Bermuda based insurer and reinsurer Everest Group has reported gross written premiums (GWP) growth of 26.9% to almost $2.8 billion in its reinsurance segment in Q2, which is a new quarterly premium record for the segment.
Growth within the reinsurance segment was broad-based across geographies and business lines, driven by 34.7% growth in property pro-rata, 29.6% growth in property catastrophe, and 16.2% in casualty pro-rata. YTD, GWP increased more than 23% to $5.4 billion.
The firm notes that within reinsurance, both price increases and a flight to quality continues on a global basis, with catastrophe pricing up 47.5% in North America and 29.2% internationally, with improved terms and conditions, during Q2 2023.
Net premiums written (NPW) rose 24% to $2.6 billion in Q2, and by 21% to $5.1 billion for the half-year period.
Within reinsurance, Everest’s catastrophe loss experience improved in Q2 2023, falling to $23 million, net of estimated recoveries and reinstatement premiums, compared with $80 million a year earlier. The re/insurer notes that cat losses were partially offset by $30 million of catastrophe bond recoveries related to Hurricane Ian.
YTD, reinsurance cat losses amount to $135 million, which is down on Q2 2022’s $190 million figure.
The reinsurance segment’s combined ratio is 85.9% for Q2 2023 and 88.2% for H1 2023, compared with 91.8% and 91.6% in Q2 2022 and H1 2022, respectively.
While not as impressive as the reinsurance segment, Everest’s insurance operation also performed well in the quarter, posting GWP growth of 13.5% to $1.4 billion, while YTD GWP rose more than 12% to $2.5 billion.
NWP within the insurance segment increased 15% year-on-year to more than $1 billion, while H1 2023 NWP rose more than 17% to $1.9 billion.
Within insurance, Everest reports that “strong cycle management delivered an underwriting profit of $64 million”, with the segment producing a combined ratio of 92.7% for Q2 2023 and 92.5% for the half-year, reflecting a slight deterioration from a year earlier for both periods.
Cat losses, however, were benign in the quarter as the firm continues to de-risk the portfolio.
The solid performance in insurance and record growth in reinsurance, means that group-wide, Q2 2023 GWP increased by more than 21% to $4.2 billion and H1 GWP rose 19% to $7.9 billion. NWP for the quarter increased 22% to $3.7 billion, and by 20% to $7 billion for H1 2023.
In total, cat losses for the quarter reported by Everest hit $27 million and stand at $137 million for H1 2023, mostly attributable to the reinsurance segment.
The group-wide Q2 2023 combined ratio stands at 87.7% compared with 91.8% a year earlier, and the H1 2023 combined ratio hit 89.4%, compared with 91.7% in 2022.
All in all, Everest has reported net income of $670 million for the second-quarter of 2023 compared with $123 million a year earlier. For H1 2023, net income stands at more than $1 billion, up from the $420 million reported in H1 2022.
On the asset side of the balance sheet, Everest has reported total invested assets and cash of $33.6 billion versus $29.9 billion on December 31st, 2022.
Juan C. Andrade, Everest President & CEO, commented on the results: “Everest’s second quarter performance was outstanding as we 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 annualized Total Shareholder Return in excess of 25%.
“Our lead market position in reinsurance, combined with best-in-class execution and dynamic capital deployment, enabled us to take advantage of favorable market conditions and drive significantly higher risk adjusted returns. 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 capitalizing on abundant market opportunities, which are expected to continue well into 2024.”
