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SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended:   Commission File Number:  
   September 30, 2003  1-15731 

EVEREST RE GROUP, LTD.
(Exact name of Registrant as specified in its charter)

          Bermuda   98-0365432  
(State or other juris-   (IRS Employer Identification  
diction of incorporation   Number)  
or organization)  

c/o ABG Financial & Management Services, Inc.
Parker House
Wildey Business Park, Wildey Road
St. Michael, Barbados
(246) 228-7398

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

YES   X       NO       

Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act).

YES   X       NO       

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

      Number of Shares Outstanding  
                  Class     at November 1, 2003
Common Shares,     $.01 par value    55,658,318  




EVEREST RE GROUP, LTD.

Index To Form 10-Q

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS  
   
                  Consolidated Balance Sheets at September 30, 2003 (unaudited) 3 
                     and December 31, 2002
   
                  Consolidated Statements of Operations and Comprehensive Income 4 
                    for the three and nine months ended September 30, 2003
                    and 2002 (unaudited)
   
                  Consolidated Statements of Changes in Shareholders' Equity for the 5 
                      three and nine months ended September, 2003 and 2002
                      (unaudited)
   
                  Consolidated Statements of Cash Flows for the three and nine 6 
                             months ended September 30, 2003 and 2002 (unaudited)
   
                  Notes to Consolidated Interim Financial Statements (unaudited) 7 
   
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20 
   
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                  ABOUT MARKET RISK 44 
   
ITEM 4. CONTROLS AND PROCEDURES 45 
   

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS 46
   
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None
   
ITEM 3. DEFAULTS UPON SENIOR SECURITIES None
   
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS None
   
ITEM 5. OTHER INFORMATION None
   
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 47




Part I - Item 1

EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value per share)



    September 30, December 31,  
        2003     2002  
ASSETS:    (unaudited)
Fixed maturities - available for sale, at market value  
  (amortized cost: 2003, $7,877,293; 2002, $6,460,839)   $ 8,241,804   $ 6,779,858  
Equity securities, at market value (cost: 2003, $59,965 ; 2002, $56,841)    57,427    47,473  
Short-term investments    395,498    169,116  
Other invested assets    92,419    53,856  
Cash    141,637    208,830  
          Total investments and cash    8,928,785    7,259,133  
Accrued investment income    115,314    85,959  
Premiums receivable    946,464    673,377  
Reinsurance receivables    1,190,314    1,116,362  
Funds held by reinsureds    156,378    121,308  
Deferred acquisition costs    301,479    207,416  
Prepaid reinsurance premiums    89,126    63,437  
Deferred tax asset    147,926    139,176  
Other assets    217,439    198,435  
TOTAL ASSETS   $ 12,093,225   $ 9,864,603  
LIABILITIES:  
Reserve for losses and adjustment expenses   $ 5,786,721   $ 4,905,582  
Future policy benefit reserve    213,603    227,925  
Unearned premium reserve    1,383,017    872,340  
Funds held under reinsurance treaties    378,978    347,360  
Losses in the course of payment    53,691    45,511  
Contingent commissions    79    1,932  
Other net payable to reinsurers    80,500    61,244  
Current federal income taxes    3,110    (16,696 )
8.5% Senior notes due 3/15/2005    249,850    249,780  
8.75% Senior notes due 3/15/2010    199,223    199,158  
Revolving credit agreement borrowings    70,000    70,000  
Company-obligated mandatorily redeemable preferred securities  
  of subsidiary trusts holding solely subordinated debentures   
  ("trust preferred securities")    210,000    210,000  
Accrued interest on debt and borrowings    3,830    13,481  
Other liabilities    433,551    308,340  
          Total liabilities    9,066,153    7,495,957  
SHAREHOLDERS' EQUITY:  
Preferred shares, par value: $0.01; 50 million shares authorized;  
      no shares issued and outstanding    --    --  
Common shares, par value: $0.01; 200 million shares authorized;  
     55.6 million shares issued in 2003 and 50.9 million shares  
      issued in 2002    560    513  
Additional paid-in capital    946,878    618,521  
Unearned compensation    (5,543 )  (340 )
Accumulated other comprehensive income, net of  
  deferred income taxes of $97.3 million in 2003 and  
  $74.4 million in 2002    267,086    221,542  
Retained earnings    1,841,041    1,551,360  
Treasury shares, at cost; 0.5 million shares in 2003 and 0.5 million  
  shares in 2002    (22,950 )  (22,950 )
          Total shareholders' equity    3,027,072    2,368,646  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 12,093,225   $ 9,864,603  




The accompanying notes are an integral part of the consolidated financial statements.


3





EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)

      Three Months Ended   Nine Months Ended  
      September 30, September 30,  
 
 
      2003   2002   2003   2002  
    (unaudited)   (unaudited)
REVENUES:  
Premiums earned   $ 1,046,353   $ 555,600   $ 2,643,211   $ 1,549,138  
Net investment income    100,283    86,412    295,720    262,782  
Net realized capital gain (loss)    (30,055 )  (7,680 )  (41,543 )  (42,543 )
Net derivative income (expense)    3,784    (12,466 )  2,389    (17,606 )
Other (expense) income    (424 )  1,136    (6,024 )  (435 )
Total revenues    1,119,941    623,002    2,893,753    1,751,336  
CLAIMS AND EXPENSES:  
Incurred loss and loss adjustment expenses    738,254    392,082    1,836,767    1,097,765  
Commission, brokerage, taxes and fees    232,548    127,956    599,762    369,285  
Other underwriting expenses    22,933    17,299    66,717    48,148  
Distributions related to trust preferred securities    4,121    --    12,364    --  
Interest expense on senior notes    9,733    9,730    29,197    29,186  
Interest expense on credit facility    327    966    1,035    2,728  
Total claims and expenses    1,007,916    548,033    2,545,842    1,547,112  
INCOME BEFORE TAXES    112,025    74,969    347,911    204,224  
Income tax expense    11,699    13,699    43,663    28,486  
NET INCOME   $ 100,326   $ 61,270   $ 304,248   $ 175,738  
Other comprehensive (loss) income, net of tax    (126,705 )  117,718    45,544    88,920  
COMPREHENSIVE (LOSS) INCOME   $ (26,379 ) $ 178,988   $ 349,792   $ 264,658  
PER SHARE DATA:  
   Average shares outstanding (000's)    55,499    50,977    53,514    50,139  
   Net income per common share - basic   $ 1.81   $ 1.20   $ 5.69   $ 3.51  
   Average diluted shares outstanding (000's)    56,562    51,627    54,408    50,974  
   Net income per common share - diluted   $ 1.77   $ 1.19   $ 5.59   $ 3.45  
  




The accompanying notes are an integral part of the consolidated financial statements.


4





EVEREST RE GROUP, LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’EQUITY
(Dollars in thousands, except per share amounts)



      Three Months Ended   Nine Months Ended
      September 30, September 30,
      2003   2002   2003   2002  
      (unaudited) (unaudited)
COMMON SHARES (shares outstanding):  
Balance, beginning of period       55,458,133     51,319,539     50,881,693     46,269,015  
Issued (repurchased) during the period, net    114,618    (449,208 )  4,691,058    4,601,316  
Balance, end of period    55,572,751    50,870,331    55,572,751    50,870,331  
COMMON SHARES (par value):  
Balance, beginning of period   $ 559   $ 513   $ 513   $ 463  
Issued during the period    1    --    47    50  
Balance, end of period    560    513    560    513  
ADDITIONAL PAID IN CAPITAL:  
Balance, beginning of period    938,551    616,508    618,521    269,945  
Common shares issued during the period    8,327    1,472    328,357    348,035  
Balance, end of period    946,878    617,980    946,878    617,980  
UNEARNED COMPENSATION:  
Balance, beginning of period    (298 )  (103 )  (340 )  (115 )
Net (increase) decrease during the period    (5,245 )  20    (5,203 )  32  
Balance, end of period    (5,543 )  (83 )  (5,543 )  (83 )
ACCUMULATED OTHER COMPREHENSIVE INCOME,  
  NET OF DEFERRED INCOME TAXES:  
Balance, beginning of period    393,791    85,082    221,542    113,880  
Net (decrease) increase during the period    (126,705 )  117,718    45,544    88,920  
Balance, end of period    267,086    202,800    267,086