Insurer Everest Group's profit surges on stronger underwriting, investment returns

Everest

07/02/2024 22:52

Feb 7 (Reuters) - Everest Group's  EG.N  operating
profit more than doubled in the fourth quarter on Wednesday, as
the insurer benefited from stronger underwriting and better
returns on its investments.
    Buoyed by employer-guaranteed and government-mandated
policies, the demand for insurance remains resilient amid
significant corporate and consumer cutback in spending,
reinforcing its reputation as "recession-proof".
    Everest said its gross written premium increased 18.3% on a
constant currency basis to $4.3 billion in the quarter. It
posted a combined ratio of 93.2%, compared with 87.8% a year
earlier. A ratio below 100% means the insurer earned more in
premiums than it paid out in claims.
    Insurers also use their cash to buy a portfolio of assets,
chiefly safe-haven such as U.S. Treasuries and other high-grade
corporate bonds. Multiple rate hikes by the U.S. Federal Reserve
have helped insurers earn higher interest from such investments.
    Everest's net investment income improved to $411 million,
compared with $210 million a year earlier, driven by strong
fixed income and alternative investment returns.
    Gross written premiums in its reinsurance segment grew 21.9%
on a constant dollar basis. The gains come in line with the
broader upbeat sentiment in the market as higher insurance sales
also drum up demand for reinsurance.
    Everest's operating income came in at $1.09 billion, or
$25.18 per share, for the three months ended Dec. 31, compared
with $478 million, or $12.21 per share, a year ago.
    

 (Reporting by Sri Hari N S in Bengaluru; Editing by Shilpi
Majumdar)
 ((SriHari.NS@thomsonreuters.com;))