EG Everest Group Ltd

Net Income of $509 million and Net Operating Income of $630 million

Total Shareholder Return1 of 19.4%

Annualized YTD 17.8% Net Income ROE and 18.7% Net Operating Income ROE

Everest Group, Ltd. (NYSE: EG), a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions, today reported its third quarter 2024 results.

Third Quarter 2024 Highlights

• Total Shareholder Return of 19.4% annualized; Annualized year-to-date 17.8% Net Income ROE and 18.7% Net Operating Income ROE
• Net Income of $509 million; Net Operating Income of $630 million driven by attritional underwriting margin improvement and solid net investment income generation
• $4.4 billion in gross written premium with year-over-year growth of 0.6% for the Group, 1.7% for Reinsurance, and -2.1% for Insurance on a comparable basis; Strong double-digit growth in property and specialty lines across both segments was partially offset by reductions in certain casualty lines
• Combined ratios of 93.1% for the Group, 91.8% for Reinsurance and 97.1% for Insurance
• Attritional combined ratios of 85.8% for the Group, 83.5% for Reinsurance and 92.6% for Insurance
• Pre-tax underwriting income of $272 million for the Group, $245 million for Reinsurance, and $27 million for Insurance
• $279 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums versus $170 million in Q3 2023
• Net investment income improved to $496 million versus $406 million in the prior year third quarter, driven by a larger asset base as well as strong core fixed income investment returns
• Strong operating cashflow for the quarter of $1.7 billion versus $1.4 billion in the third quarter 2023

(1) Denotes annualized figure; represents Total Shareholder Return or "TSR". Annualized TSR is calculated as year to date growth in book value per common share outstanding excluding URA(D) on fixed maturity, available for sale securities plus year-to-date dividends per share.

“Everest delivered another successful quarter with strong operating income driven by solid underwriting results and healthy investment income. These results reflect our underwriting discipline and prudent risk management, which position the Company to generate leading returns despite another above-average catastrophe year for the industry. We are delivering an annualized total shareholder return and operating return on equity of approximately 19%,” said Juan C. Andrade, Everest President and CEO. “As a lead reinsurance market, we grew in attractive lines of business with the highest expected returns. We are leveraging our franchise value in the continuing favorable property market conditions heading into the January 1 renewals. Additionally, we continued to shape our global primary insurance portfolio by growing strong double-digits in more attractive property and specialty lines, while remaining conservative across certain casualty lines in North America. As we approach the final stretch of the year, we remain focused on executing our strategy.”

Summary of Third Quarter 2024 Net Income and Other Items

• Net income of $509 million, equal to $11.80 per diluted share versus third quarter 2023 net income of $678 million, equal to $15.63 per diluted share
• Net operating income of $630 million, equal to $14.62 per diluted share versus third quarter 2023 net operating income of $613 million, equal to $14.14 per diluted share
• GAAP combined ratio of 93.1%, including 7.9 points of catastrophe losses, versus 91.4% in the third quarter 2023, including 5.0 points of catastrophe losses; Everest continues to successfully manage volatility against the backdrop of another year of above-average industry catastrophes

Hurricane Milton

• Pre-tax net catastrophe loss estimated to be in the range of $300 to $400 million for the fourth quarter 2024, net of estimated recoveries and reinstatement premiums
• Everest's loss estimate is based on an insured industry loss range of $25 to $35 billion

The following table summarizes the Company’s Net Income and related financial metrics.

Net income and operating income

Q3

 

Year to Date

 

Q3

 

Year to Date

All values in USD millions except for per share amounts and percentages

2024

 

2024

 

2023

 

2023

Everest Group

 

 

 

 

 

 

 

Net income (loss)

509

 

1,966

 

678

 

1,713

Net operating income (loss) (2)

630

 

2,070

 

613

 

1,684

 

 

 

 

 

 

 

 

Net income (loss) per diluted common share

11.80

 

45.40

 

15.63

 

41.49

Net operating income (loss) per diluted common share (2)

14.62

 

47.79

 

14.14

 

40.77

 

 

 

 

 

 

 

 

Net income (loss) return on average equity (annualized)

13.3%

 

17.8%

 

21.2%

 

19.7%

After-tax net operating income (loss) return on average equity (annualized) (2)

16.4%

 

18.7%

 

19.2%

 

19.3%

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

(2) Denotes non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

Shareholders' Equity and Book Value per Share

Q3

 

Year to Date

 

Q3

 

Year to Date

All values in USD millions except for per share amounts and percentages

2024

 

2024

 

2023

 

2023

Beginning shareholders' equity

14,182

 

13,202

 

10,902

 

8,441

Net income (loss)

509

 

1,966

 

678

 

1,713

Change - URA(D) of fixed maturity, available for sale securities

716

 

503

 

(242)

 

(159)

Dividends to shareholders

(86)

 

(249)

 

(76)

 

(212)

Purchase of treasury shares

(100)

 

(200)

 

—

 

—

Public equity offering of shares

—

 

—

 

—

 

1,445

Other

114

 

113

 

(37)

 

(1)

Ending shareholders' equity

15,335

 

15,335

 

11,226

 

11,226

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

43.0

 

 

 

43.4

Book value per common share outstanding

 

 

356.77

 

 

 

258.71

Less: URA(D) of fixed maturity, available for sale securities

 

 

(5.11)

 

 

 

(43.06)

Book value per common share outstanding excluding URA(D) (3)

 

 

361.87

 

 

 

301.76

 

 

 

 

 

 

 

 

Change in BVPS adjusted for dividends

 

 

19.1%

 

 

 

22.4%

Total Shareholder Return ("TSR") - Annualized

 

 

19.4%

 

 

 

24.5%

Common share dividends paid - last 12 months

 

 

7.50

 

 

 

6.70

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

(3) Denotes non-GAAP financial measure. A reconciliation to book value per share, the most comparable GAAP measure, is included in the table above. See "Comments on Non-GAAP Financial Measures" for additional information.

The following information summarizes the Company’s underwriting results, on a consolidated basis and by segment – Reinsurance and Insurance, with selected commentary on results by segment.

Underwriting information - Everest Group

Q3

 

Year to Date

 

Q3

 

Year to Date

 

Year on Year Change

All values in USD millions except for percentages

2024

 

2024

 

2023

 

2023

 

Q3

 

Year to Date

Gross written premium

4,425

 

13,561

 

4,391

 

12,314

 

0.8%

 

10.1%

Net written premium

3,805

 

11,789

 

3,866

 

10,870

 

(1.6)%

 

8.5%

 

 

 

 

 

 

 

 

 

 

 

 

Loss Ratio:

 

 

 

 

 

 

 

 

 

 

 

Current year

58.0%

 

58.5%

 

58.9%

 

59.4%

 

(0.9) pts

 

(0.9) pts

Prior year

—%

 

—%

 

—%

 

—%

 

— pts

 

— pts

Catastrophe

7.9%

 

4.9%

 

5.0%

 

3.2%

 

2.9 pts

 

1.6 pts

Total Loss ratio

66.0%

 

63.3%

 

63.9%

 

62.6%

 

2.0 pts

 

0.7 pts

Commission and brokerage ratio

21.1%

 

21.3%

 

21.4%

 

21.3%

 

(0.3) pts

 

— pts

Other underwriting expenses

6.0%

 

6.2%

 

6.1%

 

6.3%

 

(0.1) pts

 

(0.1) pts

Combined ratio

93.1%

 

90.8%

 

91.4%

 

90.1%

 

1.6 pts

 

0.6 pts

Attritional combined ratio (4)

85.8%

 

86.3%

 

86.6%

 

87.0%

 

(0.8) pts

 

(0.7) pts

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax net catastrophe losses (5)

279

 

499

 

170

 

307

 

 

 

 

Pre-tax net unfavorable (favorable) prior year reserve development

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

 

 

 

 

(4) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war. Attritional combined ratio is a non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

(5) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums.

Reinsurance Segment – Quarterly Highlights

• Gross written premiums grew 1.7% on a comparable basis (constant dollar basis and excluding reinstatement premiums)2, to approximately $3.3 billion. We continue to execute with precision, leveraging our market leading franchise to drive growth in lines with the best expected risk-adjusted returns.
• Growth was led by a 19.2% increase in Property Pro-Rata and 9.3% in Property Catastrophe XOL, partially offset by a 7.2% decrease in Casualty Pro-Rata, a 5.9% decrease in Casualty XOL, and a 28.6% decrease in Financial Lines, when adjusting for reinstatement premiums.
• Attritional loss ratio improved 60 basis points over last year to 56.9%, while the attritional combined ratio improved 140 basis points to 83.5% versus a year ago4.
• Pre-tax catastrophe losses were $239 million net of estimated recoveries and reinstatement premiums, driven primarily by several Atlantic hurricanes and other international weather-related events. Hurricane Helene accounted for $63 million of catastrophe losses, net of estimated recoveries and reinstatement premiums, in the quarter.
• Risk-adjusted returns remain excellent, particularly in property and specialty lines.

Underwriting information - Reinsurance segment

Q3

 

Year to Date

 

Q3

 

Year to Date

 

Year on Year Change

All values in USD millions except for percentages

2024

 

2024

 

2023

 

2023

 

Q3

 

Year to Date

Gross written premium

3,265

 

9,650

 

3,198

 

8,566

 

2.1%

 

12.7%

Net written premium

2,975

 

8,950

 

2,989

 

8,048

 

(0.5)%

 

11.2%

 

 

 

 

 

 

 

 

 

 

 

 

Loss Ratio:

 

 

 

 

 

 

 

 

 

 

 

Current year

56.3%

 

56.7%

 

57.4%

 

57.6%

 

(1.1) pts

 

(0.9) pts

Prior year

—%

 

—%

 

—%

 

—%

 

— pts

 

— pts

Catastrophe

9.1%

 

5.8%

 

6.4%

 

4.2%

 

2.7 pts

 

1.5 pts

Total Loss ratio

65.4%

 

62.5%

 

63.8%

 

61.9%

 

1.6 pts

 

0.6 pts

Commission and brokerage ratio

23.9%

 

24.4%

 

24.8%

 

24.8%

 

(0.9) pts

 

(0.4) pts

Other underwriting expenses

2.5%

 

2.6%

 

2.5%

 

2.6%

 

— pts

 

— pts

Combined ratio

91.8%

 

89.4%

 

91.1%

 

89.2%

 

0.7 pts

 

0.2 pts

Attritional combined ratio (4)

83.5%

 

84.1%

 

84.9%

 

85.1%

 

(1.4) pts

 

(1.0) pts

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax net catastrophe losses (5)

239

 

439

 

160

 

295

 

 

 

 

Pre-tax net prior year reserve development

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

 

 

 

 

(2) Denotes non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

(4) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war. Attritional combined ratio is a non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

(5) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums.

Insurance Segment – Quarterly Highlights

• Gross written premiums decreased to $1.2 billion on a comparable basis (constant dollar basis and excluding reinstatement premiums)2, a 2.1% decrease year-over-year as we continued to strategically shape the portfolio. Our International business continued its strong growth trajectory as it gained further traction.
• Everest Insurance grew by 21.0% in Property/Short Tail and 17.7% in Other Specialty lines. Growth was offset by a decrease of 27.6% in Accident and Health, as we exit the medical stop loss business, and 10.3% in Specialty Casualty, primarily in North America, reflecting our focus on lines of business with better expected margins.
• Pre-tax catastrophe losses were $40 million, net of estimated recoveries and reinstatement premiums, an increase over the prior year quarter, which benefited from benign catastrophe losses.
• Pricing continues to exceed loss trend in the aggregate and there was a meaningful acceleration in pricing across North American long-tail lines (excluding financial lines).

Underwriting information - Insurance segment

Q3

 

Year to Date

 

Q3

 

Year to Date

 

Year on Year Change

All values in USD millions except for percentages

2024

 

2024

 

2023

 

2023

 

Q3

 

Year to Date

Gross written premium

1,160

 

3,911

 

1,193

 

3,748

 

(2.8)%

 

4.3%

Net written premium

830

 

2,839

 

878

 

2,822

 

(5.4)%

 

0.6%

 

 

 

 

 

 

 

 

 

 

 

 

Loss Ratio:

 

 

 

 

 

 

 

 

 

 

 

Current year

63.5%

 

63.7%

 

63.3%

 

64.0%

 

0.2 pts

 

(0.3) pts

Prior year

—%

 

—%

 

—%

 

—%

 

— pts

 

— pts

Catastrophe

4.2%

 

2.1%

 

1.1%

 

0.4%

 

3.1 pts

 

1.7 pts

Total Loss ratio

67.8%

 

65.8%

 

64.4%

 

64.5%

 

3.4 pts

 

1.4 pts

Commission and brokerage ratio

12.2%

 

12.1%

 

11.8%

 

11.9%

 

0.4 pts

 

0.2 pts

Other underwriting expenses

17.2%

 

16.9%

 

16.4%

 

16.1%

 

0.8 pts

 

0.8 pts

Combined ratio

97.1%

 

94.9%

 

92.5%

 

92.5%

 

4.6 pts

 

2.4 pts

Attritional combined ratio (4)

92.6%

 

92.6%

 

91.4%

 

92.0%

 

1.2 pts

 

0.6 pts

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax net catastrophe losses (5)

40

 

60

 

10

 

12

 

 

 

 

Pre-tax net prior year reserve development

—

 

—

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

 

 

 

 

(2) Denotes non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

(4) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war. Attritional combined ratio is a non-GAAP financial measure. See "Comments on Non-GAAP Financial Measures" for an explanation and reconciliation.

(5) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums.

Investments and Shareholders’ Equity as of September 30, 2024

• Total invested assets and cash of $42.1 billion versus $37.1 billion on December 31, 2023
• Shareholders’ equity of $15.3 billion vs. $13.2 billion on December 31, 2023, including $220 million of unrealized net losses on fixed maturity, available for sale securities
• Shareholders’ equity excluding unrealized gains (losses) on fixed maturity, available for sale securities of $15.6 billion versus $13.9 billion on December 31, 2023
• Book value per share of $356.77 versus $304.29 at December 31, 2023
• Book value per share excluding unrealized gains (losses) on fixed maturity, available for sale securities of $361.87 versus $320.95 at December 31, 2023
• Common share repurchases of $100.0 million during the quarter, representing 272,460 shares at an average price of $367.03 per share. We have now repurchased $199.9 million year-to-date.
• Common share dividends declared and paid in the quarter of $2.00 per common share equal to $86 million

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. federal securities laws. These statements reflect management’s current expectations based on assumptions we believe are reasonable but are not guarantees of performance. Actual results may differ materially from those contained in forward-looking statements made on behalf of the Company. The forward-looking statements involve risks and uncertainties that include, but are not limited to, the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemics, regulatory and legal uncertainties and other factors described in our SEC filings, including our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Everest

Everest Group, Ltd. (Everest) is a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions that address customers’ most pressing challenges. Known for a 50-year track record of disciplined underwriting, capital and risk management, Everest, through its global operating affiliates, is committed to underwriting opportunity for colleagues, customers, shareholders, and communities worldwide.

Everest common stock (NYSE: EG) is a component of the S&P 500 index.

Additional information about Everest, our people, and our products can be found on our website at www.everestglobal.com.

A conference call discussing the results will be held at 8:00 a.m. Eastern Time on October 31, 2024. The call will be available on the Internet through the Company’s website at https://investors.everestglobal.com/overview.

Recipients are encouraged to visit the Company’s website to view supplemental financial information on the Company’s results. The supplemental information is located at www.everestglobal.com in the “Investors/Financials/Quarterly Results” section of the website. The supplemental financial information may also be obtained by contacting the Company directly.

Comments on Non-GAAP Financial Measures

In this Press Release, the Company has included certain non-GAAP financial measures, including after-tax net operating income (loss), after-tax net operating income (loss) per diluted share, attritional combined ratio, gross written premiums presented on a comparable basis, net operating income return on equity ("ROE"), underwriting income, and book value per common share outstanding excluding net unrealized appreciation (depreciation) on fixed maturity, available for sale securities ("URA(D)"). The Company presents these non-GAAP financial measures to facilitate a deeper understanding of the profitability drivers of our business, results of operations, financial condition and liquidity. The Company believes that such measures are important to investors and other interested persons, and that these measures are a useful supplement to GAAP information concerning the Company’s performance. These measures may not, however, be comparable to similarly titled measures used by companies within or outside of the insurance industry. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, or superior to, the Company’s financial measures prepared in accordance with generally accepted accounting principles ("GAAP").

A reconciliation non-GAAP financial measures to the most comparable corresponding GAAP financial measure is included below.

After-tax net operating income (loss) and after-tax net operating income (loss) per diluted share

After-tax net operating income (loss) (also referred to in this release as net operating income) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense), as shown below:

(Dollars in millions, except per share amounts)

Three Months Ended September 30,

 

Nine Months Ended September 30,

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount

 

Per Diluted Share

 

Amount

 

Per Diluted Share

 

Amount

 

Per Diluted Share

 

Amount

 

Per Diluted Share

After-tax net operating income (loss)

$

630

 

 

$

14.62

 

 

$

613

 

 

$

14.14

 

 

$

2,070

 

 

$

47.79

 

 

$

1,684

 

 

$

40.77

 

After-tax net gains (losses) on investments

 

(25

)

 

 

(0.57

)

 

 

(27

)

 

 

(0.61

)

 

 

(44

)

 

 

(1.02

)

 

 

(17

)

 

 

(0.40

)

After-tax net foreign exchange income (expense)

 

(97

)

 

 

(2.24

)

 

 

91

 

 

 

2.10

 

 

 

(60

)

 

 

(1.38

)

 

 

46

 

 

 

1.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

509

 

 

$

11.80

 

 

$

678

 

 

$

15.63

 

 

$

1,966

 

 

$

45.40

 

 

$

1,713

 

 

$

41.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

Although net gains (losses) on investments and net foreign exchange income (expense) are an integral part of the Company’s insurance operations, the determination of net gains (losses) on investments and foreign exchange income (expense) is independent of the insurance underwriting process. The Company believes that the level of net gains (losses) on investments and net foreign exchange income (expense) for any particular period are not indicative of the performance of the underlying business in that particular period. Providing only a GAAP presentation of net income (loss) makes it more difficult for users of the financial information to evaluate the Company’s success or failure in its basic business and may lead to incorrect or misleading assumptions and conclusions. The Company understands that the equity analysts who follow the Company focus on after-tax net operating income (loss) in their analyses for the reasons discussed above. The Company provides after-tax net operating income (loss) to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company’s performance.

Attritional Loss Ratio and Attritional Combined Ratio

The loss ratio is calculated as the sum of total incurred losses and loss adjustment expenses, divided by net premiums earned. The combined ratio is calculated as the sum of total incurred losses and loss adjustment expenses, commission and brokerage expenses, and other underwriting expenses, divided by net premiums earned. The attritional loss ratio and attritional combined ratio are defined as the loss ratio and the combined ratio, respectively, adjusted to exclude catastrophe losses, net catastrophe reinstatement premiums, prior year development, COVID-19 losses and losses from the Russia/Ukraine war. The Company believes the attritional ratios are useful to management and investors because the adjusted ratios provide for better comparability and more accurately measure the Company’s underlying underwriting performance. The following tables are a reconciliation of the loss ratio and attritional loss ratio, and the combined ratio and attritional combined ratio for the periods noted:

 

Three Months Ended September 30,

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance

 

Insurance

 

Group

 

Reinsurance

 

Insurance

 

Group

Loss ratio

65.4

%

 

67.8

%

 

66.0

%

 

63.8

%

 

64.4

%

 

63.9

%

Adjustment for catastrophe losses

(9.1

)%

 

(4.2

)%

 

(7.9

)%

 

(6.4

)%

 

(1.1

)%

 

(5.0

)%

Adjustment for reinstatement premiums

0.6

%

 

—

%

 

0.5

%

 

0.1

%

 

—

%

 

0.1

%

Adjustment for prior year development (6)

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for Russia/Ukraine war losses

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for other items

—

%

 

(0.2

)%

 

(0.1

)%

 

—

%

 

—

%

 

—

%

Attritional loss ratio

56.9

%

 

63.3

%

 

58.5

%

 

57.5

%

 

63.3

%

 

59.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

Three Months Ended September 30,

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance

 

Insurance

 

Group

 

Reinsurance

 

Insurance

 

Group

Combined ratio

91.8

%

 

97.1

%

 

93.1

%

 

91.1

%

 

92.5

%

 

91.4

%

Adjustment for catastrophe losses

(9.1

)%

 

(4.2

)%

 

(7.9

)%

 

(6.4

)%

 

(1.1

)%

 

(5.0

)%

Adjustment for reinstatement premiums

0.9

%

 

—

%

 

0.7

%

 

0.2

%

 

—

%

 

0.1

%

Adjustment for prior year development (6)

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for Russia/Ukraine war losses

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for other items

—

%

 

(0.3

)%

 

(0.1

)%

 

—

%

 

—

%

 

—

%

Attritional combined ratio

83.5

%

 

92.6

%

 

85.8

%

 

84.9

%

 

91.4

%

 

86.6

%

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

Nine Months Ended September 30,

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance

 

Insurance

 

Group

 

Reinsurance

 

Insurance

 

Group

Combined ratio

89.4

%

 

94.9

%

 

90.8

%

 

89.2

%

 

92.5

%

 

90.1

%

Adjustment for catastrophe losses

(5.8

)%

 

(2.1

)%

 

(4.9

)%

 

(4.2

)%

 

(0.4

)%

 

(3.2

)%

Adjustment for reinstatement premiums

0.5

%

 

—

%

 

0.4

%

 

0.1

%

 

—

%

 

0.1

%

Adjustment for prior year development (6)

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for Russia/Ukraine war losses

—

%

 

—

%

 

—

%

 

—

%

 

—

%

 

—

%

Adjustment for other items

—

%

 

(0.1

)%

 

—

%

 

—

%

 

—

%

 

—

%

Attritional combined ratio

84.1

%

 

92.6

%

 

86.3

%

 

85.1

%

 

92.0

%

 

87.0

%

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

 

 

 

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

 

 

 

 

(6) Prior-year development includes the impact of COVID-19 losses.

Gross Written Premium on a Comparable Basis

The Company has included in this Press Release certain changes in gross written premium on a comparable basis, reflecting constant currency basis and excluding reinstatement premiums. Constant currency basis excludes the impact of foreign exchange rates. The Company provides change in gross written premium on a comparable basis to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company’s performance. The following tables are a reconciliation of gross written premium and period-over-period changes on a GAAP basis to the non-GAAP comparable basis for the periods noted:

(Dollars in millions)

Quarter-to-Date

September 30, 2024

 

September 30, 2023

 

Change

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

Gross Written Premium

 

Gross Written Premium

 

% Impact

Group

$

4,425

 

 

$

4,391

 

 

0.8

%

Adjustment for gross CAT reinstatement premiums

 

(33

)

 

 

(6

)

 

(0.6

)%

Adjustment for foreign exchange effect

 

—

 

 

 

(21

)

 

0.5

%

Group (comparable basis)

$

4,392

 

 

$

4,365

 

 

0.6

%

 

 

 

 

 

 

Reinsurance

$

3,265

 

 

$

3,198

 

 

2.1

%

Adjustment for gross CAT reinstatement premiums

 

(33

)

 

 

(6

)

 

(0.8

)%

Adjustment for foreign exchange effect

 

—

 

 

 

(13

)

 

0.4

%

Reinsurance (comparable basis)

$

3,232

 

 

$

3,180

 

 

1.7

%

 

 

 

 

 

 

Insurance

$

1,160

 

 

$

1,193

 

 

(2.8

)%

Adjustment for gross CAT reinstatement premiums

 

—

 

 

 

—

 

 

—

%

Adjustment for foreign exchange effect

 

—

 

 

 

(8

)

 

0.7

%

Insurance (comparable basis)

$

1,160

 

 

$

1,185

 

 

(2.1

)%

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

 

 

 

 

 

Net Operating Income Return On Equity ("ROE")

Net Operating income ROE is calculated by dividing after-tax net operating income (loss) by average shareholders' equity, adjusted for average net unrealized depreciation (appreciation) of fixed maturity, available for sale securities. A reconciliation of net income, the most comparable GAAP measure, to net operating income is presented above. The Company believes net operating income ROE is a useful measure for management and investors as it allows for better comparability and removes variability when assessing the results of operations. A reconciliation of Net Operating Income ROE and Net Income ROE is shown below.

 

Quarter-to-Date

 

Year-to-Date

(Dollars in millions)

September 30,

 

September 30,

 

September 30,

 

September 30,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

Beginning of period shareholders' equity

$

14,182

 

 

$

10,902

 

 

$

13,202

 

 

$

8,441

 

Add: Net unrealized depreciation (appreciation) of fixed maturity, available for sale securities

 

936

 

 

 

1,627

 

 

 

723

 

 

 

1,709

 

Adjusted beginning of period shareholders' equity

$

15,118

 

 

$

12,529

 

 

$

13,925

 

 

$

10,149

 

 

 

 

 

 

 

 

 

End of period shareholders' equity

$

15,335

 

 

$

11,226

 

 

$

15,335

 

 

$

11,226

 

Add: Net unrealized depreciation (appreciation) of fixed maturity, available for sale securities

 

220

 

 

 

1,868

 

 

 

220

 

 

 

1,868

 

Adjusted end of period shareholders' equity

$

15,555

 

 

$

13,094

 

 

$

15,555

 

 

$

13,094

 

 

 

 

 

 

 

 

 

Average adjusted shareholders' equity

$

15,336

 

 

$

12,811

 

 

$

14,740

 

 

$

11,622

 

 

 

 

 

 

 

 

 

After-tax net operating income (loss)

$

630

 

 

$

613

 

 

$

2,070

 

 

$

1,684

 

After-tax net gains (losses) on investments

$

(25

)

 

 

(27

)

 

$

(44

)

 

 

(17

)

After-tax foreign exchange income (expense)

$

(97

)

 

 

91

 

 

$

(60

)

 

 

46

 

Net income (loss)

$

509

 

 

$

678

 

 

$

1,966

 

 

$

1,713

 

 

 

 

 

 

 

 

 

Return on equity (annualized)

 

 

 

 

 

 

 

After-tax net operating income (loss)

 

16.4

%

 

 

19.2

%

 

 

18.7

%

 

 

19.3

%

After-tax net gains (losses) on investments

 

-0.6

%

 

 

-0.8

%

 

 

-0.4

%

 

 

-0.1

%

After-tax foreign exchange income (expense)

 

-2.5

%

 

 

2.9

%

 

 

-0.5

%

 

 

0.5

%

Net income (loss)

 

13.3

%

 

 

21.2

%

 

 

17.8

%

 

 

19.7

%

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

 

 

 

 

 

 

 

Underwriting Income

Underwriting income is calculated as net premiums earned, less (1) incurred losses and loss adjustment expenses, (2) commission, brokerage, taxes and fees, and (3) other underwriting expenses. Net income (loss) is the most comparable GAAP measure. The Company believes underwriting income is a useful measure for management and investors when assessing the performance of the Company's reinsurance and insurance business segments. Group underwriting income is allocated to our Reinsurance and Insurance reportable segments. A reconciliation of Underwriting Income and Net Income is shown below.

 

Quarter-to-Date

(Dollars in millions)

September 30, 2024

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinsurance

 

Insurance

 

Group

 

Reinsurance

 

Insurance

 

Group

Net premiums earned

$

2,970

 

$

948

 

$

3,918

 

 

$

2,593

 

$

920

 

$

3,513

 

Less: Incurred losses and LAE

 

1,942

 

 

642

 

 

2,584

 

 

 

1,653

 

 

593

 

 

2,246

 

Less: Commission, brokerage, taxes and fees

 

710

 

 

116

 

 

826

 

 

 

643

 

 

108

 

 

752

 

Less: Other underwriting expenses

 

73

 

 

163

 

 

236

 

 

 

65

 

 

151

 

 

215

 

Underwriting income (loss)

$

245

 

$

27

 

$

272

 

 

$

232

 

$

69

 

$

301

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

496

 

 

 

 

 

 

 

406

 

Net gains (losses) on investments

 

 

 

 

 

(27

)

 

 

 

 

 

 

(31

)

Corporate expenses

 

 

 

 

 

(25

)

 

 

 

 

 

 

(19

)

Interest, fee and bond issue cost amortization expense

 

 

 

 

 

(38

)

 

 

 

 

 

 

(34

)

Other income (expense)

 

 

 

 

 

(102

)

 

 

 

 

 

 

103

 

Income tax benefit (expense)

 

 

 

 

 

(68

)

 

 

 

 

 

 

(47

)

Net income (loss)

 

 

 

 

$

509

 

 

 

 

 

 

$

678

 

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share outstanding excluding URA(D)

Book value per common share outstanding excluding net unrealized appreciation (depreciation) of fixed maturity, available for sale securities ("URA(D)") is calculated as reported shareholders' equity less URA(D), divided by common shares outstanding. Book value per share is the most comparable GAAP measure. The Company believes this metric is useful to management and investors as it shows the value of shareholder returns on a per share basis after eliminating the variability of investments held at fair value. Please see the table on page 3 for a reconciliation of book value per common share outstanding (excluding URA(D)) and book value per share.

Annualized Total Shareholder Return

Annualized TSR ("TSR") is calculated as year-to-date growth in book value per common share outstanding (excluding URA(D)) plus year-to-date dividends per share. As further discussed above, book value per common share outstanding (excluding URA(D)) is a non-GAAP measure. Please see the table on page 3 for a reconciliation of book value per common share outstanding (excluding URA(D)) and book value per share.

--Financial Details Follow--

 

EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

   

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(In millions of U.S. dollars, except per share amounts)

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(unaudited)

 

(unaudited)

REVENUES:

 

 

 

 

 

 

 

Premiums earned

$

3,918

 

 

$

3,513

 

 

$

11,262

 

 

$

9,865

 

Net investment income

 

496

 

 

 

406

 

 

 

1,481

 

 

 

1,023

 

Net gains (losses) on investments

 

(27

)

 

 

(31

)

 

 

(50

)

 

 

(21

)

Other income (expense)

 

(102

)

 

 

103

 

 

 

(48

)

 

 

61

 

Total revenues

 

4,285

 

 

 

3,991

 

 

 

12,645

 

 

 

10,927

 

 

 

 

 

 

 

 

 

CLAIMS AND EXPENSES:

 

 

 

 

 

 

 

Incurred losses and loss adjustment expenses

 

2,584

 

 

 

2,246

 

 

 

7,132

 

 

 

6,173

 

Commission, brokerage, taxes and fees

 

826

 

 

 

752

 

 

 

2,398

 

 

 

2,099

 

Other underwriting expenses

 

236

 

 

 

215

 

 

 

694

 

 

 

620

 

Corporate expenses

 

25

 

 

 

19

 

 

 

69

 

 

 

55

 

Interest, fees and bond issue cost amortization expense

 

38

 

 

 

34

 

 

 

112

 

 

 

99

 

Total claims and expenses

 

3,708

 

 

 

3,266

 

 

 

10,404

 

 

 

9,045

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE TAXES

 

577

 

 

 

725

 

 

 

2,241

 

 

 

1,883

 

Income tax expense (benefit)

 

68

 

 

 

47

 

 

 

275

 

 

 

169

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

$

509

 

 

$

678

 

 

$

1,966

 

 

$

1,713

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

Unrealized appreciation (depreciation) ("URA(D)") of securities arising during the period

 

704

 

 

 

(257

)

 

 

477

 

 

 

(180

)

Reclassification adjustment for realized losses (gains) included in net income (loss)

 

30

 

 

 

15

 

 

 

44

 

 

 

21

 

Total URA(D) of securities arising during the period

 

734

 

 

 

(242

)

 

 

521

 

 

 

(159

)

 

 

 

 

 

 

 

 

Foreign currency translation and other adjustments

 

83

 

 

 

(47

)

 

 

45

 

 

 

(17

)

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net (gain) loss included in net income (loss)

 

—

 

 

 

—

 

 

 

24

 

 

 

1

 

Total benefit plan net gain (loss) for the period

 

—

 

 

 

—

 

 

 

24

 

 

 

1

 

Total other comprehensive income (loss), net of tax

 

816

 

 

 

(288

)

 

 

590

 

 

 

(175

)

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

$

1,325

 

 

$

390

 

 

$

2,556

 

 

$

1,538

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

Basic

$

11.80

 

 

$

15.63

 

 

$

45.40

 

 

$

41.49

 

Diluted

 

11.80

 

 

 

15.63

 

 

 

45.40

 

 

 

41.49

 

 

EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS

   

 

September 30,

 

December 31,

(In millions of U.S. dollars, except par value per share)

 

2024

 

 

 

2023

 

 

(unaudited)

 

 

ASSETS:

 

 

 

Fixed maturities - available for sale, at fair value

 

 

 

(amortized cost: 2024, $30,753; 2023, $28,568, credit allowances: 2024, $(51); 2023, $(48))

$

30,479

 

 

$

27,740

 

Fixed maturities - held to maturity, at amortized cost

 

 

 

(fair value: 2024, $799; 2023, $854, net of credit allowances: 2024, $(8); 2023, $(8))

 

780

 

 

 

855

 

Equity securities, at fair value

 

230

 

 

 

188

 

Other invested assets

 

5,071

 

 

 

4,794

 

Short-term investments

 

3,931

 

 

 

2,127

 

Cash

 

1,599

 

 

 

1,437

 

Total investments and cash

 

42,090

 

 

 

37,142

 

Accrued investment income

 

380

 

 

 

324

 

Premiums receivable (net of credit allowances: 2024, $(51); 2023, $(41))

 

5,372

 

 

 

4,768

 

Reinsurance paid loss recoverables (net of credit allowances: 2024, $(31); 2023, $(26))

 

239

 

 

 

164

 

Reinsurance unpaid loss recoverables

 

2,276

 

 

 

2,098

 

Funds held by reinsureds

 

1,229

 

 

 

1,135

 

Deferred acquisition costs

 

1,475

 

 

 

1,247

 

Prepaid reinsurance premiums

 

952

 

 

 

713

 

Income tax asset, net

 

863

 

 

 

868

 

Other assets (net of credit allowances: 2024, $(9); 2023, $(9))

 

986

 

 

 

941

 

TOTAL ASSETS

$

55,864

 

 

$

49,399

 

 

 

 

 

LIABILITIES:

 

 

 

Reserve for losses and loss adjustment expenses

 

27,480

 

 

 

24,604

 

Unearned premium reserve

 

7,462

 

 

 

6,622

 

Funds held under reinsurance treaties

 

16

 

 

 

24

 

Amounts due to reinsurers

 

979

 

 

 

650

 

Losses in course of payment

 

259

 

 

 

171

 

Senior notes

 

2,350

 

 

 

2,349

 

Long-term notes

 

218

 

 

 

218

 

Borrowings from FHLB

 

819

 

 

 

819

 

Accrued interest on debt and borrowings

 

43

 

 

 

22

 

Unsettled securities payable

 

434

 

 

 

137

 

Other liabilities

 

469

 

 

 

582

 

Total liabilities

 

40,529

 

 

 

36,197

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

Preferred shares, par value: $0.01; 50.0 shares authorized; no shares issued and outstanding

 

—

 

 

 

—

 

Common shares, par value: $0.01; 200.0 shares authorized; (2024) 74.3 and (2023) 74.2

 

 

 

outstanding before treasury shares

 

1

 

 

 

1

 

Additional paid-in capital

 

3,799

 

 

 

3,773

 

Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit)

 

 

 

of $(28) at 2024 and $(99) at 2023

 

(344

)

 

 

(934

)

Treasury shares, at cost; 31.3 shares (2024) and 30.8 shares (2023)

 

(4,108

)

 

 

(3,908

)

Retained earnings

 

15,988

 

 

 

14,270

 

Total shareholders' equity

 

15,335

 

 

 

13,202

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

55,864

 

 

$

49,399

 

 

EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS

   

 

Nine Months Ended September 30,

(In millions of U.S. dollars)

 

2024

 

 

 

2023

 

 

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net income (loss)

$

1,966

 

 

$

1,713

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Decrease (increase) in premiums receivable

 

(529

)

 

 

(812

)

Decrease (increase) in funds held by reinsureds, net

 

(99

)

 

 

(26

)

Decrease (increase) in reinsurance recoverables

 

(112

)

 

 

(186

)

Decrease (increase) in income taxes

 

(65

)

 

 

(18

)

Decrease (increase) in prepaid reinsurance premiums

 

(201

)

 

 

(153

)

Increase (decrease) in reserve for losses and loss adjustment expenses

 

2,605

 

 

 

1,768

 

Increase (decrease) in unearned premiums

 

767

 

 

 

1,157

 

Increase (decrease) in amounts due to reinsurers

 

278

 

 

 

233

 

Increase (decrease) in losses in course of payment

 

86

 

 

 

258

 

Change in equity adjustments in limited partnerships

 

(236

)

 

 

(124

)

Distribution of limited partnership income

 

106

 

 

 

81

 

Change in other assets and liabilities, net

 

(376

)

 

 

(377

)

Non-cash compensation expense

 

49

 

 

 

37

 

Amortization of bond premium (accrual of bond discount)

 

(113

)

 

 

(35

)

Net (gains) losses on investments

 

50

 

 

 

21

 

Net cash provided by (used in) operating activities

 

4,177

 

 

 

3,536

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Proceeds from fixed maturities matured/called/repaid - available for sale

 

2,692

 

 

 

1,686

 

Proceeds from fixed maturities sold - available for sale

 

4,322

 

 

 

468

 

Proceeds from fixed maturities matured/called/repaid - held to maturity

 

129

 

 

 

81

 

Proceeds from equity securities sold

 

15

 

 

 

126

 

Distributions from other invested assets

 

289

 

 

 

189

 

Cost of fixed maturities acquired - available for sale

 

(9,069

)

 

 

(5,311

)

Cost of fixed maturities acquired - held to maturity

 

(46

)

 

 

(23

)

Cost of equity securities acquired

 

(35

)

 

 

(3

)

Cost of other invested assets acquired

 

(438

)

 

 

(422

)

Net change in short-term investments

 

(1,724

)

 

 

(1,338

)

Net change in unsettled securities transactions

 

321

 

 

 

202

 

Net cash provided by (used in) investing activities

 

(3,545

)

 

 

(4,346

)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Common shares issued (redeemed) during the period for share-based compensation, net of expense

 

(23

)

 

 

(22

)

Proceeds from public offering of common shares

 

—

 

 

 

1,445

 

Purchase of treasury shares

 

(200

)

 

 

—

 

Dividends paid to shareholders

 

(249

)

 

 

(212

)

Cost of shares withheld on settlements of share-based compensation awards

 

(23

)

 

 

(22

)

Net cash provided by (used in) financing activities

 

(495

)

 

 

1,188

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

25

 

 

 

(12

)

 

 

 

 

Net increase (decrease) in cash

 

162

 

 

 

367

 

Cash, beginning of period

 

1,437

 

 

 

1,398

 

Cash, end of period

$

1,599

 

 

$

1,765

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

Income taxes paid (recovered)

$

340

 

 

$

185

 

Interest paid

 

90

 

 

 

75

 

 

 

 

 

NON-CASH TRANSACTIONS:

 

 

 

Non-cash limited partnership distribution

 

23

 

 

 

—

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030486048/en/

Media: Dawn Lauer Chief Communications Officer 908.300.7670 Investors: Matt Rohrmann Head of Investor Relations 908.604.7343