Everest Q1 profits fall partly due to wildfires
The Everest Group has reported first quarter profit of $210 million, down from $733 million in the same period last year.
The firm’s president and chief executive, Jim Williamson, attributed this partly to the California wildfires, which he said had caused the highest level of first-quarter losses in the insurance industry in more than a decade.
“As expected, this affected our underwriting results for the quarter,” Mr Williamson said. “Given our disciplined approach to catastrophe risk underwriting, our losses were within our expected range.”
In their reinsurance division, pre-tax catastrophe losses were $461 million net of estimated recoveries and reinstatement premiums, driven primarily by the January wildfires.
The disaster accounted for $442 million of catastrophe losses, net of estimated recoveries and reinstatement premiums, in the quarter.
However, Mr Williamson said Everest Re continued to see opportunities to deploy capital at excellent expected returns, as evidenced by their successful execution of the January 1 and April 1 reinsurance renewals.
The company had a combined ratio of 102.7 per cent, including 13.9 points of catastrophe losses, versus 88.8 per cent in the first quarter of 2024, including 2.3 points of catastrophe losses.
“In insurance, the execution of our United States casualty remediation remains on track to be completed later this year, while we still see significant opportunities in property and speciality lines,” Mr Williamson said.
“Everest is delivering on its strategic plan and I am confident in our ability to achieve our return objectives.”
Everest’s net operating income for Q1 was $276 million.
Net investment income improved to $491 million compared with $457 million in the prior year quarter, while operating cashflow for the quarter was $928 million compared with $1.1 billion in the first quarter of 2024.
The total shareholder return was 5.6 per cent annualised, while the annualised year to date net income return on equity was 5.7 per cent and the net operating ROE was 7.5 per cent.
The firm had $4.4 billion in gross written premium with year-over-year decreases of 2 per cent for the group, 1.1 per cent for reinsurance, and 0.1 per cent for insurance on a comparable basis.
Strong double-digit growth in property and speciality lines across both segments was offset by reductions in certain casualty lines.
In Everest’s reinsurance segment, gross written premiums decreased 1.1 per cent on a comparable basis (constant dollar basis and excluding reinstatement premiums), to approximately $3.2 billion.
Mr Williamson said Everest continued to demonstrate their franchise value and drive growth in lines with the best expected risk-adjusted returns.
Growth was led by a 11.5 per cent increase in property pro-rata, a 7.9 per cent increase in property catastrophe excess of loss reinsurance, and a 7.7 per cent increase in property non-catastrophe excess of loss, partially offset by a 21.7 per cent decrease in casualty pro-rata and a 8.5 per cent decrease in casualty XOL, when adjusting for reinstatement premiums.
The attritional loss ratio increased 260 basis points over last year to 59.8 per cent while the attritional combined ratio increased 270 basis points to 87.1 per cent versus a year ago.
Mr Williamson said the increases were primarily driven by the Washington aviation losses, net of recoveries and reinstatement premiums, which added 2.4 points to the attritional loss and combined ratios.
• For more on the Everest Group Q1 earnings report, see Related Media
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