Everest Reports First Quarter 2024 Results

Net Income of $733 million and Operating Income of $709 million

TSR1 of 18.1%; 20.6% Net Income ROE and 20.0% Operating Income ROE

88.8% Combined Ratio Resulting in Record Underwriting Income of $409 million

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

First Quarter 2024 Highlights

• Net Income of $733 million; Operating Income of $709 million driven by underwriting margin improvement and strong net investment income generation
• Total Shareholder Return of 18.1% annualized; 20.6% Net Income ROE and 20.0% Operating Income ROE
• $4.4 billion in gross written premium with year-over-year growth of 17.2%2 for the Group, 20.4%2 for Reinsurance, and 9.8%2 for Insurance
• Combined ratios of 88.8% for the Group, 87.3% for Reinsurance and 93.1% for Insurance
• Attritional combined ratios of 86.5% for the Group, 84.4% for Reinsurance and 92.5% for Insurance
• Pre-tax underwriting income of $409 million, a company record, versus pre-tax underwriting income of $273 million in the prior year
• $85 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums, primarily driven by the Francis Scott Key Bridge Collapse in Baltimore, versus $110 million in the prior year
• Net investment income improved to $457 million versus $260 million in the prior year first quarter, a company record, driven by a larger asset base and strong core fixed income returns
• Strong operating cashflow for the quarter of $1.1 billion, in-line with the prior year quarter

“Everest had a strong start to 2024, with first quarter results delivering significant profitability across all key metrics, including a Total Shareholder Return in excess of 18% and an operating return on equity of 20%,” said Juan C. Andrade, Everest President and CEO. “Group underwriting income increased 50% over the prior year to a quarterly record of $409 million with a combined ratio of 88.8%, driven by both of our underwriting franchises. Our reinsurance business continued to differentiate Everest during another outstanding January 1 renewal as the flight to quality accelerated. We gained market share with targeted clients, positioning the portfolio for attractive levels of profitability. In our insurance division, we advanced our disciplined expansion across global markets, while remaining focused on prudent risk selection and the bottom line. Additionally, our investment portfolio contributed a record $457 million in net investment income. With strong momentum across our underwriting businesses, we are executing on our three-year strategic plan, focused on generating consistent, industry leading financial returns.”

Summary of First Quarter 2024 Net Income and Other Items

• Net Income of $733 million, equal to $16.87 per diluted share versus first quarter 2023 net income of $365 million, equal to $9.31 per diluted share
• Operating income of $709 million, equal to $16.32 per diluted share versus first quarter 2023 net operating income of $443 million, equal to $11.31 per diluted share
• GAAP combined ratio of 88.8%, including 2.3 points of catastrophe losses, versus the first quarter 2023 figure of 91.2%, including 3.7 points of catastrophe losses

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

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.

Reinsurance Segment – Quarterly Highlights

• Gross written premiums grew 20.4% on a constant dollar basis and excluding reinstatement premiums, to approximately $3.2 billion. Growth was broad-based across geographies and lines as the flight to quality continues to accelerate globally.
• Attritional loss ratio improved 80 basis points over last year to 57.2%, while the attritional combined ratio improved 150 basis points to 84.4% versus a year ago.
• Combined ratio improved 350 basis points over the last year to 87.3%.
• Pre-tax catastrophe losses were $80 million net of estimated recoveries and reinstatement premiums, driven primarily by the Baltimore Bridge Collapse.
• Risk-adjusted returns remain very attractive, particularly in property and specialty lines.

Insurance Segment – Quarterly Highlights

• Gross written premiums rose to $1.2 billion, a 9.8% increase year-over-year in constant dollars, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines.
• Loss ratio improved 10 basis points over last year to 64.5%, while the attritional loss ratio improved 40 basis points over last year to 64.0%.
• Pre-tax catastrophe losses were $5 million, net of estimated recoveries and reinstatement premiums, relatively in-line with the prior year.
• Pricing continues to exceed loss trend overall and loss trend is stable.
• There was a meaningful acceleration in pricing across long-tail lines (excluding financial lines).

Investments and Shareholders’ Equity as of March 31, 2024

• Total invested assets and cash of $38.1 billion versus $37.1 billion on December 31, 2023
• Shareholders’ equity of $13.6 billion vs. $13.2 billion on December 31, 2023, including $876 million of unrealized net losses on AFS fixed maturity investments
• Shareholders’ equity excluding unrealized gains (losses) on AFS fixed maturity investments of $14.5 billion versus $13.9 billion on December 31, 2023
• Book value per share of $313.55 versus $304.29 at December 31, 2023
• Book value per share excluding unrealized gains (losses) on AFS fixed maturity investments of $333.70 versus $320.95 at December 31, 2023
• Common share repurchases of $35.0 million during the quarter, representing 90,291 shares at an average price of $387.64 per share
• Common share dividends declared and paid in the quarter of $1.75 per share equal to $76 million

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemic, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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

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

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

A conference call discussing the results will be held at 8:00 a.m. Eastern Time on April 30, 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.

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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:

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.

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