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Everest Group Q3 Earnings Miss Estimates on Higher Catastrophe Losses
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Key Takeaways
EG's Q3 operating EPS of $7.62 missed estimates by 18.8%, while revenues fell 14% to $3.71 billion.
EG's underwriting loss widened to $223 million as catastrophe losses pushed the combined ratio to 107.1%.
EG's investment income rose 17.4% to a record $634 million, while shareholder returns totaled $550 million.
Everest Group, Ltd. (EG - Free Report) reported third-quarter 2026 operating income of $7.62 per share, which missed the Zacks Consensus Estimate of $9.38 by 18.8%. The bottom line increased 1.1% year over year.
Total revenues of $3.71 billion declined 14% year over year and missed the Zacks Consensus Estimate of $3.84 billion by 3.3%. Higher catastrophe losses and adverse prior-year reserve development weighed on underwriting profitability. Lower earned premiums hurt the top line despite strong investment income growth.
EG's Q3 Operational Update
Gross written premiums declined 14.5% year over year to $3.74 billion, reflecting lower contributions from Reinsurance Treaty and Legacy businesses.
Net investment income increased 17.4% year over year to a quarterly record of $634 million, driven by strong private equity performance.
Total claims and expenses declined 14.9% to $3.45 billion, primarily reflecting lower incurred losses and loss adjustment expenses, commissions, brokerage, taxes and fees, and other underwriting expenses.
The company reported an underwriting loss of $223 million, wider than the year-ago loss of $130 million.
The combined ratio deteriorated 370 basis points year over year to 107.1%, reflecting elevated catastrophe losses and adverse reserve development.
Everest's Reinsurance Treaty Business Faces Pressure
Reinsurance Treaty gross written premiums declined 5.3% year over year to $2.72 billion. On a comparable basis, premiums fell 6.2%, as targeted reductions in U.S. casualty business more than offset growth in speciality lines. Net premiums earned fell 13% to $2.24 billion. The segment recorded an underwriting loss of $191 million against the underwriting income of $335 million in the year-ago quarter.
The combined ratio deteriorated 2,150 basis points to 108.5%, reflecting higher catastrophe losses and unfavorable prior-year reserve development.
EG's Global Wholesale & Specialty Business Expands
Global Wholesale & Specialty generated gross written premiums of $948 million, up 3.3% year over year. Deliberate reductions in U.S. property and casualty exposures partially offset growth in niche specialty lines and international operations. Net premiums earned declined 4.3% to $705 million.
The segment's underwriting income decreased 42.2% to $19 million. Its combined ratio deteriorated 150 basis points to 97.3%, reflecting increased catastrophe losses and underwriting expenses.
Everest's Legacy Business Reflects Portfolio Runoff
The Legacy segment's gross written premiums declined 86.7% year over year to $79 million, reflecting the ongoing runoff of the commercial retail insurance business. Net premiums earned decreased 61.5% to $208 million.
The segment recorded an underwriting loss of $51 million, considerably narrower than the year-ago loss of $498 million.
Everest's Financial Position
Everest exited the third quarter with total investments and cash of $43.97 billion, down 3.2% from the 2025-end level. Shareholders' equity declined 7.8% to $14.25 billion.
Book value per share increased to $381.04 from $379.83 at 2025-end.
Cash flow from operations totaled $1.61 billion for the first nine months of 2026, down 53.7% year over year.
Annualized net operating return on average equity was 7.4%, down from 8.2% a year earlier.
Capital Deployment of EG
EG returned approximately $550 million to shareholders during the third quarter, including $474 million in share repurchases and $75 million in common dividends. It paid a dividend of $2 per share and repurchased approximately 1.3 million shares.
Chubb Limited (CB - Free Report) reported third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%. Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2026 core earnings of $9.18 per share, which beat the Zacks Consensus Estimate of $7.07 by 29.8%. The bottom line increased 12.8% year over year. Revenues of $12.45 billion surpassed the consensus estimate of $12.40 billion by 0.4% and remained nearly flat year over year. Net written premiums totaled $11.48 billion during the quarter. Travelers generated core income of $1.95 billion, up 4.3% year over year, while net income increased 1.5% to $1.92 billion
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, which beat the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues of $4.47 billion decreased 5.2% year over year, primarily due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion. Arch Capital Group’s underwriting income declined 19.4% year over year to $702 million. The combined ratio, representing the percentage of premiums paid out as claims and expenses, deteriorated 270 basis points to 82.5 year over year, beating the Zacks Consensus Estimate of 88.6 and our model estimate of 92.1.
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Everest Group Q3 Earnings Miss Estimates on Higher Catastrophe Losses
Key Takeaways
Everest Group, Ltd. (EG - Free Report) reported third-quarter 2026 operating income of $7.62 per share, which missed the Zacks Consensus Estimate of $9.38 by 18.8%. The bottom line increased 1.1% year over year.
Total revenues of $3.71 billion declined 14% year over year and missed the Zacks Consensus Estimate of $3.84 billion by 3.3%. Higher catastrophe losses and adverse prior-year reserve development weighed on underwriting profitability. Lower earned premiums hurt the top line despite strong investment income growth.
EG's Q3 Operational Update
Gross written premiums declined 14.5% year over year to $3.74 billion, reflecting lower contributions from Reinsurance Treaty and Legacy businesses.
Net investment income increased 17.4% year over year to a quarterly record of $634 million, driven by strong private equity performance.
Total claims and expenses declined 14.9% to $3.45 billion, primarily reflecting lower incurred losses and loss adjustment expenses, commissions, brokerage, taxes and fees, and other underwriting expenses.
The company reported an underwriting loss of $223 million, wider than the year-ago loss of $130 million.
The combined ratio deteriorated 370 basis points year over year to 107.1%, reflecting elevated catastrophe losses and adverse reserve development.
Everest's Reinsurance Treaty Business Faces Pressure
Reinsurance Treaty gross written premiums declined 5.3% year over year to $2.72 billion. On a comparable basis, premiums fell 6.2%, as targeted reductions in U.S. casualty business more than offset growth in speciality lines. Net premiums earned fell 13% to $2.24 billion. The segment recorded an underwriting loss of $191 million against the underwriting income of $335 million in the year-ago quarter.
The combined ratio deteriorated 2,150 basis points to 108.5%, reflecting higher catastrophe losses and unfavorable prior-year reserve development.
EG's Global Wholesale & Specialty Business Expands
Global Wholesale & Specialty generated gross written premiums of $948 million, up 3.3% year over year. Deliberate reductions in U.S. property and casualty exposures partially offset growth in niche specialty lines and international operations. Net premiums earned declined 4.3% to $705 million.
The segment's underwriting income decreased 42.2% to $19 million. Its combined ratio deteriorated 150 basis points to 97.3%, reflecting increased catastrophe losses and underwriting expenses.
Everest's Legacy Business Reflects Portfolio Runoff
The Legacy segment's gross written premiums declined 86.7% year over year to $79 million, reflecting the ongoing runoff of the commercial retail insurance business. Net premiums earned decreased 61.5% to $208 million.
The segment recorded an underwriting loss of $51 million, considerably narrower than the year-ago loss of $498 million.
Everest's Financial Position
Everest exited the third quarter with total investments and cash of $43.97 billion, down 3.2% from the 2025-end level. Shareholders' equity declined 7.8% to $14.25 billion.
Book value per share increased to $381.04 from $379.83 at 2025-end.
Cash flow from operations totaled $1.61 billion for the first nine months of 2026, down 53.7% year over year.
Annualized net operating return on average equity was 7.4%, down from 8.2% a year earlier.
Capital Deployment of EG
EG returned approximately $550 million to shareholders during the third quarter, including $474 million in share repurchases and $75 million in common dividends. It paid a dividend of $2 per share and repurchased approximately 1.3 million shares.
EG’s 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 third-quarter 2026 core operating earnings of $7.66 per share, which beat the Zacks Consensus Estimate of $6.53 by 17.3%. The bottom line increased 0.8% year over year. Revenues of $16.81 billion surpassed the consensus mark of $16.72 billion by 0.55%.
Consolidated net premiums earned rose 3.9% year over year to $14.92 billion. P&C underwriting income declined 8.8% year over year to $2.06 billion. The combined ratio deteriorated 230 basis points to 84.1%. The Zacks Consensus Estimate is pegged at 87.
The Travelers Companies, Inc. (TRV - Free Report) reported third-quarter 2026 core earnings of $9.18 per share, which beat the Zacks Consensus Estimate of $7.07 by 29.8%. The bottom line increased 12.8% year over year. Revenues of $12.45 billion surpassed the consensus estimate of $12.40 billion by 0.4% and remained nearly flat year over year. Net written premiums totaled $11.48 billion during the quarter. Travelers generated core income of $1.95 billion, up 4.3% year over year, while net income increased 1.5% to $1.92 billion
Arch Capital Group Ltd. (ACGL - Free Report) reported third-quarter 2026 operating income of $2.67 per share, which beat the Zacks Consensus Estimate by 24.2%. The bottom line declined 3.6% year over year. Operating revenues of $4.47 billion decreased 5.2% year over year, primarily due to lower net premiums earned and net realized investment losses. Revenues beat the Zacks Consensus Estimate by 0.3%. Gross premiums written decreased 0.4% year over year to $5.39 billion. Arch Capital Group’s underwriting income declined 19.4% year over year to $702 million. The combined ratio, representing the percentage of premiums paid out as claims and expenses, deteriorated 270 basis points to 82.5 year over year, beating the Zacks Consensus Estimate of 88.6 and our model estimate of 92.1.