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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:  
   March 31, 2004  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 May 1, 2004
Common Shares, $.01 par value    55,948,206  




EVEREST RE GROUP, LTD.

Index To Form 10-Q

PART I

FINANCIAL INFORMATION

       Page  
ITEM 1.   FINANCIAL STATEMENTS  
                  Consolidated Balance Sheets at March 31, 2004 (unaudited)    3  
                     and December 31, 2003  
 
                  Consolidated Statements of Operations and Comprehensive Income    4  
                    for the three months ended March 31, 2004 and 2003 (unaudited)  
 
                  Consolidated Statements of Changes in Shareholders’ Equity for the    5  
                      three months ended March 31, 2004 and 2003 (unaudited)  
 
                  Consolidated Statements of Cash Flows for the three months    6  
                             ended March 31, 2004 and 2003 (unaudited)  
 
                  Notes to Consolidated Interim Financial Statements (unaudited)    7  
 
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF  
                  FINANCIAL CONDITION AND RESULTS OF OPERATION    18  
 
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES  
                  ABOUT MARKET RISK    38  
 
ITEM 4.   CONTROLS AND PROCEDURES    39  
 
                                                                PART II  
 
                                                     OTHER INFORMATION  
 
ITEM 1.   LEGAL PROCEEDINGS    40  
 
ITEM 2.   CHANGES IN SECURITIES, USE OF PROCEEDS    40  
                  AND ISSUER PURCHASES OF EQUITY SECURITIES  
 
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES    40  
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF  
                  SECURITY HOLDERS    40  
 
ITEM 5.   OTHER INFORMATION    40  
 
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K    41  



EVEREST RE GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
    March 31, December 31,
(Dollars in thousands, except par value per share)       2004     2003  
      (unaudited)
ASSETS:  
Fixed maturities - available for sale, at market value  
  (amortized cost: 2004, $8,687,893; 2003, $8,357,723)   $ 9,128,836   $ 8,726,886  
Equity securities, at market value (cost: 2004, $253,671; 2003, $146,407)       268,664     154,381
Short-term investments    579,570    151,853  
Other invested assets (cost: 2004, $103,072; 2003, $102,742)    104,015    103,359  
Cash    101,192    184,859  
          Total investments and cash    10,182,277    9,321,338  
Accrued investment income    118,916    113,989  
Premiums receivable    1,184,575    1,047,856  
Reinsurance receivables    1,259,755    1,284,139  
Funds held by reinsureds    172,198    157,364  
Deferred acquisition costs    347,171    333,214  
Prepaid reinsurance premiums    94,642    98,384  
Deferred tax asset    135,872    145,271  
Other assets    225,836    187,981  
TOTAL ASSETS   $ 13,721,242   $ 12,689,536  
 LIABILITIES:  
Reserve for losses and adjustment expenses   $ 6,694,449   $ 6,361,245  
Future policy benefit reserve    202,866    205,275  
Unearned premium reserve    1,618,602    1,499,640  
Funds held under reinsurance treaties    343,415    385,768  
Losses in the course of payment    39,292    11,133  
Contingent commissions    3,626    2,135  
Other net payable to reinsurers    35,124    46,037  
Current federal income taxes    35,685    41,308  
8.5% Senior notes due 3/15/2005    249,899    249,874  
8.75% Senior notes due 3/15/2010    199,269    199,245  
Revolving credit agreement borrowings    70,000    70,000  
Junior subordinated debt securities payable    546,393    216,496  
Accrued interest on debt and borrowings    4,169    13,695  
Other liabilities    313,851    222,785  
          Total liabilities    10,356,640    9,524,636  
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;  
  55.9 million shares issued in 2004 and 55.7 million shares issued in 2003    564    561  
Additional paid-in capital    966,699    954,658  
Unearned compensation    (4,971 )  (5,257 )
Accumulated other comprehensive income, net of deferred income taxes of  
  $125.6 million in 2004 and $117.5 million in 2003    346,940    280,077  
Retained earnings    2,078,320    1,957,811  
Treasury shares, at cost; 0.5 million shares in 2004 and 0.5 million  
  shares in 2003    (22,950 )  (22,950 )
          Total shareholders' equity    3,364,602    3,164,900  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 13,721,242   $ 12,689,536  

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

3

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME

    Three Months Ended      
    March 31,
(Dollars in thousands, except per share amounts)       2004    2003  
      (unaudited)
REVENUES:  
Premiums earned   $ 1,055,065   $ 744,870  
Net investment income    100,897    93,505  
Net realized capital loss    (34,908 )  (13,235 )
Net derivative expense    (3,752 )  (2,700 )
Other income (expense)    1,460    (1,147 )
Total revenues    1,118,762    821,293  
CLAIMS AND EXPENSES:  
Incurred losses and loss adjustment expenses    711,528    513,471  
Commission, brokerage, taxes and fees    222,779    162,805  
Other underwriting expenses    23,598    19,864  
Interest expense on senior notes    9,736    9,731  
Interest expense on junior subordinated debt    4,419    4,249  
Interest expense on credit facility    324    360  
Total claims and expenses    972,384    710,480  
INCOME BEFORE TAXES    146,378    110,813  
Income tax expense    20,277    16,446  
NET INCOME   $ 126,101   $ 94,367  
Other comprehensive income, net of tax    66,863    29,988  
COMPREHENSIVE INCOME   $ 192,964   $ 124,355  
PER SHARE DATA:  
Average shares outstanding (000's)    55,771    50,897  
Net income per common share - basic   $ 2.26   $ 1.85  
Average diluted shares outstanding (000's)    56,834    51,521  
Net income per common share - diluted   $ 2.22   $ 1.83  

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

4

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY

    Three Months Ended      
    March 31,
(Dollars in thousands, except share amounts)       2004    2003  
    (unaudited)  
COMMON SHARES (shares outstanding):  
Balance, beginning of period    55,677,044    50,881,693  
Issued during the period    241,940    26,950  
Balance, end of period    55,918,984    50,908,643  
COMMON SHARES (par value):  
Balance, beginning of period   $ 561   $ 513  
Issued during the period    3    1  
Balance, end of period    564    514  
ADDITIONAL PAID IN CAPITAL:  
Balance, beginning of period    954,658    618,521  
Common shares issued during the period    12,041    886  
Balance, end of period    966,699    619,407  
UNEARNED COMPENSATION:  
Balance, beginning of period    (5,257 )  (340 )
Net decrease during the period    286    21  
Balance, end of period    (4,971 )  (319 )
ACCUMULATED OTHER COMPREHENSIVE INCOME,  
NET OF DEFERRED INCOME TAXES:  
Balance, beginning of period    280,077    221,542  
Net increase during the period    66,863    29,988  
Balance, end of period    346,940    251,530  
RETAINED EARNINGS:  
Balance, beginning of period    1,957,811    1,551,360  
Net income    126,101    94,367  
Dividends declared ($0.10 per share in 2004  
  and $0.09 per share in 2003)    (5,592 )  (4,581 )
Balance, end of period    2,078,320    1,641,146  
TREASURY SHARES AT COST:  
Balance, beginning of period    (22,950 )  (22,950 )
Treasury shares acquired during the period    --    --  
Balance, end of period    (22,950 )  (22,950 )
TOTAL SHAREHOLDERS' EQUITY, END OF PERIOD   $ 3,364,602   $ 2,489,328  

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

5

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

         Three Months Ended
        March 31, 2004
(Dollars in thousands)       2004     2003  
CASH FLOWS FROM OPERATING ACTIVITIES:          (unaudited)
Net income   $ 126,101   $ 94,367  
Adjustments to reconcile net income to net cash provided by  
  operating activities:  
    Increase in premiums receivable    (136,084 )  (143,600 )
    Increase in funds held by reinsureds, net    (57,767 )  (13,945 )
    Decrease in reinsurance receivables    20,920    22,674  
    Decrease (increase) in deferred tax asset    2,410    (15,274 )
    Increase in reserve for losses and loss adjustment expenses    338,185    181,783  
    Decrease in future policy benefit reserve    (2,409 )  (3,209 )
    Increase in unearned premiums    118,745    219,163  
    Decrease in other assets and liabilities    (52,129 )  (27,441 )
    Non-cash compensation expense    286    21  
    Amortization of bond premium/accrual of bond discount    6,431    (163 )