Everest Group (EG) 10-K risk factor changes: FY2019 vs FY2018

[removed: RISKS] [added: RISKS] RELATING TO OUR [removed: BUSINESS][added: BUSINESS]

[removed: Fluctuations] [added: *Fluctuations] in the financial markets could result in investment [removed: losses.][added: losses.*]

[removed: Our] [added: *Our] results could be adversely affected by catastrophic [removed: events.][added: events.*]

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

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

| 2018 | | [removed: $ |] 1,800.2 | [removed: |]

| 2017 | | [removed: |] 1,472.6 | [removed: |]

| 2016 | | [removed: |] 301.2 | [removed: |]

| 2015 | | [removed: |] 53.8 | [removed: |]

[removed: Our] [added: *Our] losses from future catastrophic events could exceed our [removed: projections.][added: projections.*]

[removed: If] [added: *If] our loss reserves are inadequate to meet our actual losses, our net income would be reduced or we could incur a [removed: loss.][added: loss.*]

During the past five calendar years, the reserve re-estimation process resulted in [removed: a decrease] [added: an increase] to our pre-tax net income in [removed: 2018] [added: 2019, 2017, 2016] and [removed: an increase] [added: 2015 and resulted in a decrease] to our pre-tax income [removed: for all other years:][added: in 2018:]

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

| 2018 | | [removed: $] | 387.1 | | decrease |

At year-end [removed: 2018, 2.6%] [added: 2019, 1.9%] of our gross reserves were comprised of A&E reserves.

A&E liabilities are especially hard to estimate for many reasons, including the long delays between exposure and manifestation of any bodily injury or property damage, difficulty in identifying the source of the asbestos or environmental contamination, long reporting delays and difficulty in properly allocating liability for the asbestos or [removed: environmental damage.]

[removed: The] [added: *The] failure to accurately assess underwriting risk and establish adequate premium rates could reduce our net income or result in a net [removed: loss.][added: loss.*]

[removed: Decreases] [added: *Decreases] in pricing for property and casualty reinsurance and insurance could reduce our net [removed: income.][added: income.*]

[removed: If] [added: *If] rating agencies downgrade the ratings of our insurance subsidiaries, future prospects for growth and profitability could be significantly and adversely [removed: affected.][added: affected.*]

[removed: The] [added: *The] failure of our insureds, intermediaries and reinsurers to satisfy their obligations to us could reduce our [removed: income.][added: income.*]

[removed: If] [added: *If] we are unable or choose not to purchase reinsurance and transfer risk to the reinsurance markets, our net income could be reduced or we could incur a net loss in the event of unusual loss [removed: experience.][added: experience.*]

| | [added: 2019 | |] 2018 | [added: |] 2017 | [added: |] 2016 | [removed: 2015] | [removed: 2014] [added: 2015] |

| Percentage of ceded written premiums to gross written premiums | [added: 14.3% | |] 12.5% | [added: |] 13.0% | [added: |] 12.6% | [removed: 12.0%] | [removed: 10.9%] [added: 12.0%] |

[removed: Our] [added: *Our] industry is highly competitive and we may not be able to compete successfully in the [removed: future.][added: future.*]

The worldwide net premium written by the Top 40 global reinsurance groups for both life and non-life business was estimated to be [removed: $232.0] [added: $225.1] billion in [removed: 2017] [added: 2018] according to data compiled by Standard & Poor’s.

The leaders in this market are [removed: Munich Re,] Swiss Re, [removed: Berkshire Hathaway] [added: Munich] Re, Hannover Rueck SE, [removed: SCOR SE,] [added: Berkshire Hathaway Re] and [removed: syndicates at Lloyd’s of London.][added: SCOR SE.]

[removed: We] [added: *We] are dependent on our key [removed: personnel.][added: personnel.*]

Taranto (age [removed: 69)] [added: 70)] and existing key executive officers and to attract and retain additional qualified personnel in the future.

[removed: The loss of the services of any key executive officer or the inability to hire and retain] other highly qualified personnel in the future could adversely affect our ability to conduct business.

Generally, we consider key executive officers to be those individuals who have the greatest influence in setting overall policy and controlling operations: [added: Effective January 1, 2020, Juan Andrade (age 54) became] President and Chief Executive Officer, [added: replacing] Dominic J.

[removed: Addesso (age 65),] [added: Other key officers include] Executive Vice President and Chief Financial Officer, Craig Howie (age [removed: 55),] [added: 56),] Executive Vice President and Chief Executive Officer Reinsurance Division, John P.

Doucette (age [removed: 53),] [added: 54),] Executive Vice President, General Counsel, Chief Compliance Officer, Secretary and Managing Director and Chief Executive Officer of Bermuda Re, Sanjoy Mukherjee (age [removed: 52)] [added: 53)] and Executive Vice President, President and Chief Executive Officer of the Everest Insurance® Division, Jonathan Zaffino (age [removed: 46).][added: 47).]

[removed: The other officer agreements referenced above] [added: We have employment contracts with all of our key officers, which] contain automatic renewal provisions that provide for the contracts to continue indefinitely unless sooner terminated in accordance with the contract or as otherwise may be agreed.

Currently, all our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda [added: government that expire at various times between August 2020 and April 2023.]

[removed: Our] [added: *Our] investment values and investment income could decline because they are exposed to interest rate, credit, and market [removed: risks.][added: risks.*]

| (Dollars in millions) | [removed: |] December 31, [removed: 2018 |] [added: 2019] | | | % of Total | | [removed: |]

| Mortgage-backed securities: | | | | | | [removed: | | |]

| Non-agency residential | | [removed: | 10.2 | |] [added: 5.7] | | [removed: 0.1] | [removed: %] [added: —%] |

| Other asset-backed | | [removed: | 540.1 | |] [added: 897.3] | | [removed: 2.9] | [removed: %] [added: 4.3%] |

| Total asset-backed | | [removed: | 2,673.3 | |] [added: 3,946.2] | | [removed: 14.5] | [removed: %] [added: 19.0%] |

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

| 2019 | $ | 575.5 |

| 2019 | | $ | 63.6 | | increase |

environmental damage.

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

The loss of the services of any key executive officer or the inability to hire and retain

Addesso (age 66), who retired effective December 31, 2019 and remains on our Board of Directors.

| | At | | | | |

| Commercial | $ | 844.6 | | | 4.1% |

| Agency residential | | 2,198.6 | | | 10.6% |

| Fixed income, available for sale at fair value | | 5.8 | | | —% |

| | | | | | |

In January 2020, the United Kingdom exited the European Union (commonly referred to as "Brexit").

international insurance matters.

As a result, each of Group’s and Holdings’ ability to pay dividends, interest or other

For this purpose, “passive institutional investors” include all persons who are eligible, pursuant to Rule 13d-1(b)(1) under the U.S.

the shares thus acquired to the shareholder, who must then refund the purchase price.

Under Delaware law, a corporation may indemnify a director or officer who becomes a party to an action, suit or proceeding because of his position as a

establishment in the U.S., Bermuda Re would be subject to U.S. tax only on that income.

Reinsurance and insurance premiums paid to Bermuda Re with respect to risks located in the U.S. are subject to a U.S. federal excise tax of one percent.

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

| 2014 | | | 56.3 | |

| 2014 | | | 39.7 | | increase |

Historically, we generally purchased reinsurance from other third parties only when we expect a net benefit.

We currently have an agreement with Mr. Taranto to serve as a non-employee Director and Chairman of the Board through December 31, 2019, subject to Mr. Taranto’s annual election to the Board by its shareholders during its Annual General Meetings that occur over the term of the agreement.

We have employment contracts with Mr. Addesso, Mr. Howie, Mr. Doucette, Mr. Mukherjee and Mr. Zaffino which have been filed with the SEC and provide for terms of employment ending on December 31, 2019 for Mr. Addesso, April 1, 2019 for Mr. Howie, June 1, 2019 for Mr. Doucette, January 1, 2020 for Mr. Mukherjee and September 6, 2020 for Mr. Zaffino.

On January 7, 2019, the Company announced that Mr. Addesso has informed the Group’s Board of Directors that he will retire at the end of his contract term on December 31, 2019.

As a result, the Board is undertaking a search as part of its succession planning process which will include a review of internal and external candidates for the position.

government that expire at various times between January 2019 and April 2021.

| | | At | | | | | | |

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

| Commercial | | $ | 326.7 | | | | 1.8 | % |

| Agency residential | | | 1,796.3 | | | | 9.7 | % |

| Fixed maturities, at fair value | | | 2.3 | | | | 0.0 | % |

| | | | | | | | | |

In June 2016, the United Kingdom approved a referendum to exit the European Union (commonly referred to as "Brexit") which resulted in volatility in global stock markets and currency exchange rates, and has increased political, economic and global market uncertainty.

The formal negotiation process for the United Kingdom to exit the European Union will determine the timing and terms of such an exit.

| --- | --- |

For purposes of the Delaware statute, an “interested shareholder” is generally

However,

[removed: Industry Conditions.][added: Industry Conditions.]

Worldwide insurance and reinsurance market conditions continued to be [removed: very competitive, particularly in the property catastrophe and casualty reinsurance lines of business.][added: competitive.]

[removed: There] [added: Although insured catastrophe losses for 2019] were [added: slightly below recent annual averages, there were] numerous natural catastrophes in 2018 with total industry losses estimated to be $90 billion.

While the future impact on market conditions from these catastrophes cannot be determined at this time, there [removed: was some firming in the markets impacted by the 2016 catastrophes and as catastrophe losses increased in 2017, there] is a growing industry consensus that there [removed: will be] [added: is] some firming of (re)insurance rates for the areas impacted by the [added: recent] catastrophes.

[removed: Financial Summary.][added: Financial Summary.]

| | [removed: |] Years Ended December 31, | | | | | | | | | [removed: | | |] Percentage Increase/(Decrease) | | | [removed: | | | |]

| (Dollars in millions) | [removed: | 2018 | |] [added: 2019] | | [removed: 2017] | [added: 2018] | | | [removed: 2016] [added: 2017] | | | [added: 2019/2018] | | 2018/2017 | [removed: | | | 2017/2016 | |]

| Gross written premiums | [removed: |] $ | [removed: 8,475.2 |] [added: 9,133.4] | | $ | [removed: 7,173.9 |] [added: 8,475.2] | | $ | [removed: 6,033.9 | | | | 18.1 | %] [added: 7,173.9] | | [added: 7.8%] | [removed: 18.9] | [removed: %] [added: 18.1%] |

| Net written premiums | | [removed: | 7,414.4 | | | | 6,244.7 | | |] [added: 7,824.4] | [removed: 5,270.9] | | [added: 7,414.4] | | [removed: 18.7] | [removed: %] [added: 6,244.7] | | [added: 5.5%] | [removed: 18.5] | [removed: %] [added: 18.7%] |

| REVENUES: | | | | | | | | | | | | | [removed: | | | | | | | |]

| Premiums earned | [removed: |] $ | [removed: 6,931.7 |] [added: 7,403.7] | | $ | [removed: 5,937.8 |] [added: 6,931.7] | | $ | [removed: 5,320.5 | | | | 16.7 | %] [added: 5,937.8] | | [added: 6.8%] | [removed: 11.6] | [removed: %] [added: 16.7%] |

| Net investment income | [removed: | | 581.2 | | | | 542.9 | | | | 473.1 | |] [added: $] | [added: 647.1] | [removed: 7.1] | [removed: %] [added: $] | [added: 581.2] | | [removed: 14.8] [added: $] | [removed: %] [added: 542.9] |

| Net realized capital gains (losses) | | [removed: | (127.1 | ) | | | 153.2 | | |] [added: 185.0] | [removed: (7.2] | [removed: )] | [added: (127.1)] | | [removed: \-183.0] | [removed: %] [added: 153.2] | | NM | | [added: \-183.0%] |

| Net derivative gain (loss) | | [removed: | 0.5 | | | | 9.6 | | |] [added: 6.4] | [removed: 18.6] | | [added: 0.5] | | [removed: \-94.6] | [removed: %] [added: 9.6] | | [added: NM] | [removed: \-48.6] | [removed: %] [added: (94.6)%] |

| CLAIMS AND EXPENSES: | | | | | | | | | | | | | [removed: | | | | | | | |]

| Incurred losses and loss adjustment expenses | | [removed: | 5,651.4 | | | | 4,522.6 | | |] [added: 4,922.9] | [removed: 3,139.6] | | [added: 5,651.4] | | [removed: 25.0] | [removed: %] [added: 4,522.6] | | [added: (12.9)%] | [removed: 44.0] | [removed: %] [added: 25.0%] |

| Commission, brokerage, taxes and fees | | [removed: | 1,519.0 | | | | 1,304.0 | | |] [added: 1,703.7] | [removed: 1,188.7] | | [added: 1,519.0] | | [removed: 16.5] | [removed: %] [added: 1,304.0] | | [added: 12.2%] | [removed: 9.7] | [removed: %] [added: 16.5%] |

| Other underwriting expenses | | [removed: | 371.5 | | | | 318.8 | | |] [added: 440.9] | [removed: 302.7] | | [added: 371.5] | | [removed: 16.5] | [removed: %] [added: 318.8] | | [added: 18.7%] | [removed: 5.3] | [removed: %] [added: 16.5%] |

| Corporate expenses | | [removed: | 30.7 | | | | 25.9 | | |] [added: 33.0] | [removed: 27.2] | | [added: 30.7] | | [removed: 18.3] | [removed: %] [added: 25.9] | | [added: 7.5%] | [removed: \-4.8] | [removed: %] [added: 18.3%] |

| Interest, fees and bond issue cost amortization expense | | [removed: | 31.0 | | | | 31.6 | | |] [added: 31.7] | [removed: 36.2] | | [added: 31.0] | | [removed: \-1.8] | [removed: %] [added: 31.6] | | [added: 2.1%] | [removed: \-12.8] | [removed: %] [added: (1.8)%] |

| Total claims and expenses | | [removed: | 7,603.7 | | | | 6,202.9 | | |] [added: 7,132.2] | [removed: 4,694.5] | | [added: 7,603.7] | | [removed: 22.6] | [removed: %] [added: 6,202.9] | | [added: (6.2)%] | [removed: 32.1] | [removed: %] [added: 22.6%] |

| RATIOS: | | | | | | | | | | [removed: | | | |] Point Change | | | [removed: | | | |]

| Other underwriting expense ratio | | [removed: | 5.4 | %] [added: 3.2%] | | | [removed: 5.3] [added: 3.3%] | [removed: %] | | [added: 3.4%] | [removed: 5.7] | [removed: %] | | | [removed: 0.1] [added: (0.1)] | | | | [removed: (0.4] | [removed: )] [added: (0.1)] |

| | [removed: |] At December 31, | | | | | | | | | [removed: | | |] Percentage Increase/(Decrease) | | | [removed: | | | |]

| (Dollars in millions, except per share amounts) | [added: 2019] | | [removed: 2018] | [added: 2018] | | | 2017 | | | [removed: | 2016 | |] [added: 2019/2018] | | 2018/2017 | [removed: | | | 2017/2016 | |]

| Balance sheet data: | | | | | | | | | | | | | [removed: | | | | | | | |]

| Total investments and cash | [removed: |] $ | [removed: 18,433.1 |] [added: 20,748.5] | | $ | [removed: 18,626.5 |] [added: 18,433.1] | | $ | [removed: 17,483.1 | | | | \-1.0 | %] [added: 18,626.5] | | [added: 12.6%] | [removed: 6.5] | [removed: %] [added: (1.0)%] |

| Loss and loss adjustment expense reserves | | [removed: | 13,119.1 | | | | 11,884.3 | | |] [added: 13,611.3] | [removed: 10,312.3] | | [added: 13,119.1] | | [removed: 10.4] | [removed: %] [added: 11,884.3] | | [added: 3.8%] | [removed: 15.2] | [removed: %] [added: 10.4%] |

| Total debt | | [removed: | 633.6 | | | | 633.4 | | |] [added: 633.8] | [removed: 633.2] | | [added: 633.6] | | [removed: 0.0] | [removed: %] [added: 633.4] | | [added: 0.0%] | [removed: 0.0] | [removed: %] [added: 0.0%] |

| Total liabilities | | [removed: | 16,890.2 | | | | 15,222.6 | | |] [added: 18,191.1] | [removed: 13,246.1] | | [added: 16,890.2] | | [removed: 11.0] | [removed: %] [added: 15,222.6] | | [added: 7.7%] | [removed: 14.9] | [removed: %] [added: 11.0%] |

| (NM, not meaningful) | | | | | | | | | | | | | [removed: | | | | | | | |]

| (Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | [removed: | | |]

[removed: Revenues.][added: Revenues.]

Gross written premiums increased by [removed: 18.9%] [added: 7.8%] to [removed: $7,173.9] [added: $9,133.4] million in [removed: 2017,] [added: 2019,] compared to [removed: $6,033.9] [added: $8,475.2] million in [removed: 2016,] [added: 2018,] reflecting [removed: an $867.8] [added: a $526.9] million, or [removed: 20.4%,] [added: 23.4%,] increase in our [removed: reinsurance] [added: insurance] business and a [removed: $272.2] [added: $131.3] million, or [removed: 15.2%,] [added: 2.1%,] increase in our [removed: insurance] [added: reinsurance] business.

[removed: The rise in insurance premiums] [added: This increase] was related to most lines of [removed: business,] [added: business] including [removed: property, retail] casualty, [added: energy,] accident and health and [removed: business] [added: premiums] written through the Lloyd’s [removed: Syndicate, partially offset by the impact of the sale of Heartland.][added: Syndicate.]

Net written premiums increased by [removed: 18.5%] [added: 18.6%] to [removed: $6,244.7] [added: $1,458.7] million in [removed: 2017,] [added: 2018] compared to [removed: $5,270.9 million in 2016.][added: $1,229.6]

[removed: Net] [added: Net] Investment [removed: Income.][added: Income.]

Net investment income increased by [removed: 14.8%] [added: 11.3%] to [removed: $542.9] [added: $647.1] million in [removed: 2017] [added: 2019] compared with investment income of [removed: $473.1] [added: $581.2] million in [removed: 2016.][added: 2018.]

Net pre-tax investment income, as a percentage of average invested assets, was [removed: 3.1%] [added: 3.3%] in [removed: 2017] [added: 2019] compared to [removed: 2.8%] [added: 3.2%] in [removed: 2016.][added: 2018.]

The increases in [added: both] income and yield were primarily the result of higher income from our [removed: limited partnerships] [added: growing fixed maturity portfolio] and higher income from [removed: the growing fixed income portfolio,] [added: our limited partnerships,] partially offset by lower dividend income from our equity portfolio.

Rates also appear to be firming in some of the casualty lines of business, particularly in the casualty lines that have seen significant losses such as excess casualty and directors and officers’ liability.

Other casualty lines are experiencing modest rate increase, while some lines such as workers’ compensation are experiencing softer market conditions.

| Other income (expense) | | (11.0) | | | (24.8) | | | (21.2) | | (55.5)% | | (17.0)% |

| Total revenues | | 8,231.2 | | | 7,361.5 | | | 6,622.3 | | 11.8% | | 11.2% |

| INCOME (LOSS) BEFORE TAXES | | 1,099.0 | | | (242.2) | | | 419.4 | | NM | | (157.7)% |

| Income tax expense (benefit) | | 89.5 | | | (331.2) | | | (63.4) | | NM | | NM |

| NET INCOME (LOSS) | $ | 1,009.5 | | $ | 89.0 | | $ | 482.8 | | NM | | (81.6)% |

| Loss ratio | | 66.5% | | | 81.5% | | | 76.2% | | (15.0) | | 5.3 |

| Commission and brokerage ratio | | 23.0% | | | 21.9% | | | 22.0% | | 1.1 | | (0.1) |

| Other underwriting expense ratio | | 6.0% | | | 5.4% | | | 5.3% | | 0.6 | | 0.1 |

| Combined ratio | | 95.5% | | | 108.8% | | | 103.5% | | (13.3) | | 5.3 |

| Total assets | | 27,324.1 | | | 24,751.0 | | | 23,563.3 | | 10.4% | | 5.0% |

| Shareholders' equity | | 9,132.9 | | | 7,860.8 | | | 8,340.7 | | 16.2% | | (5.8)% |

| Book value per share | | 223.85 | | | 193.37 | | | 204.25 | | 15.8% | | (5.3)% |

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

The increase in reinsurance premiums was mainly due to increases in treaty casualty writings and mortgage business, partially offset by a decline in treaty property business, including lower reinstatement premiums, and a $55.5 million negative impact from the movement of foreign exchange rates.

Net written premiums increased by 5.5% to $7,824.4 million in 2019, compared to $7,414.4 million in 2018.

Premiums earned increased by 6.8% to $7,403.7 million in 2019, compared to $6,931.7 million in 2018.

As a result of these adjustments in value, we

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

| 2019 | | | | | | | | | | | | | | | | | |

| Attritional | $ | 4,441.0 | | 60.0% | | | $ | (93.6) | | (1.3)% | | | $ | 4,347.4 | | 58.7% | |

| Catastrophes | | 545.5 | | 7.4% | | | | 30.0 | | 0.4% | | | | 575.5 | | 7.8% | |

| Total segment | $ | 4,986.5 | | 67.4% | | | $ | (63.6) | | (0.9)% | | | $ | 4,922.9 | | 66.5% | |

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

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

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

| Variance 2019/2018 | | | | | | | | | | | | | | | | | |

| Attritional | $ | 415.6 | | 2.0 | pts | | $ | 80.6 | | 1.2 | pts | | $ | 496.2 | | 3.2 | pts |

| Catastrophes | | (693.5) | | (10.5) | pts | | | (531.2) | | (7.7) | pts | | | (1,224.7) | | (18.2) | pts |

| Total segment | $ | (277.9) | | (8.5) | pts | | $ | (450.6) | | (6.5) | pts | | $ | (728.5) | | (15.0) | pts |

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

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

Incurred losses and LAE decreased by 12.9% to $4,922.9 million in 2019, compared to $5,651.4 million in 2018, primarily due to an decrease in current year catastrophe losses of $693.5 million and $531.2 million less of unfavorable development on prior years catastrophe losses in 2019 compared to 2018.

These decreases were partially offset by an increase of $415.6 million in current year attritional losses, mainly due to the impact of the increase in premiums earned and changes in the mix of business, and $80.6 million less of favorable development on prior years attritional losses in 2019 compared to 2018.

The current year catastrophe losses of $545.5 million in 2019 related to Typhoon Hagibis ($200.0 million), Hurricane Dorian ($170.9 million), Typhoon Faxai ($124.3 million), Townsville Monsoon ($25.3 million), and the Dallas tornadoes ($25.0 million).

The $1,239.0 million of current year catastrophe losses in 2018 related to Hurricane Michael ($462.0 million), Camp

We had income tax expense of $89.5 million in 2019, and an income tax benefit of $331.2 million in 2018 and $63.3 million in 2017.

Our combined ratio decreased by 13.3 points to 95.5% in 2019, compared to 108.8% in 2018.

The loss ratio component decreased 15.0 points in 2019 over the same period last year mainly due to lower catastrophe losses in 2019 compared to 2018 and less unfavorable development on prior years catastrophe losses.

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

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

| Other income (expense) | | | (9.1 | ) | | | (35.4 | ) | | | (10.6 | ) | | | \-74.4 | % | | | 233.2 | % |

| Total revenues | | | 7,377.2 | | | | 6,608.1 | | | | 5,794.3 | | | | 11.6 | % | | | 14.0 | % |

| INCOME (LOSS) BEFORE TAXES | | | (226.5 | ) | | | 405.2 | | | | 1,099.8 | | | | \-155.9 | % | | | \-63.2 | % |

| Income tax expense (benefit) | | | (330.0 | ) | | | (63.8 | ) | | | 103.5 | | | NM | | | | | \-161.6 | % |

| NET INCOME (LOSS) | | $ | 103.6 | | | $ | 469.0 | | | $ | 996.3 | | | | \-77.9 | % | | | \-52.9 | % |

| Loss ratio | | | 81.5 | % | | | 76.2 | % | | | 59.0 | % | | | 5.3 | | | | 17.2 | |

| Commission and brokerage ratio | | | 21.9 | % | | | 22.0 | % | | | 22.3 | % | | | (0.1 | ) | | | (0.3 | ) |

| Combined ratio | | | 108.8 | % | | | 103.5 | % | | | 87.0 | % | | | 5.3 | | | | 16.5 | |

| Total assets | | | 24,794.0 | | | | 23,591.8 | | | | 21,321.5 | | | | 5.1 | % | | | 10.6 | % |

| Shareholders' equity | | | 7,903.8 | | | | 8,369.2 | | | | 8,075.4 | | | | \-5.6 | % | | | 3.6 | % |

| Book value per share | | | 194.43 | | | | 204.95 | | | | 197.45 | | | | \-5.1 | % | | | 3.8 | % |

The increase in reinsurance premiums was mainly due to new crop reinsurance transactions, increases in treaty property and financial lines of business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter.

Premiums earned increased by 11.6% to $5,937.8 million in 2017, compared to $5,320.5 million in 2016.

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

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

| 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Attritional | | $ | 3,047.1 | | | | 57.2 | % | | | $ | (208.7 | ) | | | \-3.9 | % | | | $ | 2,838.4 | | | | 53.3 | % | |

| Catastrophes | | | 387.9 | | | | 7.3 | % | | | | (86.6 | ) | | | \-1.6 | % | | | | 301.2 | | | | 5.7 | % | |

| Total segment | | $ | 3,435.0 | | | | 64.5 | % | | | $ | (295.3 | ) | | | \-5.5 | % | | | $ | 3,139.6 | | | | 59.0 | % | |

| Attritional | | $ | 266.4 | | | | (1.4 | ) | pts | | $ | (54.7 | ) | | | (0.5 | ) | pts | | $ | 211.6 | | | | (1.9 | ) | pts |

| Catastrophes | | | 1,114.6 | | | | 18.0 | | pts | | | 56.6 | | | | 1.1 | | pts | | | 1,171.4 | | | | 19.1 | | pts |

| Total segment | | $ | 1,381.0 | | | | 16.6 | | pts | | $ | 1.9 | | | | 0.6 | | pts | | $ | 1,383.0 | | | | 17.2 | | pts |

These increases were partially offset by an additional $54.7 million of favorable development on prior years attritional losses in 2017 compared to 2016.

The $263.4 million of favorable

development on prior years attritional losses in 2017 was mainly comprised of $207.1 million of favorable development on reinsurance business, primarily related to property and short tail business in the United States and Bermuda, and $56.4 million of favorable development on insurance business, mainly related to workers compensation business.

The $387.9 million of current year catastrophe losses in 2016 related to Hurricane Matthew ($135.0 million), the Fort McMurray Canada wildfire ($115.8 million), 2016 U.S. storms ($51.6 million), the Ecuador earthquake ($23.2 million), the 2016 New Zealand earthquake ($18.9 million), the 2016 Taiwan earthquake ($15.1 million), the Tennessee wildfire ($14.7 million) and Hurricane Hermine ($13.5 million).

Our combined ratio increased by 16.5 points to 103.5% in 2017, compared to 87.0% in 2016.

The loss ratio component increased 17.2 points in 2017 over the same period last year.

The change was mainly due to the increases in current year catastrophe losses.

The commission and brokerage ratio components decreased to 22.0% in 2017 from 22.3% in 2016, reflecting changes in the mix of business and the impact from reinstatement premiums.

The other underwriting expense ratios decreased to 5.3% in 2017 from 5.7% in 2016, mainly due to a reduction in variable compensation combined with the growth in premiums earned.

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

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

| | | | | | |

| S&P 500 index | \-4.4% | | 21.8% | | 12.0% |

| Gains | | | \- | | | | \- | | | | 1.4 | | | | \- | | | | (1.4 | ) |

| Losses | | | \- | | | | \- | | | | \- | | | | \- | | | | \- | |

| Loss on sale of subsidiary: | | | \- | | | | \- | | | | (28.0 | ) | | | \- | | | | 28.0 | |

[removed: The Company.][added: The Company.]

The Company had gross written premiums, in [removed: 2018,] [added: 2019,] of [removed: $8.5] [added: $9.1] billion with approximately [removed: 73%] [added: 70%] representing reinsurance and [removed: 27%] [added: 30%] representing insurance.

Shareholders’ equity at December 31, [removed: 2018] [added: 2019] was [removed: $7.9] [added: $9.1] billion.

Group’s active operating subsidiaries, other than Ireland Insurance which is not yet rated, are each rated A+ (“Superior”) by [added: A.M. Best Company (“A.M. Best”), a leading provider of insurer ratings that assigns financial strength ratings to insurance companies based on their ability to meet their obligations to policyholders.]

[removed: | · |] [added: ] Bermuda Re, a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and long-term insurer and is authorized to write property and casualty and life and annuity business. [removed: Bermuda Re commenced business in the second half of 2000. Bermuda Re’s UK branch writes property and casualty reinsurance to the United Kingdom and European markets. At December 31, 2018, Bermuda Re had shareholder’s equity of $3.1 billion. |]

[removed: | · | Everest International Reinsurance, Ltd. (“Everest International”), a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business. Through 2018, all of Everest International’s business has been inter-affiliate quota share reinsurance assumed from Everest Re, the UK branch of Bermuda Re, Ireland Re and Ireland Insurance.] In 2015, Everest International issued additional capital as part of a capital restructuring initiative within the Company to support a planned increase in international business production, which includes supporting Group’s Lloyd’s of London Syndicate corporate member. [removed: At December 31, 2018, Everest International had shareholder’s equity of $2.7 billion. |]

[removed: | · |] [added: ] Ireland Re, an Ireland reinsurance company and an indirect subsidiary of Group, is licensed to write non-life reinsurance, both directly and through brokers, for the London and European markets. [removed: |]

[removed: | · |] [added: ] Ireland Insurance, an Ireland insurance company and an indirect subsidiary of Group, is licensed to write insurance for the European markets. [removed: |]

[removed: | · |] [added: ] Everest Re, a Delaware insurance company and a direct subsidiary of Holdings, is a licensed property and casualty insurer and/or reinsurer in all states, the District of Columbia, Puerto Rico and Guam and is authorized to conduct reinsurance business in Canada, Singapore and Brazil. [removed: Everest Re underwrites property and casualty reinsurance for insurance and reinsurance companies in the U.S. and international markets. At December 31, 2018, Everest Re had statutory surplus of $3.7 billion. |]

[removed: | · |] [added: ] Everest Insurance Company of Canada (“Everest Canada”), a Canadian insurance company and direct subsidiary of Holdings Ireland, is licensed to write property and casualty insurance in all Canadian provinces. [removed: |]

[removed: | · |] [added: ] Everest National Insurance Company (“Everest National”), a Delaware insurance company and a direct subsidiary of Everest Re, is licensed in 50 states, the District of Columbia and Puerto Rico and is authorized to write property and casualty insurance on an admitted basis in the jurisdictions in which it is licensed. [removed: The majority of Everest National’s business is reinsured by its parent, Everest Re. |]

[removed: | · | Everest Indemnity Insurance Company (“Everest Indemnity”), a Delaware insurance company and a direct subsidiary of Everest Re, writes excess and surplus lines insurance business in the U.S. on a non-admitted basis.] Excess and surplus lines insurance is specialty property and liability coverage that an insurer not licensed to write insurance in a particular jurisdiction is permitted to provide to insureds when the specific specialty coverage is unavailable from admitted insurers. [removed: Everest Indemnity is licensed in Delaware and is eligible to write business on a non-admitted basis in all other states, the District of Columbia and Puerto Rico. The majority of Everest Indemnity’s business is reinsured by its parent, Everest Re. |]

[removed: | · |] [added: ] Everest Security Insurance Company (“Everest Security”), a Georgia insurance company and a direct subsidiary of Everest Re, writes property and casualty insurance on an admitted basis in Georgia and Alabama and is approved as an eligible surplus lines insurer in Delaware. [removed: The majority of Everest Security’s business is reinsured by its parent, Everest Re. |]

[removed: | · |] Everest [removed: International Assurance, Ltd. (“Everest Assurance”), a Bermuda company and a direct subsidiary of Holdings is registered in Bermuda as a Class 3A general business insurer and as a Class C long-term insurer. Everest] Assurance has made a one-time election under section 953(d) of the U.S. Internal Revenue Code to be a U.S. income tax paying “Controlled Foreign Corporation.” By making this election, Everest Assurance is authorized to write life reinsurance and casualty reinsurance in both Bermuda and the U.S. [removed: |]

[removed: | · |] [added: ] Everest [removed: Denali,] [added: Denali Insurance Company (“Everest Denali”),] a Delaware insurance company and a direct subsidiary of Everest Re, is licensed to write property and casualty insurance in [removed: 49] [added: all 50] states and the District of Columbia. [removed: |]

[removed: | · |] [added: ] Everest [removed: Premier,] [added: Premier Insurance Company (“Everest Premier”),] a Delaware insurance company and a direct subsidiary of Everest Re, is licensed to write property and casualty insurance in [removed: 49] [added: all 50] states and the District of Columbia. [removed: |]

[removed: Reinsurance] [added: Reinsurance] Industry [removed: Overview.][added: Overview.]

Reinsurance companies cede risks under retrocessional agreements to other reinsurers, known as retrocessionaires, for reasons similar to those that cause insurers to purchase reinsurance: to reduce [removed: net liability on individual or classes of risks, protect against catastrophic losses, stabilize financial ratios and obtain additional underwriting capacity.]

[removed: Business Strategy.][added: Business Strategy.]

[removed: Marketing.][added: Marketing.]

For the [removed: 2018] [added: 2019] calendar year, no single customer (ceding company or insured) generated more than [removed: 3%] [added: 4%] of the Company’s gross written premiums.

[removed: Company] believes that a reduction of business from any one customer would not have a material adverse effect on its future financial condition or results of operations.

Approximately [removed: 66%, 27%] [added: 63%, 31%] and [removed: 7%] [added: 6%] of the Company’s [removed: 2018] [added: 2019] gross written premiums were written in the broker reinsurance, insurance and direct reinsurance markets, respectively.

Reinsurance business from any ceding company, whether new or [removed: renewal,] [added: renewal] is subject to acceptance by the Company.

The Company’s ten largest brokers accounted for an aggregate of approximately [removed: 52%] [added: 58%] of gross written premiums in [removed: 2018.][added: 2019.]

The largest broker, Marsh and McLennan, accounted for approximately [removed: 20%] [added: 23%] of gross written premiums.

The Company’s insurance business [added: mainly] writes [removed: direct business targeting commercial,] [added: commercial] property and [removed: casualty.][added: casualty on an admitted and non-admitted basis.]

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

[removed: Segment Results.][added: Segment Results.]

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 [removed: earned.]

[removed: Underwriting Operations.][added: Underwriting Operations.]

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

| | [removed: |] Years Ended December 31, [removed: 2018] | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | |]

| (Dollars in millions) | [removed: | 2018] [added: 2019] | | | | [added: 2018] | | | | 2017 | | | | [removed: | | | |] 2016 | | | | [removed: | | | |] 2015 | | | [removed: | | | | | 2014 | | | | | | |]

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

| Property | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | |]

| Casualty | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | |]

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

| Pro Rata (1) | | [removed: | 281.0] [added: 264.1] | [added: 2.9%] | | | [removed: 3.3] [added: 281.0] | [removed: %] [added: 3.3%] | | | 236.4 | [removed: | | | 3.3 | %] [added: 3.3%] | | | 111.7 | [removed: | | | 1.9 | %] [added: 1.9%] | | | 113.4 | [removed: | | | 1.9 | % | | | 152.9 | | | | 2.7 | %] [added: 1.9%] |

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

Bermuda Re commenced business in the second half of 2000.

Bermuda Re’s UK branch writes property and casualty reinsurance to the United Kingdom and European markets.

At December 31, 2019, Bermuda Re had shareholder’s equity of $3.2 billion.

 Everest International Reinsurance, Ltd. (“Everest International”), a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business.

Through 2019, all of Everest International’s business has been inter-affiliate quota share reinsurance assumed from Everest Re, the UK branch of Bermuda Re, Ireland Re and Ireland Insurance.

At December 31, 2019, Everest International had shareholder’s equity of $3.6 billion.

Everest Re underwrites property and casualty reinsurance for insurance and reinsurance companies in the U.S. and international markets.

At December 31, 2019, Everest Re had statutory surplus of $3.7 billion.

The majority of Everest National’s business is reinsured by its parent, Everest Re.

 Everest Indemnity Insurance Company (“Everest Indemnity”), a Delaware insurance company and a direct subsidiary of Everest Re, writes excess and surplus lines insurance business in the U.S. on a non-admitted basis.

Everest Indemnity is licensed in Delaware and is eligible to write business on a non-admitted basis in all other states, the District of Columbia and Puerto Rico.

The majority of Everest Indemnity’s business is reinsured by its parent, Everest Re.

The majority of Everest Security’s business is reinsured by its parent, Everest Re.

 Everest International Assurance, Ltd. (“Everest Assurance”), a Bermuda company and a direct subsidiary of Holdings is registered in Bermuda as a Class 3A general business insurer and as a Class C long-term insurer.

net liability on individual or classes of risks, protect against catastrophic losses, stabilize financial ratios and obtain additional underwriting capacity.

The Company

The business is written through wholesale and retail brokers, surplus lines brokers and through program administrators.

In 2019, two program administrators accounted for approximately 7% of the Company’s gross written premium each, and included multiple independent programs for each program administrator with the largest representing 4% of the overall gross written premium.

earned.

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

| Pro Rata (1) | $ | 875.5 | 9.6% | | $ | 1,069.6 | 12.6% | | $ | 848.4 | 11.8% | | $ | 495.2 | 8.2% | | $ | 591.3 | 10.0% |

| Excess | | 846.5 | 9.3% | | | 1,031.9 | 12.2% | | | 1,085.2 | 15.1% | | | 1,054.2 | 17.5% | | | 1,065.3 | 18.1% |

| Pro Rata (1) | | 945.0 | 10.3% | | | 702.2 | 8.3% | | | 460.7 | 6.4% | | | 378.2 | 6.3% | | | 319.9 | 5.4% |

| Excess | | 295.4 | 3.2% | | | 210.6 | 2.5% | | | 198.7 | 2.8% | | | 198.2 | 3.3% | | | 171.3 | 2.9% |

| Total (2) | | 2,962.4 | 32.4% | | | 3,014.3 | 35.6% | | | 2,593.0 | 36.1% | | | 2,125.8 | 35.2% | | | 2,147.9 | 36.5% |

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

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

| Pro Rata (1) | $ | 628.0 | 6.9% | | $ | 679.8 | 8.0% | | | 577.5 | 8.1% | | | 671.9 | 11.1% | | | 699.3 | 11.9% |

| Excess | | 544.5 | 6.0% | | | 424.7 | 5.0% | | | 377.9 | 5.3% | | | 337.4 | 5.6% | | | 411.2 | 7.0% |

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

| Excess | | 212.0 | 2.3% | | | 158.4 | 1.9% | | | 125.0 | 1.7% | | | 109.7 | 1.8% | | | 110.4 | 1.9% |

| Total (2) | | 1,648.6 | 18.1% | | | 1,543.9 | 18.2% | | | 1,316.7 | 18.4% | | | 1,230.7 | 20.4% | | | 1,334.2 | 22.6% |

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

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

| Pro Rata (1) | $ | 470.7 | 5.2% | | $ | 422.6 | 5.0% | | | 294.0 | 4.1% | | | 261.1 | 4.3% | | | 265.8 | 4.5% |

| Excess | | 238.6 | 2.6% | | | 229.4 | 2.7% | | | 222.0 | 3.1% | | | 175.5 | 2.9% | | | 165.3 | 2.8% |

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

| Pro Rata (1) | | 785.7 | 8.6% | | | 773.7 | 9.1% | | | 407.7 | 5.7% | | | 318.6 | 5.3% | | | 281.0 | 4.8% |

| Excess | | 249.9 | 2.7% | | | 240.6 | 2.8% | | | 281.2 | 3.9% | | | 135.2 | 2.2% | | | 165.2 | 2.8% |

| Total (2) | | 1,744.9 | 19.1% | | | 1,666.3 | 19.7% | | | 1,205.0 | 16.8% | | | 890.4 | 14.8% | | | 877.3 | 14.9% |

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 are being used in the continued expansion of the Insurance operations.

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 for the period owned are included within the Company’s financial statements.

A.M. Best Company (“A.M. Best”), a leading provider of insurer ratings that assigns financial strength ratings to insurance companies based on their ability to meet their obligations to policyholders.

| --- | --- |

| · | Heartland, a Kansas based managing general agent and a direct subsidiary of Holdings, was acquired on January 2, 2011. Heartland specializes in crop insurance, which is written mainly through Everest National. Effective August 24, 2016, the Company sold Heartland to CGB. The operating results of Heartland for the period owned are included within the Company’s financial statements. |

It also writes business through brokers, surplus lines brokers and general agents.

In 2018, Arrowhead General Insurance Agency accounted for approximately 3% of the Company’s gross written premium.

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

| Pro Rata (1) | | $ | 1,069.6 | | | | 12.6 | % | | $ | 848.4 | | | | 11.8 | % | | $ | 495.2 | | | | 8.2 | % | | $ | 591.3 | | | | 10.0 | % | | $ | 665.7 | | | | 11.6 | % |

| Excess | | | 1,031.9 | | | | 12.2 | % | | | 1,085.2 | | | | 15.1 | % | | | 1,054.2 | | | | 17.5 | % | | | 1,065.3 | | | | 18.1 | % | | | 887.6 | | | | 15.4 | % |

| Pro Rata (1) | | | 702.2 | | | | 8.3 | % | | | 460.7 | | | | 6.4 | % | | | 378.2 | | | | 6.3 | % | | | 319.9 | | | | 5.4 | % | | | 382.4 | | | | 6.6 | % |

| Excess | | | 210.6 | | | | 2.5 | % | | | 198.7 | | | | 2.8 | % | | | 198.2 | | | | 3.3 | % | | | 171.3 | | | | 2.9 | % | | | 218.8 | | | | 3.8 | % |

| Total (2) | | | 3,014.3 | | | | 35.6 | % | | | 2,593.0 | | | | 36.1 | % | | | 2,125.8 | | | | 35.2 | % | | | 2,147.9 | | | | 36.5 | % | | | 2,154.5 | | | | 37.4 | % |

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

| Pro Rata (1) | | $ | 679.8 | | | | 8.0 | % | | $ | 577.5 | | | | 8.1 | % | | | 671.9 | | | | 11.1 | % | | | 699.3 | | | | 11.9 | % | | | 846.0 | | | | 14.7 | % |

| Excess | | | 424.7 | | | | 5.0 | % | | | 377.9 | | | | 5.3 | % | | | 337.4 | | | | 5.6 | % | | | 411.2 | | | | 7.0 | % | | | 488.1 | | | | 8.5 | % |

| Excess | | | 158.4 | | | | 1.9 | % | | | 125.0 | | | | 1.7 | % | | | 109.7 | | | | 1.8 | % | | | 110.4 | | | | 1.9 | % | | | 116.5 | | | | 2.0 | % |

| Total (2) | | | 1,543.9 | | | | 18.2 | % | | | 1,316.7 | | | | 18.4 | % | | | 1,230.7 | | | | 20.4 | % | | | 1,334.2 | | | | 22.6 | % | | | 1,603.6 | | | | 27.8 | % |

| Pro Rata (1) | | $ | 422.6 | | | | 5.0 | % | | $ | 294.0 | | | | 4.1 | % | | | 261.1 | | | | 4.3 | % | | | 265.8 | | | | 4.5 | % | | | 252.4 | | | | 4.4 | % |

| Excess | | | 229.4 | | | | 2.7 | % | | | 222.0 | | | | 3.1 | % | | | 175.5 | | | | 2.9 | % | | | 165.3 | | | | 2.8 | % | | | 183.8 | | | | 3.2 | % |

| Pro Rata (1) | | | 773.7 | | | | 9.1 | % | | | 407.7 | | | | 5.7 | % | | | 318.6 | | | | 5.3 | % | | | 281.0 | | | | 4.8 | % | | | 178.5 | | | | 3.1 | % |

| Excess | | | 240.6 | | | | 2.8 | % | | | 281.2 | | | | 3.9 | % | | | 135.2 | | | | 2.2 | % | | | 165.2 | | | | 2.8 | % | | | 171.7 | | | | 3.0 | % |

| Total (2) | | | 1,666.3 | | | | 19.7 | % | | | 1,205.0 | | | | 16.8 | % | | | 890.4 | | | | 14.8 | % | | | 877.3 | | | | 14.9 | % | | | 786.4 | | | | 13.7 | % |

| Pro Rata (1) | | $ | 2,172.0 | | | | 25.6 | % | | $ | 1,719.9 | | | | 24.0 | % | | | 1,428.2 | | | | 23.7 | % | | | 1,556.4 | | | | 26.4 | % | | | 1,764.1 | | | | 30.6 | % |

| Excess | | | 1,686.0 | | | | 19.9 | % | | | 1,685.1 | | | | 23.5 | % | | | 1,567.1 | | | | 26.0 | % | | | 1,641.8 | | | | 27.9 | % | | | 1,559.5 | | | | 27.1 | % |

| Pro Rata (1) | | | 1,756.9 | | | | 20.7 | % | | | 1,104.8 | | | | 15.4 | % | | | 808.5 | | | | 13.4 | % | | | 714.3 | | | | 12.1 | % | | | 713.8 | | | | 12.4 | % |

| Excess | | | 609.7 | | | | 7.2 | % | | | 604.9 | | | | 8.4 | % | | | 443.1 | | | | 7.3 | % | | | 446.9 | | | | 7.6 | % | | | 507.0 | | | | 8.8 | % |

| Total (2) | | | 6,224.6 | | | | 73.4 | % | | | 5,114.7 | | | | 71.3 | % | | | 4,246.9 | | | | 70.4 | % | | | 4,359.4 | | | | 74.0 | % | | | 4,544.5 | | | | 78.9 | % |

| Pro Rata (1) | | $ | 645.9 | | | | 7.6 | % | | $ | 725.1 | | | | 10.1 | % | | | 716.4 | | | | 11.9 | % | | | 592.2 | | | | 10.1 | % | | | 414.0 | | | | 7.2 | % |

| Excess | | | \- | | | | 0.0 | % | | | \- | | | | 0.0 | % | | | \- | | | | 0.0 | % | | | \- | | | | 0.0 | % | | | \- | | | | 0.0 | % |

| Pro Rata (1) | | | 1,604.6 | | | | 18.9 | % | | | 1,334.1 | | | | 18.6 | % | | | 1,070.6 | | | | 17.7 | % | | | 940.1 | | | | 16.0 | % | | | 804.4 | | | | 14.0 | % |

| Total (2) | | | 2,250.6 | | | | 26.6 | % | | | 2,059.2 | | | | 28.7 | % | | | 1,787.0 | | | | 29.6 | % | | | 1,532.3 | | | | 26.0 | % | | | 1,218.4 | | | | 21.1 | % |

| Pro Rata (1) | | $ | 2,818.0 | | | | 33.2 | % | | $ | 2,445.1 | | | | 34.1 | % | | | 2,144.6 | | | | 35.5 | % | | | 2,148.6 | | | | 36.5 | % | | | 2,178.1 | | | | 37.8 | % |

| Pro Rata (1) | | | 3,361.5 | | | | 39.7 | % | | | 2,438.9 | | | | 34.0 | % | | | 1,879.1 | | | | 31.1 | % | | | 1,654.3 | | | | 28.1 | % | | | 1,518.2 | | | | 26.3 | % |

| __________________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Middle East, which business is serviced from Everest Re’s Miami and New Jersey offices.

Gross written premium of the Company’s Singapore Lloyd’s Syndicate totaled $4.1 million primarily on property business.

The Everest Specialty Commercial unit wrote $998.2 million in premium comprised of primary and excess casualty, and sports, leisure and entertainment business of $579.0 million, direct monoline workers compensation writings of $190.0 million and property business of $229.2 million.

Everest Underwriting Partners unit wrote $458.8 million in premium comprised of $210.8 million in workers compensation program business, $46.3 million of non-standard auto business and $201.7 million of other property and casualty business.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

PART II

[removed: FORM 10-K][added: FORM 10-K]

_X_ [removed: Annual] [added: Annual] Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of [removed: 1934][added: 1934]

For the fiscal year ended December 31, [removed: 2018][added: 2019]

___ [removed: Transition] [added: Transition] Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of [removed: 1934][added: 1934]

[removed: EVEREST] [added: EVEREST] RE GROUP, [removed: LTD.][added: LTD.]

| [removed: Bermuda] [added: Bermuda] | | [removed: 98-0365432] [added: 98-0365432] |

Seon Place – [removed: 4th] [added: 4] Floor

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

| [removed: Title of Each Class Common] [added: Common] Shares, [removed: $.01] [added: $0.01] par [removed: value per share | | |] [added: value] | [added: RE] | [removed: Name of Each Exchange on Which Registered New] [added: New] York Stock [removed: Exchange | | |] [added: Exchange] | [added: 40,813,432] |

The aggregate market value on June 30, [removed: 2018,] [added: 2019,] the last business day of the registrant’s most recently completed second quarter, of the voting shares held by non-affiliates of the registrant was [removed: $9,417,452] [added: $10,070,237] thousand.

Certain information required by Items 10, 11, 12, 13 and 14 of Form 10-K is incorporated by reference into Part III hereof from the registrant’s proxy statement for the 2018 Annual General Meeting of Shareholders, which will be filed with the Securities and Exchange Commission within 120 days of the close of the registrant’s fiscal year ended December 31, [removed: 2018.][added: 2019.]

[removed: EVEREST] [added: EVEREST] RE GROUP, [removed: LTD][added: LTD]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| | | [removed: Page] [added: Page] |

| [removed: PART I] [added: PART I] | | |

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

[removed: Item] [added: | Item] 1A. [added: | [Risk Factors](#RISKFACTORS) | 26 |]

[removed: Unresolved] [added: | Item 1B. | [Unresolved] Staff [removed: Comments 37][added: Comments](#UNRESOLVEDSTAFFCOMMENTS) | 38 |]

[removed: Item] [added: | Item] 2. [added: | [Properties](#PROPERTIES) | 38 |]

[removed: Legal Proceedings 38][added: | Item 3. | [Legal Proceedings](#LEGALPROCEEDINGS) | 38 |]

S-7

HamiltonHM 19, Bermuda

| Class | Trading Symbol | Name of Exchange where Registered | Number of Shares Outstanding At February 1, 2020 |

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

FORM 10-K

| Item 4. | [Mine Safety Disclosures](#MINESAFETYDISCLOSURES) | 39 |

| | | |

| | | |

| PART II | | |

| | | |

| Item 5. | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#MARKETFORREGISTRANTSCOMMONEQUITY) | 39 |

| Item 6. | [Selected Financial Data](#SELECTEDFINANCIALDATA) | 42 |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#MDAA) | 43 |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#QUANTANDQUAL) | 79 |

| Item 8. | [Financial Statements and Supplementary Data](#FINANCIALSTATEMENTSANDDATA) | 79 |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#CHANGESINANDDISAGREEMENTS) | 80 |

| Item 9A. | [Controls and Procedures](#CONTROLSANDPROCEDURES) | 80 |

| Item 9B. | [Other Information](#OTHERINFORMATION) | 80 |

| | | |

| | | |

| PART III | | |

| | | |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#DIRECTORSEXECUTIVEOFFICERSANDCORP) | 80 |

| Item 11. | [Executive Compensation](#EXECUTIVECOMPENSATION) | 81 |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#SECURITYOWNERSHIPOFCERTAINBEHAVIORS) | 81 |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#CERTAINRELATIONSHIPSANDRELATEDTRANSACTIO) | 81 |

| Item 14. | [Principal Accountant Fees and Services](#PRINCIPALACCOUNTANTFEESANDSERVICES) | 81 |

| | | |

| | | |

| PART IV | | |

| | | |

| Item 15. | [Exhibits and Financial Statement Schedules](#EXHIBITSANDFINANCIALSTATEMENTSCHEDULES) | 81 |

PART I

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

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

10-K 1 group10k2018.htm GROUP 10-K 2018

Hamilton HM 19, Bermuda

| | | | | | | | | | |

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

At February 1, 2019, the number of shares outstanding of the registrant’s common shares was 40,675,221.

Business 1

Risk Factors 25

Item 1B.

Properties 38

Item 3.

The Company’s other [removed: 25] [added: 23] locations occupy a total of approximately [removed: 223,650] [added: 239,600] square feet, all of which are leased.

In addition, effective October 2019, the Company entered into a lease agreement to move its corporate offices from Liberty Corner, New Jersey to Warren, New Jersey.

The lease agreement covers approximately 315,000 square feet of office space.

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

Not Applicable.

| | | |

Item 5.

Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 38

Item 6.

Selected Financial Data 41

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 42

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk 78

Item 8.

Financial Statements and Supplementary Data 78

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 78

Item 9A.

Controls and Procedures 78

[removed: Market Information.][added: Market Information.]

| | [removed: |] High | | | [removed: |] Low | | | [removed: |] High | | | [removed: |] Low | | [removed: |]

| First Quarter | [removed: |] $ | [removed: 262.67 |] [added: 226.11] | | $ | [removed: 216.47 |] [added: 208.80] | | $ | [removed: 239.15 |] [added: 262.67] | | $ | [removed: 216.04 |] [added: 216.47] |

| Second Quarter | | [removed: | 260.00 | | | | 224.72] [added: 253.31] | | | [added: 214.69] | [removed: 258.12] | | [added: 260.00] | | [removed: 230.63] | [added: 224.72] |

| Third Quarter | | [removed: | 236.32 | | | | 209.84] [added: 266.76] | | | [added: 235.88] | [removed: 271.12] | | [added: 236.32] | | [removed: 211.94] | [added: 209.84] |

| Fourth Quarter | | [removed: | 230.17 | | | | 205.03] [added: 279.01] | | | [added: 247.02] | [removed: 240.51] | | [added: 230.17] | | [removed: 210.36] | [added: 205.03] |

[removed: Number] [added: Number] of Holders of Common [removed: Shares.][added: Shares.]

The number of record holders of common shares as of February 1, [removed: 2019] [added: 2020] was [removed: 443.][added: 478.]

[removed: Dividend] [added: Dividend] History and [removed: Restrictions.][added: Restrictions.]

The Company declared and paid its quarterly cash dividend of [removed: $1.25] [added: $1.30] per share for the first three quarters of [removed: 2017.][added: 2018.]

The Company declared and paid its quarterly cash dividend of [removed: $1.30] [added: $1.40] per share for the fourth quarter of [removed: 2017] [added: 2018] and for the first three quarters of [removed: 2018.][added: 2019.]

The Company declared and paid its quarterly cash dividend of [removed: $1.40] [added: $1.55] per share for the fourth quarter of [removed: 2018.][added: 2019.]

On February [removed: 20, 2019,] [added: 26, 2020,] the Company’s Board of Directors declared a dividend of [removed: $1.40] [added: $1.55] per share, payable on or before March [removed: 20, 2019] [added: 30, 2020] to shareholders of record on March [removed: 6, 2019.][added: 11, 2020.]

[removed: As an insurance holding company, the Company is] partially dependent on dividends and other permitted payments from its subsidiaries to pay cash dividends to its shareholders.

[removed: Purchases] [added: Purchases] of Equity Securities by the Issuer and Affiliated [removed: Purchasers][added: Purchasers]

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

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

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

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

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

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

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

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

[removed: (1) On] [added: (1)On] September 21, 2004, the Company’s board of directors approved an amended share repurchase program authorizing the Company and/or its subsidiary Holdings to purchase up to an aggregate of 5,000,000 of the Company’s common shares through open market transactions, privately negotiated transactions or both.

[removed: Recent] [added: Recent] Sales of Unregistered [removed: Securities.][added: Securities.]

[removed: Performance Graph.][added: Performance Graph.]

The following Performance Graph compares cumulative total shareholder returns on the Common Shares (assuming reinvestment of dividends) from December 31, [removed: 2013] [added: 2014] through December 31, [removed: 2018,] [added: 2019,] with the cumulative total return of the Standard & Poor’s 500 Index and the Standard & Poor’s Insurance (Property and Casualty) Index.

[removed: ][added: ]

*$100 invested on [removed: 12/31/13] [added: 12/31/14] in stock or index, including reinvestment of dividends.

Copyright© [removed: 2019] [added: 2020] Standard & Poor's, a division of S&P Global.

| | 2019 | | | | | | 2018 | | | | |

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

As an insurance holding company, the Company is

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

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

| January 1 - 31, 2019 | \- | $ | — | | \- | | 1,443,328 |

| February 1 - 28, 2019 | 43,321 | $ | 223.4676 | | \- | | 1,443,328 |

| March 1 - 31, 2019 | 75,193 | $ | 214.8230 | | 75,193 | | 1,368,135 |

| April 1 - 30, 2019 | 39,440 | $ | 214.2710 | | 39,440 | | 1,328,695 |

| May 1 - 31, 2019 | 665 | $ | 248.8245 | | — | | 1,328,695 |

| June 1 - 30, 2019 | — | $ | — | | — | | 1,328,695 |

| July 1 - 31, 2019 | 350 | $ | 248.9475 | | \- | | 1,328,695 |

| August 1 - 31, 2019 | 838 | $ | 242.1097 | | — | | 1,328,695 |

| September 1 - 30, 2019 | 1,382 | $ | 250.8546 | | — | | 1,328,695 |

| October 1 - 31, 2019 | 310 | $ | 254.9750 | | \- | | 1,328,695 |

| November 1 - 30, 2019 | 758 | $ | 266.8020 | | \- | | 1,328,695 |

| December 1 - 31, 2019 | — | $ | — | | \- | | 1,328,695 |

| Total | 162,257 | $ | — | | 114,633 | | 1,328,695 |

| | 12/14 | | 12/15 | | 12/16 | | 12/17 | | 12/18 | | 12/19 |

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

| Everest Re Group, Ltd. | 100.00 | | 109.94 | | 133.13 | | 139.03 | | 140.05 | | 182.29 |

| S&P 500 | 100.00 | | 101.38 | | 113.51 | | 138.29 | | 132.23 | | 173.86 |

| S&P Property & Casualty Insurance | 100.00 | | 109.53 | | 126.73 | | 155.10 | | 147.83 | | 186.07 |

| | | 2018 | | | | | | | | 2017 | | | | | | |

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

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

| January 1 - 31, 2018 | | | 0 | | | $ | \- | | | | 0 | | | | 1,785,507 | |

| February 1 - 28, 2018 | | | 48,471 | | | $ | 242.0134 | | | | 0 | | | | 1,785,507 | |

| March 1 - 31, 2018 | | | 0 | | | $ | \- | | | | 0 | | | | 1,785,507 | |

| April 1 - 30, 2018 | | | 0 | | | $ | \- | | | | 0 | | | | 1,785,507 | |

| May 1 - 31, 2018 | | | 67,877 | | | $ | 224.1978 | | | | 67,000 | | | | 1,718,507 | |

| June 1 - 30, 2018 | | | 45,747 | | | $ | 224.8436 | | | | 45,747 | | | | 1,672,760 | |

| July 1 - 31, 2018 | | | 232 | | | $ | 234.6125 | | | | 0 | | | | 1,672,760 | |

| August 1 - 31, 2018 | | | 170,563 | | | $ | 217.2371 | | | | 170,338 | | | | 1,502,422 | |

| September 1 - 30, 2018 | | | 60,132 | | | $ | 219.8726 | | | | 59,094 | | | | 1,443,328 | |

| October 1 - 31, 2018 | | | 0 | | | $ | \- | | | | 0 | | | | 1,443,328 | |

| November 1 - 30, 2018 | | | 493 | | | $ | 217.5254 | | | | 0 | | | | 1,443,328 | |

| December 1 - 31, 2018 | | | 0 | | | $ | \- | | | | 0 | | | | 1,443,328 | |

| Total | | | 393,515 | | | $ | \- | | | | 342,179 | | | | 1,443,328 | |

| | | | | | | | | | | 12/13 | | 12/14 | | 12/15 | | 12/16 | | 12/17 | | 12/18 |

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

| Everest Re Group, Ltd. | | | | | | | | | | 100.00 | | 111.44 | | 122.52 | | 148.36 | | 154.94 | | 156.07 |

| S&P 500 | | | | | | | | | | 100.00 | | 113.69 | | 115.26 | | 129.05 | | 157.22 | | 150.33 |

| S&P Property & Casualty Insurance | | | | | | | | | | 100.00 | | 115.74 | | 126.77 | | 146.68 | | 179.52 | | 171.10 |

The following selected consolidated GAAP financial data of the Company as of and for the years ended December 31, [added: 2019,] 2018, 2017, [removed: 2016, 2015] [added: 2016] and [removed: 2014,] [added: 2015,] were derived from the audited consolidated financial statements of the Company.

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

| (Dollars in millions, except per share amounts) | [added: 2019] | [removed: 2018] | | [added: 2018] | | [removed: 2017] | [added: 2017] | | | 2016 | | | [removed: |] 2015 | | [removed: | | 2014 | | |]

| Operating data: | | | | | | | | | | | | | | | [removed: | | | | | |]

| Gross written premiums | [added: $] | [added: 9,133.4 | |] $ | 8,475.2 | | [removed: |] $ | 7,173.9 | | [removed: |] $ | 6,033.9 | | [removed: |] $ | 5,891.7 | [removed: | | $ | 5,762.9 | |]

| Net written premiums | | [added: 7,824.4] | [removed: 7,414.4] | | [added: 7,414.4] | | [removed: 6,244.7] | [added: 6,244.7] | | | 5,270.9 | | | [removed: |] 5,182.3 | [removed: | | | 5,132.4 | |]

| Premiums earned | | [added: 7,403.7] | [removed: 6,931.7] | | [added: 6,931.7] | | [removed: 5,937.8] | [added: 5,937.8] | | | 5,320.5 | | | [removed: |] 5,292.8 | [removed: | | | 5,043.7 | |]

| Net investment income | | [added: 647.1] | [removed: 581.2] | | [added: 581.2] | | [removed: 542.9] | [added: 542.9] | | | 473.1 | | | [removed: |] 473.5 | [removed: | | | 530.5 | |]

| Net realized capital gains (losses) | | [removed: | (127.1 | ) | | | 153.2 |] [added: 185.0] | | | [removed: (7.2] [added: (127.1)] | [removed: )] | | [added: 153.2] | [removed: (184.1] | [removed: )] | [added: (7.2)] | | [removed: 84.0] | [added: (184.1)] |

| Incurred losses and loss adjustment | | | | | | | | | | | | | | | [removed: | | | | | |]

| expenses (including catastrophes) | | [added: 4,922.9] | [removed: 5,651.4] | | [added: 5,651.4] | | [removed: 4,522.6] | [added: 4,522.6] | | | 3,139.6 | | | [removed: |] 3,064.7 | [removed: | | | 2,875.9 | |]

| Net catastrophe losses (1) | | [added: 550.0] | [removed: 1,669.8] | | [added: 1,669.8] | | [removed: 1,339.1] | [added: 1,339.1] | | | 286.0 | | | [removed: |] 50.7 | [removed: | | | 50.1 | |]

| Commission, brokerage, taxes and fees | | [added: 1,703.7] | [removed: 1,519.0] | | [added: 1,519.0] | | [removed: 1,304.0] | [added: 1,304.0] | | | 1,188.7 | | | [removed: |] 1,183.6 | [removed: | | | 1,121.1 | |]

| Other underwriting expenses | | [added: 440.9] | [removed: 371.5] | | [added: 371.5] | | [removed: 318.8] | [added: 318.8] | | | 302.7 | | | [removed: |] 257.1 | [removed: | | | 233.1 | |]

| Corporate expenses | | [added: 33.0] | [removed: 30.7] | | [added: 30.7] | | [removed: 25.9] | [added: 25.9] | | | 27.2 | | | [removed: |] 23.3 | [removed: | | | 23.4 | |]

| Interest, fees and bond issue cost | | | | | | | | | | | | | | | [removed: | | | | | |]

| amortization expense | | [added: 31.7] | [removed: 31.0] | | [added: 31.0] | | [removed: 31.6] | [added: 31.6] | | | 36.2 | | | [removed: |] 36.2 | [removed: | | | 38.5 | |]

| Income (loss) before taxes | | [added: 1,099.0] | [removed: (226.5] | [removed: )] | [added: (242.2)] | | [removed: 405.2] | [added: 419.4] | | | 1,099.8 | | | [removed: |] 1,111.9 | [removed: | | | 1,386.8 | |]

| Income tax expense (benefit) | | [added: 89.5] | [removed: (330.0] | [removed: )] | [added: (331.2)] | | [removed: (63.8] | [removed: )] [added: (63.4)] | | | 103.5 | | | [removed: |] 134.0 | [removed: | | | 187.7 | |]

| Net income (loss) (2) | | [added: 1,009.5] | [removed: 103.6] | | [added: 89.0] | | [removed: 469.0] | [added: 482.8] | | | 996.3 | | | [removed: |] 977.9 | [removed: | | | 1,199.2 | |]

| EARNINGS PER COMMON SHARE: | | | | | | | | | | | | | | | [removed: | | | | | |]

| Dividends declared | [added: $] | [added: 5.75 | |] $ | 5.30 | | [removed: |] $ | 5.05 | | [removed: |] $ | 4.70 | | [removed: |] $ | 4.00 | [removed: | | $ | 3.20 | |]

| Certain GAAP financial ratios: (5) | | | | | | | | | | | | | | | [removed: | | | | | |]

| Balance sheet data (at end of period): | | | | | | | | | | | | | | | [removed: | | | | | |]

| Total investments and cash | [added: $] | [added: 20,748.5 | |] $ | 18,433.1 | | [removed: |] $ | 18,626.5 | | [removed: |] $ | 17,483.1 | | [removed: |] $ | 16,676.4 | [removed: | | $ | 16,880.8 | |]

| Loss and LAE reserves | | [added: 13,611.3] | [removed: 13,119.1] | | [added: 13,119.1] | | [removed: 11,884.3] | [added: 11,884.3] | | | 10,312.3 | | | [removed: |] 9,951.8 | [removed: | | | 9,720.8 | |]

| Total debt | | [added: 633.8] | [removed: 633.6] | | [added: 633.6] | | [removed: 633.4] | [added: 633.4] | | | 633.2 | | | [removed: |] 633.0 | [removed: | | | 632.7 | |]

| Total liabilities | | [added: 18,191.1] | [removed: 16,890.2] | | [added: 16,890.2] | | [removed: 15,222.6] | [added: 15,222.6] | | | 13,246.1 | | | [removed: |] 12,936.8 | [removed: | | | 12,888.8 | |]

[removed: | (1) | Catastrophe losses are presented net of reinsurance and reinstatement premiums. Catastrophe insurance provides coverage for one event.] When limits are exhausted, some contractual arrangements provide for the availability of additional coverage upon the payment of additional premium. [removed: This additional premium is referred to as reinstatement premium. |]

[removed: |] (2) [removed: |] Some amounts may not reconcile due to rounding. [removed: |]

[removed: |] (3) [removed: |] Based on weighted average basic common shares outstanding of [added: 40.3 million,] 40.4 million, 40.6 million, 41.3 million, [removed: 43.4 million] and [removed: 45.4] [added: 43.4] million for [added: 2019,] 2018, 2017, 2016, [removed: 2015] and [removed: 2014,] [added: 2015,] respectively. [removed: |]

[removed: |] (4) [removed: |] Based on weighted average diluted common shares outstanding of [added: 40.4 million,] 40.6 million, 40.8 million, 41.6 million, [removed: 43.8 million] and [removed: 45.8] [added: 43.8] million for [added: 2019,] 2018, 2017, 2016, [removed: 2015] and [removed: 2014,] [added: 2015,] respectively. [removed: |]

[removed: | (5) | Loss ratio is the GAAP losses and LAE incurred as a percentage of GAAP net premiums earned.] Underwriting expense ratio is the GAAP commissions, brokerage, taxes, fees and other underwriting expenses as a percentage of GAAP net premiums earned. [removed: Combined ratio is the sum of the loss ratio and underwriting expense ratio. |]

[removed: |] (6) [removed: |] Based on [added: 40.8 million,] 40.7 million, 40.8 million, 40.9 million, [removed: 42.7 million] and [removed: 44.7] [added: 42.7] million common shares outstanding for December 31, [added: 2019,] 2018, 2017, 2016, [removed: 2015] and [removed: 2014,] [added: 2015,] respectively. [removed: |]

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

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

| Basic (3) | $ | 24.77 | | $ | 2.18 | | $ | 11.77 | | $ | 23.85 | | $ | 22.29 |

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

| Diluted (4) | $ | 24.70 | | $ | 2.17 | | $ | 11.70 | | $ | 23.68 | | $ | 22.10 |

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

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

| Loss ratio | | 66.5% | | | 81.5% | | | 76.2% | | | 59.0% | | | 57.9% |

| Other underwriting expense ratio | | 29.0% | | | 27.3% | | | 27.3% | | | 28.0% | | | 27.2% |

| Combined ratio (2) | | 95.5% | | | 108.8% | | | 103.5% | | | 87.0% | | | 85.1% |

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

| Total assets | | 27,324.1 | | | 24,751.0 | | | 23,563.3 | | | 21,279.2 | | | 20,545.4 |

| Shareholders' equity | | 9,132.9 | | | 7,860.8 | | | 8,340.7 | | | 8,033.1 | | | 7,608.6 |

| Book value per share (6) | | 223.85 | | | 193.37 | | | 204.25 | | | 196.41 | | | 178.21 |

(1) Catastrophe losses are presented net of reinsurance and reinstatement premiums.

Catastrophe insurance provides coverage for one event.

This additional premium is referred to as reinstatement premium.

(5) Loss ratio is the GAAP losses and LAE incurred as a percentage of GAAP net premiums earned.

Combined ratio is the sum of the loss ratio and underwriting expense ratio.

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

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

| Basic (3) | | $ | 2.54 | | | $ | 11.43 | | | $ | 23.85 | | | $ | 22.29 | | | $ | 26.16 | |

| Diluted (4) | | $ | 2.53 | | | $ | 11.36 | | | $ | 23.68 | | | $ | 22.10 | | | $ | 25.91 | |

| Loss ratio | | | 81.5 | % | | | 76.2 | % | | | 59.0 | % | | | 57.9 | % | | | 57.0 | % |

| Other underwriting expense ratio | | | 27.3 | % | | | 27.3 | % | | | 28.0 | % | | | 27.2 | % | | | 26.8 | % |

| Combined ratio (2) | | | 108.8 | % | | | 103.5 | % | | | 87.0 | % | | | 85.1 | % | | | 83.8 | % |

| Total assets | | | 24,794.0 | | | | 23,591.8 | | | | 21,321.5 | | | | 20,545.4 | | | | 20,339.9 | |

| Shareholders' equity | | | 7,903.8 | | | | 8,369.2 | | | | 8,075.4 | | | | 7,608.6 | | | | 7,451.1 | |

| Book value per share (6) | | | 194.43 | | | | 204.95 | | | | 197.45 | | | | 178.21 | | | | 166.75 | |

| _____________________________ | | | | | | | | | | | | | | | | | | | | |

| --- | --- |

[removed: Disclosure] [added: Disclosure] Controls and [removed: Procedures.][added: Procedures.]

[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting.][added: Reporting.]

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2018.][added: 2019.]

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013).][added: (2013)*.]

Based on our assessment we concluded that, as of December 31, [removed: 2018,] [added: 2019,] our internal control over financial reporting is effective based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears herein.

[removed: Changes] [added: Changes] in Internal Control over Financial [removed: Reporting.][added: Reporting.]

ITEM 9B.

OTHER INFORMATION

None.

PART III

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

None.

| | | |

Item 10.

Directors, Executive Officers and Corporate Governance 79

Item 11.

Executive Compensation 79

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 79

Item 13.

Certain Relationships and Related Transactions, and Director Independence 79

Item 14.

Principal Accountant Fees and Services 80

| PART IV | | |

Item 15.

Exhibits and Financial Statement Schedules 80

PART I

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

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

Reference is made to the sections captioned “Information Concerning Nominees”, “Information Concerning Continuing Directors and Executive Officers”, “Audit Committee”, “Nominating and Governance Committee”, “Code of Ethics for CEO and Senior Financial Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our proxy statement for the [removed: 2019] [added: 2020] Annual General Meeting of Shareholders, which will be filed with the Commission within 120 days of the close of our fiscal year ended December 31, [removed: 2018] [added: 2019] (the “Proxy Statement”), which sections are incorporated herein by reference.

[removed: PART IV][added: PART IV]

[removed: Financial] [added: Financial] Statements and [removed: Schedules.][added: Schedules.]

[removed: Exhibits.][added: Exhibits.]

[removed: SIGNATURES][added: 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 [removed: 1, 2019.][added: 2, 2020.]

| [removed: | By: |] /S/ DOMINIC J. ADDESSO | | [added: Director | | March 2, 2020 | | |]

| [removed: Signature] [added: Signature] | | [removed: Title] [added: Title] | | [removed: Date] [added: Date] | | |

| /S/ [removed: DOMINIC J. ADDESSO] [added: JUAN C. ANDRADE] | | President and Chief Executive Officer [removed: and Director] (Principal Executive Officer) | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ CRAIG HOWIE | | Executive Vice President and Chief Financial Officer | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ KEITH T. SHOEMAKER | | Comptroller (Principal Accounting Officer) | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ JOSEPH V. TARANTO | | Chairman | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ JOHN J. AMORE | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ WILLIAM F. GALTNEY, JR. | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ JOHN A. GRAF | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ GERALDINE LOSQUADRO | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ ROGER M. SINGER | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| /S/ JOHN A. WEBER | | Director | | March [removed: 1, 2019] [added: 2, 2020] | | |

| [removed: INDEX] [added: INDEX] TO [removed: EXHIBITS] [added: EXHIBITS] | | | | | | [added: | |]

| Exhibit No. | | | | | | [added: | |]

| | [added: |] 2. | 1 | | [removed: Agreement] [added: [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. [removed: 333-87361)] [added: 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199005385/0000950131-99-005385.txt)] | | [added: |]

| | [added: |] 3. | 1 | | [removed: Memorandum] [added: [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. [removed: 333-87361)] [added: 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199005385/0000950131-99-005385.txt)] | | [added: |]

| | [added: |] 3. | 2 | | [removed: Bye-Laws] [added: [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 [removed: 10-Q”)] [added: 10-Q”)](http://www.sec.gov/Archives/edgar/data/1095073/000109507311000053/bylawsexhibit.htm)] | | [added: |]

| | [added: |] 4. | 1 | | [removed: Specimen] [added: [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. [removed: 333-87361)] [added: 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199006791/0000950131-99-006791.txt)] | | [added: |]

| | [added: |] 4. | 2 | | [removed: Indenture,] [added: [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, [removed: 2000] [added: 2000](http://www.sec.gov/Archives/edgar/data/914748/000095013100001763/0000950131-00-001763.txt)] | | [added: |]

| | [added: |] 4. | 3 | | [removed: Fourth] [added: [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, [removed: 2014] [added: 2014](http://www.sec.gov/Archives/edgar/data/914748/000119312514226501/d736264dex41.htm)] | | [added: |]

| | [added: |] *10. | 1 | | [removed: Everest] [added: [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 [removed: 10-K”)] [added: 10-K”)](http://www.sec.gov/Archives/edgar/data/914748/0000914748-99-000002.txt)] | | [added: |]

| | [added: |] *10. | 2 | [removed: | Everest] [added: [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. [removed: 333-105483)] [added: 333-105483)](http://www.sec.gov/Archives/edgar/data/1095073/000095013103003076/dex41.htm)] | | [added: | |]

| | [added: |] *10. | 3 | [removed: Form] [added: [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, [removed: 2004] [added: 2004](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000008/exh10-47.htm)] | | [added: | |]

| | [added: |] *10. | 4 | [removed: Amendment] [added: [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, [removed: 2005] [added: 2005](http://www.sec.gov/Archives/edgar/data/1095073/000093041305002626/c36781_def14a.htm)] | | [added: | |]

| | [added: |] *10. | 5 | [removed: Form] [added: [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, [removed: 2005] [added: 2005](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000031/exh101.htm)] | | [added: | |]

| | [added: |] 10. | 6 | [removed: Completion] [added: | [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, [removed: 2009] [added: 2009](http://www.sec.gov/Archives/edgar/data/1095073/000109507309000014/tenderoffercompletion8k2009.htm)] | | [added: |]

| | [added: |] *10. | 7 | [removed: Everest] [added: | [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 [removed: 10-Q] [added: 10-Q](http://www.sec.gov/Archives/edgar/data/1095073/000109507309000031/appendixb2008proxy.htm)] | | [added: |]

| | [added: |] *10. | 8 | [removed: Everest] [added: | [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, [removed: 2010] [added: 2010](http://www.sec.gov/Archives/edgar/data/1095073/000109507310000056/stockincentiveplan2010.htm)] | [added: | |]

| | [added: |] *10. | 9 | [removed: Amendment] [added: | [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, [removed: 2011] [added: 2011](http://www.sec.gov/Archives/edgar/data/1095073/000109507311000026/proxy.htm)] | [added: | |]

| | [added: |] 10. | [removed: 10] [added: 16] | [removed: Credit] [added: | [Credit] Agreement, dated [removed: June 22, 2012,] [added: 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, [removed: 2012.] [added: 2016.] This new agreement replaces the [removed: July 27, 2007 five] [added: June 22, 2012 four] year, [removed: $850.0] [added: $800.0] million senior credit [removed: facility] [added: facility](http://www.sec.gov/Archives/edgar/data/1095073/000109507316000109/thirdamendcreditagree.htm)] | [added: | |]

| | [added: |] *10. | [removed: 11] [added: 17] | [removed: Chairmanship] [added: | [Chairmanship] agreement between Everest Re Group, Ltd. and Joseph V. Taranto, dated [removed: June 19, 2013] [added: August 15, 2016] and effective January 1, [removed: 2014,] [added: 2017,] incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on [removed: June 24, 2013] [added: August 16, 2016](http://www.sec.gov/Archives/edgar/data/1095073/000109507316000112/exhibit10-1agreement.htm)] | [added: | |]

| | [added: |] *10. | [removed: 12] [added: 21] | [removed: Employment] [added: | [Employment] agreement between Everest Global Services, Inc., and Sanjoy Mukherjee, dated [removed: September 1, 2013,] [added: January 3, 2017,] incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on [removed: August 16, 2013] [added: January 6, 2017](http://www.sec.gov/Archives/edgar/data/1095073/000109507317000002/mukherjeeagree2017.htm)] | [added: | |]

| | [added: |] *10. | [removed: 13] [added: 18] | [removed: Employment] [added: | [Employment] agreement between Everest Global Services, Inc., and John P. Doucette, dated [removed: September 1, 2013,] [added: October 21, 2016,] incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on [removed: September 13, 2013] [added: October 26, 2016](http://www.sec.gov/Archives/edgar/data/1095073/000109507317000011/lloydsagreement2016.htm)] | [added: | |]

| | [added: |] *10. | [removed: 14] [added: 23] | [removed: Employment] [added: | [Employment] agreement between Everest [removed: Reinsurance (Bermuda), Ltd.] [added: Re Group, Ltd.,] and [removed: Mark S. deSaram,] [added: Jonathan Zaffino] dated September [removed: 24, 2014,] [added: 8, 2017,] incorporated herein by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on September [removed: 29, 2014] [added: 12, 2017](http://www.sec.gov/Archives/edgar/data/1095073/000109507317000040/zaffino2017employmentagree.htm)] | [added: | |]

| | [added: |] *10. | [removed: 15] [added: 10] | [removed: Amendment] [added: | [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, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/1095073/000109507315000012/proxy.htm)] | [added: | |]

| | [added: |] *10. | [removed: 16] [added: 11] | [removed: Amendment] [added: | [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, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/1095073/000109507315000012/proxy.htm)] | [added: | |]

| | By: | /S/ JUAN C. ANDRADE | |

| | | Juan C. Andrade | |

| Juan C. Andrade | | | | | | |

| /S/ MERYL HARTZBAND | | Director | | March 2, 2020 | | |

| Meryl Hartzband | | | | | | |

| | | | | | | |

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