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Everest Group (EG) Q1 Earnings Surpass, Revenues Rise Y/Y

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Everest Group, Ltd.’s (EG - Free Report) first-quarter 2024 operating income of $16.32 per share beat the Zacks Consensus Estimate by 2.1%. The bottom line jumped 44.3% year over year.

Everest Group witnessed higher premiums across its reinsurance and insurance businesses, improved net investment income and record underwriting income. Higher expenses partially offset the upside.

Everest Group, Ltd. Price, Consensus and EPS Surprise

Everest Group, Ltd. Price, Consensus and EPS Surprise

Everest Group, Ltd. price-consensus-eps-surprise-chart | Everest Group, Ltd. Quote

Operational Update

Everest Group’s total operating revenues of $4.14 billion climbed 26% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 1.4%.

Gross written premiums improved 17.2% year over year to $4.4 billion, driven by 20.4% growth in Reinsurance and a rise of 9.8% in Insurance. Our estimate was $4.3 billion.

Net investment income was $457 million, which surged 75.7% year over year. The upside was driven by a larger asset base and strong core fixed income returns. Our estimate was $410.3 million. The Zacks Consensus Estimate was pegged at $436 million.

Total claims and expenses rose 14.7% to $3.3 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. The figure matched our estimate.

Pre-tax underwriting income was $409 million, which soared 50% year over year. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $85 million, narrower than the loss of $110 million in the year-ago quarter. The loss was due to the Francis Scott Key Bridge Collapse in Baltimore.

The combined ratio improved 240 basis points (bps) year over year to 88.8 in the reported quarter. The figure matched the Zacks Consensus Estimate, while our estimate was 85.5.

Segment Update

The Reinsurance segment’s gross written premiums were $3.2 billion, up 21% year over year. Growth was broad-based across geographies and lines as the flight to quality continues to accelerate globally.

The combined ratio of the Reinsurance segment improved 350 bps to 87.3. It matched the Zacks Consensus Estimate. Our estimate was 84.9.

The Insurance segment generated gross written premiums of $1.2 billion, up 10% year over year, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines.

The combined ratio deteriorated 80 bps to 93.1 for the Insurance segment. Our estimate was 87.2. The Zacks Consensus Estimate was pinned at 91.

Financial Update

Everest Group exited the first quarter of 2024 with total investments and cash of $38.1 billion, up 2.7% from the 2023-end level. Shareholder equity at the end of the reported quarter increased 3.2% from the figure at the end of 2023 to $13.6 billion.

Book value per share was $313.55 as of Mar 31, 2024, up 3% from the 2023-end level. The annualized net income return on equity was 20.6%, which expanded 640 bps from the year-ago quarter.

Everest Group’s cash flow from operations was $1.1 billion in the quarter, up 3.5% year over year. The company paid common share dividends of $76 million during the quarter.

Zacks Rank

Everest Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Chubb Limited (CB - Free Report) reported a first-quarter 2024 core operating income of $5.41 per share, which outpaced the Zacks Consensus Estimate by 2.3%. The bottom line increased 22.7% year over year. Net premiums written improved 14.1% year over year to $12.2 billion in the quarter. Our estimate was $11.4 billion, while the Zacks Consensus Estimate was pegged at $13 billion.

Net investment income was $1.4 billion, up 25.7% year over year. The Zacks Consensus Estimate was pegged at $1.3 billion, while our estimate for the same was $1.4 billion. Property and Casualty (P&C) underwriting income was $1.4 billion, up 16.7% year over year. Global P&C underwriting income, excluding Agriculture, was $1.3 billion, up 10.9%.

RLI Corp. (RLI - Free Report) reported first-quarter 2024 operating earnings of $1.89 per share, beating the Zacks Consensus Estimate as well as the year-ago number by 16%. Operating revenues for the reported quarter were $394 million, up 17.6% year over year, driven by 17% higher net premiums earned and 21.3% higher net investment income. The top line, however, missed the Zacks Consensus Estimate by 0.1%.

Gross premiums written increased 13% year over year to $468 million. This uptick can be attributed to the solid performance of the Casualty (up 12.6%), Property (up 13.5%) and Surety segments (up 12.1%). Our estimate was $511 million. Underwriting income of $77.7 million climbed 16%. The combined ratio deteriorated 60 bps year over year to 78.5. The Zacks Consensus Estimate for the metric was pegged at 85, while our estimate was 77.7.

W.R. Berkley Corporation’s (WRB - Free Report) first-quarter 2024 operating income of $1.56 per share beat the Zacks Consensus Estimate of $1.46 by 6.9%. The bottom line improved 56% year over year. W.R. Berkley’s net premiums written were $2.9 billion, up 10.7% year over year. The figure was higher than our estimate of $2.8 billion. Operating revenues came in at $3.2 billion, up 11.6% year over year. The top line beat the consensus estimate by 0.2%.

Net investment income soared 43.2% to a record $319.8 million, driven by a 63.2% surge in the core portfolio. The figure was higher than our estimate of $302 million. Total expenses increased 6.5% to $2.7 billion. The figure matched our estimate. The loss ratio improved 160 bps to 6.2, while the expense ratio improved 20 bps year over year to 28.6.


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