Everest Re Group, Ltd. Q4 FY2025 earnings call

• Strategic Steps in 2025: Simplified the company, reduced reserve risk, reshaped the portfolio, and strengthened the balance sheet. Generated an operating ROE of 12.4% and a TSR of 13.1%. - Q4 Results: Gross written premiums were $4.3 billion, net investment income was $562 million. Combined ratio was 98.4%, with attritional combined ratio excluding catastrophes and ADC at 89.9%. - Reinsurance: Performed well with strong underwriting discipline, bound over $6.3 billion of premium at Jan 1 renewals, and saw attractive opportunities in Asia. - Insurance: Completed casualty remediation in North America, sold commercial retail insurance business, and pricing in North American casualty remained strong. - Global Wholesale and Specialty: $3.6 billion in gross written premium, led by Jason Keen, expected to increase underwriting profitability. - Reserves and Capital: Completed reserve studies, strong capital position, prioritized share repurchases with $400 million repurchased in Q4 and $100 million in Jan 2026.

Reinsurance: The reinsurance business generated $255 million of underwriting income in the fourth quarter. Gross written premiums decreased 3.6% in constant dollars versus the prior year quarter when adjusting for reinstatement premiums, with growth in property cat XOL and expansion in Global Specialty lines while remaining disciplined in casualty lines. The combined ratio increased to 91.2%. Insurance: Gross premiums written decreased 20.1% in constant dollars to $1.1 billion. Pricing in North American casualty remained strong, but property rates declined. The company sold the renewal rights to its commercial retail insurance business. The global Wholesale and Specialty business had a gross written premium of $3.6 billion in 2025, with an attritional combined ratio in the mid-90s.

• Share Repurchases: Plan to continue share buybacks in 2026, with $400 million repurchased in Q4 and $100 million in Jan 2026. - Segment Changes: Will report 3 segments from 2026, disseminating historical resegmentation after filing the 2025 Form 10-K. - Property Cat Renewals: Expect similar rate pressure as Jan 1 renewals, with Florida reforms and reinsurance capacity impacting the market.

• Market Softening: Reinsurance renewals saw market softening with property cat rates down on average 10% globally. - Social Inflation: Impacting U.S. casualty lines, leading to elevated loss ratios in insurance. - Cat Loss Uncertainty: Uncertainty in cat loss levels and their impact on underwriting results. - Regulatory/Legal Risks: Risks related to reserves, claims, and legal system abuse affecting insurance results.

Q: Focus on the expense ratio, what's the final destination for the global Wholesale and Specialty business expense ratio?

A: Mark Kociancic said the group expense ratio is elevated due to retail insurance transaction, expected to work down to lower end of 6% by 2027. For Global Wholesale and Specialty, expense ratio will be significantly lower than current insurance segment, starting in 12%-13% range and improving over time.

Q: Perspective on reinsurance pricing ahead of June renewal season and portfolio change?

A: James Williamson expects similar rate pressure as Jan 1 renewals, with property cat rates likely down further. Florida reforms and reinsurance capacity will impact, but return on capital for property cat is above required level, and positioning remains good.

Q: Capital deployment and buybacks?

A: Mark Kociancic said capital position is strong, expect significant net income in 2026, with expected capital releases from renewal rights transaction, making buybacks attractive and plan to continue in Q1 and 2026.

Q: Openness to additional retroactive reinsurance transactions?

A: James Williamson said ADC was done in 2025, not looking for additional ADCs, but could see opportunities to leverage transactions to manage and free up capital for runoff business.