Thursday, August 16, 2018

Everest Re Dented, But Not Permanently Damaged

Reputation carries a lot of weight with insurance investors, and Everest Re’s (RE) recent adverse developments from the 2017 catastrophe season have dented the company’s reputation as an above-average risk manager. Even so, the total impact on the business hasn’t been that unrecoverable, and I think the company is showing that it still has opportunities to grow in both its core reinsurance and insurance operations.

Everest Re shares appear to be trading at roughly a double-digit discount to my estimate of fair value, implying solid double-digit annualized return potential from here. With a low-cost model and an attractive size/share opportunity in the reinsurance space, I think this is a name worth considering today.

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Everest Re Dented, But Not Permanently Damaged

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