Moody’s affirms Everest Re’s ratings (senior debt Baa1) – Stable Outlook

September 29, 2020

Moody’s Investors Service (“Moody’s”) has affirmed the A1 insurance financial strength (IFS) rating of Everest Reinsurance Company and Everest Re (Bermuda), Ltd., as well as the Baa1 senior debt rating of Everest Reinsurance Holdings, Inc. These entities are wholly owned by Everest Re Group, Ltd. (NYSE: Re, Everest Re). In the same rating action, Moody’s has also assigned provisional ratings to the shelf registration (see list below) of Everest Reinsurance Holdings, Inc. The rating outlook for Everest Re is stable.


According to Moody’s, the rating affirmation reflects the group’s established presence in the global reinsurance market with long standing client relationships and broad product capabilities which allow it to be a lead market for brokers and clients. Everest Re maintains a low fixed expense ratio, access to retrocessional capacity from Mt. Logan Re and conservative financial leverage. These strengths are tempered by the company’s significant exposure to natural and manmade catastrophes, rapid growth in primary insurance, and exposure to long-tail casualty businesses, which have greater reserve and pricing risk.

For Everest Re and other reinsurers, the coronavirus-related economic downturn is raising claim costs in certain business lines and adding volatility to investment performance and capital levels. For the first six months of 2020, Everest Re reported net income of $207 million, down from $687 million in the prior year period reflecting lower net investment income, net realized investment losses and $310 million of pretax coronavirus-related losses. The losses were primarily attributable to event cancellation, business interruption, accident & health and workers’ compensation, mostly from its reinsurance business. Everest Re generated an underwriting profit for the first six months of 2020 reporting a combined ratio of 98.1%.

The stable rating outlook reflects Moody’s expectation that Everest Re will prudently manage its aggregate property catastrophe exposures through improved risk mitigation, stricter terms and conditions and rate increases while maintaining good capital adequacy and strong liquidity as it navigates that pandemic-related economic downturn.

The Baa1 senior debt rating of Everest Reinsurance Holdings, Inc. reflects standard notching relative to the A1 insurance financial strength rating and is based on the expectation of ample credit support and dividend capacity from its principal operating subsidiary, Everest Reinsurance Company, as well as reinsurance support from the principal Bermuda operating company, Everest Reinsurance (Bermuda) Limited.

Moody’s has affirmed the following ratings:

Everest Reinsurance (Bermuda), Ltd. — insurance financial strength at A1,

Everest Reinsurance Company — insurance financial strength at A1,

Everest Reinsurance Holdings, Inc. — senior unsecured debt at Baa1; junior subordinated debt at Baa2(hyb).

Moody’s has assigned the following ratings:

Everest Reinsurance Holdings, Inc. – Guaranteed provisional senior unsecured shelf at (P)Baa1; Guaranteed provisional subordinated shelf at (P)Baa2.

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.