Everest Re Group Ltd saw its profits surge by nearly 39 percent amid low catastrophe activity and handily beat analysts’ expectations.The Bermuda reinsurer reported net income of $214.6 million, or $4.08 per share, compared to $131.3 million, or $2.41 per share, for the second quarter of 2011.After-tax operating income was $223 million, or $4.25 per diluted common share, easily beating the $3.77 expectation of analysts polled by Yahoo Finance.CEO Joseph Taranto hailed the results as “exceptional”.However, the company wrote less business, as gross written premiums plunged eight percent to $909 million, largely on the impact of the non-renewal of a large Florida quota share reinsurance contract.The company said the non-renewal resulted in “a portfolio return of the unearned premium reserve. Excluding the impact of this transaction, gross written premiums would have been up 12 percent.”Underwriting profitability was strong with the combined ratio — a reflection of the proportion of premium dollars spent on claims and expenses — improving to 89 percent 98 percent in the same period of 2011.“This has been an exceptional year with 10 percent growth in book value per share, adjusted for dividends, through the first six months of the year,” Mr Taranto said.“Strong market dynamics coupled with the strategic positioning of our underwriting portfolio has provided significant margin expansion as evidenced by our underwriting results, with a combined ratio of 89 percent.“Add to this the investment earnings generated off of our sizeable portfolio and we produced an annualised operating return on equity of 16 percent. These are all strong metrics and point to the strength of our franchise and our operating strategy.”Net investment income for the quarter was $149.3 million, down six percent compared to last year, primarily driven by declining reinvestment rates.Shareholders’ equity ended the quarter at $6.4 billion, up six percent over the three-month period and 9.5 percent since the end of last year.Everest was busy returning capital to shareholders during the April through June period, by repurchasing 990,957 of its common shares at an average price of $100.89 and a total cost of $100 million. A further 4.9 million shares are available for repurchase under the company’s buyback plan.