Bermuda-based reinsurer Everest Re Group says it will be using alternative capital increasingly as it comes close to closing its first catastrophe bonds.

That was the view expressed by Everest CEO Dominic Addesso in an earnings statement that showed the company posted net income of $293.9 million for the first three months of the year.

Operating income, which strips out one-off items, was $281 million, or $5.93 per share, easily beating the $5.33 consensus of analysts tracked by Yahoo Finance and edging up from the $5.88 per share achieved last year.

Mr Addesso said: “We expect to close shortly on our first catastrophe bonds that will provide $450 million of property catastrophe risk coverage at very optimal pricing and terms and conditions.

“Alternative reinsurance capacity is increasingly part of our strategy, coming into play both offensively and defensively, as we seek ways to optimise our returns.”

Third-party capital is claiming an ever greater share of the reinsurance market, especially property and catastrophe coverage. Many traditional reinsurers have embraced the change, through sponsoring catastrophe bonds and sidecars, and through setting up collateralised reinsurance funds.

Everest Re entered the cat bond market for the first time with its $450 million Kilimanjaro Re soon-to-complete issuance and also operates the Mt Logan Re sidecar.

Mr Addesso added: “Everest had another excellent quarter producing $281 million of after-tax operating income and a net income return on equity of 17 percent, driven by strong underwriting results with a combined ratio of 80 percent. The market is always challenging but we are continuing to find opportunities to grow premium and risk-adjusted returns, demonstrating the strength of our franchise and operating strategies.”

The company wrote more business, as gross written premiums increased seven percent to $1.3 billion compared to the first quarter of 2013.

Reinsurance premiums, including the Mt Logan Re segment, were up 12 percent, quarter over quarter, primarily driven by new growth opportunities at the January renewals, Everest said.

Insurance premiums were down nine percent for the quarter largely due to a premium adjustment for crop business on lower than expected premium for the winter crop season.

The cash-rich reinsurer also significantly stepped up its capital management activity.

“During the quarter, we repurchased $250 million of our common shares and paid dividends of $35 million, the largest return of capital to shareholders in any single quarter, and yet shareholders equity held constant at $7 billion,” Mr Addesso said.

“We continue to build value for our shareholders with book value per share, adjusted for dividends, climbing five percent in the quarter.”

Book value per share increased four percent from $146.57 at December 31, 2013 to $152.80 at the end of March.