Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

Everest Re: There Is Justification For Its Discount To Book

Everest Re Group Ltd. (NYSE:RE) is a Bermuda reinsurer. We will be looking at the company for a number of reasons: (1) insurers as a class are selling below book value and Everest is no exception with a P/B of 0.96; (2) there are changing dynamics with capital levels within catastrophe reinsurance business which could lead to catastrophe-risk pricing declines; and (3) Everest has a strong record of creating shareholder value at 13% annually over the last 18 years. This record is evidenced by the growth tangible book value, as shown in this graph:

The conclusion of this piece, to get it out of the way, is that Everest is not best in class and that its price...

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