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 Second Quarter 2023 Results By: Everest Group, Ltd. via Business Wire July 26, 2023 at 16:15 PM EDT Net Income of $670 million and Record Operating Income of $627 million 22.3%1 GWP2 Growth, Led by Record Reinsurance Growth of 26.9%1 and Strong Pricing Momentum 87.7% Combined Ratio Improved 410 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 second quarter 2023 results. Second Quarter 2023 Highlights Record Operating Income of $627 million; Net Income of $670 million driven by continued underwriting margin improvement 23.3% Net Income ROE and 21.8% Operating Income ROE; Record Total Shareholder Return of 25.3% annualized $4.2 billion in gross written premium with year-over-year growth of 22.3% in constant dollars as reported for the Group, 26.9% in constant dollars for Reinsurance and 14.1% in constant dollars for Insurance Combined ratios of 87.7% for the Group, 85.9% for Reinsurance and 92.7% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.7% for the Group, 84.7% for Reinsurance and 92.1% for Insurance Pre-tax underwriting income of $401 million versus $240 million in the prior year $27 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums versus $85 million in the prior year Net investment income improved to $357 million versus $226 million in the prior year second quarter, driven by strong fixed income and alternative investment returns Completed successful $1.5 billion public equity offering in May 2023 Strong operating cashflow for the quarter of $1.1 billion versus $715 million in the second quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s second quarter performance was outstanding as we leaned into the hard reinsurance market. We continued to grow premiums, while expanding margins, resulting in strong increases in quarterly underwriting profits, net income, and record operating income. We delivered an operating ROE of 21.8% and a record annualized Total Shareholder Return in excess of 25%,” said Juan C. Andrade, Everest President & CEO. “Our lead market position in reinsurance, combined with best-in-class execution and dynamic capital deployment, enabled us to take advantage of favorable market conditions and drive significantly higher risk adjusted returns. We also continued to advance our diversified and disciplined global primary insurance franchise, which is benefiting from firming rates. In addition to the excellent underwriting profit in the quarter, we generated nearly $360 million in net investment income with our well positioned portfolio. Our exceptional talent, diversified platform and underwriting discipline give us significant firepower to continue delivering on our objectives and capitalizing on abundant market opportunities, which are expected to continue well into 2024.” Summary of Second Quarter 2023 Net Income and Other Items Net Income of $670 million, equal to $16.26 per diluted share versus second quarter 2022 net income of $123 million, equal to $3.11 per diluted share Operating income of $627 million, equal to $15.21 per diluted share versus second quarter 2022 net operating income of $386 million, equal to $9.79 per diluted share GAAP combined ratio of 87.7%, including 0.8 points of catastrophe losses, versus the second quarter 2022 figure of 91.8%, including 2.9 points of catastrophe losses The following table summarizes the Company’s Net Income and related financial metrics. Net income and operating income Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Everest Group Net income (loss) 670 1,035 123 420 Operating income (loss) (1) 627 1,070 386 792 Net income (loss) per diluted common share 16.26 25.74 3.11 10.67 Net operating income (loss) per diluted common share 15.21 26.61 9.79 20.10 Net income (loss) return on average equity (annualized) 23.3% 18.3% 4.8% 8.4% After-tax operating income (loss) return on average equity (annualized) 21.8% 18.9% 15.3% 15.8% 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 Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Beginning shareholders' equity 9,014 8,441 9,528 10,139 Net income (loss) 670 1,035 123 420 Change - unrealized gains (losses) - Fixed inc. investments (167) 82 (717) (1,528) Dividends to shareholders (72) (136) (65) (126) Purchase of treasury shares — — — (1) Public equity offering of shares 1,445 1,445 — — Other 11 36 (16) (51) Ending shareholders' equity 10,902 10,902 8,853 8,853 Common shares outstanding 43.4 39.4 Book value per common share outstanding 251.17 224.59 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (37.47) (32.68) Adjusted book value per common share outstanding excluding URAD 288.64 257.27 Change in BVPS adjusted for dividends 18.1% (11.8)% Total Shareholder Return ("TSR") - Annualized 25.3% 6.6% Common share dividends paid - last 12 months 6.60 6.30 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 Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 4,180 7,923 3,447 6,633 21.3 % 19.4 % Net written premium 3,674 7,003 3,021 5,833 21.6 % 20.1 % Loss ratio 60.3% 61.8% 64.3% 64.2% (4.0)% pts (2.4)% pts Commission and brokerage ratio 21.1% 21.2% 21.6% 21.6% (0.5)% pts (0.4)% pts Other underwriting expenses 6.3% 6.4% 5.8% 5.8% 0.5 % pts 0.6 % pts Combined ratio 87.7% 89.4% 91.8% 91.7% (4.1)% pts (2.3)% pts Attritional combined ratio (1) 86.7% 87.1% 87.2% 87.3% (0.5)% pts (0.2)% pts Pre-tax net catastrophe losses (2) 27 137 85 200 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 26.9% on a constant dollar basis to approximately $2.8 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 34.7% growth in property pro-rata, 29.6% growth in property Cat, and 16.2% in Casualty pro-rata as pricing increases and a flight to quality continues globally. Robust pricing momentum continued in the second quarter, with Cat pricing up 47.5% in North America and 29.2% Internationally, with improved terms/conditions. Attritional loss ratio improved 120 basis points over last year to 57.6%, and the attritional combined ratio improved to 84.7% vs 86.0% a year ago. Pre-tax catastrophe losses fell to $27 million net of estimated recoveries and reinstatement premiums, from $80 million a year ago. Catastrophe losses in the quarter were partially offset by $30 million of catastrophe bond recoveries related to Hurricane Ian. Underwriting information - Reinsurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 2,766 5,403 2,201 4,387 25.7 % 23.2 % Net written premium 2,639 5,093 2,122 4,204 24.4 % 21.2 % Loss ratio 58.8% 60.8% 64.6% 64.4% (5.8)% pts (3.6)% pts Commission and brokerage ratio 24.5% 24.7% 24.8% 24.8% (0.3)% pts (0.1)% pts Other underwriting expenses 2.6% 2.7% 2.4% 2.4% 0.2 % pts 0.3 % pts Combined ratio 85.9% 88.2% 91.8% 91.6% (5.9)% pts (3.4)% pts Attritional combined ratio (1) 84.7% 85.3% 86.0% 86.1% (1.3)% pts (0.8)% pts Pre-tax net catastrophe losses (2) 27 135 80 190 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 $1.4 billion, a 14.1% increase year-over-year in constant dollars, a new quarterly record, led by a diversified mix of property, marine, aviation, energy and other specialty lines Strong cycle management delivered an underwriting profit of $64 million. Catastrophe losses were benign in the quarter demonstrating our de-risking actions on the portfolio. Disciplined expense management drove a total expense ratio of 28.3% with continued investment in global systems and our platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 1,414 2,520 1,246 2,247 13.5 % 12.2 % Net written premium 1,035 1,910 899 1,630 15.0 % 17.2 % Loss ratio 64.4% 64.6% 63.6% 63.9% 0.8 % pts 0.7 % pts Commission and brokerage ratio 11.8% 11.8% 12.8% 12.7% (1.0)% pts (0.9)% pts Other underwriting expenses 16.5% 16.2% 15.1% 15.2% 1.4 % pts 1.0 % pts Combined ratio 92.7% 92.5% 91.5% 91.7% 1.2 % pts 0.8 % pts Attritional combined ratio (1) 92.1% 91.9% 90.2% 90.6% 1.9 % pts 1.3 % pts Pre-tax net catastrophe losses (2) — 2 5 10 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 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 Investments and Shareholders’ Equity as of June 30, 2023 Total invested assets and cash of $33.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $10.9 billion vs. $8.4 billion on December 31, 2022, including $1.6 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $12.5 billion versus $10.1 billion on December 31, 2022 Book value per share of $251.17 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $288.64, versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.65 per share equal to $72 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 July 27, 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. _______________________________________________ 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare After-tax operating income (loss) $ 627 $ 15.21 $ 386 $ 9.79 $ 1,070 $ 26.61 $ 792 $ 20.10 After-tax net gains (losses) on investments 4 0.11 (189) (4.79) 10 0.25 (312) (7.93) After-tax net foreign exchange income (expense) 39 0.94 (74) (1.88) (45) (1.12) (59) (1.49) Net income (loss) $ 670 $ 16.26 $ 123 $ 3.11 $ 1,035 $ 25.74 $ 420 $ 10.67 (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 Six Months Ended June 30, June 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,251 $ 2,916 $ 6,352 $ 5,708 Net investment income 357 226 617 469 Total net gains (losses) on investments 5 (236) 10 (390) Other income (expense) 38 (71) (42) (56) Total revenues 3,650 2,835 6,936 5,731 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 1,960 1,876 3,927 3,666 Commission, brokerage, taxes and fees 686 630 1,347 1,236 Other underwriting expenses 205 170 405 331 Corporate expenses 17 15 36 29 Interest, fees and bond issue cost amortization expense 33 24 65 48 Total claims and expenses 2,901 2,715 5,779 5,310 INCOME (LOSS) BEFORE TAXES 750 119 1,157 421 Income tax expense (benefit) 80 (4) 122 1 NET INCOME (LOSS) $ 670 $ 123 $ 1,035 420 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (169) (732) 77 (1,548) Reclassification adjustment for realized losses (gains) included in net income (loss) 2 16 5 20 Total URA(D) on securities arising during the period (167) (717) 82 (1,528) Foreign currency translation adjustments (1) (28) 30 (62) 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 (168) (744) 113 (1,588) COMPREHENSIVE INCOME (LOSS) $ 502 $ (621) $ 1,148 $ (1,168) EARNINGS PER COMMON SHARE: Basic $ 16.26 $ 3.11 $ 25.74 $ 10.67 Diluted 16.26 3.11 25.74 10.67 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS June 30, December 31, (Dollars 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, $26,372; 2022, $24,191, credit allowances: 2023, ($63); 2022, ($54)) $ 24,489 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $781; 2022, $821, net of credit allowances: 2023 ($8); 2022, ($9)) 798 839 Equity securities, at fair value 259 281 Other invested assets 4,262 4,085 Short-term investments 1,675 1,032 Cash 2,067 1,398 Total investments and cash 33,550 29,872 Accrued investment income 266 217 Premiums receivable (net of credit allowances: 2023, ($34); 2022, ($29)) 4,263 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, ($24); 2022, ($23)) 201 136 Reinsurance unpaid loss recoverables 2,175 2,105 Funds held by reinsureds 1,075 1,056 Deferred acquisition costs 1,086 962 Prepaid reinsurance premiums 692 610 Income tax asset, net 399 459 Other assets (net of credit allowances: 2023, ($7); 2022, ($5)) 961 930 TOTAL ASSETS $ 44,668 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,405 $ 22,065 Future policy benefit reserve 28 29 Unearned premium reserve 5,943 5,147 Funds held under reinsurance treaties 25 13 Amounts due to reinsurers 678 567 Losses in course of payment 150 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 19 19 Unsettled securities payable 21 1 Other liabilities 412 526 Total liabilities 33,766 31,525 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 3,753 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of ($247) at 2023 and ($250) at 2022 (1,883) (1,996) Treasury shares, at cost; 30.8 (2023) and 30.8 shares (2022) (3,908) (3,908) Retained earnings 12,940 12,042 Total shareholders' equity 10,902 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 44,668 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,035 $ 420 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (584) (223) Decrease (increase) in funds held by reinsureds, net (5) (51) Decrease (increase) in reinsurance recoverables (21) (237) Decrease (increase) in income taxes 56 (100) Decrease (increase) in prepaid reinsurance premiums (40) (110) Increase (decrease) in reserve for losses and loss adjustment expenses 1,142 1,360 Increase (decrease) in future policy benefit reserve (1) (2) Increase (decrease) in unearned premiums 732 177 Increase (decrease) in amounts due to reinsurers 63 120 Increase (decrease) in losses in course of payment 75 (178) Change in equity adjustments in limited partnerships (56) (157) Distribution of limited partnership income 49 105 Change in other assets and liabilities, net (292) (11) Non-cash compensation expense 25 24 Amortization of bond premium (accrual of bond discount) (11) 35 Net (gains) losses on investments (10) 390 Net cash provided by (used in) operating activities 2,158 1,562 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,137 1,661 Proceeds from fixed maturities sold - available for sale 168 772 Proceeds from fixed maturities matured/called/repaid - held to maturity 61 — Proceeds from equity securities sold 46 438 Distributions from other invested assets 133 205 Cost of fixed maturities acquired - available for sale (3,396) (4,071) Cost of fixed maturities acquired - held to maturity (15) (72) Cost of equity securities acquired (3) (283) Cost of other invested assets acquired (298) (308) Net change in short-term investments (625) 878 Net change in unsettled securities transactions 41 23 Net cash provided by (used in) investing activities (2,752) (757) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (19) (15) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (1) Dividends paid to shareholders (136) (126) Cost of shares withheld on settlements of share-based compensation awards (20) (17) Net cash provided by (used in) financing activities 1,269 (159) EFFECT OF EXCHANGE RATE CHANGES ON CASH (7) 30 Net increase (decrease) in cash 668 675 Cash, beginning of period 1,398 1,441 Cash, end of period $ 2,067 2,116 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 73 $ 101 Interest paid 64 48 View source version on businesswire.com: https://www.businesswire.com/news/home/20230726044967/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. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Everest Reports Second Quarter 2023 Results By: Everest Group, Ltd. via Business Wire July 26, 2023 at 16:15 PM EDT Net Income of $670 million and Record Operating Income of $627 million 22.3%1 GWP2 Growth, Led by Record Reinsurance Growth of 26.9%1 and Strong Pricing Momentum 87.7% Combined Ratio Improved 410 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 second quarter 2023 results. Second Quarter 2023 Highlights Record Operating Income of $627 million; Net Income of $670 million driven by continued underwriting margin improvement 23.3% Net Income ROE and 21.8% Operating Income ROE; Record Total Shareholder Return of 25.3% annualized $4.2 billion in gross written premium with year-over-year growth of 22.3% in constant dollars as reported for the Group, 26.9% in constant dollars for Reinsurance and 14.1% in constant dollars for Insurance Combined ratios of 87.7% for the Group, 85.9% for Reinsurance and 92.7% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.7% for the Group, 84.7% for Reinsurance and 92.1% for Insurance Pre-tax underwriting income of $401 million versus $240 million in the prior year $27 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums versus $85 million in the prior year Net investment income improved to $357 million versus $226 million in the prior year second quarter, driven by strong fixed income and alternative investment returns Completed successful $1.5 billion public equity offering in May 2023 Strong operating cashflow for the quarter of $1.1 billion versus $715 million in the second quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s second quarter performance was outstanding as we leaned into the hard reinsurance market. We continued to grow premiums, while expanding margins, resulting in strong increases in quarterly underwriting profits, net income, and record operating income. We delivered an operating ROE of 21.8% and a record annualized Total Shareholder Return in excess of 25%,” said Juan C. Andrade, Everest President & CEO. “Our lead market position in reinsurance, combined with best-in-class execution and dynamic capital deployment, enabled us to take advantage of favorable market conditions and drive significantly higher risk adjusted returns. We also continued to advance our diversified and disciplined global primary insurance franchise, which is benefiting from firming rates. In addition to the excellent underwriting profit in the quarter, we generated nearly $360 million in net investment income with our well positioned portfolio. Our exceptional talent, diversified platform and underwriting discipline give us significant firepower to continue delivering on our objectives and capitalizing on abundant market opportunities, which are expected to continue well into 2024.” Summary of Second Quarter 2023 Net Income and Other Items Net Income of $670 million, equal to $16.26 per diluted share versus second quarter 2022 net income of $123 million, equal to $3.11 per diluted share Operating income of $627 million, equal to $15.21 per diluted share versus second quarter 2022 net operating income of $386 million, equal to $9.79 per diluted share GAAP combined ratio of 87.7%, including 0.8 points of catastrophe losses, versus the second quarter 2022 figure of 91.8%, including 2.9 points of catastrophe losses The following table summarizes the Company’s Net Income and related financial metrics. Net income and operating income Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Everest Group Net income (loss) 670 1,035 123 420 Operating income (loss) (1) 627 1,070 386 792 Net income (loss) per diluted common share 16.26 25.74 3.11 10.67 Net operating income (loss) per diluted common share 15.21 26.61 9.79 20.10 Net income (loss) return on average equity (annualized) 23.3% 18.3% 4.8% 8.4% After-tax operating income (loss) return on average equity (annualized) 21.8% 18.9% 15.3% 15.8% 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 Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Beginning shareholders' equity 9,014 8,441 9,528 10,139 Net income (loss) 670 1,035 123 420 Change - unrealized gains (losses) - Fixed inc. investments (167) 82 (717) (1,528) Dividends to shareholders (72) (136) (65) (126) Purchase of treasury shares — — — (1) Public equity offering of shares 1,445 1,445 — — Other 11 36 (16) (51) Ending shareholders' equity 10,902 10,902 8,853 8,853 Common shares outstanding 43.4 39.4 Book value per common share outstanding 251.17 224.59 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (37.47) (32.68) Adjusted book value per common share outstanding excluding URAD 288.64 257.27 Change in BVPS adjusted for dividends 18.1% (11.8)% Total Shareholder Return ("TSR") - Annualized 25.3% 6.6% Common share dividends paid - last 12 months 6.60 6.30 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 Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 4,180 7,923 3,447 6,633 21.3 % 19.4 % Net written premium 3,674 7,003 3,021 5,833 21.6 % 20.1 % Loss ratio 60.3% 61.8% 64.3% 64.2% (4.0)% pts (2.4)% pts Commission and brokerage ratio 21.1% 21.2% 21.6% 21.6% (0.5)% pts (0.4)% pts Other underwriting expenses 6.3% 6.4% 5.8% 5.8% 0.5 % pts 0.6 % pts Combined ratio 87.7% 89.4% 91.8% 91.7% (4.1)% pts (2.3)% pts Attritional combined ratio (1) 86.7% 87.1% 87.2% 87.3% (0.5)% pts (0.2)% pts Pre-tax net catastrophe losses (2) 27 137 85 200 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 26.9% on a constant dollar basis to approximately $2.8 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 34.7% growth in property pro-rata, 29.6% growth in property Cat, and 16.2% in Casualty pro-rata as pricing increases and a flight to quality continues globally. Robust pricing momentum continued in the second quarter, with Cat pricing up 47.5% in North America and 29.2% Internationally, with improved terms/conditions. Attritional loss ratio improved 120 basis points over last year to 57.6%, and the attritional combined ratio improved to 84.7% vs 86.0% a year ago. Pre-tax catastrophe losses fell to $27 million net of estimated recoveries and reinstatement premiums, from $80 million a year ago. Catastrophe losses in the quarter were partially offset by $30 million of catastrophe bond recoveries related to Hurricane Ian. Underwriting information - Reinsurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 2,766 5,403 2,201 4,387 25.7 % 23.2 % Net written premium 2,639 5,093 2,122 4,204 24.4 % 21.2 % Loss ratio 58.8% 60.8% 64.6% 64.4% (5.8)% pts (3.6)% pts Commission and brokerage ratio 24.5% 24.7% 24.8% 24.8% (0.3)% pts (0.1)% pts Other underwriting expenses 2.6% 2.7% 2.4% 2.4% 0.2 % pts 0.3 % pts Combined ratio 85.9% 88.2% 91.8% 91.6% (5.9)% pts (3.4)% pts Attritional combined ratio (1) 84.7% 85.3% 86.0% 86.1% (1.3)% pts (0.8)% pts Pre-tax net catastrophe losses (2) 27 135 80 190 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 $1.4 billion, a 14.1% increase year-over-year in constant dollars, a new quarterly record, led by a diversified mix of property, marine, aviation, energy and other specialty lines Strong cycle management delivered an underwriting profit of $64 million. Catastrophe losses were benign in the quarter demonstrating our de-risking actions on the portfolio. Disciplined expense management drove a total expense ratio of 28.3% with continued investment in global systems and our platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 1,414 2,520 1,246 2,247 13.5 % 12.2 % Net written premium 1,035 1,910 899 1,630 15.0 % 17.2 % Loss ratio 64.4% 64.6% 63.6% 63.9% 0.8 % pts 0.7 % pts Commission and brokerage ratio 11.8% 11.8% 12.8% 12.7% (1.0)% pts (0.9)% pts Other underwriting expenses 16.5% 16.2% 15.1% 15.2% 1.4 % pts 1.0 % pts Combined ratio 92.7% 92.5% 91.5% 91.7% 1.2 % pts 0.8 % pts Attritional combined ratio (1) 92.1% 91.9% 90.2% 90.6% 1.9 % pts 1.3 % pts Pre-tax net catastrophe losses (2) — 2 5 10 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 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 Investments and Shareholders’ Equity as of June 30, 2023 Total invested assets and cash of $33.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $10.9 billion vs. $8.4 billion on December 31, 2022, including $1.6 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $12.5 billion versus $10.1 billion on December 31, 2022 Book value per share of $251.17 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $288.64, versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.65 per share equal to $72 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 July 27, 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. _______________________________________________ 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare After-tax operating income (loss) $ 627 $ 15.21 $ 386 $ 9.79 $ 1,070 $ 26.61 $ 792 $ 20.10 After-tax net gains (losses) on investments 4 0.11 (189) (4.79) 10 0.25 (312) (7.93) After-tax net foreign exchange income (expense) 39 0.94 (74) (1.88) (45) (1.12) (59) (1.49) Net income (loss) $ 670 $ 16.26 $ 123 $ 3.11 $ 1,035 $ 25.74 $ 420 $ 10.67 (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 Six Months Ended June 30, June 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,251 $ 2,916 $ 6,352 $ 5,708 Net investment income 357 226 617 469 Total net gains (losses) on investments 5 (236) 10 (390) Other income (expense) 38 (71) (42) (56) Total revenues 3,650 2,835 6,936 5,731 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 1,960 1,876 3,927 3,666 Commission, brokerage, taxes and fees 686 630 1,347 1,236 Other underwriting expenses 205 170 405 331 Corporate expenses 17 15 36 29 Interest, fees and bond issue cost amortization expense 33 24 65 48 Total claims and expenses 2,901 2,715 5,779 5,310 INCOME (LOSS) BEFORE TAXES 750 119 1,157 421 Income tax expense (benefit) 80 (4) 122 1 NET INCOME (LOSS) $ 670 $ 123 $ 1,035 420 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (169) (732) 77 (1,548) Reclassification adjustment for realized losses (gains) included in net income (loss) 2 16 5 20 Total URA(D) on securities arising during the period (167) (717) 82 (1,528) Foreign currency translation adjustments (1) (28) 30 (62) 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 (168) (744) 113 (1,588) COMPREHENSIVE INCOME (LOSS) $ 502 $ (621) $ 1,148 $ (1,168) EARNINGS PER COMMON SHARE: Basic $ 16.26 $ 3.11 $ 25.74 $ 10.67 Diluted 16.26 3.11 25.74 10.67 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS June 30, December 31, (Dollars 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, $26,372; 2022, $24,191, credit allowances: 2023, ($63); 2022, ($54)) $ 24,489 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $781; 2022, $821, net of credit allowances: 2023 ($8); 2022, ($9)) 798 839 Equity securities, at fair value 259 281 Other invested assets 4,262 4,085 Short-term investments 1,675 1,032 Cash 2,067 1,398 Total investments and cash 33,550 29,872 Accrued investment income 266 217 Premiums receivable (net of credit allowances: 2023, ($34); 2022, ($29)) 4,263 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, ($24); 2022, ($23)) 201 136 Reinsurance unpaid loss recoverables 2,175 2,105 Funds held by reinsureds 1,075 1,056 Deferred acquisition costs 1,086 962 Prepaid reinsurance premiums 692 610 Income tax asset, net 399 459 Other assets (net of credit allowances: 2023, ($7); 2022, ($5)) 961 930 TOTAL ASSETS $ 44,668 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,405 $ 22,065 Future policy benefit reserve 28 29 Unearned premium reserve 5,943 5,147 Funds held under reinsurance treaties 25 13 Amounts due to reinsurers 678 567 Losses in course of payment 150 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 19 19 Unsettled securities payable 21 1 Other liabilities 412 526 Total liabilities 33,766 31,525 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 3,753 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of ($247) at 2023 and ($250) at 2022 (1,883) (1,996) Treasury shares, at cost; 30.8 (2023) and 30.8 shares (2022) (3,908) (3,908) Retained earnings 12,940 12,042 Total shareholders' equity 10,902 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 44,668 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,035 $ 420 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (584) (223) Decrease (increase) in funds held by reinsureds, net (5) (51) Decrease (increase) in reinsurance recoverables (21) (237) Decrease (increase) in income taxes 56 (100) Decrease (increase) in prepaid reinsurance premiums (40) (110) Increase (decrease) in reserve for losses and loss adjustment expenses 1,142 1,360 Increase (decrease) in future policy benefit reserve (1) (2) Increase (decrease) in unearned premiums 732 177 Increase (decrease) in amounts due to reinsurers 63 120 Increase (decrease) in losses in course of payment 75 (178) Change in equity adjustments in limited partnerships (56) (157) Distribution of limited partnership income 49 105 Change in other assets and liabilities, net (292) (11) Non-cash compensation expense 25 24 Amortization of bond premium (accrual of bond discount) (11) 35 Net (gains) losses on investments (10) 390 Net cash provided by (used in) operating activities 2,158 1,562 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,137 1,661 Proceeds from fixed maturities sold - available for sale 168 772 Proceeds from fixed maturities matured/called/repaid - held to maturity 61 — Proceeds from equity securities sold 46 438 Distributions from other invested assets 133 205 Cost of fixed maturities acquired - available for sale (3,396) (4,071) Cost of fixed maturities acquired - held to maturity (15) (72) Cost of equity securities acquired (3) (283) Cost of other invested assets acquired (298) (308) Net change in short-term investments (625) 878 Net change in unsettled securities transactions 41 23 Net cash provided by (used in) investing activities (2,752) (757) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (19) (15) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (1) Dividends paid to shareholders (136) (126) Cost of shares withheld on settlements of share-based compensation awards (20) (17) Net cash provided by (used in) financing activities 1,269 (159) EFFECT OF EXCHANGE RATE CHANGES ON CASH (7) 30 Net increase (decrease) in cash 668 675 Cash, beginning of period 1,398 1,441 Cash, end of period $ 2,067 2,116 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 73 $ 101 Interest paid 64 48 View source version on businesswire.com: https://www.businesswire.com/news/home/20230726044967/en/Contacts Media: Dawn Lauer Chief Communications Officer 908.300.7670 Investors: Matt Rohrmann Head of Investor Relations 908.604.7343
Net Income of $670 million and Record Operating Income of $627 million 22.3%1 GWP2 Growth, Led by Record Reinsurance Growth of 26.9%1 and Strong Pricing Momentum 87.7% Combined Ratio Improved 410 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 second quarter 2023 results. Second Quarter 2023 Highlights Record Operating Income of $627 million; Net Income of $670 million driven by continued underwriting margin improvement 23.3% Net Income ROE and 21.8% Operating Income ROE; Record Total Shareholder Return of 25.3% annualized $4.2 billion in gross written premium with year-over-year growth of 22.3% in constant dollars as reported for the Group, 26.9% in constant dollars for Reinsurance and 14.1% in constant dollars for Insurance Combined ratios of 87.7% for the Group, 85.9% for Reinsurance and 92.7% for Insurance driven by improved pricing and lower catastrophe losses year-over-year Attritional combined ratios of 86.7% for the Group, 84.7% for Reinsurance and 92.1% for Insurance Pre-tax underwriting income of $401 million versus $240 million in the prior year $27 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums versus $85 million in the prior year Net investment income improved to $357 million versus $226 million in the prior year second quarter, driven by strong fixed income and alternative investment returns Completed successful $1.5 billion public equity offering in May 2023 Strong operating cashflow for the quarter of $1.1 billion versus $715 million in the second quarter 2022 Footnote 1 in header denotes constant currency figure. Footnote 2 in header denotes gross written premium (“GWP”). “Everest’s second quarter performance was outstanding as we leaned into the hard reinsurance market. We continued to grow premiums, while expanding margins, resulting in strong increases in quarterly underwriting profits, net income, and record operating income. We delivered an operating ROE of 21.8% and a record annualized Total Shareholder Return in excess of 25%,” said Juan C. Andrade, Everest President & CEO. “Our lead market position in reinsurance, combined with best-in-class execution and dynamic capital deployment, enabled us to take advantage of favorable market conditions and drive significantly higher risk adjusted returns. We also continued to advance our diversified and disciplined global primary insurance franchise, which is benefiting from firming rates. In addition to the excellent underwriting profit in the quarter, we generated nearly $360 million in net investment income with our well positioned portfolio. Our exceptional talent, diversified platform and underwriting discipline give us significant firepower to continue delivering on our objectives and capitalizing on abundant market opportunities, which are expected to continue well into 2024.” Summary of Second Quarter 2023 Net Income and Other Items Net Income of $670 million, equal to $16.26 per diluted share versus second quarter 2022 net income of $123 million, equal to $3.11 per diluted share Operating income of $627 million, equal to $15.21 per diluted share versus second quarter 2022 net operating income of $386 million, equal to $9.79 per diluted share GAAP combined ratio of 87.7%, including 0.8 points of catastrophe losses, versus the second quarter 2022 figure of 91.8%, including 2.9 points of catastrophe losses The following table summarizes the Company’s Net Income and related financial metrics. Net income and operating income Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Everest Group Net income (loss) 670 1,035 123 420 Operating income (loss) (1) 627 1,070 386 792 Net income (loss) per diluted common share 16.26 25.74 3.11 10.67 Net operating income (loss) per diluted common share 15.21 26.61 9.79 20.10 Net income (loss) return on average equity (annualized) 23.3% 18.3% 4.8% 8.4% After-tax operating income (loss) return on average equity (annualized) 21.8% 18.9% 15.3% 15.8% 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 Q2 Year to Date Q2 Year to Date All values in USD millions except for per share amounts and percentages 2023 2023 2022 2022 Beginning shareholders' equity 9,014 8,441 9,528 10,139 Net income (loss) 670 1,035 123 420 Change - unrealized gains (losses) - Fixed inc. investments (167) 82 (717) (1,528) Dividends to shareholders (72) (136) (65) (126) Purchase of treasury shares — — — (1) Public equity offering of shares 1,445 1,445 — — Other 11 36 (16) (51) Ending shareholders' equity 10,902 10,902 8,853 8,853 Common shares outstanding 43.4 39.4 Book value per common share outstanding 251.17 224.59 Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD") (37.47) (32.68) Adjusted book value per common share outstanding excluding URAD 288.64 257.27 Change in BVPS adjusted for dividends 18.1% (11.8)% Total Shareholder Return ("TSR") - Annualized 25.3% 6.6% Common share dividends paid - last 12 months 6.60 6.30 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 Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 4,180 7,923 3,447 6,633 21.3 % 19.4 % Net written premium 3,674 7,003 3,021 5,833 21.6 % 20.1 % Loss ratio 60.3% 61.8% 64.3% 64.2% (4.0)% pts (2.4)% pts Commission and brokerage ratio 21.1% 21.2% 21.6% 21.6% (0.5)% pts (0.4)% pts Other underwriting expenses 6.3% 6.4% 5.8% 5.8% 0.5 % pts 0.6 % pts Combined ratio 87.7% 89.4% 91.8% 91.7% (4.1)% pts (2.3)% pts Attritional combined ratio (1) 86.7% 87.1% 87.2% 87.3% (0.5)% pts (0.2)% pts Pre-tax net catastrophe losses (2) 27 137 85 200 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 26.9% on a constant dollar basis to approximately $2.8 billion, a new quarterly premium record for the segment. Growth was broad-based across geographies and lines. Growth was driven by 34.7% growth in property pro-rata, 29.6% growth in property Cat, and 16.2% in Casualty pro-rata as pricing increases and a flight to quality continues globally. Robust pricing momentum continued in the second quarter, with Cat pricing up 47.5% in North America and 29.2% Internationally, with improved terms/conditions. Attritional loss ratio improved 120 basis points over last year to 57.6%, and the attritional combined ratio improved to 84.7% vs 86.0% a year ago. Pre-tax catastrophe losses fell to $27 million net of estimated recoveries and reinstatement premiums, from $80 million a year ago. Catastrophe losses in the quarter were partially offset by $30 million of catastrophe bond recoveries related to Hurricane Ian. Underwriting information - Reinsurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 2,766 5,403 2,201 4,387 25.7 % 23.2 % Net written premium 2,639 5,093 2,122 4,204 24.4 % 21.2 % Loss ratio 58.8% 60.8% 64.6% 64.4% (5.8)% pts (3.6)% pts Commission and brokerage ratio 24.5% 24.7% 24.8% 24.8% (0.3)% pts (0.1)% pts Other underwriting expenses 2.6% 2.7% 2.4% 2.4% 0.2 % pts 0.3 % pts Combined ratio 85.9% 88.2% 91.8% 91.6% (5.9)% pts (3.4)% pts Attritional combined ratio (1) 84.7% 85.3% 86.0% 86.1% (1.3)% pts (0.8)% pts Pre-tax net catastrophe losses (2) 27 135 80 190 Pre-tax net Russia/Ukraine losses — — 45 45 Pre-tax net prior year reserve development 0 0 (1) (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 $1.4 billion, a 14.1% increase year-over-year in constant dollars, a new quarterly record, led by a diversified mix of property, marine, aviation, energy and other specialty lines Strong cycle management delivered an underwriting profit of $64 million. Catastrophe losses were benign in the quarter demonstrating our de-risking actions on the portfolio. Disciplined expense management drove a total expense ratio of 28.3% with continued investment in global systems and our platform. Pricing continues to exceed loss trend. Underwriting information - Insurance segment Q2 Year to Date Q2 Year to Date Year on Year Change All values in USD millions except for percentages 2023 2023 2022 2022 Q2 Year to Date Gross written premium 1,414 2,520 1,246 2,247 13.5 % 12.2 % Net written premium 1,035 1,910 899 1,630 15.0 % 17.2 % Loss ratio 64.4% 64.6% 63.6% 63.9% 0.8 % pts 0.7 % pts Commission and brokerage ratio 11.8% 11.8% 12.8% 12.7% (1.0)% pts (0.9)% pts Other underwriting expenses 16.5% 16.2% 15.1% 15.2% 1.4 % pts 1.0 % pts Combined ratio 92.7% 92.5% 91.5% 91.7% 1.2 % pts 0.8 % pts Attritional combined ratio (1) 92.1% 91.9% 90.2% 90.6% 1.9 % pts 1.3 % pts Pre-tax net catastrophe losses (2) — 2 5 10 Pre-tax net Russia/Ukraine losses — — — — Pre-tax net prior year reserve development — — — 1 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 Investments and Shareholders’ Equity as of June 30, 2023 Total invested assets and cash of $33.6 billion versus $29.9 billion on December 31, 2022 Shareholders’ equity of $10.9 billion vs. $8.4 billion on December 31, 2022, including $1.6 billion of unrealized net losses on AFS fixed maturity investments Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $12.5 billion versus $10.1 billion on December 31, 2022 Book value per share of $251.17 versus $215.54 at December 31, 2022 Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $288.64, versus $259.18 at December 31, 2022 Common share dividends declared and paid in the quarter of $1.65 per share equal to $72 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 July 27, 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. _______________________________________________ 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 June 30, Six Months Ended June 30, 2023 2022 2023 2022 (unaudited) (unaudited) Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare Amount Per DilutedShare After-tax operating income (loss) $ 627 $ 15.21 $ 386 $ 9.79 $ 1,070 $ 26.61 $ 792 $ 20.10 After-tax net gains (losses) on investments 4 0.11 (189) (4.79) 10 0.25 (312) (7.93) After-tax net foreign exchange income (expense) 39 0.94 (74) (1.88) (45) (1.12) (59) (1.49) Net income (loss) $ 670 $ 16.26 $ 123 $ 3.11 $ 1,035 $ 25.74 $ 420 $ 10.67 (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 Six Months Ended June 30, June 30, (Dollars in millions, except per share amounts) 2023 2022 2023 2022 (unaudited) (unaudited) REVENUES: Premiums earned $ 3,251 $ 2,916 $ 6,352 $ 5,708 Net investment income 357 226 617 469 Total net gains (losses) on investments 5 (236) 10 (390) Other income (expense) 38 (71) (42) (56) Total revenues 3,650 2,835 6,936 5,731 CLAIMS AND EXPENSES: Incurred losses and loss adjustment expenses 1,960 1,876 3,927 3,666 Commission, brokerage, taxes and fees 686 630 1,347 1,236 Other underwriting expenses 205 170 405 331 Corporate expenses 17 15 36 29 Interest, fees and bond issue cost amortization expense 33 24 65 48 Total claims and expenses 2,901 2,715 5,779 5,310 INCOME (LOSS) BEFORE TAXES 750 119 1,157 421 Income tax expense (benefit) 80 (4) 122 1 NET INCOME (LOSS) $ 670 $ 123 $ 1,035 420 Other comprehensive income (loss), net of tax: Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period (169) (732) 77 (1,548) Reclassification adjustment for realized losses (gains) included in net income (loss) 2 16 5 20 Total URA(D) on securities arising during the period (167) (717) 82 (1,528) Foreign currency translation adjustments (1) (28) 30 (62) 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 (168) (744) 113 (1,588) COMPREHENSIVE INCOME (LOSS) $ 502 $ (621) $ 1,148 $ (1,168) EARNINGS PER COMMON SHARE: Basic $ 16.26 $ 3.11 $ 25.74 $ 10.67 Diluted 16.26 3.11 25.74 10.67 EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS June 30, December 31, (Dollars 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, $26,372; 2022, $24,191, credit allowances: 2023, ($63); 2022, ($54)) $ 24,489 $ 22,236 Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $781; 2022, $821, net of credit allowances: 2023 ($8); 2022, ($9)) 798 839 Equity securities, at fair value 259 281 Other invested assets 4,262 4,085 Short-term investments 1,675 1,032 Cash 2,067 1,398 Total investments and cash 33,550 29,872 Accrued investment income 266 217 Premiums receivable (net of credit allowances: 2023, ($34); 2022, ($29)) 4,263 3,619 Reinsurance paid loss recoverables (net of credit allowances: 2023, ($24); 2022, ($23)) 201 136 Reinsurance unpaid loss recoverables 2,175 2,105 Funds held by reinsureds 1,075 1,056 Deferred acquisition costs 1,086 962 Prepaid reinsurance premiums 692 610 Income tax asset, net 399 459 Other assets (net of credit allowances: 2023, ($7); 2022, ($5)) 961 930 TOTAL ASSETS $ 44,668 $ 39,966 LIABILITIES: Reserve for losses and loss adjustment expenses 23,405 $ 22,065 Future policy benefit reserve 28 29 Unearned premium reserve 5,943 5,147 Funds held under reinsurance treaties 25 13 Amounts due to reinsurers 678 567 Losses in course of payment 150 74 Senior notes 2,348 2,347 Long-term notes 218 218 Borrowings from FHLB 519 519 Accrued interest on debt and borrowings 19 19 Unsettled securities payable 21 1 Other liabilities 412 526 Total liabilities 33,766 31,525 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 3,753 2,302 Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of ($247) at 2023 and ($250) at 2022 (1,883) (1,996) Treasury shares, at cost; 30.8 (2023) and 30.8 shares (2022) (3,908) (3,908) Retained earnings 12,940 12,042 Total shareholders' equity 10,902 8,441 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 44,668 $ 39,966 EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended June 30, (Dollars in millions) 2023 2022 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,035 $ 420 Adjustments to reconcile net income to net cash provided by operating activities: Decrease (increase) in premiums receivable (584) (223) Decrease (increase) in funds held by reinsureds, net (5) (51) Decrease (increase) in reinsurance recoverables (21) (237) Decrease (increase) in income taxes 56 (100) Decrease (increase) in prepaid reinsurance premiums (40) (110) Increase (decrease) in reserve for losses and loss adjustment expenses 1,142 1,360 Increase (decrease) in future policy benefit reserve (1) (2) Increase (decrease) in unearned premiums 732 177 Increase (decrease) in amounts due to reinsurers 63 120 Increase (decrease) in losses in course of payment 75 (178) Change in equity adjustments in limited partnerships (56) (157) Distribution of limited partnership income 49 105 Change in other assets and liabilities, net (292) (11) Non-cash compensation expense 25 24 Amortization of bond premium (accrual of bond discount) (11) 35 Net (gains) losses on investments (10) 390 Net cash provided by (used in) operating activities 2,158 1,562 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from fixed maturities matured/called/repaid - available for sale 1,137 1,661 Proceeds from fixed maturities sold - available for sale 168 772 Proceeds from fixed maturities matured/called/repaid - held to maturity 61 — Proceeds from equity securities sold 46 438 Distributions from other invested assets 133 205 Cost of fixed maturities acquired - available for sale (3,396) (4,071) Cost of fixed maturities acquired - held to maturity (15) (72) Cost of equity securities acquired (3) (283) Cost of other invested assets acquired (298) (308) Net change in short-term investments (625) 878 Net change in unsettled securities transactions 41 23 Net cash provided by (used in) investing activities (2,752) (757) CASH FLOWS FROM FINANCING ACTIVITIES: Common shares issued (redeemed) during the period for share-based compensation, net of expense (19) (15) Proceeds from public offering of common shares 1,445 — Purchase of treasury shares — (1) Dividends paid to shareholders (136) (126) Cost of shares withheld on settlements of share-based compensation awards (20) (17) Net cash provided by (used in) financing activities 1,269 (159) EFFECT OF EXCHANGE RATE CHANGES ON CASH (7) 30 Net increase (decrease) in cash 668 675 Cash, beginning of period 1,398 1,441 Cash, end of period $ 2,067 2,116 SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid (recovered) $ 73 $ 101 Interest paid 64 48 View source version on businesswire.com: https://www.businesswire.com/news/home/20230726044967/en/
Media: Dawn Lauer Chief Communications Officer 908.300.7670 Investors: Matt Rohrmann Head of Investor Relations 908.604.7343