Skip to content
    EG
    Earnings call· Mar 2026(Q1 FY26)

    EVEREST GROUP Q1 FY26 earnings call EG

    Apr 30, 2026 Source

    Executive summary

    Everest Group Q1 FY26 — Strong Underwriting, Accelerated Capital Return, and Strategic Repositioning

    Everest Group reported a strong Q1 FY26, showcasing the benefits of its new segment structure with meaningful underwriting and investment income, alongside accelerated capital returns. The company is prioritizing profitability over volume, navigating competitive market conditions and legal environment challenges with disciplined underwriting and strategic portfolio adjustments. CFO Mark Kociancic announced his retirement, marking the end of a period of significant transformation for the company.

    Highlights

    5

    • Group operating income was $648 million, producing a net operating return on equity of 16.7%.

    • Treaty Reinsurance delivered $315 million of underwriting income on an 87.2% combined ratio.

    • Net investment income increased to $567 million, driven by strong alternative asset returns of $156 million.

    • Repurchased $331 million of shares at an average price of $330.01, with an additional $100 million in April, and raised the quarterly repurchase floor to $300 million.

    • Global Wholesale & Specialty attritional loss ratio improved 3.8 points to 58.9% due to portfolio repositioning and underwriting improvements.

    Concerns

    5

    • Gross written premium decreased 18% year-over-year, largely due to divestitures and runoff, with underlying premium down 6.4%.

    • Property Catastrophe pricing continued to soften, with rates down 13% globally on the 4/1 renewal book.

    • The Legacy segment is expected to run at a combined ratio above 110% for FY26, primarily due to higher expenses from the commercial retail insurance business transition.

    • A $58 million provision for the conflict in Iran contributed to catastrophe losses, impacting the combined ratio by 3.6 points.

    • Operating cash flow decreased to $649 million from $928 million in the prior year first quarter.

    Guidance & targets

    6
    CategoryTargetConfidence
    Quarterly Share Repurchase Floor
    $300 million
    high materiality
    High
    Restructuring Charges
    approximately $150 million
    medium materiality
    High
    Legacy Segment Combined Ratio
    above 110%
    medium materiality
    High
    Operating Income Tax Rate
    17% to 18%
    medium materiality
    High
    Payout Ratio
    elevated
    medium materiality
    Medium
    Florida Renewal Pricing
    mid-teens zone
    high materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Treaty Reinsurance
    Delivered an excellent quarter with strong underwriting income. Premium decline driven by casualty discipline and selective reductions. Portfolio rotated towards short-tail and specialty lines. Mt. Logan AUM exceeded $2.6 billion, supporting underwriting capacity and enhancing return on capital.
    Combined ratio: 87.2%Gross written premium: $2.7 billionCasualty premium reduction since Jan 2024: $1.2 billionProperty Catastrophe pricing (4/1 renewal): down 13% globallyBound premium at 4/1 renewal: decreased 14.6% versus expiringProperty growth (ex-reinstatement premiums): 1%Property CAT XOL increase: 9.4%Casualty Pro-Rata decrease: 23.9%Casualty XOL decrease: 13.3%Catastrophe losses contribution to combined ratio: 3.7 pointsFavorable prior year reserve development contribution to combined ratio: 1.4 pointsAttritional loss ratio: 56.7% (decreased 270 bps)
    		—-8.9%—$315 million underwriting income
    Global Wholesale & Specialty
    First quarter results for the go-forward platform. Growth in specialty lines and Accident & Health, partially offset by reductions in U.S. casualty. Strong underlying attritional loss performance driven by portfolio repositioning and underwriting improvements. Expense ratio reflects drag tied to mix and lower underwriting leverage, expected to improve over time.
    Combined ratio: 96.8%Gross written premium: $793 millionUnderlying attritional loss performance improvement: 3.8 pointsAttritional loss ratio: 58.9%Operating expense ratio: 12.6%Catastrophe losses contribution to combined ratio: 4.2 points (vs 3.1 points prior year)Underwriting-related expense ratio: 12.6%Commission ratio: 21.2% (increased 1.6 points)
    		—1.6%—$23 million underwriting income
    Legacy
    Generated a modest drag to group results due to higher ceded premiums and modest increase in property loss activity. Expected to run at a combined ratio above 110% for fiscal year 2026, driven by higher expenses during the transition of the commercial retail insurance book to AIG. Reserves are expected to remain meaningful, but P&L will be smaller as net earned premium becomes de minimis.
    Combined ratio: above 110% (expected for FY26)
    		————

    Operational metrics

    21
    Group Operating Income
    $648 million
    Q1 FY26

    Produced a net operating return on equity of 16.7%.

    Net Operating Return on Equity
    16.7%
    Q1 FY26

    Annualized.

    Annualized Total Shareholder Return
    16.1%
    Q1 FY26

    Reflects strong performance despite a challenging market.

    Underlying Premium Decline
    6.4%YoY
    Q1 FY26

    Excluding the impact of divestitures and deliberate runoff.

    Mt. Logan Assets Under Management
    $2.6 billion
    Q1 FY26

    Playing an increasingly important role in the overall capital model.

    U.S. Casualty Reserve Movement
    no material movements
    Q1 FY26

    Consistent with expectations following comprehensive actions in 2025.

    Operating Earnings Per Share
    $16.08
    Q1 FY26

    Driven by underwriting income of $316 million and net investment income of $567 million.

    Net Income
    $653 million
    Q1 FY26

    Resulted in an annualized total shareholder return of 16.1%.

    Gross Written Premiums Decrease (Constant Dollars)
    18.5%YoY
    Q1 FY26

    When excluding reinstatement premiums from the prior year quarter.

    Gross Written Premiums Decrease (Excluding Legacy Segment)
    6.4%YoY
    Q1 FY26

    Legacy segment now includes commercial retail insurance business.

    Combined Ratio Benefit from Favorable PYD
    90 bps
    Q1 FY26

    From well-seasoned property reserves in Reinsurance Treaty segment.

    Group Attritional Loss Ratio
    59.4%improved 2.8 points
    Q1 FY26

    Improvement driven by improved expected loss experience and lower proportion of Retail Casualty premium, excluding 2 points from prior year aviation losses.

    Commission Ratio
    23.1%increased
    Q1 FY26

    Increase driven by mix.

    Underwriting-Related Expense Ratio
    6%improved 10 bps
    Q1 FY26

    Improved 10 basis points.

    Net Expense from Sale of Commercial Retail Insurance Renewal Rights
    $81 million
    Q1 FY26

    Associated with the sale to AIG and other primary operations (principally Canada).

    Alternative Asset Returns
    $156 millionvs $55 million in prior year quarter
    Q1 FY26

    Significant driver of net investment income increase.

    Book Yield
    4.5%stable
    Q1 FY26

    Consistent with current new money yield.

    Asset Duration
    3.5 years
    Q1 FY26

    Approximately.

    Fixed Income Portfolio Credit Rating
    AA-
    Q1 FY26

    Average credit rating.

    Shareholders' Equity
    $15.3 billion
    Q1 FY26

    Excluding $369 million of net unrealized depreciation on available-for-sale fixed income securities.

    Private Credit Exposure
    7%
    Q1 FY26

    Diversified holdings, including direct lending (first lien secured loans) and software. Performing well with no meaningful impairments.

    Industry KPIs

    9
    MetricValueDetails
    Combined ratio91.2%%
    Capital returns$331 millionUSD
    ROE operating ROE16.7%%
    Catastrophe losses$130 millionUSD
    Book value per share$393.02USD
    Net investment income$567 millionUSD
    Net premiums written earned$3.6 billionUSD
    Renewal rate change pricingdown 13%%
    Prior year reserve development$33 millionUSD

    Deals & partnerships

    1
    AIGSale of commercial retail insurance renewal rights

    The transition of Everest's retail business to AIG is progressing as planned. This transaction, along with the sale of other primary operations (principally Canada), contributed to a net expense in Q1 2026.

    Risks & headwinds

    4
    Competitive Market ConditionsOngoing

    Property Catastrophe pricing down 13% globally on 4/1 renewal book; mid-teens rate decline expected for Florida renewals.

    Mitigation: Disciplined underwriting, selective reductions where pricing or structure do not meet return thresholds, and leveraging lead market position to shape attractive deals.

    U.S. Legal Environment HostilityOngoing

    Continued uncertainty in loss cost trends in U.S. Casualty lines.

    Mitigation: Maintaining elevated loss picks, reducing exposure to U.S. Casualty (over $1.2 billion in premium reduction since Jan 2024), and focusing on partnerships with cedents with strong underwriting and claims expertise. Tort reforms in Florida are showing positive statistical evidence.

    Elevated Expenses in Legacy SegmentFY26

    Legacy segment expected to run at a combined ratio above 110% for fiscal year 2026.

    Mitigation: Higher expenses are primarily due to the transition of the commercial retail insurance book to AIG. The segment's P&L is expected to become smaller as net earned premium diminishes.

    Geopolitical Conflict (Iran)Q1 FY26 and potentially future quarters

    $58 million provision for the conflict in Iran, contributing 3.6 points to the group combined ratio. Reinsurance loss pegged for Iran is $40 million.

    Mitigation: Being judicious on new writings in the region given uncertainty, while actively underwriting and securing rate increases where appropriate risk-adjusted returns are seen. The provision is considered prudent relative to a global diversified business.

    What to watch in Q2 FY26

    5

    Florida Renewal Pricing and Terms

    Q2 FY26
    CurrentRates expected to come off in mid-teens zone; terms and conditions holding.
    TargetConfirmation of pricing levels, attachment points, and structural discipline.

    Why it matters

    Florida is a peak zone, and the outcome of these renewals will significantly impact the property cat book's profitability and capacity deployment for the year.

    But I would expect rates to come off maybe in the mid-teens zone, time will tell💬. And I think we'll have an opportunity to do quite well.

    Q&A highlights

    6

    How much incremental demand is seen in Florida renewals, and how will Everest deploy capacity given tort reform benefits and current pricing?

    Everest sees strong tailwinds for clients seeking more limit and is optimistic about Florida renewals. They expect to maintain consistent capacity deployment if rates move reasonably, noting strong statistical evidence that tort reforms have worked. 80% of their Florida deals are on nonconcurrent terms.

    “I do think there's some pretty strong tailwinds in terms of clients looking to procure more limit. We have, as you probably know, a preferred position in the Florida market. I think we are a lead reinsurer for all of the best local underwriters.”

    asked by Andrew Andersen · answered by James Williamson

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Repositioning and New Segment Structure

    The first quarter marked reporting under Everest's new segment structure, which aims for a more focused, profitable, and capital-efficient company. This strategic reset is beginning to show results, particularly in the Global Wholesale & Specialty segment. The company continues to prioritize profitability and shareholder return over top-line volume, exemplified by a 6.4% underlying premium decline after divestitures and runoff.

    02

    Treaty Reinsurance Performance and Market Conditions

    The Treaty Reinsurance segment delivered strong underwriting income of $315 million with an 87.2% combined ratio. Gross written premium decreased 8.9% year-over-year, primarily due to continued casualty discipline and selective reductions. Property Catastrophe pricing softened by 13% globally at the 4/1 renewal, but terms and conditions, as well as attachment points, remained intact. The company expects continued competitive conditions for midyear renewals, with Florida showing strong demand and benefits from tort reform.

    03

    Global Wholesale & Specialty Segment Progress

    The Global Wholesale & Specialty segment, encompassing London market, U.S. wholesale, and specialty groups, reported a 96.8% combined ratio and $23 million in underwriting income. Premium was up modestly year-over-year, driven by growth in specialty lines and Accident & Health. The underlying attritional loss performance improved 3.8 points to 58.9% due to portfolio repositioning and underwriting enhancements, despite an operating expense ratio of 12.6% reflecting mix and lower underwriting leverage.

    04

    Capital Management and Shareholder Returns

    Everest accelerated capital return to shareholders, repurchasing $331 million of shares in Q1 at an average price of $330.01, with an additional $100 million in April. The company raised its quarterly share repurchase floor from $200 million to $300 million, reflecting confidence in its valuation and earnings power. Management expects an elevated payout ratio for 2026 due to a lower growth environment and strategic actions.

    05

    Reserve Adequacy and Loss Picks

    The company completed its customary Q1 reserve assessments, confirming a robust overall reserve position, particularly in reinsurance. Favorable development of $33 million was recorded, primarily from well-seasoned property reserves in short-tail lines. Management continues to maintain elevated loss picks in U.S. Casualty, despite remediation actions showing early signs of improved underwriting results, due to ongoing uncertainty in loss cost trends.

    06

    Investment Performance and Portfolio Characteristics

    Net investment income increased to $567 million, significantly boosted by strong alternative asset returns, which generated $156 million in net income compared to $55 million in the prior year quarter. The book yield remained stable at 4.5%, consistent with the current new money yield. The fixed income portfolio maintains a short asset duration of approximately 3.5 years and an average credit rating of AA-.

    AI-generated summary of the company’s earnings call. Not investment advice.