's earningssuffered during the second quarter in the fallout from a series of naturalcatastrophes around the globe.
The Bermuda-based company reported$149.1 million of disaster losses, net of reinsurance, during the period, withmuch of that coming from property claim settlements tied to three events duringthe first half of 2016. Everest Re paid $90 million related to lawsuitsfrom the wildfires that scorched Canada in May, with another $36 millionallocated to losses from hailstorms and flooding in Texas, CFO Craig Howie saidduring a July 26 conference call to discuss earnings. A 7.8-magnitude earthquake in Ecuador,meanwhile, cost the company about $23 million.
Though those losses were partiallyoffset by favorable development on prior-year catastrophe losses, they stillcame in significantly higher than losses in the same period in 2015. EverestRe's catastrophe losses on a net basis, after reinstatement premiums and taxes,totaled $105 million, Howie said, up from about $23 million in theprior-year quarter.
In the company's reinsurancedivision, catastrophes dropped second-quarter profits by about $80 millioncompared with the same period a year ago.
The losses also forced Everest Re to cut its share repurchaseplans short during the quarter, President and CEO Dominic Addesso said, overworries about trading on inside information. Once the company realized that itscatastrophe losses would affect earnings, it halted all of its buybackactivity. Everest Re ended up repurchasing about $100.4 million during thequarter.
"It became, frankly, a little difficult for us to be in themarket," Addesso said during the call. "Not because of the size ofthe events, but more because we were in the possession of material non-publicinformation."
Despite the weather-related losses, executives said Everest Re sawencouraging signs from its core operations. The company's global insuranceoperations, which include its North America and Lloyd's segments, saw its netwritten premium grow to $343 million, representing a 19% increase over theprior-year quarter.
"There are certain markets in particular that are indisarray. Companies are changing and the marketplace is always in flux. Brokersare in particular always looking for highly rated carriers to come into thespace," Addesso said. "It's more about taking advantage ofopportunities from what I would describe as dislocation."