Everest Reports Second Quarter 2024 Results

Net Income of $724 million and Operating Income of $730 million Operating Income ROE of 19.7% and TSR1 of 20.0% $358 million of Underwriting Income and Combined Ratio of 90.3%

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 2024 results.

Second Quarter 2024 Highlights

Total Shareholder Return of 20.0% annualized; 19.6% Net Income ROE and 19.7% Operating Income ROE
Net Income of $724 million; Operating Income of $730 million driven by attritional underwriting margin improvement and strong net investment income generation
$4.7 billion in gross written premium with year-over-year growth of 12.8%2 for the Group, 16.5%2 for Reinsurance, and 5.8%2 for Insurance
Combined ratios of 90.3% for the Group, 88.9% for Reinsurance and 94.4% for Insurance
Attritional combined ratios of 86.6% for the Group, 84.4% for Reinsurance and 92.8% for Insurance
Pre-tax underwriting income of $358 million for the Group, $303 million for Reinsurance, and $54 million for Insurance
$135 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums versus $27 million in the prior year
Net investment income improved to $528 million versus $357 million in the prior year second quarter, a company record, driven by a larger asset base as well as strong core fixed income and alternative investment returns
Strong operating cashflow for the quarter of $1.3 billion versus $1.1 billion in the second quarter 2023 Footnote 1 denotes annualized figure; represents Total Shareholder Return or "TSR" Footnote 2 denotes constant currency figure and excludes reinstatement premiums

“Everest produced another strong quarter and an excellent first half of the year, with second quarter results delivering an annualized Total Shareholder Return and operating ROE of 20%, driven by solid underwriting and net investment income,” said Juan C. Andrade, Everest President and CEO. “The fundamentals of our business are robust, creating significant momentum as we expand in areas with the strongest profit trajectory, while remaining focused on disciplined underwriting and risk selection. Our leading Reinsurance business continues to achieve excellent risk adjusted returns, again evidenced by our success through the most recent renewals. We made progress advancing our primary insurance strategy in key global markets, investing in, and expanding our platform with exceptional talent and capabilities to capitalize on market opportunities. As we move through the second half of 2024, we are capitalizing on this momentum, focused on achieving our primary objective of consistently generating industry leading returns.”

Summary of Second Quarter 2024 Net Income and Other Items

Net income of $724 million, equal to $16.70 per diluted share versus second quarter 2023 net income of $670 million, equal to $16.26 per diluted share
Net operating income of $730 million, equal to $16.85 per diluted share versus second quarter 2023 net operating income of $627 million, equal to $15.21 per diluted share
GAAP combined ratio of 90.3%, including 4.1 points of catastrophe losses, versus the second quarter 2023 figure of 87.7%, including 0.8 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

2024

2023

Everest Group

Net income (loss)

724

1,457

670

1,035

Net operating income (loss) (1)

730

1,439

627

1,070

Net income (loss) per diluted common share

16.70

33.57

16.26

25.74

Net operating income (loss) per diluted common share

16.85

33.17

15.21

26.61

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

19.6%

20.1%

23.3%

18.3%

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

19.7%

19.8%

21.8%

18.9%

Notes

(1) Refer to the reconciliation of net income to net operating income found on page 8 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

2024

2023

Beginning shareholders' equity

13,628

13,202

9,014

8,441

Net income (loss)

724

1,457

670

1,035

Change - unrealized gains (losses) - Fixed inc. investments

(60)

(213)

(167)

82

Dividends to shareholders

(86)

(163)

(72)

(136)

Purchase of treasury shares

(65)

(100)

—

Public equity offering of shares

—

1,445

Other

41

(1)

11

36

Ending shareholders' equity

14,182

10,902

Common shares outstanding

43.3

43.4

Book value per common share outstanding

327.68

251.17

Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD")

(21.62)

(37.47)

Adjusted book value per common share outstanding excluding URAD

349.30

288.64

Change in BVPS adjusted for dividends

8.9%

18.1%

Total Shareholder Return ("TSR") - Annualized

20.0%

25.3%

Common share dividends paid - last 12 months

7.25

6.60

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

2024

2023

Q2

Year to Date

Gross written premium

4,725

9,136

4,180

7,923

13.0%

15.3%

Net written premium

4,084

7,984

3,674

7,003

11.2%

14.0%

Loss Ratio:

Current year

58.5%

58.7%

59.5%

59.6%

(1.0) pts

(0.9) pts

Prior year

—%

— pts

Catastrophe

4.1%

3.2%

0.8%

2.2%

3.3 pts

1.0 pts

Total Loss ratio

62.6%

61.9%

60.3%

61.8%

2.3 pts

0.1 pts

Commission and brokerage ratio

21.4%

21.1%

21.2%

0.3 pts

0.2 pts

Other underwriting expenses

6.3%

6.2%

6.3%

6.4%

— pts

(0.1) pts

Combined ratio

90.3%

89.6%

87.7%

89.4%

2.6 pts

0.2 pts

Attritional combined ratio (1)

86.6%

86.5%

86.8%

87.2%

(0.2) pts

(0.7) pts

Pre-tax net catastrophe losses (2)

135

220

27

137

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

—

Notes

(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses 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 16.5% on a constant dollar basis and excluding reinstatement premiums, to approximately $3.2 billion. Growth was broad-based across geographies and lines as we continue to execute with precision and leverage our leading franchise.
Growth was driven by a 31.4% increase in Property Pro-Rata, 25.0% in Property Catastrophe XOL, and 19.6% in Casualty Pro-Rata (driven by increased rate), when adjusting for reinstatement premiums
Attritional loss ratio improved 60 basis points over last year to 57.0%, while the attritional combined ratio improved 30 basis points to 84.4% versus a year ago.
Pre-tax catastrophe losses were $120 million net of estimated recoveries and reinstatement premiums, driven primarily by a number of mid-sized international events.
Risk-adjusted returns remain very attractive, particularly in property and specialty lines.

Underwriting information - Reinsurance segment

Q2

Year to Date

Q2

Year to Date

Year on Year Change

All values in USD millions except for percentages

2024

2023

Q2

Year to Date

Gross written premium

3,209

6,385

2,747

5,368

16.8%

18.9%

Net written premium

3,033

5,975

2,621

5,059

15.7%

18.1%

Loss Ratio:

Current year

56.7%

56.9%

57.6%

57.7%

(0.9) pts

(0.8) pts

Prior year

—%

— pts

Catastrophe

5.0%

4.0%

1.2%

3.1%

3.8 pts

0.9 pts

Total Loss ratio

61.7%

60.9%

58.8%

60.8%

2.9 pts

0.1 pts

Commission and brokerage ratio

24.6%

24.5%

24.7%

0.1 pts

(0.1) pts

Other underwriting expenses

2.6%

2.7%

— pts

(0.1) pts

Combined ratio

88.9%

88.1%

85.8%

88.2%

3.1 pts

(0.1) pts

Attritional combined ratio (1)

84.4%

84.7%

85.3%

(0.3) pts

(0.9) pts

Pre-tax net catastrophe losses (2)

120

200

27

135

Pre-tax net prior year reserve development

—

Notes

(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses 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 $1.5 billion, a 5.8% increase year-over-year in constant dollars. Our International business continued to gain traction, and we received regulatory approval for new operations in Australia, Colombia, and Mexico.
As we continue to proactively change our mix of business, growth was driven by a 31.1% increase in Property/Short Tail and 26.0% in Other Specialty, led by growth in aviation, energy, surety, and construction. Growth was partially offset by a decrease of 37.4% in Accident and Health and 18.0% in Workers' Compensation as we continue to focus on lines of business with better expected margins.
Attritional loss ratio improved 70 basis points over last year to 63.7%.
Pre-tax catastrophe losses were $15 million, net of estimated recoveries and reinstatement premiums, a modest increase over the prior year quarter, which benefited from benign catastrophe losses.
Pricing continues to exceed loss trend in aggregate.
There was a meaningful acceleration in pricing across North American long-tail lines (excluding financial lines).

Underwriting information - Insurance segment

Q2

Year to Date

Q2

Year to Date

Year on Year Change

All values in USD millions except for percentages

2024

2023

Q2

Year to Date

Gross written premium

1,515

2,752

1,433

2,555

5.7%

7.7%

Net written premium

1,051

2,009

1,053

1,944

(0.2)%

3.3%

Loss Ratio:

Current year

63.7%

63.8%

64.4%

(0.7) pts

(0.6) pts

Prior year

—%

— pts

Catastrophe

1.5%

1.0%

—%

0.1%

1.5 pts

0.9 pts

Total Loss ratio

65.3%

64.9%

64.4%

64.5%

0.9 pts

0.4 pts

Commission and brokerage ratio

12.2%

12.1%

12.0%

0.1 pts

Other underwriting expenses

16.9%

16.7%

16.2%

15.9%

0.7 pts

0.8 pts

Combined ratio

94.4%

93.7%

92.6%

92.4%

1.8 pts

1.3 pts

Attritional combined ratio (1)

92.8%

92.7%

92.6%

92.3%

0.2 pts

0.4 pts

Pre-tax net catastrophe losses (2)

15

20

—

2

Pre-tax net prior year reserve development

—

Notes

(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses 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, 2024

Total invested assets and cash of $39.1 billion versus $37.1 billion on December 31, 2023
Shareholders’ equity of $14.2 billion vs. $13.2 billion on December 31, 2023, including $936 million of unrealized net losses on AFS fixed maturity investments
Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $15.1 billion versus $13.9 billion on December 31, 2023
Book value per share of $327.68 versus $304.29 at December 31, 2023
Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $349.30 versus $320.95 at December 31, 2023
Common share repurchases of $65.0 million during the quarter, representing 173,718 shares at an average price of $374.17 per share
Common share dividends declared and paid in the quarter of $2.00 per share equal to $86 million

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

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

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

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

A conference call discussing the results will be held at 8:00 a.m. Eastern Time on August 1, 2024. 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,

2024

2023

2024

2023

(unaudited)

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

After-tax net operating income (loss)

$

730

$

16.85

$

627

$

15.21

$

1,439

$

33.17

$

1,070

$

26.61

After-tax net gains (losses) on investments

(14

)

(0.32

)

4

0.11

(20

)

(0.45

)

10

0.25

After-tax net foreign exchange income (expense)

7

0.17

39

0.94

37

0.86

(45

)

(1.12

)

Net income (loss)

$

724

$

16.70

$

670

$

16.26

$

1,457

$

33.57

$

1,035

$

25.74

(Some amounts may not reconcile due to rounding.)

Although net gains (losses) on investments and net foreign exchange income (expense) are an integral part of the Company’s insurance operations, the determination of net gains (losses) on investments and foreign exchange income (expense) is independent of the insurance underwriting process. The Company believes that the level of net gains (losses) on investments and net foreign exchange income (expense) for any particular period are not indicative of the performance of the underlying business in that particular period. Providing only a GAAP presentation of net income (loss) makes it more difficult for users of the financial information to evaluate the Company’s success or failure in its basic business and may lead to incorrect or misleading assumptions and conclusions. The Company understands that the equity analysts who follow the Company focus on after-tax 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 June 30,

Six Months Ended June 30,

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

2024

2023

2024

2023

(unaudited)

REVENUES:

Premiums earned

$

3,693

$

3,251

$

7,345

$

6,352

Net investment income

528

357

985

617

Net gains (losses) on investments

(17

)

5

(24

)

10

Other income (expense)

23

38

54

(42

)

Total revenues

4,227

3,650

8,360

6,936

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

2,311

1,960

4,548

3,927

Commission, brokerage, taxes and fees

790

686

1,571

1,347

Other underwriting expenses

234

205

458

405

Corporate expenses

22

17

44

36

Interest, fees and bond issue cost amortization expense

37

33

75

65

Total claims and expenses

3,395

2,901

6,696

5,779

INCOME (LOSS) BEFORE TAXES

832

750

1,664

1,157

Income tax expense (benefit)

108

80

207

122

NET INCOME (LOSS)

$

724

$

670

$

1,457

$

1,035

Other comprehensive income (loss), net of tax:

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

(70

)

(169

)

(227

)

77

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

9

2

14

5

Total URA(D) on securities arising during the period

(60

)

(167

)

(213

)

82

Foreign currency translation adjustments

—

(1

)

(38

)

30

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

24

—

25

1

Total benefit plan net gain (loss) for the period

24

—

25

1

Total other comprehensive income (loss), net of tax

(36

)

(168

)

(227

)

113

COMPREHENSIVE INCOME (LOSS)

$

688

$

502

$

1,230

$

1,148

EARNINGS PER COMMON SHARE:

Basic

$

16.70

$

16.26

$

33.57

$

25.74

Diluted

16.70

16.26

33.57

25.74

EVEREST GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

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

2024

2023

(unaudited)

ASSETS:

Fixed maturities - available for sale, at fair value

(amortized cost: 2024, $30,134; 2023, $28,568, credit allowances: 2024, $(42); 2023, $(48))

$

29,031

$

27,740

Fixed maturities - held to maturity, at amortized cost

(fair value: 2024, $788; 2023, $854, net of credit allowances: 2024, $(8); 2023, $(8))

787

855

Equity securities, at fair value

219

188

Other invested assets

4,994

4,794

Short-term investments

2,464

2,127

Cash

1,570

1,437

Total investments and cash

39,065

37,142

Accrued investment income

360

324

Premiums receivable (net of credit allowances: 2024, $(45); 2023, $(41))

5,403

4,768

Reinsurance paid loss recoverables (net of credit allowances: 2024, $(29); 2023, $(26))

254

164

Reinsurance unpaid loss recoverables

2,151

2,098

Funds held by reinsureds

1,189

1,135

Deferred acquisition costs

1,422

1,247

Prepaid reinsurance premiums

806

713

Income tax asset, net

927

868

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

983

941

TOTAL ASSETS

$

52,560

$

49,399

LIABILITIES:

Reserve for losses and loss adjustment expenses

25,853

24,604

Unearned premium reserve

7,313

6,622

Funds held under reinsurance treaties

13

24

Amounts due to reinsurers

869

650

Losses in course of payment

289

171

Senior notes

2,349

Long-term notes

218

Borrowings from FHLB

819

Accrued interest on debt and borrowings

22

Unsettled securities payable

175

137

Other liabilities

458

582

Total liabilities

38,378

36,197

SHAREHOLDERS' EQUITY:

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

—

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

outstanding before treasury shares

1

Additional paid-in capital

3,785

3,773

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

of $(162) at 2024 and $(99) at 2023

(1,160

)

(934

)

Treasury shares, at cost; 31.0 shares (2024) and 30.8 shares (2023)

(4,008

)

(3,908

)

Retained earnings

15,565

14,270

Total shareholders' equity

14,182

13,202

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

52,560

$

49,399

EVEREST GROUP, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

(In millions of U.S. dollars)

2024

2023

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

1,457

$

1,035

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

Decrease (increase) in premiums receivable

(685

)

(584

)

Decrease (increase) in funds held by reinsureds, net

(66

)

(5

)

Decrease (increase) in reinsurance recoverables

(236

)

(21

)

Decrease (increase) in income taxes

4

56

Decrease (increase) in prepaid reinsurance premiums

(130

)

(40

)

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

1,388

1,142

Increase (decrease) in unearned premiums

744

732

Increase (decrease) in amounts due to reinsurers

258

63

Increase (decrease) in losses in course of payment

122

75

Change in equity adjustments in limited partnerships

(177

)

(56

)

Distribution of limited partnership income

60

49

Change in other assets and liabilities, net

(292

)

(293

)

Non-cash compensation expense

33

25

Amortization of bond premium (accrual of bond discount)

(65

)

(11

)

Net (gains) losses on investments

24

(10

)

Net cash provided by (used in) operating activities

2,439

2,158

CASH FLOWS FROM INVESTING ACTIVITIES:

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

1,707

1,137

Proceeds from fixed maturities sold - available for sale

1,085

168

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

109

61

Proceeds from equity securities sold

15

46

Distributions from other invested assets

209

133

Cost of fixed maturities acquired - available for sale

(4,475

)

(3,396

)

Cost of fixed maturities acquired - held to maturity

(36

)

(15

)

Cost of equity securities acquired

(35

)

(3

)

Cost of other invested assets acquired

(314

)

(298

)

Net change in short-term investments

(299

)

(625

)

Net change in unsettled securities transactions

18

41

Net cash provided by (used in) investing activities

(2,016

)

(2,752

)

CASH FLOWS FROM FINANCING ACTIVITIES:

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

(21

)

(19

)

Proceeds from public offering of common shares

—

1,445

Purchase of treasury shares

(100

)

—

Dividends paid to shareholders

(163

)

(136

)

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

(21

)

(20

)

Net cash provided by (used in) financing activities

(305

)

1,269

EFFECT OF EXCHANGE RATE CHANGES ON CASH

14

(7

)

Net increase (decrease) in cash

133

668

Cash, beginning of period

1,437

1,398

Cash, end of period

$

1,570

$

2,067

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

$

203

$

73

Interest paid

74

64

NON-CASH TRANSACTIONS:

Non-cash limited partnership distribution

23

—

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731807366/en/

Media: Dawn Lauer Chief Communications Officer 908.300.7670

Investors: Matt Rohrmann Head of Investor Relations 908.604.7343

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