On February 3, 2025, Everest Group Ltd (EG, Financial) released its 8-K filing detailing its financial performance for the fourth quarter and full year of 2024. The company, a leader in providing property, casualty, and specialty reinsurance and insurance solutions, operates in the U.S., Bermuda, and international markets.
Performance Overview and Challenges
Everest Group Ltd reported a net loss of $593 million for the fourth quarter of 2024, translating to a loss of $13.96 per diluted share. This result fell short of the analyst estimate of -$13.55 per share. The company's net operating loss was $780 million, or $18.39 per diluted share, primarily driven by reserve strengthening in U.S. casualty lines. This compares to a net income of $804 million, or $18.53 per diluted share, in the same quarter of the previous year.
The company's gross written premium for the quarter was $4.7 billion, reflecting a year-over-year growth of 7.2%. However, the combined ratio for the group surged to 135.5%, significantly higher than the 93.2% reported in Q4 2023. This increase was largely due to a 37.6-point impact from unfavorable prior year reserve development.
Financial Achievements and Industry Implications
Despite the quarterly challenges, Everest Group Ltd achieved several financial milestones in 2024. The company reported an annual net income of $1.4 billion and a net operating income of $1.3 billion. Gross written premiums reached $18.2 billion, marking a 9.1% year-over-year growth. Notably, the reinsurance segment saw a 12.2% increase, while the insurance segment grew by 4.0%.
Net investment income for the year increased by over $500 million to approximately $2 billion, setting a company record. Additionally, Everest Group Ltd reported strong operating cash flow of $5.0 billion for the year, another record achievement.
Income Statement and Key Metrics
The company's income statement highlights a significant increase in pre-tax catastrophe losses, which amounted to $672 million for the year, compared to $451 million in the prior year. The attritional combined ratio for the group was 87.6% for 2024, slightly higher than the 86.9% reported in 2023.
| Metric | Q4 2024 | Q4 2023 |
|---|---|---|
| Net Income (Loss) | ($593 million) | $804 million |
| Net Operating Income (Loss) | ($780 million) | $1.1 billion |
| Net Income (Loss) per Diluted Share | ($13.96) | $18.53 |
| Combined Ratio | 135.5% | 93.2% |
Analysis and Strategic Outlook
The financial results underscore the challenges Everest Group Ltd faces in managing its U.S. casualty reserves. The company's decisive actions to fortify these reserves are crucial for maintaining its financial stability and competitive position in the insurance industry. The increase in net investment income and strong cash flow generation are positive indicators of the company's underlying financial health.
This was a pivotal year for Everest as we took decisive action to fortify our U.S. casualty reserves, solidify our franchise value, and raise the bar across all facets of the Company," said Jim Williamson, Everest President and CEO.
Looking ahead, Everest Group Ltd's strategic focus on enhancing its reinsurance franchise and transforming its North American insurance platform is expected to drive future growth and profitability. The company's ability to navigate the complex insurance landscape and capitalize on emerging opportunities will be key to its long-term success.
Explore the complete 8-K earnings release (here) from Everest Group Ltd for further details.
