Everest Group

Everest’s durable advantages are built on reputation, relationships, claims-paying resources, and a consistently low expense ratio. Intangible assets and ratings matter in reinsurance and specialty insurance because brokers and cedents prioritize counterparties with A or better financial strength and proven claims performance.

Everest’s core operating subsidiaries carry A+ financial strength from A.M. Best, though the outlook moved to negative in October 2025 after reserve actions. This supports distribution access and pricing credibility but the outlook revision modestly reduces durability.

Switching costs exist in long-tail and complex reinsurance programs where multi-year structures, data familiarity, and trust reduce churn, yet switching remains feasible in competitive markets. Network effects are limited.

Scale and cost advantages are tangible through a low other underwriting expense ratio of about 6.6 percent for 2025 and reinsurance expense ratios around 2.5 percent, aiding price-to-cost leverage against smaller peers.

Efficient scale also applies in certain specialty and cat layers where limited capacity and underwriting expertise deter new entrants. Moat components scoring: intangible assets and ratings strong, switching costs moderate, cost efficiency strong, efficient scale moderate, network effects low.

Everest benefited from the hard market since 2023 with attractive reinsurance margins in 2025 (reinsurance combined ratio 91.7 percent). However, pricing power is cyclical. January 1, 2026 renewals showed bound premium down 1 percent with property cat pricing down roughly 10 percent, indicating some normalization.

The pivot away from retail commercial and emphasis on wholesale specialty should concentrate the book in lines where technical pricing and bespoke solutions command better terms, but competitive supply and alternative capital limit long-run unilateral pricing. Overall we see above-average but cyclical pricing power.

Insurance and reinsurance earnings are inherently volatile due to catastrophes, reserve development, and market cycles. Everest’s 2024 results were impacted by U.S. casualty reserve strengthening, followed by a 2025 clean-up and an adverse development cover to ring-fence older years.

Group combined ratio in 2025 was 98.6 percent with reinsurance at 91.7 percent, and net investment income reached a record $2.1 billion, but catastrophe losses were still $757 million for the year.

The ADC and strategic exit from retail commercial renewal rights should reduce tail risk and complexity, improving medium-term predictability, yet we still classify the business as moderate in predictability relative to subscription-like models.

Everest ended 2025 with total invested assets and cash of $45.4 billion and shareholders’ equity of $15.5 billion. Book value per share rose 20 percent to 379.83. Operating cash flow was $3.07 billion in 2025, reflecting robust underwriting cash generation and higher reinvestment yields, while interest paid was modest at $150 million. A.M.

Best affirmed A+ financial strength in October 2025 but revised the outlook to negative after casualty reserve actions. The $1.2 billion adverse development cover provides protection on older North America insurance reserves for years 2024 and prior. Overall leverage appears reasonable relative to capital and cash generation.

We view financial strength as a notable positive, albeit with the rating outlook watch.

Management has been decisive: it strengthened legacy reserves in 2024, executed a $1.2 billion adverse development cover in 2025 to cap tail risk, and sold the renewal rights of global retail commercial insurance to AIG to focus on core reinsurance and wholesale specialty.

In 2025, Everest repurchased $797 million of stock and paid $8 in dividends per share over the last 12 months. We view the exit from retail commercial as a quality-raising reallocation, improving expected returns and reducing execution complexity.

The primary caution is that prior reserve development required capital and dented 2024 results, with A.M. Best shifting outlook to negative. On balance, recent actions demonstrate rational, shareholder-minded allocation.

Jim Williamson became President and CEO in January 2025, succeeding a founder-like leadership lineage. Under his tenure, Everest has prioritized underwriting profitability over top-line growth, streamlined insurance to wholesale specialty, and executed significant capital actions.

The leadership team has deep market relationships across reinsurance and specialty lines. The openness to take reserve pain upfront and to deploy an ADC indicates a long-term mindset. The key watch item is continued delivery of mid-90s combined ratio targets in insurance and maintaining rating stability.

Overall, we assess management as capable and disciplined with a solid early track record in a challenged casualty environment.