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Everest Group Q1 Earnings Miss on Higher Catastrophe Losses
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Everest Group (EG - Free Report) reported first-quarter 2025 operating income of $6.45 per share, which missed the Zacks Consensus Estimate by 13.5%. The bottom line dropped 60.5% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Everest Group suffered due to catastrophe losses, stemming primarily from the California wildfires.
Operational Update
Everest Group’s total operating revenues of nearly $4.3 billion increased 3.1% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 4.5%.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Gross written premiums declined 2% year over year to $4.4 billion, attributable to a 1.1% decline in Reinsurance and 0.1% lower gross written premiums in Insurance. Strong double-digit growth in property and specialty lines across both segments was offset by reductions in certain casualty lines. Our estimate was $4.7 billion.
Net investment income was $491 million, which increased 7.4% year over year. The upside was driven by a larger asset base as well as strong core fixed income investment returns. Our estimate was $473.5 million. The Zacks Consensus Estimate was pegged at $490 million.
Total claims and expenses surged 21.6% to $4 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, and other underwriting expenses. Our estimate was $3.8 billion.
Pre-tax underwriting loss was $104 million against the year-ago quarter’s pre-tax underwriting income of $409 million. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $472 million, wider than a loss of $85 million in the year-ago quarter.
The combined ratio deteriorated 1390 basis points (bps) year over year to 102.7 in the reported quarter. The Zacks Consensus Estimate was pegged at 99, while our estimate was pinned at 93.
Segment Update
The Reinsurance segment’s gross written premiums were $3.1 billion, up 1.4% year over year. The rise was led by an 11.5% increase in Property Pro-Rata, a 7.9% increase in Property Catastrophe XOL and a 7.7% increase in Property Non-Catastrophe XOL.
The combined ratio of the Reinsurance segment deteriorated 1,600 bps to 103.3. Our estimate was 93.7. The Zacks Consensus Estimate was pegged at 99.
The Insurance segment generated gross written premiums of $1.1 billion, down 1.1% year over year. Everest Insurance grew 19.0% in Property/Short Tail and 16.1% in Other Specialty lines.
The combined ratio deteriorated 870 bps to 100.5 for the Insurance segment. Our estimate was 90.8. The Zacks Consensus Estimate was pegged at 100.
Financial Update
Everest Group exited the first quarter of 2025 with total investments and cash of $42.6 billion, up 2.6% from the 2024 level. Shareholder equity at the end of the reported quarter increased 1.9% from the figure at the end of 2024 to $14.1 billion.
Book value per share was $332.39 as of March 31, 2025, up 6% from the 2024-end level. The annualized net income return on equity was 5.7%, contracting 1490 basis points year over year.
Everest Group’s cash flow from operations was $928 million in the quarter, down 15.6% year over year. The company paid common share dividends of $85 million during the quarter.
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2025 operating net income per share of 75 cents, which beat the Zacks Consensus Estimate by 13.6%. Moreover, the bottom line increased 15.4% year over year. Total operating revenues of $305 million increased 0.7% year over year due to higher net investment income and net premiums earned. The top line however missed the consensus mark by 1.5%.
Insurance in force increased 1% from the prior-year quarter to $293.8 billion. The Zacks Consensus Estimate was $297 billion. Our estimate was $296.8 billion. Persistency — the percentage of insurance remaining in force from one year prior — was 84.7% as of March 31, 2025, down from 85.7% in the year-ago quarter. Net premiums written increased 0.7% year over year to $235 million. The figure was lower than our estimate of $238.4 million.
Radian Group (RDN - Free Report) reported first-quarter 2025 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 4.2%. The bottom line decreased 3.9% year over year. Operating revenues remained flat year over year at $306 million. It missed the Zacks Consensus Estimate by 6.4%.
MI New insurance written decreased 17.7% year over year to $9.5 billion. Net premiums earned were $234 million, flat year over year. Persistency was 83.7% as of March 31, 2025, contracting 60 basis points year over year.
Prudential Financial, Inc. (PRU - Free Report) reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year. Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This increase was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.
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Everest Group Q1 Earnings Miss on Higher Catastrophe Losses
Everest Group (EG - Free Report) reported first-quarter 2025 operating income of $6.45 per share, which missed the Zacks Consensus Estimate by 13.5%. The bottom line dropped 60.5% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Everest Group suffered due to catastrophe losses, stemming primarily from the California wildfires.
Operational Update
Everest Group’s total operating revenues of nearly $4.3 billion increased 3.1% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 4.5%.
Everest Group, Ltd. Price, Consensus and EPS Surprise
Everest Group, Ltd. price-consensus-eps-surprise-chart | Everest Group, Ltd. Quote
Gross written premiums declined 2% year over year to $4.4 billion, attributable to a 1.1% decline in Reinsurance and 0.1% lower gross written premiums in Insurance. Strong double-digit growth in property and specialty lines across both segments was offset by reductions in certain casualty lines. Our estimate was $4.7 billion.
Net investment income was $491 million, which increased 7.4% year over year. The upside was driven by a larger asset base as well as strong core fixed income investment returns. Our estimate was $473.5 million. The Zacks Consensus Estimate was pegged at $490 million.
Total claims and expenses surged 21.6% to $4 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, and other underwriting expenses. Our estimate was $3.8 billion.
Pre-tax underwriting loss was $104 million against the year-ago quarter’s pre-tax underwriting income of $409 million. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $472 million, wider than a loss of $85 million in the year-ago quarter.
The combined ratio deteriorated 1390 basis points (bps) year over year to 102.7 in the reported quarter. The Zacks Consensus Estimate was pegged at 99, while our estimate was pinned at 93.
Segment Update
The Reinsurance segment’s gross written premiums were $3.1 billion, up 1.4% year over year. The rise was led by an 11.5% increase in Property Pro-Rata, a 7.9% increase in Property Catastrophe XOL and a 7.7% increase in Property Non-Catastrophe XOL.
The combined ratio of the Reinsurance segment deteriorated 1,600 bps to 103.3. Our estimate was 93.7. The Zacks Consensus Estimate was pegged at 99.
The Insurance segment generated gross written premiums of $1.1 billion, down 1.1% year over year. Everest Insurance grew 19.0% in Property/Short Tail and 16.1% in Other Specialty lines.
The combined ratio deteriorated 870 bps to 100.5 for the Insurance segment. Our estimate was 90.8. The Zacks Consensus Estimate was pegged at 100.
Financial Update
Everest Group exited the first quarter of 2025 with total investments and cash of $42.6 billion, up 2.6% from the 2024 level. Shareholder equity at the end of the reported quarter increased 1.9% from the figure at the end of 2024 to $14.1 billion.
Book value per share was $332.39 as of March 31, 2025, up 6% from the 2024-end level. The annualized net income return on equity was 5.7%, contracting 1490 basis points year over year.
Everest Group’s cash flow from operations was $928 million in the quarter, down 15.6% year over year. The company paid common share dividends of $85 million during the quarter.
Zacks Rank
EG 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
MGIC Investment Corporation (MTG - Free Report) reported first-quarter 2025 operating net income per share of 75 cents, which beat the Zacks Consensus Estimate by 13.6%. Moreover, the bottom line increased 15.4% year over year. Total operating revenues of $305 million increased 0.7% year over year due to higher net investment income and net premiums earned. The top line however missed the consensus mark by 1.5%.
Insurance in force increased 1% from the prior-year quarter to $293.8 billion. The Zacks Consensus Estimate was $297 billion. Our estimate was $296.8 billion. Persistency — the percentage of insurance remaining in force from one year prior — was 84.7% as of March 31, 2025, down from 85.7% in the year-ago quarter. Net premiums written increased 0.7% year over year to $235 million. The figure was lower than our estimate of $238.4 million.
Radian Group (RDN - Free Report) reported first-quarter 2025 adjusted operating income of 99 cents per share, which beat the Zacks Consensus Estimate by 4.2%. The bottom line decreased 3.9% year over year. Operating revenues remained flat year over year at $306 million. It missed the Zacks Consensus Estimate by 6.4%.
MI New insurance written decreased 17.7% year over year to $9.5 billion. Net premiums earned were $234 million, flat year over year. Persistency was 83.7% as of March 31, 2025, contracting 60 basis points year over year.
Prudential Financial, Inc. (PRU - Free Report) reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year. Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums.
Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This increase was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.