California wildfire losses hit Everest’s Q1 earnings

(Reuters) — Everest Group on Wednesday reported a 71% drop in first-quarter profit, hit by underwriting losses tied to California wildfires and other catastrophe-related claims.

The Bermuda-based insurer reported a pre-tax catastrophe loss of $472 million, primarily due to the wildfires. This loss was net of reinsurance and reinstatement premiums.

Net income fell to $210 million, or $4.90 per share, from $733 million, or $16.87 per share, in the year-earlier period.

Everest reported a combined ratio of 102.7% for the quarter, up from 88.8% a year earlier, indicating the insurer paid out more in claims than it earned in premiums.

The company’s net written premiums in its reinsurance segment fell 4.5% to $2.81 billion for the quarter.

The company’s investment income rose to $491 million from $457 million in the prior-year period. A significant portion of its investment portfolio consists of bonds, which return better yields in a high interest rate environment.