Earnings call transcript Q2 2023

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Operator

Good morning, everyone, and welcome to the Everest Group Limited Second Quarter of 2023 Earnings Conference Call. The Everest executives leading today’s call are Juan Andrade, President and CEO; and Mark Kociancic, Executive Vice President and CFO.

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

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

that, With I’ll Rohrmann. now over call to hand Matthew the

Matthew Rohrmann

Good Mark leading today’s Limited are Everest Juan Earnings morning, and to Vice call Call. Quarter CEO; President President and CFO. Conference executives of XXXX Executive everyone, Group Everest The Andrade, welcome Kociancic, and Second the and

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

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

the Juan. With over that, call I’ll turn to

Juan Andrade

business quarter near taking record Everest Thank outstanding. total market return We you, XX% joining hard a the industry-leading for Matt. and the and equity on us. operating significantly annualized shareholder you reinsurance Good delivered everyone. returns, was performance advantage return. Thank of at including expanded XX% second morning, grew a full margins,

which the continue market across conditions. hard both and amidst have persistent and the quality Capitalizing excellent benefit We in global reinsurance, strong from the businesses board. continues to market momentum on globally, opportunity underwriting flight to

reinsurance superb In renewals. July our execution addition, and in drove results June strong the

our primary of with in business, business invest tailwinds number favorable benefiting to continue a similar is across We insurance which also pricing from lines.

the see are to and capital X, nimble from XXXX our validates billion deployment, remain proactive our by the excellent and January renewal. was capital fully The before and completed base. We $X.X response we May, we raised the track successful us. In the deploy on opportunity we with market equity

our the This changed another and during stock symbol quarter. company ticker key official name We was milestone.

our hybrid EG, ticker to commitment strategy name global about a our and insurance. newly reinsurance is Group testament Everest updated branded and steadfast with symbol, Our

talent, approach significant achieve underwriting the returns. we our us capital the our and year, drive to discipline, As objectives and superior position back give half of firepower

I’ll quarter to level. beginning highlights, group our turn With that, financial at second the

improved income of total records financial quarterly shareholder metrics return. group and key both broad and operating included Growth for and All was our diversified.

We to our further opportunities see excellent continue for portfolio. expansion across

was by grew We profits growth, than led which by in $XXX million. more premiums premium in underwriting a excess an of high This up Net dollars, exceptional to new hit gross by year-over-year operating income constant million, written supported XX% of record. increased $XXX written all-time year-over-year. XX% reinsurance

The group worst combined to ratio catastrophe points was improved catastrophe especially losses considering quarter this projected for the year-over-year $XX.X million. is just to Everest This result, excellent second loss U.S. is XXX since XXXX. basis XX.X%. net an be

our Additionally, in well, investment a investment income, the performed significant net million producing improvement year. from $XXX portfolio prior

Turning business. reinsurance our now to

remained surpassed mid-year results renewals. Second portfolio offering margins. for pricing strong, We of XXXX Andrew reinsurance has are and were market outstanding also team. market. and a the and quarter execution our backdrop grew excellent. The the Property breadth market of our product our expanded post-hurricane hard This by position, we the excellent provided lead now Cat They

prospective up the July returns June sharply into renewals. strong persisted the X renewal. market, world. on very January was around centered Florida markets renewal, in was Xst momentum key the with the This X exceeding Pricing

market moving a frequency example, complete structures. the away to underwent Australian from catastrophe true For covers restructuring,

able constant attractive for dollar over the XXXX XX% returns. billion. core I of second customers. our many around market of the quarter And our we clients to a globe. Everest to to the from quarter up is of by additional the at were as many on benefit continue premiums quality Gross earlier, were a flight basis, noted capacity preferred to deploy We $X.X

As record for earlier, division. a this is the I noted

were XX% last Cat across and Property geographies. XX%, XX% up rata lines from at and premiums was year. business respectively. and Along Growth widespread premiums property with pro casualty

grew and marine aviation. in specialty lines, also We including

strong, nimbly took Korea. like losses active growth we share the in modest cap for South Asia, International in particularly where markets order industry. was the despite were catastrophe dislocated Pretax

deliberate our to the shape Our manage improve volatility to initiatives portfolio continue and results.

renewed positioned our XXXX improvement a positive. to doubled XX.X%, and year-over-year. million, is second X.X% We Approximately equating the portfolio nearly at $XXX the renewal XX% improved a outlook for we our enter rates significantly our half ratio X, the January and year underwriting now of well profit in combined XXXX of terms, to of

marine, dollars, Turning domestically our in to particularly advancing both energy. and billion We more lines insurance aviation XX% business. the insurance. and We generating in like specialty premiums. constant than a both and by in broad $X.X was diversified, and line, made global property, Growth in strong strong record as as geographically grew product well in segment progress international

company and approach portfolio, diversifying in lines well our is the workers’ managing monoline our and maintained to the compensation We disciplined public D&O. like where reducing not market exposure priced,

days, are where capabilities expanding methodically traction local still our early gaining are it’s and also we expertise. we While markets in international

exceed workers’ Market across portfolio. that rate financial We double-digit response compensation a the Reinforcing excluding opportunity and abundant increase, lines. has continues been we our see. excellent. aggregate, to achieved In trend rate global core

heart noteworthy pricing persistent a with in and lines. specialty in environment reinsurance cat industry particularly insurance. primary favorable pricing of supports This, property, to the marine in was The coupled risk heightened and losses contributed other market market. continued pricing positive Group

made Everything methodically proactive risk-adjusted greater allowing from are and and The reflect and and our connectivity across agile severe distribution being Despite streamline claims consistent enhancements on needs, returns. platform. we our technology cat to remain we yielding U.S., our in and efficiencies to weather superior de have augment infrastructure the management us our responsive focus client our were grow. losses portfolio minimis scaled as to is our around

clients quarter, returns leading shareholders. team’s to second our needs serve and in consistent and ability the of deliver and adapt our Everest’s performance I’m proud to of our the

a with We hybrid have the runway our to built profitably approaching market and full durable we’re force. grow long platform, opportunity

financials over it Mark to detail. to turn I’ll that, in review the With more

Mark Kociancic

good Thank to you, half equating $XXX record strong first start XXXX. XX.X%. of or an of the out per morning, company diluted to Juan, rounding operating quarter, of income very $XX.XX Everest everyone. in operating quarter, million reported a had The a ROE and income the share solid

combined Total most attractive lines points dollars shareholder as stands overall generating basis in return at of We our XXX constant or world. segments business around by than annualized. more XX.X% growth in terms TSR double-digit in while remain both improved and pricing ratio the

the execution billion with schedule into offering that core in in tailwinds markets, by a our we are in strong XXXX. and that completed number deployment back on public the throughout year of led performance level equity a team’s have the quarter $X.X and we was May, the during mentioned of Juan the well of remainder are quarter Company’s our successful second capital. high of

XXXX, natural at Looking second ratio in includes premium the million group losses results of constant XX.X% $XX which gross catastrophes. $X.X or was XX.X%, Everest points the dollars representing reported billion, XX growth of for of year-over-year. from basis quarter written The combined

related partially in by more the moment. offset to quarter, bond a basis was improvement XX by I’ll the $XX in segment, discuss Catastrophe catastrophe over point losses were million reinsurance which XX.X%, ratio the in led recoveries detail loss group Hurricane a attritional prior just quarter Ian. The of year’s

ratio mix points within the X.X%, systems improved modestly ratio Group’s continue invest while and year-over-year changes, to group’s talent commission basis was franchises. both we XX XX.X% our to up expense as on in

Strong with of growth starting continued Reinsurance constant and results reinsurance. our grew double-digit renewal segment the execution strategy. from to line came We generated Moving the in XX.X% premiums the written every business. during successful across quarter. of gross growth XXXX dollars

and improved loss Combined favorable prior XXXX. The ratio we achieve from which we was expect points year. XXX more an basis basis to essentially XXX was XX.X%, improved underwriting year-over-year. improvement flat points attritional was which to X.X%, terms, which XX The continue the continue XX.X% year. of was ratio basis ratio expense the XX.X%, points to from rate ratio related as prior commission into The

written lines Gross Overall, the quarterly as trend, loss volume as driven of pricing Insurance. mentioned. in remains Juan primarily pricing grew momentum. to additional XX.X% gained to dollars of record constant in Growth premiums was ahead quarter by specialty Moving and $X.X billion. premium a property

was the quarter business ratio in catastrophe points basis The demonstrating Lloyd’s XXX one-off further attritional up modestly and at in mix our XX.X%, The driven Combined year-over-year. success by our losses XX.X%, zero natural division derisking was premium loss of higher from our the benefited portfolio. syndicate. this quarter adjustments ratio on actions

ratio expense investment basis multiple certain XX.X%, gross ceding systems improved by XXX largely property one-off well lines. in commissions as points, increased earned global as our and decreased Commission as writings continued business across mix driven largely commissions driven platform. underwriting in expenses increased The volume related of through and by ratio was

ratio the over We course to the expect diminish expense of the year.

finally, investments, And Alternative the sequential investment our under markets balance investment for tax floating income sheet. income, securities million increased continued driven million and $XXX higher to primarily money of $XXX improvement as to yields, quarter, investment higher cover assets assets net rebound. equity a in the Net million new by in to rate generated management. have $XX

from north improved to and yield X%. X.X% reinvestment our book our X.X% of remains rate Overall, year-over-year

our investments reminder, a the are floating as asset income have short securities. a duration of in X.X to continue approximately rate We years. of And XX% fixed

unrealized quarter, increases quarter of income quarter line the operating losses ended our front of curve. XX% of billion, or rate year. rates at $XXX as approximately securities. XXXX, for in end equity at the $XX.X compared increase with resulting Shareholders’ income second tax billion, unrealized billion excluding the first the to end XX.X%, equate the in working depreciation fixed of For our quarter $X.X the end to XX% the the At an of of assumption to was of from million $XX.X in and depreciation the the portfolio

$XXX.XX year-end securities sequential and at year-end at share, billion ended quarter. excluding approximately share $X.XX representing leverage per improvement flow the year-over-year XX.X%. XXXX, operations depreciation of adjusted and dividends for during per Book share from quarter-end of stood share when at at Net basis. increase the per was modestly from on at $X.X depreciation per Cash an unrealized at lower year-to-date. quarter approximately an $XXX.XX a XX.X% XX.X% versus of stood of $XXX.XX, value value XXXX Book strong

quarter positioned the excellent well of and XXXX. an into had is second Everest year conclusion, heading half and of the In back XXXX

to that, back turn I’ll call With Matt. the over

Matthew Rohrmann

do we up, the We line limit any are to one to now follow question questions. please open for Operator, rejoin for one then Mark. Thanks, the queue questions. ask that additional plus you ready questions your

Operator

first go ahead. Please session. Fargo. with now [Operator you. Thank Wells the question We’ll Instructions] begin comes Your question-and-answer Elyse Greenspan from

Elyse Greenspan

the give expand as $X.X on the capital. morning. Can just question, of guys us you expected casualty walk Hi, deployment guys thanks. through and of Mark, you you know, said plans a equity that of reinsurance first putting capital. you Good split billion I upon sense, could us work. My the you sense a see schedule was the hoping just writings on to us on your between raised give you are the property and deployed as well ROE that I

Juan Andrade

Yes. Thanks, Juan. is This Elyse.

me said much and So by we’re renewal. a on topic. in X, then deploy as January the fully granularity Mark to provide very and capital and the get on I’ll remarks, But that you prepared started, lot I in XXXX both let to ask Jim more track join our to

also July quarter Jim numbers, but drove not As to the will renewal. more excellent bit in from But of private also have talk the renewal X saw in outside opportunities dates, we done key renewal the emerged you the rates and of number placed this and meaningful we also at detail, little addition terms during a growth the or closely only have that in about period. a

market, continue We to a much with bit of now don’t very deployment. the go the any But see see we change let to me on deeper plenty track little So we’re in Jim opportunity. ask that. and on

James Williamson

laid within trends for we is us out, around how what on $X mean, because little be think to going a back X/X billion I quarter’s business. this really premium. this renewal, is of first, of little of we to expansive the with to the play a capital the here expected which a do said question, deployment this to expiring Thanks I’m out, Elyse. about sort of the for last look, number And you I to begins take bit Sure. call critical connected we

the expiring It point, you’ve would proportionality the our X expected. we billion at end about the And somewhere of got And out account capital then it playing as through of that that’s this at premium. another of deployment. $X be continue XXXX, renewal, which, on book order will would And the where billion. complete Jan $X for would

add fact, the a strongly very it some to did rate. we to meaningfully I continued core outside Florida, in with which we into renewal of opportunities excellent but at lines would grew attractive. targeted In That have that very that, some increased at cedents, of that renewal our and at way take X/X did X/X. We were

you look printed for renewals. we quarter North and if rate America for the cases many in [‘XX], fact, In June we that at of actually the July exceeded in the second

So we feel really good about that.

cedent risks with in to deal had of on Juan of of in variety there’s a of number everything closely Cat then private sort global a placements indicated, down we layer between. top single whether brokered And for and large a placements, dislocated to on participated as fact things the or a and program there, it’s

feet And those as taking to and opportunities our of advantage way they so us. we’re front come that on

And the incredible rate property in again, the cite of also advantage XX% add, here but of of which in I was the to taken change lines. some quarter up obviously, our continue book, back on would over I’m specialty where one Cat, focusing also I grow is we in second at example And on casualty we’ve really trends year-over-year economics. would terrific aviation

we’ve And key growth, a focused so this, priorities. talk portfolio even it’s before And you as really executed number we’ve of quality. about been on

in going things out. to call our And that up. continue play are so all points mentioned Attachment the we’ve last

in was point moving attachment is which you in further second of out Cat And print, the that certainly, saw curve. proof outstanding. our average quarter Our simply

Florida from redeploy not pass elsewhere. in capital financial frankly, You rated A adjust and specialists, us saw away our them Florida. portfolio moved of number our standards, did and Demotech underwriting the the we

are top that nimble even focused on we’re line, portfolio so. are quality we on we So more and as way, as

priorities incremental and people And lines. thing is we deployed existing over people the of wide has of say I XX% with other variety with our would well we’ve across been the terms that are These know in of clients. capacity who a we play

not core incremental it our relationships. in that so also Cat opportunity further is tremendous only itself, And capacity strengthens a

to fundamental And we Jan so just expectation you as play forward with at that Why do prospective believe all X, excellent that? renewal. our confronted be that returns Pretty stuff. we’ll is the

playing hasn’t that And imbalance first is that in changed. seen very still suggests there’s supply-demand supply out gap analysis market The we’ve the been that’s the a fundamentally between reinsurance certainly meaningful demand. and

the And to any risk scenes posit rapidly. demand and because easier, being that would and queue. many the I wanted you to And not at is placements that other geopolitics to. pent-up getting facing are environment also they X/X able way think growing their They’re of a climate There weren’t I inflation, that’s front factors. line, change but complete that’s

second And then primary a quarter while many terrific in not. did had underwriters we obviously, Cats,

quarter Cat level level but other in a second world. markets of also fact, around activity, the record United States, In particularly the record near it’s or in

tough primary in meaningful seen and We’ve be of a underwriter obviously, to nothing heard and change raise that. capital going aside in putting any really their also really that’s pipeline capital to reinsurance. increasing demand our spot extent, a I’ve for as no of So that’s meaningful the formation

an the of in cedents, extensively. you X/X, that global I reinsurers think number to much The opportunity in that not mentioned trading factor we’ll a is panels help important those if we’ll happening, to we for many the panels rather frankly, global back up be had and continue X/X, a underwriter. opening they’d very that where to clients go remarks, particularly place from I quality benefit put quality got of is there is with have at with clean higher our think And think a Juan his to as flight other that included

an at And a I’ll but impossible, it’s I a component hardened or and it’s of then in and haven’t number in that into down the mentality this to Cat. not industry play, little exists That’s psychology which there’s last maybe cite, auction reason a the quantify who there’s have underwriters to harder I anybody taken is market piece it’s because think important, some is property capital just – that our wants of they because may or this trade losses. have pricing in coming industry. years that And X/X additional met Cat underwriter down

the should So increased given our had expectation experience X/X we’ve be we for we’re more push into is going to about. think the hard going industry that external for We factors in talked rates. all those hard pushing

meaningfully, not and which grow to specialty We’re casualty, will grow going other looking to a of just but property be we Cat, number areas.

diversified, drive multiple in regions. growth can are We so globally we

can at We’re deployment renewal also name Cat, incremental outstanding so of we the we diversified we expect the the it. specialty, you grow X/X line, that terms. complete And will by non-Cat fully property capital at

So for. hopefully, looking you’re color that gives you the

Mark Kociancic

a Elyse, we were That’s the walked gives that to will deployment franchise it’s That’s strong reinsurance into greater out want especially where couldn’t use. exceptionally to once going conviction that of division. coming at to year specifics we just and points a see some be this put Mark. that of comments Jim’s get earlier, of I fundamentals our still capital the have us strong the Jim we capital good this an XX% and raise X/Xs, be than really lion’s the asking the just just confidence, stronger you raise through very underlying share. few add

supplement. is financial our billion something on premium $X.X operating into incremental in a with of forwards. or casualty the of QX evolution expect going ROE And exceeding again, capital And think bit property forwards. we digits property I property seeing swing you’re some do confident that feel ROE lines to mix that I our in the more favor moving single

Elyse Greenspan

and thanks My That’s cedents on to see the we’ve the is I for looking – expecting replace wondering play And in you there’s are if guys been been we casualty to you’re that reinsurers high-quality like collateralized something headlines helpful, this Or reinsurance. seeing color. if follow-up, the start yourselves? with surrounding could all was covers out market?

James Williamson

Yes. I Jim you’ve dislocation lot some definitely are events, parts, – variety of again. the some the say obviously, Elyse, a opportunistic. a And particularly is to of look, topic, market. we around what we’re Yes, is recent in and we seen chatter fronting given would hearing look, in particularly this that

the opportunity returns. that an take earn us gives certainly to have interesting that an flexibility there’s We opportunity it. emerges, if great We

remains franchise But underwriters opportunities our the global we even opportunity should are it, some a building might lean don’t priority to of our those around time. that means we positions that’s focus by get is, over with our best that And though and noise the into distracted come ready particular exist where way.

Elyse Greenspan

you. Thank

Juan Andrade

Elyse. Thanks,

Operator

Thank you.

next Your with Jefferies. Please ahead. Yaron from question comes go Kinar

Yaron Kinar

follow-up a Good Jim, the the now you. We rate property one everybody. response, some Cat noticed, Maybe of in said rates adequate to thing of lot looking your Thank And on they yesterday a industry. were from line you that that commentary a believe last questions. morning, X/X. for I did couple of you’re competitors, still hear your in push that

today? just interested matter rates adequate up just your I to going forward? I’d a pricing guess it’s views on keeping are with So how really be hear of Or trends loss if or

reinsurance. your one yesterday we’re you. heard competitors other the of hearing different into insurance by really property from And deploy a we and was preference then clearly, a than comment tone more capital to And

So perspective. hear thinking how I that from two you’re would to about the love

Juan Andrade

Juan. this Yaron, is Yes,

that. well. obviously perspective, Look, the that agree Cat said. property what but get Jim in let So I And we general started I with in ahead fundamentally as go getting returns and our with like from we’re think me

rate keep really seen external structure will terms and any environment. haven’t fundamental pushing as the We for changes in we

headline think average this Cats of billion. seen you’ve first XX-year morning over our of that I year, the at were the news some the in competitors $XX one with of the over reporting half

Cat an still active changed. there’s That So environment. hasn’t

be continue also to elevated. risk environment see We general the very

there, inflation You’ve social that hasn’t that right? There’s things cetera. got on got changed. comes And into geopolitical materials, you of that equation, et inflation, these then you’ve are impact also you’ve the an have got out cost issues, all other

So the perspective, see don’t this change therefore, is terms to price, And in structure. going why market. we we’re rate, continue push a and to from our

my it. how from that about think perspective, So is we

question by the saw right do in in deployment, insurance we second Cat numbers, like as in your also insurance and as reported XX% the environment To we Cat on you reinsurance reinsurance. property property grew But and we supplement. now our property insurance and

we’re Jim it that. pretty models. advantages We as And of our can on frankly, leaning hybrid have the But nimbly in of well. we add capital have and So best me some one take that the advantage to let that’s opportunities move risk-adjusted into this. color also

James Williamson

Losses And the maybe critical Yes, of whether at it’s in a is, a of like be. that bit were Yaron, do we thanks needed live point. a period think of losses little Juan hurt where we’ve for and the we it Cat come of what cyclical but pricing of companies The lot to risk wasn’t through elevated repeating years question. number underwriting a and I not, said, up. piled a a And fact where or it industry.

it. be take going the inherently returns. this want Cat even starting sit how you’ve adequacy, going push And to but declare challenge. to get consistently earning XXXX, in just to That for to and prospective mean not going we’re that. so change risk we’re does to with to here accept then think to want just paid renewal hit There we "Okay, We volatile, is and an X/X elevated continue There is to really until reinsurers X/X we’re and rate excellent not is is We to push. And geopolitical are view not excellent. of that, It inflation. idly there." for deserve we and heard return environment. me sitting back sit victory we’re going say, is profiles continue we’re mean going run business. particular, that’s my saying, to I

Michael Karmilowicz

on earlier, what volatility done across would just muting our is side concentration, U.S. opportunity not also made the into across our actually that, can the actually insurance we specifically really of portfolio that to Yaron, at add not strategy, through the years, derisk the Karmilowicz. of but just but on globe. point to the that how consideration Juan I Mike looking go just last And the we’ve couple take take this basically

So years we basically have over last XX%. lowered the two limits our by over gross

premium just addition to the over of our in when consideration seeing point change XX% of opportunity ratio PMLs, In leaning very over that X to we’re that, PML rate dramatically XX%. XXX you’re take an lowered heavy the in increases and to average capacity exposure into with is what’s Jim add the given talking us very the meaningful premium said, returns of you change to

and So robust. with see a going I us lot peak non-peak think to in in just opportunity just derisk really really good and we for really into market but not a bodes both areas, internationally and We pockets which is our ‘XX good think strategy of concentration the domestically, well keep limited ‘XX.

Yaron Kinar

Thanks give could in called shift. some quantify out in the adjustments a ratio more color But insurance. us know and loss deterioration underlying mix Mark And basis little point answer. you if here maybe premium was a one of quarter. there apologize the for EBIT Mike, very you, stand did with I for out nitpicking the on and thing then But maybe we very that a good I and continue changes? XXX comprehensive some

Mark Kociancic

it’s can Mark. start. I Yaron, Maybe

adjustments I in – remarks, reasonable my premium scripted of Like the were said they couple were size. So a components. a

million, lion’s coming $X $X of the Lloyd’s talking share You’re out million syndicate.

the that’s to one-off So in premium it through consider but flowing and unfortunate ratios nature. be mechanically, definitely, altering earned we situation, would

a there. you’ll contribution expense see, component. the subside the of to earned and of change within mix going think, the to got property that’s substantial becoming the And of help its ratio so size loss moving portion the expected terms more attritional do then brings and the in ratio loss in business premium forward, a dynamics you’ve also terms We of see I much composition ratio it combined A&H of the within of and ratio to combined

should a lower ratio that something moving loss is this towards So move mechanically forward. attritional

Juan Andrade

would was being we more what to point is is, and quarters. prices specialty in Mark and write to just you And we too, property really uptick as quoted from heard the products, in one emphasize, quarter continue the Yaron, during as this ratios is, last emphasize on XX% by cetera, one-time the saying, of – more I also energy, And like have Mike, saw the numbers too, as non-recurring was at specialty his and the growth of frankly, excellent aviation all is earns other loss write, to it which positive we a marine, in we that over and impact very et going subsequent adjustments.

Yaron Kinar

Thank you.

Operator

Thank you.

comes ahead. Ward Your Please next from go Michael with Citi. question

Michael Ward

Thanks, question, morning. a somewhat guys. Good Maybe similar but for reinsurance.

improvement you if curious margin from Just underlying could talk about of pace the here?

James Williamson

say look based really our driven Thanks in attritional if experience. loss current at quarter, improvement Williamson. a our Jim portfolio selected it’s the mostly on for ratio factors. One, two we I’d for the by lower Look, you the question. Mike, current that’s accident year Yes, have Cat

we’ve So prior just years, pick. that in outperformed

a expect over we I rate pick that so the tailwind getting Obviously, to continue we’re from reduced improve to it. all And time.

be factor. So that would a

a is second growing property picked really earn we the but beginning saw not a property because at from And toward up factor slightly of in has we’ll QX do you portfolio. to casualty, then continue continue growth the rate, casualty, to mix the through lower we and that shift not are that

really particular, will just at that beginning positive I the you’re of tailwinds all really of those continue. all In So these impacts. earning through described

the So I would really positive around that other talking way. describe is And I know we’re you’re but talking tailwind loss while commission. margin, ratio,

good the in driven little commission improvement of which mix. entirely welcome. thing, obviously That You was did bit see a quarter, which a by almost we

beginning will piece So pretty premium starting the and The to down. that X/X, We’ve even seeing continue. portfolio. will the fact on mix earn that’s just you that but consistently side not coming and mix shift yet, seating really been increases, commissions this is see into it’s property that you’re seen with a have toward casualty really property the earned that

So a tailwind there.

margin. is, in the total terms some bottom of line So expect good trends really we

Michael Ward

was so quarter. Thanks. ops for Really guess, income helpful. net then the I And including investment pretty strong,

for Just year. you half the wondering have the if second any of outlook

Mark Kociancic

Mike, it’s Mark.

of So it ops income couple and points component interest a to performance. then I’ll make here. between split the the

income I taken the our We’ve curve. got structuring advantage very of portfolio think yield interest good taking of end momentum. short account the into the has

generated And so floating higher from off yield those resets terms really frequently, the is securities. the you’re speak that securities about rate that of in we seeing and pay those

So I see there. tailwind a strong

book our rise yield year-over-year. seeing You’re

of global well a equity raise investing AUM, beyond basis. north think, clearly And the X% a rate churning is contribution. new the on even We’re north money I

We’re nice pickup that. getting some on

So very good. feel

the think the quite of is I strong. quality portfolio credit

a of a on really the given that We’re performance fixed difficult so on give average at of diversified – for equity limited set to the as quality to we’ve that’s – relatively we very an most pleased adequacy north the stable got part. income portfolio. the forecast, portfolio is something us in of partnerships. broadly diversification distribution nice And the credit XXX but we’re contemplate end important side expected stable bordering but investments is the there private over op AA-, It’s with. credit a And A+ the

kind in income. one-off well QX, in performance quarterly don’t the support from cyclical with somewhat terms it’s comes in but think coming seeing rather S&P a the time. any for that ops XXX of the in, contribution correlates contribution of broad-based seeing type you’re generally I but how Now is you’re the in where over

Michael Ward

Thanks, guys.

Operator

you. Thank

Peters Your James. ahead. with next question from Gregory Raymond Please comes C. go

Gregory Peters

portion one you talked I you’ve more Good a had spoken, know about Can macro and property speak everyone. I macro your the and the I question the in believe hear On I facultative hard versus treaty Hey. question. facultative really you morning, can one market. talk don’t portion then side, I basis, just guess active lot detailed perspectives the too. about the of the market a pretty commentary, of on market. but you’re of

Juan Andrade

some talking structure. if has as Look, to risk is it’s facultative Yes, Juan of right? reasons the the into we’ve And are treaty Greg, growth been will, opportunities upload, some their same seen for this does looking well. for that Andrade. that frankly about, Basically, cedents you strong fit necessarily very

pretty right But So about perspective, Jim, that maybe specific can fac well. our We some you add good color. book significantly. from also our now feel is very global as growing

James Williamson

Greg, thanks question. Yes, for the

our treaty we tough it’s exposures their because to up, it’s environment manage and risk. mentioned, pre-risk they’re think concerns. an astute for And if and gone their cedents at looking their one looking I they’re a have as attachments

some to they trends, segments We by Based emphasis in casualty XX%. So fac quarter of almost portfolio as turn real fac well on and the lines. a second with property on the as grew our specialty market. those

terms What approach you’ll I in say very underwriting. factors what facultative add our property us out playing The are insurance hear is to similar of same that our in would to about business. to

quality We’re tight, that selection taking. very paid for keeping limits risk focused risks controlling so and ensuring extremely well limits on deployed, we’re getting we’re the

their competitors say, own to The similar insurance taking fac as primary I costs. reinsurance steeply, are with would really market. dealing accelerated And our again particularly rate has

nice opportunity. So we a as view it

Gregory Peters

lines I to insurance look casualty, workers’ sense. When accident, specialty as wanted the I business, not comp. but professional the health Makes pivot and second of my operations liability, some maybe of at so question. much, follow-up to

around report development We’re prior that other not guys. companies year primary volatility out seeing and you some of observing really

give could out accident reserves us sort So the takes of your a maybe how just and developing? and years older of some you and book are spend the inside update on minute of the

Mark Kociancic

Yes.

that industry through Mark in the that about few it’s ‘XX make. is So A from pressure here. studies. to That’s few social you’re comes points real. reserve the the portfolio. our in points something Greg, Look, the to A and seeing inflation ‘XX

reserves. lines. Last lines, for had in the movements, lines, tail those very longer cetera. had and modest years shorter had et say, I’d we workers’ as We in specific offsets our casualty And well, some insurance coming pluses year, tail from minuses comp also we positive

to portfolio over make so allows of time. have is minuses of one broad-based pluses And and here we the do that the that points a course for

things. of couple a from benefit also We

try we of since of on the when Juan lines, picks hold bit particularly I picks those good. to want we’ve to say longer certainty. has be tail started, have and conservative, until a – XXXX been quite I’d loss the quite our we prudency We think

think insurance, proportion for, particularly conservatism, XXXX when the in level helpful that to And say, business I ‘XX I of in got onwards, of this that you’ve than of so reserves is have And think, the is that then significantly marketplace. in the and uncertainty XXXX, wrote larger we the set we ‘XX.

So the is quite kind relative really of scale meaningful.

quarters And and compounding off been throughout take XXXX would has it probably those since QX one much, of that saw I more the reasons time. say, that’s important rate is you started really pretty

the there that, we helps then in in loss we’re vigilant equation. obviously I And so ELRs, in so think, rate as and and make time, versus track and reserves trends over margin adjustments And forth. in how overall, the the we the needed

that’s we what us where gets so with are. And comfortable

Gregory Peters

the for Fair Thanks answers. enough.

Juan Andrade

Thanks, Greg.

Operator

you. Thank

next from ahead. Michael question Zaremski BMO. with Your Please comes go

Michael Zaremski

We Cat but morning. numbers Hey, in and up on guys, creeping levels that that your still they’re well Maybe Thanks. touching pre-pandemic to good below see, ratios. PYD a the paid on bit, subject. incurred ex I guess, think, I

might kind So bit know a there’s of that’s cost a are a be again ex up a loss tough seeing to are I inching discussion. Cat it brush. inflation, different But property seeing? maybe of you – in you broad broadly paint

Mark Kociancic

a Yes, trend. again Mike, definitely it’s That’s a here. that concern, Mark

You of have different levels inflation.

understood. lines obviously, whether I inflation, which would the So all inflation wage on got this social depending segments, Then of by excess well inflation, you’ve inflation, what call, to. loss medical think, driven I certain or it’s pertains excess, CPI is

monitor. those so are that we And things

seen of there’s words, elevated increase, in these more Clearly, as some risk environment an moderately. we’ve other

the monitoring of trend. adequacy. would picks reiterate rate it’s take the setting of loss account again, But rate and versus with I So something excess loss into we

Juan Andrade

Yes.

Juan This because ahead point. to call, of a Let are what remarks is in beginning in said Mike. on prepared I my very this think build me interesting I that’s jump of And there, at the we very we increased out are by financial not over rate now, So and a us our right level instance, really when right? comp rate to for in take lines, core which you comfortable trend insurance way, XX%.

for insurance that we pretty you’re that. that. a ahead good significantly margins. you in us loss top on then of comfort that leverage And can lower aggregate building are, basis level of on exposure of which gives you an And far than on basically on is means trend how And

a on of other So obviously, gives calls loss basis, comfortably very right as we we on mentioned very look exposure you another frequent past. close on buffer. I’ve in keep at track trend and the with ahead add that, We you rate trends then of now that it. But are

Michael Zaremski

– environment some on you’re comfortable it’s guess most we’re releases that’s reserve of sometimes think saying I which math. the Cat. not kind just tough I’m triangulating we’ve of feel is it. really what yet Got curious Everest, happening. property It’s the a that just also investors excluding much pricing just I seeing not from so knock,

side. changing some you like pricing was flattish acceleration Marsh other on the sequentially broadly seeing of points data even have much maybe although, on Are rata carriers carriers of – the hand, quarter-over-quarter, conflicting larger the – commercial bit We’re more index portfolio, is kind your of the a especially pro McLennan for sequentially? pricing seen an some

Juan Andrade

Marsh I’m is If Juan, Karmilowicz global I add think not and a mistaken, numbers Let then Jim color. me Mike start, this are and I’ll numbers. little have bit the to of Mike,

from Europe, so America, variations you Latin to are have And cetera, cetera. in Asia, numbers those et going et

that in we improvement certainly And environment I minutes have on primary we continue is side said ago, in a see to seen quite the reinsurance pricing sequential actually good. rate of as of just and insurance The things. couple

the right environment we trade that on a and seeing as in that daily So basis. living we’re is now we’re that

then But some on give some pro the Jim can you you primary and side. rata’s color give can more on color the Karm

James Williamson

Jim. Yes, Mike, it’s

we’re think trend having Juan is direction moving the cost ratios So indicated, as had that analysis cedents look, loss in needs front. think key keep is in the the and rate up to with I doing hold I fundamentally, in the on conversations that we’re it our and loss with at renewals, place

is I really where does what of particular, just looking under of as a areas in matter. of you the and of D&O, or industry are Juan market" indices reacceleration look And we would experiencing workers’ at, some terms this very of caution that are measure at that not And comp mix if in exposure. have little the "casualty pressure the discussed, things like portfolio some

And what we index. metrics our move own so continue where heading. is on, obviously, portfolio, that feel about But we’re are focused those can good and to an

Michael Karmilowicz

cycle focus primary stress And group, We Yes. a management. as I insurance couple things. far from on the of always importance of the

D&O, workers’ about well as last you been about comp. which we’ve as year talk when the So talking for

ago, on cost as You’ve down what that guaranteed down comp go example, years seen was X%. an monoline to XX% from to workers’ the now

side, know and you besides in opportunity party, aviation, the to when see then And can we that marine, property we really things of take drive leaning really the where we’re advantage terms the really first actually marketplace. rate

based think we foreseeable on So in not opportunity, and see the we we’re future. the benefit I itself think what see change, just with seeing comments I particularly Juan’s about rate and the exposure in

Michael Zaremski

That’s helpful. Thank you.

Operator

Thank you.

question go comes UBS. Meredith ahead. with Brian Please next Your from

Brian Meredith

you. for here of couple A thanks. Yes,

benefited of I you And a the And Jim, in transactions kind make one, not to don’t how are deals growth. you did that want know. private those they’re if just continuing First maybe little of some I’m have us Maybe assuming the wonder continuing. forward my those your not of would quarter. I for if can kind sense about estimates, don’t are could a continuing? that top-up of they bit I sure you are, talk give

Juan Andrade

Jim? Brian. thing, Sure

James Williamson

seeing Yes. Thanks, Brian. Yes, look, types. variety of we’re a

closely market to in to first capacity global number large pent-up some question, our of have situation a placement So to programs. issue come a cases, up either Cat or brokered existing features, the is private one one into of for points top the this of your in clients part think that a out and biggest looking the I their demand

liked reality is to have at have those top-ups X/X. I think would they the And bought

and to get probably – wasn’t try their advised by to that get brokers so appropriately were done. that they that think I the time

waited. it’s We really it’s And around that and they continued time, and X/X started it right at been so nice activity. seeing

to they cetera, placements, facultative peak and acceptable. And per where how profile, zones risk large have and at still treaties, this to more they keep coming their a we but end I smaller et the exposures of manage spectrum, partners mentioned is with some even us with the had the total little risk as a of of get just creative variety want and deal economics then other earlier, on

And so it’s continuing.

I bulk of is in just market. big of though, renewals the view results a The that transactions all bulk I North open would market, an is particularly tailwind. this would the the look, nice say, broker these driving other the reporting. reality is America, we’re are

key future importantly in indication have demand. more also supply what happen to think of and of the I they’re a terms in we expect

And that way. so extremely they’re useful

Juan Andrade

right? You last this that – amplify been is not have this we saying all would all exactly what Cat in made still changed, high we’re that point the I What because environment right? would along, I is is activity. macro operating this that Juan. illustrates that Jim Right. fact the have has fundamental really

You a manage also to risk have heightened our earnings environment are and looking cedents volatility.

do side. to same that, market figure same at way to so attack market therefore, out the on time, they’re And try trying primary to property at to they’re the coming side also the still the a while to

the I is right, right and there like that is with they to highly trade carriers think want Jim So absolutely still exactly rated, these demand are of all cetera. us, look, quality, great and signs, et

Brian Meredith

wondering I’m the in are a build-out we That’s business. insurance of if little really kind could on question, second Great. helpful. bit the the where then And about international you talk

it, expense where foreseeable increases the for of And a Should looking is year-over-year we process? build at just operating the that up growth call continue to that you here little year-over-year. XX%, future, So over XX% kind big as in are out? continue

Juan Andrade

the for I of this really of a very methodical year. Brian. beginning really began days. think early at build-out We you, strategy still Look, Thank last it’s Yes. us,

other online later France, this of in in essentially year. now with Singapore and coming We in point Germany, in in in this a Chile, at couple markets Spain, in are Australia time

has We’re really we with They have they we A+ as the the people, been cetera. fact two do, our name normally the brokers, the frankly, us. very years, company. And that I’ve the market et with the people has reaction our reception clients, the excited of that world know over phenomenal. because that paper. I frankly, like the about terrific. opportunities trading And last love been they’re the They meeting the our traveled like They see.

of And the that been target Part people, set et been the operating the cetera. so there. build-out has systems, underwriters, from et methodical has that perspective, the cetera, opportunity the model,

And expectations. so all of this is really, our frankly, within

last comment quarter’s expense Mark But that about disciplined in When think do call. time, see we way. trend indicated a had particularly that you’re in as we think very to doing making. the I down over And this beginning we’re

expenses. the managing We’re

careful build-out managing had in markets. We’re And we’re about frankly, way, very that these very seeing. the reaction a but each we’ve the excited what in of we’re

Brian Meredith

you. Thank

Juan Andrade

Brian. Thanks,

Operator

Thank you.

with next Bruyette go Your Keefe, from question comes & Shields Meyer Woods. Please ahead.

Meyer Shields

in Great. the Thanks. the you’re okay. Florida cautious companies update how One some you introductory are the I on comfortable as themselves question, more thinking about you hoping reforms on words, us could being the with market individual Jim, long was you guess, Florida. how about of are as In other holding cedents talked up? I

James Williamson

that of Yes, Meyer. for Thanks into parts. break two I’ll and the kind Look, question.

get and First, reforms. to then why – more what bit tell about would a we you I’ll did and the little

given number of A that year, that last didn’t with from experience of with screen. underwriting. been screen. over these particularly our clients our X/X under is in last one dealing didn’t rated the important, So, I business And underwriting over screens past when that most specialists, and Demotech-rated Demotech of the years Florida the we specialist stress have Florida think, our the little clients those financial the particularly did folks of pass couple just a pass

longer to so support we just no programs. And were their able

capacity we less so those deploying up ended to And folks.

terrific we Now a we’re in market.

reallocated simply opportunities. Florida both to we it and non-Florida So

a for So I us trade think, overall. really good

on. Florida In political exercised head look, the was tackle think reforms, reforms. they’re terrific It this we to terms think of encouraged necessary. fortitude, of in absolutely the We class lot a problem

going in to given place and to were crisis. was was think happening that insurance and a have an abuse heading the the you fraud it reinsurance where state, I

reforms don’t – loss the will folks bar to it’s we’re in to and play we’re yet the we’re costs. on how reform. state acquiesce the on clear plaintiffs also simply that based facts, the but reforms, So positive expect I not that out XXX% make in decisions

to play need see out. we so And that

necessarily So reveal loss that as they we less market, size. equal. not if add the obviously, I Florida the show in not think, loss of irrespective other results sort down, commitment happens. on of to favorable that, would have make state looking on are all activity obviously, if I The that necessarily what the don’t being coming that’s more down for Florida, only of is actual to to the the the reform is so. costs – signs And right us other themselves true, things would piece either double I though,

Meyer Shields

Okay, perfect. That’s very helpful.

broad question, portfolio casualty how concern and could us you Second was trends. for we loss a loss your transfers on sort talked of bit see – hoping update about and you writing loss demand appetite I little about evolving? portfolio there

James Williamson

quality of we Yes, with has not franchises something focus focus the our Everest the on. local market transactions multiple it’s It’s on. Meyer, with so and We kind obviously carry done highly it’s effort Look, sheet rather Jim and competing that’s and of across where where over and a again. bulk you’re the do area It not really few the build time. And who an companies forward-looking typically changes and we’ve is competitive. rating strong global best that their balance cedents that of is would lines economics.

of what going forward. see So we big do I a just being that don’t piece

Meyer Shields

Thanks Fantastic. Okay. much. so

Operator

Thank you.

Your Elyse Wells Please Greenspan go ahead. next from question with Fargo. comes

Elyse Greenspan

segment, guys I better XX% years that ago, one insurance is a on just ratio market with combined target, You right? obviously, out the had I follow-up have plan of thanks. much XX% impacted that end to financial some guided couple that know a the Hi, laid And today. in do have the one-offs the this margin towards sense of we quarter come QX in see the you perhaps could reported when there the when dynamics, given But results. that market were range? the lower right,

Mark Kociancic

Yes.

the it’s that fundamentals insurance Elyse, very I we think good So side. some have Look, on Mark. there’s

few a a noise factors. You little bit coming from of have do

this let bit. little develop So a just me

pretty One, top line can now few the from very And to a got you coming our that’s right So expansion. premium. some translating see in of we’ve more solid points a earned in necessarily as property expected. good It’s make. growth international not to

to bit pieces a exacerbates some the no there. be And that, going But the issue as the of that’s driver. for in a we’re so expenses putting foundational that And expansion.

is confidence. internationally very that’s key that that us good we’re I domestically gives more think The business timing. the writing thing and

the the range. what And And Cat even so on really the done end think that standpoint, add the think growth the going that I mix changing, from to conscious for is the to margin, expected side that further overall it us to is to I drive lower insurance. de-risking we’ve is of

driver we another a of so print of when there. example, Cat low you and appetite quarter, And a and for in some the at how the meaningful zero tactical how constructing our this Cat take pretty for we’ve that’s insurance, and made number a get loss on QX changes we’re look

maybe part, we have management this are then quite you And we division give see the strong. the last verbal and I can commentary the in that written think cycle insurance the all capabilities in

lines respect the in when to into other You’ve are of favorable. less business that higher-margin got allow minimize set fairly of diversified transition are lines us a markets areas that that favorable and

lower us years pieces IR And XX%, the on we’re Day still so two that XX%. working you I of the portion what’s really those the get quite comfortable that And with gave we ago. are going to think to assumption

Elyse Greenspan

you. Thank

Operator

for now to Thank our conference remarks. and the you. session. like question-and-answer This turn closing Mark would concludes Juan I back any to

Juan Andrade

strategy and remain execution. the Great. We you this Thank driving remain our discussion. offense the talent excellent that’s and reiterating in call by I’ll in for this the And market. exceptional all no team, and frankly, the we hard disciplined our confidence questions close our and opportunistic

stakeholders, that have look third creating quarter value to you and unwavering you. all I Thank of again discuss We results. seeing is sustained mind. an to focus our on our of forward top for

Operator

now has Thank concluded. you presentation. attending for conference today’s The

You may disconnect. now

Everest Re (EG) 27 Jul 232023 Q2 Earnings call transcript