Everest Group, Ltd. (RE) has once again demonstrated its ability to deliver industry-leading financial results, reporting strong second quarter and first half 2024 performance. The company's annualized total shareholder return and operating return on equity both reached 20% for the quarter, underscoring its commitment to generating superior returns for shareholders.

Business Overview

Everest's gross written premiums grew 13.0% to $4.7 billion in the second quarter of 2024, driven by a 16.8% increase in the Reinsurance segment and a 5.7% increase in the Insurance segment. On a year-to-date basis, gross written premiums increased 15.3% to $9.1 billion, with the Reinsurance segment growing 18.9% and the Insurance segment growing 7.7%. This robust premium growth reflects Everest's ability to capitalize on favorable market conditions and its strong competitive positioning.

Financials

The company's net income for the first half of 2024 reached $1.5 billion, up 40.7% from the same period in 2023. Everest's annual net income for 2023 was $2.5 billion, while its annual revenue was $14.6 billion. The company's annual operating cash flow and free cash flow for 2023 were both $4.8 billion, demonstrating its strong liquidity position.

In the second quarter of 2024, Everest's combined ratio was 90.3%, a 2.6 percentage point increase from the prior year period. This was driven by a 2.3 percentage point increase in the loss ratio to 62.6%, partially offset by stable commission and expense ratios. For the first half of 2024, the combined ratio was 89.6%, a 0.2 percentage point increase from the same period in 2023.

Reinsurance Segment Performance

Everest's Reinsurance segment delivered an excellent performance in the second quarter, with a combined ratio of 88.9% and an underwriting profit of $303 million. The segment's attritional combined ratio improved by 30 basis points to 84.4%, reflecting the company's disciplined underwriting and favorable pricing environment. Gross written premiums in the Reinsurance segment grew 16.5% in the quarter, driven by strong demand for property and specialty lines.

Insurance Segment Performance

The Insurance segment continued to make progress, though its combined ratio of 94.4% in the second quarter was 1.8 percentage points higher than the prior year period. This was primarily due to a higher expense ratio as the company invests in its global platform and a lag in earned premium from underwriting actions. Everest expects the Insurance segment to achieve its target 90-92% combined ratio range in 2025, as it continues to optimize its business mix and scale its international operations.

Investment Performance

Everest's investment portfolio generated $528 million in net investment income in the second quarter, a 47.9% increase from the prior year period. This was driven by higher asset levels, improved yields, and strong performance from alternative investments. The company's investment portfolio remains well-positioned, with a short duration of 3.4 years and a reinvestment rate in excess of 5%.

Geographic Diversification

Geographically, Everest continues to benefit from its diversified global platform. The company has been expanding its international footprint, particularly in markets like Mexico, Colombia, and Australia, where it is seeing attractive opportunities and favorable loss experience compared to the United States.

Outlook

Looking ahead, Everest remains bullish on its outlook for 2025, with the Reinsurance segment expected to continue delivering strong risk-adjusted returns. In the Insurance segment, the company is confident in its ability to achieve its 90-92% combined ratio target, driven by a more balanced business mix, increased scale in international markets, and disciplined underwriting.

Liquidity

Everest's capital position remains a source of strength, with shareholders' equity of $14.2 billion as of June 30, 2024. The company has ample liquidity, with $4.0 billion in cash and short-term investments, and access to $1.7 billion in committed credit facilities. Everest will continue to evaluate opportunities to deploy capital, including through share repurchases, which totaled $100 million in the first half of 2024.

Conclusion

In conclusion, Everest Group, Ltd. has delivered another quarter of impressive financial results, demonstrating the resilience and adaptability of its diversified global platform. The company's strong underwriting discipline, prudent risk management, and consistent investment performance position it well to continue generating industry-leading returns for shareholders. Everest's clear strategic focus and execution provide confidence in its ability to capitalize on the current market environment and drive sustainable long-term growth.