Everest hails ‘outstanding’ Q2 as profits swell in hard reinsurance market

Bermuda-based global re/insurer  Everest Group reported soaring net profit and gross written premiums in the second quarter, capitalising on favourable market conditions in the hard reinsurance market to achieve “significantly higher” risk-adjusted returns.

The company’s net profit increased more than 400% to $670 million in Q2 2023, compared with $123 million in the prior year period. At the same time, the gross written premiums jumped 22.7% to $4.2 billion, and the group combined ratio fell to 87.7% from 91.8%.

In the company’s reinsurance segment, gross written premium rose 26.9% on constand dollar basis to $2.8 billion and the combined ratio fell to 85.9% from 88.2%, as a result of improved pricing and lower pre-tax catastrophe losses, which dropped to $27 million from $80 million a year ago. Management said this was driven by 34.7% growth in property pro-rata, 29.6% growth in property cat, and 16.2% in casualty pro-rata.

Everest Re cited “robust pricing momentum” in the second quarter, with cat pricing up 47.5% in North America and 29.2% Internationally, with improved terms and conditions.

In Everest’s insurance segment, gross written premiums rose 14.1% on constand dollar basis from $1.25 billion to $1.4 billion and the combined ration edged up to 92.7% from 91.9% in Q2 2022.

Everest’s net investment income also improved to $357 million versus $226 million in the prior year second quarter, driven by strong fixed income and alternative investment returns.

Juan Andrade (pictured), Everest president & CEO, described its second quarter performance as “outstanding”, stating that it “leaned into the hard reinsurance market.”

“We continued to grow premiums, while expanding margins, resulting in strong increases in quarterly underwriting profits, net income, and record operating income. We delivered an operating ROE of 21.8% and a record annualised Total Shareholder Return in excess of 25%,” Andrade said.

“Our lead market position in reinsurance, combined with best-in-class execution and dynamic capital deployment, enabled us to take advantage of favourable market conditions and drive significantly higher risk adjusted returns,” he added.

“We also continued to advance our diversified and disciplined global primary insurance franchise, which is benefiting from firming rates. In addition to the excellent underwriting profit in the quarter, we generated nearly $360 million in net investment income with our well positioned portfolio. Our exceptional talent, diversified platform and underwriting discipline give us significant firepower to continue delivering on our objectives and capitalising on abundant market opportunities, which are expected to continue well into 2024.”

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