Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Everest Reports Third Quarter 2023 Results By: Everest Group, Ltd. via Business Wire October 25, 2023 at 16:15 PM EDT Net Income of $678 million and Operating Income of $613 million 21.2% Net Income ROE and 19.2% Operating Income ROE 23.4%1 GWP2 Growth, Led by Record Reinsurance Growth of 32.7%1 86.5% Attritional Combined Ratio Improved 110 Basis Points Year-Over-Year 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 2023 results. Third Quarter 2023 Highlights Net Income of $678 million; Operating Income of $613 million driven by continued underwriting margin improvement and strong net investment income generation 21.2% Net Income ROE and 19.2% Operating Income ROE; Total Shareholder Return of 24.5% annualized $4.4 billion in gross written premium with year-over-year growth of 23.4% in constant dollars as reported for the Group, 32.7% in constant dollars when adjusting for reinstatement premiums for Reinsurance and 3.5% in constant dollars for Insurance Combined ratios of 91.4% for the Group, 91.0% for Reinsurance and 92.6% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.5% for the Group, 84.9% for Reinsurance and 91.0% for Insurance Pre-tax underwriting income of $301 million versus a pre-tax underwriting loss of $367 million in the prior year $170 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums, driven by a number of mid-sized events globally, versus $730 million in the prior year Net investment income improved to $406 million versus $151 million in the prior year third quarter, driven by strong fixed income and alternative investment returns Strong operating cashflow for the quarter of $1.4 billion, a company record, versus $1.1 billion in the third quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s third quarter performance was excellent. We delivered outstanding returns including a near 20% operating return on equity and an annualized 25% total shareholder return,” said Everest President & CEO Juan C. Andrade. "We are leaning into the hard reinsurance market, where favorable conditions and the global flight to quality persist. As a lead market and preferred partner, we are well-positioned for the upcoming January renewals. We continue to expand our global reinsurance portfolio at significantly improved risk adjusted returns. In addition, our primary insurance business continues to generate strong and consistent underwriting income, with a significant year-over-year improvement. Supporting the strong underwriting performance of our two businesses, our high-quality investment portfolio continues to deliver outstanding returns, generating over $400 million in net investment income in the quarter, and over $1 billion year-to-date. We have significant momentum heading into the final quarter of the year, with strong tailwinds and exceptional talent powering our disciplined execution and industry-leading shareholder returns." Summary of Third Quarter 2023 Net Income and Other Items Net Income of $678 million, equal to $15.63 per diluted share versus third quarter 2022 net loss of $319 million, equal to $(8.22) per diluted share Operating income of $613 million, equal to $14.14 per diluted share versus third quarter 2022 net operating loss of $205 million, equal to $(5.28) per diluted share GAAP combined ratio of 91.4%, including 5.0 points of catastrophe losses versus the third quarter 2022 figure of 112.0%, including 27.4 points of catastrophe losses 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 2023 2023 2022 2022 Everest Group Net income (loss) 678 1,713 (319) 101 Operating income (loss) (1) 613 1,684 (205) 587 Net income (loss) per diluted common share 15.63 41.49 (8.22) 2.57 Net operating income (loss) per diluted common share 14.14 40.77 (5.28) 14.91 Net income (loss) return on average equity (annualized) 21.2% 19.7% (12.9%) 1.4% After-tax operating income (loss) return on average equity (annualized) 19.2% 19.3% (8.3%) 8.0% Notes (1) Refer to the reconciliation of net income to net operating income found on page 6 of this press release 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 2023 2023 2022 2022 Beginning shareholders' equity 10,902 8,441 8,853 10,139 Net income (loss) 678 1,713 (319) 101 Change - unrealized gains (losses) - Fixed inc. investments (242) (159) (671) (2,199) Dividends to shareholders (76) (212) (65) (191) Purchase of treasury shares — — (58) (60) Public equity offering of shares — 1,445 — — Other (37) (1) (91) (141) Ending shareholders' equity 11,226 11,226 7,649 7,649 Common shares outstanding 43.4 39.2 Book value per common share outstanding 258.71 195.27 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (43.06) (50.02) Adjusted book value per common share outstanding excluding URAD 301.76 245.29 Change in BVPS adjusted for dividends 22.4% (22.5)% Total Shareholder Return ("TSR") - Annualized 24.5% -1.0% Common share dividends paid - last 12 months 6.70 6.40 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 2023 2023 2022 2022 Q3 Year to Date Gross written premium 4,391 12,314 3,680 10,313 19.3% 19.4% Net written premium 3,866 10,870 3,323 9,156 16.4% 18.7% Loss ratio 63.9% 62.6% 85.5% 71.7% (21.6) pts (9.1) pts Commission and brokerage ratio 21.4% 21.3% 20.9% 21.4% 0.5 pts (0.1) pts Other underwriting expenses 6.1% 6.3% 5.5% 5.7% 0.6 pts 0.6 pts Combined ratio 91.4% 90.1% 112.0% 98.8% (20.5) pts (8.6) pts Attritional combined ratio (1) 86.5% 86.9% 87.6% 87.4% (1.1) pts (0.5) pts Pre-tax net catastrophe losses (2) 170 307 730 930 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Reinsurance Segment – Quarterly Highlights Gross written premiums grew 32.7% on a constant dollar basis, when adjusting for reinstatement premiums, to approximately $3.2 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 43.9% growth in Property Pro-Rata, 41.2% in Property Catastrophe XOL, 28.8% growth in Casualty XOL, and 19.9% growth in Casualty Pro-Rata, when adjusting for reinstatement premiums, as pricing increases and a flight to quality continue globally. Robust pricing momentum continued in the third quarter, with Cat pricing up over 30% with improved terms/conditions. Attritional loss ratio improved 160-basis points over last year to 57.5%, and the attritional combined ratio improved to 84.9% versus 86.8% a year ago. Pre-tax catastrophe losses fell to $160 million net of estimated recoveries and reinstatement premiums, from $620 million a year ago. Underwriting information - Reinsurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 3,219 8,622 2,551 6,938 26.2% 24.3% Net written premium 3,008 8,101 2,460 6,664 22.3% 21.6% Loss ratio 63.7% 61.9% 88.7% 72.8% (25.0) pts (10.9) pts Commission and brokerage ratio 24.8% 24.8% 23.9% 24.5% 0.9 pts 0.3 pts Other underwriting expenses 2.5% 2.6% 2.4% 2.4% 0.1 pts 0.2 pts Combined ratio 91.0% 89.2% 115.0% 99.8% (24.0) pts (10.6) pts Attritional combined ratio (1) 84.9% 85.1% 86.8% 86.3% (1.9) pts (1.2) pts Pre-tax net catastrophe losses (2) 160 295 620 810 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Insurance Segment – Quarterly Highlights Gross written premiums rose to $1.2 billion, a 3.5% increase year-over-year in constant dollars, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines. Strong underwriting profit of $66 million for the quarter, $196 million year-to-date. Pre-tax catastrophe losses were $10 million, net of estimated recoveries and reinstatement premiums, in the quarter versus $110 million in the prior year. Expense ratio of 28.2% with continued investment in systems, talent, and our global platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 1,172 3,692 1,129 3,376 3.8% 9.4% Net written premium 858 2,768 862 2,492 (0.4) % 11.1% Loss ratio 64.4% 64.5% 76.8% 68.4% (12.4) pts (3.9) pts Commission and brokerage ratio 11.5% 11.7% 12.7% 12.7% (1.2) pts (1.0) pts Other underwriting expenses 16.7% 16.3% 14.0% 14.8% 2.7 pts 1.5 pts Combined ratio 92.6% 92.6% 103.5% 95.9% (10.9) pts (3.3) pts Attritional combined ratio (1) 91.0% 91.6% 89.8% 90.3% 1.2 pts 1.3 pts Pre-tax net catastrophe losses (2) 10 12 110 120 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 Notes (1) Attritional combined ratio excludes catastrophe losses, reinstatement premiums, prior year development, Covid-19 losses, CECL, and losses from the Russian/Ukraine war. (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Investments and Shareholders’ Equity as of September 30, 2023 Total invested assets and cash of $34.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $11.2 billion vs. $8.4 billion on December 31, 2022, including $1.9 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $13.1 billion versus $10.1 billion on December 31, 2022 Book value per share of $258.71 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $301.76 versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.75 per share equal to $76 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 involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include 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, pandemic, regulatory and legal uncertainties and other factors described in 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 26, 2023. The call will be available on the Internet through the Company’s website at https://www.everestglobal.com/investor-relations. 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. Everest will host its 2023 Investor Day on Tuesday, November 14, 2023, from 9:30 am to 1:00 pm Eastern Time. A live, listen-only webcast will be available for interested parties at https://vimeo.com/webinars/events/17b74702-5109-4c76-b8d7-4ca9b583d8b6. _______________________________________________ The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance. After-tax operating income (loss) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense) as the following reconciliation displays: (Dollars in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share After-tax operating income (loss) $ 613 $ 14.14 $ (205 ) $ (5.28 ) $ 1,684 $ 40.77 $ 587 $ 14.91 After-tax net gains (losses) on investments (27 ) (0.61 ) (102 ) (2.63 ) (17 ) (0.40 ) (415 ) (10.53 ) After-tax net foreign exchange income (expense) 91 2.10 (12 ) (0.31 ) 46 1.12 (71 ) (1.80 ) Net income (loss) $ 678 $ 15.63 $ (319 ) $ (8.22 ) $ 1,713 $ 41.49 $ 101 $ 2.57 (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 is 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 operating income (loss) in their analyses for the reasons discussed above. The Company provides after-tax 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. --Financial Details Follow-- EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,513 $ 3,067 $ 9,865 $ 8,775 Net investment income 406 151 1,023 620 Total net gains (losses) on investments (31 ) (129 ) (21 ) (519 ) Other income (expense) 103 (16 ) 61 (71 ) Total revenues 3,991 3,073 10,927 8,805 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 2,246 2,623 6,173 6,289 Commission, brokerage, taxes and fees 752 641 2,099 1,877 Other underwriting expenses 215 169 620 500 Corporate expenses 19 16 55 45 Interest, fees and bond issue cost amortization expense 34 25 99 74 Total claims and expenses 3,266 3,474 9,045 8,785 INCOME (LOSS) BEFORE TAXES 725 (401 ) 1,883 20 Income tax expense (benefit) 47 (82 ) 169 (81 ) NET INCOME (LOSS) $ 678 $ (319 ) $ 1,713 $ 101 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (257 ) (712 ) (180 ) (2,260 ) Reclassification adjustment for realized losses (gains) included in net income (loss) 15 41 21 61 Total URA(D) on securities arising during the period (242 ) (671 ) (159 ) (2,199 ) Foreign currency translation adjustments (47 ) (101 ) (17 ) (163 ) Reclassification adjustment for amortization of net (gain) loss included in net income (loss) — 1 1 2 Total benefit plan net gain (loss) for the period — 1 1 2 Total other comprehensive income (loss), net of tax (288 ) (771 ) (175 ) (2,360 ) COMPREHENSIVE INCOME (LOSS) $ 390 $ (1,090 ) $ 1,538 $ (2,259 ) EARNINGS PER COMMON SHARE: Basic $ 15.63 $ (8.22 ) $ 41.49 $ 2.57 Diluted 15.63 (8.22 ) 41.49 2.57 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS September 30, December 31, (Dollar and share amounts in millions, except par value per share) 2023 2022 (unaudited) ASSETS: Fixed maturities - available for sale, at fair value (amortized cost: 2023, $27,305; 2022, $24,191, credit allowances: 2023, $(60); 2022, $(54)) $ 25,159 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $766; 2022, $821, net of credit allowances: 2023, $(8); 2022, $(9)) 789 839 Equity securities, at fair value 166 281 Other invested assets 4,353 4,085 Short-term investments 2,403 1,032 Cash 1,765 1,398 Total investments and cash 34,635 29,872 Accrued investment income 298 217 Premiums receivable (net of credit allowances: 2023, $(36); 2022, $(29)) 4,426 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, $(25); 2022, $(23)) 226 136 Reinsurance unpaid loss recoverables 2,196 2,105 Funds held by reinsureds 1,097 1,056 Deferred acquisition costs 1,156 962 Prepaid reinsurance premiums 756 610 Income tax asset, net 500 459 Other assets (net of credit allowances: 2023, $(8); 2022, $(5)) 1,029 930 TOTAL ASSETS $ 46,318 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,833 $ 22,065 Future policy benefit reserve 27 29 Unearned premium reserve 6,295 5,147 Funds held under reinsurance treaties 28 13 Amounts due to reinsurers 795 567 Losses in course of payment 330 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 41 19 Unsettled securities payable 200 1 Other liabilities 459 526 Total liabilities 35,092 31,526 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; (2023) 74.2 and (2022) 69.9 outstanding before treasury shares 1 1 Additional paid-in capital 3,762 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $(272) at 2023 and $(250) at 2022 (2,171 ) (1,996 ) Treasury shares, at cost; 30.8 shares (2023) and 30.8 shares (2022) (3,908 ) (3,908 ) Retained earnings 13,542 12,042 Total shareholders' equity 11,226 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,318 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,713 $ 101 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (812 ) (405 ) Decrease (increase) in funds held by reinsureds, net (26 ) (35 ) Decrease (increase) in reinsurance recoverables (186 ) (662 ) Decrease (increase) in income taxes (18 ) (249 ) Decrease (increase) in prepaid reinsurance premiums (153 ) (194 ) Increase (decrease) in reserve for losses and loss adjustment expenses 1,768 3,117 Increase (decrease) in future policy benefit reserve (2 ) (2 ) Increase (decrease) in unearned premiums 1,157 435 Increase (decrease) in amounts due to reinsurers 233 242 Increase (decrease) in losses in course of payment 258 (150 ) Change in equity adjustments in limited partnerships (124 ) (126 ) Distribution of limited partnership income 81 139 Change in other assets and liabilities, net (375 ) (134 ) Non-cash compensation expense 37 35 Amortization of bond premium (accrual of bond discount) (35 ) 49 Net (gains) losses on investments 21 519 Net cash provided by (used in) operating activities 3,536 2,680 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,686 2,171 Proceeds from fixed maturities sold - available for sale 468 1,177 Proceeds from fixed maturities matured/called/repaid - held to maturity 81 18 Proceeds from equity securities sold 126 1,030 Distributions from other invested assets 189 244 Cost of fixed maturities acquired - available for sale (5,311 ) (5,958 ) Cost of fixed maturities acquired - held to maturity (23 ) (133 ) Cost of equity securities acquired (3 ) (960 ) Cost of other invested assets acquired (422 ) (455 ) Net change in short-term investments (1,338 ) 568 Net change in unsettled securities transactions 202 102 Net cash provided by (used in) investing activities (4,346 ) (2,196 ) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (22 ) (16 ) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (60 ) Dividends paid to shareholders (212 ) (191 ) Cost of debt repurchase — (6 ) Cost of shares withheld on settlements of share-based compensation awards (22 ) (19 ) Net cash provided by (used in) financing activities 1,188 (292 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (12 ) 46 Net increase (decrease) in cash 367 238 Cash, beginning of period 1,398 1,441 Cash, end of period $ 1,765 $ 1,679 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 185 $ 167 Interest paid 75 51 NON-CASH TRANSACTIONS: Reclassification of specific investments from fixed maturity securities, available for sale at fair value to fixed maturity securities, held to maturity at amortized cost net of credit allowances $ — $ 722 View source version on businesswire.com: https://www.businesswire.com/news/home/20231025504199/en/Contacts Media: Dawn Lauer Chief Communications Officer 908.300.7670 Investors: Matt Rohrmann Head of Investor Relations 908.604.7343 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Everest Reports Third Quarter 2023 Results By: Everest Group, Ltd. via Business Wire October 25, 2023 at 16:15 PM EDT Net Income of $678 million and Operating Income of $613 million 21.2% Net Income ROE and 19.2% Operating Income ROE 23.4%1 GWP2 Growth, Led by Record Reinsurance Growth of 32.7%1 86.5% Attritional Combined Ratio Improved 110 Basis Points Year-Over-Year 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 2023 results. Third Quarter 2023 Highlights Net Income of $678 million; Operating Income of $613 million driven by continued underwriting margin improvement and strong net investment income generation 21.2% Net Income ROE and 19.2% Operating Income ROE; Total Shareholder Return of 24.5% annualized $4.4 billion in gross written premium with year-over-year growth of 23.4% in constant dollars as reported for the Group, 32.7% in constant dollars when adjusting for reinstatement premiums for Reinsurance and 3.5% in constant dollars for Insurance Combined ratios of 91.4% for the Group, 91.0% for Reinsurance and 92.6% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.5% for the Group, 84.9% for Reinsurance and 91.0% for Insurance Pre-tax underwriting income of $301 million versus a pre-tax underwriting loss of $367 million in the prior year $170 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums, driven by a number of mid-sized events globally, versus $730 million in the prior year Net investment income improved to $406 million versus $151 million in the prior year third quarter, driven by strong fixed income and alternative investment returns Strong operating cashflow for the quarter of $1.4 billion, a company record, versus $1.1 billion in the third quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s third quarter performance was excellent. We delivered outstanding returns including a near 20% operating return on equity and an annualized 25% total shareholder return,” said Everest President & CEO Juan C. Andrade. "We are leaning into the hard reinsurance market, where favorable conditions and the global flight to quality persist. As a lead market and preferred partner, we are well-positioned for the upcoming January renewals. We continue to expand our global reinsurance portfolio at significantly improved risk adjusted returns. In addition, our primary insurance business continues to generate strong and consistent underwriting income, with a significant year-over-year improvement. Supporting the strong underwriting performance of our two businesses, our high-quality investment portfolio continues to deliver outstanding returns, generating over $400 million in net investment income in the quarter, and over $1 billion year-to-date. We have significant momentum heading into the final quarter of the year, with strong tailwinds and exceptional talent powering our disciplined execution and industry-leading shareholder returns." Summary of Third Quarter 2023 Net Income and Other Items Net Income of $678 million, equal to $15.63 per diluted share versus third quarter 2022 net loss of $319 million, equal to $(8.22) per diluted share Operating income of $613 million, equal to $14.14 per diluted share versus third quarter 2022 net operating loss of $205 million, equal to $(5.28) per diluted share GAAP combined ratio of 91.4%, including 5.0 points of catastrophe losses versus the third quarter 2022 figure of 112.0%, including 27.4 points of catastrophe losses 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 2023 2023 2022 2022 Everest Group Net income (loss) 678 1,713 (319) 101 Operating income (loss) (1) 613 1,684 (205) 587 Net income (loss) per diluted common share 15.63 41.49 (8.22) 2.57 Net operating income (loss) per diluted common share 14.14 40.77 (5.28) 14.91 Net income (loss) return on average equity (annualized) 21.2% 19.7% (12.9%) 1.4% After-tax operating income (loss) return on average equity (annualized) 19.2% 19.3% (8.3%) 8.0% Notes (1) Refer to the reconciliation of net income to net operating income found on page 6 of this press release 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 2023 2023 2022 2022 Beginning shareholders' equity 10,902 8,441 8,853 10,139 Net income (loss) 678 1,713 (319) 101 Change - unrealized gains (losses) - Fixed inc. investments (242) (159) (671) (2,199) Dividends to shareholders (76) (212) (65) (191) Purchase of treasury shares — — (58) (60) Public equity offering of shares — 1,445 — — Other (37) (1) (91) (141) Ending shareholders' equity 11,226 11,226 7,649 7,649 Common shares outstanding 43.4 39.2 Book value per common share outstanding 258.71 195.27 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (43.06) (50.02) Adjusted book value per common share outstanding excluding URAD 301.76 245.29 Change in BVPS adjusted for dividends 22.4% (22.5)% Total Shareholder Return ("TSR") - Annualized 24.5% -1.0% Common share dividends paid - last 12 months 6.70 6.40 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 2023 2023 2022 2022 Q3 Year to Date Gross written premium 4,391 12,314 3,680 10,313 19.3% 19.4% Net written premium 3,866 10,870 3,323 9,156 16.4% 18.7% Loss ratio 63.9% 62.6% 85.5% 71.7% (21.6) pts (9.1) pts Commission and brokerage ratio 21.4% 21.3% 20.9% 21.4% 0.5 pts (0.1) pts Other underwriting expenses 6.1% 6.3% 5.5% 5.7% 0.6 pts 0.6 pts Combined ratio 91.4% 90.1% 112.0% 98.8% (20.5) pts (8.6) pts Attritional combined ratio (1) 86.5% 86.9% 87.6% 87.4% (1.1) pts (0.5) pts Pre-tax net catastrophe losses (2) 170 307 730 930 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Reinsurance Segment – Quarterly Highlights Gross written premiums grew 32.7% on a constant dollar basis, when adjusting for reinstatement premiums, to approximately $3.2 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 43.9% growth in Property Pro-Rata, 41.2% in Property Catastrophe XOL, 28.8% growth in Casualty XOL, and 19.9% growth in Casualty Pro-Rata, when adjusting for reinstatement premiums, as pricing increases and a flight to quality continue globally. Robust pricing momentum continued in the third quarter, with Cat pricing up over 30% with improved terms/conditions. Attritional loss ratio improved 160-basis points over last year to 57.5%, and the attritional combined ratio improved to 84.9% versus 86.8% a year ago. Pre-tax catastrophe losses fell to $160 million net of estimated recoveries and reinstatement premiums, from $620 million a year ago. Underwriting information - Reinsurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 3,219 8,622 2,551 6,938 26.2% 24.3% Net written premium 3,008 8,101 2,460 6,664 22.3% 21.6% Loss ratio 63.7% 61.9% 88.7% 72.8% (25.0) pts (10.9) pts Commission and brokerage ratio 24.8% 24.8% 23.9% 24.5% 0.9 pts 0.3 pts Other underwriting expenses 2.5% 2.6% 2.4% 2.4% 0.1 pts 0.2 pts Combined ratio 91.0% 89.2% 115.0% 99.8% (24.0) pts (10.6) pts Attritional combined ratio (1) 84.9% 85.1% 86.8% 86.3% (1.9) pts (1.2) pts Pre-tax net catastrophe losses (2) 160 295 620 810 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Insurance Segment – Quarterly Highlights Gross written premiums rose to $1.2 billion, a 3.5% increase year-over-year in constant dollars, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines. Strong underwriting profit of $66 million for the quarter, $196 million year-to-date. Pre-tax catastrophe losses were $10 million, net of estimated recoveries and reinstatement premiums, in the quarter versus $110 million in the prior year. Expense ratio of 28.2% with continued investment in systems, talent, and our global platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 1,172 3,692 1,129 3,376 3.8% 9.4% Net written premium 858 2,768 862 2,492 (0.4) % 11.1% Loss ratio 64.4% 64.5% 76.8% 68.4% (12.4) pts (3.9) pts Commission and brokerage ratio 11.5% 11.7% 12.7% 12.7% (1.2) pts (1.0) pts Other underwriting expenses 16.7% 16.3% 14.0% 14.8% 2.7 pts 1.5 pts Combined ratio 92.6% 92.6% 103.5% 95.9% (10.9) pts (3.3) pts Attritional combined ratio (1) 91.0% 91.6% 89.8% 90.3% 1.2 pts 1.3 pts Pre-tax net catastrophe losses (2) 10 12 110 120 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 Notes (1) Attritional combined ratio excludes catastrophe losses, reinstatement premiums, prior year development, Covid-19 losses, CECL, and losses from the Russian/Ukraine war. (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Investments and Shareholders’ Equity as of September 30, 2023 Total invested assets and cash of $34.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $11.2 billion vs. $8.4 billion on December 31, 2022, including $1.9 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $13.1 billion versus $10.1 billion on December 31, 2022 Book value per share of $258.71 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $301.76 versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.75 per share equal to $76 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 involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include 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, pandemic, regulatory and legal uncertainties and other factors described in 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 26, 2023. The call will be available on the Internet through the Company’s website at https://www.everestglobal.com/investor-relations. 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. Everest will host its 2023 Investor Day on Tuesday, November 14, 2023, from 9:30 am to 1:00 pm Eastern Time. A live, listen-only webcast will be available for interested parties at https://vimeo.com/webinars/events/17b74702-5109-4c76-b8d7-4ca9b583d8b6. _______________________________________________ The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance. After-tax operating income (loss) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense) as the following reconciliation displays: (Dollars in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share After-tax operating income (loss) $ 613 $ 14.14 $ (205 ) $ (5.28 ) $ 1,684 $ 40.77 $ 587 $ 14.91 After-tax net gains (losses) on investments (27 ) (0.61 ) (102 ) (2.63 ) (17 ) (0.40 ) (415 ) (10.53 ) After-tax net foreign exchange income (expense) 91 2.10 (12 ) (0.31 ) 46 1.12 (71 ) (1.80 ) Net income (loss) $ 678 $ 15.63 $ (319 ) $ (8.22 ) $ 1,713 $ 41.49 $ 101 $ 2.57 (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 is 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 operating income (loss) in their analyses for the reasons discussed above. The Company provides after-tax 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. --Financial Details Follow-- EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,513 $ 3,067 $ 9,865 $ 8,775 Net investment income 406 151 1,023 620 Total net gains (losses) on investments (31 ) (129 ) (21 ) (519 ) Other income (expense) 103 (16 ) 61 (71 ) Total revenues 3,991 3,073 10,927 8,805 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 2,246 2,623 6,173 6,289 Commission, brokerage, taxes and fees 752 641 2,099 1,877 Other underwriting expenses 215 169 620 500 Corporate expenses 19 16 55 45 Interest, fees and bond issue cost amortization expense 34 25 99 74 Total claims and expenses 3,266 3,474 9,045 8,785 INCOME (LOSS) BEFORE TAXES 725 (401 ) 1,883 20 Income tax expense (benefit) 47 (82 ) 169 (81 ) NET INCOME (LOSS) $ 678 $ (319 ) $ 1,713 $ 101 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (257 ) (712 ) (180 ) (2,260 ) Reclassification adjustment for realized losses (gains) included in net income (loss) 15 41 21 61 Total URA(D) on securities arising during the period (242 ) (671 ) (159 ) (2,199 ) Foreign currency translation adjustments (47 ) (101 ) (17 ) (163 ) Reclassification adjustment for amortization of net (gain) loss included in net income (loss) — 1 1 2 Total benefit plan net gain (loss) for the period — 1 1 2 Total other comprehensive income (loss), net of tax (288 ) (771 ) (175 ) (2,360 ) COMPREHENSIVE INCOME (LOSS) $ 390 $ (1,090 ) $ 1,538 $ (2,259 ) EARNINGS PER COMMON SHARE: Basic $ 15.63 $ (8.22 ) $ 41.49 $ 2.57 Diluted 15.63 (8.22 ) 41.49 2.57 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS September 30, December 31, (Dollar and share amounts in millions, except par value per share) 2023 2022 (unaudited) ASSETS: Fixed maturities - available for sale, at fair value (amortized cost: 2023, $27,305; 2022, $24,191, credit allowances: 2023, $(60); 2022, $(54)) $ 25,159 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $766; 2022, $821, net of credit allowances: 2023, $(8); 2022, $(9)) 789 839 Equity securities, at fair value 166 281 Other invested assets 4,353 4,085 Short-term investments 2,403 1,032 Cash 1,765 1,398 Total investments and cash 34,635 29,872 Accrued investment income 298 217 Premiums receivable (net of credit allowances: 2023, $(36); 2022, $(29)) 4,426 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, $(25); 2022, $(23)) 226 136 Reinsurance unpaid loss recoverables 2,196 2,105 Funds held by reinsureds 1,097 1,056 Deferred acquisition costs 1,156 962 Prepaid reinsurance premiums 756 610 Income tax asset, net 500 459 Other assets (net of credit allowances: 2023, $(8); 2022, $(5)) 1,029 930 TOTAL ASSETS $ 46,318 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,833 $ 22,065 Future policy benefit reserve 27 29 Unearned premium reserve 6,295 5,147 Funds held under reinsurance treaties 28 13 Amounts due to reinsurers 795 567 Losses in course of payment 330 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 41 19 Unsettled securities payable 200 1 Other liabilities 459 526 Total liabilities 35,092 31,526 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; (2023) 74.2 and (2022) 69.9 outstanding before treasury shares 1 1 Additional paid-in capital 3,762 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $(272) at 2023 and $(250) at 2022 (2,171 ) (1,996 ) Treasury shares, at cost; 30.8 shares (2023) and 30.8 shares (2022) (3,908 ) (3,908 ) Retained earnings 13,542 12,042 Total shareholders' equity 11,226 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,318 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,713 $ 101 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (812 ) (405 ) Decrease (increase) in funds held by reinsureds, net (26 ) (35 ) Decrease (increase) in reinsurance recoverables (186 ) (662 ) Decrease (increase) in income taxes (18 ) (249 ) Decrease (increase) in prepaid reinsurance premiums (153 ) (194 ) Increase (decrease) in reserve for losses and loss adjustment expenses 1,768 3,117 Increase (decrease) in future policy benefit reserve (2 ) (2 ) Increase (decrease) in unearned premiums 1,157 435 Increase (decrease) in amounts due to reinsurers 233 242 Increase (decrease) in losses in course of payment 258 (150 ) Change in equity adjustments in limited partnerships (124 ) (126 ) Distribution of limited partnership income 81 139 Change in other assets and liabilities, net (375 ) (134 ) Non-cash compensation expense 37 35 Amortization of bond premium (accrual of bond discount) (35 ) 49 Net (gains) losses on investments 21 519 Net cash provided by (used in) operating activities 3,536 2,680 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,686 2,171 Proceeds from fixed maturities sold - available for sale 468 1,177 Proceeds from fixed maturities matured/called/repaid - held to maturity 81 18 Proceeds from equity securities sold 126 1,030 Distributions from other invested assets 189 244 Cost of fixed maturities acquired - available for sale (5,311 ) (5,958 ) Cost of fixed maturities acquired - held to maturity (23 ) (133 ) Cost of equity securities acquired (3 ) (960 ) Cost of other invested assets acquired (422 ) (455 ) Net change in short-term investments (1,338 ) 568 Net change in unsettled securities transactions 202 102 Net cash provided by (used in) investing activities (4,346 ) (2,196 ) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (22 ) (16 ) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (60 ) Dividends paid to shareholders (212 ) (191 ) Cost of debt repurchase — (6 ) Cost of shares withheld on settlements of share-based compensation awards (22 ) (19 ) Net cash provided by (used in) financing activities 1,188 (292 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (12 ) 46 Net increase (decrease) in cash 367 238 Cash, beginning of period 1,398 1,441 Cash, end of period $ 1,765 $ 1,679 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 185 $ 167 Interest paid 75 51 NON-CASH TRANSACTIONS: Reclassification of specific investments from fixed maturity securities, available for sale at fair value to fixed maturity securities, held to maturity at amortized cost net of credit allowances $ — $ 722 View source version on businesswire.com: https://www.businesswire.com/news/home/20231025504199/en/Contacts Media: Dawn Lauer Chief Communications Officer 908.300.7670 Investors: Matt Rohrmann Head of Investor Relations 908.604.7343
Net Income of $678 million and Operating Income of $613 million 21.2% Net Income ROE and 19.2% Operating Income ROE 23.4%1 GWP2 Growth, Led by Record Reinsurance Growth of 32.7%1 86.5% Attritional Combined Ratio Improved 110 Basis Points Year-Over-Year
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 2023 results. Third Quarter 2023 Highlights Net Income of $678 million; Operating Income of $613 million driven by continued underwriting margin improvement and strong net investment income generation 21.2% Net Income ROE and 19.2% Operating Income ROE; Total Shareholder Return of 24.5% annualized $4.4 billion in gross written premium with year-over-year growth of 23.4% in constant dollars as reported for the Group, 32.7% in constant dollars when adjusting for reinstatement premiums for Reinsurance and 3.5% in constant dollars for Insurance Combined ratios of 91.4% for the Group, 91.0% for Reinsurance and 92.6% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.5% for the Group, 84.9% for Reinsurance and 91.0% for Insurance Pre-tax underwriting income of $301 million versus a pre-tax underwriting loss of $367 million in the prior year $170 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums, driven by a number of mid-sized events globally, versus $730 million in the prior year Net investment income improved to $406 million versus $151 million in the prior year third quarter, driven by strong fixed income and alternative investment returns Strong operating cashflow for the quarter of $1.4 billion, a company record, versus $1.1 billion in the third quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s third quarter performance was excellent. We delivered outstanding returns including a near 20% operating return on equity and an annualized 25% total shareholder return,” said Everest President & CEO Juan C. Andrade. "We are leaning into the hard reinsurance market, where favorable conditions and the global flight to quality persist. As a lead market and preferred partner, we are well-positioned for the upcoming January renewals. We continue to expand our global reinsurance portfolio at significantly improved risk adjusted returns. In addition, our primary insurance business continues to generate strong and consistent underwriting income, with a significant year-over-year improvement. Supporting the strong underwriting performance of our two businesses, our high-quality investment portfolio continues to deliver outstanding returns, generating over $400 million in net investment income in the quarter, and over $1 billion year-to-date. We have significant momentum heading into the final quarter of the year, with strong tailwinds and exceptional talent powering our disciplined execution and industry-leading shareholder returns." Summary of Third Quarter 2023 Net Income and Other Items Net Income of $678 million, equal to $15.63 per diluted share versus third quarter 2022 net loss of $319 million, equal to $(8.22) per diluted share Operating income of $613 million, equal to $14.14 per diluted share versus third quarter 2022 net operating loss of $205 million, equal to $(5.28) per diluted share GAAP combined ratio of 91.4%, including 5.0 points of catastrophe losses versus the third quarter 2022 figure of 112.0%, including 27.4 points of catastrophe losses 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 2023 2023 2022 2022 Everest Group Net income (loss) 678 1,713 (319) 101 Operating income (loss) (1) 613 1,684 (205) 587 Net income (loss) per diluted common share 15.63 41.49 (8.22) 2.57 Net operating income (loss) per diluted common share 14.14 40.77 (5.28) 14.91 Net income (loss) return on average equity (annualized) 21.2% 19.7% (12.9%) 1.4% After-tax operating income (loss) return on average equity (annualized) 19.2% 19.3% (8.3%) 8.0% Notes (1) Refer to the reconciliation of net income to net operating income found on page 6 of this press release 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 2023 2023 2022 2022 Beginning shareholders' equity 10,902 8,441 8,853 10,139 Net income (loss) 678 1,713 (319) 101 Change - unrealized gains (losses) - Fixed inc. investments (242) (159) (671) (2,199) Dividends to shareholders (76) (212) (65) (191) Purchase of treasury shares — — (58) (60) Public equity offering of shares — 1,445 — — Other (37) (1) (91) (141) Ending shareholders' equity 11,226 11,226 7,649 7,649 Common shares outstanding 43.4 39.2 Book value per common share outstanding 258.71 195.27 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (43.06) (50.02) Adjusted book value per common share outstanding excluding URAD 301.76 245.29 Change in BVPS adjusted for dividends 22.4% (22.5)% Total Shareholder Return ("TSR") - Annualized 24.5% -1.0% Common share dividends paid - last 12 months 6.70 6.40 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 2023 2023 2022 2022 Q3 Year to Date Gross written premium 4,391 12,314 3,680 10,313 19.3% 19.4% Net written premium 3,866 10,870 3,323 9,156 16.4% 18.7% Loss ratio 63.9% 62.6% 85.5% 71.7% (21.6) pts (9.1) pts Commission and brokerage ratio 21.4% 21.3% 20.9% 21.4% 0.5 pts (0.1) pts Other underwriting expenses 6.1% 6.3% 5.5% 5.7% 0.6 pts 0.6 pts Combined ratio 91.4% 90.1% 112.0% 98.8% (20.5) pts (8.6) pts Attritional combined ratio (1) 86.5% 86.9% 87.6% 87.4% (1.1) pts (0.5) pts Pre-tax net catastrophe losses (2) 170 307 730 930 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Reinsurance Segment – Quarterly Highlights Gross written premiums grew 32.7% on a constant dollar basis, when adjusting for reinstatement premiums, to approximately $3.2 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 43.9% growth in Property Pro-Rata, 41.2% in Property Catastrophe XOL, 28.8% growth in Casualty XOL, and 19.9% growth in Casualty Pro-Rata, when adjusting for reinstatement premiums, as pricing increases and a flight to quality continue globally. Robust pricing momentum continued in the third quarter, with Cat pricing up over 30% with improved terms/conditions. Attritional loss ratio improved 160-basis points over last year to 57.5%, and the attritional combined ratio improved to 84.9% versus 86.8% a year ago. Pre-tax catastrophe losses fell to $160 million net of estimated recoveries and reinstatement premiums, from $620 million a year ago. Underwriting information - Reinsurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 3,219 8,622 2,551 6,938 26.2% 24.3% Net written premium 3,008 8,101 2,460 6,664 22.3% 21.6% Loss ratio 63.7% 61.9% 88.7% 72.8% (25.0) pts (10.9) pts Commission and brokerage ratio 24.8% 24.8% 23.9% 24.5% 0.9 pts 0.3 pts Other underwriting expenses 2.5% 2.6% 2.4% 2.4% 0.1 pts 0.2 pts Combined ratio 91.0% 89.2% 115.0% 99.8% (24.0) pts (10.6) pts Attritional combined ratio (1) 84.9% 85.1% 86.8% 86.3% (1.9) pts (1.2) pts Pre-tax net catastrophe losses (2) 160 295 620 810 Pre-tax net Russia/Ukraine losses — — — 45 Pre-tax net prior year reserve development — — — (2) Notes (1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses, CECL, and losses from the Russia/Ukraine war (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Insurance Segment – Quarterly Highlights Gross written premiums rose to $1.2 billion, a 3.5% increase year-over-year in constant dollars, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines. Strong underwriting profit of $66 million for the quarter, $196 million year-to-date. Pre-tax catastrophe losses were $10 million, net of estimated recoveries and reinstatement premiums, in the quarter versus $110 million in the prior year. Expense ratio of 28.2% with continued investment in systems, talent, and our global platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q3 Year to Date Q3 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q3 Year to Date Gross written premium 1,172 3,692 1,129 3,376 3.8% 9.4% Net written premium 858 2,768 862 2,492 (0.4) % 11.1% Loss ratio 64.4% 64.5% 76.8% 68.4% (12.4) pts (3.9) pts Commission and brokerage ratio 11.5% 11.7% 12.7% 12.7% (1.2) pts (1.0) pts Other underwriting expenses 16.7% 16.3% 14.0% 14.8% 2.7 pts 1.5 pts Combined ratio 92.6% 92.6% 103.5% 95.9% (10.9) pts (3.3) pts Attritional combined ratio (1) 91.0% 91.6% 89.8% 90.3% 1.2 pts 1.3 pts Pre-tax net catastrophe losses (2) 10 12 110 120 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 Notes (1) Attritional combined ratio excludes catastrophe losses, reinstatement premiums, prior year development, Covid-19 losses, CECL, and losses from the Russian/Ukraine war. (2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums Investments and Shareholders’ Equity as of September 30, 2023 Total invested assets and cash of $34.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $11.2 billion vs. $8.4 billion on December 31, 2022, including $1.9 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $13.1 billion versus $10.1 billion on December 31, 2022 Book value per share of $258.71 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $301.76 versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.75 per share equal to $76 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 involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include 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, pandemic, regulatory and legal uncertainties and other factors described in 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 26, 2023. The call will be available on the Internet through the Company’s website at https://www.everestglobal.com/investor-relations. 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. Everest will host its 2023 Investor Day on Tuesday, November 14, 2023, from 9:30 am to 1:00 pm Eastern Time. A live, listen-only webcast will be available for interested parties at https://vimeo.com/webinars/events/17b74702-5109-4c76-b8d7-4ca9b583d8b6. _______________________________________________ The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance. After-tax operating income (loss) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense) as the following reconciliation displays: (Dollars in millions, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share Amount Per Diluted Share After-tax operating income (loss) $ 613 $ 14.14 $ (205 ) $ (5.28 ) $ 1,684 $ 40.77 $ 587 $ 14.91 After-tax net gains (losses) on investments (27 ) (0.61 ) (102 ) (2.63 ) (17 ) (0.40 ) (415 ) (10.53 ) After-tax net foreign exchange income (expense) 91 2.10 (12 ) (0.31 ) 46 1.12 (71 ) (1.80 ) Net income (loss) $ 678 $ 15.63 $ (319 ) $ (8.22 ) $ 1,713 $ 41.49 $ 101 $ 2.57 (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 is 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 operating income (loss) in their analyses for the reasons discussed above. The Company provides after-tax 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. --Financial Details Follow-- EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,513 $ 3,067 $ 9,865 $ 8,775 Net investment income 406 151 1,023 620 Total net gains (losses) on investments (31 ) (129 ) (21 ) (519 ) Other income (expense) 103 (16 ) 61 (71 ) Total revenues 3,991 3,073 10,927 8,805 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 2,246 2,623 6,173 6,289 Commission, brokerage, taxes and fees 752 641 2,099 1,877 Other underwriting expenses 215 169 620 500 Corporate expenses 19 16 55 45 Interest, fees and bond issue cost amortization expense 34 25 99 74 Total claims and expenses 3,266 3,474 9,045 8,785 INCOME (LOSS) BEFORE TAXES 725 (401 ) 1,883 20 Income tax expense (benefit) 47 (82 ) 169 (81 ) NET INCOME (LOSS) $ 678 $ (319 ) $ 1,713 $ 101 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (257 ) (712 ) (180 ) (2,260 ) Reclassification adjustment for realized losses (gains) included in net income (loss) 15 41 21 61 Total URA(D) on securities arising during the period (242 ) (671 ) (159 ) (2,199 ) Foreign currency translation adjustments (47 ) (101 ) (17 ) (163 ) Reclassification adjustment for amortization of net (gain) loss included in net income (loss) — 1 1 2 Total benefit plan net gain (loss) for the period — 1 1 2 Total other comprehensive income (loss), net of tax (288 ) (771 ) (175 ) (2,360 ) COMPREHENSIVE INCOME (LOSS) $ 390 $ (1,090 ) $ 1,538 $ (2,259 ) EARNINGS PER COMMON SHARE: Basic $ 15.63 $ (8.22 ) $ 41.49 $ 2.57 Diluted 15.63 (8.22 ) 41.49 2.57 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS September 30, December 31, (Dollar and share amounts in millions, except par value per share) 2023 2022 (unaudited) ASSETS: Fixed maturities - available for sale, at fair value (amortized cost: 2023, $27,305; 2022, $24,191, credit allowances: 2023, $(60); 2022, $(54)) $ 25,159 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $766; 2022, $821, net of credit allowances: 2023, $(8); 2022, $(9)) 789 839 Equity securities, at fair value 166 281 Other invested assets 4,353 4,085 Short-term investments 2,403 1,032 Cash 1,765 1,398 Total investments and cash 34,635 29,872 Accrued investment income 298 217 Premiums receivable (net of credit allowances: 2023, $(36); 2022, $(29)) 4,426 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, $(25); 2022, $(23)) 226 136 Reinsurance unpaid loss recoverables 2,196 2,105 Funds held by reinsureds 1,097 1,056 Deferred acquisition costs 1,156 962 Prepaid reinsurance premiums 756 610 Income tax asset, net 500 459 Other assets (net of credit allowances: 2023, $(8); 2022, $(5)) 1,029 930 TOTAL ASSETS $ 46,318 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,833 $ 22,065 Future policy benefit reserve 27 29 Unearned premium reserve 6,295 5,147 Funds held under reinsurance treaties 28 13 Amounts due to reinsurers 795 567 Losses in course of payment 330 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 41 19 Unsettled securities payable 200 1 Other liabilities 459 526 Total liabilities 35,092 31,526 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; (2023) 74.2 and (2022) 69.9 outstanding before treasury shares 1 1 Additional paid-in capital 3,762 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $(272) at 2023 and $(250) at 2022 (2,171 ) (1,996 ) Treasury shares, at cost; 30.8 shares (2023) and 30.8 shares (2022) (3,908 ) (3,908 ) Retained earnings 13,542 12,042 Total shareholders' equity 11,226 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 46,318 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,713 $ 101 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (812 ) (405 ) Decrease (increase) in funds held by reinsureds, net (26 ) (35 ) Decrease (increase) in reinsurance recoverables (186 ) (662 ) Decrease (increase) in income taxes (18 ) (249 ) Decrease (increase) in prepaid reinsurance premiums (153 ) (194 ) Increase (decrease) in reserve for losses and loss adjustment expenses 1,768 3,117 Increase (decrease) in future policy benefit reserve (2 ) (2 ) Increase (decrease) in unearned premiums 1,157 435 Increase (decrease) in amounts due to reinsurers 233 242 Increase (decrease) in losses in course of payment 258 (150 ) Change in equity adjustments in limited partnerships (124 ) (126 ) Distribution of limited partnership income 81 139 Change in other assets and liabilities, net (375 ) (134 ) Non-cash compensation expense 37 35 Amortization of bond premium (accrual of bond discount) (35 ) 49 Net (gains) losses on investments 21 519 Net cash provided by (used in) operating activities 3,536 2,680 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,686 2,171 Proceeds from fixed maturities sold - available for sale 468 1,177 Proceeds from fixed maturities matured/called/repaid - held to maturity 81 18 Proceeds from equity securities sold 126 1,030 Distributions from other invested assets 189 244 Cost of fixed maturities acquired - available for sale (5,311 ) (5,958 ) Cost of fixed maturities acquired - held to maturity (23 ) (133 ) Cost of equity securities acquired (3 ) (960 ) Cost of other invested assets acquired (422 ) (455 ) Net change in short-term investments (1,338 ) 568 Net change in unsettled securities transactions 202 102 Net cash provided by (used in) investing activities (4,346 ) (2,196 ) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (22 ) (16 ) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (60 ) Dividends paid to shareholders (212 ) (191 ) Cost of debt repurchase — (6 ) Cost of shares withheld on settlements of share-based compensation awards (22 ) (19 ) Net cash provided by (used in) financing activities 1,188 (292 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (12 ) 46 Net increase (decrease) in cash 367 238 Cash, beginning of period 1,398 1,441 Cash, end of period $ 1,765 $ 1,679 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 185 $ 167 Interest paid 75 51 NON-CASH TRANSACTIONS: Reclassification of specific investments from fixed maturity securities, available for sale at fair value to fixed maturity securities, held to maturity at amortized cost net of credit allowances $ — $ 722 View source version on businesswire.com: https://www.businesswire.com/news/home/20231025504199/en/
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