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 1, 2017.

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	March 1, 2017
Dominic J. Addesso	and Director (Principal Executive Officer)

/S/ CRAIG HOWIE		Executive Vice President and Chief	March 1, 2017
Craig Howie	Financial Officer

/S/ KEITH T. SHOEMAKER		Comptroller (Principal Accounting Officer)	March 1, 2017
Keith T. Shoemaker

/S/ JOSEPH V. TARANTO		Chairman	March 1, 2017
Joseph V. Taranto

/S/ JOHN J. AMORE		Director	March 1, 2017
John J. Amore

/S/ JOHN R. DUNNE		Director	March 1, 2017
John R. Dunne

/S/ WILLIAM F. GALTNEY, JR.		Director	March 1, 2017
William F. Galtney, Jr.

/S/ JOHN A. GRAF		Director	March 1, 2017
John A. Graf

/S/ GERALDINE LOSQUADRO		Director	March 1, 2017
Geraldine Losquadro

/S/ ROGER M. SINGER		Director	March 1, 2017
Roger M. Singer

/S/ JOHN A. WEBER		Director	March 1, 2017
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		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

4.4		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")

*10.2		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)

*10.3		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

*10.4		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

*10.5		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

E-1

10.6		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

*10.7		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

*10.8		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

*10.9		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

10.10		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

*10.11		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

*10.12		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

*10.13		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

*10.14		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

*10.15		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

*10.16		Amendment of Everest Re Group, Ltd. 2010 Stock Incentive Plan adopted by shareholders at the annual general meeting on May 13, 2015, incorporated herein by reference to Appendix A to the 2015 Proxy Statement filed on April 10, 2015

*10.17		Amendment of Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan adopted by shareholders at the annual general meeting on May 13, 2015, incorporated herein by reference to Appendix B to the 2015 Proxy Statement filed on April 10, 2015

*10.18		Employment agreement between Everest Global Services, Inc., Everest Reinsurance Holdings Inc. and Dominic J. Addesso, dated December 4, 2015, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on December 8, 2015

E-2

10.19		Standby Letter of Credit, dated November 9, 2015, between Everest International Reinsurance, Ltd. and Lloyds Bank, Plc. providing £175.0 million four year credit facility, incorporated herein by reference to Exhibit 10.23 to Everest Re Group, Ltd. Annual Report on Form 10-K- for the year ended December 31, 2015 filed on February 29, 2016

*10.20		Amendment of employment agreement between Everest Global Services, Inc. and Sanjoy Mukherjee, dated February 12, 2016, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on February 17, 2016

*10.21		Amendment of employment agreement between Everest Global Services, Inc. and John P. Doucette, dated February 16, 2016, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on February 17, 2016

*10.22		Employment agreement between Everest Global Services, Inc. and Craig Howie, dated April 7, 2016, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on April 8, 2016

10.23		Credit Agreement, dated May 26, 2016, 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, 2016. This new agreement replaces the June 22, 2012 four year, $800.0 million senior credit facility

*10.24		Chairmanship agreement between Everest Re Group, Ltd. and Joseph V. Taranto, dated August 15, 2016 and effective January 1, 2017, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on August 16, 2016

*10.25		Employment agreement between Everest Global Services, Inc., and John P. Doucette, dated October 21, 2016, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on October 26, 2016

10.26		Amendment of Standby Letter of Credit, dated November 9, 2016, between Everest International Reinsurance, Ltd. and Lloyds Bank, Plc. providing £140.0 million four year credit facility, filed herewith

10.27		Amendment of Standby Letter of Credit, dated December 30, 2016, between Everest Reinsurance (Bermuda), Ltd. and Citibank Europe plc providing $200.0 million four year credit facility, filed herewith

*10.28		Employment agreement between Everest Global Services, Inc., and Sanjoy Mukherjee, dated January 3, 2017, incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on January 6, 2017

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, 2016 and 2015			F-4

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended
	December 31, 2016, 2015 and 2014		F-5

Consolidated Statements of Changes in Shareholders' Equity for the Years Ended
	December 31, 2016, 2015 and 2014		F-6

Consolidated Statements of Cash Flows for the Years Ended
	December 31, 2016, 2015 and 2014		F-7

Notes to Consolidated Financial Statements			F-8

Schedules

I	Summary of Investments Other Than Investments in Related Parties at December 31, 2016		S-1

II	Condensed Financial Information of Registrant:

		Balance Sheets as of December 31, 2016 and 2015	S-2

		Statements of Operations for the Years Ended December 31, 2016, 2015 and 2014	S-3

		Statements of Cash Flows for the Years Ended December 31, 2016, 2015 and 2014	S-4

		Notes to Condensed Financial Information	S-5

III	Supplementary Insurance Information for the Years Ended
		December 31, 2016, 2015 and 2014	S-6

IV	Reinsurance for the Years Ended December 31, 2016, 2015 and 2014		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 at December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016 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, 2016, 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 1, 2017

F-3

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

	December 31,
(Dollars and share amounts in thousands, except par value per share)	2016			2015

ASSETS:
Fixed maturities - available for sale, at market value	$	14,107,408		$	13,357,294
(amortized cost: 2016, $13,932,613; 2015, $13,276,206)
Fixed maturities - available for sale, at fair value		-			2,102
Equity securities - available for sale, at market value (cost: 2016, $129,553; 2015, $122,271)		119,067			108,940
Equity securities - available for sale, at fair value		1,010,085			1,337,733
Short-term investments		431,478			799,684
Other invested assets (cost: 2016, $1,333,069; 2015, $786,994)		1,333,129			786,994
Cash		481,922			283,658
Total investments and cash		17,483,089			16,676,405
Accrued investment income		96,473			100,942
Premiums receivable		1,485,990			1,483,090
Reinsurance receivables		1,018,325			894,037
Funds held by reinsureds		260,644			278,673
Deferred acquisition costs		344,052			372,351
Prepaid reinsurance premiums		191,768			164,971
Income taxes		177,704			258,541
Other assets		263,459			316,408
TOTAL ASSETS		21,321,504			20,545,418

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	10,312,313		$	9,951,798
Future policy benefit reserve		55,074			58,910
Unearned premium reserve		1,577,546			1,613,390
Funds held under reinsurance treaties		21,278			13,544
Commission reserves		70,335			60,098
Other net payable to reinsurers		190,986			173,087
Losses in course of payment		67,107			112,170
4.868% Senior notes due 6/1/2044		396,714			396,594
6.6% Long term notes due 5/1/2067		236,462			236,364
Accrued interest on debt and borrowings		3,537			3,537
Equity index put option liability		22,059			40,705
Unsettled securities payable		27,927			15,314
Other liabilities		264,770			261,322
Total liabilities		13,246,108			12,936,833

Commitments and contingencies (Note 15)

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; (2016) 68,871
and (2015) 68,606 outstanding before treasury shares		689			686
Additional paid-in capital		2,140,783			2,103,638
Accumulated other comprehensive income (loss), net of deferred income tax expense
(benefit) of $8,240 at 2016 and ($15,863) at 2015		(216,764	)		(231,755	)
Treasury shares, at cost; 27,972 shares (2016) and 25,912 shares (2015)		(3,272,244	)		(2,885,956	)
Retained earnings		9,422,932			8,621,972
Total shareholders' equity		8,075,396			7,608,585
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		21,321,504			20,545,418

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)	2016			2015			2014

REVENUES:
Premiums earned	$	5,320,466		$	5,292,842		$	5,043,707
Net investment income		473,085			473,473			530,485
Net realized capital gains (losses):
Other-than-temporary impairments on fixed maturity securities		(31,595	)		(102,199	)		(39,502	)
Other-than-temporary impairments on fixed maturity securities
transferred to other comprehensive income (loss)		-			-			-
Other net realized capital gains (losses)		24,379			(81,948	)		123,548
Total net realized capital gains (losses)		(7,216	)		(184,147	)		84,046
Net derivative gain (loss)		18,647			6,317			(11,599	)
Other income (expense)		(10,636	)		88,280			32,308
Total revenues		5,794,346			5,676,765			5,678,947

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		3,139,629			3,064,715			2,875,936
Commission, brokerage, taxes and fees		1,188,692			1,183,646			1,121,145
Other underwriting expenses		302,722			257,069			233,104
Corporate expenses		27,231			23,254			23,421
Interest, fees and bond issue cost amortization expense		36,228			36,191			38,533
Total claims and expenses		4,694,502			4,564,875			4,292,139

INCOME (LOSS) BEFORE TAXES		1,099,844			1,111,890			1,386,808
Income tax expense (benefit)		103,500			134,021			187,652

NET INCOME (LOSS)	$	996,344		$	977,869		$	1,199,156

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		57,629			(274,127	)		704
Reclassification adjustment for realized losses (gains) included in net income (loss)		15,118			93,688			21,392
Total URA(D) on securities arising during the period		72,747			(180,439	)		22,096

Foreign currency translation adjustments		(55,341	)		(111,530	)		(95,417	)

Benefit plan actuarial net gain (loss) for the period		(7,488	)		5,681			(39,110	)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		5,073			6,216			3,020
Total benefit plan net gain (loss) for the period		(2,415	)		11,897			(36,090	)
Total other comprehensive income (loss), net of tax		14,991			(280,072	)		(109,411	)

COMPREHENSIVE INCOME (LOSS)	$	1,011,335		$	697,797		$	1,089,745

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO EVEREST RE GROUP:
Basic	$	23.85		$	22.29		$	26.16
Diluted		23.68			22.10			25.91
Dividends declared		4.70			4.00			3.20

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)	2016			2015			2014

COMMON SHARES (shares outstanding):
Balance, beginning of period		42,694,252			44,685,637			47,543,132
Issued during the period, net		264,313			270,477			371,359
Treasury shares acquired		(2,059,701	)		(2,261,862	)		(3,228,854	)
Balance, end of period		40,898,864			42,694,252			44,685,637

COMMON SHARES (par value):
Balance, beginning of period	$	686		$	683		$	680
Issued during the period, net		3			3			3
Balance, end of period		689			686			683

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period		2,103,638			2,068,807			2,029,774
Share-based compensation plans		37,145			34,831			39,033
Balance, end of period		2,140,783			2,103,638			2,068,807

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),
NET OF DEFERRED INCOME TAXES:
Balance, beginning of period		(231,755	)		48,317			157,728
Net increase (decrease) during the period		14,991			(280,072	)		(109,411	)
Balance, end of period		(216,764	)		(231,755	)		48,317

RETAINED EARNINGS:
Balance, beginning of period		8,621,972			7,819,210			6,765,967
Net income (loss)		996,344			977,869			1,199,156
Dividends declared ($4.70 per share in 2016, $4.00 per share in 2015
and $3.20 per share in 2014)		(195,384	)		(175,107	)		(145,913	)
Balance, end of period		9,422,932			8,621,972			7,819,210

TREASURY SHARES AT COST:
Balance, beginning of period		(2,885,956	)		(2,485,897	)		(1,985,873	)
Purchase of treasury shares		(386,288	)		(400,059	)		(500,024	)
Balance, end of period		(3,272,244	)		(2,885,956	)		(2,485,897	)

TOTAL SHAREHOLDERS' EQUITY, END OF PERIOD	$	8,075,396		$	7,608,585		$	7,451,120

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)	2016			2015			2014

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	996,344		$	977,869		$	1,199,156
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable		(15,655	)		(98,211	)		48,371
Decrease (increase) in funds held by reinsureds, net		22,219			(43,775	)		(1,835	)
Decrease (increase) in reinsurance receivables		(202,950	)		(265,103	)		(210,648	)
Decrease (increase) in income taxes		54,526			(36,771	)		31,333
Decrease (increase) in prepaid reinsurance premiums		(32,455	)		(21,819	)		(78,130	)
Increase (decrease) in reserve for losses and loss adjustment expenses		545,967			394,167			195,524
Increase (decrease) in future policy benefit reserve		(3,836	)		(910	)		308
Increase (decrease) in unearned premiums		(22,072	)		(96,950	)		161,149
Increase (decrease) in other net payable to reinsurers		26,200			43,727			28,308
Increase (decrease) in losses in course of payment		(45,933	)		(43,964	)		(174,206	)
Change in equity adjustments in limited partnerships		(37,939	)		(12,965	)		(39,464	)
Distribution of limited partnership income		62,008			53,984			51,120
Change in other assets and liabilities, net		(56,204	)		(8,934	)		(142,635	)
Non-cash compensation expense		26,398			21,237			21,197
Amortization of bond premium (accrual of bond discount)		49,167			50,901			49,214
Amortization of underwriting discount on senior notes		4			4			46
Net realized capital (gains) losses		7,216			184,147			(84,046	)
Net cash provided by (used in) operating activities		1,373,005			1,096,634			1,054,762

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called - available for sale, at market value		1,919,808			2,144,930			2,142,693
'Proceeds from fixed maturities matured/called - available for sale, at fair value		-			-			875
Proceeds from fixed maturities sold - available for sale, at market value		1,258,434			1,724,093			1,811,801
Proceeds from fixed maturities sold - available for sale, at fair value		5,837			1,824			36,467
Proceeds from equity securities sold - available for sale, at market value		6,423			28,936			16,901
Proceeds from equity securities sold - available for sale, at fair value		723,359			614,044			584,069
Distributions from other invested assets		4,823,484			57,201			115,482
Proceeds from sale of subsidiary (net of cash disposed)		47,721			3,934			-
Cost of fixed maturities acquired - available for sale, at market value		(4,061,896	)		(4,718,303	)		(4,672,633	)
Cost of fixed maturities acquired - available for sale, at fair value		(3,940	)		(2,436	)		(24,098	)
Cost of equity securities acquired - available for sale, at market value		(12,538	)		(10,850	)		(18,016	)
Cost of equity securities acquired - available for sale, at fair value		(346,929	)		(556,889	)		(446,457	)
Cost of other invested assets acquired		(5,396,001	)		(286,599	)		(224,740	)
Net change in short-term investments		368,977			341,733			(76,483	)
Net change in unsettled securities transactions		9,388			(22,719	)		(4,433	)
Net cash provided by (used in) investing activities		(657,873	)		(681,101	)		(758,572	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period, net		10,751			13,597			17,839
Purchase of treasury shares		(386,288	)		(400,059	)		(500,024	)
Net cost of senior notes maturing		-			-			(250,000	)
Proceeds from issuance of senior notes		-			-			400,000
Dividends paid to shareholders		(195,384	)		(175,107	)		(145,913	)
Net cash provided by (used in) financing activities		(570,921	)		(561,569	)		(478,098	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		54,053			(7,780	)		8,000

Net increase (decrease) in cash		198,264			(153,816	)		(173,908	)
Cash, beginning of period		283,658			437,474			611,382
Cash, end of period	$	481,922		$	283,658		$	437,474

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	42,636		$	164,856		$	153,455
Interest paid		36,010			35,973			39,424

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

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2016, 2015 and 2014

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.

During the third quarter of 2016, the Company established domestic subsidiaries, Everest Premier Insurance Company ("Everest Premier") and Everest Denali Insurance Company ("Everest Denali"), which will be used in the continued expansion of the Insurance operations.

Effective July 1, 2016, the Company established a new Irish holding company, Everest Dublin Insurance Holdings Limited (Ireland) ("Everest Dublin Holdings").

Effective August 24, 2016, the Company sold its wholly-owned subsidiary, Heartland Crop Insurance Company ("Heartland"), a managing agent for crop insurance, to CGB Diversified Services, Inc. ("CGB"). The operating results of Heartland through August 24, 2016, are included within the Company's financial statements.

During the fourth quarter of 2015, the Company established new subsidiaries, Everest Preferred International Holdings, Ltd. ("Preferred International"), a Bermuda based company and Everest International Holdings (Bermuda), Ltd. ("International Holdings"), a Bermuda based company. These new subsidiaries were part of a capital restructuring within the Company to support a planned increase in international business production, which includes directly supporting Group's new Lloyd's of London Syndicate corporate member.

Effective July 13, 2015, the Company sold all of the outstanding shares of capital stock of a wholly-owned subsidiary entity, Mt. McKinley Insurance Company ("Mt. McKinley"), to Clearwater Insurance Company. The operating results of Mt. McKinley through July 13, 2015 are included within the Company's financial statements.

Effective February 27, 2013, the Company established a new subsidiary, Mt. Logan Reinsurance Limited ("Mt. Logan Re"). Mt. Logan Re manages separate segregated accounts whose assets and capital relate mainly to third party external investors. The segregated account activities related to third party external investors are not included as part of 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 Insurance Managers, Ltd., Mt. Logan Management, Ltd., International Holdings, Everest Corporate Member Limited, Everest Service Company (UK), Ltd., Preferred International, Everest Reinsurance (Bermuda), Ltd. ("Bermuda Re"), Everest Re Advisors, Ltd., Everest Advisors (UK), Ltd., Everest Underwriting Group (Ireland), Limited ("Holdings Ireland"), Everest Insurance Company of Canada ("Everest Canada"), Premiere Insurance Underwriting Services ("Premiere"), Everest Dublin Holdings, Everest Dublin Insurance Limited, Everest Reinsurance Company (Ireland), designated activity company ("Ireland Re"), Everest Reinsurance Holdings, Inc. ("Holdings"), Heartland, Everest International Assurance, Ltd. (Bermuda) ("Everest Assurance"), Specialty Insurance Group, Inc. ("Specialty"), Specialty Insurance Group - Leisure and Entertainment Risk Purchasing Group LLC ("Specialty RPG"), Mt. McKinley, Mt. McKinley Managers, L.L.C., Workcare Southeast of Georgia, Inc., Everest Specialty Underwriters Services, LLC, 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"), Everest Denali, Everest Premier and Everest Security Insurance Company ("Everest Security"). All amounts are reported in U.S. dollars.

F-8

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 2016 presentation.

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 some 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 other non-publicly traded securities, an investment manager's valuation committee will estimate fair value, which is reviewed by the Company for reasonableness. 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, a private placement liquidity sweep facility and rabbi trusts. Cash contributions to and cash distributions from the sweep facility are reported gross in cash flows from investing activities in the Consolidated Statements of Cash Flows. Limited partnerships are accounted for under the equity method of accounting, which can be recorded on a monthly or quarterly lag.

F-9

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)		2016				2015
Reinsurance receivables and premium receivables		$	23,360			$	22,878

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)		2016				2015				2014
Deferred acquisition costs		$	1,188,692			$	1,183,646			$	1,121,145

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.

F-10

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, 2016 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 subsidiaries and 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. Deferred income taxes have been recorded to recognize the tax effect of temporary differences between the financial reporting and income tax bases of assets and liabilities, which arise because of differences between GAAP and income tax accounting rules.

J. Foreign Currency.

As a global entity, the Company transacts business in numerous currencies through business units located around the world. The base transactional currency for each business unit is determined by the local currency used for most economic activity in that area. Movements in exchange rates related to assets and liabilities at the business units between the original currency and the base currency are recorded through the consolidated statements of operations and comprehensive income (loss) in other income (expense), except for currency movements related to available for sale investments, which are excluded from net income (loss) and accumulated in shareholders' equity, net of deferred taxes.

The business units' base currency financial statements are translated to U.S. dollars using the exchange rates at the end of period for the balance sheets and the average exchange rates in effect for the reporting period for the income statements. Gains and losses resulting from translating the foreign currency financial statements, net of deferred income taxes, are excluded from net income loss and accumulated in shareholder's equity.

F-11

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)	2016			2015			2014
Net income (loss) per share:
Numerator
Net income (loss)	$	996,344		$	977,869		$	1,199,156
Less: dividends declared-common shares and nonvested common shares		(195,384	)		(175,107	)		(145,913	)
Undistributed earnings		800,960			802,762			1,053,243
Percentage allocated to common shareholders (1)		98.9	%		98.9	%		99.0	%
		792,415			794,309			1,042,423
Add: dividends declared-common shareholders		193,413			173,367			144,447
Numerator for basic and diluted earnings per common share	$	985,829		$	967,676		$	1,186,870

Denominator
Denominator for basic earnings per weighted-average common shares		41,329			43,415			45,377
Effect of dilutive securities:
Options		300			380			425
Denominator for diluted earnings per adjusted weighted-average common shares		41,628			43,795			45,802

Per common share net income (loss)
Basic	$	23.85		$	22.29		$	26.16
Diluted	$	23.68		$	22.10		$	25.91

(1) Basic weighted-average common shares outstanding		41,329			43,415			45,377
Basic weighted-average common shares outstanding and nonvested common shares expected to vest		41,774			43,877			45,848
Percentage allocated to common shareholders		98.9	%		98.9	%		99.0	%
(Some amounts may not reconcile due to rounding.)

There were no anti-diluted options outstanding for the years ended December 31, 2016, 2015 and 2014.

All outstanding options expire on or between February 21, 2017 and September 19, 2022.

L. Segmentation.

The Company, through its subsidiaries, operates in four segments: U.S. Reinsurance, International, Bermuda and Insurance. See also Note 17.

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).

F-12

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	2016		2015

Equity index put option contracts	Equity index put option liability	$	22,059	$	40,705
Total		$	22,059	$	40,705

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)	2016		2015		2014

Equity index put option contracts	Net derivative gain (loss)	$	18,647	$	6,317	$	(11,599	)
Total		$	18,647	$	6,317	$	(11,599	)

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 stock option, restricted share and performance share unit 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 16.

P. Application of Recently Issued Accounting Guidance.

Accounting for Share-Based Compensation. In March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09, authoritative guidance regarding the accounting for share-based compensation. This guidance requires that the income tax effects resulting from the change in the value of share-based compensation awards between grant and settlement will be recorded as part of the Consolidated Statements of Operations and Comprehensive Income/(Loss). Previously, excess tax benefits have been recorded as part of the additional paid in capital within the Consolidated Balance Sheets. The guidance is effective for annual reporting periods beginning after December 15, 2016 and interim periods within that annual reporting period. The Company has chosen not to early adopt and will implement this guidance as of January 1, 2017.

Disclosures about Short-Duration Contracts. In May 2015, the FASB issued ASU 2015-09, authoritative guidance regarding required disclosures associated with short duration insurance contracts. The new disclosure requirements focus on information about initial claim estimates and subsequent claim estimate adjustment, methodologies in estimating claims and the timing, frequency and severity of claims related to short duration insurance contracts. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim reporting periods beginning after December 15, 2016. The Company has included these disclosures within Footnote 3; Reserve for Losses, LAE and Future Policy Benefit Reserve, as part of the Notes to Consolidated Financial Statements.

F-13

Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share. In May 2015, the FASB issued ASU 2015-07, which removes the requirement to categorize, within the fair value hierarchy, investments for which fair values are estimated using the net asset value practical expedient provided by Accounting Standards Codification 820, Fair Value Measurement. The updated guidance is effective for annual reporting periods beginning after December 15, 2015. The adoption did not have a material impact on the Company's financial statements.

Debt Issuance Costs. In April 2015, The FASB issued ASU 2015–03, authoritative guidance on the presentation of debt issuance costs. This guidance requires that debt issuance costs be presented within the balance sheet as a reduction of the carrying value of the debt liability, rather than as a separate asset. This guidance is effective for annual reporting periods beginning after December 15, 2015 and related interim reporting periods. Based upon this guidance, the Company has adjusted prior financial statements and footnotes to conform with this new presentation.

Consolidation. In February 2015, the FASB issued ASU 2015-02, authoritative guidance regarding consolidation of reporting entities. The new guidance focuses on the required evaluation of whether certain legal entities should be consolidated. This guidance is effective for annual and interim reporting periods beginning after December 15, 2015. Based upon this guidance, the Company has determined that the separate segregated accounts associated with Mt. Logan Re should not be consolidated. As a result, the Company has adjusted prior financial statements and footnotes to conform with this new consolidation presentation.

The following tables present certain financial statement line items as previously reported in 2015 and 2014, the effect on those line items due to not consolidating the segregated accounts of Mt. Logan Re, in accordance with the newly adopted accounting policy and the line items as currently reported within the financial statements.

CONSOLIDATED BALANCE SHEET:	December 31, 2015
			Effect of adoption
	As previously		of new accounting
	reported		policy			As adopted
(Dollars in thousands)
ASSETS:
Short-term investments	$	1,795,455	$	(995,771	)	$	799,684
Total investments and cash		17,672,176		(995,771	)		16,676,405
Premiums receivable		1,479,293		3,797			1,483,090
Reinsurance receivables		840,420		53,617			894,037
Deferred acquisition costs		373,072		(721	)		372,351
Prepaid reinsurance premiums		157,424		7,547			164,971
Other assets		265,634		56,184			321,818
TOTAL ASSETS		21,426,175		(875,347	)		20,550,828

LIABILITIES:
Funds held under reinsurance treaties		88,544		(75,000	)		13,544
Commission reserves		79,849		(19,751	)		60,098
Other net payable to reinsurers		166,822		6,265			173,087
Other liabilities		291,322		(30,000	)		261,322
Total liabilities		13,060,729		(118,486	)		12,942,243

NONCONTROLLING INTERESTS:
Redeemable noncontrolling interests - Mt. Logan Re		756,861		(756,861	)		-

TOTAL LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY		21,426,175		(875,347	)		20,550,828

F-14

CONSOLIDATED STATEMENTS OF OPERATIONS	Twelve Months Ended December 31, 2015								Twelve Months Ended December 31, 2014
AND COMPREHENSIVE INCOME (LOSS):				Effect of								Effect of
				adoption of								adoption of
	As previously			new accounting					As previously			new accounting
	reported			policy			As adopted		reported			policy			As adopted
(Dollars in thousands)
REVENUES:
Premiums earned	$	5,481,459		$	(188,617	)	$	5,292,842	$	5,169,135		$	(125,428	)	$	5,043,707
Net investment income		473,825			(352	)		473,473		530,570			(85	)		530,485
Other income (expense)		60,435			27,845			88,280		18,437			13,871			32,308
Total revenues		5,837,889			(161,124	)		5,676,765		5,790,589			(111,642	)		5,678,947

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses		3,101,915			(37,200	)		3,064,715		2,906,534			(30,598	)		2,875,936
Commission, brokerage, taxes and fees		1,202,036			(18,390	)		1,183,646		1,135,586			(14,441	)		1,121,145
Other underwriting expenses		265,984			(8,915	)		257,069		240,400			(7,296	)		233,104
Total claims and expenses		4,629,380			(64,505	)		4,564,875		4,344,474			(52,335	)		4,292,139

INCOME (LOSS) BEFORE TAXES		1,208,509			(96,619	)		1,111,890		1,446,115			(59,307	)		1,386,808
NET INCOME (LOSS)		1,074,488			(96,619	)		977,869		1,258,463			(59,307	)		1,199,156

Net income (loss) attributable to noncontrolling interests		(96,619	)		96,619			-		(59,307	)		59,307			-

NET INCOME (LOSS) ATTRIBUTABLE TO EVEREST RE GROUP		977,869			(977,869	)		-		1,199,156			(1,199,156	)		-

CONSOLIDATED STATEMENT OF CASH FLOWS:	Twelve Months Ended December 31, 2015									Twelve Months Ended December 31, 2014
				Effect of									Effect of
				adoption of									adoption of
	As previously			new accounting						As previously			new accounting
(Dollars in thousands)	reported			policy			As adopted			reported			policy			As adopted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,074,488		$	(96,619	)	$	977,869		$	1,258,463		$	(59,307	)	$	1,199,156
Decrease (increase) in premiums receivable		(93,837	)		(4,374	)		(98,211	)		45,282			3,089			48,371
Decrease (increase) in funds held by reinsureds, net		31,225			(75,000	)		(43,775	)		(1,835	)		-			(1,835	)
Decrease (increase) in reinsurance receivables		(240,414	)		(24,689	)		(265,103	)		(186,014	)		(24,634	)		(210,648	)
Decrease (increase) in prepaid reinsurance premiums		(14,486	)		(7,333	)		(21,819	)		(79,086	)		956			(78,130	)
Increase (decrease) in other net payable to reinsurers		38,262			5,465			43,727			29,410			(1,102	)		28,308
Change in other assets and liabilities, net		264			(9,198	)		(8,934	)		35,419			(178,054	)		(142,635	)
Net cash provided by (used in) operating activities		1,308,382			(211,748	)		1,096,634			1,313,821			(259,059	)		1,054,762

CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in short-term investments		(98,903	)		440,636			341,733			(497,983	)		421,500			(76,483	)
Net cash provided by (used in) investing activities		(1,121,737	)		440,636			(681,101	)		(1,180,072	)		421,500			(758,572	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Third party investment in redeemable noncontrolling interest		266,848			(266,848	)		-			136,200			(136,200	)		-
Subscription advances for third party redeemable noncontrolling interest		30,000			(30,000	)		-			40,000			(40,000	)		-
Dividends paid on third party investment in redeemable noncontrolling interest		(68,158	)		68,158			-			(10,334	)		10,334			-
Net cash provided by (used in) financing activities		(332,879	)		(228,690	)		(561,569	)		(312,232	)		(165,866	)		(478,098	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		(7,582	)		(198	)		(7,780	)		4,575			3,425			8,000

F-15

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, 2016
	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	$	1,115,208	$	20,410	$	(5,303	)	$	1,130,315	$	-
Obligations of U.S. states and political subdivisions		723,938		18,016		(11,970	)		729,984		-
Corporate securities		5,059,388		131,651		(35,758	)		5,155,281		7,936
Asset-backed securities		488,824		1,110		(1,286	)		488,648		-
Mortgage-backed securities
Commercial		308,827		1,983		(3,878	)		306,932		-
Agency residential		2,415,901		17,478		(27,910	)		2,405,469		-
Non-agency residential		642		44		(45	)		641		-
Foreign government securities		1,254,175		61,226		(57,241	)		1,258,160		115
Foreign corporate securities		2,565,710		130,714		(64,446	)		2,631,978		1,184
Total fixed maturity securities	$	13,932,613	$	382,632	$	(207,837	)	$	14,107,408	$	9,235
Equity securities	$	129,553	$	2,298	$	(12,784	)	$	119,067	$	-

	At December 31, 2015
	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	$	805,273	$	13,465	$	(1,861	)	$	816,877	$	-
Obligations of U.S. states and political subdivisions		669,945		34,020		(890	)		703,075		-
Corporate securities		4,817,014		97,159		(109,310	)		4,804,863		1,412
Asset-backed securities		470,320		719		(3,813	)		467,226		-
Mortgage-backed securities
Commercial		264,924		4,750		(3,375	)		266,299		-
Agency residential		2,313,265		25,318		(18,059	)		2,320,524		-
Non-agency residential		893		51		(46	)		898		-
Foreign government securities		1,256,983		54,403		(52,205	)		1,259,181		53
Foreign corporate securities		2,677,589		107,163		(66,401	)		2,718,351		36
Total fixed maturity securities	$	13,276,206	$	337,048	$	(255,960	)	$	13,357,294	$	1,501
Equity securities	$	122,271	$	3,401	$	(16,732	)	$	108,940	$	-

(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-16

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, 2016				At December 31, 2015
	Amortized		Market		Amortized		Market
(Dollars in thousands)	Cost		Value		Cost		Value
Fixed maturity securities – available for sale:
Due in one year or less	$	956,945	$	966,970	$	1,021,200	$	1,036,016
Due after one year through five years		6,769,585		6,870,056		6,193,426		6,220,563
Due after five years through ten years		2,020,215		2,052,733		2,217,075		2,203,932
Due after ten years		971,674		1,015,959		795,103		841,836
Asset-backed securities		488,824		488,648		470,320		467,226
Mortgage-backed securities:
Commercial		308,827		306,932		264,924		266,299
Agency residential		2,415,901		2,405,469		2,313,265		2,320,524
Non-agency residential		642		641		893		898
Total fixed maturity securities	$	13,932,613	$	14,107,408	$	13,276,206	$	13,357,294

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)	2016			2015
Increase (decrease) during the period between the market value and cost
of investments carried at market value, and deferred taxes thereon:
Fixed maturity securities	$	85,972		$	(197,231	)
Fixed maturity securities, other-than-temporary impairment		7,734			8,411
Equity securities		2,845			(5,215	)
Other invested assets		60			-
Change in unrealized appreciation (depreciation), pre-tax		96,611			(194,035	)
Deferred tax benefit (expense)		(22,075	)		16,979
Deferred tax benefit (expense), other-than-temporary impairment		(1,789	)		(3,383	)
Change in unrealized appreciation (depreciation),
net of deferred taxes, included in shareholders' equity	$	72,747		$	(180,439	)

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-17

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, 2016 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	$	638,740	$	(5,303	)	$	-	$	-		$	638,740	$	(5,303	)
Obligations of U.S. states and political subdivisions		221,088		(11,486	)		564		(484	)		221,652		(11,970	)
Corporate securities		1,360,743		(24,023	)		177,153		(11,735	)		1,537,896		(35,758	)
Asset-backed securities		150,023		(565	)		18,786		(721	)		168,809		(1,286	)
Mortgage-backed securities
Commercial		143,554		(3,223	)		7,184		(655	)		150,738		(3,878	)
Agency residential		1,618,372		(22,461	)		189,665		(5,449	)		1,808,037		(27,910	)
Non-agency residential		-		-			113		(45	)		113		(45	)
Foreign government securities		360,289		(12,041	)		236,820		(45,200	)		597,109		(57,241	)
Foreign corporate securities		687,599		(12,769	)		295,500		(51,677	)		983,099		(64,446	)
Total fixed maturity securities	$	5,180,408	$	(91,871	)	$	925,785	$	(115,966	)	$	6,106,193	$	(207,837	)
Equity securities		-		-			105,507		(12,784	)		105,507		(12,784	)
Total	$	5,180,408	$	(91,871	)	$	1,031,292	$	(128,750	)	$	6,211,700	$	(220,621	)

	Duration of Unrealized Loss at December 31, 2016 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	$	178,281	$	(1,122	)	$	78,153	$	(14,318	)	$	256,434	$	(15,440	)
Due in one year through five years		2,123,113		(26,263	)		538,130		(84,803	)		2,661,243		(111,066	)
Due in five years through ten years		680,334		(22,555	)		86,631		(8,754	)		766,965		(31,309	)
Due after ten years		286,731		(15,682	)		7,123		(1,221	)		293,854		(16,903	)
Asset-backed securities		150,023		(565	)		18,786		(721	)		168,809		(1,286	)
Mortgage-backed securities		1,761,926		(25,684	)		196,962		(6,149	)		1,958,888		(31,833	)
Total fixed maturity securities	$	5,180,408	$	(91,871	)	$	925,785	$	(115,966	)	$	6,106,193	$	(207,837	)

F-18

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2016 were $6,211,700 thousand and $220,621 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2016, did not exceed 1.1% 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 $91,871 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, agency residential mortgage-backed securities, foreign government securities and obligations of U.S. states and political subdivisions. Of these unrealized losses, $85,078 thousand were related to securities that were rated investment grade by at least one nationally recognized statistical rating agency. The $115,966 thousand of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to foreign government securities, foreign corporate securities and domestic corporate securities. Of these unrealized losses $112,132 thousand is attributable to net unrealized foreign exchange losses, as the U.S. dollar has strengthened against other currencies. There was no gross unrealized depreciation for mortgage-backed securities 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, 2015 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	$	539,177	$	(1,855	)	$	692	$	(6	)	$	539,869	$	(1,861	)
Obligations of U.S. states and political subdivisions		6,434		(84	)		4,917		(806	)		11,351		(890	)
Corporate securities		1,818,331		(74,161	)		440,682		(35,149	)		2,259,013		(109,310	)
Asset-backed securities		348,545		(2,510	)		67,230		(1,303	)		415,775		(3,813	)
Mortgage-backed securities
Commercial		145,490		(3,375	)		-		-			145,490		(3,375	)
Agency residential		1,021,390		(10,014	)		326,449		(8,045	)		1,347,839		(18,059	)
Non-agency residential		152		(2	)		38		(44	)		190		(46	)
Foreign government securities		227,384		(21,996	)		216,428		(30,209	)		443,812		(52,205	)
Foreign corporate securities		821,548		(25,627	)		295,389		(40,774	)		1,116,937		(66,401	)
Total fixed maturity securities	$	4,928,451	$	(139,624	)	$	1,351,825	$	(116,336	)	$	6,280,276	$	(255,960	)
Equity securities		-		-			91,907		(16,732	)		91,907		(16,732	)
Total	$	4,928,451	$	(139,624	)	$	1,443,732	$	(133,068	)	$	6,372,183	$	(272,692	)

F-19

	Duration of Unrealized Loss at December 31, 2015 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	$	29,737	$	(1,840	)	$	74,615	$	(13,440	)	$	104,352	$	(15,280	)
Due in one year through five years		2,328,805		(62,329	)		651,228		(59,993	)		2,980,033		(122,322	)
Due in five years through ten years		969,139		(52,725	)		206,538		(28,018	)		1,175,677		(80,743	)
Due after ten years		85,193		(6,829	)		25,727		(5,493	)		110,920		(12,322	)
Asset-backed securities		348,545		(2,510	)		67,230		(1,303	)		415,775		(3,813	)
Mortgage-backed securities		1,167,032		(13,391	)		326,487		(8,089	)		1,493,519		(21,480	)
Total fixed maturity securities	$	4,928,451	$	(139,624	)	$	1,351,825	$	(116,336	)	$	6,280,276	$	(255,960	)

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2015 were $6,372,183 thousand and $272,692 thousand, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2015, did not exceed 0.7% 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 $139,624 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. The majority of these unrealized losses are attributable to unrealized losses in the energy sector, $46,793 thousand, as falling oil prices have disrupted the market values for this sector, particularly for oil exploration, production and servicing companies and net unrealized foreign exchange losses, $39,037 thousand, as the U.S. dollar has strengthened against other currencies. The $116,336 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. The majority of these unrealized losses are attributable to net unrealized foreign exchange losses, $72,738 thousand, as the U.S. dollar has strengthened against other currencies and to unrealized losses in the energy sector, $18,447 thousand, as falling oil prices have disrupted the market values for this sector, particularly for oil exploration as well as production and servicing companies. There was no gross unrealized depreciation for mortgage-backed securities 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)	2016			2015			2014
Fixed maturities	$	410,337		$	433,097		$	462,757
Equity securities		40,707			45,617			47,193
Short-term investments and cash		1,769			1,225			1,550
Other invested assets
Limited partnerships		38,647			14,431			40,868
Other		2,852			1,804			3,619
Gross investment income before adjustments		494,312			496,174			555,988
Funds held interest income (expense)		7,853			10,767			9,471
Future policy benefit reserve income (expense)		(1,633	)		(1,907	)		(1,686	)
Gross investment income		500,532			505,034			563,772
Investment expenses		(27,447	)		(31,561	)		(33,287	)
Net investment income	$	473,085		$	473,473		$	530,485

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-20

The Company had contractual commitments to invest up to an additional $507,244 thousand in limited partnerships at December 31, 2016. These commitments will be funded when called in accordance with the partnership agreements, which have investment periods that expire, unless extended, through 2021.

The Company's other invested assets at December 31, 2016 included $378,862 thousand related to a private placement liquidity sweep facility. The primary purpose of the facility is to enhance the Company's return on its short-term investments and cash positions. The facility invests in high quality, short-duration securities and permits daily liquidity.

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)	2016			2015			2014
Fixed maturity securities, market value:
Other-than-temporary impairments	$	(31,595	)	$	(102,199	)	$	(39,502	)
Gains (losses) from sales		6,918			(22,310	)		4,408
Fixed maturity securities, fair value:
Gains (losses) from sales		(1,586	)		24			(3,137	)
Gains (losses) from fair value adjustments		1,381			(44	)		(1,498	)
Equity securities, market value:
Gains (losses) from sales		1,426			(6,702	)		426
Equity securities, fair value:
Gains (losses) from sales		(13,442	)		(7,305	)		156
Gains (losses) from fair value adjustments		57,686			(45,627	)		123,196
Sale of Subsidiary		(28,032	)		-			-
Other invested assets		18			-			-
Short-term investments gain (loss)		10			16			(3	)
Total net realized capital gains (losses)	$	(7,216	)	$	(184,147	)	$	84,046

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)	2016			2015			2014
Proceeds from sales of fixed maturity securities	$	1,264,271		$	1,725,917		$	1,848,268
Gross gains from sales		53,093			47,899			37,427
Gross losses from sales		(47,761	)		(70,185	)		(36,156	)

Proceeds from sales of equity securities	$	729,782		$	642,980		$	600,970
Gross gains from sales		18,462			27,675			20,900
Gross losses from sales		(30,478	)		(41,682	)		(20,318	)

Securities with a carrying value amount of $1,415,085 thousand at December 31, 2016 were on deposit with various state or governmental insurance departments in compliance with insurance laws.

F-21

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)	2016			2015			2014
Gross reserves at January 1	$	9,951,798		$	9,720,813		$	9,673,240
Less reinsurance recoverables		(881,503	)		(655,095	)		(478,151	)
Net reserves at January 1		9,070,295			9,065,718			9,195,089

Incurred related to:
Current year		3,434,964			3,129,744			2,915,612
Prior years		(295,335	)		(65,029	)		(39,676	)
Total incurred losses and LAE		3,139,629			3,064,715			2,875,936

Paid related to:
Current year		745,642			690,030			755,880
Prior years		2,042,972			2,180,076			2,088,772
Total paid losses and LAE		2,788,614			2,870,106			2,844,652

Foreign exchange/translation adjustment		(99,859	)		(190,032	)		(160,655	)

Net reserves at December 31		9,321,451			9,070,295			9,065,718
Plus reinsurance recoverables		990,862			881,503			655,095
Gross reserves at December 31	$	10,312,313		$	9,951,798		$	9,720,813

Incurred prior years' reserves decreased by $295,335 thousand, $65,029 thousand and $39,676 thousand for the years ended December 31, 2016, 2015 and 2014, respectively. The decrease for 2016 was attributable to favorable development in the reinsurance segments of $468,749 thousand related primarily to property and short-tail business in the U.S., property business in Canada, Latin America, Middle East and Africa, as well as favorable development on prior year catastrophe losses, partially offset by $53,909 thousand of adverse development on A&E reserves. Part of the favorable development in the reinsurance segments related to the 2015 loss from the explosion at the Chinese port of Tianjin. In 2015, this loss was originally estimated to be $60,000 thousand. At December 31, 2016, this loss was projected to be $16,720 thousand resulting in $43,280 thousand of favorable development in 2016. The net favorable development in the reinsurance segments was partially offset by $173,414 thousand of unfavorable development in the insurance segment primarily related to run-off construction liability and umbrella program business.

The decrease for 2015 was attributable to favorable development in the reinsurance segments of $217,169 thousand related to treaty casualty and treaty property reserves, partially offset by $152,140 thousand of unfavorable development in the insurance segment primarily related to umbrella program and construction liability business.

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 $24,973 thousand of unfavorable development in the insurance segment primarily related to construction liability and umbrella program business.

The following is information about incurred and paid claims development as of December 31, 2016, net of reinsurance, as well as cumulative claim frequency and the total of incurred but not reported liabilities (IBNR) plus expected development on reported claims included within the net incurred claims amounts. Each of the Company's financial reporting segments has been disaggregated into casualty and property business. The casualty and property segregation results in groups that have homogeneous loss development characteristics and are large enough to represent credible trends. Generally, casualty claims take longer to be reported and settled, resulting in longer payout patterns and increased volatility. Property claims on the other hand, tend to be reported and settled quicker and therefore tend to exhibit less volatility. The property business is more exposed to catastrophe losses, which can result in year over year fluctuations in incurred claims depending on the frequency and severity of catastrophes claims in any one accident year.

F-22

The information about incurred and paid claims development for the years ended December 31, 2012 to December 31, 2015 is presented as supplementary information.

These tables present five years of incurred and paid claims development as it is impracticable to retrospectively create the tables for ten years. For the reinsurance groups, for the years prior to 2012, the total of IBNR plus expected development on reported claims was not prepared on an accident year basis. The Company calculated these IBNR amounts in the aggregate for each business unit in total as of prior year end points in time. While business written in the United States would have been allocated to accident year for regulatory reporting purposes, business written outside of the United States would not have been similarly allocated. Attempting to allocate the non-U.S. business IBNR reserves to accident year currently for older year end valuations would require making assumptions and estimates which may not be in line with assumptions that would have been made at the time. A similar situation applies to insurance where the accumulation of the business lines reported in the regulatory filings are not consistent with the breakout of the tables presented below. As a result of not being able to present the information prior to 2012, prospectively an additional year will be added to the tables each reporting year until a ten year table is presented.

The Cumulative Number of Reported Claims is shown only for Insurance Casualty as it is impracticable to provide the information for the remaining groups. The reinsurance groups each include pro rata contracts for which ceding companies provide only summary information via a bordereau. This summary information does not include the number of reported claims underlying the paid and reported losses. Therefore, it is not possible to provide this information. The Insurance Property group includes Accident & Health insurance business. This business is written via a master contract and individual claim counts are not provided. This business represents a significant enough portion of the business in the Insurance Property group so that including the number of reported claims for the remaining business would distort any analytics performed on the group.

The Cumulative Number of Reported Claims shown for the Insurance Casualty is determined by claim and line of business. For example, a claim event with three claimants in the same line of business is a single claim. However, a claim event with a single claimant that spans two lines of business contributes two claims.

F-23

The following tables present the ultimate loss and ALAE and the paid loss and ALAE, net of reinsurance for casualty and property, as well as the average annual percentage payout of incurred claims by age, net of reinsurance for each of our disclosed lines of business.

U.S. Reinsurance – Casualty Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	400,944	$	395,674	$	328,910	$	324,870	$	320,908		69,381		N/A
2013				310,899		388,247		385,498		388,157		147,320		N/A
2014						367,454		383,597		392,300		215,144		N/A
2015								326,321		354,224		248,529		N/A
2016										330,352		272,614		N/A
									$	1,785,940

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	9,930	$	38,398	$	82,900	$	143,370	$	187,125
2013				14,814		48,891		108,736		170,781
2014						18,791		54,220		110,199
2015								19,882		53,592
2016										18,920
									$	540,617
All outstanding liabilities prior to 2012, net of reinsurance										1,103,846
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	2,349,169

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Casualty		4.6%		9.0%		14.6%		17.3%		13.6%

F-24

U.S. Reinsurance – Property Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	937,168	$	723,126	$	621,543	$	608,568	$	608,182		15,899		N/A
2013				621,644		547,741		494,573		455,623		8,005		N/A
2014						641,489		550,471		473,579		46,920		N/A
2015								679,170		543,978		113,327		N/A
2016										966,314		488,562		N/A
									$	3,047,676

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	242,129	$	401,879	$	492,597	$	528,903	$	546,305
2013				234,163		322,603		381,281		405,331
2014						218,595		321,473		369,615
2015								226,198		327,261
2016										286,082
									$	1,934,594
All outstanding liabilities prior to 2012, net of reinsurance										70,472
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	1,183,554

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Property		39.6%		21.7%		12.8%		5.7%		2.9%

F-25

International – Casualty Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	222,381	$	145,165	$	134,433	$	134,806	$	118,381		19,893		N/A
2013				182,388		167,152		164,664		146,192		38,720		N/A
2014						194,110		187,335		170,072		66,586		N/A
2015								192,610		179,393		99,975		N/A
2016										183,120		135,120		N/A
									$	797,159

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	18,968	$	30,309	$	46,356	$	56,937	$	66,755
2013				17,945		41,511		55,190		68,508
2014						25,854		45,309		63,412
2015								24,408		49,198
2016										26,582
									$	274,456
All outstanding liabilities prior to 2012, net of reinsurance										132,472
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	655,175

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Casualty		14.3%		12.9%		11.0%		9.0%		8.3%

F-26

International – Property Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	562,356	$	516,568	$	464,379	$	468,016	$	468,340		3,276		N/A
2013				493,798		446,011		409,911		402,109		5,153		N/A
2014						590,986		536,437		491,539		73,701		N/A
2015								563,857		439,133		68,845		N/A
2016										510,072		151,258		N/A
									$	2,311,193

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	200,839	$	327,627	$	396,237	$	420,097	$	433,538
2013				135,240		272,527		326,747		357,358
2014						163,098		285,019		352,586
2015								145,406		267,899
2016										150,819
									$	1,562,200
All outstanding liabilities prior to 2012, net of reinsurance										135,170
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	884,163

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Property		34.4%		28.2%		14.0%		6.3%		2.9%

F-27

Bermuda – Casualty Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	277,335	$	257,552	$	238,136	$	228,861	$	236,554		69,097		N/A
2013				223,085		254,485		250,151		259,719		120,413		N/A
2014						205,404		239,078		257,310		163,951		N/A
2015								263,919		293,967		196,691		N/A
2016										282,729		208,938		N/A
									$	1,330,278

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	12,975	$	29,971	$	52,026	$	76,682	$	103,489
2013				17,185		34,498		53,035		78,476
2014						13,846		25,272		43,582
2015								13,664		58,647
2016										45,134
									$	329,328
All outstanding liabilities prior to 2012, net of reinsurance										507,747
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	1,508,697

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Casualty		7.7%		8.7%		7.8%		10.1%		11.3%

F-28

Bermuda – Property Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	233,738	$	177,683	$	162,787	$	158,711	$	159,285		624		N/A
2013				203,306		147,275		129,687		120,904		1,207		N/A
2014						178,615		157,187		131,588		13,592		N/A
2015								187,738		157,662		45,387		N/A
2016										198,310		123,224		N/A
									$	767,749

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	45,233	$	84,680	$	115,938	$	141,516	$	148,159
2013				31,315		67,966		106,936		114,050
2014						28,540		81,535		101,239
2015								32,687		72,186
2016										26,324
									$	461,959
All outstanding liabilities prior to 2012, net of reinsurance										44,730
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	350,520

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Property		21.4%		29.6%		21.8%		11.7%		4.2%

F-29

Insurance – Casualty Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	349,301	$	351,107	$	346,685	$	347,989	$	353,145		50,190		15,638
2013				393,201		393,103		392,539		392,829		101,156		21,168
2014						430,554		456,532		454,071		151,768		24,829
2015								518,706		527,109		282,784		25,939
2016										552,006		406,759		23,463
									$	2,279,161

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	33,162	$	101,258	$	157,834	$	213,365	$	246,294
2013				33,303		117,016		176,280		224,558
2014						41,182		124,865		201,545
2015								44,298		134,658
2016										54,710
									$	861,765
All outstanding liabilities prior to 2012, net of reinsurance										644,177
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	2,061,572

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Casualty		9.1%		18.9%		16.0%		13.9%		9.3%

F-30

Insurance – Property Business

											At December 31, 2016
											Total of
											IBNR Liabilites
	Incurred Claims and Allocated Claim Adjustment Expenses, Net of reinsurance										Plus Expected
	Years Ended December 31,										Development		Cumulative
	2012		2013		2014		2015		2016		on Reported		Number of
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)				Claims		Reported Claims
(Dollars in thousands)
2012	$	106,229	$	88,908	$	81,682	$	82,382	$	81,957		52		N/A
2013				111,926		97,870		91,054		91,956		5		N/A
2014						131,505		123,487		119,781		1,044		N/A
2015								172,535		152,580		3,999		N/A
2016										300,127		82,989		N/A
									$	746,400

(Some amounts may not reconcile due to rounding.)

	Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance
	Years Ended December 31,
	2012		2013		2014		2015		2016
Accident Year	(unaudited)		(unaudited)		(unaudited)		(unaudited)
(Dollars in thousands)
2012	$	56,498	$	81,712	$	80,405	$	81,686	$	81,830
2013				68,656		92,945		91,653		91,923
2014						81,766		115,913		118,085
2015								102,005		141,010
2016										162,060
									$	594,908
All outstanding liabilities prior to 2012, net of reinsurance										171
Liabilities for claims and claim adjustment expenses, net of reinsurance									$	151,663

(Some amounts may not reconcile due to rounding.)

		Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance (unaudited)
Years		1		2		3		4		5
Property		63.1%		27.5%		-0.1%		0.9%		0.2%

F-31

Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses

The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated statement of financial position is as follows.

	December 31, 2016
(Dollars in thousands)
Net outstanding liabilities
U.S. Reinsurance Casualty	$	2,349,169
U.S. Reinsurance Property		1,183,554
International Casualty		655,175
International Property		884,163
Bermuda Casualty		1,508,697
Bermuda Property		350,520
Insurance Casualty		2,061,572
Insurance Property		151,663
Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance		9,144,514

Reinsurance recoverable on unpaid claims
U.S. Reinsurance Casualty		98,282
U.S. Reinsurance Property		84,224
International Casualty		83,912
International Property		79,044
Bermuda Casualty		10,135
Bermuda Property		101,210
Insurance Casualty		498,493
Insurance Property		35,562
Total reinsurance recoverable on unpaid claims		990,862

Insurance lines other than short-duration		-
Unallocated claims adjustment expenses		132,210
Other		44,727
		176,937

Total gross liability for unpaid claims and claim adjustment expense	$	10,312,313

(Some amounts may not reconcile due to rounding.)

Reserving Methodology

The Company maintains reserves equal to our estimated ultimate liability for losses and loss adjustment expense (LAE) for reported and unreported claims for our insurance and reinsurance businesses. Because reserves are based on estimates of ultimate losses and LAE by underwriting or accident year, the Company uses a variety of statistical and actuarial techniques to monitor reserve adequacy over time, evaluate new information as it becomes known, and adjust reserves whenever an adjustment appears warranted. The Company considers many factors when setting reserves including: (1) exposure base and projected ultimate premium; (2) expected loss ratios by product and class of business, which are developed collaboratively by underwriters and actuaries; (3) actuarial methodologies which analyze loss reporting and payment experience, reports from ceding companies and historical trends, such as reserving patterns, loss payments, and product mix; (4) current legal interpretations of coverage and liability; and (5) economic conditions. Insurance and reinsurance loss and LAE reserves represent the Company's best estimate of its ultimate liability. Actual loss and LAE ultimately paid may deviate, perhaps substantially, from such reserves. Net income (gain or loss) will be impacted in a period in which the change in estimated ultimate loss and LAE is recorded.

The detailed data required to evaluate ultimate losses for the Company's insurance business is accumulated from its underwriting and claim systems. Reserving for reinsurance requires evaluation of loss information received from ceding companies. Ceding companies report losses in many forms depending on the type of contract and the agreed or contractual reporting requirements. Generally, pro rata contracts require the

F-32

submission of a monthly/quarterly account, which includes premium and loss activity for the period with corresponding reserves as established by the ceding company. This information is recorded into the Company's records. For certain pro rata contracts, the Company may require a detailed loss report for claims that exceed a certain dollar threshold or relate to a particular type of loss. Excess of loss and facultative contracts generally require individual loss reporting with precautionary notices provided when a loss reaches a significant percentage of the attachment point of the contract or when certain causes of loss or types of injury occur. Experienced claims staff handles individual loss reports and supporting claim information. Based on evaluation of a claim, the Company may establish additional case reserves in addition to the case reserves reported by the ceding company. To ensure ceding companies are submitting required and accurate data, Everest's Underwriting, Claim, Reinsurance Accounting, and Internal Audit Departments perform various reviews of ceding companies, particularly larger ceding companies, including on-site audits.

The Company segments both reinsurance and insurance reserves into exposure groupings for actuarial analysis. The Company assigns business to exposure groupings so that the underlying exposures have reasonably homogeneous loss development characteristics and are large enough to facilitate credible estimation of ultimate losses. The Company periodically reviews its exposure groupings and may change groupings over time as business changes. The Company currently uses approximately 200 exposure groupings to develop reserve estimates. One of the key selection characteristics for the exposure groupings is the historical duration of the claims settlement process. Business in which claims are reported and settled relatively quickly are commonly referred to as short tail lines, principally property lines. On the other hand, casualty claims tend to take longer to be reported and settled and casualty lines are generally referred to as long tail lines. Estimates of ultimate losses for shorter tail lines, with the exception of loss estimates for large catastrophic events, generally exhibit less volatility than those for the longer tail lines.

The Company uses a variety of actuarial methodologies, such as the expected loss ratio method, chain ladder methods, and Bornhuetter-Ferguson methods, supplemented by judgment where appropriate, to estimate ultimate loss and LAE for each exposure group.

Expected Loss Ratio Method: The expected loss ratio method uses earned premium times an expected loss ratio to calculate ultimate losses for a given underwriting or accident year. This method relies entirely on expectation to project ultimate losses with no consideration given to actual losses. As such, it may be appropriate for an immature underwriting or accident year where few, if any, losses have been reported or paid, but less appropriate for a more mature year.

Chain Ladder Method: Chain ladder methods use a standard loss development triangle to project ultimate losses. Age-to-age development factors are selected for each development period and combined to calculate age-to-ultimate development factors which are then applied to paid or reported losses to project ultimate losses. This method relies entirely on actual paid or reported losses to project ultimate losses. No other factors such as changes in pricing or other expectations are taken into account. It is most appropriate for groups with homogeneous, stable experience where past development patterns are expected to continue in the future. It is least appropriate for groups which have changed significantly over time or which are more volatile.

Bornhuetter-Ferguson Method: The Bornhuetter-Ferguson method is a combination of the expected loss ratio method and the chain ladder method. Ultimate losses are projected based partly on actual paid or reported losses and partly on expectation. Incurred but not reported (IBNR) reserves are calculated using earned premium, an a priori loss ratio, and selected age-to-age development factors and added to actual reported (paid) losses to determine ultimate losses. It is more responsive to actual reported or paid development than the expected loss ratio method but less responsive than the chain ladder method. The reliability of the method depends on the accuracy of the selected a priori loss ratio.

Although the Company uses similar actuarial methods for both short tail and long tail lines, the faster reporting of experience for the short tail lines allows the Company to have greater confidence in its estimates of ultimate losses for short tail lines at an earlier stage than for long tail lines. As a result, the Company utilizes, as well, exposure-based methods to estimate its ultimate losses for longer tail lines, especially for immature underwriting or accident years. For both short and long tail lines, the Company supplements these general approaches with analytically based judgments.

F-33

Key actuarial assumptions contain no explicit provisions for reserve uncertainty nor does the Company supplement the actuarially determined reserves for uncertainty.

Carried reserves at each reporting date are the Company's best estimate of ultimate unpaid losses and LAE at that date. The Company completes detailed reserve studies for each exposure group annually for both reinsurance and insurance operations. The completed annual reserve studies are "rolled-forward" for each accounting period until the subsequent reserve study is completed. Analyzing the roll-forward process involves comparing actual reported losses to expected losses based on the most recent reserve study. The Company analyzes significant variances between actual and expected losses and post adjustments to its reserves as warranted.

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.

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)	2016			2015			2014
Gross basis:
Beginning of period reserves	$	433,117		$	476,205		$	402,461
Incurred losses		73,336			40,000			142,233
Paid losses		(65,342	)		(83,088	)		(68,489	)
End of period reserves	$	441,111		$	433,117		$	476,205

Net basis:
Beginning of period reserves	$	319,620		$	458,211		$	386,677
Incurred losses		53,909			38,440			137,769
Paid losses		(54,457	)		(177,031	)		(66,235	)
End of period reserves	$	319,072		$	319,620		$	458,211

On July 13, 2015, the Company sold Mt. McKinley, a Delaware domiciled insurance company and wholly-owned subsidiary of the Company to Clearwater Insurance Company, a Delaware domiciled insurance company. Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater Insurance Company. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which related entirely to A&E business and had been reinsured by Bermuda Re. As consideration for entering into the retrocession treaty, Everest Re Bermuda transferred cash of $140,279 thousand, an amount equal to the net loss reserves as of the closing date. The maximum liability retroceded under the retrocession treaty will be $440,279 thousand, equal to the retrocession payment plus $300,000 thousand. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty.

Reinsurance Receivables.

Reinsurance receivables for both paid and recoverable on unpaid losses totaled $1,018,325 thousand and $894,037 thousand at December 31, 2016 and 2015, respectively. At December 31, 2016, $175,042 thousand, or 17.2%, was receivable from Resolution Group Reinsurance (Barbados) Limited ("Resolution Group"); $129,040 thousand, or 12.7%, was receivable from C.V. Starr (Bermuda) ("C.V. Starr"); $109,392 thousand, or 10.7%, was receivable from Zurich Vericherungs Gesellschaft ("Zurich"); $78,225 thousand, or

F-34

7.7%, was receivable from Mt. Logan Re segregated accounts and $51,124 thousand, or 5.0%, was receivable from Federal Crop Insurance Corporation ("FCIC"). The receivables from Resolution Group and C.V. Starr 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)	2016			2015			2014
Balance at beginning of year	$	58,910		$	59,820		$	59,512
Liabilities assumed		175			315			250
Adjustments to reserves		303			2,310			4,724
Benefits paid in the current year		(4,315	)		(3,535	)		(4,667	)
Balance at end of year	$	55,074		$	58,910		$	59,820

(Some amounts may not reconcile due to rounding.)

FAIR VALUE

GAAP guidance regarding fair value measurements address how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:

Level 1:	Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market;

Level 2:	Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument;

Level 3:	Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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.

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

F-35

determine fair value. Due to the unavailability of prices for forty-two private placement securities, the investment manager's valuation committee valued the forty-two securities at $86,536 thousand at December 31, 2016. Due to the unavailability of prices for two private placement securities, the Company valued the two securities at $3,593 thousand at December 31, 2015.

The Company internally manages a public equity portfolio which had a fair value at December 31, 2016 and 2015 of $256,041 thousand and $253,575 thousand, respectively, and all prices were obtained from publically published sources.

Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as level 1 since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as level 2 due to the added input of a foreign exchange conversion rate to determine fair or market value. The Company uses foreign currency exchange rates published by nationally recognized sources.

All categories of fixed maturity securities listed in the tables below are generally categorized as level 2, 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. For foreign government securities and foreign corporate securities, the fair values provided by the third party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

The fixed maturities with fair values categorized as level 3 result when prices are not available from the nationally recognized pricing services. The asset managers will then obtain non-binding price quotes for the securities from brokers. 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. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources. In limited circumstances when broker prices are not available for private placements, the Company will value the securities using comparable market information.

The composition and valuation inputs for the presented fixed maturities categories are as follows:

·	U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;

·	Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

·	Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

·	Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;

Foreign government securities are comprised of global non-U.S. sovereign bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;

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Foreign corporate securities are comprised of global non-U.S. corporate bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source.

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. Based on historical index volatilities and trends and the December 31, 2016 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 7%. 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, 2016, the present value of these theoretical maximum payouts using a 3% discount factor was $445,627 thousand. Conversely, if the contracts had all expired on December 31, 2016, with the S&P index at $2,238.83, there would have been no settlement amount.

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. Based on historical index volatilities and trends and the December 31, 2016 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 25%. 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, 2016, the present value of the theoretical maximum payout using a 3% discount factor and current exchange rate was $36,231 thousand. Conversely, if the contract had expired on December 31, 2016, with the FTSE index at ₤7,142.83, there would have been no settlement amount.

At December 31, 2016 and 2015, the fair value for these equity put options was $22,059 thousand and $40,705 thousand, respectively.

The Company's liability for equity index put options is categorized as level 3 since there is no active market for these seven long dated equity put options. The fair values for these options are calculated by the Company using an industry accepted pricing model, Black-Scholes. The model inputs and assumptions are: risk free interest rates, equity market indexes values, volatilities and dividend yields and duration. The model results are then adjusted for the Company's credit default swap rate. All of these inputs and assumptions are updated quarterly. One of the option contacts is in British Pound Sterling so the fair value for this contract is converted to U.S. dollars using an exchange rate from a nationally recognized source.

F-37

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, 2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	1,130,315	$	-	$	1,130,315	$	-
Obligations of U.S. States and political subdivisions		729,984		-		729,984		-
Corporate securities		5,155,281		-		5,090,084		65,197
Asset-backed securities		488,648		-		488,648		-
Mortgage-backed securities
Commercial		306,932		-		306,932		-
Agency residential		2,405,469		-		2,405,469		-
Non-agency residential		641		-		641		-
Foreign government securities		1,258,160		-		1,258,160		-
Foreign corporate securities		2,631,978		-		2,629,440		2,538
Total fixed maturities, market value		14,107,408		-		14,039,673		67,735

Fixed maturities, fair value		-		-		-		-
Equity securities, market value		119,067		105,507		13,560		-
Equity securities, fair value		1,010,085		949,523		60,562		-

Liabilities:
Equity index put option contracts	$	22,059	$	-	$	-	$	22,059

In addition, $18,801 thousand of investments within other invested assets on the consolidated balance sheet as of December 31, 2016, are not included within the fair value hierarchy table as the assets are valued using the NAV practical expedient guidance within ASU 2015-07.

There were no transfers between Level 1 and Level 2 for the twelve months ended December 31, 2016.

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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, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Fixed maturities, market value
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	816,877	$	-	$	816,877	$	-
Obligations of U.S. States and political subdivisions		703,075		-		703,075		-
Corporate securities		4,804,863		-		4,800,930		3,933
Asset-backed securities		467,226		-		467,226		-
Mortgage-backed securities
Commercial		266,299		-		266,299		-
Agency residential		2,320,524		-		2,320,524		-
Non-agency residential		898		-		898		-
Foreign government securities		1,259,181		-		1,259,181		-
Foreign corporate securities		2,718,351		-		2,716,758		1,593
Total fixed maturities, market value		13,357,294		-		13,351,768		5,526

Fixed maturities, fair value		2,102		-		2,102		-
Equity securities, market value		108,940		91,907		17,033		-
Equity securities, fair value		1,337,733		1,275,666		62,067		-

Liabilities:
Equity index put option contracts	$	40,705	$	-	$	-	$	40,705

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, 2016												December 31, 2015
	Corporate						Foreign						Corporate						Foreign
(Dollars in thousands)	Securities			CMBS			Corporate			Total			Securities			CMBS			Corporate			Total
Beginning balance	$	3,933		$	-		$	1,593		$	5,526		$	-		$	8,597		$	7,166		$	15,763
Total gains or (losses) (realized/unrealized)
Included in earnings		100			-			(1,193	)		(1,093	)		4			-			(9,480	)		(9,476	)
Included in other comprehensive income (loss)		41			16			-			57			(96	)		-			3,908			3,812
Purchases, issuances and settlements		63,054			(44	)		2,138			65,148			3,626			-			-			3,626
Transfers in and/or (out) of Level 3		(1,931	)		28			-			(1,903	)		399			(8,597	)		(1	)		(8,199	)
Ending balance	$	65,197		$	-		$	2,538		$	67,735		$	3,933		$	-		$	1,593		$	5,526

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	$	-		$	-		$	-		$	-		$	-		$	-		$	9,721		$	9,721

(Some amounts may not reconcile due to rounding.)

F-39

The net transfers to/(from) level 3, fair value measurements using significant unobservable inputs were ($1,903) thousand and ($8,199) thousand of investments for the years ended December 31, 2016 and 2015, respectively. The $1,903 thousand and $8,199 thousand primarily related to securities that were priced using single non-binding broker quotes as of December 31, 2015 and 2014, respectively. The securities were subsequently priced using a recognized pricing service as of December 31, 2016 and 2015, and were classified as level 2 as of those dates.

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)	2016			2015
Liabilities:
Balance, beginning of period	$	40,705		$	47,022
Total (gains) or losses (realized/unrealized)
Included in earnings		(18,646	)		(6,317	)
Included in other comprehensive income (loss)		-			-
Purchases, issuances and settlements		-			-
Transfers in and/or (out) of Level 3		-			-
Balance, end of period	$	22,059		$	40,705

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.)

CREDIT FACILITIES

The Company has two active credit facilities for a total commitment of up to $1,000,000 thousand and an additional credit facility for a total commitment of up to £140,000 thousand, providing for the issuance of letters of credit and/or unsecured revolving credit lines. The following table presents the interest and fees incurred in connection with the two credit facilities for the periods indicated:

		Years Ended December 31,
(Dollars in thousands)		2016				2015				2014
Credit facility fees incurred		$	793			$	756			$	659

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

Group Credit Facility

Effective May 26, 2016, Group, Everest Reinsurance (Bermuda), Ltd. ("Bermuda Re") and Everest International Reinsurance, Ltd. ("Everest International"), both direct subsidiaries of Group, entered into a five year, $800,000 thousand senior credit facility with a syndicate of lenders, which amended and restated in its entirety the June 22, 2012, four year, $800,000 thousand senior credit facility. Both the May 26, 2016 and June 22, 2012 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.

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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 $5,370,979 thousand plus 25% of consolidated net income for each of Group's fiscal quarters, for which statements are available ending on or after March 31, 2016 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, 2016, was $5,584,382 thousand. As of December 31, 2016, 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, 2016					At December 31, 2015
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		-			600,000		2,488	12/12/2016
			-		478,233	12/31/2017		-		447,178	12/31/2016
Total Wells Fargo Bank Group Credit Facility		$	800,000	$	478,233		$	800,000	$	449,666

Bermuda Re Letter of Credit Facility

Effective December 30, 2016, Bermuda Re renewed its 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 current renewal of the Bermuda Re Letter of Credit Facility provides for the issuance of up to $200,000 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.

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

(Dollars in thousands)	At December 31, 2016					At December 31, 2015
Bank	Commitment		In Use		Date of Expiry	Commitment		In Use		Date of Expiry
Citibank Bilateral Letter of Credit Agreement	$	200,000	$	4,058	2/28/2017	$	300,000	$	3,672	11/24/2016
				3,672	11/24/2017				67,783	12/31/2016
				69,404	12/31/2017				179	8/30/2017
				269	8/30/2018				316	12/31/2017
				1,163	12/31/2018				-
				93,180	12/30/2020				99,521	12/31/2019
Total Citibank Bilateral Agreement	$	200,000	$	171,746		$	300,000	$	171,471

Everest International Credit Facility

Effective November 9, 2016, Everest International renewed its credit facility with Lloyd's of London Bank ("Everest International Credit Facility"). The current renewal of the Everest International Credit Facility has a four year term and provides up to £140,000 thousand for the issuance of standby letters of credit on a collateralized basis. The Company pays a commitment fee of 0.1% per annum on the average daily amount of the remainder of (1) the aggregate amount available under the facility and (2) the aggregate amount of drawings outstanding under the facility. The Company pays a credit commission fee of 0.35% per annum on drawings outstanding under the facility.

F-41

The Everest International 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 $5,326,009 thousand (70% of consolidated net worth as of December 31, 2015), plus 25% of consolidated net income for each of Group's fiscal quarters, for which statements are available ending on or after January 1, 2015 and for which net income is positive, plus 25% of any increase in consolidated net worth of Group during such period attributable to the issuance of ordinary and preferred shares, which at December 31, 2016, was $5,584,382 thousand. As of December 31, 2016, the Company was in compliance with all Everest International Credit Facility requirements.

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

(Dollars in thousands)	At December 31, 2016					At December 31, 2015
Bank	Commitment		In Use		Date of Expiry	Commitment		In Use		Date of Expiry
Lloyd's Bank plc	£	140,000	£	130,606	12/31/2019	£	175,000	£	164,961	12/31/2019
		-		-			-		-
Total Lloyd's Bank Credit Facility	£	140,000	£	130,606		£	175,000	£	164,961

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.

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, 2016				December 31, 2015
					Consolidated Balance				Consolidated Balance
(Dollars in thousands)	Date Issued	Date Due	Principal Amounts		Sheet Amount		Market Value		Sheet Amount		Market Value
4.868% Senior notes	06/05/2014	06/01/2044		400,000	$	396,714	$	383,612	$	396,594	$	381,204
5.40% Senior notes	10/12/2004	10/15/2014		250,000		-		-		-		-

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)		2016				2015				2014
Interest expense incurred		$	19,472			$	19,472			$	21,818

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, 2016				December 31, 2015
		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	$	236,462	$	204,636	$	236,364	$	208,978

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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)		2016				2015				2014
Interest expense incurred		$	15,749			$	15,749			$	15,749

COLLATERALIZED 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, 2016, the total amount on deposit in trust accounts was $466,029 thousand.

The Company reinsures some of its catastrophe exposures with the segregated accounts of 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 for Mt. Logan Re began being established effective July 1, 2013 and non-voting, redeemable preferred shares have been issued to capitalize the segregated accounts. Each segregated account invests predominately in a diversified set of catastrophe exposures, diversified by risk/peril and across different geographic regions globally.

F-43

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan Re segregated accounts.

	Years Ended December 31,
Mt. Logan Re Segregated Accounts	2016	2015	2014
(Dollars in thousands)
Ceded written premiums	197,537	234,001	138,362
Ceded earned premiums	191,568	226,385	139,317
Ceded losses and LAE	44,802	40,807	30,598

Assumed written premiums	14,563	15,421	13,889
Assumed earned premiums	14,563	15,421	13,889
Assumed losses and LAE	-	-	-

Each segregated account is permitted to assume net risk exposures equal to its amount of preferred shares and posted collateral, which in the aggregate was $932,243 thousand and $798,548 thousand at December 31, 2016 and 2015, respectively. Of this amount, Group had invested $55,536 thousand and $50,000 thousand at December 31, 2016 and 2015, respectively, in the preferred shares.

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.

On December 1, 2015 the Company entered into two collateralized reinsurance agreements with Kilimanjaro Re to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The first agreement provides up to $300,000 thousand of reinsurance coverage from named storms and earthquakes in the United States, Puerto Rico and Canada. The second agreement provides up to $325,000 thousand of reinsurance coverage from named storms and 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 notes ("Series 2014-1 Notes"). On November 18, 2014, Kilimanjaro issued $500,000 thousand of notes ("Series 2014-2 Notes"). On December 1, 2015, Kilimanjaro issued $625,000 thousand of notes ("Series 2015-1 Notes). The proceeds from the issuance of the Series 2014-1 Notes, the Series 2014-2 Notes and the Series 2015-1 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-44

OPERATING LEASE AGREEMENTS

The future minimum rental commitments, exclusive of cost escalation clauses, at December 31, 2016, for all of the Company's operating leases with remaining non-cancelable terms in excess of one year are as follows:

(Dollars in thousands)
2017	$	14,818
2018		15,302
2019		15,801
2020		15,170
2021		6,307
Thereafter		23,769
Net commitments	$	91,168

(Some amounts may not reconcile due to rounding.)

All of these leases, the expiration terms of which range from 2018 to 2027, are for the rental of office space. Rental expense was $17,663 thousand, $15,986 thousand and $15,519 thousand for the years ended December 31, 2016, 2015 and 2014, 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 the 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% U.S. withholding tax. Currently, however, no withholding tax has been 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)	2016			2015		2014
Current tax expense (benefit):
U.S.	$	30,971		$	90,486	$	143,297
Non-U.S.		4,228			14,811		22,575
Total current tax expense (benefit)		35,199			105,297		165,872
Deferred tax expense (benefit):
U.S.		70,995			28,724		21,780
Non-U.S.		(2,694	)		-		-
Total deferred tax expense (benefit)		68,301			28,724		21,780

Total income tax expense (benefit)	$	103,500		$	134,021	$	187,652

(Some amounts may not reconcile due to rounding.)

F-45

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)	2016						2015						2014
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Underwriting gain (loss)	$	208,821		$	480,602		$	294,386		$	493,025		$	228,194		$	585,327
Net investment income		230,691			242,393			234,709			238,763			260,501			269,985
Net realized capital gains (losses)		(16,465	)		9,249			(159,268	)		(24,879	)		78,006			6,040
Net derivative gain (loss)		-			18,647			-			6,317			-			(11,599	)
Corporate expenses		(8,276	)		(18,955	)		(7,179	)		(16,075	)		(7,252	)		(16,169	)
Interest, fee and bond issue cost amortization expense		(35,435	)		(793	)		(35,434	)		(756	)		(37,970	)		(563	)
Other income (expense)		(5,536	)		(5,101	)		27,706			60,574			(1,561	)		33,869
Pre-tax income (loss)	$	373,801		$	726,043		$	354,920		$	756,970		$	519,918		$	866,890

Expected tax provision at the applicable statutory rate(s)		130,830			2,387			124,221			14,848			181,972			21,279
Increase (decrease) in taxes resulting from:
Tax exempt income		(9,078	)		-			(10,004	)		-			(12,231	)		-
Dividend received deduction		(4,913	)		-			(5,364	)		-			(5,910	)		-
Proration		1,931			-			2,160			-			1,835			-
Tax audit settlement		(18,644	)		-			-			-			-			-
Other		1,840			(853	)		8,197			(37	)		(588	)		1,296
Total income tax provision	$	101,966		$	1,534		$	119,210		$	14,811		$	165,077		$	22,575

(Some amounts may not reconcile due to rounding.)

During 2016, the Internal Revenue Service ("IRS") completed its audit of the Company for the 2009 through 2013 tax years and issued a final Revenue Agent Report ("RAR"). The RAR reflected that the IRS owed the Company a net refund for the five years of $44,241 thousand plus interest of $3,396 thousand. In addition, the Company will subsequently file amended tax returns for those years plus 2014 and 2015 for $34,234 thousand in net refunds, reflecting the conversion of foreign premium tax deductions into foreign tax credits ("FTCs"). The overall net refunds due to the Company resulted primarily from the carryback of capital losses incurred in 2009 and 2010 to 2006 and 2007, from the conversion of foreign premium tax deductions into FTCs and from increased utilization of such FTCs as well as the increased utilization of Alternative Minimum Tax ("AMT") credit carryforwards. The net refund due the Company as a result of the RAR is required to be reviewed and approved by IRS Joint Committee since such amount is more than $5,000 thousand.

The Company has no reserve for uncertain tax positions.

F-46

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/ (liabilities) are as follows for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	2016			2015
Deferred tax assets:
Loss reserves	$	104,547		$	169,771
Unearned premium reserves		37,573			40,624
Net unrealized losses on benefit plans		35,271			33,971
Unrealized foreign currency losses		27,410			-
Benefit plan liability		14,576			18,747
Net operating loss carryforward		6,341			3,412
Uncollectible reinsurance reserves		5,534			5,534
Investment impairments		3,093			23,481
Deferred expenses		2,884			3,182
Foreign tax credits		-			11,836
Alternative minimum tax credits		-			7,604
Other assets		14,843			16,347
Total deferred tax assets		252,071			334,509

Deferred tax liabilities:
Net fair value income		78,740			80,268
Deferred acquisition costs		26,652			33,227
Net unrealized investment gains		20,698			7,491
Partnership investments		11,912			6,006
Gain on tender of debt		10,958			16,437
Unrealized foreign currency gains		-			3,778
Other liabilities		3,086			5,860
Total deferred tax liabilities		152,045			153,067

Net deferred tax assets		100,026			181,442
Less: Valuation allowance		(3,846	)		(3,412	)
Total net deferred tax assets	$	96,181		$	178,030

(Some amounts may not reconcile due to rounding.)

At December 31, 2016, the Company has no FTCs or AMT credit carry forwards. Management believes that it is more likely than not that the Company will realize the majority of its deferred tax assets, however, a valuation allowance of $3,846 thousand and $3,412 thousand has been recorded in 2016 and 2015, respectively, against the deferred tax assets in its Canadian subsidiaries.

The Company has recorded tax benefits related to share-based compensation deductions for dividends on restricted stock, vesting of restricted stock and exercised stock options in 2016 and 2015, respectively of $7,458 thousand and $8,064 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 Company of its underlying 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 8.

F-47

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)	2016			2015			2014
Written premiums:
Direct	$	1,819,588		$	1,569,791		$	1,227,645
Assumed		4,214,286			4,321,922			4,535,231
Ceded		(762,969	)		(709,402	)		(630,446	)
Net written premiums	$	5,270,905		$	5,182,311		$	5,132,430

Premiums earned:
Direct	$	1,694,702		$	1,491,163		$	1,183,498
Assumed		4,361,944			4,500,526			4,419,322
Ceded		(736,180	)		(698,847	)		(559,113	)
Net premiums earned	$	5,320,466		$	5,292,842		$	5,043,707

Incurred losses and LAE:
Direct	$	1,496,455		$	1,268,896		$	1,100,037
Assumed		2,121,902			2,152,633			2,160,663
Ceded		(478,728	)		(356,814	)		(384,764	)
Net incurred losses and LAE	$	3,139,629		$	3,064,715		$	2,875,936

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,
	2016									2015									2014
(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	$	65,645		$	(13,961	)	$	51,684		$	(333,657	)	$	54,502		$	(279,155	)	$	(4,278	)	$	11,653		$	7,375
URA(D) on securities - OTTI		7,734			(1,789	)		5,945			8,411			(3,383	)		5,028			(10,078	)		3,407			(6,671	)
Reclassification of net realized losses (gains) included in net income (loss)		23,232			(8,114	)		15,118			131,211			(37,523	)		93,688			34,668			(13,276	)		21,392
Foreign currency translation adjustments		(53,802	)		(1,539	)		(55,341	)		(140,918	)		29,388			(111,530	)		(111,145	)		15,728			(95,417	)
Benefit plan actuarial net gain (loss)		(11,520	)		4,032			(7,488	)		8,740			(3,059	)		5,681			(60,169	)		21,059			(39,110	)
Reclassification of benefit plan liability amortization included in net income (loss)		7,805			(2,732	)		5,073			9,563			(3,347	)		6,216			4,647			(1,627	)		3,020
Total other comprehensive income (loss)	$	39,094		$	(24,103	)	$	14,991		$	(316,650	)	$	36,578		$	(280,072	)	$	(146,355	)	$	36,944		$	(109,411	)

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	2016			2015			operations and comprehensive income (loss)
(Dollars in thousands)
URA(D) on securities	$	23,232		$	131,211		Other net realized capital gains (losses)
		(8,114	)		(37,523	)	Income tax expense (benefit)
	$	15,118		$	93,688		Net income (loss)

Benefit plan net gain (loss)	$	7,805		$	9,563		Other underwriting expenses
		(2,732	)		(3,347	)	Income tax expense (benefit)
	$	5,073		$	6,216		Net income (loss)

F-48

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)	2016			2015
Beginning balance of URA (D) on securities	$	42,811		$	223,250
Current period change in URA (D) of investments - temporary		66,802			(185,467	)
Current period change in URA (D) of investments - non-credit OTTI		5,945			5,028
Ending balance of URA (D) on securities		115,558			42,811

Beginning balance of foreign currency translation adjustments		(211,477	)		(99,947	)
Current period change in foreign currency translation adjustments		(55,341	)		(111,530	)
Ending balance of foreign currency translation adjustments		(266,818	)		(211,477	)

Beginning balance of benefit plan net gain (loss)		(63,089	)		(74,986	)
Current period change in benefit plan net gain (loss)		(2,415	)		11,897
Ending balance of benefit plan net gain (loss)		(65,504	)		(63,089	)

Ending balance of accumulated other comprehensive income (loss)	$	(216,764	)	$	(231,755	)

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)		2016				2015				2014
Company contributions		$	30,821			$	5,949			$	16,484

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

		Years Ended December 31,
(Dollars in thousands)		2016				2015				2014
Pension expense		$	17,188			$	22,682			$	18,543

F-49

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)	2016			2015
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	254,022		$	270,065
Service cost		10,924			12,511
Interest cost		9,485			10,759
Actuarial (gain)/loss		12,155			(18,595	)
Benefits paid		(4,733	)		(20,718	)
Projected benefit obligation at end of year		281,853			254,022

Change in plan assets:
Fair value of plan assets at beginning of year		135,087			157,090
Actual return on plan assets		10,331			(7,234	)
Actual contributions during the year		30,821			5,949
Benefits paid		(4,733	)		(20,718	)
Fair value of plan assets at end of year		171,506			135,087

Funded status at end of year	$	(110,348	)	$	(118,936	)

(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)	2016			2015
Other assets (due beyond one year)	$	-		$	-
Other liabilities (due within one year)		(2,371	)		(1,869	)
Other liabilities (due beyond one year)		(107,977	)		(117,067	)
Net amount recognized in the consolidated balance sheets	$	(110,348	)	$	(118,936	)

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)	2016			2015
Prior service cost	$	-		$	-
Accumulated income (loss)		(96,965	)		(91,920	)
Accumulated other comprehensive income (loss)	$	(96,965	)	$	(91,920	)

(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)	2016			2015
Other comprehensive income (loss) at December 31, prior year	$	(91,920	)	$	(102,692	)
Net gain (loss) arising during period		(12,982	)		(259	)
Recognition of amortizations in net periodic benefit cost:
Prior service cost		-			21
Actuarial loss		7,937			11,011
Other comprehensive income (loss) at December 31, current year	$	(96,965	)	$	(91,920	)

(Some amounts may not reconcile due to rounding.)

F-50

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

	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Service cost	$	10,924		$	12,511		$	10,015
Interest cost		9,485			10,759			10,474
Expected return on assets		(11,158	)		(11,620	)		(11,288	)
Amortization of actuarial loss from earlier periods		7,937			9,243			4,341
Amortization of unrecognized prior service cost		-			21			49
Settlement		-			1,768			4,953
Net periodic benefit cost	$	17,188		$	22,682		$	18,543

Other changes recognized in other comprehensive income (loss):
Other comprehensive income (loss) attributable to change from prior year		5,045			(10,773	)

Total recognized in net periodic benefit cost and other
comprehensive income (loss)	$	22,233		$	11,909

(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, $8,758 thousand and $0 thousand, respectively.

The weighted average discount rates used to determine net periodic benefit cost for 2016, 2015 and 2014 were 4.38%, 4.00% and 5.00%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2016, 2015 and 2014 was 4.00%. The expected long-term rate of return on plan assets for 2016, 2015 and 2014 was 7.50% 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 years end 2016, 2015 and 2014 were 4.16%, 4.38% and 4.00%, respectively.

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

	At December 31,
(Dollars in thousands)	2016		2015
Qualified Plan	$	211,720	$	188,702
Non-qualified Plan		21,123		17,756
Total	$	232,843	$	206,458

(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)	2016		2015
Qualified Plan
Projected benefit obligation	$	254,320	$	229,719
Fair value of plan assets		171,506		135,087
Non-qualified Plan
Projected benefit obligation	$	27,534	$	24,303
Fair value of plan assets		-		-

F-51

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)	2016		2015
Qualified Plan
Accumulated benefit obligation	$	211,720	$	188,702
Fair value of plan assets		171,506		135,087
Non-qualified Plan
Accumulated benefit obligation	$	21,123	$	17,756
Fair value of plan assets		-		-

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

(Dollars in thousands)
2017	$	7,926
2018		10,069
2019		12,993
2020		10,732
2021		12,936
Next 5 years		72,113

Plan assets consist of shares in investment trusts with 78%, 13%, 7% and 2% of the underlying assets consisting of equity securities, fixed maturities, limited partnerships 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.

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, 2016		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash	$	-	$	-	$	-	$	-
Short-term investments, which approximates fair value (a)		3,665		3,665		-		-
Mutual funds, fair value
Fixed income (b)		21,445		21,445		-		-
Equities (c)		122,213		122,213		-		-
Multi-strategy equity fund, fair value (d)		11,274		-		-		11,274
Total	$	158,597	$	147,323	$	-	$	11,274

(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.

F-52

			Fair Value Measurement Using:
			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
(Dollars in thousands)	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash	$	-	$	-	$	-	$	-
Short-term investments, which approximates fair value (a)		4,034		4,034		-		-
Mutual funds, fair value
Fixed income (b)		22,537		22,537		-		-
Equities (c)		86,505		86,505		-		-
Multi-strategy equity fund, fair value (d)		10,673		-		-		10,673
Total	$	123,749	$	113,076	$	-	$	10,673

(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.

In addition, $12,909 thousand and $11,338 thousand of private equity limited partnerships were recorded as part of the qualified plan assets at December 31, 2016 and 2015, respectively, are not included within the fair value hierarchy tables as the assets are valued using the NAV practical expedient guidance within ASU 2015-07.

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)	2016			2015
Assets:
Balance, beginning of period	$	10,673		$	10,629
Actual return on plan assets:
Realized gains (losses) relating to assets sold during the period		28			9
Unrealized gains (losses) relating to assets still held at the reporting date		517			12
Purchases and capital contributions		-			161
Investment income earned on assets		189			-
Sales and capital distributions		(134	)		(138	)
Transfers in and/or (out) of Level 3		-			-
Balance, end of period	$	11,274		$	10,673

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	$	489		$	3

(Some amounts may not reconcile due to rounding.)

The Company does not expect to make any contributions to the qualified plan in 2017. The Company contributed $30,000 thousand to the qualified pension benefit plan for the year ended December 31, 2016.

F-53

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)		2016				2015				2014
Incurred expenses		$	6,058			$	5,468			$	4,676

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, Zurich 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 5.0% to 19.7%. 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)		2016				2015				2014
Incurred expenses		$	1,560			$	1,423			$	1,387

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 periodic cost: a healthcare inflation rate for pre-Medicare claims of 6.7% in 2016 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 6.2% in 2016 was assumed to decrease gradually to 4.5% in 2027 and then remain at that level.

The following medical cost trend rates were used to determine benefit obligations: a healthcare inflation rate for pre-Medicare claims of 7.5% in 2017 was assumed to decrease gradually to 4.5% in 2029 and then remain at that level; and a healthcare inflation rate for post-Medicare claims of 7.5% in 2017 was assumed to decrease gradually to 4.5% in 2029 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	$	541	$	(419	)
b. Effect on accumulated post-retirement benefit obligation		6,622		(5,158	)

F-54

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

		Years Ended December 31,
(Dollars in thousands)		2016				2015				2014
Post-retirement benefit expenses		$	2,293			$	3,280			$	3,196

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

	At December 31,
(Dollars in thousands)	2016			2015
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	31,687		$	36,506
Service cost		1,418			1,794
Interest cost		1,007			1,187
Amendments		(794	)		-
Actuarial (gain)/loss		(668	)		(7,231	)
Benefits paid		(579	)		(568	)
Benefit obligation at end of year		32,071			31,687

Change in plan assets:
Fair value of plan assets at beginning of year		-			-
Employer contributions		579			568
Benefits paid		(579	)		(568	)
Fair value of plan assets at end of year		-			-

Funded status at end of year	$	(32,071	)	$	(31,687	)

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

	At December 31,
(Dollars in thousands)	2016			2015
Other liabilities (due within one year)	$	(614	)	$	(654	)
Other liabilities (due beyond one year)		(31,457	)		(31,033	)
Net amount recognized in the consolidated balance sheets	$	(32,071	)	$	(31,687	)

(Some amounts may not reconcile due to rounding.)

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)	2016			2015
Accumulated income (loss)	$	(4,471	)	$	(5,139	)
Accumulated prior service credit (cost)		662		$	-
Accumulated other comprehensive income (loss)	$	(3,809	)	$	(5,139	)

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

	Years Ended December 31,
(Dollars in thousands)	2016			2015
Other comprehensive income (loss) at December 31, prior year	$	(5,139	)	$	(12,670	)
Net gain (loss) arising during period		668			7,231
Prior Service credit (cost) arising during period		794			-
Recognition of amortizations in net periodic benefit cost:
Actuarial loss (gain)		-			300
Prior service cost		(132	)		-
Other comprehensive income (loss) at December 31, current year	$	(3,809	)	$	(5,139	)

F-55

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

	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Service cost	$	1,418		$	1,794		$	1,619
Interest cost		1,007			1,187			1,320
Net loss recognition		(132	)		300			257
Net periodic cost	$	2,293		$	3,280		$	3,196

Other changes recognized in other comprehensive income (loss):
Other comprehensive gain (loss) attributable to change from prior year		(1,330	)		(7,531	)

Total recognized in net periodic benefit cost and
other comprehensive income (loss)	$	963		$	(4,251	)

(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, $132 thousand and ($131) thousand, respectively.

The weighted average discount rates used to determine net periodic benefit cost for 2016, 2015 and 2014 were 4.38%, 4.00% and 5.00%, respectively.

The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2016, 2015 and 2014 were 4.16%, 4.38% and 4.00%, respectively.

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

(Dollars in thousands)
2017	$	614
2018		706
2019		824
2020		951
2021		1,071
Next 5 years		7,804

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.

F-56

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 $2,702,624 thousand and $2,632,411 thousand at December 31, 2016 and 2015, respectively. The general business statutory net income of Bermuda Re was $682,876 thousand, $621,643 thousand and $698,834 thousand for the years ended December 31, 2016, 2015 and 2014, 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, 2016, Everest Re has $523,547 thousand available for payment of dividends in 2017 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 $3,635,121 thousand and $3,210,891 thousand at December 31, 2016 and 2015, respectively. The statutory net income of Everest Re was $523,547 thousand, $498,455 thousand and $357,298 thousand for the years ended December 31, 2016, 2015 and 2014, 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.

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)	2016 (3)		2015 (3)		2016		2015
Regulatory targeted capital	$	-	$	2,079,005	$	1,411,440	$	1,355,668
Actual capital	$	2,702,624	$	2,632,411	$	3,635,121	$	3,210,891

(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 2016 BSCR calculation is not yet due to be completed; however, the Company anticipates that Bermuda Re's December 31, 2016 actual capital will exceed the targeted capital level.

F-57

COMMITMENTS AND 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)	2016		2015
The Prudential Insurance Company of America	$	146,507	$	142,427
Unaffiliated life insurance company	$	33,860	$	33,062

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, restricted share awards or performance share unit awards to officers and key employees of the Company. At December 31, 2016, there were 2,629,771 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, 2016, only non-qualified share options, restricted share awards and performance share unit 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, 2016, there were 34,957 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, 2016 there were 362,714 remaining shares available to be granted under the 2003 Director Plan.

F-58

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 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.

Performance Share Unit awards granted under the 2010 Employee Plan will vest 100% after three years. The Performance Share Unit awards represent the right to receive between and 0 and 1.75 shares of stock for each unit awarded depending upon performance in relation to certain metrics. The performance share unit valuation will be based 50% on growth in book value per share over the three year vesting period, compared to designated peer companies. The remaining 50% of the performance share valuation will be based upon operating return on equity for each of the separate operating years within the vesting period.

For share options, restricted shares and performance share units granted under the 2010 Employee Plan, the 2002 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, share-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) was $26,398 thousand, $21,237 thousand and $21,196 thousand for the years ended December 31, 2016, 2015 and 2014, respectively. The corresponding income tax benefit recorded in the consolidated statements of operations and comprehensive income (loss) for share-based compensation was $6,898 thousand, $4,870 thousand and $5,819 thousand for the years ended December 31, 2016, 2015 and 2014, respectively.

For the year ended December 31, 2016, a total of 173,546 restricted shares were granted on February 24, 2016, May 18, 2016, September 8, 2016, and November 16, 2016, with a fair value of $186.015, $182.095, $194.165 and $212.120 per share, respectively. Additionally, 11,130 performance share units were awarded on February 24, 2016, with a fair value of $186.015 per unit. No share options were granted during the year ended December 31, 2016. 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 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, 2016, 2015 and 2014, the Company recognized $597 thousand, $446 thousand and $401 thousand, respectively, of additional paid-in capital due to tax benefits from dividends on restricted shares.

F-59

A summary of the option activity under the Company's shareholder approved plans as of December 31, 2016, 2015 and 2014, 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, 2016		648,034	$	85.61
Granted		-		-
Exercised		187,940		87.31
Forfeited/Cancelled/Expired		5,100		88.25
Outstanding at December 31, 2016		454,994		84.88		3.7	$	59,843

Exercisable at December 31, 2016		410,694		84.50		3.5	$	54,169

					Weighted-
			Weighted-		Average
			Average		Remaining		Aggregate
(Aggregate Intrinsic Value in thousands)			Exercise		Contractual		Intrinsic
Options	Shares		Price/Share		Term		Value
Outstanding at January 1, 2015		888,184	$	86.05
Granted		-		-
Exercised		230,350		87.21
Forfeited/Cancelled/Expired		9,800		87.68
Outstanding at December 31, 2015		648,034		85.61		4.5	$	64,352

Exercisable at December 31, 2015		495,334		84.94		4.1	$	49,517

					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

There were no share options granted in 2016, 2015 and 2014. The aggregate intrinsic value (market price less exercise price) of options exercised during the years ended December 31, 2016, 2015 and 2014 was $19,876 thousand, $21,434 thousand and $21,202 thousand, respectively. The cash received from the exercised share options for the year ended December 31, 2016 was $16,408 thousand. The tax benefit realized from the options exercised for the year ended December 31, 2016 was $6,480 thousand.

F-60

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

	At December 31, 2016
	Options Outstanding						Options Exercisable
			Weighted-
			Average		Weighted-				Weighted-
	Number		Remaining		Average		Number		Average
Range of	Outstanding		Contractual		Exercise		Exercisable		Exercise
Exercise Prices	at 12/31/16		Life		Price		at 12/31/16		Price
$71.7150 - $78.1700		90,880		2.1	$	71.72		90,880	$	71.72
$78.1800 - $85.6300		71,510		3.1		84.63		71,510		84.63
$85.6400 - $87.4700		109,240		4.1		86.62		109,240		86.62
$87.4800 - $110.1300		183,364		4.4		90.46		139,064		91.14
		454,994		3.7		84.88		410,694		84.50

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

	Years Ended December 31,
	2016				2015				2014
			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,		435,336	$	143.02		467,745	$	120.84		429,041	$	103.50
Granted		173,546		186.37		156,262		178.80		176,159		147.44
Vested		145,834		130.54		154,387		113.12		128,549		99.55
Forfeited		27,710		147.32		34,284		138.19		8,906		118.82
Outstanding at December 31,		435,338		164.21		435,336		143.02		467,745		120.84

As of December 31, 2016, there was $51,511 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 3.1 years. The total fair value of shares vested during the years ended December 31, 2016, 2015 and 2014, was $27,427 thousand, $17,464 thousand and $12,797 thousand, respectively. The tax benefit realized from the shares vested for the year ended December 31, 2016 was $8,061 thousand.

In addition to the 2010 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, Group issued 547 common shares in 2016, 426 common shares in 2015 and 476 common shares in 2014 to the Company's non-employee directors as compensation for their service as directors. These issuances had aggregate values of approximately $103 thousand, $75 thousand and $75 thousand, respectively.

Since its 1995 initial public offering, the Company has issued to certain key employees of the Company 1,997,372 restricted common shares, of which 258,587 restricted shares have been cancelled. The Company has issued to non-employee directors of the Company 129,817 restricted common shares, of which no restricted shares have been cancelled. The Company acquired 70,010, 82,277 and 82,490 common shares at a cost of $12,111 thousand, $14,666 thousand and $12,738 thousand in 2016, 2015 and 2014, respectively, from employees and non-employee directors who chose to pay required withholding taxes and/or the exercise cost on option exercises or restricted share vestings by withholding shares.

F-61

The following table summarized the status of the Company's non-vested performance share unit awards and changes for the period indicated:

	Year Ended December 31,
	2016				2015
			Weighted-				Weighted-
			Average				Average
			Grant Date				Grant Date
Performance Share Unit Awards	Shares		Fair Value		Shares		Fair Value
Outstanding at January 1,		10,705	$	178.84		-	$	-
Granted		11,130		186.02		10,705		178.84
Vested		-		-		-		-
Forfeited		-		-		-		-
Outstanding at December 31,		21,835		182.50		10,705		178.84

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 brokers, surplus lines brokers and general agents within the U.S. and Canada.

These segments 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.

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.

For inter-affiliate reinsurance and business written through the Lloyd's Syndicate, business is generally reported within the segment in which the business was first produced, consistent with how the business is managed.

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-62

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)	2016		2015		2014
Gross written premiums	$	2,125,792	$	2,147,892	$	2,154,530
Net written premiums		1,970,575		1,855,853		1,983,800

Premiums earned	$	2,072,155	$	1,952,680	$	1,986,769
Incurred losses and LAE		1,068,475		825,081		954,525
Commission and brokerage		465,953		493,261		466,291
Other underwriting expenses		54,107		50,087		45,583
Underwriting gain (loss)	$	483,620	$	584,251	$	520,370

International	Years Ended December 31,
(Dollars in thousands)	2016		2015		2014
Gross written premiums	$	1,230,683	$	1,334,206	$	1,603,566
Net written premiums		1,082,712		1,208,978		1,336,633

Premiums earned	$	1,119,121	$	1,251,111	$	1,310,903
Incurred losses and LAE		486,550		749,891		748,174
Commission and brokerage		283,447		298,180		306,229
Other underwriting expenses		35,512		34,303		34,598
Underwriting gain (loss)	$	313,612	$	168,737	$	221,902

Bermuda	Years Ended December 31,
(Dollars in thousands)	2016		2015		2014
Gross written premiums	$	890,375	$	877,328	$	786,408
Net written premiums		831,931		791,594		744,664

Premiums earned	$	837,964	$	822,391	$	715,736
Incurred losses and LAE		461,909		456,448		361,792
Commission and brokerage		233,989		215,992		198,848
Other underwriting expenses		36,331		36,017		34,923
Underwriting gain (loss)	$	105,735	$	113,934	$	120,173

Insurance	Years Ended December 31,
(Dollars in thousands)	2016			2015			2014
Gross written premiums	$	1,787,024		$	1,532,287		$	1,218,372
Net written premiums		1,385,687			1,325,886			1,067,333

Premiums earned	$	1,291,226		$	1,266,660		$	1,030,299
Incurred losses and LAE		1,122,695			1,033,295			811,445
Commission and brokerage		205,303			176,213			149,777
Other underwriting expenses		176,772			136,661			118,001
Underwriting gain (loss)	$	(213,544	)	$	(79,509	)	$	(48,924	)

F-63

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)	2016			2015			2014
Underwriting gain (loss)	$	689,423		$	787,412		$	813,522
Net investment income		473,085			473,473			530,485
Net realized capital gains (losses)		(7,216	)		(184,147	)		84,046
Net derivative gain (loss)		18,647			6,317			(11,599	)
Corporate expenses		(27,231	)		(23,254	)		(23,421	)
Interest, fee and bond issue cost amortization expense		(36,228	)		(36,191	)		(38,533	)
Other income (expense)		(10,636	)		88,280			32,308
Income (loss) before taxes	$	1,099,844		$	1,111,890		$	1,386,808

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)		2016				2015				2014
United Kingdom		$	688,598			$	740,763			$	676,490

Approximately 19.4%, 20.7% and 22.7% of the Company's gross written premiums in 2016, 2015 and 2014, respectively, were sourced through the Company's largest intermediary.

DISPOSITIONS

On August 24, 2016, the Company sold Heartland, its crop Managing General Agent to CGB for $49,000 thousand. The sale agreement includes a provision for a long term strategic reinsurance relationship with CGB. The Company has recognized an after-tax loss on the sale of Heartland of $12,942 thousand. Under the terms of the reinsurance arrangement, there will not be a material fluctuation in the level of crop business, although it will be reflected as reinsurance rather than insurance.

On July 13, 2015, the Company closed its agreement to sell all of the outstanding shares of capital stock of Mt. McKinley, a Delaware domiciled insurance company and wholly-owned subsidiary of the Company to Clearwater Insurance Company, a Delaware domiciled insurance company. The Company received $20,156 thousand in cash for Mt. McKinley and did not recognize any realized gain or loss from the sale.

Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater Insurance Company. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which had been reinsured by Everest Reinsurance (Bermuda), Ltd. ("Everest Re Bermuda"), a wholly-owned subsidiary of the Company. As consideration for entering into the retrocession treaty, Everest Re Bermuda transferred cash of $140,279 thousand, an amount equal to the net loss reserves as of the closing date. Of the $140,279 thousand of net loss reserves retroceded, $100,451 thousand were related to A&E business. The maximum liability retroceded under the retrocession treaty will be $440,279 thousand, equal to the retrocession payment plus $300,000 thousand. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty.

SUBSEQUENT EVENTS

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

F-64

UNAUDITED QUARTERLY FINANCIAL DATA

Summarized quarterly financial data for the periods indicated:

	2016
(Dollars in thousands, except per share amounts)	1st Quarter			2nd Quarter		3rd Quarter		4th Quarter

Operating data:
Gross written premiums	$	1,353,189		$	1,363,351	$	1,782,616	$	1,534,719
Net written premiums		1,181,457			1,154,953		1,564,644		1,369,851

Premiums earned		1,218,867			1,288,860		1,371,474		1,441,265
Net investment income		102,524			132,737		122,657		115,167
Net realized capital gains (losses)		(74,259	)		32,658		380		34,005
Total claims and underwriting expenses		1,047,865			1,225,395		1,174,276		1,183,507
Net income (loss)		171,686			155,692		295,394		373,572

Earnings per common share attributable to Everest Re Group:
Basic	$	4.03		$	3.70	$	7.11	$	9.14
Diluted	$	4.00		$	3.67	$	7.06	$	9.08

	2015
(Dollars in thousands, except per share amounts)	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter

Operating data:
Gross written premiums	$	1,418,025		$	1,261,660		$	1,724,943		$	1,487,085
Net written premiums		1,224,289			1,135,718			1,500,355			1,321,949

Premiums earned		1,272,488			1,285,255			1,362,864			1,372,235
Net investment income		122,566			124,990			115,403			110,514
Net realized capital gains (losses)		(10,505	)		(24,178	)		(159,971	)		10,507
Total claims and underwriting expenses		1,056,990			1,130,606			1,234,785			1,083,049
Net income (loss)		322,978			209,057			88,553			357,281

Earnings per common share attributable to Everest Re Group:
Basic	$	7.26		$	4.72		$	2.02		$	8.32
Diluted	$	7.19		$	4.68		$	2.00		$	8.26

F-65

SCHEDULE I — SUMMARY OF INVESTMENTS —
OTHER THAN INVESTMENTS IN RELATED PARTIES
December 31, 2016

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	$	1,115,208	$	1,130,315	$	1,130,315
State, municipalities and political subdivisions		723,938		729,984		729,984
Foreign government securities		1,254,175		1,258,160		1,258,160
Foreign corporate securities		2,565,710		2,631,978		2,631,978
Public utilities		272,946		277,978		277,978
All other corporate bonds		5,255,468		5,345,900		5,345,900
Mortgage - backed securities:
Commercial		308,827		306,932		306,932
Agency residential		2,415,901		2,405,469		2,405,469
Non-agency residential		642		641		641
Redeemable preferred stock		19,798		20,051		20,051
Total fixed maturities-available for sale		13,932,613		14,107,408		14,107,408
Fixed maturities - available for sale at fair value (1)		-		-		-
Equity securities - available for sale at market value		129,553		119,067		119,067
Equity securities - available for sale at fair value (1)		778,526		1,010,085		1,010,085
Short-term investments		431,478		431,478		431,478
Other invested assets		1,333,069		1,333,129		1,333,129
Cash		481,922		481,922		481,922

Total investments and cash	$	17,087,161	$	17,483,089	$	17,483,089

(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)	2016			2015

ASSETS:
Fixed maturities - available for sale, at market value	$	2,178		$	78,282
(amortized cost: 2016, $2,176; 2015, $78,153)
Short-term investments		-			18,288
Other invested assets (cost: 2016, $145,036; 2015, $0)		145,036			-
Cash		2,034			740
Investment in subsidiaries, at equity in the underlying net assets		8,120,595			7,705,868
Accrued investment income		20			71
Receivable from subsidiaries		894			736
Other assets		60,603			56,314
TOTAL ASSETS	$	8,331,360		$	7,860,299

LIABILITIES:
Long term note payable - Affiliated	$	250,000		$	250,000
Due to subsidiaries		1,020			1,068
Other liabilities		4,944			646
Total liabilities		255,964			251,714

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;
(2016) 68,871 and (2015) 68,606 issued outstanding before treasury shares		689			686
Additional paid-in capital		2,140,783			2,103,638
Accumulated other comprehensive income (loss), net of deferred income
tax expense (benefit) of $8,240 at 2016 and ($15,863) at 2015		(216,764	)		(231,755	)
Treasury shares, at cost; 27,972 shares (2016) and 25,912 shares (2015)		(3,272,244	)		(2,885,956	)
Retained earnings		9,422,932			8,621,972
Total shareholders' equity		8,075,396			7,608,585
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	8,331,360		$	7,860,299

See notes to consolidated financial statements.

S-2

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


	Years Ended December 31,
	2016			2015			2014
(Dollars in thousands)
REVENUES:
Net investment income	$	879		$	3,895		$	824
Net realized capital gains (losses)		144			(3,057	)		15
Other income (expense)		5,022			7,809			5,568
Net income (loss) of subsidiaries		1,012,315			989,462			1,208,192
Total revenues		1,018,360			998,109			1,214,599

EXPENSES:
Interest expense - affiliated		4,300			4,300			-
Other expenses		17,716			15,940			15,443
Total expenses		22,016			20,240			15,443

INCOME (LOSS) BEFORE TAXES		996,344			977,869			1,199,156
Income tax expense (benefit)		-			-			-

NET INCOME (LOSS)	$	996,344		$	977,869		$	1,199,156

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period		57,629			(274,127	)		704
Reclassification adjustment for realized losses (gains) included in net income (loss)		15,118			93,688			21,392
Total URA(D) on securities arising during the period		72,747			(180,439	)		22,096

Foreign currency translation adjustments		(55,341	)		(111,530	)		(95,417	)

Benefit plan actuarial net gain (loss) for the period		(7,488	)		5,681			(39,110	)
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)		5,073			6,216			3,020
Total benefit plan net gain (loss) for the period		(2,415	)		11,897			(36,090	)
Total other comprehensive income (loss), net of tax		14,991			(280,072	)		(109,411	)

COMPREHENSIVE INCOME (LOSS)	$	1,011,335		$	697,797		$	1,089,745

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)	2016			2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	996,344		$	977,869		$	1,199,156
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in retained (earnings) deficit of subsidiaries		(1,012,315	)		(989,462	)		(1,208,192	)
Dividends received from subsidiaries		690,000			590,000			690,000
Change in other assets and liabilities, net		66			(7,626	)		14,470
Increase (decrease) in due to/from affiliates		(206	)		839			(2,520	)
Amortization of bond premium (accrual of bond discount)		(56	)		525			156
Realized capital losses (gains)		(144	)		3,057			(15	)
Non-cash compensation expense		2,311			1,841			1,828
Net cash provided by (used in) operating activities		676,000			577,043			694,883

CASH FLOWS FROM INVESTING ACTIVITIES:
Additional investment in subsidiaries		(77,324	)		(60,600	)		(73,873	)
Proceeds from fixed maturities matured/called - available for sale, at market value		1,152			26,074			4,765
Proceeds from fixed maturities sold - available for sale, at market value		75,025			252,047			50,010
Distribution from other invested assets		757,399			-			-
Cost of fixed maturities acquired - available for sale, at market value		-			(532,480	)		(49,994	)
Cost of other invested assets acquired		(902,435	)		-			-
Net change in short-term investments		18,288			279,462			(269,307	)
Net cash provided by (used in) investing activities		(127,895	)		(35,497	)		(338,399	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued during the period, net		34,861			32,962			37,208
Purchase of treasury shares		(386,288	)		(400,059	)		(500,024	)
Proceeds from issuance of long term notes - affiliated		-			-			250,000
Dividends paid to shareholders		(195,384	)		(175,107	)		(145,913	)
Net cash provided by (used in) financing activities		(546,811	)		(542,204	)		(358,729	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		-			-			-

Net increase (decrease) in cash		1,294			(658	)		(2,245	)
Cash, beginning of period		740			1,398			3,643
Cash, end of period	$	2,034		$	740		$	1,398

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. This transaction is presented as a Long Term Note Payable – Affiliated in the Condensed Balance Sheets of Everest Re Group, Ltd.

3.)	Everest Re Group, Ltd. has invested funds in the segregated accounts of Mt. Logan Re, Ltd. ("Mt. Logan Re"), an affiliated entity. As of December 31, 2016 and 2015, Everest Re Group, Ltd. had investments in preferred shares of Mt. Logan Re, Ltd. segregated accounts of $55,536 thousand and $50,000 thousand, respectively.

Based upon ASU 2015-02, authoritative guidance regarding consolidation of reporting entities, the separate segregated accounts of Mt. Logan Re are no longer included as part of the consolidated financial statements of Everest Re Group, Ltd. and its subsidiaries. Therefore, for the condensed financial statements, the presentation of Everest Re Group, Ltd. investments and operating results related to Mt. Logan Re have been reclassified for the presented periods in accordance with the guidance. On the Condensed Balance Sheets, investments in Mt. Logan Re valued at $58,955 thousand and $55,673 thousand as of December 31, 2016 and 2015, respectively, have been recorded within Other Assets instead of within Investment in subsidiaries, at equity in the underlying net assets. On the Condensed Statements of Operations, operating results of $5,536 thousand, $8,268 thousand and $6,142 thousand for the years ended December 31, 2016, 2015 and 2014, respectively, have been recorded in other income (expense) instead of net income (loss) of subsidiaries.

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, 2016
Domestic	$	220,864	$	6,604,867	$	1,110,528	$	3,363,381	$	234,123	$	2,191,170	$	671,256	$	230,879	$	3,356,262
International		52,014		1,748,380		237,120		1,119,121		33,059		486,550		283,447		35,512		1,082,712
Bermuda		71,174		1,959,065		229,898		837,964		205,902		461,909		233,989		36,331		831,931
Total	$	344,052	$	10,312,313	$	1,577,546	$	5,320,466	$	473,085	$	3,139,629	$	1,188,692	$	302,722	$	5,270,905

December 31, 2015
Domestic	$	234,061	$	6,114,129	$	1,083,493	$	3,219,340	$	245,159	$	1,858,376	$	669,474	$	186,748	$	3,181,739
International		61,217		1,819,700		273,677		1,251,111		34,181		749,891		298,180		34,303		1,208,978
Bermuda		77,074		2,017,970		256,220		822,391		194,133		456,448		215,992		36,017		791,594
Total	$	372,351	$	9,951,798	$	1,613,390	$	5,292,842	$	473,473	$	3,064,715	$	1,183,646	$	257,069	$	5,182,311

December 31, 2014
Domestic	$	242,178	$	6,041,129	$	1,099,842	$	3,017,068	$	253,304	$	1,765,970	$	616,068	$	163,584	$	3,051,133
International		69,050		1,785,695		347,352		1,310,903		40,262		748,174		306,229		34,598		1,336,633
Bermuda		87,103		1,893,989		281,551		715,736		236,920		361,792		198,848		34,923		744,664
Total	$	398,331	$	9,720,813	$	1,728,745	$	5,043,707	$	530,485	$	2,875,936	$	1,121,145	$	233,104	$	5,132,430

(Some amounts may not reconcile due to rounding.)

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, 2016
Total property and liability insurance
premiums earned	$	1,694,702	$	736,180	$	4,361,944	$	5,320,466		82.0	%

December 31, 2015
Total property and liability insurance
premiums earned	$	1,491,163	$	698,847	$	4,500,526	$	5,292,842		85.0	%

December 31, 2014
Total property and liability insurance
premiums earned	$	1,183,498	$	559,113	$	4,419,322	$	5,043,707		87.6	%

S-7

Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES