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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Everest Group Ltd | NYSE:EG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
2.40 | 0.62% | 390.93 | 392.05 | 387.30 | 387.82 | 369,837 | 22:30:00 |
Net Income of $733 million and Operating Income of $709 million
TSR1 of 18.1%; 20.6% Net Income ROE and 20.0% Operating Income ROE
88.8% Combined Ratio Resulting in Record Underwriting Income of $409 million
Everest Group, Ltd. (NYSE: EG), a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions, today reported its first quarter 2024 results.
First Quarter 2024 Highlights
Footnote 1 denotes annualized figure; represents Total Shareholder Return or "TSR"
Footnote 2 denotes constant currency figure and excludes reinstatement premiums
“Everest had a strong start to 2024, with first quarter results delivering significant profitability across all key metrics, including a Total Shareholder Return in excess of 18% and an operating return on equity of 20%,” said Juan C. Andrade, Everest President and CEO. “Group underwriting income increased 50% over the prior year to a quarterly record of $409 million with a combined ratio of 88.8%, driven by both of our underwriting franchises. Our reinsurance business continued to differentiate Everest during another outstanding January 1 renewal as the flight to quality accelerated. We gained market share with targeted clients, positioning the portfolio for attractive levels of profitability. In our insurance division, we advanced our disciplined expansion across global markets, while remaining focused on prudent risk selection and the bottom line. Additionally, our investment portfolio contributed a record $457 million in net investment income. With strong momentum across our underwriting businesses, we are executing on our three-year strategic plan, focused on generating consistent, industry leading financial returns.”
Summary of First Quarter 2024 Net Income and Other Items
The following table summarizes the Company’s Net Income and related financial metrics.
Net income and operating income
Q1
Year to Date
Q1
Year to Date
All values in USD millions except for per share amounts and percentages
2024
2024
2023
2023
Everest Group
Net income (loss)
733
733
365
365
Operating income (loss) (1)
709
709
443
443
Net income (loss) per diluted common share
16.87
16.87
9.31
9.31
Net operating income (loss) per diluted common share
16.32
16.32
11.31
11.31
Net income (loss) return on average equity (annualized)
20.6%
20.6%
14.2%
14.2%
After-tax operating income (loss) return on average equity (annualized)
20.0%
20.0%
17.2%
17.2%
Notes
(1) Refer to the reconciliation of net income to net operating income found on page 8 of this press release
Shareholders' Equity and Book Value per Share
Q1
Year to Date
Q1
Year to Date
All values in USD millions except for per share amounts and percentages
2024
2024
2023
2023
Beginning shareholders' equity
13,202
13,202
8,441
8,441
Net income (loss)
733
733
365
365
Change - unrealized gains (losses) - Fixed inc. investments
(153
)
(153
)
249
249
Dividends to shareholders
(76
)
(76
)
(65
)
(65
)
Purchase of treasury shares
(35
)
(35
)
—
—
Other
(42
)
(42
)
24
24
Ending shareholders' equity
13,628
13,628
9,014
9,014
Common shares outstanding
43.5
39.3
Book value per common share outstanding
313.55
229.49
Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD")
(20.15
)
(37.15
)
Adjusted book value per common share outstanding excluding URAD
333.70
266.64
Change in BVPS adjusted for dividends
3.6
%
7.2
%
Total Shareholder Return ("TSR") - Annualized
18.1
%
14.1
%
Common share dividends paid - last 12 months
6.90
6.60
The following information summarizes the Company’s underwriting results, on a consolidated basis and by segment – Reinsurance and Insurance, with selected commentary on results by segment.
Underwriting information - Everest Group
Q1
Year to Date
Q1
Year to Date
Year on Year Change
All values in USD millions except for percentages
2024
2024
2023
2023
Q1
Year to Date
Gross written premium
4,411
4,411
3,743
3,743
17.9
%
17.9
%
Net written premium
3,900
3,900
3,329
3,329
17.1
%
17.1
%
Loss Ratio:
Current year
58.9
%
58.9
%
59.7
%
59.7
%
(0.8) pts
(0.8) pts
Prior year
—
%
—
%
—
%
—
%
— pts
— pts
Catastrophe
2.3
%
2.3
%
3.7
%
3.7
%
(1.4) pts
(1.4) pts
Total Loss ratio
61.3
%
61.3
%
63.4
%
63.4
%
(2.1) pts
(2.1) pts
Commission and brokerage ratio
21.4
%
21.4
%
21.3
%
21.3
%
0.1 pts
0.1 pts
Other underwriting expenses
6.1
%
6.1
%
6.4
%
6.4
%
(0.3) pts
(0.3) pts
Combined ratio
88.8
%
88.8
%
91.2
%
91.2
%
(2.4) pts
(2.4) pts
Attritional combined ratio (1)
86.5
%
86.5
%
87.6
%
87.6
%
(1.1) pts
(1.1) pts
Pre-tax net catastrophe losses (2)
85
85
110
110
Pre-tax net unfavorable (favorable) prior year reserve development
—
—
—
—
Notes
(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war.
(2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Reinsurance Segment – Quarterly Highlights
Underwriting information - Reinsurance segment
Q1
Year to Date
Q1
Year to Date
Year on Year Change
All values in USD millions except for percentages
2024
2024
2023
2023
Q1
Year to Date
Gross written premium
3,175
3,175
2,620
2,620
21.2
%
21.2
%
Net written premium
2,942
2,942
2,438
2,438
20.7
%
20.7
%
Loss Ratio:
Current year
57.2
%
57.2
%
57.9
%
57.9
%
(0.7) pts
(0.7) pts
Prior year
—
%
—
%
—
%
—
%
— pts
— pts
Catastrophe
2.9
%
2.9
%
5.1
%
5.1
%
(2.2) pts
(2.2) pts
Total Loss ratio
60.2
%
60.2
%
63.0
%
63.0
%
(2.8) pts
(2.8) pts
Commission and brokerage ratio
24.6
%
24.6
%
25.0
%
25.0
%
(0.4) pts
(0.4) pts
Other underwriting expenses
2.6
%
2.6
%
2.8
%
2.8
%
(0.2) pts
(0.2) pts
Combined ratio
87.3
%
87.3
%
90.8
%
90.8
%
(3.5) pts
(3.5) pts
Attritional combined ratio (1)
84.4
%
84.4
%
85.9
%
85.9
%
(1.5) pts
(1.5) pts
Pre-tax net catastrophe losses (2)
80
80
108
108
Pre-tax net prior year reserve development
—
—
—
—
Notes
(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war.
(2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Insurance Segment – Quarterly Highlights
Underwriting information - Insurance segment
Q1
Year to Date
Q1
Year to Date
Year on Year Change
All values in USD millions except for percentages
2024
2024
2023
2023
Q1
Year to Date
Gross written premium
1,236
1,236
1,122
1,122
10.1
%
10.1
%
Net written premium
958
958
891
891
7.5
%
7.5
%
Loss Ratio:
Current year
64.0
%
64.0
%
64.4
%
64.4
%
(0.4) pts
(0.4) pts
Prior year
—
%
—
%
—
%
—
%
— pts
— pts
Catastrophe
0.5
%
0.5
%
0.2
%
0.2
%
0.3 pts
0.3 pts
Total Loss ratio
64.5
%
64.5
%
64.6
%
64.6
%
(0.1) pts
(0.1) pts
Commission and brokerage ratio
12.0
%
12.0
%
12.0
%
12.0
%
— pts
— pts
Other underwriting expenses
16.6
%
16.6
%
15.6
%
15.6
%
1.0 pts
1.0 pts
Combined ratio
93.1
%
93.1
%
92.3
%
92.3
%
0.8 pts
0.8 pts
Attritional combined ratio (1)
92.5
%
92.5
%
92.0
%
92.0
%
0.5 pts
0.5 pts
Pre-tax net catastrophe losses (2)
5
5
2
2
Pre-tax net prior year reserve development
—
—
—
—
Notes
(1) Attritional ratios exclude catastrophe losses, net CAT reinstatement premiums earned, prior year development, COVID-19 losses and losses from the Russia/Ukraine war.
(2) Pre-tax net catastrophe losses are net of reinsurance and reinstatement premiums
Investments and Shareholders’ Equity as of March 31, 2024
This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market and investment income fluctuations, trends in insured and paid losses, catastrophes, pandemic, regulatory and legal uncertainties and other factors described in our latest Annual Report on Form 10-K. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Everest Everest Group, Ltd. (Everest) is a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions that address customers’ most pressing challenges. Known for a 50-year track record of disciplined underwriting, capital and risk management, Everest, through its global operating affiliates, is committed to underwriting opportunity for colleagues, customers, shareholders, and communities worldwide.
Everest common stock (NYSE: EG) is a component of the S&P 500 index.
Additional information about Everest, our people, and our products can be found on our website at www.everestglobal.com.
A conference call discussing the results will be held at 8:00 a.m. Eastern Time on April 30, 2024. The call will be available on the Internet through the Company’s website at https://www.everestglobal.com/investor-relations.
Recipients are encouraged to visit the Company’s website to view supplemental financial information on the Company’s results. The supplemental information is located at www.everestglobal.com in the “Investors/Financials/Quarterly Results” section of the website. The supplemental financial information may also be obtained by contacting the Company directly.
_______________________________________________
The Company generally uses after-tax operating income (loss), a non-GAAP financial measure, to evaluate its performance. After-tax operating income (loss) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense) as the following reconciliation displays:
(Dollars in millions, except per share amounts)
Three Months Ended March 31,
Three Months Ended March 31,
2024
2023
2024
2023
(unaudited)
(unaudited)
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
After-tax operating income (loss)
$
709
$
16.32
$
443
$
11.31
$
709
$
16.32
$
443
$
11.31
After-tax net gains (losses) on investments
(6
)
(0.13
)
6
0.14
(6
)
(0.13
)
6
0.14
After-tax net foreign exchange income (expense)
30
0.69
(84
)
(2.14
)
30
0.69
(84
)
(2.14
)
Net income (loss)
$
733
$
16.87
$
365
$
9.31
$
733
$
16.87
$
365
$
9.31
(Some amounts may not reconcile due to rounding.)
Although net gains (losses) on investments and net foreign exchange income (expense) are an integral part of the Company’s insurance operations, the determination of net gains (losses) on investments and foreign exchange income (expense) is independent of the insurance underwriting process. The Company believes that the level of net gains (losses) on investments and net foreign exchange income (expense) for any particular period are not indicative of the performance of the underlying business in that particular period. Providing only a GAAP presentation of net income (loss) makes it more difficult for users of the financial information to evaluate the Company’s success or failure in its basic business and may lead to incorrect or misleading assumptions and conclusions. The Company understands that the equity analysts who follow the Company focus on after-tax operating income (loss) in their analyses for the reasons discussed above. The Company provides after-tax operating income (loss) to investors so that they have what management believes to be a useful supplement to GAAP information concerning the Company’s performance.
--Financial Details Follow--
EVEREST GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
Three Months Ended March 31,
(In millions of U.S. dollars, except per share amounts)
2024
2023
(unaudited)
REVENUES:
Premiums earned
$
3,652
$
3,100
Net investment income
457
260
Total net gains (losses) on investments
(7
)
5
Other income (expense)
31
(79
)
Total revenues
4,133
3,286
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
2,237
1,966
Commission, brokerage, taxes and fees
782
661
Other underwriting expenses
224
200
Corporate expenses
22
19
Interest, fees and bond issue cost amortization expense
37
32
Total claims and expenses
3,302
2,878
INCOME (LOSS) BEFORE TAXES
832
408
Income tax expense (benefit)
99
43
NET INCOME (LOSS)
$
733
$
365
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
(158
)
246
Reclassification adjustment for realized losses (gains) included in net income (loss)
5
3
Total URA(D) on securities arising during the period
(153
)
249
Foreign currency translation adjustments
(38
)
31
Reclassification adjustment for amortization of net (gain) loss included in net income (loss)
—
—
Total benefit plan net gain (loss) for the period
—
—
Total other comprehensive income (loss), net of tax
(191
)
280
COMPREHENSIVE INCOME (LOSS)
$
542
$
645
EARNINGS PER COMMON SHARE:
Basic
$
16.87
$
9.31
Diluted
16.87
9.31
EVEREST GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
March 31,
December 31,
(In millions of U.S. dollars, except par value per share)
2024
2023
(unaudited)
ASSETS:
Fixed maturities - available for sale, at fair value
(amortized cost: 2024, $29,311; 2023, $28,568, credit allowances: 2024, $(46); 2023, $(48))
$
28,297
$
27,740
Fixed maturities - held to maturity, at amortized cost
(fair value: 2024, $842; 2023, $854, net of credit allowances: 2024, $(9); 2023, $(8))
840
855
Equity securities, at fair value
216
188
Other invested assets
4,854
4,794
Short-term investments
2,397
2,127
Cash
1,544
1,437
Total investments and cash
38,148
37,142
Accrued investment income
327
324
Premiums receivable (net of credit allowances: 2024, $(43); 2023, $(41))
5,101
4,768
Reinsurance paid loss recoverables (net of credit allowances: 2024, $(27); 2023, $(26))
233
164
Reinsurance unpaid loss recoverables
2,084
2,098
Funds held by reinsureds
1,155
1,135
Deferred acquisition costs
1,331
1,247
Prepaid reinsurance premiums
702
713
Income tax asset, net
823
868
Other assets (net of credit allowances: 2024, $(10); 2023, $(9))
1,033
941
TOTAL ASSETS
$
50,937
$
49,399
LIABILITIES:
Reserve for losses and loss adjustment expenses
25,211
24,604
Unearned premium reserve
6,826
6,622
Funds held under reinsurance treaties
11
24
Amounts due to reinsurers
716
650
Losses in course of payment
168
171
Senior notes
2,349
2,349
Long-term notes
218
218
Borrowings from FHLB
819
819
Accrued interest on debt and borrowings
43
22
Unsettled securities payable
403
137
Other liabilities
543
582
Total liabilities
37,308
36,197
SHAREHOLDERS' EQUITY:
Preferred shares, par value: $0.01; 50.0 shares authorized; no shares issued and outstanding
—
—
Common shares, par value: $0.01; 200.0 shares authorized; (2024) 74.3 and (2023) 74.2
outstanding before treasury shares
1
1
Additional paid-in capital
3,768
3,773
Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit)
of $(137) at 2024 and $(99) at 2023
(1,125
)
(934
)
Treasury shares, at cost; 30.9 shares (2024) and 30.8 shares (2023)
(3,943
)
(3,908
)
Retained earnings
14,927
14,270
Total shareholders' equity
13,628
13,202
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
50,937
$
49,399
EVEREST GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
(In millions of U.S. dollars)
2024
2023
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
733
$
365
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable
(370
)
(259
)
Decrease (increase) in funds held by reinsureds, net
(33
)
(17
)
Decrease (increase) in reinsurance recoverables
(129
)
7
Decrease (increase) in income taxes
82
41
Decrease (increase) in prepaid reinsurance premiums
(14
)
28
Increase (decrease) in reserve for losses and loss adjustment expenses
720
681
Increase (decrease) in unearned premiums
242
226
Increase (decrease) in amounts due to reinsurers
95
17
Increase (decrease) in losses in course of payment
—
47
Change in equity adjustments in limited partnerships
(59
)
(5
)
Distribution of limited partnership income
31
48
Change in other assets and liabilities, net
(188
)
(121
)
Non-cash compensation expense
16
12
Amortization of bond premium (accrual of bond discount)
(30
)
(1
)
Net (gains) losses on investments
7
(5
)
Net cash provided by (used in) operating activities
1,102
1,064
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale
736
562
Proceeds from fixed maturities sold - available for sale
407
72
Proceeds from fixed maturities matured/called/repaid - held to maturity
45
28
Proceeds from equity securities sold
—
46
Distributions from other invested assets
100
137
Cost of fixed maturities acquired - available for sale
(1,971
)
(1,613
)
Cost of fixed maturities acquired - held to maturity
(27
)
(11
)
Cost of equity securities acquired
(33
)
(1
)
Cost of other invested assets acquired
(138
)
(242
)
Net change in short-term investments
(252
)
4
Net change in unsettled securities transactions
284
267
Net cash provided by (used in) investing activities
(849
)
(752
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued (redeemed) during the period for share-based compensation, net of expense
(21
)
(19
)
Purchase of treasury shares
(35
)
—
Dividends paid to shareholders
(76
)
(65
)
Cost of shares withheld on settlements of share-based compensation awards
(21
)
(19
)
Net cash provided by (used in) financing activities
(153
)
(103
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
7
3
Net increase (decrease) in cash
107
212
Cash, beginning of period
1,437
1,398
Cash, end of period
$
1,544
$
1,610
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$
16
$
2
Interest paid
16
10
View source version on businesswire.com: https://www.businesswire.com/news/home/20240429589609/en/
Media: Dawn Lauer Chief Communications Officer 908.300.7670
Investors: Matt Rohrmann Head of Investor Relations 908.604.7343
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