Everest Q3 2026 Results: Reserve Strengthening Drives 107.1% Combined Ratio

Everest Group reported a third-quarter 2026 combined ratio of 107.1% after strengthening prior-year casualty reinsurance reserves, offsetting improved underlying loss experience in its core businesses and record investment income. The insurer and reinsurer recorded net income of $233 million, or $6.12 per diluted share, while after-tax net operating income was $290 million, or $7.62 per diluted share.

The company strengthened gross casualty reinsurance reserves by approximately $600 million during the quarter, following more than $200 million of strengthening in the second quarter. The action resulted in net prior-year reserve strengthening of $253 million and was largely associated with underwriting years 2022 and earlier. Everest said it also applied the experience to more recent underwriting years as part of a more conservative reserving process.

Management’s best estimate of reserves exceeded the actuarial central estimate by more than $850 million as of Sept. 30. The company said it had not recognized most of the favorable development in short-tail lines and made no material change to its 2026 loss picks despite favorable indications.

Core underwriting trends improve as premiums decline

Everest’s core businesses—Reinsurance Treaty and Global Wholesale & Specialty—generated gross written premiums of $3.66 billion, down 3.2% from the prior-year quarter and 4.0% when excluding foreign-exchange effects and catastrophe reinstatement premiums. Growth in specialty lines was outweighed by targeted reductions in U.S. casualty and, to a lesser extent, property business.

The core attritional loss ratio improved by 0.4 percentage points to 57.2%, reflecting what the company described as better loss experience and portfolio mix. The core attritional combined ratio was 87.0%, compared with 87.6% a year earlier. Attritional ratios exclude catastrophe losses, catastrophe reinstatement premiums and prior-year reserve development, among other specified items.

Reinsurance Treaty gross written premiums declined 5.3% to $2.72 billion, or 6.2% on a comparable basis excluding currency movements and catastrophe reinstatement premiums. Specialty growth was more than offset by deliberate reductions in U.S. casualty lines. The segment’s attritional combined ratio improved to 84.9% from 86.0%, supported by mix benefits and improved loss experience.

Everest said it has reduced its U.S. casualty portfolio by more than $1.2 billion. The company continues to focus reinsurance capital on businesses offering the strongest risk-adjusted returns while seeking to shorten the duration and improve the mix of the portfolio.

Global Wholesale & Specialty gross written premiums rose 3.3% to $948 million, or 3.2% excluding foreign-exchange effects. Expansion in niche specialty lines and international markets offset reductions in U.S. property and casualty business. The segment produced $19 million of underwriting profit and a 97.3% combined ratio. Its attritional loss ratio improved by 0.9 percentage points to 60.0%, although the attritional combined ratio increased to 93.7% from 93.4% as commission, brokerage and other underwriting expenses rose.

Record investment income and capital returns

Net investment income reached a quarterly record of $634 million, driven by private-equity performance. Everest had $44.0 billion of invested assets at quarter-end, with 86% held in fixed income and cash or short-term securities. The fixed-income portfolio had an average duration of 3.4 years and an average credit quality of AA-. The company also said yields on new investments exceeded the existing portfolio yield.

Everest returned $550 million to shareholders during the quarter, comprising $474 million of share repurchases and $75 million of dividends. Common shares outstanding declined to 37.4 million from 42.0 million a year earlier. Reported book value per share was $381.04, while book value excluding unrealized gains and losses on available-for-sale fixed-maturity securities was $414.00. Annualized year-to-date total shareholder return, as defined by the company, was 14.2%.

Management said it intends to maintain a quarterly share-repurchase floor of $300 million while retaining an opportunistic approach to additional buybacks. Everest is targeting a mid-teens total shareholder return over the cycle.

The company is also expanding third-party capital management through Mt. Logan Capital Management, which had approximately $3.4 billion of assets under management, up 89% since Jan. 1, 2025. The recently launched Annapurna Re casualty and specialty sidecar had about $600 million of committed capital and approximately $200 million of quarterly ceded premiums. Everest expects the vehicle to be modestly accretive to underwriting income and return on equity over time, with additional underwriting and fee income partly offset by lower investment income.

Everest’s outlook remains subject to reserve adequacy, catastrophe and insured-loss trends, pricing conditions, competition, investment-market volatility, regulatory developments and execution risks related to divestitures and strategic transactions. The company is also continuing to manage its legacy portfolio and the sale of commercial retail insurance operations.