Everest Re President and CEO, Juan Andrade, and Jim Williamson, Group COO and Head of Reinsurance, see a host of significant opportunities for growth in 2023, noting that Everest is very well positioned to take full advantage of them.
Andrade cited Everest’s strong client and broker relationships that the firm has built, in addition to portfolio strength and expertise across lines and geographies that will allow it to deploy capacity wherever the best opportunities arise.
Andrade said, “In the property cat space, the hardening that we’re already seeing is going to intensify post-Ian. Our key priorities with regard to property cat are pretty straightforward.
“Number one is to continue hardening our portfolio, basically continuing the work that we’ve been doing now for the past several years. Number two is getting paid significantly more for the risks that we’re already taking. Number three is to prudently grow with core cedents where we see the opportunity.
All of this, however, within the trading range that we have outlined with respect for natural catastrophe exposure,” He adds.
Williamson reiterated Andrade’s comments, breaking down the three key priority points to convey how “tremendous” Everest believes the market opportunity is.
Williamson said, “In terms of hardening our portfolio, I think you’ll see us continue to trade away from some of the areas of the market which really make you susceptible to climate change, things like aggregate programmes, cat exposed pro rata, and some of the peak risk that comes along with a retro book.”
On the topic of getting paid more, Williamson noted that the expectation that the market had for pricing going into Monte Carlo, in terms of average rate increase, is now the minimum for programmes that haven’t been affected by loss.
He adds, “While I expect clients to try to mitigate some of those rate increases by taking higher attachment points, which we’re in favour of, my sense at this point is that rate change will be top-line accretive for us, even if we make changes to the portfolio.”
In terms of growth with target cedents, Williamson observed that it is a very real opportunity for the firm.
He said, “We’re already having discussions with our core trading partners around the world. There is an intense demand for capacity in general, and Everest capacity specifically, we’re being very thoughtful about picking up high-quality opportunities.”
Williamson concluded on the prospect of a higher margin portfolio, one that he suspects would likely be bigger after 1/1 than it is today, yet also, as Andrade indicated, that’s well within the defined trading range that Everest set out in 2021.
Everest Re reported net investment income of $151m for Q3, having suffered a net operating loss of $205m, with a net loss of $319m.
