Good day, everyone, and welcome to the Everest Re Group Limited Fourth Quarter 2012 Earnings Call. Today’s conference is being recorded. At this time for opening remarks and introductions, I’d like to turn the conference over to Beth Farrell. Please go ahead.

Thanks, Tim. Good morning and welcome to Everest Re Group’s fourth quarter and full year 2012 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 am pleased to report that in 2012 Everest increased shareholder value by 18% and had comprehensive income of $1 billion. These results were achieved despite losses from Sandy and the crop insurance industry having one of its worst years ever. Achieving these results despite these losses demonstrates the strength of our franchise. We were pleased with our January 1 renewals. On our reinsurance business, rates, terms and conditions were relatively the same as in 2012. We did add some new business. Accordingly, the expected margins remained quite good for 2013 and up from 2012. Dom will provide more detail on this momentarily. For our insurance operations, we continue to see double-digit increases in workers’ compensation and general liability and single-digit increases in D&O and property. We believe the workers’ comp business is positioned for profit and that continued rate increases will provide for growth. For our crop book, we are expecting a much better year. Further, our net crop premiums will increase meaningfully as we no longer purchase quota share reinsurance. Again, Dom will provide more detail. Our investments performed very well in 2012 and are off to a good start in 2013. Craig will provide more color on this. We bought back $40 million worth of stock in the fourth quarter and $38 million in the first quarter of 2013. We wanted to buy a great deal more, but Sandy kept us out of the market for much of the quarter. It is our plan to buy when our window reopens. We have achieved a 13% increase in shareholder value compounded over an 18-year period. In 2012, we did better than our historic average coming in at 18%. Given these returns, our current quality portfolio and solid balance sheet, our stock being below book makes no sense to us, meaning we are most happy to buy more and fully expect the price to book to correct. In summary, I’m bullish on 2013. Our franchise has never been stronger. Dom?

Thanks, Joe and good morning. The financial details regarding the quarter will be covered by Craig, but it is worth highlighting the areas that address how we have positioned the portfolio and what that means for current and future performance. The attritional combined ratio continues to improve in both the reinsurance segments and the insurance segments. For reinsurance, this primarily reflects the increasing proportion of excessive loss business versus pro rata, in particular for catastrophe exposure business, as well as increasing rates in 2012. The calendar year combined ratio for the reinsurance book, despite Superstorm Sandy and the other catastrophe losses earlier in the year, came in at 90.1%. This result reflects a 102.1% combined ratio in the U.S. book due to the losses incurred for Sandy, offset by a 75.4% and a 91.5% combined ratio in our international and Bermuda portfolios respectively. This overall outcome reflects our balanced and geographically diversified book of business. During 2012, there was a continued emphasis on excess-of-loss business, particularly in our non-peak zones. This allowed us to diversify or spread our aggregate exposure more broadly without any material impact on our average annual loss. Along with rate increases, this strategy helped grow our catastrophe premium by $150 million to approximately $1 billion. At this level of premium, we’re well positioned to absorb any infrequent, but significant industry event, such as Superstorm Sandy. This strategy has also been instrumental in expanding our customer base, thereby improving diversification both by client and by line of business. Broadening of the customer base has supported some growth in the treaty and facultative casualty lines, as rates are beginning to firm. Overall, we expect margins to improve in these areas, while rates in the treaty property area begin to moderate. Nevertheless, margins there are still favorable as evidenced…

Thank you, Dom and good morning everyone. We’re pleased to report that Everest had a very strong year with after-tax operating income of $715.2 million or $13.62 per diluted common share. This represents an operating return on equity of 12.2%. I won’t be comparing these results to last year given the record catastrophes experienced in 2011. Operating income for the fourth quarter was $41.7 million or $0.80 per diluted share. Net income for the fourth quarter was $58.8 million or $1.13 per diluted share. Net income includes realized capital gains. Net income for the year was $829 million or $15.79 per share. These results reflect the continued improvement in the overall current year attritional combined ratio which has decline a full three points from 88.0% to 85.0%. This measure excludes the impact of catastrophes, reinstatement premiums and prior period loss development. The total reinsurance attritional combined ratio was 80.9% compared to 83.5% in the prior year. The insurance segment attritional combined ratio was 100.9% compared to 105.8% in the prior year. However, eliminating the effects of the primary crop book, this ratio would have been 97.2% compared to 105.3% in the prior year. These improvements, both on the reinsurance book and the insurance book should continue as rate increases earn-in over time. Also providing better margins is the shift in our reinsurance portfolio from quota share to excess-of-loss. Gross written premiums of $1.15 billion for the quarter were up 4% compared to the fourth quarter of 2011. This increase was primarily related to the insurance segment. Gross written premiums for the year were $4.3 billion. This represents an increase of 2% after adjusting for reinstatement premiums and the effects of foreign currency movement. Earned premiums of $1.12 billion for the quarter were up 9% compared to the same quarter last…

Tim, we’re ready to take questions.

(Operator Instructions) And we’ll take our first question from Josh Shanker with Deutsche Bank. Josh Shanker – Deutsche Bank: Good morning. I realized your holding us a little bit in suspense about a partnership coming up, but can you explain a little bit about how partnerships overall are going to be able to transform the business and how transformational it can be?

Yeah, relates, Josh this is Dom, what I was referencing, I can’t get into the details because we have not concluded on the transaction, but essentially it’s going to leave us with the ability to take our non-standard auto book which is currently running at about $30 million of premium and it’s anticipated that that could grow to as much as $80 million in to 2013. This will give us much better scale in that business, which it is a business that needs scale. And as a consequence not only the ability to improve our underwriting account meaning by the loss ratio, but also gives us an expense advantage. So that – without getting into the details of the structure and the who, that’s the intended outcome. Josh Shanker – Deutsche Bank: Understood. And you may have seen one of your former peers was railing against sidecars as potentially it raises a issue that will ultimately lower the profits for the industry. Where do you think the industry is five years from now and as you participate to some extent in that, what’s the right business mix over the long-term?

Well, I’ll start with that Josh. Clearly, we see more alternate capacity coming into the marketplace; some of it is sidecar, some of its pension fund and other ways. And we intend to participate in that market and frankly we intend to make some fees on that market. In the beginning, the fee part of our book is going to be quite small compared to the risk taking part that we’re currently on. But at the end of the day, given our ratings and our offices around the world, our people, the fact that we know clients for many, many years, we see a lot more business especially on the cat side than we can accommodate or want to accommodate given the fact that we want to keep PMLs to a certain degree. So we have a tremendous opportunity to write a lot more business share it with some partners and make fees in the process. Yes, that kind of brings more capacity into the marketplace especially as others do it as well. And it may make more competition, although there’s always competition. And we still think all the money that’s coming in and any of the money that we bring in will only want to come in from profitable business, and so we think it will be a good model. In terms of ultimately what – how much will be fee and how much will be risk taking, that remains to be seen but clearly for now it’s going to be mostly – most of our earning is going to be on the risk-taking side. Josh Shanker – Deutsche Bank: And then given that you guys have extra capacity along those lines (inaudible) but you certainly could write more business if it became available. Are you giving up profitability in order to make a footprint in the alternative capacity market?

No, we’re not looking to take away from anything that we would want to keep for ourselves. That really is the design. Now we’ll try to put ourselves in the same position with our new partners, so they feel as if it’s really a equal trading. But we are not looking to give away $1 worth of business that we would normally write for ourselves. Josh Shanker – Deutsche Bank: Is there any risk to that? I mean that’s always been my concern that, of course you don’t want to give any way that, there’s a risk of that happening, am I mistaken about that?

I don’t see that Josh. We really kind of measure our appetite quite keenly nowadays and would continue to do so. And I think again given the opportunities, we’ll be able to fill our plate with everything that we want. And then have more that we can share with others on a fee basis. Josh Shanker – Deutsche Bank: Well, thank you. I appreciate the answers.

And we’ll take our next question from Amit Kumar with Macquarie. Amit Kumar – Macquarie: Thanks and good morning. Maybe just going back to the discussion on capital, obviously you have all these new opportunities. How do you think about capital management for 2013? The reason why I’m asking is that relatively it has been lower than some of the other companies. What sort of math do you use? Is it buybacks plus dividends would equal net income or is there something beyond in terms of how you look at 2013 in terms of capital management?

Well, I think we start with what are the opportunities that we see and we certainly see plenty of that including some new opportunities on the business side. As Dom noted, we certainly want to be prepared for future opportunities that arise if the world changes and it has a habit of doing that. But at the same time, we look at our stock, where it’s trading, the current portfolio, the people, the future. And we feel very good about buying back a whole lot more stock. Now, we were kind of prevented from doing that in 2012. We took ourselves out of the market for hurricane season. We’re keen to get back into the market in the fourth quarter and then Sandy happened. And we did not want to get back into the market until we put out an estimate on Sandy, which took us late into December. So, we bought some after that and a bit early January. But as I noted, we’re keen as soon as the open window comes to get back into the market and buy some more. So, we are going to foster earnings and ROE in multiple ways, some of it in business, some of it in new business, some of it stock buyback. Amit Kumar – Macquarie: So, it seems that just based on the ranking, it seems to be of lower relative importance. Just based on how much you’ve grown excess capital in 2012, it seems that you’re saying that let’s look at the opportunities and maybe further down the list, you’re looking at the stocks multiple, because clearly, there’s value which can be created in terms of a buyback right now, but it just seems that it’s somewhat down the list, is that a fair assertion?

No, I wouldn’t put it that way. We bought back about 25% of our stock in recent years. We bought back close to $300 million in 2012 and would have bought back a bunch more if it wasn’t for Sandy. So, no, I think it’s still important in the sense that we think it’s a great opportunity for us to buy. And we don’t think it’s going to last forever quite honestly, so we’re keen to do a fair amount now. But there are opportunities out there; both in the existing business and new business, and again what else may come about. So, it’s always a bit of a juggling act, but we’re happy that we’ve both levers to press to increase the ROE for next year. And I would not say that it’s of less importance. Amit Kumar – Macquarie: I guess, my offset to that point would be why even look at non-standard auto opportunities based on the history, just based on the stock multiple right now?

Well, that’s a business we’re already in. We have a small company that operates out of Georgia. We’re looking to be able to add to that and add to the margins by the construction that Dom took you through. And frankly it’s just an add-on and that requires very little capital quite honestly and we believe it will increase profits. We like the proposed business plan, but in the scheme of capital usage, it’s really quite small.

And it meets our return objectives in terms of how we think it can perform. Amit Kumar – Macquarie: And what is the return objective?

12% to 13%, 14% return on capital. Amit Kumar – Macquarie: Okay. The only other question I have is a lot of the other companies have talked about – they’ve given sort of a flavor in terms of 1/1 renewals, and you sort of have broadly alluded to it. How much do you expect your prop cat book to grow for 2013? I think previously we’ve talked about maybe $1 billion plus number, generally how do you think about that for 2013?

Well, as I mentioned in my opening comments, we’ve already at 1/1 increased our property premium by $150 million. So, that was essentially 15% growth if you will. Amit Kumar – Macquarie: Okay. I’m sorry I was on another call.

The annual number – shame on you. Amit Kumar – Macquarie: I guess related to that, did you discuss your PMLs? Did I miss that too in terms of how do you expect the risk profile to shift with that growth? I think previously the number was 11%ish.

Well, you didn’t miss that because we didn’t discuss our PMLs. And they will go up slightly, but as a percentage of capital they’re not expected to move at all. Amit Kumar – Macquarie: Got it. Okay, that’s...

But nominally they will increase of course. Amit Kumar – Macquarie: Nominal, okay. That’s all I have for now. Thanks so much.

Thank you.

And we’ll take our next question from Michael Nannizzi with Goldman Sachs. Mike Nannizzi – Goldman Sachs: Thanks. Just want to understand, Dom, maybe in the insurance book, can you tell us like what percentage of the business is crop, maybe this year and now with all the noise out the way in 2013? And how big is that book as a percentage of the total?

Well, for 2012, of the top of my head, I’d say around 20%. Mike Nannizzi – Goldman Sachs: Okay.

And going into next year, we would expect that to increase, because of not only growth objectives and the hiring of some underwriters and marketing teams, and the elimination of the quota share, that’s likely to grow by $100 million, at least. Mike Nannizzi – Goldman Sachs: Okay.

Be about 30% to the overall book. Yeah.

Right. Mike Nannizzi – Goldman Sachs: Got it. Okay. And then, do you expect the rest of the – like the non-crop insurance book to grow as well, or do you expect that to kind of – because it sounded like you’ve got a lot of puts and takes, lot of moving parts, some new initiatives, some things kind of going away, I’m guessing the program business is kind of done in terms of the net change?

Yeah, the runoff for the program business is not going to have any major impact. But yeah, we will have growth in our excess casualty book, the initiatives that we started, environmental book of business that we have announced. The nonstandard auto was already mentioned. We’ve started up a new specialty unit that will grow – will have a modest amount of new premium maybe $20 million in 2012, but that could rapidly grow from there in the years beyond and as well as, as I mentioned, expansion of the Canadian platform. So, we’ve got a number of oars in the water all over the place in for the insurance space. And as the California DIC will be growing our professional liability book as well, and then of course the double-digit rate increases for workers comp. So, it’s – we’re quite enthusiastic about that space right now. Mike Nannizzi – Goldman Sachs: And you think, I mean if your double-digit rate on the 80% – 70% or 80% of the book outside the crop, crop gets back to, I don’t know, high 80% or maybe 90%. I mean is low 90s% feasible for 2013 in the insurance business, is that possible?

With the good crop year, I suppose that’s possible, sure.

Yeah, I would say yes with the good crop year. Comp continues to trend very nicely. We continue to get very sizeable rate increases and that continued into January and Dom touched on all the other areas which we really feel quite good about as well. So the answer is yes. Mike Nannizzi – Goldman Sachs: Great. And then last question, not to beat on the buyback, I mean I guess I mean in my math, I get about $100 million of buybacks in the beginning of the year next year, book value goes up a buckish. I mean what math when you think about deployment outside of buybacks gets you to that sort of book value growth? I mean if you assume that you’re writing business against $100 million for example like, what is the kind of tradeoff as you see it internally? Thanks.

Well, you get into where you can invest it and where you can use it against the business. And we can get into what’s the timing as to when you want to use it, if you don’t buy back on Monday, you can always buy back on Tuesday so it’s not like the opportunity necessarily goes away. But I’ll say that the levels that we’ve been trading at really are pushing us to do more sooner as opposed to later. But frankly we don’t believe it’ll stay at these levels. But having bought back 25% is a good chunk to begin with. And again the fact that we bought back $300 million, we’re looking to buyback more and kind of telling as soon as we can we’re going to jump into the market, tells you that that’s certainly part of what we plan to do as well. Mike Nannizzi – Goldman Sachs: Great. Thank you.

And we’ll take our next question from Vinay Misquith with Evercore Partners. Vinay Misquith – Evercore Partners: Hi. First just a numbers question within the U.S. primary insurance operation, the commission expense ratio was really low this quarter. I was just wondering if there was some one-time items in there?

Primarily related to crops, in other words contingent commissions that would have had to be paid out given that a poor crop year took place were taken down in the quarter. Vinay Misquith – Evercore Partners: Sure, so we should just move it backup to the normal about 17.5% for the future, correct? Okay.

That’s correct. Vinay Misquith – Evercore Partners: Okay, that’s helpful. Secondly, on the margins, as you look at the various opportunities, do you expect your accident – your combined ratio to improve further from these levels? I mean they’re certainly very good right now.

Yes we do. Vinay Misquith – Evercore Partners: Okay. And that’s driven by business mix change or is that pure pricing?

Well, some of the pricing that I referenced particularly in the insurance space and in cat, general casualty rate increases as it affects our treaty books. And then of course continued push towards write more excess-of-loss business spread our cat aggregate laterally if you will. And that will have – should have a furthering impact – positive impact on the attritional loss ratio. Vinay Misquith – Evercore Partners: Okay. That’s helpful. And the one final thing if I may, just looking in terms of cats, could you say that this year is – last year, sorry, was a normal year in terms of cats or do you think it was higher than normal year in term of cats and ag losses?

That number was approximately what we project as what we call our average annual loss. And that does... Vinay Misquith – Evercore Partners: Right.

I don’t know that there is an average angle. But over the long-term that would be considered a theoretical average year. Vinay Misquith – Evercore Partners: Okay, that’s fair. Thank you very much.

And we’ll take our next question from Brian Meredith with UBS. Brian Meredith – UBS: Yeah, good morning everybody. Couple of questions here, first the property growth that you’re seeing, where is that coming from? Is it cat business, is it international, U.S.?

The cat business, it’s.... Brian Meredith – UBS: Is it property cat, when you refer to property $150 million?

Yes, property – U.S. and Europe, that’s predominantly. Brian Meredith – UBS: Okay. Great. And then I’m just curious what your thoughts are on the opportunities in Florida as we approach the midyear renewals with the depopulation at Citizens?

Well, we think this will be some very good opportunities there. Certainly, the market at the insurance level continues to get healthier with rate increases, so it will be a bigger pie. There’s still an awful lot of companies down there that are very much in need of reinsurance. You saw what Citizens did last year. So I think it’s a big pie, it’s an explosive pie and the people are somewhat cautious as to how they fill up. It tends to be everyone’s number one zone in terms of PML. It is for us. So I think it’ll continue to be some very good opportunities down there for companies like ourselves in June. Brian Meredith – UBS: Joe, is that a place that you’re more likely to use a sidecar you think at this point?

Yeah, it’s not a sidecar that we’re putting together and that’s in the sense that sidecars tend to be operations that are put together for one and two years and then they’re kind of designed to go away. We’re putting something together that would be in place permanently. But Florida is exactly the kind of opportunity where we’re going to have a PML that we don’t want to exceed and we’re going to have a ton of business beyond that that we could write if we wanted to. Brian Meredith – UBS: Great. And then last quick questions here. Is Heartland much of a player in the winter wheat area? I know they’ve been having some issues with wheat crop this year?

It’s in that space. It’s probably about 10% of the book. Soybean and corn is bigger, but it’s in that space and so yes, that is started. And it’s early days, but looks fine so far. Brian Meredith – UBS: Great. Thank you very much.

Thank you, Brian.

And we’ll take our final question from Greg Locraft with Morgan Stanley. Greg Locraft – Morgan Stanley: Hi, thanks. Just wanted to open up the reserve side of the equation. It’s been in the past, a concern of some in the investment community. It seems like you exit 2012, it’s a third year of very, very low reserve moving either way. How are you feeling on this line? Our work suggests you have considerable excess here. Many in the industry have been releasing, I guess on the good side that isn’t a headwind going forward because you don’t need to pull from reserves to hit your target ROEs. On the other hand, you haven’t been releasing, it seems like you’ve been holding back. So, how do you feel on reserves as you enter 2013 and beyond?

Greg, this is Craig. I don’t know. We’ve completed our annual loss reserve studies and we’re comfortable with our overall position that we remain adequate. You know we posted our global cost development triangles for the past couple of years, and they also appear adequate. I’m comfortable with this position and I’m also comfortable with respect to the practices and the procedures that we’ve put into place to come up with such a good reserve position. I think this company produces good results without those releases in place. I think one of the things that I like also is the fact that we’re – we take our time to react to favorable development. Some of these redundancies that you’ve seen have developed over time, but we don’t want to react until that position becomes more mature. So, we continue to hold the more recent years and we expect to do the same going forward as well. Greg Locraft – Morgan Stanley: Okay. So, actually the peers that are releasing, it’s not that you’re any different; it’s just that you’re holding back. Philosophically you’re holding back more than they are?

We can’t speak, we can’t speak to.

We’re not going to get into what others do. We don’t know what they do, and we’re not here to comment on that. Greg Locraft – Morgan Stanley: Okay. And then just last one this is – has the reserving practices of the corporation changed at all in the last few years? And again, it was never a big issue; it just seemed to break against shareholders more frequently several years ago, than it has happened in the last several years. So, I’m just wondering if there’s a shift at all?

Well, Greg, that’s a good question. I think the reserve practices did change a few years back to create this position that we’re in today. I think the practices that we’ve put into place by meeting on a quarterly basis, and setting up these estimates on a quarterly basis, it’s difficult to estimate what these numbers should be to begin with. But the practice that we put into place is pretty conservative. We look at prior year losses, look at the prior loss review, and then we compare and put loss trend on top of that. And then we also take note of any rate increases or decreases in the marketplace at the same time. But what that does is gives us appropriate data to look and set of our reserve position at given point in time. But that same process has been taking place for the last three years.

It’s a kind way of saying, Greg that is my fault.

Let me chime in. I was about to say we had a great CFO by the name of Dom Addesso who started this process, did an excellent job in making out process more robust. Greg Locraft – Morgan Stanley: Okay. Great. And I do just want to clarify. Your forward view on ROE and everything that includes no reserve moving either way, right?

Yes, I think that’s correct. We do not put that into any thoughts that we give you with regard to the targets we’re shooting for. Greg Locraft – Morgan Stanley: Okay. Awesome. Okay, good. Thanks and solid year. I appreciate it.

Thank you.

And that concludes our question-and-answer session. I’ll turn it over to our presenters for any closing remarks.

I’d like to thank everybody for participating on the call and talk again next quarter. Thank you.