Business Context and Reporting Period
Company: EVEREST GROUP, LTD. (NYSE: EG)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Everest is a Bermuda-based global reinsurance and insurance organization. It operates through two primary reportable segments: Reinsurance (72.4% of gross written premiums) and Insurance (27.1% of gross written premiums), with a third "Other" segment for run-off and discontinued businesses. The company serves clients in over 100 countries.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Gross Written Premiums | $17.7 billion | $18.2 billion | (2.9)% |
| Premiums Earned | $15.6 billion | $15.2 billion | 2.5% |
| Net Investment Income | $2.1 billion | $2.0 billion | 8.7% |
| Net Income | $1.6 billion | $1.4 billion | 15.9% |
| Combined Ratio | 98.6% | 102.3% | (3.7) pts |
| Loss Ratio | 69.8% | 74.4% | (4.6) pts |
| Total Assets | $62.5 billion | $56.3 billion | 11.0% |
| Shareholders' Equity | $15.5 billion | $13.9 billion | 11.4% |
| Total Debt | $3.6 billion | $3.6 billion | 0.0% |
| Loss & LAE Reserves | $34.3 billion | $29.9 billion | 14.8% |
Material Changes vs. Prior Period
- Underwriting Performance: The combined ratio improved significantly to 98.6% from 102.3% in 2024. This improvement was driven by a decrease in unfavorable prior-year loss development ($657 million in 2025 vs. $1.3 billion in 2024) and lower current-year catastrophe losses ($726 million in 2025 vs. $755 million in 2024).
- Segment Results:
- Reinsurance: Generated an underwriting gain of $972 million. Gross written premiums decreased slightly (0.9%) due to declines in North American casualty lines, partially offset by growth in property and financial lines.
- Insurance: Reported an underwriting loss of $541 million, a significant improvement from the $1.1 billion loss in 2024. Gross written premiums decreased 5.7% due to portfolio actions in casualty lines and the sale of renewal rights.
- Investment Income: Net investment income increased 8.7% to $2.1 billion, driven by higher yields on fixed maturities and increased income from limited partnerships.
- Strategic Transactions:
- Sale of Renewal Rights: Sold renewal rights for commercial retail insurance business in the U.S., U.K., Asia Pacific, and EU to AIG for an aggregate purchase price of $301 million ($252M + $49M). This generated a gain of $259 million recognized in 2025.
- Adverse Development Cover (ADC): Entered into reinsurance agreements to cover potential adverse loss development for accident years 2024 and prior, with a gross limit of $1.2 billion. This resulted in an immediate pre-tax loss of $122 million due to the premium paid exceeding ceded reserves.
Guidance, Outlook, Risks, and Unusual Items
- Rating Outlook: All three major rating agencies (A.M. Best, S&P, Moody's) have revised their outlook for Everest's financial strength ratings from "Stable" to "Negative" in late 2025, though the ratings themselves (A+/A1) remain unchanged.
- Reserve Development: The company continues to face challenges with social inflation and elevated loss experience in U.S. casualty lines (accident years 2022-2024), leading to reserve strengthening. However, the magnitude of unfavorable development decreased significantly compared to 2024.
- Catastrophe Exposure: The company estimates its greatest worldwide 1-in-100-year exposure is a wind event in the Southeast U.S., with a probable maximum loss (PML) of approximately $2.4 billion (11.0% of shareholders' equity).
- Taxation: The implementation of Bermuda's 15% corporate income tax (effective Jan 1, 2025) and OECD Pillar Two global minimum tax rules introduce uncertainty regarding deferred tax assets and future effective tax rates.
- Regulatory Changes: New Bermuda legislation (Amendment Act) may subject the Group to group-level supervision by the Bermuda Monetary Authority, potentially increasing capital and reporting requirements.
Key Facts for Investor Verification
- Reserve Adequacy: Verify the sustainability of the reduced prior-year loss development ($657M in 2025 vs $1.3B in 2024) and the impact of the new ADC agreements on future volatility.
- Rating Agency Actions: Monitor the "Negative" outlook from A.M. Best, S&P, and Moody's for potential rating downgrades that could trigger collateral requirements or contract terminations.
- Strategic Divestiture Impact: Assess the long-term impact of selling $2 billion in renewal rights to AIG on future premium growth and profitability in the Insurance segment.
- Tax Liability: Evaluate the final impact of the Bermuda Corporate Income Tax Act and OECD Pillar Two rules on the company's effective tax rate and deferred tax asset valuation.
- Catastrophe Modeling: Review the company's exposure to Southeast U.S. wind events and the adequacy of reinsurance coverage given the $2.4 billion PML estimate.