RE - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Everest Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call off to Jon Levenson with Everest.

Jon Levenson

to year-end Re earnings welcome fourth Limited and and quarter conference morning, the Group Everest XXXX Good call. President Mark The are Everest Executive Officer; Juan call Financial Vice Kociancic, Andrade, President Executives and Chief leading and Chief today's Officer. Executive

members by We Everest the other also management of are joined team.

and noted refer to these call are comments Management similar to extensive begin, respect disclosures Juan release I that, filings. today's to the certain our risks, regarding Everest to and that items over the forward-looking comments With preface and Andrade. we noting subject in assumptions SEC Management These estimates, with are projections Before on statements. I in will as by call may turn financial supplement. non-GAAP also financial uncertainties filings reconciled the earnings include measures.

Juan Andrade

target. book shareholders, profitable in more even strategic years positioned to with a of you a continued record Thank entered XXXX well return to for shareholder strong talent, earnings finished growth natural today. balance thank reflect for Good generated our on This milestone exceptional year renewal and total our expanding sheet growth And With to achieved a income. we and profitable business out year margins everyone. strong exceptional Jon. joining season, We in expanding investment global both XX% profitability coming results momentum led well-executed strong you objectives. us value for a morning proposition, a against power the drove January a solid reinsurance and pivotal Everest. underwriting and businesses X quarter XXXX of the and deliver of These year was $X.X income for value of our and create billion XX.X% net the our diversified of catastrophes. elevated a in and the franchises,

for our priorities our about and first driven contributions colleagues customers. our our investments global that continued year. industry. the our We execution strategic challenging pandemic earnings insurance, a details we and of and greater disciplined of foundation and I less on of business. Despite want people, significant discipline drives our this strategic three for performance. provide advanced XXXX with I solutions In global delivered my superior and in was the optimizing Before technology, core in are profitability reinsurance, results, climate make our accelerated to to XXXX, priorities, products acknowledge volatility class infrastructure the we many building and investments drivers, all key that catastrophes,

franchises. underwriting our First,

P&C leading build continue our market reinsurance. to We in position on global

As evidenced a for in $XXX outcome preferred and provider with line a the an in our growth in strong this year. underwriting both is insurance in consecutive solid footprint. year. and increased XXXX focus scaling underwriting diverse products, franchises, markets records context diversifying, margins, and through relevance execution catastrophe our with to is demand market a the in and led meaningful And relevant client billion responding of by quarterly particularly that strategy top franchise is solutions, more expanding a Focused increasing product and distribution offerings driven and insurance driving

current January plan. diversification, This executing year and more continued success and in diversified, a returns. portfolio our more clearly are example recent this stronger, Our is strategy measured disciplined a focus profitable reduction, profitable. to being underwriting volatility A yielding into defined renewal and resulted X our average

path conditions rapidly data, operational changing and to responsive enabled that becoming more to optimizing technology manage greater made and how organization a model high depth us to market excellence quality in with approach performance model XXXX and to is pivot with XXXX driven Reflecting inclusive this. accomplishments our dimension segment Everest to inroads supports investments, I part and To the that this regard superior of digitally and through bringing helps that by year, end, proud well-balanced, in was we the and past culture diverse, drive our prudent to excellent portfolio material and analytics commitment of are supports how our on Our a on we big am accomplish we a to clients entrepreneurial we ready keeps in With precision. meaningful a purpose speed and an to risk that returns. franchises credit driven do. investment everything agile

sustainable a most for Our reflected long core as our the strategy term UN signatory continued by to recently pillar of decision become a emphasis of was insurance. our principles ESG to

is our around global talent industry the the organization exceptional and we us bring more help employer our attracted drive the will globe. year throughout offering be to proud of chapter events profitable an to across who talents Finally, to customers performance. Everest next of this and our growth drives choice in and

gross the our of grew across XX.X to we turn continued premiums In in combined underwriting Growth and XXXX. In in group broad our expansion diversified for margin with and Let’s and XX.X XX%. our quarter, with of fourth financial year the results division. both reflecting segments. a profit attritional was Beginning the million an insurance we generated $XXX the fourth by written results. full ratio quarter, combined quarter ratio

in new catastrophe written was for manage billion. year-over-year industry’s record These The in expenses continue reflecting strategic XX% over enhance and written optimize priorities grew is drive full than underwriting year XX% billion combined gross disciplined portfolio X% the including our the our to was demonstrate estimated Net setting Prudently losses the $XX XX.X% XXXX, for which grew premiums efficiencies. margin. our $XXX billion operational against company less X.X of progress Turning reduced attritional the to year. of volatility. to group loss a and results group XX.X The ratio XXXX, to premiums average the ratio combined

Let’s results. our reinsurance turn to

combined and over the up was XXXX. This division with profitable programs. casualty and Gross broad increase opportunities strategy quarter ratio underwriting the XX.X. the underlying in in quarter the targeted with The quarter The the had XX% of successful a our rate and casualty quarter profile a gross returns. written superior increases attritional fourth was division combined our and finished XX.X growth, written year ratio These to increased premium generated billion Our strong based with the in We a fourth results XXXX X risk and of attritional and growth of market growth ratio in XX%. our reflect improvement reflecting growth supported core property ratio growth combined ended exceeding profit of for reshaping excellent economic with by combined the XXX partners, portfolio, progress achieve our discipline. an performance in a and reinsurance premium execution million our continued expense a trading on-going of the solidly margin to participate XX.X was fourth on XX.X.

continue property We of and to improved diversify balance exposures. actively our portfolio with casualty reinsurance an

for and decades trading less disciplined a of getting with overall volatility gave built strong optimize focussed capacity The with to loss. distinct advantage. appropriately three We growing progress these about three cat strategy returns. average volatile focussed are key top breadth Two, portfolio relationships focused meaningful over and with size us We period and underwriters. combined our and advancing that decreasing objectives. our the And property a XXXX market and to started risk. book our in exposure non-catastrophe preferred priorities maximized One, made position reducing with by cleared X, renewal January continue capital

vessels. precise Our increases and meet lines pricing team and economics with were not and the our We capital did lines on uptake. lines, maintain financial Rate where effective was where above returned our property the deployed focused improving across we book. property favorable property seeing most highest loss in discipline casualty

were participation layers. Despite loss renewals For on in outside retro came how example, loss particularly ample there seasons available in restructured ensure to late for Europe the higher effective impacted aggregate covers. of Many and together, catastrophe was programs most capacity Germany. programs property

was upward successfully property, we our reduce continued our P&C excellent terms. and loss Retail same catastrophe meaningfully premium market retro, targeted book on reductions pressure portfolio layers, clients rate growing targeted share. in notably at with gross growth property, lines, achieved We to European casualty and excessive time working economics, as lower rata U.K. overall the Within While casualty drive portfolio. catastrophe ceding across improvements in competitive property as Continental well achieve reduced Overall, helped in zones. key we quota margin better loss in [ph] our commissions, at business our potential exposure while pro the underlying peak

renewable We season. proud team's margin dynamic have a book. higher during more profitable of a discipline I'm and the

Logan comments few is property and Logan. long the average about role with our alignment its uniquely in a positioned Mt. portfolio. plays an given excellent term Mt. aspirations, growth Now important

new with prospects the investors. we We the have and We platform a in investor’s about customized pipeline remain strong objectives. continue prospective of Logan to meet investing for optimistic products

which and key our on North These in structure, expand Latin promotions capitalize In to a further business leadership the hires, income market leadership. streamline optimize is underwriting Mt. our and And positioned better promotions and already also support today we to organization. internationally. year, is summary, benefiting our reinsurance our and results, and the During and successful talents, strong strengthened opportunities, in market of were positions part America, effort elsewhere bench Logan. America

growth outlined in Now term excellent over the and We an a fourth the XX%. in a over underlying consecutive the quarter, the This quarter billion strategic continued supported by gross quarter written in in for up premiums bottom resulted both let's fourth plan. year, fourth turn gross quarter. was line and in line for top had or record progress profitability, in billion The growth factors. influenced Insurance Insurance division. growth XX% X by X to achieved strong our XXXX. few long the insurance written premium third in delivering targets was performance the

to increasing rebounds. continue we as exposures First, from the benefit economy

across market renewal our are workers excluding rates digit retention, favorable where increases down. rate conditions target slightly strong compensation, of all double and classes, Second,

sales. execution Third, diversified metrics we sales network. with and sharpened execution, a we based our And to quantitative our deepened approach distribution and

retail channels we about accidents retail [ph] where a XX.X margins. of in and and our transactional As in portfolio which U.S. of result, improve growth a targeted is professional, respectively. written channels, and wholesale now business growth by an includes and overall management both new quarterly premiums. profit reduce continue portfolio with year-over-year only business volatility XX our to and property underwriting in underwriting XX% the along XX% strong with was health, strong we result exposed primarily X% We our casualty, gross wholesale partially modeling and and combined Four, in compensation, This catastrophe repositioning hit of related liability, improve offsetting another delivered and global to million. workers ratios ratio on-going

XX.X XXXX the fourth point combined almost to point compared was since attritional performance XXXX. of outstanding. Our ratio eight underlying quarter improvement, an also The X.X a is and improvement

ratios all point loss including fourth expense operating loss quarter. Our and improved, a ratio, for the ratio commission ratio improvement X.X

committed are to and areas key this it. to in two momentum focus sustaining are We positive we sharpening our achieve

management. First, is cycle proactive

We are building diversified business. a

our continue lines, growth will profitable of we a mentioned, crop specialty in to I As number grow business see and more over time. of classes we

us Our allow and the opportunities the E&S diversified offering to both relevance market. channels seize and new product Retail in evolving in

Second scale. is efficiency increased and

based efficiencies, investment best-in-class intelligence, and enabling increasing higher outcomes and and instance improve in An by claims greater speed experiences. customer processing, tools, enhancing of fact insights, operational to and artificial delivers in part process as are accuracy, For we which better efficiency and our claims such important productivity, customer natural continued resulting automation, satisfaction. our this robotic advanced creates process language decisions better

in we the XXX to scale, global to we America, where grow P&C commercial across profitably Asia, industry. plus As footprint our opportunity billion expanded and also see Latin Europe,

passion more expertise Building our demonstrates. have I'm customer consistently in knowledge places where company capabilities, existing its brings in this a clients, global is for our global a with risk the we a on company That future. management results, the a plan North for a work We risk strong that company of our An solutions framework remain I'm a grow follows we providing for execution base of daily by influence delivers the hyper to not marketplace. respected marathon, the exceptional can agile and tenacity, and profitably. it’s leading thoughtful focused on world and by that and and broader to outside America and together our future that proud very as encouraged win. global but a the company class the is consistent hard we team service ambition, the sprint. team expansion position returns impact focused to united

Mark Now will Kociancic I to the over more details. turn numbers to us take it in through

Mark Kociancic

or as the executing plan Thank our remain quarter we strategic and during year to make you, continued achieve investor Juan morning strategic the and full everyone. day good XXXX Everest excellent track well to progress its on time or year review results. TSR. providing full the shareholder and context I'll fourth plan the on the some return, assumptions. objectives, year additional greater But let's underlying spend full quarter first, total notably XX%

quarter fourth X growth reported X.X ago. premium billion, segment, By billion over billion of year-over-year gross same grew quarter the of For insurance the written written X.X growth. in reinsurance reported representing and Everest XX% representing of once XXXX, again to quarter, premium XX% year a the gross XX%

For year XX the billion X reinsurance written X billion for full achieved Everest billion gross in XXXX, for total insurance. premium, and

diluted for XXXX an and and income, with income on for to return return an are quarter, annualized income operating of share, diluted equity operating Everest XX.X%. equal net XX.X%. equity to $XX.XX per net of delivered XXX Turning the basis, XXX of annualized strong $X.XX fourth million share, the quarter of numbers the On an on per million

which net year X.XX the of return target at value The year $XX.XX earnings and dividends. our diluted billion equal the a income XXXX was of XX.X%, for increase Book full per of an the X.X% robust reflects Operating for as billion, diluted exceeds ended to share the year ROE equity full full equal share year on stands for TSR share, an operating For diversified to adjusted XXXX Everest. year the noted $XX.XX XX.X%. for the one per well and or year was power of and $XXX.XX, XX.X%. income at per X.XX year

losses of premiums We've fourth key profitably highlights several of for underlying the drought event losses attractive quarter. primary of number loss this an the long reinstatement the of view net on event Canadian incurred Canadian the We crop million Canadian loss $X crop term billion the for crop underwritten $XXX nearly the of financial amount market casualty and conditions cat years. history of focus one largest business. unseen a quarter, $XX the pretax the at in in me The as being years with is and reinsurance property million. with XX Let and

net quarter in from The million in place the and $XX in other reinsurance million total, the which in insurance. reinsurance segment quad state loss, reinstatement took million cap and $XX was significant tornados, pretax December, our premiums of in $XX

losses year that We not there in the also this know period, quarter. prior was development any prior unfavorable cat or

Everest's driven adjusted our and into X% cat timely X% to than reserve Everest, lines action Everest XXXX in a day initial a in review investor higher For decisive volatility the of taking processes and our [ph] arrival a loss balanced we've combination our to at picks, one's with the when position. a Consistent ways; strengthen of in establishment we portfolio, less remain our expects by of reserve Starting improve load scheduled year and of to needed. continued other during reserves, X% overall in prudent line number reduced and with prior risk cap guidance, margin. quarters, with confident from expanding and with

to analysis our on processes actuaries informed focus All making this driven and decisions. improved is most allow and numbers tools interpreting by to the the of

the with is the loss assumption This position. total incurred reserve COVID-XX here our million is of overall full confident XXXX. our at ratio, for to remains range since for remains Our incurred. unchanged provision IBNR. reconfirm group combined year The reserve XX% plan the consistent COVID And XXX in majority remain XX% strategic of we XXXX. We in this number for

book cat January at Everest expected losses. on combined losses, disciplined underwriting points. overall reduce X achieved the basis, at will XX.X% ending and Our The is driven by XXXX ratio further from cat thus an insulating at volatility year outsized XX.X meaningful stood cap

ending reinsurance remain combined I for X% Everest expense of in at X% expect plan. in was attritional refined X.XX in competitive quarter, the an to shared with income versus ratio for group, our The other net detailed continues and expenses XX.X% continues year, non-recurring have Everest billion under the reflect income. below investment our to stable to within the broadly ratio; Investment expense be exceptional year our the underwriting for to quarter X.X% XXXX. reinsurance charges as some XXX portfolio assumption million, investment this for pretax XXXX. very the tolerances with Our for asset for liquidity quality and enhancing and ratio quarter, core the improving and focus portfolio, which day, capital Specific while a duration X.X% investor June a credit strategic reserves. our efficiency, all stood strong approximately working liability and matching, backing assets on yield are

For private our of income rate investment. interest good have investments continued our which XX% from we affords floating our portfolio, Everest good for insulation environment. see equity within investments, focus, portfolio, total and nearly return rate rising And opportunities we core which fixed is a

also the portfolio. of this Specific liability duration run strategic to limited XXXX We continue to to somewhat add see excellent plan room X.X to we well-diversified class years, is than during our And targets. our approximately asset shorter four at our under years. a from continued duration investments, partnership contribution

our expected in to Finally, to we X.XX% the conclude on XXXX on invested of investments reaffirm assets range X.XX%. return

to Notes At an at capital excellent offering our our position, XXXX our shareholders’ with expanding underwriting of lowers while Senior and three equity cost in overall $X completed capital, this a optimize further structure balance early year-end the was October. full XX-year our ended offering at For growth. year the by offering premium which cash XXXX, generated sheet billion portfolio, in an fueled management. an our in flow of year XX.X debt assets driven investment Everest billion operating strong exceptional under the ended billion X.X we and cash coupon, XX.X continue $X This flow XXXX billion billion eighth The in Everest firepower.

XXXX. was that strategic assumption plan XX% within leverage by to of ratio and our at see XX.X% we the end range XX% financial year-end Our

management Everest the As in repurchase million shares part million. full year the our strategy, $XX to common also we quarter, capital total of bringing during XXX

our XX% we For tax good rate Everest in strategic as net full XX% our objectives. the XXXX towards made to a income estimate year, was XXXX. and for progress plan validated XX.X% income the has tax XXXX rate see net

profitable. vibrant and are businesses underwriting Our

and investment is now with and current environment. into Jon. was to to portfolio sheet the to And market we seize the Our navigate see returns. well with back market our for I'll highest optionality where current us Everest balance classes positioned that, franchise grow provide optimized well the and the environment, and turn it opportunities macroeconomic territories

Jon Levenson

to questions. We are or the follow that ask questions up Thanks have re-join any remaining now two one one limit do ready line Mark. for then Operator, please open your we to question you and questions. the if queue you plus

Operator

first And Bank Josh of question the with comes Instructions] [Operator Shanker from America.

Joshua Shanker

ploughing Thank much. what and you in ROI trying insurance, reinsurance quarter and for Good I’m versus million into on very the XX figure capital outlook your versus to in and I'm at price. this is repurchases [ph] thinking out XQ stock great shares use incremental

Mark Kociancic

for Mark. morning compliments its the thanks and Good Josh on the results.

me So split into a we're this few --let buckets.

So opportunities in franchises or aspect, other, different certainly privileging allocate expanding management it's or the and when organic each competing reinsurance, we're capital growth, whether capital, the we against insurance.

And a so really at when objective adjusted these opportunities. XX% least look on cornerstone basis our risk TSR different at is of we the

capital share were in have unconstrained capital both for And in buybacks, so like that also to we ample and aspect. deploy management actions, businesses

And philosophy I continued. think in see XXXX, so you'll this

Joshua Shanker

one prices? choice? put where to can if difference Are you'd only like, in make equal a there Or all prefer capital at these almost is options you

Mark Kociancic

organic more shareholders. because privilege I expands that growth, for create definitely going we to term we're the value franchise, the and long think Well,

buckets, equally opportunities. put definitely you've I capital So investments are reinsurance for for one. three which that would got competing insurance, Within and that and

the time, buybacks share at it table at we're opportunistically same on the the during year. are think looking and I certainly the

Joshua Shanker

commissions? is in what's the and returns ceding in it business? And and outlook How for regard, where you impact to renewals future? reinsurance happening trending, impacting the have do an going numbers in that's that that with And

Jim Williamson

with one. lines, bit a to you particularly strategy one, around and We've a perspective, pro deliberate of Williamson. our pursuing this particularly of Sure. been a little give rata we've just particularly a what saw deal great growing scenes And is on Hey, Josh, had very core in we Jim casualty basis. at a of the being ahead that feel trend. in and fashion success very taking in good see we're through a there's rate Limits there that place about being are we change are Look well narrowed. insurance quickly, one, loss results strategy the seeing. is underlying Coverage no expanding markets. reduced. that are grants really significant of question one Margins Yes, with

And you to creating then up add that so for we And us those all margin can participate ceding those around imagine, be scenes, our there's programs. things some for to of in respect as commissions. going to and as with trade

pressure ceding we seen have over of one they we certainly on were little and market, we in the so the couple some think years, reasonable. remain bit a last casualty And they commissions at saw one, upward

For don't were the participate in us. the is we economics still the mostly and most plus there little programs results think reasonable, reasonable. seeds that definitely extra bottom improving line part, for margin beyond that's were a in created, I programs, being And but those

On the flat. property was it more much side,

can not you in people commissions as are casualty. improving in seeking are our programs, they to there. economics capacity some the seeking out see moving way we book ceding fill And same do are the and As imagine, their

Joshua Shanker

precise Thank answers. you the for very much

Jim Williamson

Josh. Thanks,

Operator

next question And with Phillips comes from Morgan of your Stanley. the line Michael

Michael Phillips

that mean on outlook year reinsurance the for growth and and quarter? to ahead? the the of related what guess reinsurance increase cedings. growth outlook take your that, their morning. and Good guess how Jim mean too, for own does a for commissions. Thanks. to more just risk on ceding last I the you retentions, that And month of the for profitability I on I much question on Kind of your this that was kind want bit as what on does from that influencing hold mentioned cedings of

Jim Williamson

we we pro in lines at quarter growing little both Yes, margins. the view rata growth for quarter. of achieved is record very basis, premium, again. provide a bit fastest rate sure, were Those Jim attractive XOL Mike, To this lines the of essentially our what fourth of a perspective written on levels casualty, and is terms in

the that's see to So the look, And see did to in business own day, the margin, we think away shifting who much of how at reinsurers, pro rata are around particularly cedings of rata some their there definitely structures, I an they end think want into important about movement lines. the And from XOL. pro fact. their people

area one very with manage on one we However, in that And with placements. their are choose reinsurance focus selection. ceding we're when looking folks closely ceding a we partner particular, consistently is to for what of our core ceding that

And in who shifting of cedings. so to saw we're participation. lot among are their trying our consistency avoid cedings quarter-to-quarter we terms of a And

piece franchise of core the from, down, strength that where to the benefit relationships our revenue of and clients. we've total think I our value local maybe where is we given from sustain came the share even trading the session areas there in and were stream our in areas other our able were increase,

from perspective. very successful one all-in-all, a I successful that a quarter think fourth and So very one,

Michael Phillips

We've your for maybe in business the Thanks. think or that might two one, and of Okay, means implications industry, what the for you. for a may question, mean pulling next are recently of well. be And for pretty market It Jim think it guess, where activity out what Florida I'm thank little MLB an some industry that think higher big players market. maybe I in curious year lot the as level maybe even specifically, [ph]. question, we seen a industry, you the any the we

Juan Andrade

Yes, Mike.

start. over So being we've Look, something years, this fourth which think up in in and what, in of of able that dialogue cat one, but is decisions of again, making and part saw the of book had. this couple of their what hasn't to we're Look, you've Andrade, in we'll lot numbers, really improved was, meaningfully in is business And and at really, seen to place the we've on take doing the improved on property pay ahead the is has trade-offs what the I'll a calls certainly our latter looking Juan that really as one volatility catching industry you reality pricing be last frankly climate by the exposure some, that quarter change. justify and that the is and you've I been enough companies the is catastrophe and and for our see seen as curve, that. it that in driven

underwriters has to I so that more in And environment in southeast think, a an general. like Florida particularly lot prudent and be proven wind

So I on I the a the to there's invite rising more that But with invite, policy questions to levels, construction, there is some that. we sea society would all have a related how as about forward, that I of think commentary ensure etcetera. a issue problem regard the warming zoning, seas, would Jim also to add with public maybe to deal of becomes public regard to to the issue policy ability capacity, going essentially we with

Jim Williamson

I'll detail. little Mike, a Jim. Yes, add more this is bit just

the the meaningful way. is one in very Florida that meaningful during the retro one a through market. dislocation the I one will expectation play think into of things in renewals was renewal clearly some our saw we And that

so in up selective challenges way. portfolio. or a programs, in as I think for And to going be Overtime, That those present very we're southeast reasonably the bullish etcetera. we've Florida sized changes over do some could think that to that renewals wind come us increases, opportunity there's And our I significant could summer. rate result right

have powder that out We one, deploy one, great are level very can we do coming dry we're of we we when that selectively of And risk a opportunities. with. comfortable see taking

we pass, question there's And so and opportunity if as dislocation the market, come selectively of sorts fashion, targeted great to an of trends the in implication Florida very and that to a and use we're a pursue it lot incremental some returns. discussing in the your here opportunity at of might

Michael Phillips

appreciate it. on the for the detail, Congrats you Thank guys quarter.

Jim Williamson

Mike. Thanks, Thanks.

Operator

with Elyse Your Greenspan comes Wells next from Fargo. question

Elyse Greenspan

Investor thanks. morning. out load you at laid at target first Hi, provided end is guidance Good guys a low the which the day. question of XXXX, you My X% cat for

you've your as business. really, that there's assuming implies property to going way some I'm probably businesses related that on, discussed, within in some a cat So this reinsurance shift towards from casualty mix

So know the is that think reaffirmed in ratio margin is shift and margin, going Because this underlying shift or a mean, reinsurance? how itself the you underlying mix due on? mix load higher particularly do lower, we just I the cat if your little underlying about to loss for impacting underlying But does the combined guidance XXXX. the bit ratio the overall

Juan Andrade

you is this Elyse, Thank question. Juan Yes, in. the for

And regard in in in been my up well. X%. it remarks annual a less overall their we've The he catastrophe With in reduced average the potential portfolio in We've our said cat with loss this prepared is de-risking achieved break I have that basically improved of in reduced, meaningfully that's And favorable PML to me book. let economics. actions the points. as on key a then loss. zones, call. has reductions to Catastrophe to reality couple to ratio, in spoke to, that limits we ask expected loss gave than the jump lot Mark Kociancic earlier COVID peaks and a related of So guidance I'll Mark reduction

from of is perspective. our coming the that loss driver down the key ratio cat So

I'll because the that are other we diversifying of margin will the The to we the that of to from as taken, in the as business. reinsurance XXXX, fact non-cat up invite lines anything additional we're into is expect of color. Mark improve but actions division, to some have add the concerned, part But far if that that book we generate

Mark Kociancic

think shift add much morning, was of Not of Juan's good seeing other we're because non-cat to I between a growth lines. too quite somewhat cat Elyse. mix to and But the of more definitely the complete. he Yeah, growth comments,

to XX firmly the XX. We’re in

I pretty confidence think we that on forward. have going good

on much. And impact very I don't I expect So reinsurance given opportunities. a underlying side think adjusted the where profitability basis, market that makes the to with this on most are risk the we sense,

Elyse Greenspan

in less you could Thank this there. process Thanks. comments that on you're U.S. some a looking than it's impact it's through then the how the how on revised get model out question comments S&P follow Everest? some capital model collecting I sense to of And thinking Everest. think the my of you up the that based, But give since impact on I us We're just Bermuda of could that guys is are peers. would know to a capital the you. hoping if put just have impact of on you

Mark Kociancic

Yes, it’s Elyse. Mark again,

high industry of and the we watching really and been will as that S&P see engaged it develops. only kind very been direct it. know an we've been detailed discussion based we're this and it of what terms industry, timetable of extending obviously for have that today. So There's provide, as shared with think, industry level their I more the in I don't thereafter. impact much definitely proposals is feedback on discussions proposals on

really in going would companies. Everest regulated highlighted of you've important the that an the issuing a think the concerns opposed expect we has U.S. main and domicile legal avoid is forward. distinguish That debt unaffected. therefore, so have should Bermuda in has Bermuda, as is issuance our regulatory we it's be past, be thing, And to question the elevated biggest been your some factor issues for to and -- that of continue with of U.S. it I to Everest it entity a capabilities And debt the issued Holdco. aspect. it to the that That within

somewhat XXX broader into a cat on think we're nonetheless. be XXX risk very come sound see We'll making, as The impacts to diversification last XXX other that lot fine. development I corresponding sense. parts, And they're in economics, charges long benefits. careful think that higher we'll of are with The how as a industry, years with I tail they're they've the in loss that that based out one makes on factor one adjustments timescale,

investment last diversified we'll fine is impact So The portfolio there. I piece so not really is S&P high credit but the and on comments very We've more make be they quality, on some there. big a too broadly concerned, side. But we've got the industry. think respected, a got that's well have to

to companies many proposals comment for we sure expect impactful. these time goes think I I'm see, on don't us, as be But on. to going you're it very So it's,

Elyse Greenspan

Thank you.

Mark Kociancic

Elyse. Thanks,

Operator

Brian question UBS. next from comes Your with Meredith

Brian Meredith

A thanks. here. points Yes, of couple you for

kind for leverage your up. position? operating moving insurance. look it to Mark, we P&L on? move we towards think your that think given just your to what's of the operating mean, about way us capital should I reductions maybe First, best as And continue at and sense is more in excess the about it How leverage that curious, makes that evaluate should outsider, I'm moving an

Mark Kociancic

our Well, on in ambitions. an day terms I debt raises. we capital position; of the access we're in think the you gave investor you guidance two good that know growth And we pretty have

we we saw have print, able so shape more as grow I execute funding strategic XX% you to to year, growth the gave and in per approximately going be think good saw to terms you XX. to X where of But annum guidance in in reinsurance it. do a particularly rate of plan, rapidly, flexibility we're And last for

getting think So growth very and really year insurance, on then year. market good we've there think are And where see over us. very can times XX% trajectory gives Last we what I strong there. the we're a I similarly well this got

probably I level think in group. growth is excess the with factor of how overall develops conjunction the of capital the that primary profitability on the

allocation profitability So have I I’d improve a talking growing last might still management an more achieve And group evolves the XXXX. mention at now of good there's capital look all it that can growth. on we how no QX say a two I to capital, capital the leverage, excess in the about on even future probably we're take did a, efficient. actions, constraints then be think, so or and in And we're into operating this lot you're I whether we point organic funding, of efficiency as group. divisions getting some in and three and as situation that's year, investments of very kind well. really see potential the buybacks very buckets we account did the with the been to more capital But

more there achieve to So in on XXXX. would efficiency aspect I bit us that expect that a is

our optimizing, like about but I talking really you're Thereafter, position now. as it stands right

Brian Meredith

the an moved your and And obviously We rates out that respect that environment. obviously the have unrealized answer. of for that's Thanks contemplate guys -- the out to your on important thanks. and laid XX% up question on value. just have part with the does interest rate second to TSR what that on Great, you Its’ laid your TSR subsequent when interest have losses book here. you gains

So how we think do about that?

Mark Kociancic

for last investment set primarily the served forecast portfolio. up as year, in we interest plan the we rates. the assumption took the And that on forward curves underlying When base

that returns. example, It's have I factor in manage And for so a the investment we reaffirmed, a of to the plan. execution

some think that of So whatever excluded, unrealized Obviously whether that that investments, income when the we it's are went TSR definition us. of the the direction got on behind we rising, through it's and or I underwriting from goes. one it's more with we're fixed fine, comes tailwind we if reasons and the But losses portfolio. gains rates the volatility

that so where value, volatility to expect economic from come of real the creating some not And be, rates. can is we we're macroeconomic that despite

the is. why it that's so way, we way And set TSR up the the

Brian Meredith

you. thank Great,

Operator

Ryan line comes Tunis question from of next with Research. Your the Autonomous

Ryan Tunis

question for Juan. thanks, good Hey A morning.

you and So have rates favor. the targets gone since our then, in gave interest day investor us at

load a Are cat an excessive goals, cat looks the exceeding XX%. we XXXX your a in lowered TSR tough even you're on year. basis normalized You've

could why to targets? revisit you're us on So context having you this just give some

Juan Andrade

thank you. said what the is Look, way. Day was back that too, and essentially greater XX%. question. said we the the what floor Thanks actually by Investor we for than it's Thank accomplishments Yes for you Ryan, in XX%, recognizing June, at the

predict can't talking portfolio, been is been start profitable returns. But really And on good some And the improve book the underwriting XX% future. be in a on had of of on we and to the to to we actions the Right? from all very call better focused obviously aligning of we much do seek to standpoint. are profitability leading that. about the aimed cap able the here. on with take to the that's drive the very actions focus for we've this That's, continue that able that to that what side are those the drivers growth. that insurance of We've drivers or Now focused we're the on We that XXXX.

to And so again, over TSR time, and achieve at a what start. we good the of go back if least we'd off XX% to I to said, we're that period like

Ryan Tunis

of reserve it just there's Thanks. and charge And year then, I the somewhat show bit you prudent conservatism of of be reserve the aspect this I to year? reinsurance. Is more margin to of XXXX. a on ago. to a in maybe seems and less give Obviously is there to conservatism us might level guess improvement yes, ratio, loss little that that the guess, a to you confidence, need ability some XXXX want And potentially

Juan Andrade

Yes.

ask me Williamson So then Jim more let start, to and I'll add color.

prudent been think our fix. So look, I setting we have loss in

into granularity analyze I the think we have react. data us we to been allow we reserves, and put that lot in a numbers more prudent the how got to more process in the into insight, the we place,

obviously slowdown courts efficiency there's inflation. saw at on frequency definitely I an external full sure keep the good things not the a we When social about You I'm as we back environment, keep eye on, in eye an In So at you feel to right? the XXXX, completely open definitely pretty all drop and look that. in XXXX have period, that point industry, seen time. up in a we this courts. the an

So eye of you you're are loss, some social there, long line. keep an as particularly factors the that tail do writing on inflation

of So that's that. important an component

other the you an these right? is eye Material keep supply impact trend. that types The disruptions, on on inflation, and that component that all could have things, chain real of of inflation,

ensure our we XXXX certainly select selects that loss what trend to business given number profitable, perspective, all to we we a But factors meets we're the the adapted continued the putting that those loss margin our right. XXXX, addition standards on sure our to are from done picks have is very portfolio have do are it's continuing to for to prudent that So that, that and books actions make in we there. of have macroeconomic on

one one discussion, the Karmilowicz we've is you has that and season XXXX just that have the have meet set me, side out. renewal can the we that talk this ensure so some about let from Jim throughout in and approach his underwriting to we the hallmark took heard that we on-going also from good me So heard team But insurance took that all of of you earlier Jim specifically done a Mike that with on of ratio reinsurance. key portfolio loss targets management, is ask that, to the that to the

Jim Williamson

add discussion I'll just Yes, you loss we more Sure, sure. of give having at a I'll we're the our just, a picks. Jim. this each detail little Ryan, sense is as to bit quarter look

can amply seen uncertainty, of as consistently other than really react change, assumptions quarter-over-quarter good are and as rate than side And the imagine, quickly for. rate gives the basis taking. in And the costs. his that indicated it's we planned underwriting component better expected, has the Juan on equation in is, on cedings that to of side, risk news our rate we of equation loss we're actions have to better as come what around that we we've that the set that us given in around the assumptions those well loss you around comments, pause on As picks cost the how environment,

We and also the are the segmentation the believe doing cedings and and work all underwriting our of ahead that our re-underwriting is actions the expectations.

those for our some expectation very which still talk ratio when one take taken us at I my to I some did are know, in ratio, to see loss early. does we're reflecting also proof will cat loss we up lines think, as that property. we've but I on is of property, years. particularly one. particularly we're in mean, the loss of it want improvement reinsurance, news. attritional underwriting it's see underlying I to tail our would we'll all And traditional actions seeing then And so But looking improving in economics, tail, obviously that. the suggest the long lines, we ratio indications that ladder begin say would think we and good to what obviously emergence mature, that And result of begin side there that. that, all of the on I emerge. loss show the certainly it casualty up that of on benefit And things would the for longer what is the certainly those costs, primarily allow

terms have these lot to do very be But the good when we in timeline a on recognize things. momentum. prudent of we So of

Ryan Tunis

you. Thank

Jim Williamson

Thanks Ryan.

Operator

question comes next with Yaron your Kinar And from Jeffries.

Yaron Kinar

you. question and Thank maybe Ron’s last until -- Good question earlier. on heading morning, I guess

targeting So a a combined head XXXX into XX% you with you're ended load consolidated under a and report X% just XX cat of load, ratio for cat XXXX.

ratio already you to So that range. essentially gets combined XX XX targeted that to

my other to side? is we target coming headwinds XX question from So down XX you some move further why I guess wouldn't unless that see see see improvement on the or

Juan Andrade

working business return. catastrophes you drive we And doing, what job the of very with sustainable over key of And saw last XXXX, in over total that the on to shareholder good we few a And results clearly in the But business, let book are done be Well, working are of me we've that. meet underwriting, to able what on of and right. have the portfolio this shaping all to that essentially book our targets. levers start headwinds with environment, I already sensibly exceed think discussed, any sort working our other a macro I specific the very think, is we've than all don't those on time. in we see the we XX.X%, component that years.

You XXXX. saw of the that in benefit

actions XX. a the describing positive. one And we took of been we one, at that think You I that saw that all have is

se, other we being about. to good environment than headwinds that. I'm what macroeconomic But react not able per pretty to feel I just control the any seeing So necessarily

Yaron Kinar

Right.

opportunity significant the maybe ultimately, market years to if what opportunistic, the target, you or that, I XXXX. the And of the around conditions you see that XX%, to take so try is XXXX? clarify Okay. to grow or to Is understand few maybe guidance line because change? beyond top then growth, through better you're as just next potentially XX% or it, see of the do excess in well to X% see clearly the you'll base reinsurance if you but saying slowing X% want CAGR over that the of end further you're Was

Juan Andrade

bring had let few would give you the broader thoughts jump start Number you our growth on out, XXXX. given we're we XXXX. maybe well as in then well investor I very And and and I'll looking out to by the and to them, to day, comfortable to a targets achieving down we Jim we're way one, pointed me saying I'll ask it on June. perspective that that we on growth growth as at in Yes remain that set Yaron, last how with a give do you reinsurance

to our I divisions thing seen company would is opportunities market underwriting respond second also margins. in the in our grow and both The say expand you've us to

there, to the be is And we're right? we the reason is for do the agile, straightforward, to nimble, We're continue have take platform, opportunity the capital, if that. the pretty it. able we're that and relationships, the the So products, people to to able

our really So we and that third margin. But the about us question the also pretty core that, able back driving. focus. reinsurance, this who earlier always It’s good A works return, do in We can think, in the really advantage. that earlier. that. franchise is to to Mark competitive way are economic goes allocation a same is about environment as do it having really said, focus that allocating to to were discussion Ryan's to underwriting a company. capital And goes us our gives best results. I be is insurance, And capital it investments That's we is keep think point a That's give advantage the within or you give diversified one. have dynamic mind pretty I'll what the we the the

brings specific so the XXXX. to landscape of And us that

going is, in into Frankly, have traction you're XXXX. in at as area. line. about pick for XXXX excellent as more more our insurance, the we're so growth think think the that hearing primary we see from bottom targeted what opportunities spots. And us And selective, look the opportunities And U.S., when I we in reinsurance, to to going continue well internationally. look, seen as in that's landscape, I I But both I've

it's earlier, underwriting the like know add if mentioned powder, to dry day, of don’t we results. Jim opportunities see. you'd underwriting the as have that on We and income capitalize But anything? and end intend Jim, I the to we at about But

Jim Williamson

the little we're has this. for Yes, want XXXX, deliberate to within Juan. I’ll really, parts some in capitalize the around as you been participate to happening well, the around way. We've that's on. casualty we a And the bit opportunity provide executing just of in with to in XXXX, business very primary underwriters we've meaningful pursuing alongside give more and best shifts of strategy saw a how in the flavor a indicated, in an as what some Juan significant detail market markets, really reinsurance we

to us all pro allows particular in quarter, economic talking in meaningful And so improvements almost participate will been the grown we've billion us. in that business And dollars a very that's casualty it's premium, quarters in our rata those fourth end, that three about of for today. we've

a So that clearly lot growth. significant of drove

absolutely the continue ratio, and support moved loss customers. where see particularly We working target thoughtful translate that, good deploy also in selective the layers, into cat And, growth those consistent, obviously, pro about or cedings new from on focused moved with how the one then be programs in certainly optimize result continued very some we saw for are retro to in we our we view the casualty opportunities that one, cat to capacity. where on we're the some react will deploying growth nice emerging key well. in in that core And to way, portfolio, from capacity that if cedings, a then rata we we as to our and targeted side, So we space, opportunities an cat that some core market. were as is executed very really an in we and very and structures, very away opportunity improvement away which strategy we aggregate in thing. We our cat on the a with

the to that can And So market renewal to to opportunities created relative for seasons the scaled going targeted. we react we exists. We've margins, be And new rest to as be it's emerge during very be it's of Juan of sort going have opportunity it's nice the and consistent, if going dry year. the powder. said,

Yaron Kinar

answers. Thanks helpful the for

Operator

next comes Mike from Research. Wolfe question Your with Zaremski

Mike Zaremski

believe remarks first elaborate sales improving to Juan, Morning. by segment. I on improve seemed that Juan since hit analytics you and prepared Good great. the a mark. and like the it in sales can on ratios thriving more about insurance you meaningful question talked a talked Hey, you're the Maybe about booking you've primary meaningful increase on tweaking is kind new your conservatively business is of it onset? the ratio guys and maybe underwriting hit the [Indiscernible] your the

Juan Andrade

Yaron that. of is Mike and distribution Yes asking momentum to I because goes the growth Those who bit all highlighted a That's before. this ago that XXXX. a of that component see into also the thanks. key thing when you've about how Look, very we best actually little a important I've think said question execute was

able in lot So one, plan productive the to about the submissions, where more our the needed product on essentially approach particularly the our thoughtful submissions, that we have quantitative how at of offering we're is by be a much at of the lot on we're the U.S., the that etcetera. of closer intelligence our triage good doing brokers, is solutions submissions a broker to we them, a to Number be more and good have underwriter our have we efficient. at on But getting, more closer what one the those etcetera. be in to lot very field, very just more regional now that distribution level, data, all those a sell, things really able be looking backing we're shift can how people and we structure area the level that to a solutions be number things more ground, to a distribution sales, to expand are into to etcetera, done

the is we and into more we pipeline. then what the at in much what risk that about more coming bind up. be go what's want, basically the able our those effective being bottom that's what's within efficient what funnel So hit seeing for ratios you're line to based being appetite, we're much And on asking

more it's a risk ask But within our well. as appetite. Karmilowicz productive making lot So I'll this to to that a Mike bit little add

Mike Karmilowicz

couple I changing things would to customer for the distribution, addition, in of Karmilowicz, the we've sales talent mind This Sure. culture add been just adding Mike that. a and Besides thank from question. more set. is you in of focus and a

about, focused our analytics So data structure. Juan talking been much with on the that that, simplifying we've very was

our actually partners. developed to pipelines. And success being to continue allowing more and distribution sales doing how in improve, and we're we as tactical again, partners, a can So coordinate more can is example. with much our to we've us be efficient hit And our it it market is lot together an our go with which effectively, trading increase offering we our bring what we ratio, so is that's more

see you'll think I So that continuation. a as

XXXX days, of this we're example that. an lot making in early but So is of a progress was

Mike Zaremski

Okay, is deals growth. up, an strategic update term that’s hourly to inorganic aid great any open on profile? in sizable Is lines of that still long just curious potentially color. Everest follow My business the could

Juan Andrade

our thanks can before, Yes we're strategy which heard that plan the is And pretty in that. question Mike, time. is what say again, an is insurance this you've reinsurance and we that for right. organic, That's what on That's at on for. it's this is me theme. this Juan. point And I'm executing. Look, And consistent

that's And not transformative the out, capital. This would Mark it's I'm does of etcetera. an along will if access product pointed more Now, it we interesting. etcetera. consider, in help do a full sort but at way, remains opportunity the things, that focus But see or a be do strategy particular strategy. organic looking time us etcetera, considering Obviously, line, we a that said, have an something being we as particular type geography,

Mike Zaremski

Understood. Thank you.

Juan Andrade

Thanks, Mike.

Operator

from comes Shields question Meyer final with your KBW. And

Meyer Shields

appreciate in Juan, specific growth And I a North you bit we I America. about as strategy get hinder thought in. you profitability putting about morning. outside sort you of more that comments that and of little guess Good talked specifically for Thanks. your color a I could in me if can new lines, underwriting article regions the risks like the markets. penetrate those

Juan Andrade

hear you. from thank good Meyer, It's Yes to you.

bit. me expand Let that on a little

So outside essentially the we basically, phase insurance have since primary our be site really, the been on about of thoughtful North talking and pretty past strategy the a development disciplined next year, about America. of to

presence market. retail So we have already the the both wholesale in U.K. participate We a into and

basically essentially think, can add our go do. to we is proposition. countries effectively can to same And sort perspective have limited base the of us where see a flags. play market We make really of now can into so at need it's thoughtful about given already upper a have around around difference out products And we we're value. market It's a And operations we the the Chile. in where geographies In geography we dislocation, on Ireland, value. time. product out what a value world that of thinking a sort extending add doing middle on planting few either of depending America, when our what an Singapore value, targeting, where idea we only well. And well, add dictate, competitor and more can given dislocation, we than operation process of a company handful Europe, doing of the select range. that the Latin world the company, Irish a have the very we that's discipline, is as believe From small And we're for into will to else, product what trying similar we can we're for but are the anything our now essentially thought and of continent not of

play markets non in be it’s of at going If you more emerging a to the looking Latin America first Asia party and are cat.

If lines we're you're expansion going at in success what again, looking the that a America, the But first in and same is time. we've more doing markets a North party all party at the logical third this to blend from and Europe, had be of here. it's lines frankly, sophisticated

Meyer Shields

in I you. quick means the a One what I for the or term thank something cyber that seeing can. lines. lot down guess gross, very that for Juan, That's factors that usually year. you reinsurance cyber financial other decrease. strategy that the growth communities if a We're people Okay, would in quarter could And industry about question, maybe actually are driving talk helpful. went of across

Juan Andrade

provide Yes, Karmilowicz some on let Mike ask that. follow to me

Mike Karmilowicz

years a small that But thing our hygiene is able really entered a from been is a necessary couple it's the on the is portfolio. of focus. cyber middle the that opportunity This profiles Mike sure portfolio sell. accomplish whether market really to a more been One Sure, risk thanks we've for driven. we've focusing question. is one two very is here. to are Karmilowicz to whether and or on It's But make perspective. for have ago. our the very required the making we things diligent been things we've it's It's key sure about And sure requirements, MSA all risk suitable very us

rate different the us want market and after. go all to we've the has sit itself, things really the focus increases, we to with on there allowed So seen, that just

don't to continue for hygiene. and not look will a effectively. right that don't opportunities. looking We're just is portfolio. that, rate And it soon. slowing we picking kind continue see with down of and cyber risk to -- the anytime profile just it's I the small meet forward requirements So right the very But we're if manage for around market move And they

Meyer Shields

Okay, fantastic. you. Thank

Operator

like to conference for comments. to closing over now would management I back the turn

Juan Andrade

discussion the questions Great. excellent the Thank today. you for and all

of hear And look we from and continue thank markets And to today. can you us And our our our great you we Have build your create accelerate to As you your our us. forward our support for and about next for clients QX we for in time serve. investors, value progress the we're tone, that you company, talking for the before to a Thank optimistic opportunities results. company. continued day.

Operator

Thank your today's call. Ladies for participation. and conference gentlemen, does you conclude this

your now You disconnect lines. may

Everest (EG) 10 Feb 222021 Q4 Earnings call transcript