Hurricane and typhoon claims have led to an 88.6 percent drop in Everest Re Group's third quarter income.

The reinsurer said late on Monday evening that net income for the quarter ended September 30, 2004 decreased to to $11.5 million or $0.20 per diluted share compared to $100.3 million or $1.77 per diluted share. Excluding realised gains and losses from investments, Everest earned $4.8 million, or 8 cents per diluted share for the quarter ended September 30.

This was a 96.2% decrease compared to $126.2 million, or $2.23 per diluted share in the third quarter of 2003.

Operating income differs from net income only by the exclusion of realised gains and losses on investments. The Associated Press reports that analysts surveyed by Thomson First Call predicted a loss of 35 cents per share in the latest quarter.

Everest Re's revenue rose 13 percent to $1.26 billion from $1.12 billion a year ago. In early October, the company said aggregate losses from hurricanes and typhoons would be about $120 million in the third quarter.

For the nine months ended September 30, 2004, the company's after-tax operating income was $330.7 million, a decrease of 2 percent compared to $337.4 million, in 2003.

Net income in the first nine months of 2004 increased 32 percent to $401.5 million compared to $304.2 million in 2003.

At the end of the quarter, Everest Re's shareholders' equity had increased 11.7 percent to $3.53 billion, or $62.98 per outstanding share from $3.16 billion, or $56.84 per outstanding share, at December 31, 2003.

Chairman and chief executive officer, Joseph V. Taranto said, “Despite four hurricanes and two typhoons, our equity increased 5% in the quarter to over $3.5 billion, demonstrating the underlying strength of our company”.

Gross premiums written for the third quarter of 2004 were $1.22 billion, a 1.8 percent decrease compared to $1.24 billion in 2003.

Net premiums written were $1.18 billion, a decrease of 0.3% from $1.18 billion for the third quarter of 2003.

The Company's GAAP combined ratio in the third quarter was 108.5 percent compared to 95 percent in 2003.

Net investment income for the third quarter was $123.8 million compared to $100.4 million in the third quarter of 2003.

Cash flow from operations for the third quarter of 2004 was $498.1 million, an increase of 1.2% from $492.3 million in the third quarter of 2003.