility	-	-	26.16%
Weighted-average dividend yield	-	-	2.00%
Weighted-average expected term	-	-	6.69 years
Weighted-average risk-free rate	-	-	1.33%

F-43

The Company recognizes, as an increase to additional paid-in capital, a realized income tax benefit from dividends, charged to retained earnings and paid to employees on equity classified non-vested equity shares. In addition, the amount recognized in additional paid-in capital for the realized income tax benefit from dividends on those awards is included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards. For the years ended December 31, 2014, 2013 and 2012, the Company recognized $401 thousand, $237 thousand and $162 thousand, respectively, of additional paid-in capital due to tax benefits from dividends on restricted shares.

A summary of the option activity under the Company’s shareholder approved plans as of December 31, 2014, 2013 and 2012, and changes during the year then ended is presented in the following tables:

					Weighted-
			Weighted-		Average
			Average		Remaining		Aggregate
(Aggregate Intrinsic Value in thousands)			Exercise		Contractual		Intrinsic
Options	Shares		Price/Share		Term		Value
Outstanding at January 1, 2014		1,190,544	$	85.44
Granted		-		-
Exercised		286,120		83.53
Forfeited/Cancelled/Expired		16,240		85.73
Outstanding at December 31, 2014		888,184		86.05		5.2	$	76,485

Exercisable at December 31, 2014		562,684		85.41		4.5	$	48,812

					Weighted-
			Weighted-		Average
			Average		Remaining		Aggregate
(Aggregate Intrinsic Value in thousands)			Exercise		Contractual		Intrinsic
Options	Shares		Price/Share		Term		Value
Outstanding at January 1, 2013		2,012,164	$	87.25
Granted		-		-
Exercised		768,190		90.26
Forfeited/Cancelled/Expired		53,430		84.23
Outstanding at December 31, 2013		1,190,544		85.44		5.8	$	83,313

Exercisable at December 31, 2013		579,417		86.33		4.5	$	40,029

					Weighted-
			Weighted-		Average
			Average		Remaining		Aggregate
(Aggregate Intrinsic Value in thousands)			Exercise		Contractual		Intrinsic
Options	Shares		Price/Share		Term		Value
Outstanding at January 1, 2012		2,316,276	$	84.39
Granted		320,454		88.35
Exercised		581,496		76.51
Forfeited/Cancelled/Expired		43,070		86.56
Outstanding at December 31, 2012		2,012,164		87.25		6.0	$	44,053

Exercisable at December 31, 2012		995,070		90.09		4.4	$	18,956

There were no share options granted in 2014 and 2013. The weighted-average grant-date fair value of options granted during the year 2012 was $19.21 per share. The aggregate intrinsic value (market price less exercise price) of options exercised during the years ended December 31, 2014, 2013 and 2012 was $21,202 thousand, $30,050 thousand and $14,603 thousand, respectively. The cash received from the exercised share options for the year ended December 31, 2014 was $23,899 thousand. The tax benefit realized from the options exercised for the year ended December 31, 2014 was $6,925 thousand.

F-44

The following table summarizes information about share options outstanding for the period indicated:

		At December 31, 2014
		Options Outstanding						Options Exercisable
				Weighted-
				Average		Weighted-				Weighted-
		Number		Remaining		Average		Number		Average
Range of		Outstanding		Contractual		Exercise		Exercisable		Exercise
Exercise Prices		at 12/31/14		Life		Price		at 12/31/14		Price
$	66.0780 - $77.0910		158,810		4.1	$	71.72		158,810	$	71.72
$	77.0911 - $88.1040		354,240		5.7		85.74		190,540		85.56
$	88.1041 - $99.1170		305,180		5.6		90.72		143,380		93.39
$	99.1171 - $110.1300		69,954		3.2		99.77		69,954		99.77
			888,184		5.2		86.05		562,684		85.41

The following table summarizes the status of the Company’s non-vested shares and changes for the periods indicated:

	Years Ended December 31,
	2014				2013				2012
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
			Grant Date				Grant Date				Grant Date
Restricted (non-vested) Shares	Shares		Fair Value		Shares		Fair Value		Shares		Fair Value
Outstanding at January 1,		429,041	$	103.50		357,750	$	87.86		372,453	$	85.12
Granted		176,159		147.44		274,715		132.95		310,370		92.46
Vested		128,549		99.55		187,397		116.83		313,573		89.30
Forfeited		8,906		118.82		16,027		103.29		11,500		84.17
Outstanding at December 31,		467,745		120.84		429,041		103.50		357,750		87.86

As of December 31, 2014, there was $41,818 thousand of total unrecognized compensation cost related to non-vested share-based compensation expense. That cost is expected to be recognized over a weighted-average period of 3.3 years. The total fair value of shares vested during the years ended December 31, 2014, 2013 and 2012, was $12,797 thousand, $21,894 thousand and $28,003 thousand, respectively. The tax benefit realized from the shares vested for the year ended December 31, 2014 was $4,496 thousand.

In addition to the 2010 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, Group issued 476 common shares in 2014, 586 common shares in 2013 and 518 common shares in 2012 to the Company’s non-employee directors as compensation for their service as directors. These issuances had aggregate values of approximately $75 thousand, $75 thousand and $48 thousand, respectively.

Since its 1995 initial public offering, the Company has issued to certain key employees of the Company 1,696,595 restricted common shares, of which 196,593 restricted shares have been cancelled. The Company has issued to non-employee directors of the Company 100,786 restricted common shares, of which no restricted shares have been cancelled. The Company acquired 55,756, 94,014 and 148,962 common shares at a cost of $8,531 thousand, $13,180 thousand and $15,307 thousand in 2014, 2013 and 2012, respectively, from employees and non-employee directors who chose to pay required withholding taxes with shares exercised or restricted shares vested. The Company acquired 26,734, 74,175 and 79,086 common shares at a cost of $4,207 thousand, $9,313 thousand and $8,322 thousand in 2014, 2013 and 2012, respectively, from employees and non-employee directors who chose to pay the option grant price with shares.

F-45

RELATED-PARTY TRANSACTIONS

During the normal course of business, the Company, through its affiliates, engages in reinsurance and brokerage and commission business transactions with companies controlled by or affiliated with one or more of its outside directors. Such transactions, individually and in the aggregate, are not material to the Company’s financial condition, results of operations and cash flows.

SEGMENT REPORTING

The U.S. Reinsurance operation writes property and casualty reinsurance and specialty lines of business, including Marine, Aviation, Surety and Accident and Health (“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 non-U.S. property and casualty reinsurance through Everest Re’s branches in Canada and Singapore and through offices in Brazil, Miami and New Jersey. The Bermuda operation provides reinsurance and insurance to worldwide property and casualty markets through brokers and directly with ceding companies from its Bermuda office and reinsurance to the United Kingdom and European markets through its UK branch and Ireland Re. The Insurance operation writes property and casualty insurance directly and through general agents, brokers and surplus lines brokers within the U.S. and Canada. The Mt. 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. 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. Management generally monitors and evaluates the financial performance of these operating segments based upon their underwriting results. 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.

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

Mt. 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.

F-46

The following tables present the underwriting results for the operating segments for the periods indicated:

U.S. Reinsurance	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Gross written premiums	$	2,039,578	$	1,809,669	$	1,310,683
Net written premiums		1,983,800		1,807,067		1,306,463

Premiums earned	$	1,986,769	$	1,671,513	$	1,416,407
Incurred losses and LAE		954,525		814,668		1,050,394
Commission and brokerage		466,291		366,890		350,634
Other underwriting expenses		45,583		47,176		44,776
Underwriting gain (loss)	$	520,370	$	442,779	$	(29,397	)

International	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Gross written premiums	$	1,582,426	$	1,345,770	$	1,192,306
Net written premiums		1,336,633		1,327,430		1,188,745

Premiums earned	$	1,310,903	$	1,289,341	$	1,214,840
Incurred losses and LAE		748,174		675,362		586,325
Commission and brokerage		306,229		295,883		300,116
Other underwriting expenses		34,598		33,910		29,294
Underwriting gain (loss)	$	221,902	$	284,186	$	299,105

Bermuda	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Gross written premiums	$	770,249	$	774,268	$	734,405
Net written premiums		744,664		765,660		733,751

Premiums earned	$	715,736	$	737,986	$	680,948
Incurred losses and LAE		361,792		374,375		408,230
Commission and brokerage		198,848		179,138		184,357
Other underwriting expenses		34,923		34,654		30,607
Underwriting gain (loss)	$	120,173	$	149,819	$	57,754

Insurance	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Gross written premiums	$	1,218,372		$	1,268,745		$	1,073,143
Net written premiums		1,067,333			1,086,217			852,112

Premiums earned	$	1,030,299		$	1,037,425		$	852,433
Incurred losses and LAE		811,445			931,466			700,316
Commission and brokerage		149,777			133,695			117,594
Other underwriting expenses		118,001			119,283			102,982
Underwriting gain (loss)	$	(48,924	)	$	(147,019	)	$	(68,459	)

Mt. Logan Re	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Gross written premiums	$	138,362	$	20,182	$	-
Net written premiums		124,473		18,447		-

Premiums earned	$	125,428	$	17,278	$	-
Incurred losses and LAE		30,598		4,380		-
Commission and brokerage		14,441		1,952		-
Other underwriting expenses		7,295		2,103		-
Underwriting gain (loss)	$	73,094	$	8,843	$	-

F-47

The following table reconciles the underwriting results for the operating segments to income before taxes as reported in the consolidated statements of operations and comprehensive income (loss) for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
Underwriting gain (loss)	$	886,615		$	738,608		$	259,003
Net investment income		530,570			548,509			600,202
Net realized capital gains (losses)		84,046			300,227			164,400
Net derivative gain (loss)		(11,599	)		44,044			(9,738	)
Corporate expenses		(23,421	)		(24,817	)		(23,976	)
Interest, fee and bond issue cost amortization expense		(38,533	)		(46,118	)		(53,683	)
Other income (expense)		18,437			(5,487	)		3,318
Income (loss) before taxes	$	1,446,115		$	1,554,966		$	939,526

The Company produces business in the U.S., Bermuda and internationally. The net income deriving from and assets residing in the individual foreign countries in which the Company writes business are not identifiable in the Company’s financial records. Based on gross written premium, the table below presents the largest country, other than the U.S., in which the Company writes business, for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2014				2013				2012
United Kingdom		$	676,490			$	555,332			$	456,724

Approximately 22.7%, 20.6% and 21.1% of the Company’s gross written premiums in 2014, 2013 and 2012, respectively, were sourced through the Company’s largest intermediary.

SUBSEQUENT EVENTS

The Company has evaluated known recognized and non-recognized subsequent events. The Company does not have any subsequent events to report.

F-48

UNAUDITED QUARTERLY FINANCIAL DATA

Summarized quarterly financial data for the periods indicated:

	2014
(Dollars in thousands, except per share amounts)	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Operating data:
Gross written premiums	$	1,267,424		$	1,415,362		$	1,666,701		$	1,399,500
Net written premiums		1,227,589			1,217,487			1,517,580			1,294,247

Premiums earned		1,144,490			1,272,317			1,389,998			1,362,330
Net investment income		123,157			131,224			142,143			134,046
Net realized capital gains (losses)		21,126			59,016			(9,448	)		13,352
Total claims and underwriting expenses		916,049			1,077,798			1,191,389			1,097,284
Net income (loss)		302,022			297,925			301,253			357,263
Net (income) loss attributable to noncontrolling interests		(8,089	)		(7,741	)		(26,337	)		(17,140	)
Net income (loss) attributable to Everest Re Group		293,933			290,184			274,916			340,123

Earnings per common share attributable to Everest Re Group:
Basic	$	6.26		$	6.32		$	6.05		$	7.54
Diluted	$	6.21		$	6.26		$	6.00		$	7.47

	2013
(Dollars in thousands, except per share amounts)	1st Quarter		2nd Quarter		3rd Quarter			4th Quarter

Operating data:
Gross written premiums	$	1,180,790	$	1,260,202	$	1,464,984		$	1,312,658
Net written premiums		1,149,693		1,212,626		1,389,147			1,253,355

Premiums earned		1,088,759		1,151,533		1,225,755			1,287,496
Net investment income		145,781		148,729		127,872			126,127
Net realized capital gains (losses)		126,735		33,905		44,958			94,629
Total claims and underwriting expenses		878,636		1,008,558		1,078,549			1,049,192
Net income (loss)		384,343		275,642		238,527			366,748
Net (income) loss attributable to noncontrolling interests		-		-		(3,768	)		(2,110	)
Net income (loss) attributable to Everest Re Group		384,343		275,642		234,759			364,638

Earnings per common share attributable to Everest Re Group:
Basic	$	7.56	$	5.60	$	4.85		$	7.62
Diluted	$	7.50	$	5.56	$	4.81		$	7.54

F-49


SCHEDULE I — SUMMARY OF INVESTMENTS —
OTHER THAN INVESTMENTS IN RELATED PARTIES
December 31, 2014

Column A	Column B		Column C		Column D
					Amount
					Shown in
			Market		Balance
(Dollars in thousands)	Cost		Value		Sheet
Fixed maturities-available for sale
Bonds:
U.S. government and government agencies	$	221,052	$	231,038	$	231,038
State, municipalities and political subdivisions		783,129		824,472		824,472
Foreign government securities		1,488,144		1,532,455		1,532,455
Foreign corporate securities		2,980,716		3,037,315		3,037,315
Public utilities		227,042		239,627		239,627
All other corporate bonds		4,715,726		4,783,608		4,783,608
Mortgage - backed securities:
Commercial		231,439		241,685		241,685
Agency residential		2,157,182		2,183,164		2,183,164
Non-agency residential		2,734		2,731		2,731
Redeemable preferred stock		23,995		24,972		24,972
Total fixed maturities-available for sale		12,831,159		13,101,067		13,101,067
Fixed maturities - available for sale at fair value (1)		2,143		1,509		1,509
Equity securities - available for sale at market value		148,326		140,210		140,210
Equity securities - available for sale at fair value (1)		1,082,281		1,447,820		1,447,820
Short-term investments		1,705,932		1,705,932		1,705,932
Other invested assets		601,925		601,925		601,925
Cash		437,474		437,474		437,474

Total investments and cash	$	16,809,240	$	17,435,937	$	17,435,937

(1) Original cost does not reflect fair value adjustments, which have been realized through the statements of operations and comprehensive income (loss).

S-1

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED BALANCE SHEETS


	December 31,
(Dollars and share amounts in thousands, except par value per share)	2014			2013

ASSETS:
Fixed maturities - available for sale, at market value	$	26,297		$	31,856
(amortized cost: 2014, $26,016; 2013, $30,937)
Short-term investments		297,751			28,443
Cash		1,398			3,643
Investment in subsidiaries, at equity in the underlying net assets		7,374,460			6,885,027
Accrued investment income		239			290
Receivable from subsidiaries		2,273			728
Subscription advances to Mt. Logan Re		-			20,000
Other assets		1,075			1,609
TOTAL ASSETS	$	7,703,493		$	6,971,596

LIABILITIES:
Long term note payable - Affiliated	$	250,000		$	-
Due to subsidiaries		1,765			2,740
Other liabilities		608			580
Total liabilities		252,373			3,320

SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50,000 shares authorized;
no shares issued and outstanding		-			-
Common shares, par value: $0.01; 200,000 shares authorized;
(2014) 68,336 and (2013) 67,965 issued outstanding before treasury shares		683			680
Additional paid-in capital		2,068,807			2,029,774
Accumulated other comprehensive income (loss), net of deferred income
tax expense (benefit) of $20,715 at 2014 and $57,661 at 2013		48,317			157,728
Treasury shares, at cost; 23,650 shares (2014) and 20,422 shares (2013)		(2,485,897	)		(1,985,873	)
Retained earnings		7,819,210			6,765,967
Total shareholders' equity		7,451,120			6,968,276
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	7,703,493		$	6,971,596

See notes to consolidated financial statements.

S-2

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS


	Years Ended December 31,
	2014			2013			2012
(Dollars in thousands)
REVENUES:
Net investment income	$	824		$	982		$	1,160
Net realized capital gains (losses)		15			-			286
Other income (expense)		(574	)		(902	)		(754	)
Net income (loss) of subsidiaries		1,214,334			1,275,955			843,022
Total revenues		1,214,599			1,276,035			843,714

EXPENSES:
Other expenses		15,443			16,653			14,760
Total expenses		15,443			16,653			14,760

INCOME (LOSS) BEFORE TAXES		1,199,156			1,259,382			828,954
Income tax expense (benefit)		-			-			-

NET INCOME (LOSS)	$	1,199,156		$	1,259,382		$	828,954

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		704			(395,797	)		174,025
Reclassification adjustment for realized losses (gains) included in net income (loss)		21,392			(6,977	)		(19,676	)
Total URA(D) on securities arising during the period		22,096			(402,774	)		154,349

Foreign currency translation adjustments		(95,417	)		(162	)		22,698

Benefit plan actuarial net gain (loss) for the period		(39,110	)		17,837			(11,771	)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		3,020			5,778			4,795
Total benefit plan net gain (loss) for the period		(36,090	)		23,615			(6,976	)
Total other comprehensive income (loss), net of tax		(109,411	)		(379,321	)		170,071

COMPREHENSIVE INCOME (LOSS)	$	1,089,745		$	880,061		$	999,025

See notes to consolidated financial statements.

S-3

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS


	Years Ended December 31,
(Dollars in thousands)	2014			2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,199,156		$	1,259,382		$	828,954
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in retained (earnings) deficit of subsidiaries		(1,214,334	)		(1,275,955	)		(843,022	)
Dividends received from subsidiaries		690,000			665,000			465,000
Change in other assets and liabilities, net		20,612			1,334			(2,414	)
Increase (decrease) in due to/from affiliates		(2,520	)		1,378			484
Amortization of bond premium (accrual of bond discount)		156			241			494
Realized capital losses (gains)		(15	)		-			(286	)
Non-cash compensation expense		1,828			1,087			1,536
Net cash provided by (used in) operating activities		694,883			652,467			450,746

CASH FLOWS FROM INVESTING ACTIVITIES:
Additional investment in subsidiaries		(73,873	)		(93,967	)		(49,673	)
Subscription advances to Mt. Logan Re		-			(20,000	)		-
Proceeds from fixed maturities matured/called - available for sale, at market value		4,765			7,856			5,290
Proceeds from fixed maturities sold - available for sale, at market value		50,010			-			21,955
Cost of fixed maturities acquired - available for sale, at market value		(49,994	)		(413	)		-
Net change in short-term investments		(269,307	)		103,174			(89,247	)
Net cash provided by (used in) investing activities		(338,399	)		(3,350	)		(111,675	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period, net		37,208			82,258			51,921
Purchase of treasury shares		(500,024	)		(621,915	)		(289,988	)
Proceeds from issuance of long term notes - affiliated		250,000			-			-
Dividends paid to shareholders		(145,913	)		(106,681	)		(100,402	)
Net cash provided by (used in) financing activities		(358,729	)		(646,338	)		(338,469	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		-			-			-

Net increase (decrease) in cash		(2,245	)		2,779			602
Cash, beginning of period		3,643			864			262
Cash, end of period	$	1,398		$	3,643		$	864

See notes to consolidated financial statements.

S-4

SCHEDULE II – CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT

NOTES TO CONDENSED FINANCIAL INFORMATION

1.)	The accompanying condensed financial information should be read in conjunction with the Consolidated Financial Statements and related Notes of Everest Re Group, Ltd. and its Subsidiaries.

2.)

Everest Re Group, Ltd. entered into a $250,000 thousand long term promissory note agreement with Everest Reinsurance Holdings, Inc., an affiliated company, as of December 31, 2014. The note will mature on December 31, 2023 and has an interest rate of 1.72% that will be paid annually, on December 15th of each year. This transaction is presented as a Long Term Note Payable – Affiliated in the Condensed Balance Sheets of Everest Re Group, Ltd.

S-5

SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION



Column A	Column B		Column C		Column D		Column E		Column F		Column G		Column H		Column I		Column J
			Reserve								Incurred
Geographic Area			for Losses								Loss and		Amortization
	Deferred		and Loss		Unearned				Net		Loss		of Deferred		Other		Net
	Acquisition		Adjustment		Premium		Premiums		Investment		Adjustment		Acquisition		Operating		Written
(Dollars in thousands)	Costs		Expenses		Reserves		Earned		Income		Expenses		Costs		Expenses		Premium
December 31, 2014
Domestic	$	242,178	$	6,022,556	$	1,099,644	$	3,017,068	$	253,304	$	1,765,970	$	616,068	$	163,584	$	3,051,133
International		69,050		1,778,216		347,261		1,310,903		40,262		748,174		306,229		34,598		1,336,633
Bermuda		87,180		1,920,041		281,840		841,164		237,004		392,390		213,289		42,218		869,137
Total	$	398,408	$	9,720,813	$	1,728,745	$	5,169,135	$	530,570	$	2,906,534	$	1,135,586	$	240,400	$	5,256,903

December 31, 2013
Domestic	$	224,201	$	5,915,490	$	1,044,609	$	2,708,938	$	256,120	$	1,746,134	$	500,585	$	166,459	$	2,893,284
International		68,594		1,701,907		275,083		1,289,341		44,325		675,362		295,883		33,910		1,327,430
Bermuda		70,926		2,055,843		260,253		755,264		248,064		378,755		181,090		36,757		784,107
Total	$	363,721	$	9,673,240	$	1,579,945	$	4,753,543	$	548,509	$	2,800,251	$	977,558	$	237,126	$	5,004,821

December 31, 2012
Domestic	$	183,021	$	6,281,606	$	857,325	$	2,268,840	$	261,727	$	1,750,710	$	468,228	$	147,758	$	2,158,575
International		62,250		1,825,443		239,671		1,214,840		47,676		586,325		300,116		29,294		1,188,745
Bermuda		57,996		1,962,006		225,529		680,948		290,799		408,230		184,357		30,607		733,751
Total	$	303,268	$	10,069,055	$	1,322,525	$	4,164,628	$	600,202	$	2,745,265	$	952,701	$	207,659	$	4,081,071

S-6

SCHEDULE IV — REINSURANCE


Column A	Column B		Column C		Column D		Column E		Column F
			Ceded to		Assumed
	Gross		Other		from Other		Net		Assumed
(Dollars in thousands)	Amount		Companies		Companies		Amount		to Net

December 31, 2014
Total property and liability insurance
premiums earned	$	1,183,498	$	419,616	$	4,405,253	$	5,169,135		85.2	%

December 31, 2013
Total property and liability insurance
premiums earned	$	1,207,833	$	203,114	$	3,748,824	$	4,753,543		78.9	%

December 31, 2012
Total property and liability insurance
premiums earned	$	1,054,707	$	243,746	$	3,353,667	$	4,164,628		80.5	%

S-7

Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES