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.

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 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.

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).

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.

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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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