Everest (US:EG)2023-02-23 16:00Reinsurance Segment Performance - In 2022, the Company's Reinsurance segment wrote $9.3 billion of gross written premiums, with 90.2% ($8.4 billion) written directly through the Company's offices[41]. - The Property Pro Rata business accounted for 28.0% of reinsurance gross written premiums, primarily covering property damage and related losses[40][42]. - The Property Catastrophe Excess of Loss (XOL) business represented 15.3% of reinsurance gross written premiums, covering catastrophic losses from events like hurricanes and earthquakes[40][44]. - The Casualty Pro Rata business accounted for 28.5% of reinsurance gross written premiums, covering various liability losses[40][45]. - The Company leads on approximately two-thirds of its treaty reinsurance business, allowing for more favorable terms and conditions[53]. Insurance Segment Performance - The Insurance segment wrote $4.6 billion of gross written premiums in 2022, with Specialty Casualty accounting for 35.0% of this segment[48][49]. - The Accident and Health business accounted for 10.8% of Insurance gross written premiums, covering various medical protection policies[48]. - The Workers' Compensation business accounted for 11.1% of Insurance gross written premiums, including both guaranteed cost and loss-sensitive offerings[51]. Catastrophe Risk Management - The Company employs selective underwriting practices and diversifies its risk portfolio to manage exposure to catastrophic events[60]. - The Company utilizes sophisticated Monte Carlo simulation techniques to estimate potential losses from catastrophic events[61]. - The projected net economic loss from the Company's largest 100-year event represents approximately 6.9% of its December 31, 2022 shareholders' equity[67]. - The Company's catastrophe loss projections are updated quarterly and segmented by risk zones, with significant losses projected for California (up to $1,762 million) and Southeast U.S. (up to $1,224 million) at the 1 in 500 return period[69]. - Management sets limits on catastrophe loss exposure based on financial resources and risk/reward analyses, which are revised periodically[65]. - The Company has increased its use of reinsurance offered through capital market facilities in recent years[73]. - The Company's methods for monitoring and managing catastrophe exposures are integrated with its enterprise risk management and capital management plans[69]. - The Company is exposed to terrorism risk, particularly in its workers' compensation and property policies, despite some coverage limitations[70]. Claims Management and Reserves - The Company actively manages its claims through a professional staff, ensuring effective evaluation and payment processes[77]. - The reserving process for unpaid losses involves collaboration across various departments, aiming to establish the best estimate of ultimate liability[83]. - The Company's gross reserves for asbestos and environmental claims represented 1.3% of its total reserves as of December 31, 2022[86]. - The Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, receiving $140.3 million in cash, which equals the net loss reserves as of the closing date[87]. - The maximum liability retroceded under the retrocession treaty increased to $450.3 million following an amendment and partial commutation[88]. Financial Position and Investments - The Company's cash and invested assets totaled $29.9 billion at December 31, 2022, with 85.4% in fixed maturities, short-term investments, and cash[98]. - The average duration of the fixed income portfolio was 3.1 years at December 31, 2022, compared to 3.2 years in 2021[96]. - Approximately 42.7% of the Company's consolidated reserves for losses and LAE and unearned premiums are payable in foreign currencies[97]. - The Company reported pre-tax investment income of $830 million for 2022, with a yield of 2.79%[101]. - The fair value of the Company's fixed maturities was $23.1 billion at December 31, 2022, with 36.6% rated AAA[102]. - The Company has structured commercial mortgage-backed securities with a book value of $1.0 billion and a fair value of $925.8 million[100]. - The average maturity of fixed maturity securities was 4.6 years at December 31, 2022[98]. - The Company maintains a diversified investment portfolio to enhance risk-adjusted total returns while ensuring funds are available to meet insurance obligations[93]. Operational and Regulatory Overview - As of February 1, 2023, the company employed 2,428 persons, with no employees subject to collective bargaining agreements[119]. - The company's statutory earned surplus was $5.6 billion at December 31, 2022, allowing for potential dividends[130]. - The maximum amount available for dividend payments by Everest Re in 2023 without regulatory approval is $555 million[130]. - The company maintains a diversified global platform with high-quality invested assets and significant liquidity[117]. - The company’s capital position is strong, with a low operating expense ratio[117]. - The company’s insurance subsidiaries are subject to various regulatory requirements across multiple jurisdictions, including the U.S., Canada, and Bermuda[124]. - The company’s long-term insurers must maintain a minimum solvency margin of $250,000[129]. - The company continues to monitor the impact of the Tax Cuts and Jobs Act and the Inflation Reduction Act on its operations[151][152]. Diversity and Corporate Responsibility - The company has a proactive diversity recruitment strategy integrated into its succession planning[122]. - The company emphasizes the importance of diversity in its governance and corporate responsibility initiatives[121]. International Operations - Everest Re is licensed as a property and casualty reinsurer in Canada, Singapore, and Brazil, and can write reinsurance in other foreign countries[138]. - Everest National, Everest Indemnity, Everest Security, Everest Denali, and Everest Premier are licensed in all 50 states and the District of Columbia[140][141]. - Bermuda Re and Everest International are registered as Class 4 insurers in Bermuda, with Bermuda Re also registered as a long-term insurer[142]. - As of December 31, 2022, Everest Re and its subsidiaries exceed the minimum thresholds set by the NAIC Risk-Based Capital Requirements[148]. - Group and its Bermuda subsidiaries are exempt from taxation in Bermuda until March 2035, with no income, withholding, or capital gains taxes imposed[150]. - Everest Assurance is registered as a foreign insurer in several countries, including Bolivia, Colombia, and Chile[143]. - Ireland Re and Ireland Insurance are licensed to write non-life reinsurance and insurance for the European markets[144]. - The company’s financial examinations by state regulators have not revealed any material findings or recommendations[145]. - Everest's various international branches are subject to local taxation in their respective jurisdictions, including the UK, Ireland, and Switzerland[153][154][155].