Core Insights - Everest Group, Ltd. reported a third-quarter 2025 operating income of $7.54 per share, which missed the Zacks Consensus Estimate by 43.7% and decreased 48.4% year over year [1][10] - The company experienced declining premiums, an underwriting loss, and higher expenses, although these were partially offset by narrower catastrophe losses and improved net investment income [1] Q3 Operational Update - Total operating revenues reached $4.3 billion, a 0.7% increase year over year, driven by higher net investment income, but fell short of the consensus mark by 2.9% [2][10] - Gross written premiums decreased by 1.1% year over year to $4.4 billion, with growth in property and specialty lines offset by reductions in certain casualty lines [2] Investment Income and Expenses - Net investment income was $540 million, an increase of 8.8% year over year, attributed to a larger asset base and strong alternative investment returns [3] - Total claims and expenses rose by 9.2% to $4 billion, primarily due to higher incurred losses and various underwriting expenses [3] Underwriting Performance - The underwriting loss was $130 million, contrasting with an underwriting income of $272 million in the same quarter last year [4] - The combined ratio deteriorated by 1030 basis points year over year to 103.4, significantly above the Zacks Consensus Estimate of 93 [4] Segmental Performance - In the Reinsurance segment, gross written premiums were $3.2 billion, down 1.8% year over year, with a mixed performance across different lines [5] - The combined ratio for the Reinsurance segment improved by 480 basis points to 87, better than the Zacks Consensus Estimate of 90 [6] - The Insurance segment generated gross written premiums of $1.1 billion, up 3.3% year over year, but the combined ratio deteriorated sharply to 138.1 [7][8] Financial Position - As of the end of Q3 2025, total investments and cash amounted to $45.8 billion, a 10.3% increase from the end of 2024 [11] - Shareholder equity rose by 10.8% to $15.4 billion, with a book value per share of $366.22, up 13.4% from the previous year [11] - Cash flow from operations was $1.5 billion, down 16% year over year, with common share dividends paid amounting to $83.7 million [12]

Core Insights - The article highlights seven insurance stocks to watch, including United Parcel Service, Berkshire Hathaway, Wells Fargo & Company, Progressive, Arthur J. Gallagher & Co., Brown & Brown, and Everest Group, based on their high trading volumes recently [2] Group 1: Company Profiles - United Parcel Service (UPS) is a package delivery company that offers a range of services including transportation, delivery, distribution, and insurance, operating through U.S. Domestic Package and International Package segments [3] - Berkshire Hathaway Inc. engages in insurance, freight rail transportation, and utility businesses, providing various insurance products and operating railroad systems in North America [4] - Wells Fargo & Company is a diversified financial services company offering banking, insurance, investments, and mortgage services, operating through multiple segments including Consumer Banking and Lending, and Corporate and Investment Banking [5] - Progressive Corporation provides personal and commercial auto and property insurance products, operating in three segments: Personal Lines, Commercial Lines, and Property [6] - Arthur J. Gallagher & Co. offers insurance brokerage and consulting services, operating through Brokerage, Risk Management, and Corporate segments [6] - Brown & Brown, Inc. is an insurance agency and brokerage firm providing various insurance services, operating through Retail, National Programs, Wholesale Brokerage, and Services segments [7] - Everest Group, Ltd. provides reinsurance and insurance products globally, operating through Insurance and Reinsurance segments [7]

Core Viewpoint - AM Best has revised the outlooks for Everest Group, Ltd. and its subsidiaries to negative from stable, while affirming their Financial Strength Rating (FSR) of A+ and Long-Term Issuer Credit Ratings (ICR) of "aa-" [1][2] Group Ratings - The ratings reflect Everest's balance sheet strength assessed as strongest, adequate operating performance, very favorable business profile, and appropriate enterprise risk management (ERM) [1][3] - The Long-Term ICRs of Everest Group, Ltd. and Everest Reinsurance Holdings, Inc. have also been affirmed with revised outlooks to negative from stable [1][4] Recent Developments - The negative outlooks are due to elevated uncertainty surrounding the group's business profile and ERM capabilities, following a third-quarter reserve charge of $478 million primarily related to its retail commercial insurance business [2][3] - This reserve charge marks Everest's second significant reserve charge in the past 12 months, following a $1.5 billion adverse development reported in Q4 2024, also driven by the retail commercial portfolio [2][3] Strategic Changes - Everest has announced the sale of its retail commercial book of business through a renewal rights transaction with American International Group, Inc., along with signing an adverse development cover for accident years 2024 and prior [2][3] - The addition of an adverse development cover and the sale of the retail commercial insurance business is expected to enhance confidence in Everest's prospective performance returning to historically stronger levels [3] Operational Focus - The negative outlooks reflect heightened operational risk as Everest shifts its strategy to focus exclusively on its reinsurance and global specialty insurance segments, which together account for over 80% of the group's business [3] - Any adverse developments in Everest's remaining business lines or challenges from restructuring could increase negative pressure on the group's ratings in the near term [3]

Group 1 - Everest Group has experienced a challenging year, with shares down 20% compared to last year [1] - The company is facing issues related to poorly underwritten policies [1]

Core Insights - EG (EG.US) has been upgraded from an A to an AA rating in the MSCI ESG ratings as of October 28, 2025 [1] Group 1 - The upgrade reflects an improvement in EG's environmental, social, and governance practices [1]

Core Insights - Everest Group (EG) is a significant player in the multi-line insurance sector, providing various insurance and reinsurance products, with a current stock price of $343.98 and a price target of $425 set by Barclays, indicating a potential upside of 23.55% [1][6] Financial Performance - For Q3 2025, EG reported revenue of $4.32 billion, a 0.8% increase year-over-year, but this was below the Zacks Consensus Estimate of $4.45 billion, resulting in a revenue surprise of -2.93% [2][6] - The company's earnings per share (EPS) for the quarter were $7.54, a significant decline from $14.62 in the same period last year, missing the consensus EPS estimate of $13.39, leading to a negative EPS surprise of 43.69% [3][6] - In the previous quarter, EG had a positive surprise with earnings of $17.36 per share against an anticipated $15.14, but it has only surpassed consensus EPS estimates once in the past four quarters, indicating volatility in earnings performance [4][6] Stock Performance - EG's stock price has fluctuated, currently at $343.98, reflecting a decrease of 1.42% or $4.96, with a trading range today between $343.27 and $349.96 [5] - Over the past year, the stock reached a high of $392.78 and a low of $320, with a market capitalization of approximately $14.43 billion [5]

Financial Data and Key Metrics Changes - The group gross written premium was $4.4 billion, down 1% from last year, reflecting targeted re-underwriting in insurance and careful portfolio mix management in reinsurance [7][15] - Operating income was $316 million compared to $630 million last year, primarily due to reserve adjustments [7][15] - The combined ratio for the quarter was 103.4%, with an attritional combined ratio of 89.6%, indicating strong underlying performance [7][15] Business Line Data and Key Metrics Changes - The reinsurance business reported gross written premium of $3.2 billion, down 2% year over year, with a combined ratio of 87%, improving year over year due to lower CAT losses and favorable prior year development [7][8][15] - The insurance segment saw gross premiums written increase by 2.7% in constant dollars to $1.1 billion, driven by strong growth in specialty and accident and health lines, offset by actions in U.S. casualty lines [17][18] Market Data and Key Metrics Changes - Market conditions in the reinsurance business, particularly in CAT-exposed lines, are expected to remain favorable through the January 1, 2026 renewal [8][10] - The company is a preferred partner in the reinsurance market, with no barriers to continued attractive capital deployment [8][10] Company Strategy and Development Direction - The company is exiting global retail insurance to focus on core reinsurance and specialty insurance businesses, which are expected to yield better returns on capital [4][12] - A comprehensive adverse development cover has been established for the North America insurance division, covering reserves for accident years 2024 and prior, to ensure past underwriting issues do not overshadow current performance [5][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of core reinsurance and wholesale specialty operations, emphasizing a disciplined approach to capital deployment and risk management [6][10] - The company aims to maintain pricing momentum and improve risk selection in its insurance portfolio, with a significant portion of U.S. casualty business not renewed [9][10] Other Important Information - The company expects to take a pre-tax non-operating charge in the range of $250 million to $350 million associated with the transaction of selling renewal rights to AIG, recognized over 2025 and 2026 [12][13] - Shareholders' equity ended the quarter at $15.4 billion, with book value per share improving by 15.2% from year-end 2024 [21] Q&A Session Summary Question: What is the CAT load for the specialty business? - Management indicated that the CAT load is quite modest and very low relative to the overall insurance division burden [28][29] Question: What does the $2 billion of insurance gross written premiums mean in terms of capital liberation? - Management expects substantial capital release over time, with the renewal process taking place over the coming 12 months [30][35] Question: What is the plan for returning capital to shareholders? - Management views capital repatriation and share buybacks as attractive, especially given the stock trading below book value, and expects to unlock more capital for this purpose over time [38][39] Question: How confident is management about the casualty reserves in the reinsurance business? - Management expressed confidence that the casualty reserves in the reinsurance business will hold up, emphasizing the distinction between the performance of the insurance and reinsurance portfolios [50][52] Question: What are the pricing conditions for property reinsurance going forward? - Management characterized the environment as still favorable, with expectations of some pricing pressure but overall good pricing levels [56][58]

Financial Data and Key Metrics Changes - The group gross written premium was $4.4 billion, down 1% from last year, reflecting targeted re-underwriting in insurance and careful portfolio mix management in reinsurance [7][15] - Operating income was $316 million compared to $630 million last year, primarily due to reserve adjustments [7][15] - The combined ratio for the quarter was 103.4%, with an attritional combined ratio of 89.6%, indicating strong underlying performance [7][15] Business Line Data and Key Metrics Changes - The reinsurance business reported gross written premiums of $3.2 billion, down 2% year-over-year, with a combined ratio of 87%, improving year-over-year due to lower CAT losses and favorable prior year development [7][8] - The global specialties business produced almost $500 million of gross written premium and over $100 million of underwriting income in the quarter, with expectations for continued growth [8][10] - In the insurance segment, gross premiums written increased 2.7% in constant dollars to $1.1 billion, driven by strong growth in specialty lines, offset by actions taken in U.S. casualty lines [17][18] Market Data and Key Metrics Changes - Market conditions in the reinsurance business, particularly in CAT-exposed lines, are expected to remain favorable through the January 1, 2026 renewal [8][10] - The company is seeing increased competition in the property CAT market, but believes pricing remains attractive despite potential decreases [56][58] Company Strategy and Development Direction - The company is exiting global retail insurance to focus on core reinsurance and specialty insurance businesses, which are expected to yield better returns on capital [4][12] - A comprehensive adverse development cover has been established for the North America insurance division, covering reserves for accident years 2024 and prior, to enhance capital flexibility [5][14] - The company aims to operate in businesses with clear competitive advantages and strong economics, while continuing to evaluate opportunities for diversification [6][10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the core reinsurance business and wholesale/specialty insurance operations, despite challenges in the U.S. casualty market [5][10] - The management team emphasized a disciplined approach to capital deployment and risk management, particularly in light of social inflation and legal system challenges [9][18] - The company expects to unlock more capital for shareholder returns over time, particularly through the recent strategic transactions [39][40] Other Important Information - The company reported net investment income of $540 million for the quarter, driven by higher assets under management and strong alternative asset returns [19][20] - Shareholders' equity ended the quarter at $15.4 billion, with a book value per share of $366.22, reflecting a 15.2% improvement from year-end 2024 [21][22] Q&A Session Summary Question: What is the CAT load for the specialty business? - Management indicated that the CAT load for the specialty business is quite modest and low relative to the overall insurance division burden [29] Question: What is the expected capital release from the $2 billion retail business transferred to AIG? - Management expects substantial capital release over time, with benefits from non-renewing premium and enhanced reserves contributing to capital relief becoming visible in the latter half of 2026 [35] Question: How does the company view capital repatriation and share buybacks? - Management views share buybacks as attractive, especially given the stock's trading below book value, and expects to resume meaningful repurchases going forward [39] Question: What is the confidence level regarding casualty reserves in the reinsurance business? - Management expressed confidence that the casualty reserves in the reinsurance business will hold up, emphasizing the distinction between the performance of the insurance and reinsurance portfolios [51][52] Question: How does the company plan to diversify its operations? - Management stated that diversification opportunities will be evaluated carefully, focusing on businesses with clear competitive advantages and strong economics [81]

Financial Data and Key Metrics Changes - The group gross written premium was $4.4 billion, down 1% from last year, reflecting targeted re-underwriting in insurance and careful portfolio mix management in reinsurance [5][13] - The combined ratio for the quarter was 103.4%, with an attritional combined ratio of 89.6%, demonstrating the strength of the underlying book [5][13] - Operating income was $316 million compared to $630 million last year, primarily due to reserve adjustments [5][13] - Net investment income increased to $540 million for the quarter, driven by higher assets under management and strong alternative asset returns [18][19] Business Line Data and Key Metrics Changes - The reinsurance business reported gross written premium of $3.2 billion, down 2% year over year, with a combined ratio of 87%, improving year over year due to lower CAT losses and favorable prior year development [5][15] - The global specialties business produced almost $500 million of gross written premium and over $100 million of underwriting income in the quarter [6][7] - In the insurance segment, gross premiums written increased 2.7% in constant dollars to $1.1 billion, with strong growth in specialty and accident and health lines offset by actions in U.S. casualty lines [16][17] Market Data and Key Metrics Changes - Market conditions in the reinsurance business, particularly in CAT-exposed lines, are expected to remain favorable through the January 1, 2026 renewal [7] - The company is a preferred partner in the reinsurance market, with no barriers to continued attractive capital deployment [7] Company Strategy and Development Direction - The company is exiting global retail insurance to focus on core reinsurance and specialty insurance businesses, which are expected to yield improved returns on capital [3][11] - A comprehensive adverse development cover has been established for the North America insurance division, covering reserves for accident years 2024 and prior, to ensure past underwriting decisions do not overshadow current performance [4][12] - The company aims to operate in businesses with clear competitive advantages and strong economics, applying a standard for capital deployment [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of core reinsurance and wholesale specialty operations, emphasizing a disciplined approach to capital allocation and risk management [4][9] - The management team is focused on creating a more agile and profitable company, with a strong balance sheet and significant excess capital to deploy [9][10] Other Important Information - The company expects to take a pre-tax non-operating charge in the range of $250 million to $350 million associated with the transaction of selling renewal rights to AIG, recognized over 2025 and 2026 [11][12] - Share repurchases are viewed as an attractive opportunity, with plans to resume meaningful buybacks going forward [20] Q&A Session Summary Question: What is the CAT load for the specialty business? - Management indicated that the CAT load is quite modest and very low relative to the overall insurance division burden [26][27] Question: What does the $2 billion of insurance gross written premiums mean in terms of capital liberation? - Management expects substantial capital release over time, with the renewal process taking place over the next 12 months [28][34] Question: What is the plan for returning capital to shareholders? - Management views capital repatriation and share buybacks attractively, especially given the stock's trading below book value [37] Question: How confident is management about the casualty reserves in the reinsurance business? - Management expressed confidence that the casualty reserves in the reinsurance business will hold up, noting the distinction between the performance of the insurance and reinsurance portfolios [48][50] Question: What are the pricing conditions for property reinsurance going forward? - Management characterized the environment as still favorable, despite potential pricing pressure, and emphasized a disciplined approach to underwriting [54][56]

Financial Performance - The company's net operating income for the third quarter of 2025 was $316 million[77], and the year-to-date net operating income reached $1326 million[77] - The annualized Total Shareholder Return (TSR) for the third quarter of 2025 was 123%[35, 72] - Net investment income for the third quarter of 2025 was $540 million[33, 69], driven by higher assets under management and strong alternative investment returns[33, 69] Gross Written Premium (GWP) - The group's gross written premiums for the third quarter of 2025 were $4375 million[71, 80] - Reinsurance GWP decreased by 17% on a comparable basis to approximately $3203 million[41, 80] - Insurance GWP increased by 27% on a comparable basis to $1147 million[44, 80] Reserve Development - The company strengthened US casualty reserves, primarily in accident years 2022 to 2024[10] - The reinsurance segment experienced net favorable prior year development of $29 million[10, 41] - The insurance segment experienced adverse development of $361 million[10] - The "Other" segment experienced unfavorable development of $146 million, primarily driven by the sports and leisure business[9, 10] Strategic Actions - Everest purchased a $12 billion gross ($10 billion net) Adverse Development Cover (ADC) from Longtail Re[13] - Everest announced a renewal rights transaction for its Retail Commercial Insurance business, which represents approximately $2 billion of in-force gross premiums written as of October 25, 2025[17]