Everest Group, Ltd. ((EG)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for Everest Group Ltd. painted a balanced picture of the company’s performance. While there were significant achievements in property lines and international markets, challenges persisted in certain areas such as casualty and aviation losses. The sentiment expressed during the call was one of cautious optimism, with strong growth and strategic initiatives offset by the impact of catastrophic events.
Growth in Property Lines
Everest Group Ltd. reported a notable increase in total premiums, driven by approximately 16% growth in property lines. Excluding reinstatement premiums, this growth was still a robust 8%. The April renewal period saw the book grow by 5%, with property growth leading at 15%, highlighting the company’s strength in this sector.
Strong International Insurance Business
The international insurance segment of Everest Group Ltd. turned a modest profit, despite significant investments in personnel and technology. This segment demonstrated strong growth in key markets, maintaining attractive loss ratios, which underscores the company’s strategic focus on expanding its international footprint.
Share Repurchases
In a move to deliver value to shareholders, Everest repurchased $200 million worth of shares during the quarter. The shares were bought at an average price of just over $348 per share, reflecting the company’s confidence in its financial health and future prospects.
Operating Income Despite Catastrophes
Despite facing significant catastrophe loss activity, Everest Group Ltd. managed to deliver $276 million in operating income. This achievement underscores the company’s resilience and ability to maintain profitability even in challenging circumstances.
Improvements in Book Value Per Share
The book value per share saw an improvement, ending the quarter at $332.39. This represents a 3.5% increase from the end of 2024, when adjusted for dividends, indicating a positive trend in shareholder equity.
Elevated Combined Ratio Due to Catastrophic Events
The combined ratio for the quarter was elevated at 102.7%, primarily due to catastrophic events such as the California wildfires and aviation losses. These events contributed significantly to the combined ratio, highlighting the challenges faced by the company in managing unforeseen disasters.
Decline in Casualty Written Premium
There was a notable decline in pro-rata written premium, down almost 22% for the quarter. This decrease was driven by portfolio actions taken since the January 1st, 2024 renewal, reflecting strategic adjustments in the company’s casualty lines.
Attritional Loss Ratio Increase
The Group’s attritional loss ratio increased to 62.2%, a rise of 330 basis points compared to the previous year’s quarter. This increase was primarily driven by aviation losses and conservative loss picks in U.S. casualty lines, indicating areas where the company is exercising caution.
Flat Insurance Written Premium
The insurance written premium for the quarter was down by 1.3% from the previous year. While property lines grew by 19%, this was offset by a 15% decline in the third-party book, largely due to U.S. casualty portfolio remediation efforts.
Aviation Losses Impact
Aviation losses amounted to $70 million, net of recoveries and reinstatement premiums, contributing 2 points to the attritional loss ratio. This impact highlights the volatility and risk associated with the aviation sector.
Forward-Looking Guidance
Looking ahead, Everest Group Ltd. provided guidance that reflects both challenges and opportunities. The company anticipates moderate catastrophe pricing pressure for the remainder of 2025, with opportunities for capital deployment at attractive returns. The reserve position has improved, and the company remains committed to shareholder value through strategic share repurchases.
In summary, the earnings call for Everest Group Ltd. presented a mixed but cautiously optimistic outlook. While the company achieved significant growth in property lines and international markets, it continues to face challenges from catastrophic events and specific sector losses. The forward-looking guidance suggests a strategic focus on navigating these challenges while capitalizing on growth opportunities.