Everest Group, Ltd.

Everest reported operating income of $585 million, after-tax net operating EPS of $14.85, annualized after-tax net operating ROE of 14.9%, and annualized total shareholder return of 16.8%. Book value per share excluding unrealized gains and losses increased 12% year over year to roughly $408. Core businesses generated $317 million of underwriting income on a 90% combined ratio, while net investment income was $523 million. Gross written premium for the core businesses was $3.7 billion, down about 7% on a comparable basis year over year, reflecting deliberate underwriting discipline. In reinsurance treaty, the combined ratio was 88.5%; in Global Wholesale and Specialty, it was 95.2%. Management said the next-quarter/full-year outlook includes ceding roughly $200 million of premium per quarter to Annapurna Re over the next three years, expecting that to be modestly accretive to underwriting income and ROE over time while lowering net investment income. The company also said it continues to expect Global Wholesale and Specialty to run at combined ratios in the mid- to high 90s near term, and it views share repurchases of $300 million as a quarterly floor.

Jim Williamson framed the quarter as evidence that Everest’s more focused strategy is working: better portfolio quality, tighter underwriting, and stronger capital deployment. He emphasized selective growth only where pricing and terms meet return hurdles, while continuing to reduce U.S. casualty exposure and manage the cycle with discipline. His tone was confident but cautious, repeatedly noting that market softness, tort pressure, and signs of less disciplined underwriting elsewhere keep the company from declaring victory.

Elias Habayeb highlighted the financial quality of the quarter: $317 million of core underwriting profit, $523 million of net investment income, and 12% year-over-year growth in book value per share to about $408. He said the core combined ratio was 90%, including $85 million of catastrophe losses, with no net prior-year loss development; the attritional loss ratio was 57.8% and the expense ratio was 5.1%. On capital management, he said Everest repurchased about 1.2 million shares for $395 million at an average price of $342, returned over $470 million to shareholders in the quarter, and sees $300 million as a quarterly floor for buybacks. He also said over $1 billion of capital sits behind legacy business and will free up over time as that book runs off.

Analysts focused heavily on reserve quality after the CEO/CFO/actuary transitions, and management said it reacted early to emerging data rather than waiting for the full reserve study. Elias said the main reserve action was roughly just under $200 million in North America casualty, plus about $55 million for the Baltimore Bridge matter, while short-tail lines remained favorable. Questions also centered on property pricing, hurricane season exposure, and the new Annapurna Re sidecar; management said property rates are down in the market but Everest is still achieving better-than-market outcomes through selective participation and that net PMLs have been coming down. On Annapurna, management said it is a quota-share structure with aligned economics, is not a reason to stretch for more gross business, and should lower net casualty retention while improving capital flexibility.