Good day everyone, and welcome to the second quarter 2013 earnings call of Everest Re Group. Today’s conference is being recorded. At this time for openings remarks and introductions, I’d like to turn the conference over to Ms. Beth Farrell, Vice President of Investor Relations. Please go ahead ma’am.

Thank you Eric, and welcome to Everest Re Group’s second quarter 2013 earnings conference call. On the call with me today are Joe Taranto, the Company’s Chairman and Chief Executive Officer; Dom Addesso, our President; and Craig Howie, our Chief Financial Officer. Before we begin, I will preface 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 extremely pleased with our results for the first six months of the year. Our net income was $660 million, producing an ROE of 21%. Our worldwide growth return premium has increased by 25% over 2012. Our worldwide reinsurance premium has increased by 26% and our insurance premiums have increased by 22%. The attritional combined ratio has improved by 6 points to 80.5%. Our attritional combined ratio for our insurance operation continues to improve and was 94.8% for the second quarter. Our investment income was strong through six months at $295 million, only modestly off last year’s $302 million despite the headwinds generated from today’s low interest rate environment. Through six months, we grew book value per share, adjusted for dividends, by 5% despite falling bond prices and catastrophes. During the quarter, we completed our April 1st Japanese reinsurance renewals, our June 1st Florida reinsurance renewals and our July 1st International reinsurance renewals. I was most pleased with our overall results, even though we experienced increased competition. In particularly in Florida, we increased up premiums, but more importantly we increased our expected margins and yet did not increase our 1-in-100 PML, as we bought some industry loss warranty cover, that contained this risk. Much of our increased margin came from writing pro rata reinsurance on homeowners business. Rate increases on homeowners business and other changes continued to improve the underlying insurance business making it more attractive. In addition, the fact that Cat XOL reinsurance was less costly for homeowners companies made for further improvement and the net after reinsurance expected results, as these saving inure to the benefit of our quarterly shares. As always we continued to optimize our portfolio and move towards the best opportunities. Our insurance operation continues to achieve meaningful rate increases in…

Thanks Joe and good morning. The second quarter results were quite favorable despite storm activity in the period. After-tax operating income was $253 million, providing for an annualized operating return on equity of 16%. Strong and growing underwriting profitability and a stable base of investment income continue to provide for these favorable results. Over the last several quarters, we have talked about the strategies we have deployed enhance returns and our success is born out by these results. In that context, I’d like to outline our underwriting results and what actions, we have taken to reshape and improve in our portfolio. Compared to the prior year, underwriting income was $29 million higher at $143 million. Even after Cat losses of $90 million in this year’s second quarter versus $30 million one year ago. This year-over-year improvement continues to reflect an improvement in the underlying attritional combined ratio of more than 6 points. When adjusting for reinstatement premium, the attritional combined ratio was at 80.2%. I will touch on specifics in a moment, but generally the major improvements in the combined ratios were in U.S. reinsurance and Bermuda, followed by continued improvement in the insurance segment. The catastrophe losses of $90 million in the quarter, added 7 points to the combined ratio. So, overall, that ratio stood at a respectable 87.6%. There are multiple Cat events in the quarter. The details are as follows; U.S. tornadoes, $50 million; European floods, $20 million; Alberta floods, $20 million. The continuing improving fundamentals are due to a variety of factors. At its core, it is underwriting. Changes in the portfolio mix which emphasized excessive loss over pro rata was a factor as primary rates softened. But other important measures included broader geographical diversification, new product initiatives, terminating unprofitable relationships and finally a basic disciplined…

Thank you, Dom and good morning everyone. We’re pleased to report that Everest had another very strong quarter of earnings with net income of $275.6 million or $5.56 per diluted common share. This compares to net income of $214.6 million or $4.08 per share for the second quarter of 2012. Net income includes realized capital gains and losses. On a year-to-date basis, net income was $660.0 million or $13.09 per share compared to $519.3 million or $9.79 per share in 2012. The 2013 result represents an annualized return on equity of 21%. Operating income year-to-date was $554.2 million or $10.99 per share. This represents a 20% increase over operating income of $462.9 million last year. These results were driven by $129 million increase in underwriting income representing a 58% increase year-over-year. As you just heard from Dom, there are a number of strategic initiatives that are driving these improved results. This increase in underwriting income was partially offset by higher income taxes and slightly lower net investment income compared to the first half of 2012. These results reflect the continued improvement in the overall current year attritional combined ratio, which has declined more than six points from 86.6% to 88.5% on a year-to-date basis. This measure excludes the impact of catastrophes, reinstatement premiums and prior period loss development. The total reinsurance attritional combined ratio was 76.5% for the first half of 2013 compared to 83.7% in the prior year. The insurance segment attritional combined ratio was 96.4% year-to-date compared to 98.7% in the prior year. All segments reported increases in premium volume for the quarter and year-to-date and all segments reported underwriting gains for the quarter and for the first half of 2013. Total reinsurance reported in the underwriting gain of $134 million for the quarter, compared to a $107…

Thank you, Craig. At this point, we are open for questions.

(Operator Instructions) And will take our first question from Amit Kumar with Macquarie Capital. Amit J. Kumar – Macquarie Research: Well, thanks and good morning. I guess two or three quick questions. First of all just going back on the discussion on the business mix and, I know we’ve talked about this in the past on the shift towards XOL. As you look forward what percentage would you be comfortable with in terms of the business mix?

I’ll start with, Amit. I mean, what we try to do is optimize our portfolio and go to the best deals available certainly on the property side, when we’re fusing the P&L’s that were willing to write to. Now we had seen for the last year or to XOL especially as the rates were rising that we wanted to write more of that, and that was stacking up better relative to pro rata. I’d say on the worldwide basis most of the changes that we wanted to make, we’ve made in the last couple of years, but what we kind of added to the mix was this past June in Florida where we had a shift if you will, within the Florida book where we did more pro rata. I was still kind of guesstimate that where we are at mix wise today is pretty much where we’ll stay on a world-wide basis. But having said that, we will continue to change as the world changes. XOL rates changes, underlying insurance rates change, but I don’t expect the worldwide portfolio to undergo any significant changes I look out for the next year, like it has in the past couple of years. Amit J. Kumar – Macquarie Research: Got it, that’s helpful. And then where does Mt. Logan I guess fit in and start flowing in the numbers. I guess that would be more so in Q3, just could you refresh us on that?

Amit, it’s Dom. Amit J. Kumar – Macquarie Research: Hi.

We had initially targeted by the end of the year to raise approximately $250 million in outsized capital until. We are about half way there, so we have some capital already deployed at Mt. Logan which would be reflected in the third quarter. Craig can get into the details if you like on how that will run through our financials because perhaps they are may have to consolidate that operation but that’s yet to be determined. But that capital has already been committed to us and that will allow us to expand our writings within the reinsurance operations and then essentially quarter share, some business off to Mt. Logan, but it’s not as you can see it’s not necessarily a material amount. Amit J. Kumar – Macquarie Research: Yeah.

It’s a slow build. Amit J. Kumar – Macquarie Research: Got it. I can take that offline and final question on capital management and you were talking about some of the numbers, I think buybacks were and dividends were 86% or something like that of net income, which is obviously running at a higher trend than what we have seen in the past. How do you think about that, I guess for the remainder of the year? Is that a good metric to use, the current level or do you sort of pullback in the win season, maybe comeback a bit or do you wait for one-one renewals and then sort of comeback in Q1?

Well, we are keen to buy and that’s why we bought $450 million through the first six months. As I said, that kind of shows the confidence that we have in our portfolio, in our future. We probably will be a bit more cautious in the coming quarter, I mean we have historically through win season been a bit more cautious and I think we will probably take that same position. Now we never forecast and so don’t hold us because we reserve the right to change as conditions change, but probably later in the third quarter and if that all goes well, probably back to more in the fourth quarter, that would be kind of a guess at this point. Amit J. Kumar – Macquarie Research: Okay. That actually is quite helpful. That’s all I have. Thanks.

We will take our next question from Joshua Shanker with Deutsche Bank. Joshua Shanker – Deutsche Bank: Hi, I guess for Craig, start, on the bond portfolio, you said, I guess the mark to markets were $325 million, is that correct?

That’s correct on a year-to-date basis Josh. Joshua Shanker – Deutsche Bank: Year-to-date, okay. So I actually looking at the portfolio at about $6.5 billion, $16.5 billion that’s been fairly resilient, can we sort of get more granularity, it’s certainly better than the performance your peers have so far reported. To the rising interest rate environment and mark-to-market.

I recall that what we have been doing is been shorting the duration of our portfolio, so that helps dramatically. And then of course we’ve over the last couple of years, we’ve been reallocating some of our portfolio to a larger equity position, which has obviously helped as rates have been coming down, but obviously the stock market has been rising and that’s helped shield some of that results. As well as our yield floating bank debt, and other areas that have kind of protected the portfolio from the times that were most recently have gone through. Joshua Shanker – Deutsche Bank: And do you’ve taken some profits I guess on the equity markets.

We have our equity position has not in terms of what percentage of our asset base has not changed dramatically, but we do within our equity portfolios, we’ll take profits on certain securities and then reinvest in other opportunities that we think have a better upside. Those not been any material change in our allocation equities. Joshua Shanker – Deutsche Bank: It looks like it shrink by about $100 million despite the rising equity markets, sorry I just thought that may you take some money off the table.

In some cases we are in particular positions but we continue to look for opportunity in that space. We are not directionally making a major change in our equity allocation. Joshua Shanker – Deutsche Bank: And can we talk about the size of the California workers’ comp business now compared to where it was prior to Berkshire’s 2007 moving that space. Are you larger than you were back then or as the proportion of the overall churns business, where does that stand?

Now we were once close to $800 million or $900 million in the marketplace, we’re no longer close to that, but it’s growing we’ll probably better than $300 million in the marketplace this year. We continue to get some very good rate increase and I would expect we’ll probably do more business next year than this year. Joshua Shanker – Deutsche Bank: So, if we go back to like ’06 almost all the business was workers’ comp and now it’s minority of the business?

Well, that would still, it would represent close to 20% to 25%, but yes, we have gotten into crop, we’ve done A&H, professional liability, non-standard auto was now in mix, the California DIC, as well as our E&S operation. So we’ve got a well diversified insurance platform at this point, just in last couple of years, which is we’re quite proud of. Joshua Shanker – Deutsche Bank: Can we tease out of the strong growth, rate growth versus unit growth versus I guess expansion into newer markets?

I’m sorry Josh. Can we… Joshua Shanker – Deutsche Bank: I was looking at 36% growth in this quarter; over the last 12 months, probably 30% growth in the insurance book. Can we divide that into rate versus like exposures growth versus I guess newer markets and what not?

Well, at a very, very rough estimate you can think about rate level increases particularly in comp and in our general liability classes in a 10% to 15% range. So, essentially that might help you think the 36% versus with that 10% to 15% number. Joshua Shanker – Deutsche Bank: No, I’ll try and work that. Thank you very much.

We’ll take our next question from Michael Nannizzi with Goldman Sachs. Michael S. Nannizzi – Goldman Sachs & Co.: Thank you. Dom, would it be possible to give us a little bit more detail on this Florida program that you wrote? I was looking back and it looks like even if we compare to like Q2 2011, gross premiums were still quite a bit higher here. So just wondering if that difference is because this contractor program got a lot bigger or you took other exposures in the same area. And then just a quick follow-up on that. Thanks.

You’re saying that 2013 is higher than just this one transaction. Michael S. Nannizzi – Goldman Sachs & Co.: Well, no. You said that – I thought you had said this was a program that you guys did not, that you had participated in historically and then you didn’t last year. So the delta between 2012 and 2011 or between 2012 and 2013 is really big. So I just figured maybe the better comparison would be 2011, when I would assume then that contractor was in place, comparing that to 2013.

I don’t have the 2011 numbers at my fingertips, but let’s maybe just talk about 2012. So in 2012 for this one particular transaction we had almost $200 million of portfolio out. Right. In 2013, the portfolio winning was above $44 million and in addition we wrote some other quarter shares in 2013 that is also packed in these results. I don’t know if that gets to your question, but that’s about the most I can give you in terms of those transactions. Michael S. Nannizzi – Goldman Sachs & Co.: Okay. And then, in terms of thinking about this contract earnings through for the rest of the year, I assume that’s when the majority of the contracts are through. First of all, is that right? And second of all, how much is earned though already in the second quarter?

No, it earns ratably. I mean there’s no unusual earnings pattern to. It’s just that homeowner business that (inaudible) had over a 12-month period of time.

Starting June 1.

Yes. Yeah. Michael S. Nannizzi – Goldman Sachs & Co.: As always starting June 1.

You wouldn’t get too much earning in this quarter. Michael S. Nannizzi – Goldman Sachs & Co.: Got it. Okay. And then, just one question maybe for Craig. Looks like the revolver, you took some out on the revolver in the quarter. Was that just kind of timing or is that something that you’ll expect to do just to take advantage of still lower interest rates on the borrowing side?

That’s correct, Mike. It is just really timing, more so than anything else and you’re right. It is very low interest rates. Michael S. Nannizzi – Goldman Sachs & Co.: Got it. And then, lastly I guess just thinking about capital deployment looking forward, does this program as large (inaudible) does this is in any way change your outlook in terms of how much you think or would like to deploy via buybacks relative to the how much you are earning over the foreseeable future or should we just consider that to be as it was?

No, I think our outlook on buybacks is very much the same. It’s going to be clearly part of the mix. It’s been a big part of the mix for six months. I think it will continue to be a big part of the mix going forward. We told you despite not just this contract, but everything that was written in Florida we really didn’t increase the PML at the one in 100 and above. So we didn’t want that volatility, which frankly allows us to be more aggressive with regard to buyback. So it doesn’t really change out outlook on that item. Michael S. Nannizzi – Goldman Sachs & Co.: Great. And then just last one if I may. Can you just talk about the non-standard auto book? I’m just trying to understand like when we’re looking ahead in that insurance segment, how big is that, how big should that get into, just what sort of run rate are you thinking about in term or should we be thinking about in terms of profitability there? Thanks.

Well, our non-standard auto book was running approximately $30 million a year for us and this year our expectation is that we would be somewhere around $30 million with the expansion hopes into the next year and beyond. That book of business we feel will have at least 10 points of margin in it. So that’s kind of where we expect it to run. Michael S. Nannizzi – Goldman Sachs & Co.: Great. Thank you very much.

We’ll take our next question from Greg Locraft with Morgan Stanley. Gregory Locraft – Morgan Stanley: Hi, good morning. Just wanted to talk a bit about the reserve triangles. This is the quarter in which you guys have released them. And it seems that there is a cushion that’s growing, and I guess that’s our opinion, based on what we can see. And the numbers are excellent that you are reporting, no doubt there and you’re doing it without reserve releases. So can you comment a bit on how you feel in the reserves, maybe if you can cut across the different lines where you may feel relatively better or worse? And then, can you perhaps contrast it with the industry, which continues to release a lot, but their position seem to be slipping year-over-year.

Greg, this is Craig. So as you’ve noticed, the decision that we’ve taken over time is to put up a prudent reserve position and over time we’ve developed some very strong process that we have in place to develop that on a conservative basis going forward. So as you see those growing and you’re seeing that across pretty much all lines in those triangles that we put out, but specifically on the reinsurance side we’re seeing some very favorable development in our internal metrics that we look at, for example, actual versus expected that we look out on a regular basis. But again, the multi-pronged approach that we’ve taken in the past over the last three years to setup this reserve position keeps supporting us in a better position over time.

And Greg, to comment on any specific line or class of business at this point in time in the absence of a full reserve review is a little bit premature for us to get to in the second quarter. So what’s important for us is the overall reserve position. There are going to be ups and downs in any particular class of business, I mean, we monitor close to 200 different reserve buckets and those move up and down over time. But it’s fair to say that as the industry you always get a little more conservative with respect to the longer tail line. So, the longer tail lines require a little bit more conservative reserve position, but that doesn’t mean – so therefore, I guess, by definition, you can say that it there’s any particular classes of the business that you’d be less comfortable with it would be the longer tails, but we still feel that are causally comp and all those classes are well reserved.

But I will add that, as you know, the results that we’ve put out, and we are proud of these results, do not include any releases if you will. They’re pure results based on this year and we’re very happy that we have such good results that don’t require the benefit of these releases. As far as the industry and how much more there’s left and what’s to come, we really won’t comment on that. I don’t think that we know any better than anybody else about that. We’ll just talk about ourselves. Gregory Locraft – Morgan Stanley: Okay, great. Yes, the numbers are excellent. So congrats on another great quarter. Thanks.

Thank you.

We will go next to Vinay Misquith with Evercore Partners. Vinay Misquith – Evercore Partners: Hi, good afternoon. The first question is on the property cat business. I believe you have about $1 billion of premiums in there. And we’ve heard various things about pricing, US versus the non-US, curious what portion of that business of yours is U.S. versus non-U.S. and how do you see the pricing outlook of that for the future?

Well, it is about a $1 billion – it’s probably grown from $1 billion in terms of the pure Cat premiums that we have on a worldwide basis. And I would tell you that the portfolio that we have as of the present after the July 1 renewals is probably the best portfolio we’ve ever had in terms of total expected margin dollars going forward. And the ROE on the business that we’ve written, we think is excellent. Yes, we’ve seen more competition for the business recently, some of that in Florida and you’ve heard how we responded to some of that, and we did see somewhere beyond Florida in July. Clearly we have seen more capacity and in the market wise and I not – I don’t necessarily expect that to go away if there is no big losses. But really as I continue to look forward, I expect us to continue to do well. We’ve dealt with competitions for many years. We’ll continue to deal with that for many years to go. I think we have a lot of advantages in terms of our client relationships, the flexibility that we have in terms of the products that we can put together to meet clients needs, the ratings, the ability to move into pro rata or other options if that makes more sense. So yes, there’s been recently more competition and probably that will stay but we’re still putting together deals that we’re very pleased with.

Currently our U.S. catastrophe book represents approximately 50% of the overall worldwide Cat. So not that can change as Joe was describing depending on where the opportunities are, plus or minus 5 points, 10 points, but as we think of it, it’s about approximately half. Vinay Misquith – Evercore Partners: Okay, that's helpful. And just thinking about this philosophically, if pricing does come down next year, would we see a pullback from you guys or do you think you can manage to still maintain your market share?

Well, yes, to be determinative, the pricing change dramatically and we were less enthusiastic about, less than I would expect that we would do less. And probably buy a whole lot of stock more back. And of course we would look for other opportunities to deploy our capital in other lines of business and other business dealing, whether it’s acquisitions or something else. So sure as the world changes, we’ll change, that’s always the way it’s been, that’s always the way it will be. Vinay Misquith – Evercore Partners: Sure, that's helpful. And then on the primary insurance, are we still on track for a low 90%’s combined ratio?

Right now we’re in the mid-90%’s, and trending towards that number, yes. Vinay Misquith – Evercore Partners: Fine, and then just the last question is on Cats. Your Cats in the Canadian flood seem to be very low, just about $20 million and I know you guys are big player there. Just wanted to understand your exposure there and how you had such low Cats there? Thanks.

In Canada? Vinay Misquith – Evercore Partners: Yes, correct.

We are a significant player in the Canadian market. We tend to figure ourselves as probably the second or third largest reinsurer there. A bigger proportion of our portfolio relative to maybe some of the others is perhaps more casualty. And also we have not been as strong in that region as some others. So we’ve not put down a lot of capacity in those regions where heavily prone – easily and more readily exposed to flood.

The property pro rata in Canada and the actual lead cut back in the last couple of years as we didn’t believe that business was rated as healthy as it should be. Vinay Misquith – Evercore Partners: Okay that's very helpful. Thank you.

We will take our final question from Brian Meredith with UBS. Brian Meredith – UBS: Yeah, good morning. A couple of questions here for you. The first one, can you tell us what the actual UEP transfer that came in on that Florida deal was?

The portfolio end was $44 million. Brian Meredith – UBS: $44 million? Great, thanks. And then just another quick question, on that deal how important was securing the ILW for you doing the deal and how much margin enhancement was that?

That was not a factor in that transaction.

The ILW deal wasn’t just us managing the overall portfolio. We liked all the deals that we did, very pleased to do them and increase our margin. But when we got done we had a PML at 1-in-100 and above that was over, what it was a year ago. And we decided we didn’t want that. And so we went to the ILW market, procured a deal that was very, very happy with at, took it back down. Brian Meredith – UBS: Great. And then can you give us a quick update on what you are seeing as far as demand for casualty reinsurance out there? Is it still kind of declining? What is kind of the appetite out there for casualty reinsurance? And then also on that, have you seen any kind of change in terms and conditions, more multiyear deals, coverage’s, anything else going on?

Well, demand on the casualty side is it is kind of what you’re implying in your question has been relatively weak. But that’s been certainly something we have seen for the last couple of years. Nevertheless, we actually have been writing some new accounts, less so on the larger national type of clients where in that particular case the trend would be for less purchases as they increase retentions and as pricing is going up maybe a bigger better appetite on their end. But we have written some new business in the casualty space which is growing our portfolio, so it’s real difficult to say what’s happening with the market overall, but I don’t think there is any significant change from the year-ago in terms of buyers appetite. And again, we’re able to put some new business on the books, which were part of our franchises about building out the casualty operations well particularly into a market that where we are seeing some rate increase. In terms of other types of transactions we are only seeing new and different types of transactions, different structures all the time, whether it’s on the property or the casualty side and it’s I made some slight reference – remarks about structured solutions and we’re beginning to see opportunity there. And perhaps there is a slight pick up in where buyers are looking for in that space and we’re participating in that. Brian Meredith – UBS: Great. Thank you.

This does conclude today’s question-and-answer session. I’d like to turn the conference back over to management for any closing or additional remarks.

I’d just like to thank everybody for joining us today.