EVEREST GROUP LTD

Previous wording

Financial instruments such as side cars, catastrophe bonds and collateralized reinsurance funds, provide capital markets with access to insurance and reinsurance risk exposure. The capital markets demand for these products is primarily driven by the desire to achieve greater risk diversification and potentially higher returns on their investments. This competition generally has a negative impact on rates, terms and conditions; however, the impact varies widely by market and coverage. Based on recent competitive behaviors in the insurance and reinsurance industry, natural catastrophe events and the macroeconomic backdrop, there has been dislocation in the market which has had a positive impact on rates and terms and conditions, generally, though specifics in local markets can vary.

Current wording

Financial instruments, such as side cars, catastrophe bonds and collateralized reinsurance funds, provide capital markets with access to insurance and reinsurance risk exposure. The capital markets demand for these products is primarily driven by the desire to achieve greater risk diversification and potentially higher returns on their investments. This competition generally has a negative impact on rates and terms and conditions; however, the impact varies widely by market and coverage. Based on recent competitive behaviors in the insurance and reinsurance industry, natural catastrophe events and the macroeconomic backdrop, there has been dislocation in the market which has had a positive impact on rates and terms and conditions, generally, though specifics in local markets can vary.

Previous wording

Specifically, recent market conditions in property, particularly catastrophe excess of loss, have resulted in rate increases. As a result of the rate increases, most of the lines within property have been affected. Other casualty lines have been experiencing modest rate increases, while some lines such as workers’ compensation and directors and officers liability have been experiencing softer market conditions. The impact on pricing conditions is likely to change depending on the line of business and geography.

Current wording

Specifically, recent market conditions in property, particularly catastrophe excess of loss, have resulted in rate increases. As a result of the rate increases, most of the lines within property have been affected. Other casualty lines have been experiencing rate increases, while some lines such as workers’ compensation and directors and officers liability have been experiencing softer market conditions. The impact on pricing conditions is likely to change depending on the line of business and geography.

Previous wording

Premiums. Gross written premiums increased by 17.9% to $4.4 billion for the three months ended March 31, 2024, compared to $3.7 billion for the three months ended March 31, 2023, reflecting a $555 million, or 21.2%, increase in our reinsurance business and a $114 million, or 10.1%, increase in our insurance business. The increase in reinsurance premiums was primarily due to property pro rata business and casualty pro rata business. The increase in insurance premiums was primarily due to property/short tail business and other specialty business.

Current wording

Premiums. Gross written premiums increased by 13.0% to $4.7 billion for the three months ended June 30, 2024, compared to $4.2 billion for the three months ended June 30, 2023, reflecting a $462 million, or 16.8%, increase in our reinsurance business and a $82 million, or 5.7%, increase in our insurance business. The increase in reinsurance premiums was primarily due to property pro rata, property catastrophe excess of loss and casualty pro rata lines of business. The increase in insurance premiums compared to the prior year period was primarily due to other specialty business, property/short tail business and professional liability business partially offset by reduction in accident and health and workers’ compensation lines. Gross written premiums increased by 15.3% to $9.1 billion for the six months ended June 30, 2024, compared to $7.9 billion for the six months ended June 30, 2023, reflecting a $1.0 billion, or 18.9%, increase in our reinsurance business and a $196 million, or 7.7%, increase in our insurance business. The increase in reinsurance premiums was primarily driven by property pro rata, property catastrophe excess of loss and casualty pro rata lines of business. The increase in insurance premiums was primarily due to other specialty business, property/short tail business and professional liability business. These increases were partially offset by reductions in accident and health and workers’ compensation lines.

Previous wording

Net written premiums increased by 17.1% to $3.9 billion for the three months ended March 31, 2024, compared to $3.3 billion for the three months ended March 31, 2023, which is consistent with the percentage change in gross written premiums. Premiums earned increased by 17.8% to $3.7 billion during the three months ended March 31, 2024, compared to $3.1 billion during the three months ended March 31, 2023. The change in premiums earned relative to net written premiums was primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Current wording

Net written premiums increased by 11.2% to $4.1 billion for the three months ended June 30, 2024, compared to $3.7 billion for the three months ended June 30, 2023. Net written premiums increased by 14.0% to $8.0 billion for the six months ended June 30, 2024, compared to $7.0 billion for the six months ended June 30, 2023. These increases were consistent with the percentage changes in gross written premiums. Premiums earned increased by 13.6% to $3.7 billion during the three months ended June 30, 2024, compared to $3.3 billion during the three months ended June 30, 2023. Premiums earned increased by 15.6% to $7.3 billion for the six months ended June 30, 2024, compared to $6.4 billion for the six months ended June 30, 2023. Premiums earned generally reflect the portion of net premiums written that was recognized as revenue for the period as the exposure period expires. The change in premiums earned relative to net written premiums was primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.

Previous wording

Other Income (Expense). We recorded other income of $31 million and other expense of $79 million for the three months ended March 31, 2024 and 2023, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates. We recognized foreign currency exchange income of $32 million for thethree months ended March 31, 2024 and foreign currency exchange expense of $85 million for the three months ended March 31, 2023.

Current wording

Other Income (Expense). We recorded other income of $23 million and $38 million for the three months ended June 30, 2024 and 2023, respectively. We recorded other income of $54 million and other expense of $42 million for the six months ended June 30, 2024 and 2023, respectively. The period over period changes were primarily the result of a $9 million gain on pension curtailment as well as fluctuations in foreign currency exchange rates. During the three months ended June 30, 2024, the Company amended its defined benefit pension plan (the “Plan”) to freeze all benefits accruals and terminate the Plan effective June 30, 2024, which resulted in a pension curtailment gain. We recognized foreign currency exchange income of $9 million and $36 million for the three months ended June 30, 2024 and 2023, respectively. We recognized foreign currency exchange income of $41 million and foreign currency exchange expense of $49 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Incurred losses and LAE increased by 13.8% to $2.2 billion for the three months ended March 31, 2024, compared to $2.0 billion for the three months ended March 31, 2023, primarily due to an increase of $301 million in current year attritional losses, partially offset by a decrease of $30 million in current year catastrophe losses. The increase in current year attritional losses was mainly due to the impact of the increase in underlying exposures due to increased premiums earned. The current year catastrophe losses of $85 million for the three months ended March 31, 2024 related primarily to the 2024 Baltimore bridge collapse ($70 million) and the 2024 United States (“U.S.”) East Coast convective storms ($15 million). The $115 million of current year catastrophe losses for the three months ended March 31, 2023 related primarily to the 2023 Turkey earthquakes ($75.0 million), and the 2023 New Zealand storms ($40.0 million).

Current wording

Incurred losses and LAE increased by 17.9% to $2.3 billion for the three months ended June 30, 2024, compared to $2.0 billion for the three months ended June 30, 2023, primarily due to an increase of $227 million in current year attritional losses and an increase of $124 million in current year catastrophe losses. The increase in current year attritional losses was mainly due to the impact of the increase in underlying exposures due to increased premiums earned. The current year catastrophe losses of $151 million for the three months ended June 30, 2024 related primarily to the 2024 Dubai floods ($40 million), the 2024 Germany floods ($40 million), the 2024 Brazil Floods ($35 million), and the 2024 Taiwan earthquake ($23 million). The $27 million of current year catastrophe losses for the three months ended June 30, 2023 related primarily to the 2023 Turkey earthquakes ($20 million), Typhoon Mawar ($12 million), the 2023 Italian floods ($10 million), and the 2023 second quarter U.S. storms ($10 million), partially offset by $30 million of reinsurance recoveries related to Hurricane Ian.

Previous wording

Catastrophe losses and loss expenses typically have a material effect on our incurred losses and loss adjustment expense results and can vary significantly from period to period. Losses from natural and man-made catastrophes contributed 2.3 percentage points to the combined ratio for the three months ended March 31, 2024, compared with 3.7 percentage points for the three months ended March 31, 2023. The Company has up to$350 million of catastrophe bond protection (“CAT Bond”) that attaches at a$48.1 billion Property Claims Services (“PCS”) Industry loss threshold. This recovery would be recognized on a pro-rata basis up to a$63.8 billion PCS Industry loss level. As a result of Hurricane Ian, PCS’s current industry estimate of $48.3 billion issued in April 2024 exceeds the attachment point. The potential recovery under the CAT Bond is not expected to be material.

Current wording

Catastrophe losses and loss expenses typically have a material effect on our incurred losses and LAE results and can vary significantly from period to period. Losses from natural catastrophes contributed 4.1 percentage points to the combined ratio for the three months ended June 30, 2024, compared with 0.8 percentage points in the corresponding period of 2023, and 3.2 percentage points to the combined ratio for the six months ended June 30, 2024, compared with 2.2 percentage points in the corresponding period of 2023. The Company has up to$350 million of catastrophe bond protection (“CAT Bond”) that attaches at a$48.1 billion Property Claims Services (“PCS”) Industry loss threshold. This recovery would be recognized on a pro-rata basis up to a$63.8 billion PCS Industry loss level. As a result of Hurricane Ian, PCS’s current industry estimate of $48.3 billion issued in June 2024 exceeds the attachment point. The current estimated recovery under the CAT Bond is not material.

Previous wording

Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees increased by 18.2% to $782 million for the three months ended March 31, 2024 compared to $661 million for the three months ended March 31, 2023. The increase was primarily due to the impact of the increase in premiums earned and changes in the mix of business.

Current wording

Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees increased by 15.2% to $790 million for the three months ended June 30, 2024 compared to $686 million for the three months ended June 30, 2023. Commission, brokerage, taxes and fees increased by 16.7% to $1.6 billion for the six months ended June 30, 2024, compared to $1.3 billion for the six months ended June 30, 2023. The increases were primarily due to the impact of the increase in premiums earned and changes in the mix of business. Refer to Ratios section for commission and brokerage ratio analysis discussion.

Previous wording

Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, were $22 million and $19 million for the three months ended March 31, 2024 and 2023, respectively. The increase from 2023 to 2024 was mainly due to information technology costs.

Current wording

Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, were $22 million and $17 million for the three months ended June 30, 2024 and 2023, respectively, and $44 million and $36 million for the six months ended June 30, 2024 and 2023, respectively. The increase in Corporate expenses for the three and six month periods ended June 30, 2024 are primarily due to information management related costs.

Previous wording

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $37 million and $32 million for the three months ended March 31, 2024 and 2023, respectively. Interest expense was mainly impacted by the movement in the floating interest rate related to the Company’s long-term subordinated notes, which is reset quarterly per the note agreement, as well as variable interest rate costs on borrowings from FHLB.

Current wording

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $37 million and $33 million for the three months ended June 30, 2024 and 2023, respectively. Interest, fees and other bond amortization expense was $75 million and $65 million for the six months ended June 30, 2024 and 2023, respectively. The increases were mainly due to higher interest costs on the FHLBNY borrowing as a result of the rising interest rate environment. Interest expense was also impacted by the movements in the floating interest rate related to the Company’s long-term Subordinated Notes Issued 2007, which is reset quarterly per the note agreement. The floating rate was 7.97% as of June 30, 2024.

Previous wording

Income Tax Expense (Benefit). We had income tax expense of $99 million and $43 million for the three months ended March 31, 2024 and 2023, respectively. Income tax expense is primarily a function of the geographic location of the Company’s pre-tax income and the statutory tax rates in those jurisdictions. The effective tax rate (“ETR”) is primarily affected by tax-exempt investment income, foreign tax credits and dividends. Variations in the ETR generally result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses and net capital gains (losses), among jurisdictions with different tax rates.

Current wording

Income Tax Expense (Benefit). We had income tax expense of $108 million and $80 million for the three months ended June 30, 2024, and 2023, respectively. We had income tax expense of $207 million and $122 million for the six months ended June 30, 2024, and 2023, respectively. The period over period increase in income tax expense is primarily a function of the geographic location of the Company’s pre-tax income and the statutory tax rates in those jurisdictions. The effective tax rate (“ETR”) is primarily affected by tax-exempt investment income, foreign tax credits and dividends. Variations in the ETR generally result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses and net capital gains (losses), among jurisdictions with different tax rates.

Previous wording

With the assent of the governor on December 27, 2023, the Bermuda Corporate Income Tax Act of 2023 (“The 2023 Act”) became law. Beginning in 2025, a 15% corporate income tax will be applicable to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more. Group’s Bermuda entities will be subject to the new corporate income tax. The Company has evaluated The 2023 Act and has recorded $578 million of net deferred income tax benefits as of December 31, 2023. The net deferred income tax benefits relate primarily to a default provision in the law which allows for what is called an “Economic Transition Adjustment” (“ETA”). The ETA allowed companies to establish deferred tax assets or liabilities related to the revaluation of intangible assets, excluding goodwill, and their other assets and liabilities, based on fair value as of September 30, 2023.

Current wording

With the assent of the governor on December 27, 2023, the Bermuda Corporate Income Tax Act of 2023 ( the “2023 Act”) became law. Under the 2023 Act, beginning in 2025, a 15% corporate income tax will be applicable to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more. Group’s Bermuda entities will be subject to the new corporate income tax. The Company has evaluated The 2023 Act and has recorded $578 million of net deferred income tax benefits as of December 31, 2023. The net deferred income tax benefits relate primarily to a default provision in the law that allows for an Economic Transition Adjustment (“ETA”). The ETA allowed companies to establish deferred tax assets or liabilities related to the revaluation of intangible assets, excluding goodwill, and their other assets and liabilities, based on fair value as of September 30, 2023.

Previous wording

Our net income was $733 million and $365 million for the three months ended March 31, 2024 and 2023, respectively. These changes were primarily driven by the financial component fluctuations explained above.

Current wording

Our net income was $724 million and $670 million for the three months ended June 30, 2024 and 2023, respectively. Our net income was $1.5 billion and $1.0 billion for the six months ended June 30, 2024 and 2023, respectively. The period over period changes in net income were primarily driven by the financial component fluctuations explained above.

Previous wording

Our combined ratio decreased by 2.4 points to 88.8% for the three months ended March 31, 2024, compared to 91.2% for the three months ended March 31, 2023. The loss ratio component decreased by 2.1 points for the three months ended March 31, 2024 over the same period last year mainly due to a $30 million decrease in catastrophe losses and changes in the mix of business. The commission and brokerage ratio components increased to 21.4% for the three months ended March 31, 2024 compared to 21.3% for the three months ended March 31, 2023. The increase was mainly due to changes in the mix of business. The other underwriting expense ratios decreased to 6.1% for the three months ended March 31, 2024 compared to 6.4% for the three months ended March 31, 2023. This decrease was mainly due to higher insurance operations costs offset by higher earned premium base.

Current wording

The commission and brokerage ratio components increased to 21.4% for the three months ended June 30, 2024 compared to 21.1% for the three months ended June 30, 2023 and increased to 21.4% for the six months ended June 30, 2024 compared to 21.2% for the six months ended June 30, 2023. These changes were mainly due to changes in the mix of business.

Previous wording

Shareholders’ equity increased by $426 million to $13.6 billion at March 31, 2024 from $13.2 billion at December 31, 2023, principally as a result of $733 million of net income, partially offset by $153 million of unrealized depreciation on available for sale fixed maturity portfolio net of tax, $38 million of net foreign currency translation adjustments, $76 million of shareholder dividends and $35 million of treasury share purchases.

Current wording

Shareholders’ equity increased by $1.0 billion to $14.2 billion at June 30, 2024 from $13.2 billion at December 31, 2023, principally as a result of $1.5 billion of net income, partially offset by $213 million of unrealized depreciation on the available for sale fixed maturity portfolio, net of tax, $163 million of shareholder dividends, $100 million of treasury share purchases and $38 million of net foreign currency translation adjustments.

Previous wording

Net investment income increased by 76.0% to $457 million for the three months ended March 31, 2024 compared with net investment income of $260 million for the three months ended March 31, 2023. The increase for the three months ended March 31, 2024 was primarily the result of an increase of $105 million in income from fixed maturity investments, an increase of $21 million in short-term investments and an increase of $69 million in limited partnership income. The limited partnership income primarily reflects changes in their reported net asset values. As such, until these asset values are monetized and the resultant income is distributed, they are subject to future increases or decreases in the asset value, and the results may be volatile.

Current wording

Net investment income increased by 47.9% to $528 million for the three months ended June 30, 2024 compared with net investment income of $357 million for the three months ended June 30, 2023. The increase for the three months ended June 30, 2024 was primarily the result of an increase of $93 million in income from fixed maturity investments, an increase of $40 million in limited partnership income, an increase of $24 million in income from other alternative investments and an increase of $10 million in income from short-term investments. Net investment income increased by 59.7% to approximately $1.0 billion for the six months ended June 30, 2024, compared with investment income of $617 million for the six months ended June 30, 2023. The increase for the six months ended June 30, 2024 was primarily the result of an increase of $198 million of income from fixed maturity investments, an increase of $110 million in limited partnership income, an increase of $30 million from short-term investments and an increase of $22 million in income from other alternative investments. The limited partnership income primarily reflects changes in reported net asset values. As such, until these asset values are monetized and the resultant income is distributed, they are subject to volatile results of future increases or decreases in the asset value.

Previous wording

Net gains (losses) on investments during the three months ended March 31, 2024 primarily relate to $6 million of losses due to the disposition of investments, $2 million of losses from fair value adjustments on equity securities, partially offset by a decrease to the allowance for credit losses of $2 million. The realized losses from dispositions of investments mainly related to the execution of a Company strategy to sell lower yielding investments in order to reinvest the proceeds at higher interest rates.

Current wording

Net gains (losses) on investments during the three months ended June 30, 2024 primarily relate to $15 million of losses due to the disposition of investments, $5 million of losses from fair value adjustments on equity securities, partially offset by a decrease to the allowance for credit losses of $4 million. The realized losses from dispositions of investments mainly related to the execution of a Company strategy to sell lower yielding investments in order to reinvest the proceeds at higher interest rates.

Previous wording

The Company operates through two operating segments. The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S., Bermuda, and Ireland offices, as well as, through branches in Canada, Singapore, the United Kingdom (“UK”) and Switzerland. The Insurance operation writes property and casualty insurance directly and through brokers, including for surplus lines, and general agents within the U.S., Bermuda, Canada, Europe, Singapore and South America through its offices in the U.S., Bermuda, Canada, Chile, Singapore, the UK, Ireland, and branches located in the UK, the Netherlands, France, Germany and Spain. The two segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.

Current wording

The Company operates through two operating segments. The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S., Bermuda, and Ireland offices, as well as, through branches in Canada, Singapore, the United Kingdom (“UK”) and Switzerland. The Insurance operation writes property and casualty insurance directly and through brokers, including for surplus lines, and general agents within the U.S., Bermuda, Canada, Europe, Singapore and South America through its offices in the U.S., Australia, Bermuda, Canada, Chile, Colombia, Mexico, Singapore, the UK, Ireland, and branches located in the UK, the Netherlands, France, Germany and Spain. The two segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.

Previous wording

Executive Officer of Everest Group, Ltd., who is ultimately responsible for reviewing the business to assess performance, make operating decisions and allocate resources. We report the results of our operations consistent with the manner in which our CODM reviews the business.

Current wording

Our two operating segments each have executive leadership who are responsible for the overall performance of their respective segments and who are directly accountable to our chief operating decision maker (“CODM”), the Chief Executive Officer of Everest Group, Ltd., who is ultimately responsible for reviewing the business to assess performance, make operating decisions and allocate resources. We report the results of our operations consistent with the manner in which our CODM reviews the business.

Previous wording

The following tables present the underwriting results for our segments for the periods indicated:

Current wording

The following discusses the underwriting results for each of our segments for the periods indicated.

Previous wording

Premiums. Gross written premiums increased by 21.2% to $3.2 billion for the three months ended March 31, 2024 from $2.6 billion for the three months ended March 31, 2023, primarily due to property and casualty pro rata business. Net written premiums increased by 20.7% to $2.9 billion for the three months ended March 31, 2024 compared to $2.4 billion for the three months ended March 31, 2023. The increase was consistent with the percentage increase in gross written premiums. Premiums earned generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Premiums earned increased by 22.6% to $2.7 billion for the three months ended March 31, 2024, compared to $2.2 billion for the three months ended March 31, 2023.

Current wording

Premiums. Gross written premiums increased by 16.8% to $3.2 billion for the three months ended June 30, 2024 from $2.7 billion for the three months ended June 30, 2023, primarily driven by property pro rata, property catastrophe excess of loss and casualty pro rata lines of business. Net written premiums increased by 15.7% to $3.0 billion for the three months ended June 30, 2024 compared to $2.6 billion for the three months ended June 30, 2023. The increase was consistent with the percentage increase in gross written premiums. Premiums earned generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Premiums earned increased by 15.5% to $2.7 billion for the three months ended June 30, 2024, compared to $2.4 billion for the three months ended June 30, 2023.

Previous wording

Incurred losses increased by 17.1% to $1.6 billion for the three months ended March 31, 2024, compared to $1.4 billion for the three months ended March 31, 2023. The increase was primarily due to an increase of $273 million in current year attritional losses, partially offset by a decrease of $33 million in current year catastrophe losses. The increase in current year attritional losses was mainly related to the impact of the increase in premiums earned. The current year catastrophe losses of $80 million for the three months ended March 31, 2024 related primarily to the 2024 Baltimore bridge collapse ($65 million) and the 2024 U.S. East Coast convective storms ($15 million). The $113 million of current year catastrophe losses for the three months ended March 31, 2023 related primarily to the 2023 Turkey earthquakes ($75.0 million) and the 2023 New Zealand storms ($38.0 million).

Current wording

Incurred losses increased by 21.2% to $1.7 billion for the three months ended June 30, 2024, compared to $1.4 billion for the three months ended June 30, 2023. The increase was primarily due to an increase of $185 million in current year attritional losses and an increase of $109 million in current year catastrophe losses. The increase in current year attritional losses was mainly related to the impact of the increase in premiums earned. The current year catastrophe losses of $137 million for the three months ended June 30, 2024 related primarily to the 2024 Dubai floods ($40 million), the 2024 Germany floods ($39 million), the 2024 Brazil Floods ($35 million), and the 2024 Taiwan earthquake ($21 million). The $27 million of current year catastrophe losses for the three months ended June 30, 2023 related primarily to the 2023 Turkey earthquakes ($20 million), Typhoon Mawar ($12 million), the 2023 Italian floods ($10 million), the 2023 second quarter U.S. storms ($10 million) and the 2023 New Zealand storms ($5 million), partially offset by $30 million of reinsurance recoveries related to Hurricane Ian.

Previous wording

Segment Expenses. Commission and brokerage expense increased by 20.7% to $671 million for the three months ended March 31, 2024 compared to $556 million for the three months ended March 31, 2023. The increase was mainly due to the impact of the increase in premiums earned. Segment other underwriting expenses increased to $71 million for the three months ended March 31, 2024 from $63 million for the three months ended March 31, 2023. The increase was due to increased expenditures supporting the increased premium volume of the segment.

Current wording

Segment other underwriting expenses increased to $72 million for the three months ended June 30, 2024 from $61 million for the three months ended June 30, 2023. Segment other underwriting expenses increased to $142 million for the six months ended June 30, 2024, compared to $124 million for the six months ended June 30, 2023. The increases were mainly due to increased expenditures supporting the increased premium volume of the segment.

Previous wording

Premiums. Gross written premiums increased by 10.1% to $1.2 billion for the three months ended March 31, 2024 compared to $1.1 billion for the three months ended March 31, 2023. The increase in insurance premiums was primarily due to increases in property/short tail business, other specialty lines of business, and specialty casualty business. Net written premiums increased by 7.5% to $958 million for the three months ended March 31, 2024, compared to $891 million for the three months ended March 31, 2023. The lower percentage change in net written premiums compared to gross written premiums is due to lower net retention resulting from changes in the mix of business. Premiums earned increased by 5.6% to $923 million for the three months ended March 31, 2024, compared to $874 million for the three months ended March 31, 2023.

Current wording

Premiums. Gross written premiums increased by 5.7% to $1.5 billion for the three months ended June 30, 2024 compared to $1.4 billion for the three months ended June 30, 2023. The increase in insurance premiums was primarily due to increases in property/short tail business, professional liability business and other specialty lines of business partially offset by reductions in accident and health and workers’ compensation lines of business. Net written premiums decreased by 0.2% to $1.1 billion for the three months ended June 30, 2024, compared to $1.1 billion for the three months ended June 30, 2023. The lower percentage change in net written premiums compared to gross written premiums is due to lower net retention resulting from changes in the mix of business and strategic portfolio actions executed on the accident and health and workers’ compensation lines of business. Premiums earned increased by 8.4% to $962 million for the three months ended June 30, 2024, compared to $888 million for the three months ended June 30, 2023. The increase in premiums earned was driven by the expansion of international business offset by strategic portfolio actions executed on the accident and health line of business.

Previous wording

Incurred losses and LAE increased by 5.4% to $596 million for the three months ended March 31, 2024, compared to $565 million for the three months ended March 31, 2023. The increase was mainly due to an increase of $27 million in current year attritional losses and an increase of $3 million in current year catastrophe losses. The increase in current year attritional losses was primarily due to the impact of the increase in premiums earned and changes in mix of business. The $5 million of current year catastrophe losses for the three months ended March 31, 2024 related to the 2024 Baltimore bridge collapse. The $2 million of current year catastrophe losses for the three months ended March 31, 2023 related to the 2023 New Zealand storms.

Current wording

Incurred losses and LAE increased by 7.6% to $1.2 billion for the six months ended June 30, 2024, compared to $1.1 billion for the six months ended June 30, 2023. The increase was mainly due to an increase of $69 million in current year attritional losses, partially offset by an increase in current year catastrophe losses of $18 million. The increase in current year attritional losses was primarily due to the impact of the increase in premiums earned and changes in mix of business. The current year catastrophe losses of $20 million for the six months ended June 30, 2024 related primarily to the 2024 second quarter U.S. convective storms ($12 million), the 2024 Baltimore bridge collapse ($4 million), the 2024 Taiwan earthquake ($2 million) and the 2024 Germany floods ($1 million). The $2 million of current year catastrophe losses for the six months ended June 30, 2023 related to the 2023 New Zealand storms.

Previous wording

Segment Expenses. Commission and brokerage increased by 5.3% to $111 million for the three months ended March 31, 2024 compared to $105 million for the three months ended March 31, 2023. Segment other underwriting expenses increased to $153 million for the three months ended March 31, 2024 compared to $137 million for the three months ended March 31, 2023. The increases were mainly due to the impact of the increase in premiums earned and increased expenses related to the continued build out of the insurance business, including an expansion of the international insurance platform.

Current wording

Segment other underwriting expenses increased to $162 million for the three months ended June 30, 2024, compared to $143 million for the three months ended June 30, 2023. Segment other underwriting expenses increased to $316 million for the six months ended June 30, 2024, compared to $280 million for the six months ended June 30, 2023. These increases were mainly due to the impact of the increase in premiums earned and increased expenses related to the continued build out of the insurance business, including an expansion of the international insurance platform.

Previous wording

Investments. Total investments were $36.6 billion at March 31, 2024, an increase of $898 million compared to $35.7 billion at December 31, 2023. The rise in investments was primarily related to an increase in fixed maturities - available for sale due to an overall net purchase of $828 million of fixed maturities - available for sale during the three months ended March 31, 2024.

Current wording

Investments. Total investments were $37.5 billion at June 30, 2024, an increase of $1.8 billion compared to $35.7 billion at December 31, 2023. The rise in investments was primarily related to an increase in fixed maturities - available for sale due to an overall net purchase of $1.7 billion of fixed maturities - available for sale during the six months ended June 30, 2024.

Previous wording

Reinsurance recoverables for both paid and unpaid losses totaled $2.3 billion and $2.3 billion at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, $403 million, or 17.4%, was receivable from Mt. Logan Re collateralized segregated accounts; $248 million, or 10.7%, was receivable from Munich Reinsurance America, Inc. and $171 million, or 7.4% was receivable from Endurance Specialty Holdings, Ltd. No other retrocessionaire accounted for more than 5% of our recoverables.

Current wording

Reinsurance recoverables for both paid and unpaid losses totaled $2.4 billion and $2.3 billion at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024, $384 million, or 16.0%, was receivable from Mt. Logan Re collateralized segregated accounts; $267 million, or 11.1%, was receivable from Munich Reinsurance America, Inc. and $175 million, or 7.3% was receivable from Endurance Specialty Holdings, Ltd. No other retrocessionaire accounted for more than 5% of our recoverables.

Previous wording

Loss and LAE Reserves. Gross loss and LAE reserves totaled $25.2 billion and $24.6 billion at March 31, 2024 and December 31, 2023, respectively.

Current wording

Loss and LAE Reserves. Gross loss and LAE reserves totaled $25.9 billion and $24.6 billion at June 30, 2024 and December 31, 2023, respectively.

Previous wording

With respect to asbestos only, at March 31, 2024, we had net asbestos loss reserves of $200 million, or 90.9%, of total net A&E reserves, all of which was for assumed business.

Current wording

With respect to asbestos only, at June 30, 2024, we had net asbestos loss reserves of $196 million, or 90.8%, of total net A&E reserves, all of which was for assumed business.

Previous wording

Industry analysts use the “survival ratio” to compare the A&E reserves among companies with such liabilities. The survival ratio is typically calculated by dividing a company’s current net reserves by the three-year average of annual paid losses. Hence, the survival ratio equals the number of years that it would take to exhaust the current reserves if future loss payments were to continue at historical levels. Using this measurement, our net three-year asbestos survival ratio was 6.4 years at March 31, 2024. These metrics can be skewed by individual large settlements occurring in the prior three years and therefore may not be indicative of the timing of future payments.

Current wording

Industry analysts use the “survival ratio” to compare the A&E reserves among companies with such liabilities. The survival ratio is typically calculated by dividing a company’s current net reserves by the three-year average of annual paid losses. Hence, the survival ratio equals the number of years that it would take to exhaust the current reserves if future loss payments were to continue at historical levels. Using this measurement, our net three-year asbestos survival ratio was 6.5 years at June 30, 2024. These metrics can be skewed by individual large settlements occurring in the prior three years and therefore may not be indicative of the timing of future payments.

Previous wording

Capital. Shareholders’ equity at March 31, 2024 and December 31, 2023 was $13.6 billion and $13.2 billion, respectively. Management’s objective in managing capital is to ensure its overall capital level, as well as the capital levels of its operating subsidiaries, exceed the amounts required by regulators, the amount needed to support our current financial strength ratings from rating agencies and our own economic capital models. The Company’s capital has historically exceeded these benchmark levels.

Current wording

Capital. Shareholders’ equity at June 30, 2024 and December 31, 2023 was $14.2 billion and $13.2 billion, respectively. Management’s objective in managing capital is to ensure that the Company’s overall capital level, as well as the capital levels of its operating subsidiaries, exceed the amounts required by regulators, the amount needed to support our current financial strength ratings from rating agencies and our own economic capital models. The Company’s capital has historically exceeded these benchmark levels.

Previous wording

Our two main operating companies, Bermuda Re and Everest Re, are regulated by the Bermuda Monetary Authority and the State of Delaware’s Department of Insurance, respectively. Both regulatory bodies have their own capital adequacy models based on statutory capital as opposed to GAAP basis equity. Failure to meet the required statutory capital levels could result in various regulatory restrictions, including business activity and the payment of dividends to their parent companies.

Current wording

Our two main operating companies, Bermuda Re and Everest Re, are regulated by the Bermuda Monetary Authority and the State of Delaware’s Department of Insurance, respectively. Both regulatory bodies have their own capital adequacy models based on statutory capital as opposed to GAAP basis equity. Failure to meet the required statutory capital levels could result in various regulatory restrictions, including restrictions on business activity and the payment of dividends to their parent companies.

Previous wording

(1)Regulatory targeted capital represents the target capital level from the applicable year's BSCR calculation.

Current wording

(1)Regulatory targeted capital represents the target capital level from the applicable year's Bermuda Solvency Capital Requirement calculation.

Previous wording

(2)Regulatory targeted capital represents 200% of the RBC authorized control level calculation for the applicable year.

Current wording

(2)Regulatory targeted capital represents 200% of the Risk Based Capital authorized control level calculation for the applicable year.

Previous wording

During the first quarter of 2024, we repurchased 0.1 million of our shares at a cost of $35 million in the open market. We paid $76 million in dividends to adjust our capital position and enhance long-term expected returns to our shareholders. In 2023, we repurchased no shares in the open market and paid $288 million in dividends. On May 22, 2020, our existing Board authorization to purchase up to 30 million of our shares was amended to authorize the purchase of up to 32 million shares. As of March 31, 2024, we had repurchased 30.9 million shares under this authorization.

Current wording

For the six months ended June 30, 2024, we repurchased 264,009 of our shares at a cost of $100 million in the open market. We paid $163 million in dividends to adjust our capital position and enhance long-term expected returns to our shareholders. As of December 31, 2023, we repurchased no shares in the open market and paid $288 million in dividends. On May 22, 2020, our existing Board authorization to purchase up to 30 million of our shares was amended to authorize the purchase of up to 32 million shares. As of June 30, 2024, we had repurchased 31.0 million shares under this authorization. During the second quarter of 2024, the Company’s Board of Directors declared an increase in the quarterly common stock dividend from $1.75 to $2.00 per share. The increase applied to the common stock dividend paid on June 14, 2024 for holders of record as of May 29, 2024. We paid $86 million in dividends during the second quarter 2024.

Previous wording

Liquidity. Our liquidity requirements are generally met from positive cash flow from operations. Positive cash flow results from reinsurance and insurance premiums being collected prior to disbursements for claims, which disbursements generally take place over an extended period after the collection of premiums, sometimes a period of many years. Collected premiums are generally invested, prior to their use in such disbursements, and investment income provides additional funding for loss payments. Our net cash flows from operating activities were $1.1 billion and $1.1 billion for the three months ended March 31, 2024 and 2023, respectively. Additionally, these cash flows reflected net catastrophe loss payments of $229 million and $198 million for the three months ended March 31, 2024 and 2023, respectively, and net tax payments of $16 million and $2 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Liquidity. Our liquidity requirements are generally met from positive cash flow from operations. Positive cash flow results from reinsurance and insurance premiums being collected prior to disbursements for claims, which disbursements generally take place over an extended period after the collection of premiums, sometimes a period of many years. Collected premiums are generally invested, prior to their use in such disbursements, and investment income provides additional funding for loss payments. Our net cash flows from operating activities were $2.4 billion and $2.2 billion for the six months ended June 30, 2024 and 2023, respectively. Additionally, these cash flows reflected net catastrophe loss payments of $365 million and $458 million for the six months ended June 30, 2024 and 2023, respectively, and net tax payments of $203 million and $73 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

As the timing of payments for losses and LAE cannot be predicted with certainty, we maintain portfolios of long-term invested assets with varying maturities, along with short-term investments that provide additional liquidity for payment of claims. At March 31, 2024 and December 31, 2023, we held cash and short-term investments of $3.9 billion and $3.6 billion, respectively. Our short-term investments are generally readily marketable and can be converted to cash. In addition to these cash and short-term investments, at March 31, 2024, we had $1.5 billion of available for sale fixed maturity securities maturing within one year or less, $6.9 billion maturing within one to five years and $8.4 billion maturing after five years. We believe that these fixed maturity securities, in conjunction with the short-term investments and positive cash flow from operations, provide ample sources of liquidity for the expected payment of losses and LAE in the near future. We do not anticipate selling a significant amount of securities to pay losses and LAE. At March 31, 2024, we had $1.0 billion of net pre-tax unrealized depreciation related to fixed maturity - available for sale securities, comprised of $1.2 billion of pre-tax unrealized depreciation and $240 million of pre-tax unrealized appreciation.

Current wording

As the timing of payments for losses and LAE cannot be predicted with certainty, we maintain portfolios of long-term invested assets with varying maturities, along with short-term investments that provide additional liquidity for payment of claims. At June 30, 2024 and December 31, 2023, we held cash and short-term investments of $4.0 billion and $3.6 billion, respectively. Our short-term investments are generally readily marketable and can be converted to cash. In addition to these cash and short-term investments, at June 30, 2024, we had $1.4 billion of available for sale fixed maturity securities maturing within one year or less, $7.3 billion maturing within one to five years and $8.4 billion maturing after five years. We believe that these fixed maturity securities, in conjunction with the short-term investments and positive cash flow from operations, provide ample sources of liquidity for the expected payment of losses and LAE in the near future. We do not anticipate selling a significant amount of securities to pay losses and LAE. At June 30, 2024, we had $1.1 billion of net pre-tax unrealized depreciation related to fixed maturity - available for sale securities, comprised of $1.2 billion of pre-tax unrealized depreciation and $188 million of pre-tax unrealized appreciation.

Previous wording

Management generally expects annual positive cash flow from operations, which reflects the strength of overall pricing. However, given catastrophic events observed in recent periods, cash flow from operations may decline and could become negative in the near term as significant claim payments are made related to the catastrophes. However, as indicated above, the Company has ample liquidity to settle its catastrophe claims and/or any payments due for its catastrophe bond program.

Current wording

Management generally expects annual positive cash flow from operations, which reflects the strength of overall pricing. However, given catastrophic events observed in recent periods, cash flow from operations may decline and could become negative in the near term as significant claim payments are made related to the catastrophes. However, as indicated above, the Company has access to ample liquidity to settle its catastrophe claims and also may receive payments under the catastrophe bond program and the Mt. Logan Re collateralized reinsurance arrangement.

Previous wording

The Securities and Exchange Commission’s (“SEC”) Financial Reporting Release #48 requires registrants to clarify and expand upon the existing financial statement disclosure requirements for derivative financial instruments, derivative commodity instruments and other financial instruments (collectively, “market sensitive instruments”). We do not generally enter into market sensitive instruments for trading purposes.

Current wording

The SEC’s Financial Reporting Release #48 requires registrants to clarify and expand upon the existing financial statement disclosure requirements for derivative financial instruments, derivative commodity instruments and other financial instruments (collectively, “market sensitive instruments”). We do not generally enter into market sensitive instruments for trading purposes.