Net Income of $509 million and Net Operating
Income of $630 million
Total Shareholder Return1 of 19.4%
Annualized YTD 17.8% Net Income ROE and
18.7% Net Operating Income ROE
Everest Group, Ltd. (NYSE: EG), a global underwriting leader
providing best-in-class property, casualty, and specialty
reinsurance and insurance solutions, today reported its third
quarter 2024 results.
Third Quarter 2024 Highlights
- Total Shareholder Return of 19.4% annualized; Annualized
year-to-date 17.8% Net Income ROE and 18.7% Net Operating Income
ROE
- Net Income of $509 million; Net Operating Income of $630
million driven by attritional underwriting margin improvement and
solid net investment income generation
- $4.4 billion in gross written premium with year-over-year
growth of 0.6% for the Group, 1.7% for Reinsurance, and -2.1% for
Insurance on a comparable basis; Strong double-digit growth in
property and specialty lines across both segments was partially
offset by reductions in certain casualty lines
- Combined ratios of 93.1% for the Group, 91.8% for Reinsurance
and 97.1% for Insurance
- Attritional combined ratios of 85.8% for the Group, 83.5% for
Reinsurance and 92.6% for Insurance
- Pre-tax underwriting income of $272 million for the Group, $245
million for Reinsurance, and $27 million for Insurance
- $279 million of pre-tax catastrophe losses net of recoveries
and reinstatement premiums versus $170 million in Q3 2023
- Net investment income improved to $496 million versus $406
million in the prior year third quarter, driven by a larger asset
base as well as strong core fixed income investment returns
- Strong operating cashflow for the quarter of $1.7 billion
versus $1.4 billion in the third quarter 2023
(1) Denotes annualized figure; represents
Total Shareholder Return or "TSR". Annualized TSR is calculated as
year to date growth in book value per common share outstanding
excluding URA(D) on fixed maturity, available for sale securities
plus year-to-date dividends per share.
“Everest delivered another successful quarter with strong
operating income driven by solid underwriting results and healthy
investment income. These results reflect our underwriting
discipline and prudent risk management, which position the Company
to generate leading returns despite another above-average
catastrophe year for the industry. We are delivering an annualized
total shareholder return and operating return on equity of
approximately 19%,” said Juan C. Andrade, Everest President and
CEO. “As a lead reinsurance market, we grew in attractive lines of
business with the highest expected returns. We are leveraging our
franchise value in the continuing favorable property market
conditions heading into the January 1 renewals. Additionally, we
continued to shape our global primary insurance portfolio by
growing strong double-digits in more attractive property and
specialty lines, while remaining conservative across certain
casualty lines in North America. As we approach the final stretch
of the year, we remain focused on executing our strategy.”
Summary of Third Quarter 2024 Net Income
and Other Items
- Net income of $509 million, equal to $11.80 per diluted share
versus third quarter 2023 net income of $678 million, equal to
$15.63 per diluted share
- Net operating income of $630 million, equal to $14.62 per
diluted share versus third quarter 2023 net operating income of
$613 million, equal to $14.14 per diluted share
- GAAP combined ratio of 93.1%, including 7.9 points of
catastrophe losses, versus 91.4% in the third quarter 2023,
including 5.0 points of catastrophe losses; Everest continues to
successfully manage volatility against the backdrop of another year
of above-average industry catastrophes
Hurricane Milton
- Pre-tax net catastrophe loss estimated to be in the range of
$300 to $400 million for the fourth quarter 2024, net of estimated
recoveries and reinstatement premiums
- Everest's loss estimate is based on an insured industry loss
range of $25 to $35 billion
The following table summarizes the Company’s Net Income and
related financial metrics.
Net income and operating income
Q3
Year to Date
Q3
Year to Date
All values in USD millions except for
per share amounts and percentages
2024
2024
2023
2023
Everest
Group
Net income (loss)
509
1,966
678
1,713
Net operating income (loss) (2)
630
2,070
613
1,684
Net income (loss) per diluted common
share
11.80
45.40
15.63
41.49
Net operating income (loss) per diluted
common share (2)
14.62
47.79
14.14
40.77
Net income (loss) return on average equity
(annualized)
13.3%
17.8%
21.2%
19.7%
After-tax net operating income (loss)
return on average equity (annualized) (2)
16.4%
18.7%
19.2%
19.3%
Notes
(2) Denotes non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
Shareholders' Equity and Book Value per
Share
Q3
Year to Date
Q3
Year to Date
All values in USD millions except for
per share amounts and percentages
2024
2024
2023
2023
Beginning shareholders' equity
14,182
13,202
10,902
8,441
Net income (loss)
509
1,966
678
1,713
Change - URA(D) of fixed maturity,
available for sale securities
716
503
(242)
(159)
Dividends to shareholders
(86)
(249)
(76)
(212)
Purchase of treasury shares
(100)
(200)
—
—
Public equity offering of shares
—
—
—
1,445
Other
114
113
(37)
(1)
Ending shareholders' equity
15,335
15,335
11,226
11,226
Common shares outstanding
43.0
43.4
Book value per common share
outstanding
356.77
258.71
Less: URA(D) of fixed maturity, available
for sale securities
(5.11)
(43.06)
Book value per common share outstanding
excluding URA(D) (3)
361.87
301.76
Change in BVPS adjusted for dividends
19.1%
22.4%
Total Shareholder Return ("TSR") -
Annualized
19.4%
24.5%
Common share dividends paid - last 12
months
7.50
6.70
Notes
(3) Denotes non-GAAP financial measure. A
reconciliation to book value per share, the most comparable GAAP
measure, is included in the table above. See "Comments on Non-GAAP
Financial Measures" for additional information.
The following information summarizes the Company’s underwriting
results, on a consolidated basis and by segment – Reinsurance and
Insurance, with selected commentary on results by segment.
Underwriting information - Everest
Group
Q3
Year to Date
Q3
Year to Date
Year on Year Change
All values in USD millions except for
percentages
2024
2024
2023
2023
Q3
Year to Date
Gross written premium
4,425
13,561
4,391
12,314
0.8%
10.1%
Net written premium
3,805
11,789
3,866
10,870
(1.6)%
8.5%
Loss Ratio:
Current year
58.0%
58.5%
58.9%
59.4%
(0.9) pts
(0.9) pts
Prior year
—%
—%
—%
—%
— pts
— pts
Catastrophe
7.9%
4.9%
5.0%
3.2%
2.9 pts
1.6 pts
Total Loss ratio
66.0%
63.3%
63.9%
62.6%
2.0 pts
0.7 pts
Commission and brokerage ratio
21.1%
21.3%
21.4%
21.3%
(0.3) pts
— pts
Other underwriting expenses
6.0%
6.2%
6.1%
6.3%
(0.1) pts
(0.1) pts
Combined ratio
93.1%
90.8%
91.4%
90.1%
1.6 pts
0.6 pts
Attritional combined ratio (4)
85.8%
86.3%
86.6%
87.0%
(0.8) pts
(0.7) pts
Pre-tax net catastrophe losses (5)
279
499
170
307
Pre-tax net unfavorable (favorable) prior
year reserve development
—
—
—
—
Notes
(4) Attritional ratios exclude catastrophe
losses, net CAT reinstatement premiums earned, prior year
development, COVID-19 losses and losses from the Russia/Ukraine
war. Attritional combined ratio is a non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
(5) Pre-tax net catastrophe losses are net
of reinsurance and reinstatement premiums.
Reinsurance Segment – Quarterly Highlights
- Gross written premiums grew 1.7% on a comparable basis
(constant dollar basis and excluding reinstatement premiums)2, to
approximately $3.3 billion. We continue to execute with precision,
leveraging our market leading franchise to drive growth in lines
with the best expected risk-adjusted returns.
- Growth was led by a 19.2% increase in Property Pro-Rata and
9.3% in Property Catastrophe XOL, partially offset by a 7.2%
decrease in Casualty Pro-Rata, a 5.9% decrease in Casualty XOL, and
a 28.6% decrease in Financial Lines, when adjusting for
reinstatement premiums.
- Attritional loss ratio improved 60 basis points over last year
to 56.9%, while the attritional combined ratio improved 140 basis
points to 83.5% versus a year ago4.
- Pre-tax catastrophe losses were $239 million net of estimated
recoveries and reinstatement premiums, driven primarily by several
Atlantic hurricanes and other international weather-related events.
Hurricane Helene accounted for $63 million of catastrophe losses,
net of estimated recoveries and reinstatement premiums, in the
quarter.
- Risk-adjusted returns remain excellent, particularly in
property and specialty lines.
Underwriting information - Reinsurance
segment
Q3
Year to Date
Q3
Year to Date
Year on Year Change
All values in USD millions except for
percentages
2024
2024
2023
2023
Q3
Year to Date
Gross written premium
3,265
9,650
3,198
8,566
2.1%
12.7%
Net written premium
2,975
8,950
2,989
8,048
(0.5)%
11.2%
Loss Ratio:
Current year
56.3%
56.7%
57.4%
57.6%
(1.1) pts
(0.9) pts
Prior year
—%
—%
—%
—%
— pts
— pts
Catastrophe
9.1%
5.8%
6.4%
4.2%
2.7 pts
1.5 pts
Total Loss ratio
65.4%
62.5%
63.8%
61.9%
1.6 pts
0.6 pts
Commission and brokerage ratio
23.9%
24.4%
24.8%
24.8%
(0.9) pts
(0.4) pts
Other underwriting expenses
2.5%
2.6%
2.5%
2.6%
— pts
— pts
Combined ratio
91.8%
89.4%
91.1%
89.2%
0.7 pts
0.2 pts
Attritional combined ratio (4)
83.5%
84.1%
84.9%
85.1%
(1.4) pts
(1.0) pts
Pre-tax net catastrophe losses (5)
239
439
160
295
Pre-tax net prior year reserve
development
—
—
—
—
Notes
(2) Denotes non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
(4) Attritional ratios exclude catastrophe
losses, net CAT reinstatement premiums earned, prior year
development, COVID-19 losses and losses from the Russia/Ukraine
war. Attritional combined ratio is a non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
(5) Pre-tax net catastrophe losses are net
of reinsurance and reinstatement premiums.
Insurance Segment – Quarterly Highlights
- Gross written premiums decreased to $1.2 billion on a
comparable basis (constant dollar basis and excluding reinstatement
premiums)2, a 2.1% decrease year-over-year as we continued to
strategically shape the portfolio. Our International business
continued its strong growth trajectory as it gained further
traction.
- Everest Insurance grew by 21.0% in Property/Short Tail and
17.7% in Other Specialty lines. Growth was offset by a decrease of
27.6% in Accident and Health, as we exit the medical stop loss
business, and 10.3% in Specialty Casualty, primarily in North
America, reflecting our focus on lines of business with better
expected margins.
- Pre-tax catastrophe losses were $40 million, net of estimated
recoveries and reinstatement premiums, an increase over the prior
year quarter, which benefited from benign catastrophe losses.
- Pricing continues to exceed loss trend in the aggregate and
there was a meaningful acceleration in pricing across North
American long-tail lines (excluding financial lines).
Underwriting information - Insurance
segment
Q3
Year to Date
Q3
Year to Date
Year on Year Change
All values in USD millions except for
percentages
2024
2024
2023
2023
Q3
Year to Date
Gross written premium
1,160
3,911
1,193
3,748
(2.8)%
4.3%
Net written premium
830
2,839
878
2,822
(5.4)%
0.6%
Loss Ratio:
Current year
63.5%
63.7%
63.3%
64.0%
0.2 pts
(0.3) pts
Prior year
—%
—%
—%
—%
— pts
— pts
Catastrophe
4.2%
2.1%
1.1%
0.4%
3.1 pts
1.7 pts
Total Loss ratio
67.8%
65.8%
64.4%
64.5%
3.4 pts
1.4 pts
Commission and brokerage ratio
12.2%
12.1%
11.8%
11.9%
0.4 pts
0.2 pts
Other underwriting expenses
17.2%
16.9%
16.4%
16.1%
0.8 pts
0.8 pts
Combined ratio
97.1%
94.9%
92.5%
92.5%
4.6 pts
2.4 pts
Attritional combined ratio (4)
92.6%
92.6%
91.4%
92.0%
1.2 pts
0.6 pts
Pre-tax net catastrophe losses (5)
40
60
10
12
Pre-tax net prior year reserve
development
—
—
—
—
Notes
(2) Denotes non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
(4) Attritional ratios exclude catastrophe
losses, net CAT reinstatement premiums earned, prior year
development, COVID-19 losses and losses from the Russia/Ukraine
war. Attritional combined ratio is a non-GAAP financial measure.
See "Comments on Non-GAAP Financial Measures" for an explanation
and reconciliation.
(5) Pre-tax net catastrophe losses are net
of reinsurance and reinstatement premiums.
Investments and Shareholders’ Equity as of September 30,
2024
- Total invested assets and cash of $42.1 billion versus $37.1
billion on December 31, 2023
- Shareholders’ equity of $15.3 billion vs. $13.2 billion on
December 31, 2023, including $220 million of unrealized net losses
on fixed maturity, available for sale securities
- Shareholders’ equity excluding unrealized gains (losses) on
fixed maturity, available for sale securities of $15.6 billion
versus $13.9 billion on December 31, 2023
- Book value per share of $356.77 versus $304.29 at December 31,
2023
- Book value per share excluding unrealized gains (losses) on
fixed maturity, available for sale securities of $361.87 versus
$320.95 at December 31, 2023
- Common share repurchases of $100.0 million during the quarter,
representing 272,460 shares at an average price of $367.03 per
share. We have now repurchased $199.9 million year-to-date.
- Common share dividends declared and paid in the quarter of
$2.00 per common share equal to $86 million
This news release contains forward-looking statements within the
meaning of the U.S. federal securities laws. We intend these
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements in the U.S. federal
securities laws. These statements reflect management’s current
expectations based on assumptions we believe are reasonable but are
not guarantees of performance. Actual results may differ materially
from those contained in forward-looking statements made on behalf
of the Company. The forward-looking statements involve risks and
uncertainties that include, but are not limited to, the impact of
general economic conditions and conditions affecting the insurance
and reinsurance industry, the adequacy of our reserves, our ability
to assess underwriting risk, trends in rates for property and
casualty insurance and reinsurance, competition, investment market
and investment income fluctuations, trends in insured and paid
losses, catastrophes, pandemics, regulatory and legal uncertainties
and other factors described in our SEC filings, including our
latest Annual Report on Form 10-K. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About Everest
Everest Group, Ltd. (Everest) is a global underwriting leader
providing best-in-class property, casualty, and specialty
reinsurance and insurance solutions that address customers’ most
pressing challenges. Known for a 50-year track record of
disciplined underwriting, capital and risk management, Everest,
through its global operating affiliates, is committed to
underwriting opportunity for colleagues, customers, shareholders,
and communities worldwide.
Everest common stock (NYSE: EG) is a component of the S&P
500 index.
Additional information about Everest, our people, and our
products can be found on our website at www.everestglobal.com.
A conference call discussing the results will be held at 8:00
a.m. Eastern Time on October 31, 2024. The call will be available
on the Internet through the Company’s website at
https://investors.everestglobal.com/overview.
Recipients are encouraged to visit the Company’s website to view
supplemental financial information on the Company’s results. The
supplemental information is located at www.everestglobal.com in the
“Investors/Financials/Quarterly Results” section of the website.
The supplemental financial information may also be obtained by
contacting the Company directly.
Comments on Non-GAAP Financial Measures
In this Press Release, the Company has included certain non-GAAP
financial measures, including after-tax net operating income
(loss), after-tax net operating income (loss) per diluted share,
attritional combined ratio, gross written premiums presented on a
comparable basis, net operating income return on equity ("ROE"),
underwriting income, and book value per common share outstanding
excluding net unrealized appreciation (depreciation) on fixed
maturity, available for sale securities ("URA(D)"). The Company
presents these non-GAAP financial measures to facilitate a deeper
understanding of the profitability drivers of our business, results
of operations, financial condition and liquidity. The Company
believes that such measures are important to investors and other
interested persons, and that these measures are a useful supplement
to GAAP information concerning the Company’s performance. These
measures may not, however, be comparable to similarly titled
measures used by companies within or outside of the insurance
industry. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, or superior to, the Company’s
financial measures prepared in accordance with generally accepted
accounting principles ("GAAP").
A reconciliation non-GAAP financial measures to the most
comparable corresponding GAAP financial measure is included
below.
After-tax net operating income (loss) and after-tax net
operating income (loss) per diluted share
After-tax net operating income (loss) (also referred to in this
release as net operating income) consists of net income (loss)
excluding after-tax net gains (losses) on investments and after-tax
net foreign exchange income (expense), as shown below:
(Dollars in millions, except per share
amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
(unaudited)
(unaudited)
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
After-tax net operating income (loss)
$
630
$
14.62
$
613
$
14.14
$
2,070
$
47.79
$
1,684
$
40.77
After-tax net gains (losses) on
investments
(25
)
(0.57
)
(27
)
(0.61
)
(44
)
(1.02
)
(17
)
(0.40
)
After-tax net foreign exchange income
(expense)
(97
)
(2.24
)
91
2.10
(60
)
(1.38
)
46
1.12
Net income (loss)
$
509
$
11.80
$
678
$
15.63
$
1,966
$
45.40
$
1,713
$
41.49
(Some amounts may not reconcile due to
rounding.)
Although net gains (losses) on investments and net foreign
exchange income (expense) are an integral part of the Company’s
insurance operations, the determination of net gains (losses) on
investments and foreign exchange income (expense) is independent of
the insurance underwriting process. The Company believes that the
level of net gains (losses) on investments and net foreign exchange
income (expense) for any particular period are not indicative of
the performance of the underlying business in that particular
period. Providing only a GAAP presentation of net income (loss)
makes it more difficult for users of the financial information to
evaluate the Company’s success or failure in its basic business and
may lead to incorrect or misleading assumptions and conclusions.
The Company understands that the equity analysts who follow the
Company focus on after-tax net operating income (loss) in their
analyses for the reasons discussed above. The Company provides
after-tax net operating income (loss) to investors so that they
have what management believes to be a useful supplement to GAAP
information concerning the Company’s performance.
Attritional Loss Ratio and Attritional Combined Ratio
The loss ratio is calculated as the sum of total incurred losses
and loss adjustment expenses, divided by net premiums earned. The
combined ratio is calculated as the sum of total incurred losses
and loss adjustment expenses, commission and brokerage expenses,
and other underwriting expenses, divided by net premiums earned.
The attritional loss ratio and attritional combined ratio are
defined as the loss ratio and the combined ratio, respectively,
adjusted to exclude catastrophe losses, net catastrophe
reinstatement premiums, prior year development, COVID-19 losses and
losses from the Russia/Ukraine war. The Company believes the
attritional ratios are useful to management and investors because
the adjusted ratios provide for better comparability and more
accurately measure the Company’s underlying underwriting
performance. The following tables are a reconciliation of the loss
ratio and attritional loss ratio, and the combined ratio and
attritional combined ratio for the periods noted:
Three Months Ended September
30,
2024
2023
(unaudited)
Reinsurance
Insurance
Group
Reinsurance
Insurance
Group
Loss ratio
65.4
%
67.8
%
66.0
%
63.8
%
64.4
%
63.9
%
Adjustment for catastrophe losses
(9.1
)%
(4.2
)%
(7.9
)%
(6.4
)%
(1.1
)%
(5.0
)%
Adjustment for reinstatement premiums
0.6
%
—
%
0.5
%
0.1
%
—
%
0.1
%
Adjustment for prior year development
(6)
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for Russia/Ukraine war
losses
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for other items
—
%
(0.2
)%
(0.1
)%
—
%
—
%
—
%
Attritional loss ratio
56.9
%
63.3
%
58.5
%
57.5
%
63.3
%
59.0
%
(Some amounts may not reconcile due to
rounding.)
Three Months Ended September
30,
2024
2023
(unaudited)
Reinsurance
Insurance
Group
Reinsurance
Insurance
Group
Combined ratio
91.8
%
97.1
%
93.1
%
91.1
%
92.5
%
91.4
%
Adjustment for catastrophe losses
(9.1
)%
(4.2
)%
(7.9
)%
(6.4
)%
(1.1
)%
(5.0
)%
Adjustment for reinstatement premiums
0.9
%
—
%
0.7
%
0.2
%
—
%
0.1
%
Adjustment for prior year development
(6)
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for Russia/Ukraine war
losses
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for other items
—
%
(0.3
)%
(0.1
)%
—
%
—
%
—
%
Attritional combined ratio
83.5
%
92.6
%
85.8
%
84.9
%
91.4
%
86.6
%
(Some amounts may not reconcile due to
rounding.)
Nine Months Ended September
30,
2024
2023
(unaudited)
Reinsurance
Insurance
Group
Reinsurance
Insurance
Group
Combined ratio
89.4
%
94.9
%
90.8
%
89.2
%
92.5
%
90.1
%
Adjustment for catastrophe losses
(5.8
)%
(2.1
)%
(4.9
)%
(4.2
)%
(0.4
)%
(3.2
)%
Adjustment for reinstatement premiums
0.5
%
—
%
0.4
%
0.1
%
—
%
0.1
%
Adjustment for prior year development
(6)
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for Russia/Ukraine war
losses
—
%
—
%
—
%
—
%
—
%
—
%
Adjustment for other items
—
%
(0.1
)%
—
%
—
%
—
%
—
%
Attritional combined ratio
84.1
%
92.6
%
86.3
%
85.1
%
92.0
%
87.0
%
(Some amounts may not reconcile due to
rounding.)
Notes
(6) Prior-year development includes the
impact of COVID-19 losses.
Gross Written Premium on a Comparable Basis
The Company has included in this Press Release certain changes
in gross written premium on a comparable basis, reflecting constant
currency basis and excluding reinstatement premiums. Constant
currency basis excludes the impact of foreign exchange rates. The
Company provides change in gross written premium on a comparable
basis to investors so that they have what management believes to be
a useful supplement to GAAP information concerning the Company’s
performance. The following tables are a reconciliation of gross
written premium and period-over-period changes on a GAAP basis to
the non-GAAP comparable basis for the periods noted:
(Dollars in millions)
Quarter-to-Date
September 30, 2024
September 30, 2023
Change
(unaudited)
Gross Written Premium
Gross Written Premium
% Impact
Group
$
4,425
$
4,391
0.8
%
Adjustment for gross CAT reinstatement
premiums
(33
)
(6
)
(0.6
)%
Adjustment for foreign exchange effect
—
(21
)
0.5
%
Group (comparable basis)
$
4,392
$
4,365
0.6
%
Reinsurance
$
3,265
$
3,198
2.1
%
Adjustment for gross CAT reinstatement
premiums
(33
)
(6
)
(0.8
)%
Adjustment for foreign exchange effect
—
(13
)
0.4
%
Reinsurance (comparable basis)
$
3,232
$
3,180
1.7
%
Insurance
$
1,160
$
1,193
(2.8
)%
Adjustment for gross CAT reinstatement
premiums
—
—
—
%
Adjustment for foreign exchange effect
—
(8
)
0.7
%
Insurance (comparable basis)
$
1,160
$
1,185
(2.1
)%
(Some amounts may not reconcile due to
rounding.)
Net Operating Income Return On Equity ("ROE")
Net Operating income ROE is calculated by dividing after-tax net
operating income (loss) by average shareholders' equity, adjusted
for average net unrealized depreciation (appreciation) of fixed
maturity, available for sale securities. A reconciliation of net
income, the most comparable GAAP measure, to net operating income
is presented above. The Company believes net operating income ROE
is a useful measure for management and investors as it allows for
better comparability and removes variability when assessing the
results of operations. A reconciliation of Net Operating Income ROE
and Net Income ROE is shown below.
Quarter-to-Date
Year-to-Date
(Dollars in millions)
September 30,
September 30,
September 30,
September 30,
2024
2023
2024
2023
(unaudited)
(unaudited)
Beginning of period shareholders'
equity
$
14,182
$
10,902
$
13,202
$
8,441
Add: Net unrealized depreciation
(appreciation) of fixed maturity, available for sale securities
936
1,627
723
1,709
Adjusted beginning of period shareholders'
equity
$
15,118
$
12,529
$
13,925
$
10,149
End of period shareholders' equity
$
15,335
$
11,226
$
15,335
$
11,226
Add: Net unrealized depreciation
(appreciation) of fixed maturity, available for sale securities
220
1,868
220
1,868
Adjusted end of period shareholders'
equity
$
15,555
$
13,094
$
15,555
$
13,094
Average adjusted shareholders' equity
$
15,336
$
12,811
$
14,740
$
11,622
After-tax net operating income (loss)
$
630
$
613
$
2,070
$
1,684
After-tax net gains (losses) on
investments
$
(25
)
(27
)
$
(44
)
(17
)
After-tax foreign exchange income
(expense)
$
(97
)
91
$
(60
)
46
Net income (loss)
$
509
$
678
$
1,966
$
1,713
Return on equity (annualized)
After-tax net operating income (loss)
16.4
%
19.2
%
18.7
%
19.3
%
After-tax net gains (losses) on
investments
-0.6
%
-0.8
%
-0.4
%
-0.1
%
After-tax foreign exchange income
(expense)
-2.5
%
2.9
%
-0.5
%
0.5
%
Net income (loss)
13.3
%
21.2
%
17.8
%
19.7
%
(Some amounts may not reconcile due to
rounding.)
Underwriting Income
Underwriting income is calculated as net premiums earned, less
(1) incurred losses and loss adjustment expenses, (2) commission,
brokerage, taxes and fees, and (3) other underwriting expenses. Net
income (loss) is the most comparable GAAP measure. The Company
believes underwriting income is a useful measure for management and
investors when assessing the performance of the Company's
reinsurance and insurance business segments. Group underwriting
income is allocated to our Reinsurance and Insurance reportable
segments. A reconciliation of Underwriting Income and Net Income is
shown below.
Quarter-to-Date
(Dollars in millions)
September 30, 2024
September 30, 2023
(unaudited)
Reinsurance
Insurance
Group
Reinsurance
Insurance
Group
Net premiums earned
$
2,970
$
948
$
3,918
$
2,593
$
920
$
3,513
Less: Incurred losses and LAE
1,942
642
2,584
1,653
593
2,246
Less: Commission, brokerage, taxes and
fees
710
116
826
643
108
752
Less: Other underwriting expenses
73
163
236
65
151
215
Underwriting income (loss)
$
245
$
27
$
272
$
232
$
69
$
301
Net investment income
496
406
Net gains (losses) on investments
(27
)
(31
)
Corporate expenses
(25
)
(19
)
Interest, fee and bond issue cost
amortization expense
(38
)
(34
)
Other income (expense)
(102
)
103
Income tax benefit (expense)
(68
)
(47
)
Net income (loss)
$
509
$
678
(Some amounts may not reconcile due to
rounding.)
Book value per common share outstanding excluding
URA(D)
Book value per common share outstanding excluding net unrealized
appreciation (depreciation) of fixed maturity, available for sale
securities ("URA(D)") is calculated as reported shareholders'
equity less URA(D), divided by common shares outstanding. Book
value per share is the most comparable GAAP measure. The Company
believes this metric is useful to management and investors as it
shows the value of shareholder returns on a per share basis after
eliminating the variability of investments held at fair value.
Please see the table on page 3 for a reconciliation of book value
per common share outstanding (excluding URA(D)) and book value per
share.
Annualized Total Shareholder Return
Annualized TSR ("TSR") is calculated as year-to-date growth in
book value per common share outstanding (excluding URA(D)) plus
year-to-date dividends per share. As further discussed above, book
value per common share outstanding (excluding URA(D)) is a non-GAAP
measure. Please see the table on page 3 for a reconciliation of
book value per common share outstanding (excluding URA(D)) and book
value per share.
--Financial Details Follow--
EVEREST GROUP, LTD. CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended September
30,
Nine Months Ended September
30,
(In millions of U.S. dollars, except per
share amounts)
2024
2023
2024
2023
(unaudited)
(unaudited)
REVENUES:
Premiums earned
$
3,918
$
3,513
$
11,262
$
9,865
Net investment income
496
406
1,481
1,023
Net gains (losses) on investments
(27
)
(31
)
(50
)
(21
)
Other income (expense)
(102
)
103
(48
)
61
Total revenues
4,285
3,991
12,645
10,927
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment
expenses
2,584
2,246
7,132
6,173
Commission, brokerage, taxes and fees
826
752
2,398
2,099
Other underwriting expenses
236
215
694
620
Corporate expenses
25
19
69
55
Interest, fees and bond issue cost
amortization expense
38
34
112
99
Total claims and expenses
3,708
3,266
10,404
9,045
INCOME (LOSS) BEFORE TAXES
577
725
2,241
1,883
Income tax expense (benefit)
68
47
275
169
NET INCOME (LOSS)
$
509
$
678
$
1,966
$
1,713
Other comprehensive income (loss), net of
tax:
Unrealized appreciation (depreciation)
("URA(D)") of securities arising during the period
704
(257
)
477
(180
)
Reclassification adjustment for realized
losses (gains) included in net income (loss)
30
15
44
21
Total URA(D) of securities arising during
the period
734
(242
)
521
(159
)
Foreign currency translation and other
adjustments
83
(47
)
45
(17
)
Reclassification adjustment for
amortization of net (gain) loss included in net income (loss)
—
—
24
1
Total benefit plan net gain (loss) for the
period
—
—
24
1
Total other comprehensive income (loss),
net of tax
816
(288
)
590
(175
)
COMPREHENSIVE INCOME (LOSS)
$
1,325
$
390
$
2,556
$
1,538
EARNINGS PER COMMON SHARE:
Basic
$
11.80
$
15.63
$
45.40
$
41.49
Diluted
11.80
15.63
45.40
41.49
EVEREST GROUP, LTD. CONSOLIDATED BALANCE
SHEETS
September 30,
December 31,
(In millions of U.S. dollars, except par
value per share)
2024
2023
(unaudited)
ASSETS:
Fixed maturities - available for sale, at
fair value
(amortized cost: 2024, $30,753; 2023,
$28,568, credit allowances: 2024, $(51); 2023, $(48))
$
30,479
$
27,740
Fixed maturities - held to maturity, at
amortized cost
(fair value: 2024, $799; 2023, $854, net
of credit allowances: 2024, $(8); 2023, $(8))
780
855
Equity securities, at fair value
230
188
Other invested assets
5,071
4,794
Short-term investments
3,931
2,127
Cash
1,599
1,437
Total investments and cash
42,090
37,142
Accrued investment income
380
324
Premiums receivable (net of credit
allowances: 2024, $(51); 2023, $(41))
5,372
4,768
Reinsurance paid loss recoverables (net of
credit allowances: 2024, $(31); 2023, $(26))
239
164
Reinsurance unpaid loss recoverables
2,276
2,098
Funds held by reinsureds
1,229
1,135
Deferred acquisition costs
1,475
1,247
Prepaid reinsurance premiums
952
713
Income tax asset, net
863
868
Other assets (net of credit allowances:
2024, $(9); 2023, $(9))
986
941
TOTAL ASSETS
$
55,864
$
49,399
LIABILITIES:
Reserve for losses and loss adjustment
expenses
27,480
24,604
Unearned premium reserve
7,462
6,622
Funds held under reinsurance treaties
16
24
Amounts due to reinsurers
979
650
Losses in course of payment
259
171
Senior notes
2,350
2,349
Long-term notes
218
218
Borrowings from FHLB
819
819
Accrued interest on debt and
borrowings
43
22
Unsettled securities payable
434
137
Other liabilities
469
582
Total liabilities
40,529
36,197
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50.0
shares authorized; no shares issued and outstanding
—
—
Common shares, par value: $0.01; 200.0
shares authorized; (2024) 74.3 and (2023) 74.2
outstanding before treasury shares
1
1
Additional paid-in capital
3,799
3,773
Accumulated other comprehensive income
(loss), net of deferred income tax expense (benefit)
of $(28) at 2024 and $(99) at 2023
(344
)
(934
)
Treasury shares, at cost; 31.3 shares
(2024) and 30.8 shares (2023)
(4,108
)
(3,908
)
Retained earnings
15,988
14,270
Total shareholders' equity
15,335
13,202
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
55,864
$
49,399
EVEREST GROUP, LTD. CONSOLIDATED
STATEMENTS OF CASH FLOWS
Nine Months Ended September
30,
(In millions of U.S. dollars)
2024
2023
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
1,966
$
1,713
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease (increase) in premiums
receivable
(529
)
(812
)
Decrease (increase) in funds held by
reinsureds, net
(99
)
(26
)
Decrease (increase) in reinsurance
recoverables
(112
)
(186
)
Decrease (increase) in income taxes
(65
)
(18
)
Decrease (increase) in prepaid reinsurance
premiums
(201
)
(153
)
Increase (decrease) in reserve for losses
and loss adjustment expenses
2,605
1,768
Increase (decrease) in unearned
premiums
767
1,157
Increase (decrease) in amounts due to
reinsurers
278
233
Increase (decrease) in losses in course of
payment
86
258
Change in equity adjustments in limited
partnerships
(236
)
(124
)
Distribution of limited partnership
income
106
81
Change in other assets and liabilities,
net
(376
)
(377
)
Non-cash compensation expense
49
37
Amortization of bond premium (accrual of
bond discount)
(113
)
(35
)
Net (gains) losses on investments
50
21
Net cash provided by (used in) operating
activities
4,177
3,536
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities
matured/called/repaid - available for sale
2,692
1,686
Proceeds from fixed maturities sold -
available for sale
4,322
468
Proceeds from fixed maturities
matured/called/repaid - held to maturity
129
81
Proceeds from equity securities sold
15
126
Distributions from other invested
assets
289
189
Cost of fixed maturities acquired -
available for sale
(9,069
)
(5,311
)
Cost of fixed maturities acquired - held
to maturity
(46
)
(23
)
Cost of equity securities acquired
(35
)
(3
)
Cost of other invested assets acquired
(438
)
(422
)
Net change in short-term investments
(1,724
)
(1,338
)
Net change in unsettled securities
transactions
321
202
Net cash provided by (used in) investing
activities
(3,545
)
(4,346
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued (redeemed) during the
period for share-based compensation, net of expense
(23
)
(22
)
Proceeds from public offering of common
shares
—
1,445
Purchase of treasury shares
(200
)
—
Dividends paid to shareholders
(249
)
(212
)
Cost of shares withheld on settlements of
share-based compensation awards
(23
)
(22
)
Net cash provided by (used in) financing
activities
(495
)
1,188
EFFECT OF EXCHANGE RATE CHANGES ON
CASH
25
(12
)
Net increase (decrease) in cash
162
367
Cash, beginning of period
1,437
1,398
Cash, end of period
$
1,599
$
1,765
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$
340
$
185
Interest paid
90
75
NON-CASH TRANSACTIONS:
Non-cash limited partnership
distribution
23
—
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030486048/en/
Media: Dawn Lauer Chief Communications Officer 908.300.7670
Investors: Matt Rohrmann Head of Investor Relations
908.604.7343
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