Everest Re 10Q 2022 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE

COMMISSION

Washington, D.C.

20549

FORM

10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended

June 30, 2022

___

Transition Report Pursuant

to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number

1-15731

EVEREST RE GROUP, LTD.

(Exact name of registrant as specified in its charter)

Bermuda

98-0365432

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Seon Place – 4th Floor

141 Front Street

PO Box HM 845

Hamilton

HM 19

Bermuda

441

295-0006

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive office)

Indicate

check

mark

whether

the

registrant:

(1)

has

filed

all

reports

required

filed

Section

15(d)

the

Securities

Exchange Act

of 1934

during the

preceding 12

months (or

for such

shorter period

that the

registrant

was required

to file

such reports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark

whether the registrant

has submitted electronically

every Interactive Data

File required to be

submitted pursuant

to Rule 405 of

Regulation S-T during the

preceding 12 months (or

for such shorter period

that the registrant

was required to

submit such

files).

Yes

Indicate by check mark

whether the registrant

is a large accelerated

filer, an

accelerated filer,

a non-accelerated filer,

a smaller reporting

company

emerging

growth

company.

See

the

definitions

“large

accelerated

filer,”

“accelerated

filer,”

“smaller

reporting

company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Indicate by

check mark

if the

registrant

is an

emerging growth

company

and has

elected not

to use

the extended

transition period

for

complying with any new or revised financial accounting standards provided

pursuant to Section 13(a) of the Exchange act.

YES

Indicate by check mark whether the registrant is a shell company (as defined in

Rule 12b-2 of the Exchange Act).

YES

Securities registered pursuant to Section 12(b) of the Act:

Class

Trading Symbol

Name of Exchange where

Registered

Number of Shares Outstanding

At August 1, 2022

Common Shares, $0.01 par value

New York Stock Exchange

39,410,456

EVEREST RE GROUP,

LTD

Table of Contents

Form 10-Q

Page

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Balance Sheets as of June 30, 2022 (unaudited)

and December 31, 2021

Consolidated Statements of Operations and Comprehensive Income (Loss) for the

three and six months ended June 30, 2022 and 2021 (unaudited)

Consolidated Statements of Changes in Shareholders’ Equity for the three and six

months ended June 30, 2022 and 2021 (unaudited)

Consolidated Statements of Cash Flows for the six months ended

June 30, 2022 and 2021 (unaudited)

Notes to Consolidated Interim Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and

Results of Operation

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

EVEREST RE GROUP,

LTD.

CONSOLIDATED

BALANCE SHEETS

June 30,

December 31,

(Dollars and share amounts in thousands, except par value per share)

2022

2021

(unaudited)

ASSETS:

Fixed maturities - available for sale, at fair value

21,880,443

22,308,272

(amortized cost: 2022, $

23,408,417

; 2021, $

22,063,592

, credit allowances: 2022, $

(

42,714

)

; 2021, $

(

29,738

)

Fixed maturities - held to maturity, at amortized cost, net of credit allowances

(fair value: 2022, $

71,245

, credit allowances: 2022, $

(

366

)

71,390

Equity securities, at fair value

1,299,221

1,825,908

Short-term investments (cost: 2022, $

300,854

; 2021, $

1,178,386

)

300,840

1,178,337

Other invested assets

3,055,356

2,919,965

Cash

2,116,049

1,440,861

Total investments and cash

28,723,299

29,673,343

Accrued investment income

178,123

149,105

Premiums receivable

3,406,564

3,293,598

Reinsurance recoverables

2,096,968

2,053,354

Funds held by reinsureds

909,454

868,601

Deferred acquisition costs

836,496

872,289

Prepaid reinsurance premiums

562,550

515,445

Income taxes

336,646

2,381

Other assets

857,550

757,167

TOTAL

ASSETS

37,907,650

38,185,283

LIABILITIES:

Reserve for losses and loss adjustment expenses

19,993,054

19,009,486

Future policy benefit reserve

33,580

35,669

Unearned premium reserve

4,681,010

4,609,634

Funds held under reinsurance treaties

12,658

18,391

Other net payable to reinsurers

492,556

449,723

Losses in course of payment

79,549

260,684

Senior notes

2,346,495

2,345,800

Long term notes

223,824

223,774

Borrowings from FHLB

519,000

Accrued interest on debt and borrowings

16,664

17,348

Unsettled securities payable

66,150

16,698

Other liabilities

590,244

539,896

Total liabilities

29,054,784

28,046,103

Commitments and contingencies (Note 7)

(nil)

SHAREHOLDERS' EQUITY:

Preferred shares, par value: $

0.01

;

50,000

shares authorized;

shares issued and outstanding

Common shares, par value: $

0.01

;

200,000

shares authorized; (2022)

69,947

and (2021)

69,790

outstanding before treasury shares

700

698

Additional paid-in capital

2,283,513

2,274,431

Accumulated other comprehensive income (loss), net of deferred income

tax expense (benefit) of $

(208,066)

at 2022 and $

26,781

at 2021

(1,576,854)

11,523

Treasury shares, at cost;

30,529

shares (2022) and

30,524

shares (2021)

(3,848,630)

(3,847,308)

Retained earnings

11,994,137

11,699,836

Total shareholders' equity

8,852,866

10,139,180

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

37,907,650

38,185,283

The accompanying notes are an integral part of the consolidated

financial statements.

EVEREST RE GROUP,

LTD.

CONSOLIDATED

STATEMENTS

OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands, except per share amounts)

2022

2021

2022

2021

(unaudited)

REVENUES:

Premiums earned

2,916,237

2,558,372

5,708,003

4,946,237

Net investment income

225,978

407,095

468,808

667,508

Net gains (losses) on investments:

Credit allowances on fixed maturity securities

(1,490)

(15,927)

(13,343)

(22,904)

Gains (losses) from fair value adjustments

(188,924)

103,525

(325,784)

132,581

Net realized gains (losses) from

dispositions

(45,851)

16,511

(50,765)

33,334

Total net gains

(losses) on investments

(236,265)

104,109

(389,892)

143,011

Other income (expense)

(71,337)

7,114

(55,977)

63,707

Total revenues

2,834,613

3,076,690

5,730,942

5,820,463

CLAIMS AND EXPENSES:

Incurred losses and loss adjustment expenses

1,876,247

1,586,141

3,666,110

3,297,560

Commission, brokerage, taxes

and fees

630,294

557,749

1,235,523

1,046,760

Other underwriting expenses

169,533

140,844

330,826

283,075

Corporate expenses

15,018

16,168

29,038

28,546

Interest, fees and bond issue

cost amortization expense

24,398

15,607

48,476

31,246

Total claims and expenses

2,715,490

2,316,509

5,309,973

4,687,187

INCOME (LOSS) BEFORE TAXES

119,123

760,181

420,969

1,133,276

Income tax expense (benefit)

(3,507)

80,199

588

111,432

NET INCOME (LOSS)

122,630

679,982

420,381

1,021,844

Other comprehensive income (loss), net

of tax:

Unrealized appreciation (depreciation)

("URA(D)") on securities arising during the period

(732,364)

84,171

(1,547,540)

(204,444)

Reclassification adjustment for

realized losses (gains) included

in net income (loss)

15,841

1,590

20,019

(2,076)

Total URA(D) on

securities arising during the period

(716,523)

85,761

(1,527,521)

(206,520)

Foreign currency translation adjustments

(28,269)

34,295

(62,371)

24,713

Reclassification adjustment for

amortization of net (gain) loss included

in net income (loss)

758

2,043

1,515

4,086

Total benefit plan

net gain (loss) for the period

758

2,043

1,515

4,086

Total other comprehensive

income (loss), net of tax

(744,034)

122,099

(1,588,377)

(177,721)

COMPREHENSIVE INCOME (LOSS)

(621,404)

802,081

(1,167,996)

844,123

EARNINGS PER COMMON SHARE:

Basic

3.11

16.97

10.67

25.50

Diluted

3.11

16.95

10.67

25.47

The accompanying notes are an integral part of the consolidated

financial statements.

EVEREST RE GROUP,

LTD.

CONSOLIDATED

STATEMENTS

CHANGES IN SHAREHOLDERS’ EQUITY

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands, except share and dividends per share

amounts)

2022

2021

2022

2021

(unaudited)

COMMON SHARES (shares outstanding):

Balance beginning of period

39,448,677

40,082,500

39,266,633

39,983,481

Issued (redeemed) during the period, net

(30,923)

940

156,121

197,421

Treasury shares acquired

(68,100)

(5,000)

(165,562)

Balance end of period

39,417,754

40,015,340

39,417,754

40,015,340

COMMON SHARES (par value):

Balance beginning of period

700

698

696

Issued during the period, net

Balance end of period

700

698

700

698

ADDITIONAL PAID-IN CAPITAL:

Balance beginning of period

2,271,890

2,245,737

2,274,431

2,245,301

Share-based compensation plans

11,623

10,653

9,082

11,089

Balance end of period

2,283,513

2,256,390

2,283,513

2,256,390

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),

NET OF DEFERRED INCOME TAXES:

Balance beginning of period

(832,820)

235,079

11,523

534,899

Net increase (decrease) during the period

(744,034)

122,099

(1,588,377)

(177,721)

Balance end of period

(1,576,854)

357,178

(1,576,854)

357,178

RETAINED EARNINGS:

Balance beginning of period

11,936,489

10,847,086

11,699,836

10,567,452

Net income (loss)

122,630

679,982

420,381

1,021,844

Dividends declared ($

1.65

per share in 2Q 2022 and $

3.20

per share YTD

in 2022; $

1.55

per share in 2Q 2021 and $

3.10

per share YTD in 2021)

(64,982)

(62,046)

(126,079)

(124,274)

Balance, end of period

11,994,137

11,465,022

11,994,137

11,465,022

TREASURY SHARES AT COST:

Balance beginning of period

(3,848,630)

(3,645,717)

(3,847,308)

(3,622,172)

Purchase of treasury shares

(16,782)

(1,322)

(40,327)

Balance end of period

(3,848,630)

(3,662,499)

(3,848,630)

(3,662,499)

TOTAL

SHAREHOLDERS' EQUITY, END OF PERIOD

8,852,866

10,416,789

8,852,866

10,416,789

The accompanying notes are an integral part

of the consolidated financial statements.

EVEREST RE GROUP,

LTD.

CONSOLIDATED

STATEMENTS

OF CASH FLOWS

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

420,381

1,021,844

Adjustments to reconcile net income to net cash provided by operating activities:

Decrease (increase) in premiums receivable

(223,030)

(499,647)

Decrease (increase) in funds held by reinsureds, net

(51,451)

(79,485)

Decrease (increase) in reinsurance recoverables

(236,849)

15,836

Decrease (increase) in income taxes

(100,230)

76,452

Decrease (increase) in prepaid reinsurance premiums

(109,716)

(71,566)

Increase (decrease) in reserve for losses and loss adjustment expenses

1,360,076

1,139,879

Increase (decrease) in future policy benefit reserve

(2,089)

(1,226)

Increase (decrease) in unearned premiums

176,631

500,077

Increase (decrease) in other net payable to reinsurers

119,858

72,850

Increase (decrease) in losses in course of payment

(178,091)

70,653

Change in equity adjustments in limited partnerships

(156,868)

(377,120)

Distribution of limited partnership income

105,452

49,053

Change in other assets and liabilities, net

(11,031)

(206,994)

Non-cash compensation expense

23,919

22,439

Amortization of bond premium (accrual of bond discount)

35,052

37,928

Net (gains) losses on investments

389,892

(143,011)

Net cash provided by (used in) operating activities

1,561,906

1,627,962

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from fixed maturities matured/called/repaid - available for sale

1,661,128

1,897,536

Proceeds from fixed maturities matured/called/repaid - held to maturity

333

Proceeds from fixed maturities sold - available for sale

772,148

599,737

Proceeds from equity securities sold, at fair value

437,815

474,663

Distributions from other invested assets

204,790

112,398

Cost of fixed maturities acquired - available for sale

(4,070,949)

(3,949,973)

Cost of fixed maturities acquired - held to maturity

(72,061)

Cost of equity securities acquired, at fair value

(283,352)

(360,016)

Cost of other invested assets acquired

(307,525)

(309,691)

Net change in short-term investments

878,360

506,285

Net change in unsettled securities transactions

22,512

(103,527)

Net cash provided by (used in) investing activities

(756,801)

(1,132,588)

CASH FLOWS FROM FINANCING ACTIVITIES:

Common shares issued (redeemed) during the period for share-based compensation, net of expense

(14,835)

(11,349)

Purchase of treasury shares

(1,322)

(40,328)

Dividends paid to shareholders

(126,079)

(124,274)

Cost of shares withheld on settlements of share-based compensation awards

(17,352)

(13,713)

Net cash provided by (used in) financing activities

(159,588)

(189,664)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

29,671

(1,016)

Net increase (decrease) in cash

675,188

304,694

Cash, beginning of period

1,440,861

801,651

Cash, end of period

2,116,049

1,106,345

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid (recovered)

100,506

34,780

Interest paid

48,414

31,695

The accompanying notes are an integral

part of the consolidated financial statements.

NOTES TO CONSOLIDATED

INTERIM FINANCIAL STATEMENTS

(UNAUDITED)

For the Three and Six Months Ended June 30, 2022 and 2021

GENERAL

Everest

Re Group,

Ltd. (“Group”),

a Bermuda company,

through its

subsidiaries, principally

provides reinsurance

and

insurance

the

U.S.,

Bermuda

and

international

markets.

used

this

document,

“Company”

means

Group and its subsidiaries.

BASIS OF PRESENTATION

The unaudited

consolidated

financial statements

of the

Company

of June

30,

2022 and

December

31,

2021

and

for

the three

and six

months

ended June

30,

2022 and

2021

include

all

adjustments,

consisting

of normal

recurring accruals,

which, in the

opinion of management,

are necessary

for a

fair statement

of the results

on an

interim basis.

Certain financial

information,

which is

normally included

in annual

financial statements

prepared

in accordance

with accounting

principles generally

accepted in

the United States

of America (“GAAP”),

has been

omitted

since

not

required

for

interim

reporting

purposes.

The

December

31,

2021

consolidated

balance

sheet data was

derived from audited

financial statements

but does not

include all disclosures

required by

GAAP.

The

results

for

the

three

and

six

months

ended

June

30,

2022

and

2021

are

not

necessarily

indicative

the

results

for

a full

year.

These financial

statements

should be

read

in conjunction

with the

audited

consolidated

financial statements

and notes

thereto for

the years

ended December

31, 2021,

2020 and

2019, included

in the

Company’s most recent

Form 10-K filing.

The Company

consolidates

the results

of operations

and financial

position of

all voting

interest

entities ("VOE")

which

the

Company

has

a controlling

financial

interest

and

all

variable

interest

entities

("VIE")

which

the

Company is considered to be the primary beneficiary.

The consolidation assessment, including

the determination

whether

entity

qualifies

VIE

VOE,

depends

the

facts

and

circumstances

surrounding

each

entity.

The preparation

of financial

statements

in conformity

with GAAP

requires

management

to make

estimates

and

assumptions

that

affect

the reported

amounts

of assets

and liabilities

(and disclosure

of contingent

assets

and

liabilities) at the date of the financial

statements and the reported

amounts of revenues and expenses

during the

reporting period.

Ultimate actual results could differ,

possibly materially,

from those estimates.

All intercompany accounts

and transactions have been eliminated.

Certain

reclassifications

and

format

changes

have

been

made

prior

years’

amounts

conform

the

2022

presentation.

Application of Recently Issued Accounting

Standard Changes.

The Company

did not

adopt any

new accounting

standards

that had

a material

impact during

the three

and six

months

ended

June

30,

2022.

The

Company

assessed

the

adoption

impacts

recently

issued

accounting

standards

by the

Financial Accounting

Standards

Board on

the Company’s

consolidated

financial statements

well as

material updates

to previous

assessments,

if any,

from the

Company’s

Annual Report

on Form

10-K for

the year ended

December 31, 2021.

There were

no new material

accounting standards

issued in the

six months

ended June 30, 2022, that impacted Group.

Any

issued

guidance

and

pronouncements,

other

than

those

directly

referenced

above,

are

deemed

the

Company to be either not applicable or immaterial to

its financial statements.

INVESTMENTS

The

following

tables

show

amortized

cost,

allowance

for

credit

losses,

gross

unrealized

appreciation/(depreciation) and fair

value of fixed maturity securities available

for sale as of the dates indicated:

At June 30, 2022

Amortized

Allowance for

Unrealized

Fair

(Dollars in thousands)

Cost

Credit Losses

Appreciation

Depreciation

Value

Fixed maturity securities - available for

sale

U.S. Treasury securities and

obligations of

U.S. government agencies and corporations

1,385,608

7,193

(54,571)

1,338,230

Obligations of U.S. states and

political subdivisions

528,830

(151)

3,950

(24,348)

508,281

Corporate securities

7,505,558

(25,583)

31,650

(524,848)

6,986,777

Asset-backed securities

4,081,011

909

(183,241)

3,898,679

Mortgage-backed securities

Commercial

1,024,591

124

(72,820)

951,895

Agency residential

2,874,574

2,937

(186,656)

2,690,855

Non-agency residential

5,349

(208)

5,141

Foreign government securities

1,463,494

11,670

(115,421)

1,359,743

Foreign corporate securities

4,539,402

(16,980)

21,900

(403,480)

4,140,842

Total fixed

maturity securities - available for

sale

23,408,417

(42,714)

80,333

(1,565,593)

21,880,443

At December 31, 2021

Amortized

Allowance for

Unrealized

Fair

(Dollars in thousands)

Cost

Credit Losses

Appreciation

Depreciation

Value

Fixed maturity securities - available for

sale

U.S. Treasury securities and

obligations of

U.S. government agencies and corporations

1,407,256

23,720

(10,358)

1,420,618

Obligations of U.S. states and

political subdivisions

558,842

(151)

29,080

(1,150)

586,621

Corporate securities

7,443,535

(19,267)

195,210

(62,580)

7,556,898

Asset-backed securities

3,579,439

(7,679)

21,817

(11,848)

3,581,729

Mortgage-backed securities

Commercial

1,032,506

37,550

(5,690)

1,064,366

Agency residential

2,361,208

32,997

(18,873)

2,375,332

Non-agency residential

6,530

(16)

6,536

Foreign government securities

1,423,634

41,957

(28,079)

1,437,512

Foreign corporate securities

4,250,642

(2,641)

95,195

(64,536)

4,278,660

Total fixed

maturity securities - available for

sale

22,063,592

(29,738)

477,548

(203,130)

22,308,272

The amortized

cost and

fair value

of fixed

maturity securities

available for

sale are

shown in

the following

table

contractual

maturity.

Mortgage-backed

securities

are

generally

likely

prepaid

than

other

fixed

maturity securities. As the stated

maturity of such securities may not

be indicative of actual maturities, the totals

for mortgage-backed and

asset-backed securities

are shown separately.

At June 30, 2022

At December 31, 2021

Amortized

Fair

Amortized

Fair

(Dollars in thousands)

Cost

Value

Cost

Value

Fixed maturity securities – available for sale:

Due in one year or less

1,261,875

1,263,628

1,398,742

1,398,006

Due after one year through five years

7,565,293

7,187,705

7,075,077

7,154,468

Due after five years through ten years

4,746,315

4,285,866

5,003,792

5,100,672

Due after ten years

1,849,409

1,596,674

1,606,298

1,627,163

Asset-backed securities

4,081,011

3,898,679

3,579,439

3,581,729

Mortgage-backed securities:

Commercial

1,024,591

951,895

1,032,506

1,064,366

Agency residential

2,874,574

2,690,855

2,361,208

2,375,332

Non-agency residential

5,349

5,141

6,530

6,536

Total fixed maturity securities

23,408,417

21,880,443

22,063,592

22,308,272

During

the

second

quarter

2022,

the

Company

purchased

fixed

maturity

securities

classified

held

maturity

with

amortized

cost

71.8

million

and

fair

value

71.2

million

June

30,

2022.

Fixed

maturity securities held to maturity

consist of debt securities for which the

Company has both the positive intent

and ability

to hold

maturity or

redemption

and

are

reported

amortized

cost,

net of

the current

expected

credit loss

allowance.

Interest

income for

fixed

maturity

securities held

to maturity

is determined

in the

same

manner as interest income for

fixed maturity securities available

for sale.

These fixed maturity

securities held to maturity

are comprised of asset-backed

securities, with an amortized

cost

of $

62.8

million, gross

unrealized appreciation

of $

0.1

million, gross

unrealized depreciation

of $

0.2

million, and

fair

value

62.4

million,

and

corporate

securities,

with

amortized

cost

9.0

million,

unrealized

appreciation of

0.0

million, unrealized

depreciation of

0.1

million, and fair

value of

8.8

million, as of

June 30,

2022. The

contractual

maturity

of the

corporate

securities

held to

maturity

5 years

as of

June 30,

2022. The

stated maturity of asset-backed

securities held to maturity may not be indicative

of actual maturities.

The Company evaluated

fixed maturity

securities classified as

held to maturity

for current

expected credit

losses

June

30,

2022

utilizing

risk

characteristics

each

security,

including

credit

rating,

remaining

time

maturity,

adjusted

for

prepayment

considerations,

and

subordination

level,

and

applying

default

and

recovery

rates,

which

include

the

incorporation

historical

credit

loss

experience

and

macroeconomic

forecasts,

develop an estimate

of current expected

credit losses. These

fixed maturities classified

as held to maturity

are of

high

credit

quality

and

are

all

rated

investment

grade

June

30,

2022.

The

allowance

for

credit

losses

expected to be

recognized over

the remaining life

of the fixed

maturity securities classified

as held to maturity

0.4

million as of June 30, 2022.

The changes

net

unrealized

appreciation

(depreciation)

for

the

Company’s

available

for

sale

and

short-term

investments are derived

from the following sources for

the periods indicated:

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

2022

2021

Increase (decrease) during the period between the fair value and cost

of investments carried at fair value, and deferred taxes thereon:

Fixed maturity securities - available for sale and short-term investments

(832,237)

97,127

(1,759,644)

(235,581)

Change in unrealized appreciation (depreciation), pre-tax

(832,237)

97,127

(1,759,644)

(235,581)

Deferred tax benefit (expense)

115,714

(11,366)

232,123

29,061

Change in unrealized appreciation (depreciation),

net of deferred taxes, included in shareholders’ equity

(716,523)

85,761

(1,527,521)

(206,520)

The tables

below display

the aggregate

fair value

and gross

unrealized

depreciation

of fixed

maturity securities

available for

sale, by security

type and contractual

maturity,

in each case

subdivided according

to length

of time

that individual securities had been in a continuous unrealized

loss position for the periods indicated.

Duration of Unrealized Loss at June

30, 2022 By Security Type

Less than 12 months

Greater than 12 months

Total

Gross

Unrealized

(Dollars in thousands)

Fair Value

Depreciation

Fair Value

Depreciation

Fair Value

Depreciation

Fixed maturity securities - available for

sale

U.S. Treasury securities and

obligations of

U.S. government agencies and corporations

949,790

(39,469)

199,364

(15,102)

1,149,154

(54,571)

Obligations of U.S. states and

political subdivisions

210,645

(21,935)

12,067

(2,366)

222,712

(24,301)

Corporate securities

4,911,170

(420,055)

779,916

(104,127)

5,691,086

(524,182)

Asset-backed securities

3,623,327

(180,189)

42,484

(3,052)

3,665,811

(183,241)

Mortgage-backed securities

Commercial

926,417

(69,573)

21,217

(3,247)

947,634

(72,820)

Agency residential

1,939,847

(116,105)

579,272

(70,551)

2,519,119

(186,656)

Non-agency residential

4,402

(188)

739

(20)

5,141

(208)

Foreign government securities

972,856

(73,986)

177,226

(41,435)

1,150,082

(115,421)

Foreign corporate securities

3,100,785

(329,255)

479,179

(73,849)

3,579,964

(403,104)

Total

16,639,239

(1,250,755)

2,291,464

(313,749)

18,930,703

(1,564,504)

Securities where an allowance for credit

loss was recorded

7,213

(1,089)

7,213

(1,089)

Total fixed

maturity securities

16,646,452

(1,251,844)

2,291,464

(313,749)

18,937,916

(1,565,593)

Duration of Unrealized Loss at June

30, 2022 By Maturity

Less than 12 months

Greater than 12 months

Total

Gross

Unrealized

(Dollars in thousands)

Fair Value

Depreciation

Fair Value

Depreciation

Fair Value

Depreciation

Fixed maturity securities

- available for sale

Due in one year or less

660,642

(4,878)

90,052

(7,477)

750,694

(12,355)

Due in one year through five years

5,163,545

(300,876)

818,035

(79,426)

5,981,580

(380,302)

Due in five years through ten years

3,087,307

(359,536)

598,581

(114,767)

3,685,888

(474,303)

Due after ten years

1,233,752

(219,410)

141,084

(35,209)

1,374,836

(254,619)

Asset-backed securities

3,623,327

(180,189)

42,484

(3,052)

3,665,811

(183,241)

Mortgage-backed securities

2,870,666

(185,866)

601,228

(73,818)

3,471,894

(259,684)

Total

16,639,239

(1,250,755)

2,291,464

(313,749)

18,930,703

(1,564,504)

Securities where an allowance for credit

loss was recorded

7,213

(1,089)

7,213

(1,089)

Total fixed

maturity securities

16,646,452

(1,251,844)

2,291,464

(313,749)

18,937,916

(1,565,593)

The aggregate

fair

value

and gross

unrealized

losses related

fixed

maturity

securities available

for

sale in

unrealized

loss

position

June 30,

2022

were

18.9

billion

and

1.6

billion,

respectively.

The

fair

value

securities for the

single issuer (the United

States government)

whose securities comprised

the largest unrealized

loss

position

June 30,

2022,

did

not

exceed

5.3

the

overall

fair

value

the

Company’s

fixed

maturity

securities available

for sale.

The fair

value of

the securities

for the

issuer with

the second

largest unrealized

loss

position at June 30,

2022, comprised less than

1.3

% of the Company’s

fixed maturity

securities available

for sale.

In addition,

as indicated

on the

above

table,

there

was

no significant

concentration

of unrealized

losses

in any

one market sector.

The $

1.3

billion of unrealized

losses related to

fixed maturity securities available

for sale that

have been in an unrealized

loss position for

less than one year were generally

comprised of foreign and domestic

corporate securities,

agency residential and

commercial mortgage-backed

securities, asset-backed

securities, U.S

government

securities and

foreign

government

securities.

Of these

unrealized

losses, $

1.1

billion were

to securities

that were

rated

investment

grade by

at least

one nationally

recognized

rating

agency.

The $

313.7

million of unrealized

losses related to

fixed maturity securities

available for sale

in an unrealized

loss position for

than

one

year

primarily

domestic

and

foreign

corporate

securities,

foreign

government

securities,

agency

residential

mortgage-backed

securities

and

U.S.

government

securities.

these

unrealized

losses,

300.6

million

were

securities

that

were

rated

investment

grade

least

one

nationally

recognized

rating

agency.

In all

instances, there

were no

projected cash

flow shortfalls

to recover

the full

book

value of

the investments

and the

interest

obligations.

The mortgage

-backed

securities still

have excess

credit

coverage

and

are

current

interest

and

principal

payments.

Based

upon

the

Company’s

current

evaluation

securities

unrealized

loss

position

June

30,

2022,

the

unrealized

losses

are

due

changes

interest

rates

and

non-issuer

specific

credit

spreads

and

are

not

credit-related.

addition,

the

contractual

terms

these

securities

not

permit

these

securities

settled

price

less

than

their

amortized cost.

The

Company,

given

the

size

its

investment

portfolio

and

capital

position,

does

not

have

the

intent

sell

these securities; and it is more

likely than not that

the Company will not have

to sell the security before

recovery

its

cost

basis.

addition,

all

securities

currently

unrealized

loss

position

are

current

with

respect

principal and interest payments.

The tables

below display

the aggregate

fair value

and gross

unrealized

depreciation

of fixed

maturity securities

available for

sale, by security

type and contractual

maturity,

in each case

subdivided according

to length

of time

that

individual

securities

had

been

continuous

unrealized

loss

position

for

the

periods

indicated.

The

amounts presented

in the

tables below

include $

15.7

million of

fair value

and $(

0.4

) million

of gross

unrealized

depreciation

December

31,

2021

fixed

maturity

securities

available

for

sale

for

which

the

Company has recorded an allowance

for credit losses.

Duration of Unrealized Loss at December

31, 2021 By Security Type

Less than 12 months

Greater than 12 months

Total

Gross

Unrealized

(Dollars in thousands)

Fair Value

Depreciation

Fair Value

Depreciation

Fair Value

Depreciation

Fixed maturity securities

- available for sale

U.S. Treasury securities and

obligations of

U.S. government agencies and corporations

504,168

(6,264)

91,735

(4,094)

595,903

(10,358)

Obligations of U.S. states and

political subdivisions

51,094

(1,038)

2,558

(112)

53,652

(1,150)

Corporate securities

2,132,576

(38,316)

472,831

(24,264)

2,605,407

(62,580)

Asset-backed securities

1,954,079

(11,180)

41,823

(668)

1,995,902

(11,848)

Mortgage-backed securities

Commercial

221,852

(2,854)

40,496

(2,836)

262,348

(5,690)

Agency residential

1,101,215

(12,178)

279,697

(6,695)

1,380,912

(18,873)

Non-agency residential

2,320

(14)

156

(2)

2,476

(16)

Foreign government securities

392,447

(9,709)

100,673

(18,370)

493,120

(28,079)

Foreign corporate securities

1,734,510

(46,247)

210,722

(18,289)

1,945,232

(64,536)

Total fixed

maturity securities

8,094,261

(127,800)

1,240,691

(75,330)

9,334,952

(203,130)

Duration of Unrealized Loss at December

31, 2021 By Maturity

Less than 12 months

Greater than 12 months

Total

Gross

Unrealized

(Dollars in thousands)

Fair Value

Depreciation

Fair Value

Depreciation

Fair Value

Depreciation

Fixed maturity securities - available for

sale

Due in one year or less

129,860

(2,415)

136,827

(11,832)

266,687

(14,247)

Due in one year through five years

2,165,467

(35,264)

446,247

(28,685)

2,611,714

(63,949)

Due in five years through ten years

1,727,823

(47,413)

244,454

(22,038)

1,972,277

(69,451)

Due after ten years

791,645

(16,482)

50,991

(2,574)

842,636

(19,056)

Asset-backed securities

1,954,079

(11,180)

41,823

(668)

1,995,902

(11,848)

Mortgage-backed securities

1,325,387

(15,046)

320,349

(9,533)

1,645,736

(24,579)

Total fixed

maturity securities

8,094,261

(127,800)

1,240,691

(75,330)

9,334,952

(203,130)

The

aggregate

fair

value

and

gross

unrealized

losses

investments

unrealized

loss

position

December 31, 2021

were $

9.3

billion and

203.1

million, respectively.

The fair

value of

securities for

the single

issuer

(the

United

States

government)

whose

securities

comprised

the

largest

unrealized

loss

position

December

31,

2021,

did

not

exceed

2.7

the

overall

fair

value

the

Company’s

fixed

maturity

securities

available for sale.

The fair value of the securities

for the issuer with the second

largest unrealized

loss comprised

less

than

0.5

the

Company’s

fixed

maturity

securities

available

for

sale.

addition,

indicated

the

above

table,

there was

no significant

concentration

of unrealized

losses

in any

one market

sector.

The $

127.8

million of unrealized

losses related

to fixed

maturity securities

available for

sale that

have been

in an unrealized

loss

position

for

less

than

one

year

were

generally

comprised

domestic

and

foreign

corporate

securities,

agency

residential

mortgage-backed

securities,

asset-backed

securities

and

foreign

government

securities.

these unrealized

losses,

116.2

million were

securities

that

were rated

investment

grade

least

one

nationally

recognized

rating

agency.

The

75.3

million

unrealized

losses

fixed

maturity

securities available

for

sale in

an unrealized

loss position

for

more than

one year

primarily to

domestic

and

foreign

corporate

securities,

foreign

government

securities

and

agency

residential

mortgage-backed

securities.

Of these unrealized

losses, $

72.3

million were related

to securities

that were rated

investment grade

by at least one

nationally recognized

rating agency.

In all instances,

there were no projected

cash flow shortfalls

recover

the

full

book

value

the

investments

and

the

interest

obligations.

The

mortgage-backed

securities still have excess

credit coverage and are

current on interest and

principal payments.

The components of net investment

income are presented in the table

below for the periods indicated:

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

2022

2021

Fixed maturities

168,769

148,262

316,995

289,178

Equity securities

4,600

3,493

8,746

8,331

Short-term investments and cash

6,587

773

6,746

953

Other invested assets:

Limited partnerships

47,584

239,966

136,021

354,299

Other

13,991

25,855

25,822

31,874

Gross investment income before

adjustments

241,531

418,349

494,330

684,635

Funds held interest income (expense)

772

3,287

4,457

11,253

Future policy benefit reserve income (expense)

(128)

(170)

(350)

(461)

Gross investment income

242,175

421,466

498,437

695,427

Investment expenses

(16,197)

(14,371)

(29,629)

(27,919)

Net investment income

225,978

407,095

468,808

667,508

The

Company

records

results

from

limited

partnership

investments

the

equity

method

accounting

with

changes

value

reported

through

net

investment

income.

The

net

investment

income

from

limited

partnerships is dependent

upon the Company’s

share of the net asset

values of interests

underlying each limited

partnership.

Due

the

timing

receiving

financial

information

from

these

partnerships,

the

results

are

generally

reported

one

month

quarter

lag.

the

Company

determines

there

has

been

significant

decline in value

of a limited

partnership during

this lag period,

a loss will

be recorded

in the period

in which the

Company identifies the decline.

The Company had

contractual commitments

to invest

up to an additional

2.4

billion in limited partnerships

and

private

placement

loan

securities

June

30,

2022.

These

commitments

will

funded

when

called

accordance

with

the

partnership

and

loan

agreements,

which

have

investment

periods

that

expire,

unless

extended, through

2026

The Company

participates in

a private

placement liquidity

sweep facility

(“the facility”).

The primary purpose

the

facility

enhance

the

Company’s

return

its

short-term

investments

and

cash

positions.

The

facility

invests

high

quality,

short-duration

securities

and

permits

daily

liquidity.

The

Company

consolidates

its

participation in

the facility.

As of

June 30,

2022, the

fair value

of investments

in the

facility consolidated

within

the Company’s balance sheets

was $

377.7

million.

Variable Interest

Entities

The

Company

engaged

with

various

special

purpose

entities

and

other

entities

that

are

deemed

VIEs

primarily

investor

through

normal

investment

activities

but

also

investment

manager.

VIE

entity that

either has

investors

that lack

certain essential

characteristics

of a

controlling

financial interest,

such

as simple

majority kick-out

rights, or

lacks sufficient

funds to

finance its

own activities

without financial

support

provided

other

entities.

The

Company

performs

ongoing

qualitative

assessments

its

VIEs

determine

whether the Company has

a controlling financial interest

in the VIE and therefore

is the primary beneficiary.

The

Company

deemed to

have

controlling

financial

interest

when

has

both

the

ability to

direct

the

activities

that most

significantly impact

the economic

performance of

the VIE

and the

obligation to

absorb losses

or right

receive

benefits

from

the

VIE

that

could

potentially

significant

the

VIE.

Based

the

Company’s

assessment,

if it

determines

the

primary

beneficiary,

the

Company

consolidates

the

VIE

the

Company’s

Consolidated Financial

Statements.

As of June

30, 2022 and

December 31, 2021, the

Company did

t hold any

securities for which it is the primary beneficiary.

The

Company,

through

normal

investment

activities,

makes

passive

investments

general

and

limited

partnerships

and other

alternative

investments.

For these

non-consolidated

VIEs, the

Company has

determined

it is not the

primary beneficiary as

it has no ability

to direct activities

that could significantly

affect the economic

performance

the

investments.

The

Company’s

maximum

exposure

loss

June

30,

2022

and

December 31, 2021

is limited

to the

total

carrying value

of $

3.1

billion and

2.9

billion,

respectively,

which are

included in

general

and limited

partnerships

and

other alternative

investments

in Other

Invested

Assets

in the

Company's

Consolidated

Balance

Sheets.

June

30,

2022,

the

Company

has

outstanding

commitments

totaling

2.2

billion

whereby

the

Company

committed

fund

these

investments

and

may

called

the

partnership during

the commitment period

to fund

the purchase

of new investments

and partnership

expenses.

These

investments

are

generally

passive

nature

that

the

Company

does

not

take

active

role

management.

addition,

the

Company

makes

passive

investments

structured

securities

issued

VIEs

for

which

the

Company

not

the

manager.

These

investments

are

included

asset-backed

securities,

which

includes

collateralized loan

obligations and are

reported in fixed

maturities, available

-for-sale and fixed

maturities held to

maturity.

The

Company

has

not

provided

financial

other

support

with

respect

these

investments

other

than its

original investment.

For these

investments,

the Company

determined

it is

not the

primary beneficiary

due

the

relative

size

of the

Company’s

investment

comparison

the principal

amount

of the

structured

securities issued by the

VIEs, the level of

credit subordination

which reduces the Company’s

obligation to absorb

losses

right

receive

benefits

and

the

Company’s

inability

direct

the

activities

that

most

significantly

impact the economic performance

of the VIEs.

The Company’s

maximum exposure

to loss on

these investments

is limited to the amount of the Company’s

investment.

The components of net gains (losses) on investments

are presented in the tables below for

the periods indicated:

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

2022

2021

Fixed maturity securities:

Allowance for credit losses

(1,490)

(15,927)

(13,343)

(22,904)

Net realized gains (losses) from dispositions

(15,560)

10,060

(12,761)

19,234

Equity securities, fair value:

Net realized gains (losses) from dispositions

(30,926)

3,755

(42,713)

9,993

Gains (losses) from fair value adjustments

(188,924)

103,525

(325,784)

132,581

Other invested assets

583

2,748

4,735

4,094

Short-term investments gain (loss)

(52)

(26)

Total net gains (losses) on investments

(236,265)

104,109

(389,892)

143,011

(Some amounts may not reconcile due to rounding.)

Roll Forward of Allowance for Credit Losses – Fixed maturities, available for sale

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

Obligations of

U.S. States

Foreign

U.S. States

Foreign

Corporate

Asset-Backed

and Political

Corporate

Asset-Backed

and Political

Corporate

Securities

Subdivisions

Securities

Total

Securities

Subdivisions

Securities

Total

(Dollars in thousands)

Beginning Balance

(20,049)

(7,679)

(151)

(13,712)

(41,591)

(19,267)

(7,679)

(151)

(2,641)

(29,738)

Credit losses on securities where credit

losses were not previously recorded

(4,887)

(4,706)

(9,593)

(6,816)

(15,890)

(22,706)

Increases in allowance on previously

impaired securities

(654)

(732)

(1,386)

(654)

(732)

(1,386)

Decreases in allowance on previously

impaired securities

Reduction in allowance due to disposals

7,679

2,170

9,856

1,154

7,679

2,283

11,116

Balance as of June 30, 2022

(25,583)

(151)

(16,980)

(42,714)

(25,583)

(151)

(16,980)

(42,714)

Roll Forward of Allowance for Credit Losses – Fixed maturities,

available for sale

Three Months Ended June 30, 2021

Six Months Ended June 30, 2021

Foreign

Corporate

Asset-Backed

Corporate

Asset-Backed

Government

Corporate

Securities

Total

Securities

Total

(Dollars in thousands)

Beginning Balance

(3,603)

(4,915)

(205)

(8,723)

(1,220)

(22)

(503)

(1,745)

Credit losses on securities where credit

losses were not previously recorded

(13,537)

(1,055)

(14,592)

(15,920)

(4,915)

(1,055)

(21,890)

Increases in allowance on previously

impaired securities

(1,468)

Decreases in allowance on previously

impaired securities

Reduction in allowance due to disposals

133

298

453

Balance as of June 30, 2021

(18,475)

(4,915)

(1,260)

(24,650)

(18,475)

(4,915)

(1,260)

(24,650)

The proceeds

and split

between gross

gains and

losses from

dispositions of

fixed maturity

and equity

securities,

are presented in the table below

for the periods indicated:

Three Months Ended

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

2022

2021

Proceeds from sales of fixed maturity securities, available for sale

353,160

371,459

772,148

599,737

Gross gains from dispositions

7,456

19,870

27,578

34,734

Gross losses from dispositions

(23,016)

(9,810)

(40,339)

(15,500)

Proceeds from sales of equity securities

347,714

193,350

437,815

474,663

Gross gains from dispositions

4,135

5,803

7,643

18,107

Gross losses from dispositions

(35,061)

(2,048)

(50,356)

(8,114)

RESERVE FOR LOSSES, LAE AND FUTURE

POLICY BENEFIT RESERVE

Activity in the reserve for losses and LAE is summarized

for the periods indicated:

Six Months Ended

June 30,

(Dollars in thousands)

2022

2021

Gross reserves beginning of period

19,009,486

16,322,143

Less reinsurance recoverables on unpaid losses

(1,946,365)

(1,843,691)

Net reserves beginning of period

17,063,121

14,478,452

Incurred related to:

Current year

3,667,769

3,302,013

Prior years

(1,659)

(4,453)

Total incurred losses and LAE

3,666,110

3,297,560

Paid related to:

Current year

978,599

710,677

Prior years

1,483,844

1,399,579

Total paid losses and LAE

2,462,443

2,110,256

Foreign exchange/translation adjustment

(259,484)

35,651

Net reserves end of period

18,007,304

15,701,407

Plus reinsurance recoverables on unpaid losses

1,985,750

1,862,760

Gross reserves end of period

19,993,054

17,564,167

(Some amounts may not reconcile due

to rounding.)

Current year

incurred losses

were $

3.7

billion and $

3.3

billion for the

six months ended

June 30, 2022

and 2021,

respectively.

Gross and net

reserves increased

for the six

months ended June

30, 2022, reflecting

an increase

underlying

exposure

due

to premium

growth

and

the

impact

of $

45.0

million

of incurred

losses

the

Ukraine/Russia war,

partially offset by a reduction of $

115.0

million in current year catastrophe

losses.

The war in

the Ukraine

is ongoing

and an evolving

event. Economic

and legal

sanctions have

been levied against

Russia,

specific

named

individuals

and

entities

connected

the

Russian

government,

well

businesses

located

the

Russian

Federation

and/or

owned

Russian

nationals

numerous

countries,

including

the

United States.

The significant

political and

economic uncertainty

surrounding

the war

and associated

sanctions

have

impacted

economic and

investment

markets

both within

Russia and

around

the world.

The Company

has

recorded

45.0

million

of incurred

underwriting

losses

the

Ukraine/Russia

war for

the

three

and

six

months ended June 30, 2022.

FAIR VALUE

GAAP guidance

regarding

fair

value

measurements

addresses

how

companies

should

measure

fair

value

when

they are

required to

use fair

value measures

for recognition

or disclosure

purposes under

GAAP and

provides

common

definition

of fair

value

be used

throughout

GAAP.

defines

fair

value

the

price that

would

received

sell an

asset

or paid

transfer

a liability

in an

orderly

fashion

between market

participants

at the

measurement

date.

addition,

establishes

three-level

valuation

hierarchy

for

the

disclosure

of fair

value

measurements.

The valuation

hierarchy

is based

on the

transparency

of inputs

the valuation

of an

asset or

liability.

The level in the

hierarchy within

which a given fair

value measurement

falls is determined

based on the

lowest

level

input

that

significant

the

measurement,

with

Level

being

the

highest

priority

and

Level

being the lowest priority.

The levels in the hierarchy

are defined as follows:

Level 1:

Inputs

the valuation

methodology

are

observable

inputs that

reflect unadjusted

quoted

prices for

identical assets or liabilities in an active market;

Level 2:

Inputs

the

valuation

methodology

include

quoted

prices

for

similar

assets

and

liabilities

active

markets,

and

inputs

that

are

observable

for

the

asset

liability,

either

directly

indirectly,

for

substantially the full term of the financial instrument;

Level 3:

Inputs to the valuation methodology are

unobservable and significant to the fair

value measurement.

The

Company’s

fixed

maturity

and

equity

securities

are

primarily

managed

third

party

investment

asset

managers.

The

investment

asset

managers

managing

publicly

traded

securities

obtain

prices

from

nationally

recognized

pricing

services.

These

services

seek

utilize

market

data

and

observations

their

evaluation

process.

They use pricing

applications that

vary by asset

class and incorporate

available market

information and

when fixed

maturity securities

do not trade

on a daily

basis the services

will apply available

information through

processes

such

benchmark

curves,

benchmarking

securities,

sector

groupings

and

matrix

pricing.

addition,

they

use

model

processes,

such

the

Option

Adjusted

Spread

model

develop

prepayment

and

interest rate scenarios

for securities that have

prepayment features.

The investment

asset managers

do not

make any

changes to

prices received

from either

the pricing

services or

the

investment

brokers.

addition,

the

investment

asset

managers

have

procedures

place

review

the

reasonableness

the

prices

from

the

service

providers

and

may

request

verification

the

prices.

The

Company

also

continually

performs

quantitative

and

qualitative

analysis

of prices,

including

but

not

limited

initial

and

ongoing

review

pricing

methodologies,

review

prices

obtained

from

pricing

services

and

third

party

investment

asset

managers,

review

pricing

statistics

and

trends,

and

comparison

prices

for

certain

securities

with

secondary

price

source

for

reasonableness.

material

variances

were

noted

during

these

price validation

procedures.

In limited

situations,

where financial

markets

are inactive

or illiquid,

the Company

may use

its own

assumptions

about future

cash flows

and risk-adjusted

discount

rates

to determine

fair value.

June

30,

2022,

2.2

billion

fixed

maturities

were

fair

valued

using

unobservable

inputs.

The

majority

these fixed maturities were

valued by investment

managers’ valuation

committees and many

of these fair values

were

substantiated

valuations

from

independent

third

parties.

The

Company

has

procedures

place

evaluate

these independent

third party

valuations.

At December

31, 2021,

2.1

billion of

fixed maturities

were

fair valued using unobservable inputs.

The Company internally

manages a public equity

portfolio which had

a fair value at

June 30, 2022 and

December

31, 2021 of $

896.9

million and $

1.3

billion, respectively.

During the fourth

quarter of 2021,

the Company

began

internally

manage

portfolio

of collateralized

loan

obligations

included

asset-backed

securities,

available

for

sale,

which

had

fair

value

2.1

billion

and

2.0

billion

June

30,

2022

and

December

31,

2021,

respectively.

All

prices

for

these

securities

were

obtained

from

publicly

published

sources

nationally

recognized pricing vendors.

Equity

securities

denominated

U.S.

currency

with

quoted

prices

active

markets

for

identical

assets

are

categorized

Level

since

the

quoted

prices

are

directly

observable.

Equity

securities

traded

foreign

exchanges are

categorized as

Level 2 due to

the added input of

a foreign exchange

conversion

rate to determine

fair value.

The Company uses foreign currency exchange

rates published by national

ly recognized sources.

Fixed maturity

securities listed in

the tables have

been categorized

as Level 2, since

a particular security may

not

have

traded

but

the

pricing

services

are

able

use

valuation

models

with

observable

market

inputs

such

interest rate yield

curves and prices for similar fixed

maturity securities in terms of issuer,

maturity and seniority.

For

foreign

government

securities

and

foreign

corporate

securities,

the

fair

values

provided

the

third

party

pricing services

in local

currencies, and

where applicable,

are converted

to U.S.

dollars using

currency exchange

rates from nationally recognized

sources.

addition

the

valuations

from

investment

managers,

some

the

fixed

maturities

with

fair

values

categorized

Level

3 result

when

prices

are

not

available

from

the

nationally

recognized

pricing

services

and

are

derived

using

unobservable

inputs.

The

Company

will

value

the

securities

with

unobservable

inputs

using

comparable

market

information

receive

fair

values

from

investment

managers.

The

investment

managers

may obtain

non-binding price

quotes for

the securities

from brokers.

The single

broker

quotes are

provided by

market

makers

broker-dealers

who

are

recognized

market

participants

the

markets

which

they

are

providing the quotes.

The prices received from

brokers are

reviewed for

reasonableness by the

third party asset

managers

and

the

Company.

the

broker

quotes

are

for

foreign

denominated

securities,

the

quotes

are

converted to U.S. dollars

using currency exchange rates

from nationally recognized

sources.

The composition

and

valuation

inputs

for

the

presented

fixed

maturities

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	6th grade V good

Everest Re (EG) 10-Q2022 Q2 Quarterly report

Content analysis