Everest (EG) - 2025 Q2 - Quarterly Results

Executive Summary & Key Highlights Second Quarter 2025 Performance Overview Everest Group reported strong Q2 2025 results with net income of $680 million and net operating income of $734 million, achieving annualized ROEs of 18.2% and 19.6% respectively | Metric | Q2 2025 (USD millions / %) | Q2 2024 (USD millions / %) | | :----------------------------------- | :----------------------- | :----------------------- | | Net Income | 680 | 724 | | Net Operating Income | 734 | 730 | | Annualized Net Income ROE | 18.2% | 19.6% | | Annualized Net Operating Income ROE | 19.6% | 19.7% | | Gross Written Premium (Group) | 4,700 (approx) | 4,725 | | Combined Ratio (Group) | 90.4% | 90.3% | | Underwriting Income (Group) | 385 | 358 | | Net Investment Income | 532 | 528 | | Operating Cashflow | 1,100 (approx) | 1,300 (approx) | - Gross written premium for the Group decreased by 0.7% year-over-year, with Reinsurance increasing by 1.6% and Insurance decreasing by 3.3% on a comparable basis[3] - Aviation losses associated with the Russia / Ukraine war contributed 2.5 points to the Group's combined ratio[3] - Net favorable development of approximately $39 million in prior year loss reserves in Reinsurance, resulting in a 1.0 point decrease on the Group's combined ratio[3] CEO Commentary CEO Jim Williamson highlighted strong Q2 performance driven by both underwriting and net investment income, resulting in an approximate 20% operating ROE - Everest delivered a strong second quarter, with solid contributions from both underwriting income and net investment income, resulting in an annualized operating ROE of approximately 20%[4] - The Reinsurance business continues to deliver outstanding results, further supported by favorable reserve development this quarter[4] - In Insurance, the execution of the '1-Renewal Strategy' is nearly complete, positioning the portfolio to generate improved results over time[4] Consolidated Financial Results Net Income and Operating Income Everest Group reported Q2 2025 net income of $680 million ($16.10 per diluted share) and net operating income of $734 million ($17.36 per diluted share) Net Income and Operating Income Summary | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | YoY Change (USD millions) | | :----------------------------------- | :--------------------- | :--------------------- | :------------------------ | | Net income (loss) | 680 | 724 | (44) | | Net operating income (loss) | 734 | 730 | 4 | | Net income (loss) per diluted common share | 16.10 | 16.70 | (0.60) | | Net operating income (loss) per diluted common share | 17.36 | 16.85 | 0.51 | | Net income (loss) return on average equity (annualized) | 18.2% | 19.6% | (1.4) pts | | After-tax net operating income (loss) return on average equity (annualized) | 19.6% | 19.7% | (0.1) pts | Shareholders' Equity and Book Value per Share Shareholders' equity increased to $15.0 billion at June 30, 2025, from $13.9 billion at December 31, 2024, with book value per common share rising to $358.08 Shareholders' Equity and Book Value per Share | Metric | June 30, 2025 (USD millions / share) | Dec 31, 2024 (USD millions / share) | Change (USD millions / share / pts) | | :-------------------------------------------------------------------- | :--------------------------------- | :--------------------------------- | :---------------------------------- | | Ending shareholders' equity | 15,019 | 13,875 | 1,144 | | Shareholders' equity excluding URA(D) on fixed maturity, available for sale securities | 15,272 | 14,700 (adjusted beginning of period) | 572 | | Book value per common share outstanding | 358.08 | 322.97 | 35.11 | | Book value per common share outstanding excluding URA(D) | 364.10 | 342.74 | 21.36 | | Common share repurchases (Q2 2025) | 200.0 | 65 (Q2 2024) | 135 | | Common share dividends paid (Q2 2025) | 84.0 | 86 (Q2 2024) | (2) | | Total Shareholder Return ("TSR") - Annualized (YTD 2025) | 14.8% | 20.0% (YTD 2024) | (5.2) pts | Consolidated Underwriting Performance The Group's underwriting income for Q2 2025 was $385 million, with a combined ratio of 90.4%, a slight increase of 0.1 points year-over-year Consolidated Underwriting Information | Metric | Q2 2025 (USD millions / %) | Q2 2024 (USD millions / %) | YoY Change (points / %) | | :----------------------------------- | :----------------------- | :----------------------- | :---------------------- | | Gross written premium | 4,680 | 4,725 | (0.9)% | | Net written premium | 4,119 | 4,084 | 0.8% | | Total Loss ratio | 61.9% | 62.6% | (0.7) pts | | Current year Loss ratio | 60.0% | 58.5% | 1.5 pts | | Prior year Loss ratio | (1.0)% | —% | (1.0) pts | | Russia/Ukraine war losses (Loss Ratio) | 2.5% | —% | 2.5 pts | | Combined ratio | 90.4% | 90.3% | 0.1 pts | | Attritional combined ratio | 88.6% | 86.6% | 2.0 pts | | Pre-tax underwriting income (loss) | 385 | 358 | 27 | | Pre-tax net catastrophe losses | 20 | 135 | (115) | | Pre-tax net Russia/Ukraine war losses | 98 | — | 98 | | Pre-tax net favorable prior year reserve development | (39) | — | (39) | Investment Income and Cash Flow Net investment income for Q2 2025 increased slightly to $532 million, while operating cash flow was $1.1 billion, and total invested assets grew to $44.3 billion Investment Income and Cash Flow Summary | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | YoY Change (USD millions) | | :----------------------------------- | :--------------------- | :--------------------- | :------------------------ | | Net investment income | 532 | 528 | 4 | | Operating cashflow | 1,100 (approx) | 1,300 (approx) | (200) | | Total invested assets and cash (as of June 30, 2025) | 44,300 | 41,531 (Dec 31, 2024) | 2,769 | Segment-Specific Underwriting Performance Reinsurance Segment Highlights The Reinsurance segment reported a 1.1% increase in gross written premium to $3.24 billion and a strong combined ratio of 85.6%, improving by 3.3 points year-over-year Reinsurance Underwriting Information | Metric | Q2 2025 (USD millions / %) | Q2 2024 (USD millions / %) | YoY Change (points / %) | | :----------------------------------- | :----------------------- | :----------------------- | :---------------------- | | Gross written premium | 3,243 | 3,209 | 1.1% | | Net written premium | 3,077 | 3,033 | 1.4% | | Total Loss ratio | 58.3% | 61.7% | (3.4) pts | | Current year Loss ratio | 56.4% | 56.7% | (0.3) pts | | Prior year Loss ratio | (1.3)% | —% | (1.3) pts | | Russia/Ukraine war losses (Loss Ratio) | 3.2% | —% | 3.2 pts | | Combined ratio | 85.6% | 88.9% | (3.3) pts | | Attritional combined ratio | 84.1% | 84.4% | (0.3) pts | | Pre-tax net prior year reserve development | (39) | — | (39) | | Pre-tax net Russia/Ukraine war losses | 98 | — | 98 | - Gross written premiums increased 1.6% on a comparable basis, primarily led by a 15.2% increase in Property Catastrophe XOL and an 8.5% increase in Property Pro-Rata, partially offset by a 14.9% decrease in Casualty Pro-Rata[16] - Aviation losses associated with the Russia / Ukraine war of $98 million contributed 3.2 points to the Reinsurance combined ratio[16] - Catastrophe losses were benign in the quarter, compared to $120 million in the prior year quarter[16] Insurance Segment Highlights The Insurance segment's gross written premium decreased by 3.1% to $1.41 billion, reflecting strategic portfolio shaping, while its combined ratio deteriorated to 102.0% Insurance Underwriting Information | Metric | Q2 2025 (USD millions / %) | Q2 2024 (USD millions / %) | YoY Change (points / %) | | :----------------------------------- | :----------------------- | :----------------------- | :---------------------- | | Gross written premium | 1,414 | 1,459 | (3.1)% | | Net written premium | 1,022 | 1,009 | 1.3% | | Total Loss ratio | 69.9% | 64.7% | 5.2 pts | | Current year Loss ratio | 68.9% | 63.0% | 5.9 pts | | Combined ratio | 102.0% | 93.8% | 8.2 pts | | Attritional combined ratio | 100.7% | 92.1% | 8.6 pts | - Gross written premiums decreased 3.3% on a comparable basis as the company continued to strategically shape the portfolio, executing on its strategy to improve business mix and portfolio quality in North America[20] - Growth in Other Specialty (39.7%) and Accident and Health (24.1%) was offset by decreases in Specialty Casualty (27.3%) due to the '1-Renewal Strategy' and Workers' Compensation (7.2%)[20] - The '1-Renewal Strategy' is on track to be completed in 3Q'25[20] Other Segment Performance The Other segment reported an underwriting loss of $33 million in Q2 2025, a significant increase from a $2 million loss in Q2 2024 Other Segment Underwriting Information | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | YoY Change (USD millions) | | :----------------------- | :--------------------- | :--------------------- | :------------------------ | | Gross written premium | 22 | 57 | (35) | | Net written premium | 20 | 42 | (22) | | Underwriting income (loss) | (33) | (2) | (31) | - Gross written premiums reflect a limited number of renewed and new policies written on the Company's paper by the purchaser of the sports and leisure business, for a finite period of time post-closing[22] - The segment included current accident year losses from intellectual property business that the company has exited[22] Company Information & Disclosures About Everest Group, Ltd. Everest Group, Ltd. (NYSE: EG) is a global underwriting leader providing property, casualty, and specialty reinsurance and insurance solutions - Everest Group, Ltd. is a global underwriting leader providing best-in-class property, casualty, and specialty reinsurance and insurance solutions[25] - The company is known for a 50-year track record of disciplined underwriting, capital and risk management[25] - Everest common stock (NYSE: EG) is a component of the S&P 500 index[26] Forward-Looking Statements The report contains forward-looking statements subject to risks and uncertainties, including economic conditions, industry trends, and regulatory changes - This news release contains forward-looking statements intended to be covered by safe harbor provisions[24] - Actual results may differ materially from those contained in forward-looking statements due to risks and uncertainties including general economic conditions, industry conditions, adequacy of reserves, underwriting risk, competition, investment market fluctuations, catastrophes, pandemics, and regulatory uncertainties[24] - The Company undertakes no obligation to publicly update or revise any forward-looking statements[24] Non-GAAP Financial Measures and Reconciliations After-tax Net Operating Income (Loss) Reconciliation After-tax net operating income (loss) is a non-GAAP measure that excludes after-tax net gains (losses) on investments and foreign exchange from net income (loss) - After-tax net operating income (loss) consists of net income (loss) excluding after-tax net gains (losses) on investments and after-tax net foreign exchange income (expense)[31] - This non-GAAP measure is presented to facilitate a deeper understanding of the profitability drivers of the business and is considered a useful supplement to GAAP information[29][33] After-tax Net Operating Income (Loss) Reconciliation | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | | :----------------------------------- | :--------------------- | :--------------------- | | After-tax net operating income (loss) | 734 | 730 | | After-tax net gains (losses) on investments | (3) | (14) | | After-tax net foreign exchange income (expense) | (50) | 7 | | Net income (loss) | 680 | 724 | Attritional Loss Ratio and Attritional Combined Ratio Reconciliation Attritional ratios are non-GAAP measures that adjust standard loss and combined ratios by excluding volatile or non-recurring events for better comparability - Attritional loss ratio and attritional combined ratio are defined as the loss ratio and combined ratio, respectively, adjusted to exclude catastrophe losses, net catastrophe reinstatement premiums, prior year development, COVID-19 losses, and losses from the Russia/Ukraine war[34] - These adjusted ratios are useful to management and investors because they provide for better comparability and more accurately measure the Company's underlying underwriting performance[34] Attritional Ratios Reconciliation (Group) | Metric | Q2 2025 Group (%) | Q2 2024 Group (%) | YoY Change (points) | | :---------------------- | :---------------- | :---------------- | :--------------- | | Loss ratio | 61.9% | 62.6% | (0.7) | | Attritional loss ratio | 60.1% | 58.8% | 1.3 | | Combined ratio | 90.4% | 90.3% | 0.1 | | Attritional combined ratio | 88.6% | 86.6% | 2.0 | Gross Written Premium on a Comparable Basis Reconciliation Gross written premium on a comparable basis is a non-GAAP measure that adjusts reported gross written premium for constant currency effects and excludes reinstatement premiums - Gross written premium on a comparable basis reflects constant currency basis and excludes reinstatement premiums[36] - This measure is provided to investors as a useful supplement to GAAP information concerning the Company's performance[36] Gross Written Premium Reconciliation (Comparable Basis) | Segment | Q2 2025 (USD millions) | Q2 2024 (USD millions) | YoY Change (%) | | :----------------------------------- | :--------------------- | :--------------------- | :------------- | | Group Gross Written Premium (GAAP) | 4,680 | 4,725 | (0.9)% | | Group Gross Written Premium (Comparable Basis) | 4,678 | 4,709 | (0.7)% | | Reinsurance Gross Written Premium (GAAP) | 3,243 | 3,209 | 1.1% | | Reinsurance Gross Written Premium (Comparable Basis) | 3,241 | 3,191 | 1.6% | | Insurance Gross Written Premium (GAAP) | 1,414 | 1,459 | (3.1)% | | Insurance Gross Written Premium (Comparable Basis) | 1,414 | 1,462 | (3.3)% | Net Operating Income Return On Equity ("ROE") Reconciliation Net Operating Income ROE is a non-GAAP measure used to assess operational results with better comparability by removing investment-related variability - Net Operating Income ROE is calculated by dividing after-tax net operating income (loss) by average shareholders' equity, adjusted for average net unrealized depreciation (appreciation) of fixed maturity, available for sale securities[37] - This measure is useful for management and investors as it allows for better comparability and removes variability when assessing the results of operations[37] Return on Equity (Annualized) | Metric (Annualized) | Q2 2025 (%) | Q2 2024 (%) | YoY Change (points) | | :----------------------------------- | :---------- | :---------- | :--------------- | | After-tax net operating income (loss) ROE | 19.6% | 19.7% | (0.1) | | Net income (loss) ROE | 18.2% | 19.6% | (1.4) | Underwriting Income Reconciliation Underwriting income is a non-GAAP measure representing net premiums earned less incurred losses and expenses, useful for evaluating core business segment performance - Underwriting income is calculated as net premiums earned, less incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, and other underwriting expenses[39] - The Company believes underwriting income is a useful measure for management and investors when assessing the performance of the Company's reinsurance and insurance business segments[39] Underwriting Income (Loss) by Segment | Segment | Q2 2025 (USD millions) | Q2 2024 (USD millions) | YoY Change (USD millions) | | :----------------------- | :--------------------- | :--------------------- | :------------------------ | | Consolidated Group | 385 | 358 | 27 | | Reinsurance | 436 | 303 | 133 | | Insurance | (18) | 56 | (74) | | Other | (33) | (2) | (31) | Book Value per Common Share Outstanding Excluding URA(D) Reconciliation This non-GAAP measure shows shareholder returns per share, adjusted for investment volatility, by excluding unrealized appreciation (depreciation) on fixed maturity securities - Book value per common share outstanding excluding net unrealized appreciation (depreciation) on fixed maturity, available for sale securities ("URA(D)") is calculated as reported shareholders' equity less URA(D), divided by common shares outstanding[41] - This metric is useful to management and investors as it shows the value of shareholder returns on a per share basis after eliminating the variability of investments held at fair value[41] Book Value per Common Share Outstanding | Metric | June 30, 2025 (USD) | Dec 31, 2024 (USD) | Change (USD) | | :-------------------------------------------------------------------- | :------------------ | :----------------- | :----------- | | Book value per common share outstanding | 358.08 | 322.97 | 35.11 | | Book value per common share outstanding excluding URA(D) | 364.10 | 342.74 | 21.36 | Annualized Total Shareholder Return Reconciliation Annualized Total Shareholder Return (TSR) is a non-GAAP measure providing a comprehensive view of shareholder returns, adjusted for investment volatility - Annualized TSR is calculated as year-to-date growth in book value per common share outstanding (excluding URA(D)) plus year-to-date dividends per share[42] - This measure provides a comprehensive view of shareholder returns, adjusted for investment volatility[42] Annualized Total Shareholder Return | Metric | YTD 2025 (%) | YTD 2024 (%) | YoY Change (points) | | :----------------------------------- | :----------- | :----------- | :--------------- | | Total Shareholder Return ("TSR") - Annualized | 14.8% | 20.0% | (5.2) | Consolidated Financial Statements (GAAP) Consolidated Statements of Operations and Comprehensive Income (Loss) This statement presents the company's revenues, claims and expenses, and net income (loss) for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations and Comprehensive Income (Loss) | Metric | Q2 2025 (USD millions) | Q2 2024 (USD millions) | | :----------------------------------- | :--------------------- | :--------------------- | | Premiums earned | 3,991 | 3,693 | | Net investment income | 532 | 528 | | Total revenues | 4,491 | 4,227 | | Incurred losses and loss adjustment expenses | 2,472 | 2,311 | | Total claims and expenses | 3,676 | 3,395 | | Income (loss) before taxes | 815 | 832 | | Net income (loss) | 680 | 724 | | Comprehensive income (loss) | 1,145 | 688 | | Diluted Earnings Per Common Share | 16.10 | 16.70 | Consolidated Balance Sheets The consolidated balance sheet provides a snapshot of Everest Group's financial position as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets | Metric | June 30, 2025 (USD millions) | Dec 31, 2024 (USD millions) | | :----------------------------------- | :----------------------------- | :----------------------------- | | Total investments and cash | 44,300 | 41,531 | | Total assets | 60,519 | 56,341 | | Reserve for losses and loss adjustment expenses | 32,476 | 29,889 | | Unearned premium reserve | 7,643 | 7,324 | | Total liabilities | 45,500 | 42,466 | | Total shareholders' equity | 15,019 | 13,875 | Consolidated Statements of Cash Flows The consolidated statement of cash flows details the cash generated and used by Everest Group's operating, investing, and financing activities Consolidated Statements of Cash Flows | Metric | Six Months Ended June 30, 2025 (USD millions) | Six Months Ended June 30, 2024 (USD millions) | | :----------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | 2,007 | 2,439 | | Net cash provided by (used in) investing activities | (1,014) | (2,016) | | Net cash provided by (used in) financing activities | (608) | (305) | | Net increase (decrease) in cash | 352 | 133 | | Cash, end of period | 1,902 | 1,570 |