Property cat rates still above what Everest needs to deploy in most markets: CEO, Williamson

Despite property catastrophe reinsurance prices falling between 5% and 15% for loss free programmes at the January 1st, 2025, renewals, Jim Williamson, President and Chief Executive Officer (CEO) of Bermuda-based carrier Everest, has said that overall, rates are still above what’s required for the firm to have appetite to deploy in most markets.

The CEO said on the re/insurer’s recent Q4’24 earnings call that the Everest team “again executed at the highest level” at 1.1 2025.

Williamson explained that, all in all, the company’s total reinsurance division bound premium declined by around 3% during the Jan 1st, 2025, renewal when compared with the prior year, driven mostly by discipline in casualty, which was offset by “growth on the very best deals in the market,” predominantly in property and specialty lines of business.

Regarding casualty discipline, ahead of its Q4 and full year 2024 results release, Everest reported total casualty reserve strengthening across the business of $1.7 billion for the year, and Williamson confirmed today that since the 1.1 2024 renewals, the firm has walked away from almost $750 million in North American casualty quota share business.

Offsetting the reductions in casualty at Jan 1 2025 was growth in property and specialty, and commenting on the former, Williamson highlighted an attractive market overall.

“Although property cat prices were down generally between 5% and 15% for loss free programs, overall rate levels remain above what we need to be willing to deploy capacity in most markets,” he said.

One exception to Williamson’s view on the property cat market is continental Europe.

“European cat activity in the form of severe convective storm, hail, and flooding is clearly a rising trend. Those events throw significant annual losses. France, Germany, Italy, and Eastern Europe have all been particularly affected over the last several years,” said Williamson. “After a thorough review of our modelling and analytics for these perils, we reached the conclusion that we needed to charge more for European cat exposure, in some cases, significantly more. As a result, our average model loss costs increased by about 10%. We fully exited over 20 deals, significantly cut back on many others, while increasing moderately on the most profitable layers and programs.”

Looking ahead to the future April and mid-year reinsurance renewals, Williamson said that Everest expects the Los Angeles wildfires to serve a reminder “to all property reinsurance underwriters of the need to maintain pricing discipline and achieve adequate rate.”

In its Q4’24 financials, Everest estimated its pre-tax losses from the recent wildfires at $350 million to $450 million, based on a 1% market share of a $35 billion to $45 billion industry loss range.

“Obviously, this is a big event, and whether you like the $35 billion number, $45 billion number, or you prefer a number bigger than that, this is a major event that certainly you would expect to have a positive impact on prices.

“What I tend to hear from people is that if there was a move to decrease rates in a reasonable fashion at 1.1, which I indicated we’ve seen 5% to 15% off of loss free programs, that’s probably ameliorated. Obviously, it’ll take time for that to play out,” said Williamson.

“But look, I think you add that with the fact that a lot of our clients are looking to buy more overall cover, there’s a lot of increased demand in the market. And then you further look at the fact that those clients, if they have their choice, would rather do more of that cover with Everest, I think that means there’s a terrific opportunity for us to continue to be very, very selective in the deals we’re writing, and to get terrific economics, which I think is a very favorable thing,” he added.

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