A ballooning combined ratio for the insurance segment and net unfavourable reserve development dragged down Everest Group’s quarterly profit to $255 million compared to third quarter 2024 net income of $509 million.

For the year to date, the reinsurer has net income of $1.15 billion compared to nearly $2 billion for the corresponding three quarters of 2024.

Quarterly net operating income of $316 million was compared to $630 million for the same period last year.

Jim Williamson, president and chief executive, commented: “Everest has taken decisive steps to define its strategic direction and position the company for improved performance. The renewal rights transaction of our retail commercial insurance business and establishment of an adverse development cover are the outcomes of a careful strategic review of the company.

“These actions will provide meaningful flexibility to deploy capital towards share repurchases, strategic opportunities and selective investments in talent, technology and data that will enhance our competitive edge.

“The go-forward Everest is a more focused, higher-return enterprise anchored in reinsurance and wholesale and speciality insurance, built on underwriting excellence, balance sheet strength and disciplined execution.”

The company said the agreement to sell retail commercial insurance renewal rights to AIG will result in meaningful total value to Everest, including the release of significant capital over time.

Everest expects to take a pre-tax non-operating charge in the range of $250 million to $350 million associated with the transaction, with the charge being recognised over 2025 and 2026.

The $4.4 billion in gross written premium for the quarter was a year-over-year decrease of 1.2 per cent for the group, including a decrease of 1.7 per cent for reinsurance, and an increase of 2.7 per cent for insurance on a comparable basis.

Combined ratios of 103.4 per cent for the group included 87 per cent for reinsurance and 138.1 per cent for insurance, which includes strengthening of American casualty reserves.

Net unfavourable reserve development of approximately $478 million in prior year loss reserves, resulting in an increase of 12.4 points on the combined ratio for the group.

Net investment income increased to $540 million versus $496 million in the prior year quarter, driven by a larger asset base and strong alternative investment returns.

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