Everest grows property re pro-rata to capture strong primary metrics

Bermuda-based global re/insurer Everest has focused its property reinsurance growth on pro-rata deals, to the detriment of XoL, on faith that the primary market faces great conditions and as a side-effect of rising growth in Asia. 

“Starting in the back half of last year, we saw terrific economics in the primary market,” Jim Williamson, Everest's chief operating officer and head of both reinsurance and insurance operations, told his company's Q1 earnings call. 

“We leaned into that,” Williamson said of what he called “meaningful” growth in Q1. 

The Asian market, with its pro-rata predilections, also contributed. “We are growing nicely again,” Williamson said. “You are seeing the effect of selecting some outstanding deals on the Asian market.” 

Q1 gross written premium in property pro-rata reinsurance was up a heady 57.5%, increasing its weight in the reinsurance book by 7.9 percentage points to 34.1%. That led 31% growth in overall property reinsurance and 21% growth in insurance overall after a sizeable contraction in financial lines. 

Q1 property cat XoL, in turn, was listed with a 3.8% year on year gain to shrink as a portion of the book to 14.6%. 

Williamson surprised analysts with a claim that the timing of written premium recognition vis-a-vis Everest's caution at the 2023 mid-years had artificially dampened the reading.  

Recognition of written premium at Everest “is spread out in the case of property cat” on a non-linear progression over the course of four quarters, Williamson claimed.

 The upshot:  the Everest attack at 1.1 and 4.1 have yet to make themselves fully felt at any point in the Everest P&L.

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