Everest ups GWP 18% in Q1, leans towards higher margin reinsurance
Everest Insurance group grew its top lines neighbourhood 18% in the first quarter, tipping growth visibly towards its still-dominant reinsurance segment where margins have fared better, including most notably at the 1.1 renewals.
“Group underwriting income increased 50% over the prior year to a quarterly record of $409 million with a combined ratio of 88.8%, driven by both of our underwriting franchises,” CEO Juan Andrade said of what he called “a strong start to 2024”.
Reinsurance segment gross written premium rose 21.2% year on year (20.4% constant FX and ex-reinstatement premium) to $3.2 billion on growth management called “broad based across geographies and lines as the flight to quality continues to accelerate globally”.
The 1.1 reinsurance renewals proved “outstanding,” Andrade reiterated. “We gained market share with targeted clients, positioning the portfolio for attractive levels of profitability.”
The reinsurance segment combined ratio came down 3.5 points to 87.3% on a 26% y/y reduction in pre-tax cat losses to take 2.2 points off of the tally. Management said the Q1 tally was “driven primarily by the Baltimore Bridge Collapse” but offered no further insights.
“Risk adjusted returns remain very attractive, particularly in property and specialty lines,” management said of segment outlook.
Everest's newer and smaller primary insurance segment increased gross written premium by a smaller 10% (9.8% in constant FX). Management bragged of gains in “a diversified mix of property and specialty lines” partially offset by lower premium in monoline workers' compensation and financial lines.
The combined ratio in primary insurance rose by a fractional 1.0 points, chiefly on non-loss expense against a largely stable set of loss ratios.
Management claims that pricing continues to exceed loss trend overall which is said to be holding stable. Everest has seen a “meaningful acceleration” in pricing across long tail lines excluding financial lines.
Following an increase in net investment income to $457 million versus $260 million in the prior year period, the group more than doubled Q! net profits to $733 million for a net ROE measure of an even 20%.
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