Moody’s Ratings has affirmed the A1 insurance financial strength (IFS) ratings of Everest Reinsurance Company and Everest Reinsurance (Bermuda), Ltd., along with the Baa1 senior unsecured debt rating of Everest Reinsurance Holdings, Inc. The ratings carry a stable outlook.
Moody’s says that the affirmation reflects Everest’s established role in the global reinsurance sector, supported by longstanding client relationships and diversified product offerings.
Moody’s noted that these characteristics position the company as a lead market for brokers and clients. Everest continues to operate with a low fixed expense ratio and maintains access to retrocessional capacity through Mt. Logan Re. While the group has demonstrated profitability, Moody’s highlighted that earnings remain subject to volatility.
Key risks include Everest’s exposure to both natural and man-made catastrophe losses, underperformance in its primary insurance business, and involvement in long-tail casualty lines – areas that present increased pricing and reserving challenges. The company’s financial leverage is viewed as moderate.
Everest reported net income of US$1.4 billion in 2024, down from US$2.5 billion in 2023. The decline was primarily attributed to a US$1.7 billion adverse loss reserve development charge, largely related to its casualty business.
Approximately US$1.3 billion of this charge was recorded within the insurance segment, with the majority tied to excess/umbrella, general liability, and commercial auto liability policies written in the United States between 2020 and 2024.
In the fourth quarter, Everest also reported a net loss of US$593 million and a net operating loss of US$780 million, primarily due to unfavorable development of prior-year loss reserves in US casualty lines.
The combined ratio for the quarter was 135.5% for the group, with reinsurance at 90.4% and insurance at 239.2%. The company strengthened prior-year loss reserves by approximately US$1.5 billion, impacting the combined ratio by 37.6 percentage points. Additionally, current accident year losses increased by US$229 million.
Everest says it has undertaken organizational changes and re-underwriting measures in its primary insurance operations, which Moody’s expects will contribute to improved performance going forward.
Despite the impact on underwriting results, other segments of the business delivered stronger results, and increased investment income contributed to a positive, albeit weaker, return on capital relative to peers.
Moody’s said the stable outlook reflects expectations that Everest will generate solid underwriting profitability over the next 12 to 18 months. The agency anticipates continued favorable pricing trends in most business lines, prudent management of catastrophe exposures, and the maintenance of sound capital adequacy.
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