Earnings call transcript: Everest Group Ltd beats Q2 2025 forecasts

Everest Group Ltd (EVR) delivered a strong performance in Q2 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $16.1, compared to the forecasted $14.84. This represents an 8.49% positive surprise. Revenue also exceeded expectations, reaching $4.49 billion against a forecast of $4.41 billion. Following the earnings announcement, Everest’s stock rose 1.06% in after-hours trading, closing at $335.8. According to InvestingPro analysis, EVR currently appears undervalued, with a "GOOD" overall financial health score of 2.69 out of 5, reflecting investor confidence in the company’s robust results and outlook.

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Key Takeaways

• EPS and revenue both surpassed forecasts, with EPS showing an 8.49% surprise.
• Stock price increased by 1.06% in after-hours trading.
• Focus remains on international expansion and specialty lines.
• U.S. casualty portfolio remediation expected to complete by Q3 2025.
• Share repurchases anticipated to resume in Q4 2025.

Company Performance

Everest Group Ltd demonstrated strong financial performance in Q2 2025, highlighted by a net operating income of $734 million and an annualized operating return on equity (ROE) of 19.6%. The company continues to leverage its leading position in the reinsurance market while expanding its international footprint, particularly in the insurance sector. Despite a slight decrease in gross written premiums to $4.7 billion, Everest maintained a competitive combined ratio of 90.4%.

Financial Highlights

• Revenue: $4.49 billion, exceeding forecasts
• Earnings per share: $16.1, surpassing expectations
• Net operating income: $734 million
• Net investment income: $532 million
• Shareholders’ equity: $15 billion

Earnings vs. Forecast

Everest’s Q2 2025 earnings per share of $16.1 exceeded the forecasted $14.84, marking an 8.49% surprise. Revenue also outperformed expectations, with a 1.81% surprise. This strong performance is indicative of the company’s strategic focus on high-growth areas and disciplined underwriting practices.

Market Reaction

Following the earnings announcement, Everest’s stock price increased by 1.06% in after-hours trading, closing at $335.8. This movement reflects positive investor sentiment, driven by the company’s earnings beat and promising outlook. The stock remains within its 52-week range, with a high of $407.3 and a low of $320. Analyst consensus from InvestingPro shows a positive outlook, with price targets ranging from $360 to $483, suggesting room for further growth as the company executes its strategic initiatives.

Outlook & Guidance

Looking ahead, Everest anticipates completing its U.S. casualty portfolio remediation by Q3 2025, with potential for growth in its casualty book. The company is focused on international expansion and expects to see improvements in its expense ratio as its international business scales. Additionally, Everest plans to resume share repurchases in Q4 2025, signaling confidence in its financial strength and future prospects. InvestingPro analysis highlights EVR’s strong market position with a revenue CAGR of 16% over the past 5 years.

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Executive Commentary

"Reinsurance continues to produce excellent results," stated Jim Williamson, CEO of Everest Group Ltd, highlighting the strong performance in the property catastrophe lines. Williamson also emphasized the company’s disciplined approach to building a sustainable and profitable portfolio, saying, "We’re not here focused on producing a top line growth outcome."

Risks and Challenges

• Market volatility in the property catastrophe segment could impact earnings.
• International expansion poses operational and regulatory challenges.
• Economic uncertainties may affect investment income and underwriting results.
• Competition in the reinsurance and specialty lines markets remains intense.
• Geopolitical tensions, such as the Russia-Ukraine conflict, could influence global operations.

Q&A

During the earnings call, analysts inquired about the reserve releases in reinsurance and the provisions for Russia-Ukraine aviation losses. CEO Jim Williamson clarified the company’s international business growth strategy and detailed the pricing dynamics in the property catastrophe market, reinforcing Everest’s commitment to disciplined underwriting and strategic expansion.

Full transcript - Everest Re Group Ltd (EG) Q2 2025:

Keith, Conference Operator: Good day, and welcome to the Everest Group Limited Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded.

Jim Williamson, President and CEO, Everest Group Limited: Now I would like to

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: turn the conference over to your

Keith, Conference Operator: host today, Matthew Orman, Senior Vice President and Head of HR. Please go ahead.

Matthew Orman, Senior Vice President and Head of HR, Everest Group Limited: Thank you, Keith. Good morning, everyone, and welcome to Everest Group Limited Second Quarter of twenty twenty five Earnings Conference Call. Everest executives leading today’s call are Jim Williamson, President and CEO and Mark Kosciansic, Senior Vice President and CFO. We’re also joined by the members of the Everest management team. Before we begin, I’ll preface the comments by noting that today’s call will include forward looking statements.

Actual results may differ materially, and we undertake no obligation to publicly update forward looking statements. Management comments regarding estimates, projections and similar subject to risks, uncertainties and assumptions as noted in Everest’s SEC filings. Management may also refer to certain non GAAP financial measures. Available explanations and reconciliations to GAAP can be found in the earnings press release, investor presentation and financial supplement on our website. With that, I’ll turn the call over to Jim.

Jim Williamson, President and CEO, Everest Group Limited: Thanks, Matt, and good morning, everyone. Everest delivered a strong second quarter. Contributions from underwriting and investments drove net operating income of $734,000,000 and an annualized operating ROE of nearly 20%. Our results underscore the strength and resilience of our platform. Underwriting profit totaled $385,000,000 on a combined ratio of 90.4%.

This reflected light cat experience and $39,000,000 of favorable prior year development in our reinsurance attritional property book. We maintain prudent loss picks across our portfolio with a 60.1% loss ratio. Gross written premium declined slightly year over year. Reinsurance GWP rose 1.1%, while insurance declined 3.1%. Growth excluding deliberate U.

S. Casualty portfolio actions in both divisions was 117% respectively. Net investment income was strong at $532,000,000 supported by favorable private equity performance. Moving on to reinsurance, which delivered an excellent quarter, generating $436,000,000 profit, up $133,000,000 from prior year. The combined ratio was 85.6%, reflecting improvements in our business mix and minimal catastrophe losses.

Reserve releases improved the combined ratio by 1.3 points in the quarter, while losses associated with the recent UK court aviation ruling added 3.2 points. Improved mix drove a 30 basis point reduction in both the attritional loss ratio and attritional combined ratio to 56.784.1% respectively. We continue to grow in property with premiums up about 8% over prior year. Property cat XOL grew over 15% and property pro rata north of 8% as risk adjusted returns remain attractive. Our differentiated access to clients affords Everest high quality opportunities despite rising competition.

Casualty premiums declined 7.3%, while our casualty pro rata book was down 15% as we reduced targeted exposures. Primary casualty rates are rising, but the persistent level of ceding commissions and continued legal system abuse inform our conservative approach. We continue to see attractive opportunities in our global specialty platform, particularly in engineering, renewable energy and our world class parametric business. Turning to mid year renewals, property cat rate change met our expectations and risk adjusted returns for our cat portfolio remain attractive. Importantly, terms and conditions are holding.

Property cat rate for our portfolio was essentially flat at 6.1% as the vast majority of our signings were done at preferential rate and terms. We’re also beginning to see the benefits of Florida tort reform, which has not been factored into our pricing. Market conditions at sevenone largely follow the trend seen throughout the year. We continue to reshape the portfolio, expanding in U. S.

Property, in Asia and in Latin America, while reducing our U. S. Exposed casualty business. We have shed approximately $800,000,000 of casualty pro rata business since the beginning of 2024. Our superior execution and deep relationships position Everest to optimize our share and attractive programs with core seeds, in many cases with favorable economics.

In short, our reinsurance business is well positioned to deliver regardless of the external environment. Moving on to insurance, where we are rapidly reshaping our portfolio. The division recorded an underwriting loss of $18,000,000 with a combined ratio of 102% and an attritional loss ratio of 68.7%. Results reflect ongoing prudent loss picks, particularly in casualty, as we continue to build our risk margin. Lower earned premium coupled with investments in our global platform led to a higher expense ratio.

Gross written premium declined approximately approximately 3% year over year, driven by our one renewal strategy in North American casualty, which will be completed in the third quarter. Casualty premiums decreased 27% in the quarter. 47% of casualty business in the quarter was not renewed. This was partially offset by strong rate increases, which averaged 16% for the casualty business we retained, led by excess umbrella and commercial auto, each increasing in the high teens. Importantly, rate exceeded expected loss trend across commercial auto, general liability and umbrella lines.

It’s early, but we’re already seeing results from our actions to improve the quality of our casualty portfolio. In the quarter, 88% of retail casualty gross written premiums had loss sensitive structures and 86% was in our best classes of business. Make no mistake, Everest Insurance is open for business to write well priced and well structured casualty accounts. Premium growth across all lines excluding casualty was 7% globally with strength in specialty, accident and health and across our international business. Specialty and A and H grew 4024% year over year respectively.

In property, global premiums increased 5% with 21% international growth, offsetting a 2% decline in North America. While still attractive, competitive, especially in North America large accounts. Nonetheless, our long term investments in talent and systems give us runway for disciplined growth. Our wholesale platform, Everest Evolution continues to capitalize on opportunities in the E and S market. We have expanded industry specialization and new offerings, driving growth in targeted higher margin segments of the market.

Our International Insurance business is progressing well with a 23% growth rate this quarter and improving margins. We’re making investments in key capabilities to support the business at scale. International is profitable with the more mature operations like UK wholesale and European retail achieving low 90s combined ratios this quarter. Moving to reserves, we continue to build risk margin accident year. In reinsurance, we recognize favorable development in well seasoned property lines.

In insurance, we remain consistent with our booked position. Mark will provide additional commentary on reserves and our recently published global loss triangles. Now turning to capital management, which remains a strategic priority for Everest. In the second quarter, we repurchased $200,000,000 worth of shares. Year to date, we have returned $400,000,000 to shareholders in the form of buybacks repurchasing approximately 1,200,000.0 shares.

In closing, I’m encouraged by our progress and strong performance this quarter. Reinsurance continues to produce excellent results. In insurance, the expertise and capabilities we’ve built in property and specialty lines globally are proving beneficial. Our one renewal strategy in U. S.

Casualty has already improved the quality of the portfolio, which we believe will result in more consistent profitability over time. Looking ahead, we remain focused on executing across both businesses, managing the cycle with discipline and building long term value for shareholders. With that, I’ll turn the call over to Mark.

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Thank you, Jim, and good morning, everyone. Everest delivered a strong second quarter, generating $734,000,000 of net operating income, return on equity of 19.6% and an annualized total shareholder return of 14.8%. Our results this quarter reflect strong contributions from both underwriting and our investment portfolio. Starting with group results, Everest reported gross written premiums of $4,700,000,000 representing a 0.7% decrease in constant dollars and excluding reinstatement premiums. As Jim mentioned, the combined ratio was 90.4% for the quarter, and these strong results were driven by relatively light catastrophe losses and favorable prior year reserve development from well seasoned attritional property reinsurance reserves, representing a one point benefit to the combined ratio.

This was partially offset by aviation related losses associated with The U. K. Court ruling, which contributed 2.5 points to the group combined ratio. The group attritional loss ratio increased 1.3 points to 60.1% in the quarter. Moving to reinsurance.

Gross written premiums increased 1.6% in constant dollars when adjusting for reinstatement premiums during the quarter. Consistent with prior quarters, solid growth in property and specialty lines were partially offset by continued discipline in casualty lines. The combined ratio was 85.6%, an improvement of 3.3 points from the prior year. Favorable prior year development contributed 1.3 points to the improvement. Catastrophe losses were de minimis this quarter, while the prior year quarter included $120,000,000 or five points on the combined ratio.

The aviation losses associated with the Russia Ukraine war of $98,000,000 added 3.2 points to the reinsurance combined ratio. And we included these in a separate line item, as you would have seen in our earnings release and financial supplement. There were $14,000,000 of reinstatement premiums associated with the aviation losses, bringing the net loss to $84,000,000 Moving to insurance. Gross premiums written decreased 3.3% in constant dollars to 1,400,000,000 Strong growth in other specialty and accident and health was more than offset by the aggressive actions we are taking in U. S.

Casualty lines centered around our one renewal strategy. As a result, Specialty Casualty gross written premiums fell to 22.2% of the Insurance segment mix, a decrease of over seven points from the prior year quarter. The attritional loss ratio increased to 68.7% this quarter, reflecting our disciplined approach to setting and sustaining prudent loss picks as we build risk margin in our U. S. Casualty lines given the elevated risk environment.

The twenty twenty four global loss triangles we posted to our website in late June reflect the decisive reserving actions taken at year end, and we also enhanced the level of disclosure by adding detail and commentary to each line of business, and we plan to continue enhancing our disclosures moving forward and provide additional information around our reserve position. Our Q2 U. S. Casualty loss development is consistent with our expectations, and social inflation dynamics persist at levels that are within our assumptions. While it is still early, we believe the conservatism we are applying to our loss picks in conjunction with our underwriting actions and improved portfolio quality is building risk margin in our portfolio.

Overall, the reserve position of our insurance division is adequate. The underwriting related expense ratio was 18.9% with the increase driven by slower casualty earned premium growth from our one renewal strategy, as well as the continued investment in our global platform. In the other segment, the quarter includes a $20,000,000 loss provision for our intellectual property business, which is in runoff, and the segment’s combined ratio was also impacted by catastrophe losses of $10,000,000 Moving on, net investment income increased to $532,000,000 for the quarter, driven by higher assets under management, and alternative assets generated $110,000,000 of net investment income in the quarter and benefited from strong returns in private equity investments. Overall, our book yield decreased slightly to 4.6% as foreign currency bonds with lower yields become a larger proportion of our portfolio. While our reinvestment rate remains north of 5%, we continue to have a short asset duration of approximately three point four years and the fixed income portfolio benefits from an average credit rating of AA minus.

For the 2025, our operating income tax rate was 16.4%, which was just below our working assumption of 17% to 18% for the year. Shareholders’ equity ended the quarter at $15,000,000,000 or $15,300,000,000 when excluding $52,000,000 of net unrealized depreciation on available for sale fixed income securities. Book value per share ended the quarter at 3 and $58.08 an improvement of 12.1 from year end 2024 when adjusted for dividends of $4 per share year to date. We continue to view share repurchases attractively as we repurchased 581,000 shares in the quarter amounting to 200,000,000 or an average of three and forty four point three zero dollars per share. And we expect to take a tempered approach in the third quarter given wind season.

And all other things being equal, we expect to look to resume the pace of share repurchases in the fourth quarter and into 2026. And with that, I’ll turn the call back over

Jim Williamson, President and CEO, Everest Group Limited: to Matt. Thanks, Mark. Operator, we’re

Matthew Orman, Senior Vice President and Head of HR, Everest Group Limited: now ready to open the line for questions. Additional questions. Keith, over to you.

Keith, Conference Operator: Yes, thank you. As mentioned, we will now begin the question and answer session. And the first question comes from Andrew Anderson with Jefferies.

Andrew Anderson, Analyst, Jefferies: Hey, thanks. Good morning. The underlying loss ratio insurance about 69% and if we look at year over year about six point increase, which is essentially the risk margin put in place. Over the next kind of one to two years, should we think of that 6% staying in place, but perhaps there’s some benefit on mix shift to international and short tail?

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Andrew, it’s Mark. I think the approach that we want to take on this, there’s a few pieces to unpack here. So obviously, we’re committed to a risk margin given the uncertainty of the law. I think 2025 is a little heavier than we might see in the future, given the runoff of the older unremediated portfolio stemming from essentially Q3 last year. Having said that, we’re going to make sure that the data is supporting any conclusions that lead us to reduce the need for elevated loss picks, including that risk margin.

I do think the mix of business will provide a meaningful impact in the overall loss ratio as it evolves and the net earned premium begins to grow in. And to your point, the combination of the international business that we’re writing and the increase in short tail lines here in North America are going to be the principal drivers of that. And I would also point to the fact that the percentage of casualty has been reduced almost seven points to a little over 22 in the second quarter’s composition. So you can see that trend starting in place. The earned will take a while to catch up, but that’s kind of the overall view.

Andrew Anderson, Analyst, Jefferies: And then on the expense, I think I heard you say some international investments.

Meyer Shields, Analyst, Keefe, Poyet and Woods: Were they maybe a little bit lumpier this quarter?

Andrew Anderson, Analyst, Jefferies: And perhaps you could just talk about how you’re thinking about the pace of international investments in insurance?

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Yes, it’s a bit lumpier. International is growing at a faster pace than North America, so proportionately becomes a larger component of the combined ratio. I think the key thing to look at with the expense ratio evolution in insurance is really our ability to leverage the infrastructure that we’ve built and continue to build in terms of premium evolution. It’s really scaling that premium and the commensurate net earned premium that is going to cause that ratio to diminish over time.

Keith, Conference Operator: Thank you. Thank you. And the next question comes from Alex Scott with Barclays.

Josh Shanker, Analyst, Bank of America: Hey, good morning. Wanted to

Alex Scott, Analyst, Barclays: ask about the accident and health growth. Certainly, in some areas of A and H like stop loss, I think it’s a harder market. And so maybe there’s a good opportunity there. On the other hand, I think some of the health insurers have been experiencing medical cost inflation that’s pressuring their businesses. So I’m just interested if you could provide a little more color on what you’re doing there.

Any nuances to the way you’re approaching that market and growing just given a little more uncertainty for loss cost trend?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Alex. Good question. Look, we like the accident health business. We have significantly diminished the health portion of A and H for us. We really should say accident.

And we are growing our accident business both in The U. S. And in our international business at a strong clip. The type of business we’re writing, things like business travel accident where companies are procuring coverage for executives who are traveling around the world, Participant accident where you have various groups who want accident cover for, you know, could be things like sports participation, nonprofit organizations, etcetera. And so that’s the kind of kind of premium we’re putting on the books.

That tends to be very consistent performing. You’re talking about very low severity, more of a frequency business, and the performance of that portfolio for us has been strong, which is why we’re leaning into it.

Alex Scott, Analyst, Barclays: Got it. Follow-up question, I guess, just on reinsurance and the renewals. Can you talk a bit more about what you saw in terms of, you know, the terms and conditions and the competitive environment on that front? And just, how you’re seeing the trade off between the growth and returns you can get versus capital return and a pretty attractive stock price to be buying at?

Jim Williamson, President and CEO, Everest Group Limited: Sure. Look, if you look at both the June 1 and July 1 renewals are big mid year renewals. I think it’s a pretty consistent story. So at June 1, we had obviously the Florida renewal as I indicated in my prepared remarks. Overall pricing was flat and generally terms and conditions are not moving, which I think is a terrific sign and speaks to the underlying discipline in the property cat market.

And I think my expectation is certainly that that’s going to sustain itself. And then with respect to sevenone, obviously, you have a much more diverse renewal with a number of markets around the world having significant renewal dates. Their rates down slightly, but again, terms and conditions hold. So you just see this very consistent view that says that discipline in the market is going to be sustained. And again, it informs our expectations as we go forward.

And that’s why we grew it at the sixone renewal and in the pockets of the sevenone renewal that we really liked, we also were able to deploy more capacity at really attractive margins. In terms of the trade off between capital return and growth into the property cat market, I mean the most important thing to note is we’re doing both. And we have the capital strength to do both. I will say though that if you look at the expected return from property cat, pretty much everywhere in the world and certainly in our peak zones like Southeast Windstorm or California earthquake and a bunch of the Japan, etcetera, the ROEs are still very, very strong and I think would even exceed the attractiveness of repurchase. So that’s why we’re continuing this strategy of pursuing both actions.

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Got it. That’s helpful. Thank you.

Matthew Orman, Senior Vice President and Head of HR, Everest Group Limited: You’re welcome.

Keith, Conference Operator: You. And the next question comes from Gregory Peters with Raymond James.

Gregory Peters, Analyst, Raymond James: Yes. Good morning, everyone. I’m going to focus my question first question on just the continuation on the pricing commentary. Listening to the broker calls and some of the other companies that have reported so far, we’re hearing of pricing more pricing pressure than it seems to be that you’re conveying that happened in your renewal. Maybe it’s more focused on the facultative market as opposed to the treaty market, but maybe you can just unpack why we’re hearing about more pricing pressure specifically on the sevenone renewals than maybe you’re talking to us about?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Greg. I mean, well, first of all, just to sort of contrast the sixone and the sevenone renewal, I would say rate at the sixone renewal for Everest book was flat. The July renewal was down marginally, so call it in the 5% to 10% range. And again, you have a much more diverse set of renewals that are happening at sevenone than you do at sixone, which is so Florida focused. And so and again, I think that’s pretty consistent with what we’ve seen.

The fact that the sixone renewal, the fact that we write the vast majority of our programs at non concurrent terms, whether that’s pricing, terms, conditions, etcetera, certainly speaks to part of that. I think it also has a lot to do with the choices that individual underwriters are making. If you’re trying to position your cap portfolio at the very high layers, which is more risk remote, where you’re competing with cap on capacity, you probably are seeing more price pressure. We feel like we’re in a sweet spot. We’re away from the attritional losses.

We’re a lead market and so we’re getting to drive a lot the underwriting action that’s happening on the programs we’re participating in. And so we’re not feeling the degree of price competition that maybe some brokers are speaking And then lastly, think your instinct is right, which is they’re dealing with a very broad set of data. It crosses treaty. They could absolutely be speaking about facultative individual risk is more competitive than treaty in my view. And then, of course, retail insurance is more competitive still.

So that I would imagine explains some of the difference.

Gregory Peters, Analyst, Raymond James: Yes. Thanks for that color. Just using the same format on the insurance segment, I think your business skews to the larger side of the market versus the small and mid sized market. And in insurance, we’re hearing and seeing some pressure on rate there. I understand your non your one renewal position on casualty.

Seen the growth in accident health. Just trying to help if you could just help us sort of understand the moving pieces against what we feel like is increasing price competition in the larger end of the insurance segment?

Jim Williamson, President and CEO, Everest Group Limited: Yes. Well, first of all, that’s right. The larger end of the market in retail insurance for property is definitely more competitive. Now similar to comments I would make about treaty property and the reinsurance side, one of the reasons it’s more competitive is because it corrected so strongly to the upside over the last several years that you’ve got significant embedded margin in those programs and that’s going to attract competition. So it’s important in my mind to distinguish between what rate change is doing and then where you think you are relative to adequacy.

And we still feel like a lot of these programs are above what we consider adequate pricing to take risk. But we are growing more selective and you saw in the numbers that I described in my prepared remarks, our North America insurance property insurance business is more in a flat to down slightly mode at this point as we grow more selective. Now you look globally and particularly in the international markets, slightly different competitive dynamic and also more of what I would call sort of upper middle market accounts. And we’re seeing again, very adequate pricing and we’re leaning into that and growing. And so we continue to feel like the property market is very attractive.

And then to your broader point, there are a lot of other parts of this market where we see attractive opportunities. We certainly talked about accident and health. I think our global specialties and this is both a reinsurance and insurance comment, we’re growing strongly in areas like engineering and marine in our parametric book. There’s an energy transition taking place that we all know about that’s providing terrific opportunities. So plenty of things for us to do in terms of deploying capital at very attractive returns.

Gregory Peters, Analyst, Raymond James: Thanks for the additional detail.

Jim Williamson, President and CEO, Everest Group Limited: Thank you, Greg.

Keith, Conference Operator: Thank you. And the next question comes from Josh Shanker with Bank of America.

Josh Shanker, Analyst, Bank of America: I want to continue on the theme of, I guess, maybe not by pricing, but cat a little bit. So PMLs were up in the quarter. They’re up year over year. I think that’s possible to say that maybe you could have and should have deployed more capital at risk a year ago, but hindsight is fifty-fifty or twenty twenty. Can you talk a little about your desire to increase your PMLs into what some people are describing as softening markets?

Jim Williamson, President and CEO, Everest Group Limited: Yes, Josh. Look, I think the first thing just in terms of the premise of your question, we talk about softening. One of the things I like to remind folks about is that if we were sitting at a price level that we experienced that this industry experienced in 2017, 2018, ’19 and then suddenly rates corrected to where they are now, we would call it one of the greatest hard markets in living memory. Rates are very strong in property cat. And I have absolutely no problem deploying incremental capacity for our best clients on well structured accounts at the rates that we’re receiving today and the rates frankly that I expect to be receiving next year.

It’s just simply these accounts are simply very, very well priced. In terms of the specific PMLs, it’s always about risk and reward. And yes, we have increased net PMLs, but that’s because of the pricing dynamics that I described and the attractive return profile that’s available to us. It makes sense to take the risks we’re taking, And we still remain well within the sort of risk guidelines that we’ve talked about every quarter with respect to earnings and capital at risk, so feeling good about that. Just to break down the PML increase, some of that is certainly growth in our gross book in both divisions.

And then we continue to optimize our hedging in terms of where we’re purchasing our cat bonds, focusing on managing tail exposures, offset somewhat by growth in assets under management in our Mt. Logan platform, which is doing a terrific job of raising funds. So when you balance all that out, I think we’re making an excellent trade, and it’s one that I expect to continue to play out in the coming renewal periods.

Josh Shanker, Analyst, Bank of America: By extension, is it wrong to say that maybe last year, you should have put more capital to work in PMLs and then you’re leaning into something that you’ve identified as an opportunity that was actually there last year? And two, the only other thing I’d add on the PML is the PMLs currently are higher, I think, than they were after the Katrina peak. I’m just wondering, look, the system is very different in Everest, but I mean, you’re talking about how hard the market is. Maybe scale and say, this is the real opportunity because a lot of people say, oh, things are soft at this point in time right now. And you’re actually deploying more capital, it looks like, than you would have as a percentage of equity been 15 years ago.

Jim Williamson, President and CEO, Everest Group Limited: Yes, Josh, I hate to repeat myself, but I think anyone that’s describing the current cat environment as soft is not well informed. It is not soft. It may be softer than it was a year ago. Rates have come down, whether that’s five, ten points. But again, compared to where rates would have been and you can look at any of the broker rate indexes to prove this point out, they’re up massively over where they were in the twenty teens.

This remains a very hard market. I’m not going to do the forensic accounting on where we were back in 02/2005, etcetera, but we think the risk reward trade off that’s available to us today is pretty clear and it speaks to the idea that we can deploy this capital and get rewarded for it. In terms of what we did last year, I mean, I don’t see a lot of value in retrospective other than to say, we’re looking to where we want to grow on programs, we do in a very disciplined fashion. You also have to reflect on the fact that clients, they don’t always accept their markets doubling or tripling their line size in any given renewal. Some of these things you do have to work up over time and we’re certainly seeing that play out.

Josh Shanker, Analyst, Bank of America: Thank you very much.

Jim Williamson, President and CEO, Everest Group Limited: Thanks, Josh.

Keith, Conference Operator: Thank you. And the next question comes from Ryan Meredith with UBS.

Andrew Anderson, Analyst, Jefferies: Yes, thanks. Just two of them here. One just following on the PMLs a little bit here, Jim. It looks like that where you did see some meaningful increase in exposure was playing at the one in ’20 and one in fifty year, particularly for the Southeast. Is it that you were kind of writing below the FHCF?

Is that where the opportunities were? Is that also why maybe your rates that you got was maybe better than the market because it’s clearly where rates probably better down low? And then also should we expect potentially more susceptibility to lower size hurricanes here this season?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Brian. Look, the first thing I really just have to sort of reset the question a little bit in so far as I don’t consider one in twenty or one in fifty down low. And if you go back to the pre-twenty twenty three rate correction, download would have been a one in three, one in four, maybe one in five. So I feel like when you’re trading at a one in 20 to one in 50, in the heart of these cap programs. And I do think it the fact that that’s where we’ve been very consistently playing by the way over the last couple of years.

The fact that that’s our sweet spot certainly helped a bit on the rate change side because you’re really seeing maximum competition in the more risk remote layers and especially where you start talking about competing with the cap on players. So I just I really don’t see that as down low and it’s really consistent. It has nothing to do with sort of external factors. It’s where we see the best risk adjusted returns for these programs that we’re participating on.

Andrew Anderson, Analyst, Jefferies: Makes sense. Thanks. And then just pivot over to the insurance segment. Christian, were there any changes or have you made any changes as far as the build out of the, call it, European or international insurance kind of business? I mean, we’re still seeing it obviously.

But any changes under your leadership and going to thinking where are we in that process? I know that can be quite expensive to build out an international insurance operation.

Jim Williamson, President and CEO, Everest Group Limited: Yes. So the first comment I would make, Brian, is I really I’m just so incredibly proud of the team that’s building that business. And if you think about an organic build over a period of really just sort of three to four years and getting a business to well north of $1,000,000,000 in premium, rapidly pushing $2,000,000,000 and now turning an underwriting profit. I think that’s a remarkable achievement. Many have tried, very few have succeeded and we have certainly done that.

In terms of the approach, there’s consistency. I think one of the changes that we did make after I became CEO was to really just double down on the markets where we were already competing. And I think we are now represented whether it’s in Continental Europe, in The UK market, in a couple of key markets in Latin America or in the major broking centers in Asia. We have the geographic footprint that we need and we’re really just let’s really focus on going deeper where we already have market access and that’s beginning to really pay off. And you’ll start to see it as the expense leverage gets into a better spot as the earned premium sort of catches up to the growth that we’ve been seeing.

But the strategy, which is to be a lead market, to be a multinational market, to focus on large and specialty commercial risk, that has remained consistent and it’s producing for us.

Andrew Anderson, Analyst, Jefferies: Makes sense. Thank you.

Jim Williamson, President and CEO, Everest Group Limited: Thanks, Brian.

Keith, Conference Operator: Thank you. And the next question comes from Meyer Shields with Keefe, Poyet and Woods.

Meyer Shields, Analyst, Keefe, Poyet and Woods: Thanks and good morning. I want to start with the reinsurance segment, specifically the reserve releases. You talked about the book of business being well seasoned property. And given the tail typically associated with property, is it reasonable to assume that unless there’s some sort of inflection in loss trends that this sort of reserve release is sustainable as more of your reserves enter that well seasoned stage?

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Meyer, I think your premise is correct. Obviously, we’ve got to see that play out. We’re taking the approach of making sure that those reserves are well seasoned. We’re obviously just taking a fraction. We do think we’ve got very significant embedded margin in the reinsurance division as a whole.

I think you’ve seen that demonstrated the last couple of years with meaningful reserve releases and multiple lines led by property. So right now, we feel very confident. It’s been a consistent driver of margin in the business, and it’s something that we see, all things being equal, after its seasons being released into the quarterly P and Ls.

Meyer Shields, Analyst, Keefe, Poyet and Woods: Okay. Fantastic. That’s good to hear. On the international segment, if you can you talk about, I guess, the book’s exposure to deflation outside of The United States as a result of U. S.

Tariffs? I mean, on the premiums and on the loss side.

Jim Williamson, President and CEO, Everest Group Limited: Yeah, Meyer. It’s a fair question. Mean, deflation on the loss side, living in a highly inflationary environment, particularly here in U. S. Casualty, I’d almost welcome some deflation.

It would be a pleasant alternative. In terms of tariff activity and their impact on the business, I mean, obviously, we monitor it. But at the end of the day, if you look at where we are international, we are barely beginning to scratch the surface of the markets we’re competing in. And so in terms of a headwind in opportunity and revenue, it’s not on my radar really. I mean we’re focused on delivering a better value proposition to clients that resonates with them.

And if we do that, we gain market share irrespective of any kind of turbulence in the external environment. And then obviously the piece when it comes to tariffs, the piece we do watch closely is lost cost trend here in The U. S. And we’ve seen no indication that at least so far that the tariffs have contributed to any sort of uptick in loss costs.

Meyer Shields, Analyst, Keefe, Poyet and Woods: Okay, fantastic. Thank you so much.

Jim Williamson, President and CEO, Everest Group Limited: You got it.

Keith, Conference Operator: Thank you. And the next question comes from Michael Zaremski with BMO Capital Markets.

Michael Zaremski, Analyst, BMO Capital Markets: Hey, good morning. Follow-up on the expense ratio tick up. I believe the commentary from Mark and you all has been that we should be thinking about operating leverage. So once the one renewal strategy concludes, we should start seeing some improvement. In terms of the casualty growth, nonrenewal strategy.

Once that’s over, is would that book start growing at kind of low doubles because that’s where pricing is? Or how do we think about kind of juxtaposing the growth versus the expense ratio over the coming year?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Mike. Well, first of all, just in terms of where the casualty book is going to go and the opportunities we see in insurance. As we indicated, we will complete the casualty remediation in the third quarter. And I will just comment, I’ve done a number of book cleanup activities in my career and I have never seen a remediation process executed this aggressively or with this much precision. We literally and I don’t want to replay the whole history because I know you guys have been following it closely, but we literally developed action plans for each and every one of our casualty accounts.

And in the entire year that we’ve been working away at this, I can count on one hand the number of times that our planned activity or planned actions did not take place. So it’s just exceptional and we’ll wrap up very shortly. So look after remediation is done, if you think about the other parts of the book, I talked a lot about them in my prepared remarks. Whether it’s our specialty businesses and that’s a North America and an international comment, accident and health, really accident as the prior questions as we discussed, property short tail lines, marine, all growing very strongly. Casualty in international markets is growing today.

It’s not offsetting the actions we’re taking in North America, but it’s growing very nicely. And I expect all of those things to continue. And then as I again, as I said in my prepared remarks, we’re open for business and casualty. We spend a lot of time engaging risk managers from some of the leading companies here in The U. S.

On their casualty programs. We want to write those deals when they’re well priced and well structured. And so I would not be opposed to the idea that at some point the casualty book starts growing again. It obviously also has a lot of rate momentum. But we’re only going to do that where the pricing, the terms, the conditions, the quality of the underwriting and the underlying risk meets our conditions.

It’s we’re not here focused on producing a top line growth outcome. It’s about building the right portfolio that’s sustainable and profitable. And I see an awful lot of things happening in the business that indicate we’ll be able to do that.

Michael Zaremski, Analyst, BMO Capital Markets: Okay. Got it. That’s helpful. My follow-up is just on the London court decision. Is this now behind us?

Or is there still some limit or, I guess, potential for movement there? And I guess also just you guys added a lot of risk margin on the casualty side. Was this not contemplated when you took the actions earlier this year to kind of add to the airlesser

Gregory Peters, Analyst, Raymond James: issue?

Jim Williamson, President and CEO, Everest Group Limited: Yes. So with respect to the first part of your question, our view is barring any totally unexpected shift in future legal decisions, this is done and dusted for us. We took a very conservative approach to selecting the number that we posted in the quarter, and and now it’s it’s behind us as far as I’m concerned. Look, as we said when the Russian invasion of the Ukraine took place and Russia seized these aircrafts, you know, we did not have enough information at that point to make an informed decision about the ultimate loss from the aviation seizure because there were so many legal issues related to it and in terms of the coverage that will would ultimately be applied. And that’s why we have not posted a reserve for it until we got that clarity through this court decision.

So it really bears no relation relation to any of the reserve actions that we took last year.

Matthew Orman, Senior Vice President and Head of HR, Everest Group Limited: Understood. Thank you.

Keith, Conference Operator: Thank you. And the next question comes from David Movedon with Evercore ISI.

Jim Williamson, President and CEO, Everest Group Limited: Hey, thanks. Good morning. Just had a question on the attritional loss ratio in the reinsurance business. So I did see obviously the releases there on the property side. You mentioned mix shift and that was driving the 30 basis points improvement there.

Did you make any changes to your forward view of loss picks on that property business as well as the just given the releases that you experienced? No, David. We’ve been pretty consistent in our view on property. And when we talk about property loss picks and particularly in property cat, we take a very prudent perspective and prudent approach in terms of selecting an attritional loss ratio that can sustain sort of any movement in loss activity. So that’s been really a consistent approach for us over time.

In terms of the loss pick in the quarter, the other thing I would point out, because you did see that 30 basis point improvement related to mix is the earned premium mix of reinsurance will take some time to catch up to the written mix, net written mix between property and casualty. So I still think there’s some juice in terms of the mix dynamic with our attritional loss pick. Got it. Yes, understood on that. And then just another question just on the growth in property on the reinsurance side.

We’re hearing a little bit more from some broker reports, little bit more appetite to write aggregates. Just wondering what your view is on that and if you guys deployed any capacity in aggregate covers more so at midyear than you did in the past? So we’re not really deploying capacity around aggregates. I think, look, first of all, some people are going to do that and that’s their choice. I still think there’s a bid ask spread between what clients would be willing to pay for most aggregate structures and then what responsible reinsurers would charge for those structures.

So I just don’t see there being a lot of trading that that makes any sense. I do think over time, there’s obviously a lot of thought going into how do you create, how do you start solving some of the risk management problems of our clients. In my view, it’s not going to look anything like the aggregates of old, where you could just have this runaway sideways loss activity. But we’re certainly very open to working with our clients to try to solve their problems. Understood.

Thank you.

Meyer Shields, Analyst, Keefe, Poyet and Woods: Thanks, David.

Keith, Conference Operator: Thank you. And the next question comes from Elyse Greenspan with Wells Fargo.

Jim Williamson, President and CEO, Everest Group Limited0: Hi, thanks. Good morning. My first question is on workers’ comp. Was hoping to get more color on what you’re seeing in the comp market in California. I know another insurer had flagged, you know, a huge uptick in cumulative trauma comp claims in the state.

And then also, can you confirm how much of your book your workers’ comp book is in California today? And do you you intend to keep pulling back there?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Elyse. First of all, before I get to California, just a broader comment. I mean, we’re all waiting for the workers’ comp market to begin recovering. And I think there’s enough indication that it needs to start doing that in terms of the fact that rates have come off so consistently. We did see actually a rate uptick in our own portfolio in the quarter, which is certainly a positive thing to be seeing.

In terms of California, it is a much smaller portion of our book than it was a year ago. And it’s something where we did have a specialized underwriting unit that was focused on California comp. And essentially, we’ve stopped really focusing on that with that specialized unit. We’ve run that piece down. And so we’re only writing California comp when it’s part of a broader portfolio and I don’t expect that to change.

Jim Williamson, President and CEO, Everest Group Limited0: Okay, thanks. And then my second question is a clarification going back to just the Russia, Ukraine increase you guys took in the quarter. What percent of your cedents have notified you of their losses at this point? And how many have made private settlements? Because I believe brokers have noted that a lot of the claims are resolved with private settlements.

Jim Williamson, President and CEO, Everest Group Limited: Yes. I mean that’s certainly been a widespread reality. I think look, the key thing for us is we’ve been in direct contact with our scenes over the course of this process, which by the time we finally got legal clarity around how losses would be adjudicated. We have plenty of information to develop a loss that we have a high degree of confidence in. So whether they’ve actually tendered loss or not, we have a beat on where this thing is going, which is why I feel really comfortable with the number we put up.

Jim Williamson, President and CEO, Everest Group Limited0: Thank you.

Jim Williamson, President and CEO, Everest Group Limited: Thanks Elyse.

Keith, Conference Operator: Thank you. And the next question comes from Andrew Kligerman with TD Cowen.

Jim Williamson, President and CEO, Everest Group Limited1: Hey, good morning. So a few clarifications. I’m looking at your insurance segment other underwriting expenses at 18.5% year to date versus 16.8% in the prior period. And Jim, you talked a little bit about going deeper in the international regions where you are. I look at that 18.5% versus your peers and it looks like there might be two, maybe four, five points of potential improvement there.

Maybe you could help frame the outlook for that as that business as you get through one renewal and potentially start growing. Where could that ratio go?

Jim Williamson, President and CEO, Everest Group Limited: Yes, Andrew, I agree with the idea that as we reach scale in these markets, we should certainly be in a much better spot than 18.5 to date or 18.9 in the quarter. Just the one thing I do want table set for you a little bit in terms of how I think about this. Obviously expenses are important. Our overall group expense ratio I think is best in class. Our reinsurance expense ratio is world leading.

So clearly we understand how to be thoughtful about expenses and manage that line item very carefully. At the same time, there are two really important things happening that are driving what you’re seeing printed. Number one, when it comes to the North America remediation, as I’ve articulated a number of times, we are not slowing down. I’m not worrying about top line where if it makes sense to run off an account, we do it. We don’t sit there and think, this is going to pressure the expense ratio.

And as I said, that’s going to complete in the third quarter. And to your point, will become less of a headwind relative to expense rate as we put that behind us. And then the other and very much the other side of this coin, our international business is performing extremely well. It has a world class loss ratio. And we want to fuel the growth of that business.

Yes, we’re going deeper in the markets where we already are and that will help us in terms of expenses because we don’t have to open new operations in lots of different countries. But we’re still hiring a lot of people, we’re still investing in technology, we’re still out there marketing ourselves to drive that growth. So you’ve got two to me really, really sensible courses of action that both will tend in the short term to put upward pressure on the expense ratio. But then over time as market indicated earlier, we’re very confident that we’re going to get into a better spot as we go forward. Hopefully that helps.

Jim Williamson, President and CEO, Everest Group Limited1: Yes, that helps. And Thank then maybe just two follow-up clarifications, A and H and insurance and your property cat business, just the returns. Just curious with the A and H book, what particular regions you’re big in right now and what type of return on capital you’re seeing there? And Jim, by one of your comments earlier on the property cat business saying it was more attractive than repurchasing shares, I would think that implies like north of a 25% return on capital. Is that right for the property cat reinsurance?

Jim Williamson, President and CEO, Everest Group Limited: Yes. So let me start where you ended. Absolutely, it means north of 25% for property cat. And I think in some of the peak zones, whether it’s Southeast wind or Cowquake, etcetera, you’re looking well higher than that. And I think, by the way, that’s true of just about every cat market around the world.

I’m a little more thoughtful or careful about European wind, but pretty much everything else is well north of that kind of number. And hence, our interest in continuing to write the business. And it’s also why a number of times during today’s call you’ve heard me push back on any notion that this is a soft market. Yes, rates are going down, but it’s still outstanding. In terms of accident and health and really all of our businesses, I think one thing that I can assure you is if we’re growing something, it means the expected return meets or exceeds our threshold, which for the group we’ve talked about mid teens total shareholder return over the cycle, etcetera.

So I expect the accident business to be healthily above that. And we write that business, it’s still mainly in North America business, but we have a terrific emerging international business that’s led out of London. Team there is doing a great job, a lot of growth particularly in Europe and increasingly in Asia. So I think there’s tons of headroom in that business. And again, it’s a business I know well from multiple carriers and it’s a low volatility business that can just deliver some really excellent returns as it gains scale.

Jim Williamson, President and CEO, Everest Group Limited1: Thanks for the helpful insights.

Jim Williamson, President and CEO, Everest Group Limited: Thanks, Andrew.

Keith, Conference Operator: Thank you. And the next question comes from Katie Sykis with Autonomous Research.

Jim Williamson, President and CEO, Everest Group Limited2: Hi, thank you. Good morning. I wanted to follow-up on the discussion of the reserve release in the Reinsurance segment. I think at least in recent years, we have become accustomed to really only seeing changes in your reserve assumptions at the end of the year. So I guess I was curious as to whether we can expect to see a more common cadence to attritional property reserve releases.

And then sort of tagging on to that, interesting to see that, you know, the the reserve release on the reinsurance property lines wasn’t quite enough to offset the charge on the Russian aviation losses. Any additional color that you can give for us on that?

Mark Kosciansic, Senior Vice President and CFO, Everest Group Limited: Well, I think, as I said before, we do want to get into a quarterly cadence on development, obviously, where we can. Clearly, the data has to be there to support it. We feel real good about the margins that we have and the expected margins within the reinsurance segment as a whole. So very confident about it. In the past, we’ve waited somewhat to be a little more conservative in terms of the emergence, but we’re just taking a portion here of older property that, you know, well seasoned.

Now Russia, Ukraine, that’s totally independent. That’s something that we said back in 2022 when it was originally set up that it was undefined. We didn’t have the ability to make a provision for it given the uncertainties associated with it. So the concept of offsetting the two just doesn’t enter the equation. We really look at these things independently.

Having said that, and I’ll reiterate a comment I made earlier, we do feel very confident in the embedded margin that we foresee in the Reinsurance segment. So this is, I think, the beginning of a more normal cadence to your point.

Jim Williamson, President and CEO, Everest Group Limited2: Got it. Thank you. And then shifting to some of the premium growth figures, a very significant reacceleration in financial lines reinsurance growth this quarter. Great to see. Could you give us a little bit more detail on your outlook for the line going forward over the next twelve to eighteen months?

And if you expect to continue to grow at a similar clip?

Jim Williamson, President and CEO, Everest Group Limited: Sure, Katie. Just in terms of maybe a little reminder for everybody on what’s in there. For the most, it’s not financial lines the way you might think of the insurance business, D and O, etcetera. It’s credit exposed lines for the most part. And in particular, our mortgage business is in that segment.

And you had a couple of meaningful mortgage transactions that contributed to that growth in the quarter. In terms of where we see the mortgage business right now, rate levels in the mortgage reinsurance market have been under quite a bit of pressure. And so we’re being very cautious in that particular line. So I’m not going to give you any forward guidance, but I wouldn’t necessarily expect that what you saw this quarter in the financial line segment and reinsurance would be a normal pace for the foreseeable future.

Jim Williamson, President and CEO, Everest Group Limited0: Got it. Thank you.

Keith, Conference Operator: Thank you. And that concludes the question and answer session as well as the event. Thank you so much for attending today’s presentation. You may now disconnect your lines.

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