Bermuda-based Everest Group has announced a further gross $600 million strengthening of its casualty reinsurance reserves in the third quarter, as the company continues to grapple with the cost of claims from earlier underwriting years.

The latest reserve increase, which follows more than $200 million of reserve strengthening in the previous quarter, reflects a reassessment of the amount needed to meet outstanding casualty claims.

The company’s third quarter earnings report said there was net adverse prior-year reserve development of $253 million in its Everest’s reinsurance treaty segment, including the $600 million gross reserve strengthening .This contributed to a $191 million underwriting loss in the segment for the three months ended September 30.

Despite the reserve charges and underwriting losses, Everest remained profitable at group level, reporting third-quarter net income of $233 million, down from $255 million in the same period last year.

Strong investment results boosted results, as investment income increased to $634 million from $540 million a year earlier, driven by higher returns from alternative investments.

Casualty is a long-tail business line in which claims can take years to develop and settle.

The adequacy of reserves in casualty reinsurance is an industry-wide issue. Social inflation - a phrase used to describe rising rising liability claims costs driven by litigation, and larger jury awards - has resulted in insurers paying out more in casualty claims that they had expected.

Last month, Munich Re board member Stafan Golling told The Insurer that the US liability loss development for the underwriting years 2014 to 2019 was still rising sharply.

“I would say we should not be surprised if the market will continue to report further reserve strengthening in the coming years,” Mr Golling said.

Everest’s overall combined ratio deteriorated to 107.1 per cent from 103.4 per cent a year earlier, indicating an underwriting loss. A ratio above 100 per cent means claims and expenses exceed premiums earned.

Everest is reducing its exposure to casualty reinsurance. Gross written premiums in the reinsurance treaty segment declined 6.2 per cent on a comparable basis to approximately $2.7 billion.

Everest also faced an increase in pre-tax net catastrophe losses to $322 million, compared with $50 million in the corresponding period last year. The biggest loss events were a Colombia earthquake, events in the Middle East and weather-related losses around the world.

Across the group, Everest recorded a pre-tax underwriting loss of $223 million, compared with a loss of $130 million in the third quarter of 2025.

Group gross written premiums fell 14.5 per cent to $3.74 billion.

For the first nine months of 2026, Everest reported net income of $1.45 billion, compared with $1.15 billion in the corresponding period last year.

Jim Williamson, Everest's chief executive officer, highlighted the company's efforts to strengthen its balance sheet, return capital to shareholders and position its businesses for future growth.

“This quarter Everest generated an annualised total shareholder return of 14.2 per cent as we executed on a number of initiatives including strengthening the balance sheet, accelerating capital return, and positioning the company for its next chapter,” Mr Williamson said.

“Our reinsurance treaty team is navigating the market cycle with the highest level of discipline, while leveraging its expertise and competitive advantages to maintain our focus on bottom-line results.”

Everest repurchased $474 million of its common shares during the quarter, bringing total share repurchases for the first nine months of the year to $1.2 billion.

Book value per share stood at $381.04 at September 30, compared with $379.83 at the end of 2025.