Everest Group reports US$1.7 billion prior-year casualty loss development

Re/insurer strengthens reserves and adjusts earnings projections amid social inflation challenges

Everest Group reports US$1.7 billion prior-year casualty loss development

Reinsurance

By Kenneth Araullo

Everest Group Ltd. reported US$1.7 billion in unfavorable prior-year casualty loss development as part of its preliminary financial results ahead of its scheduled earnings release on Feb. 3.

The Bermuda-based reinsurance and insurance company expects full-year 2024 net income between US$1.3 billion and US$1.4 billion, with non-GAAP net operating income projected between US$1.2 billion and US$1.3 billion, according to a company statement.

The financial results reflect a US$1.5 billion unfavorable development in prior-year loss reserves. An additional US$229 million in current accident year strengthening brought total reserve strengthening to US$1.7 billion for both the full year and fourth quarter.

Chief executive officer Jim Williamson (pictured above) said that the reserve adjustments followed a comprehensive review.

"As a result of these actions, our casualty reserves are positioned with a risk margin above the actuarial central estimate,” Williamson said.

Williamson also noted that Everest has taken measures to reinforce its US casualty reserves while implementing underwriting actions in areas affected by social inflation. He said the company has also focused on talent acquisition and platform investment, positioning itself for stable financial performance across market cycles.

The reinsurance division adjusted prior-year US casualty reserves by US$684 million for the full year and fourth quarter. According to Everest, this impact was fully offset by favorable reserve development in property and mortgage lines.

The insurance segment increased prior-year US casualty reserves by US$1.1 billion and raised current accident year losses in U.S. casualty lines by US$206 million, totaling US$1.3 billion in reserve strengthening.

Everest attributed the reserve increases to social inflation and concentration in certain US casualty business lines.

Additionally, the company introduced a new "other" segment, which includes certain sports and leisure lines following the sale of that business in October 2024, as well as runoff asbestos and environmental exposures and discontinued insurance programs. This segment recorded US$425 million in unfavorable development for the full year and fourth quarter.

Everest said that its new financial objective is to achieve a mid-teens total shareholder return over the market cycle. The company also announced it will no longer provide detailed forward guidance.

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