Everest Group, Ltd. EG reported fourth-quarter 2024 operating loss of $18.39 per share, wider than the Zacks Consensus Estimate of a loss of $16.65. EG had reported an operating income of $25.18 per share in the year-ago quarter. 

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Everest Group witnessed higher premiums in the reinsurance segment and strong core fixed income investment returns. Soft performance in the insurance businesses, higher expenses and underwriting loss partially offset the upside.

Operational Update

Everest Group’s total operating revenues of nearly $4.64 billion increased 26.7% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 4.4%.

Gross written premiums improved 8% year over year to $4.7 billion, driven by strong double-digit growth in property and specialty lines across both segments. It was partially offset by reductions in certain casualty lines. Our estimate was $5.1 billion.

Net investment income was $473 million, which increased 15.1% year over year. The upside was driven by a larger asset base as well as strong core fixed income investment returns. Our estimate was $419.5 million. The Zacks Consensus Estimate was pegged at $496 million.

Total claims and expenses surged 59% to $5.4 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. Our estimate was $3.6 billion.

Pre-tax underwriting loss was $1.4 billion against the year-ago quarter’s pre-tax underwriting income of $245 million. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $173 million, wider than the loss of $143 million in the year-ago quarter.

The combined ratio deteriorated 4,230 basis points (bps) year over year to 135.5 in the reported quarter. The Zacks Consensus Estimate was pegged at 114, while our estimate was pinned at 89.8.

Segment Update

The Reinsurance segment’s gross written premiums were $3.3 billion, up 12.6% year over year. The rise was led by a 54.4% increase in Property Catastrophe XOL and 19.9% in Property ProRata. It was partially offset by a 7.3% decrease in Casualty Pro-Rata, when adjusting for reinstatement premiums.

The combined ratio of the Reinsurance segment deteriorated 1,180 bps to 90.4. Our estimate was 91.8. The Zacks Consensus Estimate was pegged at 93.

The Insurance segment generated gross written premiums of $1.3 billion, down 1.6% year over year. Everest Insurance grew 32.3% in Property and Short Tail and 37.2% in Other Specialty lines, offset by a decrease of 36.9% in Accident and Health and 20% in Specialty Casualty, primarily in North America.

The combined ratio deteriorated 10,680 bps to 239.2 for the Insurance segment. Our estimate was 83.9. The Zacks Consensus Estimate was pinned at 142.

Financial Update

Everest Group exited the fourth quarter of 2024 with total investments and cash of $41.5 billion, up 11.8% from the 2023 level. Shareholder equity at the end of the reported quarter increased 5.1% from the figure at the end of 2023 to $13.9 billion.

Book value per share was $322.97 as of Dec. 31, 2024, up 6.1% from the 2023-end level. The annualized net income return on equity was negative 15.7% against positive 23.8% in the year-ago quarter.

Everest Group’s cash flow from operations was $4.9 billion in the quarter, up 8.8% year over year. The company paid common share dividends of $86 million during the quarter.

Full-Year Highlights

Full-year 2024 operating income per share of $29.83 decreased 55% year over year. The bottom line missed the Zacks Consensus Estimate by 23%.

Total revenues jumped 18.5% from the year-ago quarter to $17.28 billion. The top line beat the Zacks Consensus Estimate by 1%.

Zacks Rank

Everest Group currently has a Zacks Rank #5 (Strong Sell).

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Performance of Other Insurers

Brown & Brown, Inc.’s BRO fourth-quarter 2024 adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 48.3% year over year. Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 6.4%. The top line improved 15.4% year over year. The upside can be primarily attributed to commission and fees, which grew 15.4% year over year to $1.1 billion. Our estimate for commission and fees was $1 billion. The Zacks Consensus Estimate was pegged at $1.1 billion. Organic revenues improved 13.8% to $1.1 billion in the quarter under review.

Investment income increased 22.2% year over year to $22 million. The Zacks Consensus Estimate for the metric was pegged at $20.7 million and our estimate was $31.8 million.  Adjusted EBITDAC was $390 million, up 22.6% year over year. EBITDAC margin expanded 190 bps year over year to 32.9%. Our estimate for adjusted EBITDAC was $366.3 million.

RLI Corp. RLI reported fourth-quarter 2024 operating earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 14.5%. The bottom line decreased 46.8% from the prior-year quarter. Operating revenues for the reported quarter were $436 million, up 15.3% year over year, driven by higher net premiums earned and net investment income. The top line matched the Zacks Consensus Estimate. Gross premiums written increased 9% year over year to $473.2 million. This uptick can be attributed to the solid performance of the Casualty segment (up 18.3%). Our estimate was $550 million.

Net investment income increased 19% year over year to $38.8 million. The Zacks Consensus Estimate and our estimate for the metric were both pegged at $38.1 million. The investment portfolio’s total return was negative 1.1% in the quarter. Underwriting income of $22.2 million decreased 62.8% year over year. The combined ratio deteriorated 1,170 bps year over year to 94.4. The Zacks Consensus Estimate for the metric was pegged at 96, while our estimate was 102.

W.R. Berkley Corporation’s WRB fourth-quarter 2024 operating income of $1.13 per share beat the Zacks Consensus Estimate by 20.2%. The bottom line improved 17.7% year over year. W.R. Berkley’s net premiums written were $2.9 billion, up 8% year over year. The figure was lower than our estimate of $3 billion. Operating revenues came in at $3.5 billion, up 9.2% year over year, on the back of higher net premiums earned as well as improved net investment income, higher insurance service fees and other income. The top line beat the consensus estimate by 4.2%.

Net investment income grew 1.3% to $317.4 million, driven by strong contributions to total return from net unrealized gains on the equity portfolio. The figure was lower than our estimate of $399.5 million. The Zacks Consensus Estimate was pegged at $342 million. Total expenses increased 8% to $2.9 billion due to higher losses and loss expenses. Our estimate was $3 billion. The consolidated combined ratio (a measure of underwriting profitability) deteriorated 180 bps year over year to 90.2. The Zacks Consensus Estimate was 91.

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