Everest Group Q2 Earnings Call Highlights

Everest Group NYSE: EG reported second-quarter operating income of $585 million, supported by underwriting income and investment income, as management emphasized underwriting discipline, portfolio adjustments and capital returns amid competitive reinsurance market conditions.

President and CEO Jim Williamson said the company generated an annualized after-tax net operating return on equity of 14.9% and annualized total shareholder return of 16.8%. Book value per share excluding unrealized gains and losses increased 12% year over year, while operating earnings per share were $14.85, according to Executive Vice President and CFO Elias Habayeb.

The company’s core businesses—Reinsurance Treaty and Global Wholesale & Specialty—produced $317 million of underwriting income on a 90% combined ratio. Gross written premiums in those businesses totaled $3.7 billion, down about 7% on a comparable basis from the prior-year quarter as Everest reduced or exited business that did not meet its return thresholds.

Reinsurance Treaty Results and Market Conditions

Everest’s Reinsurance Treaty business generated $283 million in underwriting income and posted an 88.5% combined ratio. Gross written premiums declined approximately 9% year over year on a constant-currency basis, excluding reinstatement premiums. Casualty premiums fell 19%, while property premiums were relatively flat as growth in property pro rata business offset reductions in the catastrophe portfolio.

Williamson said the company continued to reduce exposure to U.S. casualty lines while selectively cutting business where pricing or structure did not meet return requirements. He added that Everest is expanding selectively in specialty lines globally, including areas such as data centers, construction and renewable energy.

Property pricing declined by roughly 15% to 20% across the market at the June 1 and July 1 renewal periods, according to Williamson. Everest’s property catastrophe portfolio saw pricing decline by about 10% across those periods. He said terms and conditions have been largely maintained and attachment points have remained relatively stable.

During the question-and-answer session, Williamson said Everest moved its average attachment point slightly higher during midyear renewals and shifted capacity among programs based on risk-adjusted economics. He said the company did not move lower in reinsurance towers to obtain better pricing.

Habayeb said the Reinsurance Treaty segment’s attritional loss ratio rose 140 basis points to 57.1%, largely due to higher weather-related non-catastrophe losses. Excluding those losses, the ratio would have been 54.4%, representing a 130-basis-point year-over-year improvement driven by business mix and improved loss experience. He said investors should view the near-term attritional loss ratio for the treaty operation as being in the mid-50s.

Wholesale and Specialty Progress

Global Wholesale & Specialty reported a 95.2% combined ratio, unchanged from the prior-year quarter. Its attritional loss ratio improved 390 basis points to 60.6%, which Habayeb attributed to underwriting actions and an improved mix of business.

Gross written premiums were roughly flat in the segment. Growth in niche specialty products and international markets was offset by intentional reductions in U.S. property and casualty business. Everest reported double-digit international growth across financial lines, marine, political violence and selected specialty property markets.

Rate across the segment was flat, as double-digit property rate declines were offset by rate increases in casualty. Catastrophe losses added 1.4 points to the combined ratio, while the prior-year quarter had minimal catastrophe losses. Habayeb said Everest continues to expect the segment to deliver combined ratios in the mid-to-high 90s in the near term.

Reserve Actions and Investment Income

Everest reported no net prior-year reserve development in the quarter. Habayeb said favorable development in short-tail lines was offset by a higher industry loss estimate for the Baltimore Bridge collapse and strengthening in casualty reserves.

The company increased its reserve estimate for the Baltimore Bridge matter by about $55 million, bringing its estimate in line with an industry loss range of approximately $2.8 billion to $3 billion. Everest also strengthened North American casualty treaty reserves by just under $200 million. Habayeb said loss emergence was concentrated in older accident years, but the company reflected the experience across most accident years.

Management did not adjust 2026 casualty loss picks during the quarter. Habayeb said casualty loss trends have remained relatively stable since the prior reserve study, ranging from high single digits to low double digits depending on the line of business. Everest expects to complete annual reserve studies for most long-tail lines later in the third quarter and plans to publish enhanced global loss-triangle disclosures during the coming month.

Net investment income was $523 million, modestly below the prior-year period due to lower alternative investment returns. The investment portfolio’s book yield was 4.5%, compared with a current new-money yield closer to 5%, Habayeb said.

Third-Party Capital and Share Repurchases

Everest said its Mt. Logan Capital Management platform had approximately $3.4 billion in assets under management as of July 1, up 89% from the beginning of 2025. The growth included the launch of Annapurna Re, a casualty and specialty reinsurance sidecar.

The company expects to cede roughly $200 million of premium per quarter to Annapurna Re over the next three years. Management said the sidecar should be modestly accretive to underwriting income and return on equity over time, while reducing net investment income. Williamson said the arrangement is structured as a quota share and is intended to align Everest’s experience with that of its third-party capital partners.

Capital returns remained a priority. Everest repurchased approximately 1.2 million shares during the second quarter for $395 million at an average price of $342 per share, alongside dividends, resulting in a quarterly payout ratio of 81%. Since Williamson became CEO in January 2025, the company has deployed $1.5 billion toward share repurchases and reduced shares outstanding by more than 10%.

Habayeb said Everest views $300 million of quarterly repurchases as a floor and expects to exceed that amount when appropriate. The company also has more than $1 billion of capital supporting its legacy business that is expected to be released over time as reserves run off. Everest’s commercial retail insurance transition to AIG remains on track, with roughly $250 million of net premiums left to be earned in the second half of 2026.

About Everest Group (NYSE:EG)

Everest Group NYSE: EG is a global research and consulting firm specializing in strategic advisory, market intelligence, and data-driven analysis for business process, information technology, and emerging technology services. The company provides insights and benchmarks that help enterprises and service providers optimize digital transformation initiatives, sourcing strategies, and operational performance. Through its proprietary research frameworks and data analytics, Everest Group delivers actionable guidance on areas such as automation, cloud migration, customer experience, and supply chain resilience.

With offerings that span advisory engagements, managed services research, and consulting projects, Everest Group serves multiple industry verticals, including banking and financial services, healthcare, manufacturing, telecommunications, and retail.

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