Everest profit surges on stronger underwriting, investment returns

(Reuters) — Everest Group reported Wednesday that its operating profit rose sharply in the fourth quarter, as it benefited from stronger underwriting and better returns on its investments.

The insurer’s operating income came in at $1.09 billion, or $25.18 per share, compared with $478 million, or $12.21 per share, in the fourth quarter of 2022. Its net investment income improved to $411 million, compared with $210 million in the year-earlier quarter, driven by strong fixed-income and alternative investment returns.

Everest said its gross written premium increased 18.3% on a constant currency basis to $4.3 billion in the quarter. It posted a combined ratio of 93.2%, compared with 87.8% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.

Insurers use their cash to buy a portfolio of assets, chiefly safe-haven such as U.S. Treasuries and other high-grade corporate bonds. Multiple rate hikes by the U.S. Federal Reserve have helped insurers earn higher interest from such investments.

Gross written premiums in its reinsurance segment grew 21.9% on a constant dollar basis. The gains come in line with the broader upbeat sentiment in the market as higher insurance sales also drum up demand for reinsurance.