Everest Group highlights strong investment income despite underwriting losses

What's behind the result?

Everest Group highlights strong investment income despite underwriting losses

Insurance News

By Josh Recamara

Everest Group reported its fourth-quarter results for 2024, marking a challenging end to the year.

The group posted a net loss of $593 million for the quarter, which translates to a loss of $13.96 per diluted share. This loss was primarily driven by reserve strengthening in US casualty lines. In comparison, the fourth quarter of 2023 saw a net income of $804 million, or $18.53 per diluted share.

The group's net operating loss for the fourth quarter was $780 million, or $18.39 per diluted share, again due to reserve adjustments in US casualty lines. In the same period the previous year, Everest had a net operating income of $1.1 billion, or $25.18 per diluted share.

For the full year, Everest reported a total shareholder return of 9.2%, with net income return on equity (ROE) at 9.6% and operating income ROE at 9.0%. The group achieved $18.2 billion in gross written premium for 2024, reflecting a year-over-year growth of 9.1% for the overall group, 12.2% for Reinsurance, and 4.0% for Insurance, based on comparable figures.

The combined ratio for the full year was 102.3% for the group, with Reinsurance at 89.7% and Insurance at 130.7%. These figures included actions to strengthen US casualty reserves.

The group's attritional combined ratio stood at 87.6%, excluding the impact of profit commissions related to favorable loss reserve development on the mortgage business, compared to 86.9% in the prior year.

Net investment income for 2024 increased by over $500 million, reaching approximately $2 billion, setting a company record. Additionally, the group reported a strong operating cash flow of $5.0 billion for the year.

In the fourth quarter, Everest's gross written premium amounted to $4.7 billion, reflecting a year-over-year growth of 7.2%. The group saw strong growth in property and specialty lines, although reductions in certain casualty lines partly offset the gains. The combined ratio for the quarter was 135.5%, driven by 37.6 points of unfavorable prior-year loss reserve development, along with 5.8 points of accident year loss reserve strengthening.

Despite the challenging quarter, Everest’s CEO Jim Williamson (pictured above, on the left), remained optimistic, noting the actions taken to fortify US casualty reserves and improve the company’s overall operations.

“Our lead market Reinsurance franchise continues to demonstrate its value in the market, as evidenced by another well-executed January 1 renewal,” Williamson stated. He further highlighted the ongoing transformation of Everest’s North American insurance platform, expressing confidence in the company’s trajectory.

Everest also provided an estimate for its first-quarter 2025 catastrophe losses, expected to be in the range of $350 to $450 million, due to the recent California wildfires. This estimate is based on an insured industry loss range of $35 to $45 billion.

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