Everest Re Group, Ltd. (EG) Earnings

Management highlights

- Overall Financial Performance * Reported operating income of $585 million, annualized after-tax net operating ROE of 14.9%, and annualized total shareholder return of 16.8% * Book value per share (excluding unrealized gains/losses) grew 12% year-over-year to ~$408 * Core businesses (reinsurance treaty + global wholesale and specialty) generated $3.7 billion in gross written premium (7% lower year-over-year on a comparable basis), $317 million in underwriting income, and a core combined ratio of 90% (inclusive of $85 million in net catastrophe losses) * Net investment income was $523 million for the quarter, with a stable book yield of 4.5% - Strategic Execution * Maintains underwriting discipline, prioritizing bottom-line profitability over top-line growth amid a softening reinsurance market * Actively reduced exposure to underpriced U.S. casualty lines and shifted portfolio mix toward higher returning niche specialty segments including data centers, construction, and renewable energy * Leveraged strong global underwriting capabilities and distribution to outperform broader market pricing trends: Q2 2026 mid-year renewals saw market property CAT pricing down 15-20%, while Everest's portfolio only saw a 10% rate decrease * Grew Mt. Logan Capital Management (third-party capital platform) AUM to $3.4 billion as of July 1, 2026, up 89% from the start of 2025, driven by the launch of the Annapurna RE casualty and specialty reinsurance sidecar * Annapurna RE provides capital flexibility, generates incremental fee income, and is expected to have ~$200 million of seeded premium per quarter over the next three years, and will be modestly accretive to overall underwriting income and ROE over time - Capital Management * Since January 2025, Everest has deployed $1.5 billion toward share repurchases, reducing outstanding shares by over 10% * In Q2 2026, repurchased 1.2 million shares for $395 million at an average price of $342 per share, representing an 81% payout ratio for the quarter * Share repurchases remain the top capital allocation priority, with a $300 million quarterly floor, and management expects to exceed this when appropriate given balance sheet strength - Reporting Changes * Beginning Q2 2026, separate consolidated disclosure is provided for core businesses, excluding the legacy run-off segment, to improve transparency into go-forward earnings power * Starting Q3 2026, the definition of after-tax net operating income will be revised to align with industry peers, excluding one-time items and acquisition/divestiture/restructuring gains/losses, improving period-over-period comparability - Reserving Practices * New CFO and group chief actuary implemented a proactive quarterly reserving process that reacts to emerging credible data ahead of annual reserve studies * Reserving philosophy maintains management best estimates above actuarial central estimates to embed conservatism * Q2 2026 had no net prior year loss development overall: favorable development in short-tail lines offset by a $55 million reserve increase for the Baltimore Bridge collapse and a ~$200 million reserve increase for North America casualty to reflect elevated loss trends and emerging loss emergence in older accident years

Guidance

- Market conditions for 1/1/27 reinsurance renewals are expected to remain competitive barring large catastrophe losses or external shocks - Global wholesale and specialty is expected to deliver combined ratios in the mid to high 90s in the near term - Near-term expected attritional loss ratio for reinsurance treaty is the mid-50s; global wholesale and specialty is expected to remain near Q2 2026's 60.6% level - Expected catastrophe load guidance is maintained at roughly 8 percentage points for the reinsurance treaty segment and roughly 4 percentage points for the global wholesale and specialty segment - Over $1 billion of capital tied up in the legacy segment will gradually free up as the portfolio runs off, which will be available to add to capital return capacity alongside ongoing core earnings generation - No change to 2026 casualty loss picks, which remain prudent ahead of the completion of annual reserve studies in Q3 2026

Segment performance

1. Reinsurance Treaty: Generated $283 million in underwriting income, with a combined ratio of 88.5%. Gross written premium saw a 9% year-over-year decrease (constant dollar, excluding reinstatement premiums) driven by deliberate portfolio optimization; casualty lines fell 19% while property premiums were relatively flat. This segment contributed 76.5% of core business gross written premium and 89.3% of core underwriting income in Q2 2026. 2. Global Wholesale and Specialty: Gross written premium was flat year-over-year, with double-digit international growth across financial lines, marine, and other segments offset by deliberate reductions in U.S. property and casualty. The segment posted a combined ratio of 95.2%, with an improved attritional loss ratio of 60.6% (390 basis points better year-over-year), and catastrophe losses contributed 1.4 points to the combined ratio. This segment contributed approximately 23.5% of core business gross written premium. 3. Legacy: The segment continues run-off, with roughly $250 million in net premiums remaining to be earned in H2 2026. It generated a modest drag on group underwriting results in Q2 2026, and is expected to become an immaterial earnings contributor as the portfolio runs off.

Risks & headwinds

- The market is seeing increasing irresponsible underwriting, with current pricing for insurance and reinsurance failing to reflect elevated global risk levels across multiple domains - The U.S. tort environment remains corrosive even after recent reforms, putting ongoing pressure on industry casualty reserves - Softening market conditions for property reinsurance have created downward pressure on rates, requiring active portfolio management to maintain profitability - Elevated loss trends and ongoing loss emergence in older North America casualty accident years create reserving uncertainty - Increased third-party alternative capital entering the reinsurance market adds marginal competitive price pressure, though management does not expect major near-term dislocation

Analyst Q&A

• Q: With new CFO and chief actuary leading a reserve review, what gives management confidence in balance sheet and reserve quality ahead of the full annual review? /

  A: Management confirms confidence in the balance sheet based on strong capital adequacy, liquidity, leverage, and overall risk profile. The new leadership proactively adjusted reserves to reflect emerging data this quarter rather than waiting for the full annual study to complete, which is already incorporated into Q2 2026 results.

• Q: Could you detail how Everest achieved a smaller 10% property CAT rate decrease versus the 15-20% market decline at mid-year renewals? /

  A: Everest’s strong global platform gives underwriters regional authority and deep client relationships, allowing flexible positioning of capacity in the highest return parts of programs. Everest shifted participation to higher attachment points, deployed more capacity to attractively priced deals, pulled back from underpriced programs, and benefited from non-concurrent policy terms in key markets like Florida, all of which outperformed broader market trends.

• Q: How does the Annapurna RE sidecar affect net casualty exposure going forward? Will it lead to more net growth? /

  A: Everest maintains strict gross underwriting discipline, only writing business that meets return thresholds regardless of third-party capital capacity. A portion of qualifying written casualty business is ceded to Annapurna via quota share, so net casualty retention will decrease in the immediate term, and management will not stretch to add new growth just because of the sidecar capacity. The transaction primarily provides capital flexibility rather than driving additional underwriting.

• Q: What was the size and scope of the Q2 2026 casualty reserve increase, and should it be extrapolated further? /

  A: The total casualty reserve increase was just under $200 million, concentrated in the North American Casualty reinsurance book. The increase reflected elevated stable loss trends and loss emergence in older accident years, and was spread across most accident years to stay ahead of trends. No credit was taken for pending tort reform or reported claims acceleration, keeping reserving conservative. No adjustment was made to 2026 current year loss picks, which remain prudent.