Welcome to the Everest Re Group Ltd Third Quarter 2011 Earnings Release Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Beth Farrell, Vice President Investor Relations. Please go ahead.

Thank you, Patrica. Good morning and welcome to Everest Re Group’s third quarter 2011 earnings conference call. With me today are Joe Taranto, the company’s Chairman and Chief Executive Officer and Dom Addesso, our President and Chief Financial Officer. Before we begin, I will prefix our comments by noting that our SEC filings include extensive disclosures with respect to forward-looking statements. In that regard, I note that statements made during today’s call, which are forward-looking in nature such as statements about projections, estimates, expectations, and the like are subject to various risks. As you know, actual results could differ materially from current projections or expectations. Our SEC filings have a full listing of the risks that investors should consider in connection with such statements. Now, let me turn the call over to Joe.

Thanks, Beth. Good morning. I’m pleased to report $147 million of operating income or $2.70 per share for the quarter. This is a solid result when you consider the catastrophes in the quarter and the stock market decline during this period. The story this year has been one of heavy catastrophes. Property casualty reinsurers know when they budget for expected catastrophe losses at the actual outcome will in all likelihood be anything but what has been budgeted. Mother Nature doesn’t work that way, typically losses will be much lower or much higher. This year, it was the much higher variety. What’s important is that Everest has the underwriting the diversification to the underlying earnings and the capital to manage through this volatility. Indeed, despite this year’s earthquakes, Hurricanes floods and tornados, we still expect to generate an operating profit for the year given a reasonable fourth quarter. Lost projection is what we sell. Without losses, we don’t have a product. Heightened losses reinforce to our customers while they buy and reinforce to us and to our competitors the importance of charging rates that will lead to meaningful profits overtime. We expect property catastrophe rates to continue to go up into 2012. We expect retro prices at 1:1 to go up about 15%. We expect catastrophe rates on programs without losses in 2011 to average 5% rate increase. Of course, 1:1 programs with losses will have significant increases. The will include Australian and New Zealand accounts as well as some U.S. regional accounts. As we move forward to the 1:1 renewals in 2012, we will continue to execute the following strategies. First, we will continue to reposition our reinsurance portfolio towards the better opportunities. I expect that this will mean we will continue to ride more property business as a percentage…

Thanks, Joe, and good morning. Before I begin, I would like to bring your attention to the changes in our segment reporting where the specialty segment was combined into the U. S. reinsurance segment except for primary accident and health, which is now included in the insurance segment. In addition, we have provided additional disclosure on our non-U.S. investments, which highlights our limited exposure to European banks and sovereigns in distressed European countries. As mentioned, despite additional cats in the quarter, we had positive operating results with a combined ratio of 95.6. I will start with a review of premiums as this is important in understanding the underwriting results for the quarter. Overall, net written premiums are relatively flat quarter-over-quarter and up slightly over 2% for the year-to-date. These modest changes, however, do not adequately convey the underlying component changes in our book of business. For example, although total net reinsurance premium is down 6% for the quarter and 5% year-to-date, the cat excess of loss component of the book within the total is up approximately 15% while maintaining relatively flat PMLs. The offset to the increase in the cat excess of loss was in the pro rata property book, which was down by 12% and the remaining offset was from a continued reduction in our casualty lines. These changes are significant in that they explain the year-over-year improvement in the year-to-date attritional combined ratio for all reinsurance segments from 85.2% to 82.2% excluding the effect of reinstatement premiums. A significant portion of the shift in premiums earned occurred in the third quarter as a result of the June and July renewal dates and since expected loss ratios and commissions are much lower cat XOL business, we are beginning to see this favorable impact on the loss ratio and the…

Patrica, we are now open for questions and answers.

Thank you. [Operator Instructions] And we’ll go to Jay Gelb with Barclays Capital. Jay Gelb – Barclays Capital: Thank you. Can you give us a sense of what drove the reserve strengthening in the U. S. insurance segment in the last quarter?

Sure, Jay. Overall we generally wait until the fourth quarter reserve studies unless our interim metrics point us to something else. This year, we’ve seen some unusual large losses on the insurance side, which indicated a need for strengthening. If we see that this in our metrics, we should not and do not wait for the reserve study. Similarly, on the reinsurance side, each quarter our metrics have been improving. This was also the case last year. And therefore given that our overall metrics still point to total adequacy it was we felt it appropriate to re-bucket certain reserves, but clearly the internal metrics pointed us to needing some reserve additions on the insurance side. Jay Gelb – Barclays Capital: What lines were it in particular?

Work comp and excess casualty. Jay Gelb – Barclays Capital: Okay.

Mostly excess casualty. Jay Gelb – Barclays Capital: Do you expect that…

With – pardon? Jay Gelb – Barclays Capital: I’m sorry. Go ahead.

No, I was going to say that which is a turnabout from last year where we actually the – our reserve study work actually indicated some slight redundancies in our excess casualty book. So it’s just something that emerged this year. Jay Gelb – Barclays Capital: Would it be unreasonable to expect some further reserve strengthening in 4Q then?

We really can’t say which way that will go in the fourth quarter. We have our reserve studies. Like as I said, we reacted to what we saw emerge in the third quarter and obviously we took that action but it’s too early to say what our reserve studies will come up with. Jay Gelb – Barclays Capital: Okay. And then turning to the investment portfolio, we were anticipating instead of showing profits in the partnership income in the net investment income line, given what happened with hedge funds and private equity and the third quarter might actually be flat to down. So what drove that in 3Q and what should we put in there for 4Q?

I don’t know what you should put in there for 4Q and we’d not dare an estimate on that. As you know that, Jay, that can be very volatile. It is on a quarter lag relative and most many of the limited partnerships use the equity markets as a basis for providing their fair values or estimated values. In our particular case, we’ve also had some particular individual limited partnerships that had some unique transactions that led to gains. Kinder Morgan, for example, was one of those, that was a very positive outcome for us. Jay Gelb – Barclays Capital: So the – for the mark – given the one quarter lag then based on the equity market performance of 3Q, would it be reasonable to expect a loss in 4Q?

As I said, that’s your business, not my business. Jay Gelb – Barclays Capital: Okay. But that would be – that would run through the partnership income line, right, not just derivative realized.

Correct. Correct. Jay Gelb – Barclays Capital: Okay. Thank you.

Josh Shanker with Deutsche Bank. Joshua Shanker – Deutsche Bank: Yeah, good morning, everyone.

Good morning.

Good morning, Josh. Joshua Shanker – Deutsche Bank: A couple of questions. Historically obviously workers’ comp has been an important part of your business and a lot of that business that competed away a few years back. Would you be more aggressive given the market trend? Where do you see the business that you lost in the past? How do you think that’s performing now and how do you look at your own book today?

Well, as you know, we have a long history in the comp market getting into it in a small way in 2001 and then building it a very big way through 2003, ‘04 and ‘05. Yes, subsequent to that, our book – we took it down in part because we did lose some business, but in part because rates started to come down at that point. So we’re still an important player in the market probably doing about $200 million worth of business, but that is down from what was once $900 million. When the market hit its peak in 2004 and ‘05, we were very pleased with the business with reforms going in rates going up and of course that business led to outrageously wonderful results. Today, it’s not quite that. We’re pleased with 15% rate increases that we’re currently getting that kind of comes on top of rate increases of 9-ish percent last year. So the market is certainly taking a favorable turn, keeping in mind some of that rate is needed to cover medical inflation, if we don’t look at it like we looked at the business in 2004 where it was fantastic. We look at it as if it’s okay today and we’d like to see rate increases continue to build. If that’s the case, we may look to grow the book some more than what we’re currently thinking, but right now we are a bit cautious and I think we’re pushing for more rate as opposed to more business and of course these things work against one another. The more rate you push for, the less business that you do to some degree. So well, I’m sorry, in short, we’re pleased with the book, the direction, the rate increase and we expect next year to be a good year in that market and we may grow some and it may be even more than that depending upon how the rest of the market reacts in terms of joining us in rate increases. Joshua Shanker – Deutsche Bank: When you say next year is going to be a New Year on a written or an earned basis?

Well, I guess, I talk of written premium. At least that’s what I’m thinking what we actually put on the books next year. Joshua Shanker – Deutsche Bank: Yeah. And do you think given a call it, risk-free rate of 3.5% on the 10-year, 3% on the 10-year that that it’s an attractive market overall for the industry or particularly for Everest?

Well, the interest rate, you’re getting into the investment income aspect and it certainly is that it’s casualty business, there is a tail on it, but we toast that to the side to some degree even though it does figure into ROE models. We have more old school and warning to achieve an underwriting profit on this business. I do believe at the current rates it generates a fair rate of return, but as I said, we’re looking it for to increase so we can be even more confident in the business. It’s still casualty business that once you write it, it takes a few years to play out before exactly where it’s at, so you need to be paid for them. Joshua Shanker – Deutsche Bank: Understood. And finally, on the derivative, if I’m not mistaken, the liability for equity puts is about equal to where it was in 1Q09. I just like to run through a little bit of how that’s calculated a little bit, it's not severe, but I would be surprised that it would be that high today given the markets rallied about 45% since that time.

Let me tackle it, and Dom, you may want to add to it. We have a bit of a black box formula that we follow to come up with that valuation. And even though these deals at the end of the day will be determined strictly on stock market price and we’re confident that we’ll do well on these deals. The interim evaluation, the quarterly evaluation, the two most critical components are one is stock market price, but the other is interest rate. Even though that doesn’t figure into the final resolution of these, it’s kind of a discounted Black Scholes type model that’s being used, so with interest rates and the key builds in particularly going down pretty dramatically for the quarter and for that period of time that you’re talking about that’s had an impact on the estimates, if you will, even though it has no real impact on the ultimate resolution. With the market up pretty strong through October if it just stays the same, clearly and interest rates are up a bit too, as Dom noted, this will swing the other way in the fourth quarter. Joshua Shanker – Deutsche Bank: All right. Thank you very much.

You’re welcome.

Brian Meredith with UBS. Brian Meredith – UBS: Yeah, good morning. A couple of things here for you. First of them, Dom, I wonder if you could talk a little bit about what trends you’re actually were seeing in the excess liability business that resulted in the adverse development?

I wouldn’t particularly call it a trend as much as it was higher than expected number of large losses. Brian Meredith – UBS: Okay. Great. And then the next question, I wonder if you could talk a little bit about your comments about the attritional combined ratio in the quarter and I think you said part of it’s because you’re – you went to more property cat excess of loss versus primary property. Does that mean that going forward we’ll also likely to see maybe higher catastrophe losses?

No, because the business that – the shift in business from pro rata to cat XOL was done with basically the same P&Ls. So the expected loss would be approximately the same and that’s just obviously a modeled number, but obviously what’s happening in the attritional is essentially if you have no cats, the XOL is booked at zero, right, but you still have in the pro rata book, you still have some underlying attritional normal loss ratio.

And much of the growth in the XOL premium is rate increase.

Right. Brian Meredith – UBS: Got you. And then I guess, because of that shift also should we expect that you’ll have some pressure on top line?

Well, I wouldn’t call it pressure, but you’re right, Brian, pro rata pound for pound does give you more top line than XOL. So generally speaking, that trend means we won’t be building top line as fast but clearly the goal here is to focus on the bottom line. Brian Meredith – UBS: Right, right. Terrific, thank you.

Greg Locraft, Morgan Stanley Smith Barney. Gregory Locraft – Morgan Stanley Smith Barney: Hi, good morning. I actually missed the opening comments, Joe, because I was on another call, so if you mentioned this, please just I can review the transcript. But can you go kind of through each of the lines and give us at a broad brush sort of where pricing is and where loss trend is?

Yeah, I think you’re probably more looking at the insurance side than the reinsurance side, Greg. Gregory Locraft – Morgan Stanley Smith Barney: Well I’d love, I guess, pricing color on reinsurance, but, yes.

All right, let me give you some overall commentary, because I know – there’s been a lot of discussion, particularly this quarter about pricing. It’s clearly we’ve seen a broad effort by many insurance companies to draw a line in the sand and stop rates from declining and in fact get rates rising. I think this recent quarter showed more success in this effort than we’ve seen in prior quarters. We had mentioned in the opening that we continue in our insurance book to see some pockets certainly responding, California workers comp in the third quarter, we continue to give rate increases that averaged 15%. Our general liability primary rates third quarter, we saw 9% rate increase, which was up pretty significantly from the prior quarter. Our insurance rates, the property rates were up only order of 3% for the quarter, which is okay, but more is needed. Other areas didn’t respond as well. For example, the D&O on the commercial umbrella space I think continues to be flat at best and as in need of some rate increase. So, I’m not particularly forecasting a hard market. Although I certainly hope that that what’s coming before too long. In 2001, we did feel as if it was coming and we increased our market share in many areas. Now our strategy would be kind of to selectively increase where we believe rate to exposure will be quite good, but selectively decreased where we think rates to exposures aren’t quite what they need to be. So, I think it’s good that latest trend is a beneficial, will broaden the opportunities upward corrections are overall helpful, but I don’t particularly expect this to the snowball. Taking that from the insurance side to the reinsurance rates side, I think the biggest issue, the biggest…

I think you can take away than more conservative. But what I think won’t matter in terms of what really happens at the end of the day, so yes, I think I’m happy that things have taken a positive change and I hope it continues. But, in terms of anything getting back to what happened in 2000 to 2003 and 2004, I don’t feel anything that extreme is going to happen. Gregory Locraft – Morgan Stanley Smith Barney: Okay, excellent. Thanks again for the color.

You’re welcome.

Vinay Misquith with Evercore Partners. Vinay Misquith – Evercore Partners: Hi, good morning. The first question is on your capacity to grow your property cat. I believe you mentioned that your PMLs are flat, so if you could please remind us about your PMLs and how much you can grow on 1:1 please?

Remind you of what Vinay? Vinay Misquith – Evercore Partners: PMLs?

For which territory? Vinay Misquith – Evercore Partners: For your peak territories?

Okay. Florida, for example, would be our peak territory, which is 940, but on economic basis it would be $640 million. Vinay Misquith – Evercore Partners: Okay. That’s great. And do you have a significant amount of capacity to grow that business on 1:1?

Yeah. We’re trying – our plan right now is to not row the PMLs in the major zones. Now that doesn’t mean that we won’t write more business, because we may write in zones that aren’t in the major zones, we might write second, third loss. We may write in some of the U.S. regions. We haven’t been big in the regional space and now we believe rates will be going up and it may offer better opportunity. So there may be some opportunity for what I’ll call sideways growth. Vinay Misquith – Evercore Partners: Okay. That’s fair enough. Second, if you could remind us what the dollar value of your excess capital is, you had in the past disclose that number?

We are – and I will answer this in the context of what I’d say is excess, excess. And by that I mean that which we think about in terms of our share repurchase program. And we’d like to think about it as about approximately a $500 million number. Vinay Misquith – Evercore Partners: Okay, that’s great. And then just one last one. This question, did you mention that you had about $35 million of prior quarter favorable reserve development this quarter?

Prior year development? No, we have – the $35 million I was mentioning was a reduction in our provisions for small caps, those caps that are less than $10 million in losses. Is that… Vinay Misquith – Evercore Partners: So that’s prior quarter – sorry, go ahead.

Is that the 35 that you’re referring to? Vinay Misquith – Evercore Partners: Yes. So that’s not a prior year development. That’s a prior quarter development, correct?

No. Correct. Vinay Misquith – Evercore Partners: Okay. That’s great. Thank you.

Matthew Heimermann with JPMorgan. Matthew Heimermann – JPMorgan: Hi, good morning.

Good morning, Matt. Matthew Heimermann – JPMorgan: Good morning. Couple of questions. First, just maybe, Joe, could you give us – I just be curious kind of your conviction around some of the comments you have on reinsurance pricing specifically because it feels like some of the market town and commentary has softened a bit since Monte Carlo?

Sure. I mean, the reality is we’ll see what happens at 1:1, but I think let me go back three spaces, the convictions I had for June and July, I think those pretty much came to pass. And much of what I say in terms of where I expect rates to go is where we’re looking for it to go, where we think it should go and where we will be proactive in trying to make it go. Now, this is pretty simple. A lot of this is based on the last 18 months worth of catastrophe losses and if my competitors are saying something different. I don’t think they’re paying attention to what’s happened in the last 18 months. So now you will have some regional companies coming up that had some pretty good losses at 1:1. You will have some New Zealand, Australian companies coming up that have had mega losses and they’re coming up for the first time since those losses in 1:1. You will have retro business, which has continued to percolate as more losses have gone up in Japan and Australia, those have gone into increasing losses in the retro space and so to me that heightens what the price should be going forward. So I feel it will happen and certainly we’ll be looking to do our part. If it doesn’t measure up to that, we’ll do less, but you now have at least the logic which I think is pretty clear and evident as to why I think that’s the case. Matthew Heimermann – JPMorgan: Okay. That’s fair. And then with the shift to XOL versus from pro rata, can you give us a sense of what layers you’re – what layers that shift constitutes within XOL structures whether that’s generally by zone if that’s the easiest way to do it?

That level of detail, Matt, we really wouldn’t have for this call.

We’ll get back to you with color on that, Matt. Matthew Heimermann – JPMorgan: That’s fair. And I guess maybe as you think about it, I’d just be curious kind of thinking about kind of shorter return periods versus than what you normally would disclose in your SEC filings. I guess the other question is just a numbers question on the reinstatements, if you could just give us those figures by segment?

Well I can give you those figures overall. For the quarter, we’ve had $13 million of reinstatement premiums. On a year-to-date basis, just shy of $54 million and obviously that’s all in the reinsurance segment. Give me a second here, I can – Bermuda was most of the third quarter number, 12.5. On the year-to-date, we got… Matthew Heimermann – JPMorgan: Okay, I’ve got the rest of them from prior quarters, so that’s fine. I just wanted to make sure that this quarter I had it right, okay. And then just a follow-up on your comment on the underlying loss ratio, so did I hear you right there was a $35 million benefit from lower – effectively lower RBNI provisions, IBNR, excuse me, provisions in the current quarter?

Yeah. In other words, we looked at the small cat events those less than $10 million that occurred during the year and we’ve looked at the reserves we were carrying through the first two quarters and the third quarter against the actual results and we’ve had $35 million of excess reserves relative to those smaller cat event and also realized that that will be positively impacted. The provisions for small cat events by definition go down again and it’s a shift into an XOL versus pro rata. The provision for small cats is more relevant when you have a larger pro rata book. Matthew Heimermann – JPMorgan: That makes sense. Going – when we think about this going forward, is it fair to – should we expect some seasonality then as we look into next year and years beyond that on a quarterly basis with potentially more favorable back half IBNR or lower IBNR provisions in the back half assuming that either activity is wide or you don’t see upward push to the events you do book are linear?

Well, I don’t know that I’d go put it quite that way. First of all, there is seasonality for certain types of cats, but there obviously is no season for earthquake events, but you have to keep that in mind. Secondly, again, as we shift more towards the XOL and that becomes a bigger proportion of our cat premium, then the provision that we put up for small cat events in that in each quarter would be less. I don’t know if that helps. Matthew Heimermann – JPMorgan: I – I might follow-up, but that gives me a sense. Thanks

Okay.

Our final question Ian Gutterman with Adage Capital. Ian Gutterman – Adage Capital: Hi, guys. I guess, first Dom, on a crop you mentioned write a loss due to some start-up cost and such, can you quantify how much that is?

Our start-up cost that we’ve included in this year-to-date results approximate $6 million somewhere in that range. Ian Gutterman – Adage Capital: Or was that be on the combined?

That would be in the combined, yes. Ian Gutterman – Adage Capital: And so how many points on the combined, I’m not sure what that net premium is?

The premiums for the crop year-to-date, give me a second, about $120 million. Ian Gutterman – Adage Capital: Got it. Okay.

And those will be one-time events Ian. So they won’t repeat next year. Ian Gutterman – Adage Capital: Okay, right. I was just trying to get a sense of what sort of the core was, because I guess, I thought outside Texas and maybe I’m not familiar with your geographies, but thought outside Texas come out to be a pretty close to normal crop year?

Well we had some very hot weather during the summer over 100 degrees for an extended period of time in the Midwest and the Northern part, if you will, that affected the corn crop quite considerably. So that’s kind of what, in addition to the other things.

And we won’t, realistically, we’re not going to know obviously it’s a function of not only yield, but also commodity prices, so we’re really not going to know the true results of that until February, but given those drought conditions, we felt that prudent to just add something to our reserves for that potential outcome. Ian Gutterman – Adage Capital: Okay, got it.

It could work back to be a more positive result. Ian Gutterman – Adage Capital: Okay. So I was wondering because [indiscernible] the people I talked to it sounds like the harvest was going pretty good so far, so there was something I missed. The other area is when you talked about growing your property book, but without raising your PMLs, I know you mentioned the regional contracts, Joe, but outside that, I mean that kind of implies growing in non-peak zones, like international and places like that, is that where the growth is coming from?

Well, I don’t know that there will be, how much of expansion there will be, but I think it might more mean second event, third event, things of that nature because when we talk about PMLs, it’s for the one major event. Ian Gutterman – Adage Capital: Okay. So it’s – got it, I just want to make sure you weren’t going into the lower ROE prices overseas stuff.

No, in fact our – you would note that our – through our Bermuda segment, which has been generally trending down of late that’s due to backing away from some of the European exposures. Ian Gutterman – Adage Capital: Got it. Okay. So basically the growth will be in sort of low ROL type business, but hopefully high ROE?

In part.

I’d say in part. Yeah. Ian Gutterman – Adage Capital: Got it. Okay. And then just my last one is, Dom, any update on when we can see triangles? Someone had to ask, so...

That’s fine. We do have the work done. It’s being – as I might have mentioned previously, we’re having an outside third party take a look at that work, so it’s – I’ll just say it’s soon. It’s certainly before the year end, but I’m hoping well before that. Ian Gutterman – Adage Capital: All right, great. Look forward to it. Thank you.

And there are no further questions.

Okay. We’d like to thank everybody for participating on the call. Thank you.

And that concludes today’s conference. You may now disconnect.