Everest delivers solid Q3’24 underwriting result as reinsurance GWP rises to $3.3bn

Bermuda-based re/insurer Everest Group, Ltd. generated underwriting income of $272 million in the third quarter of 2024, driven by the strong performance of its reinsurance business in spite of elevated catastrophe losses.

Everest has reported a solid set of results for the third quarter, with net income of $509 million and operating income of $630 million, compared with $678 million and $613 million, respectively, in Q3 2023.

Group-wide, gross written premium (GWP) grew 0.6% to $4.4 billion, driven by 1.7% growth in reinsurance, offset by a decline of 2.1% for the insurance segment.

Within reinsurance, GWP rose to $3.3 billion 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.

In the insurance segment, the year-on-year dip in Q3 premiums to $1.2 billion reflects the continued reshaping of the portfolio, which includes a decrease of 27.6% in accident and health as the firm exits the medical stop loss business, and 10.3% decrease in specialty casualty, primarily in North America, reflecting Everest’s focus on lines of business with better expected margins.

Group-wide, Everest generated a Q3 2024 combined ratio of 93.1%, including 7.9 points of catastrophe losses, versus 91.4% in the third quarter 2023, including 5 points of catastrophe losses.

Total, pre-tax net catastrophe losses, net of reinsurance and reinstatement premiums, reached $279 million in Q3 2024, compared with $170 million last year, as year-to-date losses rose from $307 million to $499 million.

The large majority of the cat losses for both periods this year hit the company’s reinsurance division, which saw cat losses of $239 million for the quarter and $439 million for the first nine months of 2024. Everest attributes these losses to several Atlantic hurricanes and other international weather-related events, revealing a cost of $63 million net of estimated recoveries and reinstatement premiums, related to hurricane Helene.

Despite the rise in cat losses year-over-year, the reinsurance segment combined ratios of 91.8% for the quarter and 89.4% for 9M 2024 are relatively flat.

Within the firm’s insurance unit, pre-tax catastrophe losses were $40 million, net of estimated recoveries and reinstatement premiums, which is up on last year’s $10 million, but still low. For 9M 2024, insurance segment cat losses rose from $12 million to $60 million.

As well as a higher loss ratio, the insurance segment’s other underwriting expense ratio also increased year-on-year, pushing the combined ratio for the quarter to 97.1% compared with 92.5% last year, and the 9M combined ratio to 94.9% from 92.5% in 2023.

The Bermudian has also provided an update on its hurricane Milton exposure, revealing expected pre-tax net catastrophe losses in the range of $300 million to $400 million for the fourth quarter 2024, net of estimated recoveries and reinstatement premiums. This estimate is based on an industry loss range of $25 billion to $35 billion.

Alongside a solid underwriting performance, Everest’s net investment income improved from $406 million to $496 million in Q3 2024, driven by a larger asset base as well as strong core fixed income investment returns.

Juan C. Andrade, Everest President and Chief Executive Officer, commented: “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%.

“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.”

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