Global insurer and reinsurer Everest Group has reported a combined ratio of 91.4% for the third quarter of 2023 and pre-tax underwriting income of $301 million on the back of improved pricing and a reduction in catastrophe losses.
The Q3 2023 combined ratio strengthened by 20.5 percentage points from the 112% in Q3 2022, when the Bermuda-based firm reported an underwriting loss of $367 million.
This quarter, pre-tax catastrophe losses, net of recoveries and reinstatement premiums, were $170 million, driven by a number of mid-sized events globally, compared with $730 million in the prior year third quarter.
The strong underwriting performance is evident in both its reinsurance and insurance operations, which reported a Q3 2023 combined ratio of 91% and 92.6%, respectively, compared with 115% and 103.5%, respectively, in Q3 2022.
Within its reinsurance business, catastrophe losses fell from $620 million to $160 million.
Gross written premiums (GWP) in the reinsurance segment were approximately $3.2 billion, which is a new quarterly premium record, and was broad-based across geographies and lines.
Everest attributes the expansion to 43.9% growth in Property Pro-Rata, 41.2% in Property Catastrophe XOL, 28.8% growth in Casualty XOL, and 19.9% growth in Casualty Pro-Rata, when adjusting for reinstatement premiums, as pricing increases and a flight to quality continue globally.
Catastrophe reinsurance pricing was up more than 30% with improved terms and conditions, highlighting the continued robust pricing momentum in the sector.
In the insurance segment, catastrophe losses fell from $110 million in Q3 2022 to just $10 million in Q3 2023.
Insurance GWP rose to $1.2 billion, a 3.5% increase year-over-year, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers’ compensation and financial lines.
Group-wide, GWP rose more than 19% to $4.4 billion compared with $3.7 billion a year earlier.
Overall, Everest has reported net income of $678 million for Q3 2023 compared with a loss of $319 million in Q3 2022, as the operating result improved from a loss of $205 million to a gain of $613 million.
The strong result was also supported by net investment income of $406 million in Q3 2023 compared to $151 million in the prior year’s third quarter, driven by strong fixed income and alternative investment returns.
Juan Andrade, Everest President and Chief Executive Officer, commented: “Everest’s third quarter performance was excellent. We delivered outstanding returns including a near 20% operating return on equity and an annualized 25% total shareholder return.
“We are leaning into the hard reinsurance market, where favorable conditions and the global flight to quality persist. As a lead market and preferred partner, we are well-positioned for the upcoming January renewals. We continue to expand our global reinsurance portfolio at significantly improved risk-adjusted returns.
“In addition, our primary insurance business continues to generate strong and consistent underwriting income, with a significant year-over-year improvement. Supporting the strong underwriting performance of our two businesses, our high-quality investment portfolio continues to deliver outstanding returns, generating over $400 million in net investment income in the quarter, and over $1 billion year-to-date. We have significant momentum heading into the final quarter of the year, with strong tailwinds and exceptional talent powering our disciplined execution and industry-leading shareholder returns.”
