Everest Group Q4 Earnings Miss Estimates on Higher Expenses

Core Insights - Everest Group, Ltd. reported a fourth-quarter 2024 operating loss of $18.39 per share, which was wider than the Zacks Consensus Estimate of a loss of $16.65, compared to an operating income of $25.18 per share in the same quarter last year [1][3] Operational Update - Total operating revenues reached nearly $4.64 billion, marking a 26.7% year-over-year increase, driven by higher premiums and net investment income, surpassing the consensus mark by 4.4% [3] - Gross written premiums improved by 8% year-over-year to $4.7 billion, supported by strong growth in property and specialty lines, although partially offset by reductions in certain casualty lines [3] - Net investment income was $473 million, a 15.1% increase year-over-year, attributed to a larger asset base and strong core fixed income returns, although it fell short of the Zacks Consensus Estimate of $496 million [4] Claims and Expenses - Total claims and expenses surged by 59% to $5.4 billion, primarily due to higher incurred losses and various underwriting expenses, exceeding the estimate of $3.6 billion [5] - The pre-tax underwriting loss was $1.4 billion, a significant decline from the prior year's pre-tax underwriting income of $245 million, with the combined ratio deteriorating by 4,230 basis points to 135.5 [6] Segment Update - The Reinsurance segment's gross written premiums were $3.3 billion, up 12.6% year-over-year, driven by significant increases in Property Catastrophe XOL and Property ProRata, despite a decrease in Casualty Pro-Rata [7] - The Insurance segment generated gross written premiums of $1.3 billion, down 1.6% year-over-year, with notable growth in Property and Short Tail lines offset by declines in Accident and Health and Specialty Casualty [8] Financial Update - As of the end of the fourth quarter 2024, total investments and cash stood at $41.5 billion, an 11.8% increase from 2023, while shareholder equity rose by 5.1% to $13.9 billion [9] - Book value per share was $322.97, reflecting a 6.1% increase from the end of 2023, with an annualized net income return on equity of negative 15.7% compared to positive 23.8% in the previous year [10] Full-Year Highlights - For the full year 2024, operating income per share decreased by 55% year-over-year to $29.83, missing the Zacks Consensus Estimate by 23%, while total revenues increased by 18.5% to $17.28 billion, slightly beating the consensus estimate [11]