In the third quarter, Everest produced operating earnings of $3.39 per share, despite experiencing $280 million of cat losses.
Our underlying performance continue to be excellent, as our attritional underwriting gain of $250 million nearly offset the cat loss.
On a year-to-date basis, our underwriting profit was $365 million and $700 million, excluding cats.
When combined with another solid quarter of investment income the year-to-date operating income is at $742 million.
By year-end, we will be closing in on $3 billion of annual gross premium, and as you have seen, the profit picture there remains solid.
After 8 weeks on the job, I've had the opportunity to start getting deeper into our businesses and to meet our employees, major customers and our key distribution partners in the US and around the world.
We are a top 10 global reinsurer with a 47-year history.
We also have an entrepreneurial and growing primary specialty insurance business with a 'client first' culture of providing solutions with more than 150 products and services.
For the third quarter of 2019, Everest reported net income of $104 million.
This compares to net income of $198 million for the third quarter of 2018.
On a year-to-date basis, Everest had net income of $792 million compared to net income of $474 million for the first nine months of 2018.
The 2019 result represents an annualized net income return on equity of 13%.
In the third quarter of 2019, the group incurred $280 million of net pre-tax catastrophe losses compared to $230 million in the third quarter of 2018, the catastrophe losses related to Hurricane Dorian at $160 million and Typhoon Faxai at $120 million.
On a year-to-date basis, the results reflected net pre-tax estimated catastrophe losses of $335 million in 2019 compared to $795 million in 2018.
Average reported $52 million of favorable prior year reserve development in the quarter.
This primarily related to a one-time commutation of a multi-year contract that reduced prior year carried loss reserves by $44 million, which was offset by $44 million of commission paid.
Another $4 million of the favorable development was identified through reserve studies completed in the third quarter of 2019.
Excluding the catastrophe events and favorable prior year development, the underlying book continues to perform well with an overall current year attritional combined ratio of 87.7% through the first nine months compared to 87% for the full year of 2018.
Pre-tax investment income was $181 million for the quarter and $501 million year-to-date on our $20 billion investment portfolio.
Investment income was up $60 million or 14% from one year ago.
This result is primarily driven by the growth in invested assets coming from our record cash flow, which was $1.5 billion during the first nine months.
Before moving into taxes, I'd like to point out that we included for the first time on Page 15 in the financial supplement a split of our net investment income between the Insurance segment and total Reinsurance.
This shows an indication of the contribution provided by each segment to pre-tax operating income and reflects $361 million allocated to reinsurance and $140 million of net investment income allocated to the insurance segment.
The year-to-date effective tax rate of 9% is an annualized speculation that includes planned catastrophe losses for the remainder of the year.
Higher-than-expected catastrophe losses would cause the tax rate to trend lower than the current 9%.
Shareholders' equity for the Group ended the quarter at $9 billion, up over $1 billion or 14% compared to year-end 2018.
The increase in shareholders' equity is primarily attributable to $792 million of net income and the recovery in the fair value of the investment portfolio.
At the same time, the supply of reinsurance capital is relatively flat or down considering trapped capital, given that over 50% of the retro capacity is supported by unrated alternative capital.
Year-to-date reinsurance premium is $4.7 billion, up 3% from last year.
Year-to-date reinsurance underwriting profits are $310 million, impacted this quarter by the Dorian and Faxai losses mentioned by Craig.
Year-to-date reinsurance attritional losses are 57.5% compared to 57% for the full year 2018, due predominantly to shift in mix, increased casualty business as well as overall more proportional business to capture the primary rate movements.
As mentioned last quarter, our global fac book is well over $400 million gross written premium in force, and we see continued growth opportunities there, given favorable market conditions.
Currently, our annualized mortgage book is about $200 million of gross written premium, including many multi-year deals with future premium that has not yet been recognized.
Our gross written premium growth of 29% quarter-over-quarter has once again balanced across all major business segments.
Our growth accelerated this quarter beyond our year-to-date trend line of plus 21%, in part reflecting the changing nature of the market, which is impacting nearly all major product lines.
This is particularly the case for business originated within the excess and surplus lines market, which accounted for over 1/3 of our premium written in the quarter.
The segments I just referenced to make up approximately 75% of our business growth in the quarter and represent the balanced portfolio we seek to build.
The combined ratio for the quarter is 96.4%, 3.2 points better than the third quarter of 2018, and year-to-date is 96% or 2.1 points better year-over-year.
In the quarter, we experienced pure rate increases, which excludes the impact of exposure, of 7.6%, excluding workers' compensation, and a positive 6.7% year-to-date.
Year-to-date, international is showing a 7% improvement.
Most importantly, this growth in top line, coupled with improved business metrics, has resulted in Everest Insurance continuing to post an underwriting profit, over two times greater for the year-to-date period and now standing 10 of the past 11 quarters.
As Craig mentioned in the new investment disclosure, the pre-tax net investment income per insurance is $140 million year-to-date, plus our pre-tax operating income year-to-date now stands at $195 million.
The over 90,000 new business submissions we have received year-to-date in our direct broker operations speak to our relevance and positioning in this market.

Summary:
In the third quarter, Everest produced operating earnings of $3.39 per share, despite experiencing $280 million of cat losses.
Shareholders' equity for the Group ended the quarter at $9 billion, up over $1 billion or 14% compared to year-end 2018.