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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 | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 400.00 | 0 | 01:00:00 |
Record Annual Net Income of $2.5 billion and Operating Income of $2.8 billion
Annual 20.9% Net Income ROE and 23.1% Operating Income ROE; TSR1 of 26.5%
Fourth Quarter Net Income of $804 million and Operating Income of $1.1 billion
Well Positioned in 2024 Following Outstanding 1/1 Renewals
Everest Group, Ltd. (NYSE: EG), a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions, today reported its fourth quarter 2023 results.
Full Year 2023 Highlights
Fourth Quarter 2023 Highlights
Footnote 1 denotes annualized figure; represents Total Shareholder Return or "TSR"
Footnote 2 denotes constant currency figure and excludes reinstatement premiums
“Everest's strong fourth quarter performance capped off an exceptional 2023, delivering record annual results in underwriting income, net investment income, operating income, net income, and cash flow from operations. We executed on our strategic objectives, while delivering an operating ROE of over 23% and a Total Shareholder Return of over 26% for the full year," said Juan C. Andrade, Everest President and CEO. "2023 was the most profitable year in our history. The Everest of today is a stronger and more sophisticated company. We are delivering leading financial returns and we are on track to achieve the targets we set out at our most recent Investor Day. The strength and flexibility of our business was apparent in the fourth quarter as we continued to generate leading returns and further solidified our balance sheet. Everest has entered 2024 stronger and better positioned to take advantage of market opportunities in both franchises. This is evidenced by another well-executed and outstanding January 1 reinsurance renewal and improved primary pricing, generating excellent outcomes for our global portfolio. Looking ahead, we remain focused on achieving our strategic plan goals, with significant momentum across both businesses, and an exceptional team driving even greater value for our shareholders."
Summary of Fourth Quarter 2023 Net Income and Other Items
The following table summarizes the Company’s Net Income and related financial metrics.
Net income and operating income
Q4
Year to Date
Q4
Year to Date
All values in USD millions except for per share amounts and percentages
2023
2023
2022
2022
Everest Group
Net income (loss)
804
2,517
496
597
Operating income (loss) (1)
1,093
2,776
478
1,065
Net income (loss) per diluted common share
18.53
60.19
12.66
15.19
Net operating income (loss) per diluted common share
25.18
66.39
12.21
27.08
Net income (loss) return on average equity (annualized)
23.8%
20.9%
20.1%
6.0%
After-tax operating income (loss) return on average equity (annualized)
32.4%
23.1%
19.4%
10.6%
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
Q4
Year to Date
Q4
Year to Date
All values in USD millions except for per share amounts and percentages
2023
2023
2022
2022
Beginning shareholders' equity
11,226
8,441
7,649
10,139
Net income (loss)
804
2,517
496
597
Change - unrealized gains (losses) - Fixed inc. investments
1,146
986
250
(1,948)
Dividends to shareholders
(76)
(288)
(65)
(255)
Purchase of treasury shares
—
—
(1)
(61)
Public equity offering of shares
—
1,445
—
—
Other
103
102
110
(31)
Ending shareholders' equity
13,202
13,202
8,441
8,441
Common shares outstanding
43.4
39.2
Book value per common share outstanding
304.29
215.54
Less: Unrealized appreciation/depreciation of fixed maturity investments ("URAD")
(16.65)
(43.64)
Adjusted book value per common share outstanding excluding URAD
320.95
259.18
Change in BVPS adjusted for dividends
44.3 %
(14.0) %
Total Shareholder Return ("TSR") - Annualized
26.5 %
5.4 %
Common share dividends paid - last 12 months
6.80
6.50
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
Q4
Year to Date
Q4
Year to Date
Year on Year Change
All values in USD millions except for percentages
2023
2023
2022
2022
Q4
Year to Date
Gross written premium
4,323
16,637
3,639
13,952
18.8 %
19.2 %
Net written premium
3,861
14,730
3,188
12,344
21.1 %
19.3 %
Loss Ratio:
Current year
58.9 %
59.2 %
59.6 %
59.8 %
(0.7) pts
(0.6) pts
Prior year
(0.1) %
— %
— %
— %
(0.1) pts
— pts
Catastrophe
4.3 %
3.5 %
0.5 %
9.0 %
3.8 pts
(5.5) pts
Total Loss ratio
63.0 %
62.7 %
60.1 %
68.7 %
2.9 pts
(6.0) pts
Commission and brokerage ratio
23.8 %
22.0 %
21.6 %
21.4 %
2.2 pts
0.6 pts
Other underwriting expenses
6.3 %
6.3 %
6.0 %
5.8 %
0.3 pts
0.5 pts
Combined ratio
93.2 %
90.9 %
87.8 %
96.0 %
5.4 pts
(5.1) pts
Attritional combined ratio (1), (3)
89.3 %
87.6 %
87.3 %
87.4 %
2.0 pts
0.2 pts
Pre-tax net catastrophe losses (2)
143
451
15
945
Pre-tax net unfavorable (favorable) prior year reserve development
(5)
(5)
—
(1)
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
(3)
The attritional combined ratio for quarter and year ended December 31, 2023 included approximately $94m of profit commission related to loss reserves releases. Excluding this profit commission, the Group’s attritional combined ratio would have been 86.7% and 86.9% for the quarter and year ended December 31, 2023, respectively.
Reinsurance Segment – Quarterly Highlights
Underwriting information - Reinsurance segment
Q4
Year to Date
Q4
Year to Date
Year on Year Change
All values in USD millions except for percentages
2023
2023
2022
2022
Q4
Year to Date
Gross written premium
2,894
11,460
2,360
9,248
22.6 %
23.9 %
Net written premium
2,754
10,802
2,301
8,919
19.7 %
21.1 %
Loss Ratio:
Current year
57.6 %
57.6 %
58.2 %
58.5 %
(0.6) pts
(0.9) pts
Prior year
(15.2) %
(4.1) %
0.3 %
0.1 %
(15.5) pts
(4.2) pts
Catastrophe
5.5 %
4.6 %
0.5 %
10.8 %
5.0 pts
(6.2) pts
Total Loss ratio
47.9 %
58.1 %
59.0 %
69.4 %
(11.1) pts
(11.3) pts
Commission and brokerage ratio
28.4 %
25.7 %
24.9 %
24.6 %
3.5 pts
1.1 pts
Other underwriting expenses
2.5 %
2.6 %
2.8 %
2.5 %
(0.3) pts
0.1 pts
Combined ratio
78.8 %
86.4 %
86.8 %
96.5 %
(8.0) pts
(10.1) pts
Attritional combined ratio (1), (3)
88.7 %
86.1 %
86.0 %
86.2 %
2.7 pts
(0.1) pts
Pre-tax net catastrophe losses (2)
135
430
10
820
Pre-tax net unfavorable (favorable) prior year reserve development
(397)
(397)
7
5
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
(3)
The attritional combined ratio for quarter and year ended December 31, 2023 included approximately $94m of profit commission related to loss reserves releases. Excluding this profit commission, the Reinsurance Segment’s attritional combined ratio would have been 85.1% for the quarter and year ended December 31, 2023, respectively.
Insurance Segment – Quarterly Highlights
Underwriting information - Insurance segment
Q4
Year to Date
Q4
Year to Date
Year on Year Change
All values in USD millions except for percentages
2023
2023
2022
2022
Q4
Year to Date
Gross written premium
1,428
5,177
1,278
4,704
11.7 %
10.0 %
Net written premium
1,107
3,929
887
3,426
24.8 %
14.7 %
Loss Ratio:
Current year
62.5 %
63.6 %
63.3 %
63.2 %
(0.8) pts
0.4 pts
Prior year
40.8 %
10.8 %
(0.9) %
(0.2) %
41.7 pts
11.0 pts
Catastrophe
0.9 %
0.6 %
0.6 %
3.9 %
0.3 pts
(3.3) pts
Total Loss ratio
104.2 %
75.0 %
63.1 %
66.9 %
41.1 pts
8.1 pts
Commission and brokerage ratio
11.6 %
11.8 %
12.7 %
12.9 %
(1.1) pts
(1.1) pts
Other underwriting expenses
16.6 %
16.2 %
14.7 %
14.6 %
1.9 pts
1.6 pts
Combined ratio
132.4 %
103.0 %
90.5 %
94.4 %
41.8 pts
8.6 pts
Attritional combined ratio (1)
90.8 %
91.7 %
90.7 %
90.7 %
0.1 pts
1.0 pts
Pre-tax net catastrophe losses (2)
8
20
5
125
Pre-tax net unfavorable (favorable) prior year reserve development
392
392
(7)
(7)
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 December 31, 2023
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 February 8, 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 December 31,
Twelve Months Ended December 31,
2023
2022
2023
2022
(unaudited)
(unaudited)
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
Amount
Per Diluted Share
After-tax operating income (loss)
$
1,093
$
25.18
$
478
$
12.21
$
2,776
$
66.39
$
1,065
$
27.08
After-tax net gains (losses) on investments
(220
)
(5.06
)
49
1.25
(236
)
(5.65
)
(366
)
(9.30
)
After-tax net foreign exchange income (expense)
(69
)
(1.60
)
(31
)
(0.80
)
(23
)
(0.55
)
(102
)
(2.60
)
Net income (loss)
$
804
$
18.53
$
496
$
12.66
$
2,517
$
60.19
$
597
$
15.19
(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
Twelve Months Ended
December 31
December 31
(Dollars in millions, except per share amounts)
2023
2022
2023
2022
(unaudited)
(unaudited
REVENUES:
Premiums earned
$
3,578
$
3,012
$
13,443
$
11,787
Net investment income
411
210
1,434
830
Total net gains (losses) on investments
(255
)
64
(276
)
(455
)
Other income (expense)
(75
)
(30
)
(14
)
(102
)
Total revenues
3,659
3,256
14,587
12,060
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
2,254
1,811
8,427
8,100
Commission, brokerage, taxes and fees
853
651
2,952
2,528
Other underwriting expenses
226
182
846
682
Corporate expenses
18
16
73
61
Interest, fees and bond issue cost amortization expense
36
27
134
101
Total claims and expenses
3,387
2,687
12,432
11,472
INCOME (LOSS) BEFORE TAXES
272
568
2,154
588
Income tax expense (benefit)
(532
)
72
(363
)
(9
)
NET INCOME (LOSS)
$
804
$
496
$
2,517
$
597
Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period
923
223
743
(2,037
)
Reclassification adjustment for realized losses (gains) included in net income (loss)
223
28
244
89
Total URA(D) on securities arising during the period
1,146
251
986
(1,948
)
Foreign currency translation and other adjustments
76
86
59
(77
)
Benefit plan actuarial net gain (loss) for the period
15
15
15
15
Reclassification adjustment for amortization of net (gain) loss included in net income
—
—
2
2
Total benefit plan net gain (loss) for the period
16
15
17
17
Total other comprehensive income (loss), net of tax
1,238
352
1,063
(2,008
)
COMPREHENSIVE INCOME (LOSS)
$
2,041
$
848
$
3,580
$
(1,411
)
EARNINGS PER COMMON SHARE:
Basic
$
18.53
$
12.66
$
60.19
$
15.19
Diluted
18.53
12.66
60.19
15.19
EVEREST GROUP, LTD. CONSOLIDATED BALANCE SHEETS
December 31,
(Dollars and share amounts in millions, except par value per share)
2023
2022
(unaudited)
ASSETS:
Fixed maturities - available for sale, at fair value
$
27,740
$
22,236
(amortized cost: 2023, $28,568; 2022, $24,191, credit allowances: 2023, $(48); 2022, $(54))
Fixed maturities - held to maturity, at amortized cost
(fair value: 2023, $854; 2022, $821, net of credit allowances: 2023, $(8); 2022, $(9))
855
839
Equity securities, at fair value
188
281
Other invested assets
4,794
4,085
Short-term investments
2,127
1,032
Cash
1,437
1,398
Total investments and cash
37,142
29,872
Accrued investment income
324
217
Premiums receivable (net of credit allowances: 2023, $(41); 2022, $(29))
4,768
3,619
Reinsurance paid loss recoverables (net of credit allowances: 2023, $(26); 2022, $(23))
164
136
Reinsurance unpaid loss recoverables
2,098
2,105
Funds held by reinsureds
1,135
1,056
Deferred acquisition costs
1,247
962
Prepaid reinsurance premiums
713
610
Income tax asset, net
868
459
Other assets (net of credit allowances: 2023, $(9); 2022, $(5))
941
930
TOTAL ASSETS
$
49,399
$
39,966
LIABILITIES:
Reserve for losses and loss adjustment expenses
24,604
22,065
Unearned premium reserve
6,622
5,147
Funds held under reinsurance treaties
24
13
Amounts due to reinsurers
650
567
Losses in course of payment
171
74
Senior notes
2,349
2,347
Long-term notes
218
218
Borrowings from FHLB
819
519
Accrued interest on debt and borrowings
22
19
Unsettled securities payable
137
1
Other liabilities
582
555
TOTAL LIABILITIES
36,197
31,525
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; (2023) 74.2 and (2022) 69.9
outstanding before treasury shares
1
1
Additional paid-in capital
3,773
2,302
Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit)
of $(99) at 2023 and $(250) at 2022
(934
)
(1,996
)
Treasury shares, at cost: 30.8 shares (2023) and 30.8 shares (2022)
(3,908
)
(3,908
)
Retained earnings
14,270
12,042
Total shareholders' equity
13,202
8,441
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
49,399
$
39,966
EVEREST GROUP, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended
December 31
(Dollars in millions)
2023
2022
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
2,517
$
597
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable
(1,064
)
(435
)
Decrease (increase) in funds held by reinsureds, net
(66
)
(197
)
Decrease (increase) in reinsurance recoverables
143
(413
)
Decrease (increase) in income taxes
(559
)
(181
)
Decrease (increase) in prepaid reinsurance premiums
(46
)
(166
)
Increase (decrease) in reserve for losses and loss adjustment expenses
2,256
3,477
Increase (decrease) in unearned premiums
1,387
655
Increase (decrease) in amounts due to reinsurers
18
201
Increase (decrease) in losses in course of payment
93
(186
)
Change in equity adjustments in limited partnerships
(168
)
(94
)
Distribution of limited partnership income
120
180
Change in other assets and liabilities, net
(339
)
(297
)
Non-cash compensation expense
49
45
Amortization of bond premium (accrual of bond discount)
(64
)
55
Net (gains) losses on investments
276
455
Net cash provided by (used in) operating activities
4,553
3,695
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale
2,310
2,626
Proceeds from fixed maturities sold - available for sale
3,849
1,403
Proceeds from fixed maturities matured/called/repaid - held to maturity
105
39
Proceeds from equity securities sold
126
2,217
Distributions from other invested assets
245
266
Cost of fixed maturities acquired - available for sale
(10,653
)
(7,344
)
Cost of fixed maturities acquired - held to maturity
(112
)
(153
)
Cost of equity securities acquired
(17
)
(1,003
)
Cost of other invested assets acquired
(902
)
(1,547
)
Net change in short-term investments
(1,034
)
149
Net change in unsettled securities transactions
181
(71
)
Net cash provided by (used in) investing activities
(5,902
)
(3,418
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common shares issued (redeemed) during the period for share-based compensation, net of expense
(23
)
(17
)
Proceeds from public offering of common shares
1,445
—
Purchase of treasury shares
—
(61
)
Dividends paid to shareholders
(288
)
(255
)
Cost of debt repurchase
—
(6
)
Net FHLB borrowings (repayments)
300
—
Cost of shares withheld on settlements of share-based compensation awards
(24
)
(20
)
Net cash provided by (used in) financing activities
1,409
(359
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(23
)
39
Net increase (decrease) in cash
38
(42
)
Cash, beginning of period
1,398
1,441
Cash, end of period
$
1,437
$
1,398
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)
$
196
$
171
Interest paid
130
98
NON-CASH TRANSACTIONS:
Reclassification of specific investments from fixed maturity securities, available for sale at fair value
to fixed maturity securities, held to maturity at amortized cost net of credit allowances
—
722
On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023, which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The act includes a provision referred to as the economic transition adjustment, which is intended to provide a fair and equitable transition into the tax regime, and results in a deferred tax benefit for the Company. Pursuant to this legislation, the Company has estimated a $578 million net deferred tax asset as of December 31, 2023. This amount could be subject to change. Any changes will be reflected in the 4th quarter of 2023 as presented in the Company's 2023 Form 10-K filing. Net income (loss), after-tax operating income (loss), net income (loss) per diluted common share, after-tax operating income (loss) per diluted common share, net income ROE, operating income ROE, total shareholder return, book value per common share, and adjusted book value per common share excluding URAD excluding the benefit associated with the net deferred tax asset is displayed in the following reconciliation:
Three Months Ended December 31,
Twelve Months Ended December 31,
2023
2023
Excl.
Bermuda CIT
Excl.
Bermuda CIT
As Reported
Bermuda Tax
impact
As Reported
Bermuda Tax
impact
Net income (loss)
$
804
$
226
$
578
$
2,517
$
1,939
$
578
Operating income (loss)
$
1,093
$
515
$
578
$
2,776
$
2,198
$
578
Per common share diluted net income (loss)
$
18.53
$
5.21
$
13.31
$
60.19
$
46.38
$
13.81
Per common share diluted operating income (loss)
$
25.18
$
11.87
$
13.31
$
66.39
$
52.58
$
13.81
Return on equity (annualized)
After-tax operating income (loss)
32.4
%
15.6
%
16.8 pts
23.1
%
18.7
%
4.4 pts
After-tax net gains (losses) on investments
-6.5
%
-6.6
%
0.1 pts
-2.0
%
-2.0
%
— pts
After-tax foreign exchange income (expense)
-2.1
%
-2.1
%
— pts
-0.2
%
-0.2
%
— pts
Net income (loss)
23.8
%
6.9
%
16.9 pts
20.9
%
16.5
%
4.4 pts
Total Shareholder Return (TSR)
26.5
%
21.3
%
5.2 pts
Book value per common share outstanding
$
304.29
$
290.98
$
13.31
$
304.29
$
290.98
$
13.31
Adjusted book value per common share outstanding excluding ("URAD")
$
320.95
$
307.63
$
13.32
$
320.95
$
307.63
$
13.32
(Some amounts may not reconcile due to rounding.)
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207462919/en/
Media: Dawn Lauer Chief Communications Officer 908.300.7670
Investors: Matt Rohrmann Head of Investor Relations 908.604.7343
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