34
March U.S.storms ($10million). Prior yearincurred developmentof $9 millionfor thethree monthsended March 31, 2023 is primarily driven by favorablemovement on prior year catastrophes. Commission, Brokerage,Taxesand Fees.Commission, brokerage,taxes andfees increasedto $436 millionfor the three monthsended March31, 2023compared to$385 millionfor thethree monthsended March31, 2022.The increase was mainly due to the impact of the increasein premiums earned and changes in the mix of business. Other Underwriting Expenses.Other underwriting expensesincreased to$139 million forthe three monthsended March 31,2023 comparedto $118million forthe threemonthsended March31, 2022.The increasewas mainly due tothe impactof theincrease inpremiums earnedand increasedexpenses relatedto thecontinued buildout of the insurance platform.
CorporateExpenses.Corporateexpenses,whicharegeneraloperatingexpensesthatarenotallocatedto segments, remained consistentat $6 million for the three months ended
September 30, 2017, compared to $1,505.9 million for the three months ended September 30, 2016, reflecting a $263.6 million, or 26.1%, increase in our reinsurance businessMarch 31, 2023 and a $68.4 million, or 13.7%, decrease in our insurance business. The increase in reinsurance premiums was mainly due to the new crop reinsurance transactions, increases in financial lines of business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter. The decline in insurance premiums was due to the sale of Heartland Crop Insurance, Inc. ("Heartland") which accounted for $162.4 million of gross written premium in the third quarter of 2016. Excluding the impact of Heartland, insurance premiums rose by $94.0 million due to increased production in many lines of business, including retail casualty, surety and accident and health. Gross written premiums increased by 12.5% to $4,289.1 million for the nine months ended September 30, 2017, compared to $3,813.6 million for the nine months ended September 30, 2016, reflecting a $400.7 million, or 15.8%, increase in our reinsurance business and a $74.7 million, or 5.9%, increase in our insurance business. The increase in reinsurance premiums was mainly due to the new crop reinsurance transactions, increases in treaty property and financial lines of business and the influx of reinstatement premiums related to multiple catastrophe events in the third quarter. The rise in insurance premiums was primarily due to increases in many lines of business, including retail casualty, accident and health and surety, partially offset by the impact of the sale of Heartland.2022, respectively.
Net written premiums decreased by 8.3% to $570.8 million for the three months ended September 30, 2017, compared to $622.6 million for the three months ended September 30, 2016, and decreased by 5.9% to $1,437.5 million for the nine months ended September 30, 2017, compared to $1,527.9 million for the nine months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance mainly related to affiliated quota share contracts. Premiums earned decreased by 6.9% to $518.5 million for the three months ended September 30, 2017, compared to $556.7 million for the three months ended September 30, 2016 and decreased by 4.6% to $1,457.8 million for the nine months ended September 30, 2017, compared to $1,527.4 million for the nine months ended September 30, 2016. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Net Investment Income.Net investment income increased 13.7% to $73.4 million for the three months ended September 30, 2017 compared with net investment income of $64.6 million for the three months ended September 30, 2016 and increased 4.7% to $206.2 million for the nine months ended September 30, 2017 compared with net investment income of $196.9 million for the nine months ended September 30, 2016. Net pre-tax investment income as a percentage of average invested assets was 3.0% for the three months ended September 30, 2017, compared to 2.7% for the three months ended September 30, 2016 and remained flat at 2.8% for the nine months ended September 30, 2017 and 2016. The increases in income for the three and nine months ended September 30, 2017 were primarily the result of higher income from our limited partnerships and higher income from the growing fixed income portfolio, partially offset by lower dividend income from our equity portfolio.
Net Realized Capital Gains (Losses). Net realized capital gains were $228.5 million and net realized capital losses were $50.1 million for the three months ended September 30, 2017 and 2016, respectively. The net realized capital gains of $228.5 million were comprised of $227.5 million of gains from fair value re-measurements on equity securities and other invested assets and $2.4 million of gains from sales on our fixed maturity and equity securities, partially offset by $1.5 million of other-than-temporary impairments. The net realized capital losses of $50.1 million for the three months ended September 30, 2016 were comprised of $30.9 million of losses from fair value re-measurements on fixed maturity securities, equity securities and other invested assets, net realized capital losses of $28.0 million from the sale of our Heartland subsidiary and $0.8 million of other-than-temporary impairments, partially offset by $9.6 million of gains from sales on our fixed maturity and equity securities.
Net realized capital gains were $254.0 million and net realized capital losses were $87.3 million for the nine months ended September 30, 2017 and 2016, respectively. The net realized capital gains of $254.0 million were comprised of $237.8 million of gains from fair value re-measurements on equity securities and other invested assets and $20.3 million of gains from sales on our fixed maturity and equity securities, partially offset by $4.2 million of other-than-temporary impairments. The net realized capital losses of $87.3 million for the nine months ended September 30, 2016 million were comprised of net realized capital losses of $28.0 million from the sale of our Heartland subsidiary, $25.2 million of other-than-temporary impairments, $22.4 million of losses from sales on our fixed maturity and equity securities and $11.7 million of losses from fair value re-measurements on fixed maturity securities, equity securities and other invested assets.
Other Income (Expense). We recorded other income of $1.5 million and $22.0 million for the three and nine months ended September 30, 2017, respectively. We recorded other expense of $13.2 million and $10.8 million for the three and nine months ended September 30, 2016, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates.
Claims and Expenses.
Incurred Losses and Loss Adjustment Expenses. The following table presents our incurred losses and loss adjustment expenses ("LAE") for the periods indicated.
| | Three Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 325.6 | | | | 62.8 | % | | | $ | (0.9 | ) | | | -0.2 | % | | | $ | 324.7 | | | | 62.6 | % | |
Catastrophes | | | 1,007.8 | | | | 194.4 | % | | | | (0.9 | ) | | | -0.2 | % | | | | 1,006.9 | | | | 194.2 | % | |
Total | | $ | 1,333.4 | | | | 257.2 | % | | | $ | (1.8 | ) | | | -0.4 | % | | | $ | 1,331.6 | | | | 256.8 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 300.4 | | | | 54.0 | % | | | $ | 0.1 | | | | 0.0 | % | | | $ | 300.6 | | | | 54.0 | % | |
Catastrophes | | | 20.9 | | | | 3.8 | % | | | | (19.8 | ) | | | -3.6 | % | | | | 1.0 | | | | 0.2 | % | |
Total | | $ | 321.3 | | | | 57.8 | % | | | $ | (19.7 | ) | | | -3.6 | % | | | $ | 301.6 | | | | 54.2 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 25.2 | | | | 8.8 | | pts | | $ | (1.0 | ) | | | (0.2 | ) | pts | | $ | 24.1 | | | | 8.6 | | pts |
Catastrophes | | | 986.9 | | | | 190.6 | | pts | | | 18.9 | | | | 3.4 | | pts | | | 1,005.9 | | | | 194.0 | | pts |
Total | | $ | 1,012.1 | | | | 199.4 | | pts | | $ | 17.9 | | | | 3.2 | | pts | | $ | 1,030.0 | | | | 202.6 | | pts |
| | Nine Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 878.8 | | | | 60.3 | % | | | $ | 4.4 | | | | 0.3 | % | | | $ | 883.2 | | | | 60.6 | % | |
Catastrophes | | | 1,039.3 | | | | 71.3 | % | | | | (3.9 | ) | | | -0.3 | % | | | | 1,035.3 | | | | 71.0 | % | |
Total | | $ | 1,918.1 | | | | 131.6 | % | | | $ | 0.5 | | | | 0.0 | % | | | $ | 1,918.5 | | | | 131.6 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 894.7 | | | | 58.5 | % | | | $ | 0.9 | | | | 0.1 | % | | | $ | 895.6 | | | | 58.6 | % | |
Catastrophes | | | 77.6 | | | | 5.1 | % | | | | (37.0 | ) | | | -2.4 | % | | | | 40.6 | | | | 2.7 | % | |
Total | | $ | 972.3 | | | | 63.6 | % | | | $ | (36.1 | ) | | | -2.3 | % | | | $ | 936.2 | | | | 61.3 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | (15.9 | ) | | | 1.8 | | pts | | $ | 3.5 | | | | 0.2 | | pts | | $ | (12.4 | ) | | | 2.0 | | pts |
Catastrophes | | | 961.7 | | | | 66.2 | | pts | | | 33.1 | | | | 2.1 | | pts | | | 994.7 | | | | 68.3 | | pts |
Total | | $ | 945.8 | | | | 68.0 | | pts | | $ | 36.6 | | | | 2.3 | | pts | | $ | 982.3 | | | | 70.3 | | pts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Incurred losses and LAE increased to $1,331.6 million for the three months ended September 30, 2017 compared to $301.6 million for the three months ended September 30, 2016, primarily due to an increase of $986.9 million in current year catastrophe losses, an increase in current year attritional losses of $25.2 million and $19.8 million of favorable development on prior years catastrophe losses in 2016, primarily related to the 2011 Japan earthquake, which did not recur in 2017. The increase in attritional losses was primarily due to the impact of changes in affiliated quota share contracts and changes in the mix of business. The current year catastrophe losses of $1,007.8 million for the three months ended September 30, 2017 related to Hurricane Irma ($476.2 million), Hurricane Maria ($318.9 million), Hurricane Harvey ($180.7 million) and the Mexico City earthquake ($32.1 million). The current year catastrophe losses of $20.9 million for the three months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million), 2016 U.S. Storms ($6.6 million), the Fort McMurray Canada wildfire ($5.0 million), the Taiwan earthquake ($2.3 million) and the Ecuador earthquake ($0.2 million).
Incurred losses and LAE increased by 104.9% to $1,918.5 million for the nine months ended September 30, 2017 compared to $936.2 million for the nine months ended September 30, 2016, primarily due to an increase of $961.7 million in current year catastrophe losses and favorable development of $37.0 million on prior year catastrophe losses in 2016, primarily related to the 2011 Japan earthquake, which did not recur in 2017. The current year catastrophe losses of $1,039.3 million for the nine months ended September 30, 2017 related to Hurricane Irma ($476.2 million), Hurricane Maria ($318.9 million), Hurricane Harvey ($180.7 million), the Mexico City earthquake ($32.1 million), the South Africa Knysna fires ($10.0 million), Cyclone Debbie in Australia ($8.3 million), the Peru storms ($6.9 million) and the 2017 US Midwest storms ($6.2 million). The current year catastrophe losses of $77.6 million for the nine months ended September 30, 2016 were related to the Fort McMurray Canada wildfire ($26.9 million), the 2016 U.S. Storms ($24.9 million), the Ecuador earthquake ($11.6 million), the 2016 Taiwan earthquake ($7.5 million) and Hurricane Hermine ($6.8 million).
Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees decreased by 58.3% to $34.5 million for the three months ended September 30, 2017 compared to $82.8 million for the three months ended September 30, 2016. Commission, brokerage, taxes and fees decreased by 32.8% to $147.6 million for the nine months ended September 30, 2017 compared to $219.6 million for the nine months ended September 30, 2016. The decreases were primarily due to the impact of the decrease in premiums earned and the impact of affiliated quota share contracts.
Other Underwriting Expenses. Other underwriting expenses were $57.7 million and $64.1 million for the three months ended September 30, 2017 and September 30, 2016, respectively. The decrease for the three month period was primarily due to lower variable compensation costs. Other underwriting expenses were flat at $181.8 million and $181.7 million for the nine months ended September 30, 2017 and September 30, 2016, respectively.
Corporate Expenses.Corporate expenses, which are general operating expenses that are not allocated to segments, decreased slightly to $1.1 million from $1.8 million for the three months ended September 30, 2017 and 2016, respectively, and were flat at $6.2 million for the nine months ended September 30, 2017 and 2016, respectively.
Interest, Feesand Bond Issue CostAmortization Expense.Interest, feesand other bond amortization were $7.2expense was $32 million
and
$8.9 $24million for
the three
months ended
September 30, 2017March 31,2023 and 2016,2022, respectively.Interest fees and other bond amortization were $24.0 million and $26.6 million for expense was mainlyimpacted bythe
nine months ended September 30, 2017 and 2016, respectively. The decreases movementin expense for both the three and nine month periods were primarily due floating interestraterelatedto the conversion of the long termlong-term subordinatednotes, from a fixed rate of 6.6% to a floating rate, which is reset quarterly per the note
agreement. The floating agreement,as well as variable interestrate
was 3.70% as of September 30, 2017.costs on borrowingsfrom FHLB.Income TaxExpense (Benefit).We had
an income taxexpense of$49 million andbenefit of $220.5 million and income tax expense of $22.4 $10million for the
three
months
ended
September 30, 2017 March31,2023and 2016, 2022,respectively. We had an IncometaxexpenseisprimarilyafunctionofthegeographiclocationoftheCompany’spre-taxincome
andthestatutorytax
benefit of $153.3 million and incomeratesinthosejurisdictions.The effective tax
expense of $69.4 million for the nine months ended September 30, 2017 and 2016, respectively. Income tax expenserate (“ETR”) is
primarily
a function of the Company's pre-tax income and the statutory tax rate, as affected
by tax-exempt
investment income,
and foreign tax
credits and
as calculated underdividends. Variationsin the
annualized effective tax rate ("AETR") method. Variations in income tax expenseETR generally
result from changes
in the relative
levels of
pre-taxpre-tax income, including
the impact of
catastrophe
losses,
foreignexchange gains(losses) and net
capital gains (losses)
. However, if oninvestments, amongjurisdictions withOn August 16, 2022, the
AETR approach produces a year-to-date tax benefit which exceeds the amount which is estimated to be recoverable for the full year, then Inflation ReductionAct of 2022 (“IRA”) was enacted. Wehave evaluatedthe tax
benefit for provisions oftheIRA,themostsignificantofwhicharethecorporatealternativeminimumtaxandthesharerepurchase excise tax and do not expectthe
interim reporting periodlegislation to have a materialimpact on our results of operations. As theIRS issues additional guidance, we will
be limited, as prescribed under ASC 740-270,evaluate anyimpact to
the estimated tax recoverable based on the year-to-date result. The decrease in income tax expense for the three and nine months ended September 30, 2017 compared to the three and nine months ended September 30, 2016 was primarily due to the significant catastrophe losses incurred during the third quarter of 2017.
our consolidated financial statements.
Net Income (Loss).
Our
net
loss incomewas
$389.7 $220million
and
our net income was $76.3 $1million,
for
the
three
months
ended
September 30, 2017 March31,2023and 2016, 2022,respectively.
Our net loss was $184.9 million and our net income was $186.7 million for the nine months ended September 30, 2017 and 2016, respectively. The changes were primarily driven by thefinancial component fluctuations explained above.
Ratios.
Our combined
ratio
increased
by
194.00.7 points
to
274.6%95.2% forthe threemonthsended March31, 2023,comparedto94.5% for the three
months ended
September 30, 2017, compared to 80.6% for the three months ended September 30, 2016, and March31, 2022. The lossratio componentincreased by
66.6 points to 154.2% for the nine months ended September 30, 2017, compared to 87.6% for the nine months ended September 30, 2016. The loss ratio components increased 202.6 points and 70.3 0.4points for the three
months endedMarch 31,2023 overthe sameperiod lastyear mainlydue toan increaseof $22million incurrent year catastrophelosses.The commission and
nine brokerageratio componentsincreased slightly to21.1% for the three monthsendedMarch31,2023comparedto21.0%forthethreemonthsendedMarch31,2022.Theother underwriting expenseratiosincreased to6.7% from6.4% forthe threemonths ended
September 30, 2017, respectively, over the same period last year. The changesMarch 31,2023 and2022, respectively.These variances were mainly due to
the increases in current year catastrophe losses. The commission and brokerage ratio components decreased to 6.7% from 14.9% for the three months ended September 30, 2017 and 2016, respectively, and decreased to 10.1% from 14.4% for the nine months ended September 30, 2017 and 2016, respectively. The decreases reflect changes in the mix of
business, the impact of affiliated quota share contracts and the impactbusiness. Stockholder’sequity increasedby $348 millionto $6.0 billionat March31, 2023 from
reinstatement premiums. The other underwriting expense ratios decreased to 11.1% from 11.5% for the three months ended September 30, 2017 and 2016, respectively, and increased to 12.5% from 11.9% for the nine months ended September 30, 2017 and 2016, respectively. The decrease in the three month period was mainly due to lower variable compensation costs. The increase in the nine month period was due to costs associated with the continued expansion of the insurance business, partially offset by lower variable compensation costs.$5.7 billion
Stockholder's Equity.
Stockholders' equity decreased by $130.9 million to $5,167.6 million at September 30, 2017 from $5,298.6 million at December 31, 2016,
2022,principally
as
a
result
of
$184.9 $220million
of
net
loss, partially offsetincome,$121millionofnetunrealizedappreciationon investments,netoftax,and$7millionofnetforeigncurrencytranslationadjustments.Themovementinthe unrealized appreciation on investmentswas driven by
$43.2 million of net foreign currency translation adjustments, $5.4 million of net benefit plan obligation adjustments, $5.2 million of net unrealized depreciationthe change in interestrates on
investments, net of tax and $0.2 million of share-based compensation transactions.the Company’sfixed maturity - available for sale portfolio. 39
35
Consolidated Investment
Results
Net investmentincome increased by 13.7% to $73.4 $190million for
the three
months ended
September 30, 2017March 31,2023 comparedto $64.6 $156 million for
the three
months ended
September 30, 2016. Net investmentMarch 31,2022. Theincrease wasprimarily theresult ofhigher income increased by 4.7% to $206.2 million for the nine months ended September 30, 2017 compared to $196.9 million for the nine months ended September 30, 2016. The increases for the threefromfixed maturity securities and
nine month periods were primarilyshort-terminvestments due to
an increase in limited partnership income and higher income from the growing fixed income portfolio, rising reinvestment rates,partially offset by
lower dividendreductions in income
from
our equity portfolio.limitedpartnerships.The limitedpartnershipincome primarilyreflectschanges intheir reported net assetvalues. Assuch, untilthese assetvalues aremonetized andthe resultantincome isdistributed,they are subject to future increases or decreases in the assetvalue, and the results may be volatile. The following table shows the components
of net investment income for
the periods indicated:
Three Months Ended
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | September 30, | |
(Dollars in millions) | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
Fixed maturities | | $ | 48.3 | | | $ | 44.8 | | | $ | 144.9 | | | $ | 134.9 | |
Equity securities | | | 6.3 | | | | 7.9 | | | | 19.4 | | | | 25.8 | |
Short-term investments and cash | | | 0.6 | | | | 0.3 | | | | 1.6 | | | | 0.9 | |
Other invested assets | | | | | | | | | | | | | | | | |
Limited partnerships | | | 11.8 | | | | 6.0 | | | | 20.6 | | | | 17.7 | |
Dividends from preferred shares of affiliate | | | 7.8 | | | | 7.8 | | | | 23.3 | | | | 23.3 | |
Other | | | 1.5 | | | | 0.5 | | | | 4.2 | | | | 0.3 | |
Gross investment income before adjustments | | | 76.4 | | | | 67.3 | | | | 214.1 | | | | 202.8 | |
Funds held interest income (expense) | | | 1.1 | | | | 1.1 | | | | 4.0 | | | | 4.7 | |
Interest income from Parent | | | 1.1 | | | | 1.1 | | | | 3.2 | | | | 3.2 | |
Gross investment income | | | 78.5 | | | | 69.5 | | | | 221.3 | | | | 210.8 | |
Investment expenses | | | (5.1 | ) | | | (4.9 | ) | | | (15.1 | ) | | | (13.9 | ) |
Net investment income | | $ | 73.4 | | | $ | 64.6 | | | $ | 206.2 | | | $ | 196.9 | |
| | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | |
March 31,
(Dollars in millions)
2023
2022
Fixed maturities
$
174
$
94
1
4
Short-term investments and cash
11
-
Other invested assets
Limited partnerships
(24)
44
Dividends from preferred shares of affiliate
8
8
22
12
Gross investment income before adjustments
192
162
Funds held interest income (expense)
3
3
Interest income from Parent
5
2
Gross investment income
200
167
Investment expenses
(10)
(10)
Net investment income
$
190
$
156
(Some amounts may not reconcile due to rounding.)
The following
tables showtable shows a comparison
of various investment yields
for the periods indicated:
Three Months Ended
| | At | | At |
| | September 30, | | December 31, |
| | 2017 | | 2016 |
Imbedded pre-tax yield of cash and invested assets at December 31 | | 3.1% | | 2.9% |
Imbedded after-tax yield of cash and invested assets at December 31 | | 2.1% | | 2.0% |
March 31,
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
Annualized pre-tax yield on average cash and invested assets | 3.0% | | 2.7% | | 2.8% | | 2.8% |
Annualized after-tax yield on average cash and invested assets | 2.1% | | 1.9% | | 2.0% | | 1.9% |
2023
2022
Annualized pre-tax yield on average cash and invested assets
3.7%
3.3%
Annualized after-tax yield on average cash and invested assets
3.0%
2.6%
40
36
Net Realized Capital Gains (Losses). on Investments.
The following table presents the composition
of our net
realized capital gains (losses)
on investmentsfor the periods indicated:
Three Months Ended March 31,
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
(Dollars in millions) | | 2017 | | | 2016 | | | Variance | | | 2017 | | | 2016 | | | Variance | |
Gains (losses) from sales: | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, market value | | | | | | | | | | | | | | | | | | |
Gains | | $ | 8.0 | | | $ | 6.3 | | | $ | 1.7 | | | $ | 23.7 | | | $ | 13.9 | | | $ | 9.8 | |
Losses | | | (4.1 | ) | | | (1.9 | ) | | | (2.2 | ) | | | (6.9 | ) | | | (24.1 | ) | | | 17.2 | |
Total | | | 3.9 | | | | 4.4 | | | | (0.5 | ) | | | 16.8 | | | | (10.3 | ) | | | 27.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturity securities, fair value | | | | | | | | | | | | | | | | | | | | | | | | |
Gains | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Losses | | | - | | | | - | | | | - | | | | - | | | | (1.9 | ) | | | 1.9 | |
Total | | | - | | | | - | | | | - | | | | - | | | | (1.9 | ) | | | 1.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Equity securities, fair value | | | | | | | | | | | | | | | | | | | | | | | | |
Gains | | | 2.2 | | | | 6.9 | | | | (4.7 | ) | | | 13.8 | | | | 13.5 | | | | 0.3 | |
Losses | | | (3.7 | ) | | | (1.4 | ) | | | (2.3 | ) | | | (10.3 | ) | | | (23.6 | ) | | | 13.3 | |
Total | | | (1.5 | ) | | | 5.5 | | | | (7.0 | ) | | | 3.5 | | | | (10.1 | ) | | | 13.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total net realized gains (losses) from sales | | | | | | | | | | | | | | | | | | | | | | | | |
Gains | | | 10.2 | | | | 13.2 | | | | (3.0 | ) | | | 37.5 | | | | 27.4 | | | | 10.1 | |
Losses | | | (7.8 | ) | | | (3.4 | ) | | | (4.5 | ) | | | (17.2 | ) | | | (49.7 | ) | | | 32.5 | |
Total | | | 2.4 | | | | 9.6 | | | | (7.5 | ) | | | 20.3 | | | | (22.4 | ) | | | 42.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Gain (losses) on sale of subsidiary: | | | - | | | | (28.0 | ) | | | 28.0 | | | | - | | | | (28.0 | ) | | | 28.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other than temporary impairments: | | | (1.5 | ) | | | (0.8 | ) | | | (0.7 | ) | | | (4.2 | ) | | | (25.2 | ) | | | 21.0 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Gains (losses) from fair value adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed maturities, fair value | | | - | | | | 0.1 | | | | (0.1 | ) | | | - | | | | 1.4 | | | | (1.4 | ) |
Equity securities, fair value | | | 29.6 | | | | 16.0 | | | | 13.6 | | | | 82.0 | | | | 34.7 | | | | 47.3 | |
Other invested assets, fair value | | | 197.9 | | | | (47.0 | ) | | | 244.9 | | | | 155.8 | | | | (47.8 | ) | | | 203.6 | |
Total | | | 227.5 | | | | (30.9 | ) | | | 258.4 | | | | 237.8 | | | | (11.7 | ) | | | 249.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total net realized gains (losses) | | $ | 228.5 | | | $ | (50.1 | ) | | $ | 278.6 | | | $ | 254.0 | | | $ | (87.3 | ) | | $ | 341.3 | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | |
(Dollars in millions)
2023
2022
Variance
Realized gains (losses) from dispositions:
Fixed maturity securities available for sale
Gains
$
3
$
3
$
(1)
Losses
(4)
(8)
4
Total
(1)
(5)
4
Equity securities
Gains
7
4
3
Losses
-
(12)
12
Total
7
(8)
15
Other invested assets
Gains
-
4
(4)
Losses
-
-
-
Total
-
4
(4)
Total net realized gains (losses) from dispositions
Gains
9
11
(2)
Losses
(4)
(20)
17
Total
5
(10)
15
Allowances for credit losses:
(10)
(2)
(9)
Gains (losses) from fair value adjustments:
Equity securities
3
(131)
134
Other invested assets
24
(85)
109
Total
27
(215)
242
Total net gains (losses) on investments
$
22
$
(227)
$
249
(Some amounts may not reconcile due to rounding.)
Net
realized capital gains
were $228.5 million and net realized capital losses were $50.1 million for(losses) on investmentsduring the three months ended
September 30, 2017 and 2016, respectively. For the three months ended September 30, 2017 we recorded $227.5 million ofMarch 31, 2023 primarily relateto net
realized capital gains
due to fromfair value
re-measurements on equity securities and other invested assets and $2.4adjustments of$27 million
as a result of
net realized capital gains from salesmarketincreases during the firstquarter of
fixed maturity 2023. In addition, werecorded$5millionofnetrealizedgainsfromdispositionofinvestmentsand
equity securities, partially offset by $1.5 million of other-than-temporary impairments. For recordedanincreasetothe
three months ended September 30, 2016, we recorded $30.9 million of net realized capital losses due to fair value re-measurements on fixed maturity securities, equity securities and other invested assets, net realized capital allowance for credit losses of $28.0 million from the sale of our Heartland subsidiary and $0.8 million of other-than-temporary impairments, partially offset by $9.6 million of net realized capital gains from sales of fixed maturity and equity securities. The fixed maturity and equity sales for the three months ended September 30, 2017 and 2016 related primarily to adjusting the portfolios for overall market changes and individual credit shifts.
Net realized capital gains were $254.0 million and net realized capital losses were $87.3 million for the nine months ended September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 we recorded $237.8 million of net realized capital gains due to fair value re-measurements on equity securities and other invested assets and $20.3 million of net realized capital gains from sales of fixed maturity and equity securities, partially offset by $4.2 million of other-than-temporary impairments. For the nine months ended September 30, 2016, we recorded net realized capital losses of $28.0 million from the
sale of our Heartland subsidiary, $25.2 million of other-than-temporary impairments, $22.4 million of net realized capital losses from sales of fixed maturity and equity securities and $11.7 million of net realized capital losses due to fair value re-measurements on fixed maturity securities, equity securities and other invested assets. The fixed maturity and equity sales for the nine months ended September 30, 2017 and 2016 related primarily to adjusting the portfolios for overall market changes and individual credit shifts.
$10 million.
Segment Results.
The
U.S. Reinsurance operation writes property Companymanages itsreinsuranceand
casualty reinsuranceinsuranceoperationsas autonomousunits andkeystrategicdecisionsare based on the aggregate operatingresults and
projections for these segmentsof business. TheReinsuranceoperationwritesrisksonaworldwidebasisinpropertyandcasualtyreinsuranceandspecialty
lines of
business, including Marine, Aviation, Surety and A&H business, on both a treaty and facultative
basis, through reinsurance brokers,
as well as directly with ceding
companies primarilycompanies.BusinessiswrittenintheUnitedStatesaswell asthroughbranchesinCanadaandSingapore.The Insurance operationwrites property andcasualty insurance directlyand through brokers,surplus lines brokersand general agents within the
U.S. The International operation writes non-U.S. property and casualty reinsurance through Everest Re's branches in Canada, Singapore and through offices in Brazil, Miami and New Jersey. The Insurance operation writes property and casualty insurance directly, through brokers, surplus lines brokers and general agents mainly within the U.S.United States.
These segments
are
managed
independently,
but conform
with corporate
guidelines
with respect
to
pricing, risk
management,
control
of
aggregate
catastrophe
exposures,
capital,
investments
and
support
operations.
Management generally monitors
and evaluates the financial performance
of these operating segments
based upon
their underwriting results.
37
Underwriting
results
include
earned
premium
less
losses
and
LAE
incurred,
commission
and
brokerage
expenses
and other underwriting expenses.
We measure our underwriting results
using ratios, in particular loss, commission
and
brokerageand other underwritingexpense ratios,which respectively,divide incurredlosses, commissionsandbrokerage and other
underwriting expense ratios, which respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.
TheCompanydoesnotmaintainseparatebalancesheetdataforitsoperatingsegments.Accordingly,the Companydoes notreview andevaluatethe financialresultsof itsoperatingsegments basedupon balancesheet Our
loss
and
LAE
reserves
are
management'smanagement’sbestestimateofourultimateliabilityforunpaidclaims.Wereevaluateourestimatesonanongoingbasis,includingallpriorperiodreserves,takingintoconsiderationall availableinformationand,inparticular,recentlyreportedlossclaimexperienceandtrendsrelatedtoprior periods.Suchre-evaluationsarerecordedinincurredlossesintheperiodinwhichthere-evaluationismade. Management’sbestestimateisdevelopedthroughcollaborationwithactuarial,underwriting,claims,legaland financedepartmentsandculminateswiththeinputofreservecommittees.Eachsegmentreservecommittee includes theparticipation ofthe relevantparties fromactuarial, finance,claims andsegment seniormanagement andhastheresponsibilityforrecommendingandapprovingmanagement’sbestestimate.Reservesarefurther reviewedbyEverest’sChiefReservingActuaryandseniormanagement.Theobjectiveofsuchprocessisto determine a single best
estimateviewed by management to be the bestestimate of
ourits ultimate
liability for unpaid claims. We re-evaluate our estimates on an ongoing basis, including all prior period reserves, taking into consideration all available information and, in particular, recently reported loss
claim experience and trends related to prior periods. Such re-evaluations are recorded in incurred losses in the period in which the re-evaluation is made.liability.
The following discusses the underwriting results for
each of our segments for the periods indicated:
U.S. Reinsurance.
The
following
table
presents
the
underwriting
results
and
ratios
for
the
U.S. Reinsurance
segment
for
the
periods
indicated.
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
(Dollars in millions) | | 2017 | | | 2016 | | | Variance | | | % Change | | | 2017 | | | 2016 | | | Variance | | | % Change | |
Gross written premiums | | $ | 908.3 | | | $ | 654.8 | | | $ | 253.6 | | | | 38.7 | % | | $ | 1,962.3 | | | $ | 1,597.0 | | | $ | 365.3 | | | | 22.9 | % |
Net written premiums | | | 295.6 | | | | 327.2 | | | | (31.6 | ) | | | -9.7 | % | | | 649.9 | | | | 711.7 | | | | (61.8 | ) | | | -8.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 242.4 | | | $ | 249.2 | | | $ | (6.9 | ) | | | -2.8 | % | | $ | 653.0 | | | $ | 709.1 | | | $ | (56.1 | ) | | | -7.9 | % |
Incurred losses and LAE | | | 678.9 | | | | 137.2 | | | | 541.7 | | | NM | | | 919.1 | | | | 363.6 | | | | 555.5 | | | | 152.8 | % |
Commission and brokerage | | | 31.7 | | | | 48.1 | | | | (16.4 | ) | | | -34.1 | % | | | 115.2 | | | | 148.0 | | | | (32.7 | ) | | | -22.1 | % |
Other underwriting expenses | | | 12.1 | | | | 14.3 | | | | (2.2 | ) | | | -15.2 | % | | | 40.6 | | | | 39.9 | | | | 0.8 | | | | 1.9 | % |
Underwriting gain (loss) | | $ | (480.4 | ) | | $ | 49.6 | | | $ | (530.0 | ) | | NM | | $ | (422.0 | ) | | $ | 157.7 | | | $ | (579.7 | ) | | | NM |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Point Chg | | | | | | | | | | | | | | | Point Chg | |
Loss ratio | | | 280.1 | % | | | 55.1 | % | | | | | | | 225.0 | | | | 140.8 | % | | | 51.3 | % | | | | | | | 89.5 | |
Commission and brokerage ratio | | | 13.1 | % | | | 19.3 | % | | | | | | | (6.2 | ) | | | 17.6 | % | | | 20.9 | % | | | | | | | (3.2 | ) |
Other underwriting ratio | | | 5.0 | % | | | 5.7 | % | | | | | | | (0.7 | ) | | | 6.2 | % | | | 5.6 | % | | | | | | | 0.6 | |
Combined ratio | | | 298.2 | % | | | 80.1 | % | | | | | | | 218.1 | | | | 164.6 | % | | | 77.8 | % | | | | | | | 86.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(NM, not meaningful) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
indicated.Premiums.Three Months Ended March 31,
(Dollars in millions)
2023
2022
Variance
% Change
Gross written premiums
$
1,643
$
1,380
$
264
19.1%
Net written premiums
1,373
1,185
188
15.8%
Premiums earned
$
1,367
$
1,209
$
157
13.0%
Incurred losses and LAE
929
820
109
13.3%
Commission and brokerage
361
315
46
14.5%
Other underwriting expenses
39
31
8
25.0%
Underwriting gain (loss)
$
38
$
43
$
(5)
-11.3%
Point Chg
Loss ratio
68.0%
67.8%
0.2
Commission and brokerage ratio
26.4%
26.1%
0.3
Other underwriting ratio
2.8%
2.6%
0.2
Combined ratio
97.2%
96.5%
0.7
(Some amounts may not reconcile due to rounding.)
(NM, not meaningful)
Premiums.
Gross written premiumsincreased by
38.7%19.1% to
$908.3 million$1.6billion for the three
months ended
September 30, 2017March 31,2023 from
$654.8 million $1.4billionfor
the
three
months
ended
September 30, 2016, March31,2022primarily
due
to
the new crop reinsurance increasesincasualtyproratabusiness,
related to the sale propertypro ratabusiness andfinancial linesof
Heartland and the influx of reinstatement premiums due to the catastrophe losses. business.Net written
premiums
decreased increasedby
9.7% 15.8%to
$295.6 million $1.4billionfor
the
three
months
ended
September 30, 2017March31,2023compared
to
$327.2 million $1.2billionfor
the
three
months
ended
September 30, 2016. March31,2022,whichisconsistentwiththepercentagechangeingrosswrittenpremiums.Premiumsearned increasedby13.0% to$1.4billionforthethreemonthsendedMarch31,2023 comparedto$1.2 billionforthe threemonthsendedMarch31,2022.The
difference between changeinpremiumsearnedrelativetonetwrittenpremiumsisthe
change in gross written premiums compared to the change in net written premiums is primarily due to a varying utilization of reinsurance primarily related to the affiliated quota share contracts. Premiums earned decreased 2.8% to $242.4 million for the three months ended September 30, 2017 compared to $249.2 million for the three months ended September 30, 2016. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned
ratably over the coverage
period whereas written
premiums are recorded at
the initiation of the coverage
period.
Gross written premiums increased by 22.9% to $1,962.3 million for the nine months ended September 30, 2017 from $1,597.0 million for the nine months ended September 30, 2016, primarily due to the new crop reinsurance business, an increase in treaty casualty business and the influx of reinstatement premiums due to the catastrophe losses. Net written premiums decreased by 8.7% to $649.9 million for the nine months ended September 30, 2017 compared to $711.7 million for the nine months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to a varying utilization of reinsurance primarily related to the affiliated quota share contracts. Premiums earned decreased 7.9% to $653.0 million for the nine months ended September 30, 2017 compared to $709.1 million for the nine months ended September 30, 2016. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
38
Incurred Losses and LAE.
The following
table presents tables presentthe incurred losses and LAE for
the
U.S. Reinsurance segment
for
the periods indicated.
| | Three Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 128.0 | | | | 52.8 | % | | | $ | (0.4 | ) | | | -0.2 | % | | | $ | 127.5 | | | | 52.6 | % | |
Catastrophes | | | 551.6 | | | | 227.6 | % | | | | (0.2 | ) | | | -0.1 | % | | | | 551.4 | | | | 227.5 | % | |
Total segment | | $ | 679.6 | | | | 280.4 | % | | | $ | (0.6 | ) | | | -0.3 | % | | | $ | 678.9 | | | | 280.1 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 129.8 | | | | 52.1 | % | | | $ | (1.0 | ) | | | -0.4 | % | | | $ | 128.8 | | | | 51.7 | % | |
Catastrophes | | | 14.4 | | | | 5.8 | % | | | | (5.9 | ) | | | -2.4 | % | | | | 8.5 | | | | 3.4 | % | |
Total segment | | $ | 144.2 | | | | 57.9 | % | | | $ | (6.9 | ) | | | -2.8 | % | | | $ | 137.2 | | | | 55.1 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | (1.8 | ) | | | 0.7 | | pts | | $ | 0.6 | | | | 0.2 | | pts | | $ | (1.3 | ) | | | 0.9 | | pts |
Catastrophes | | | 537.2 | | | | 221.8 | | pts | | | 5.7 | | | | 2.3 | | pts | | | 542.9 | | | | 224.1 | | pts |
Total segment | | $ | 535.4 | | | | 222.5 | | pts | | $ | 6.3 | | | | 2.5 | | pts | | $ | 541.7 | | | | 225.0 | | pts |
Three Months Ended March 31,
43Current
Ratio %/Prior
| | Nine Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 374.8 | | | | 57.4 | % | | | $ | (4.7 | ) | | | -0.7 | % | | | $ | 370.0 | | | | 56.7 | % | |
Catastrophes | | | 553.2 | | | | 84.7 | % | | | | (4.1 | ) | | | -0.6 | % | | | | 549.1 | | | | 84.1 | % | |
Total segment | | $ | 928.0 | | | | 142.1 | % | | | $ | (8.8 | ) | | | -1.3 | % | | | $ | 919.1 | | | | 140.8 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 365.2 | | | | 51.6 | % | | | $ | (1.3 | ) | | | -0.2 | % | | | $ | 363.9 | | | | 51.4 | % | |
Catastrophes | | | 15.8 | | | | 2.2 | % | | | | (16.1 | ) | | | -2.3 | % | | | | (0.3 | ) | | | -0.1 | % | |
Total segment | | $ | 381.0 | | | | 53.8 | % | | | $ | (17.4 | ) | | | -2.5 | % | | | $ | 363.6 | | | | 51.3 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 9.6 | | | | 5.8 | | pts | | $ | (3.4 | ) | | | (0.5 | ) | pts | | $ | 6.1 | | | | 5.3 | | pts |
Catastrophes | | | 537.4 | | | | 82.5 | | pts | | | 12.0 | | | | 1.7 | | pts | | | 549.4 | | | | 84.2 | | pts |
Total segment | | $ | 547.0 | | | | 88.3 | | pts | | $ | 8.6 | | | | 1.2 | | pts | | $ | 555.5 | | | | 89.5 | | pts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2023
Attritional
$
834
61.1%
$
1
0.0%
$
835
61.1%
Catastrophes
101
7.4%
(7)
-0.5%
94
6.9%
Total segment
$
935
68.4%
$
(6)
-0.5%
$
929
68.0%
2022
Attritional
$
738
61.0%
$
-
0.0%
$
738
61.0%
Catastrophes
75
6.2%
7
0.6%
82
6.8%
Total segment
$
813
67.2%
$
7
0.6%
$
820
67.8%
Variance 2023/2022
Attritional
$
97
0.1
pts
$
-
-
pts
$
97
0.1
pts
Catastrophes
26
1.2
pts
(14)
(1.1)
pts
12
0.1
pts
Total segment
$
122
1.3
pts
$
(14)
(1.1)
pts
$
109
0.2
pts
Incurred losses increased
by 13.3% to
$678.9 $929 million forthe three monthsended March 31, 2023,compared to $820million for the three months
ended
September 30, 2017 compared to $137.2 million for the three months ended September 30, 2016,March 31, 2022. The increasewas primarily due to an increase
of
$537.2$97 million in
currentyearattritionallossesandanincreaseof$26millionincurrentyearcatastrophelosses.Theincreasein currentyearattritionallosses wasmainly relatedtothe impactof theincreasein premiumsearned.The current year catastrophelossesof $101million forthe threemonths endedMarch 31,2023 relatedprimarily tothe 2023 Turkeyearthquakes($65 million)and the2023 NewZealand storms($36 million).The $75million ofcurrent year
catastrophe
losses. The current lossesforthethreemonthsendedMarch31,2022relatedprimarilyto2022Australiafloods($71million) andthe 2022March U.S.storms ($5million). Prioryear
catastrophe losses incurreddevelopmentof
$551.6 $6million for
the three
months ended
September 30, 2017 related to Hurricane Irma ($348.6 million), Hurricane Harvey ($128.5 million), Hurricane Maria ($74.0 million), and the Mexico City earthquake ($1.1 million). The $14.4 million of current year catastrophe losses for the three months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million), 2016 U.S. Storms ($6.3 million) and the Fort McMurray Canada Wildfire ($1.3 million).March 31, 2023 is primarily driven
Incurred losses increased by
152.8% to $919.1 million for the nine months ended September 30, 2017 compared to $363.6 million for the nine months ended September 30, 2016, due to an increase of $537.4 million in current year catastrophe losses, favorable
development of $16.1 million movementon prior
years' catastrophe losses in 2016 which did not recur in 2017 and an increase of $9.6 million in current year
attritional losses, resulting mainly from the impact of the new crop reinsurance contract. The current year catastrophe losses of $553.2 million for the nine months ended September 30, 2017 related to Hurricane Irma ($348.6 million), Hurricane Harvey ($128.5 million), Hurricane Maria ($74.0 million), the Mexico City earthquake ($1.1 million) and the 2017 U.S. Storms ($1.4 million). The $15.8 million of current year catastrophe losses for the nine months ended September 30, 2016 were related to Hurricane Hermine ($6.8 million) and 2016 U.S. Storms ($9.6 million).catastrophes.
Segment Expenses.Commission and
brokerage
expenses decreased expense increasedby
34.1% 14.5%to
$31.7 $361million
forthe threemonths ended
September 30, 2017March31, 2023compared
to
$48.1 $315million
forthe threemonthsended September 30, 2016. Commission and brokerage expenses decreased by 22.1% to $115.2 million for the nine months ended September 30, 2017 compared to $148.0 million for the nine months ended September 30, 2016. March31, 2022.The
decreases are increasewasmainly due to the impact of the
new crop reinsurance contract which generally has a lower expense ratio,increase in premiums earned andchanges in the
impactmix of
affiliated quota share contractsbusiness.Segment otherunderwriting expensesincreased to$39 millionfor thethree monthsended March31, 2023from $31 millionfor thethree monthsended March31, 2022.The increasewas dueto increasedpersonnel and
direct and indirect expenditures supporting the
impactincreasedpremium volume of the
decreasesegment. 39
Insurance.
ThefollowingtablepresentstheunderwritingresultsandratiosfortheInsurancesegmentfortheperiods Three Months Ended March 31,
(Dollars in premiums earned.millions)
2023
Segment other2022
Variance
% Change
Gross written premiums
$
852
$
825
$
27
3.3%
Net written premiums
690
611
79
12.9%
Premiums earned
$
702
$
619
$
83
13.3%
Incurred losses and LAE
465
405
60
14.7%
Commission and brokerage
76
69
6
9.0%
Other underwriting expenses decreased
100
87
13
15.5%
Underwriting gain (loss)
$
61
$
58
$
3
5.4%
Point Chg
Loss ratio
66.2%
65.4%
0.8
Commission and brokerage ratio
10.8%
11.2%
(0.4)
Other underwriting ratio
14.3%
14.0%
0.3
Combined ratio
91.3%
90.6%
0.7
(Some amounts may not reconcile due to $12.1rounding.)
(NM, not meaningful)
Premiums.
Gross writtenpremiums increased by3.3% to $852 million
for the threemonths ended September 30, 2017 from $14.3 March 31, 2023 comparedto $825million
forthe threemonthsended March31, 2022.The increasein insurancepremiumswas primarilyduetoincreasesinproperty/shorttailbusinessandotherspecialtylinesofbusiness.Netwritten premiumsincreasedby12.9%to$690millionforthethreemonthsendedMarch31,2023comparedto$611 million for
thethree monthsended March31, 2022. Thehigher percentageof net writtenpremiums comparedto grosswrittenpremiumswasmainlyduetobusinessmixandhigherretentionincertainlinesofbusiness. Premiums earnedincreased 13.3% to$702 million forthe three months
ended
September 30, 2016. The decrease for the three month period was primarily due March31, 2023 comparedto
lower variable compensation costs. Segment other underwriting expenses increased slightly to $40.6 million for the nine months ended September 30, 2017 from $39.9 million for the nine months ended September 30, 2016.$619 International.
The following table presents the underwriting results and ratios for the International segment for the periods indicated.
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
(Dollars in millions) | | 2017 | | | 2016 | | | Variance | | | % Change | | | 2017 | | | 2016 | | | Variance | | | % Change | |
Gross written premiums | | $ | 363.2 | | | $ | 353.2 | | | $ | 10.0 | | | | 2.8 | % | | $ | 975.3 | | | $ | 939.9 | | | $ | 35.4 | | | | 3.8 | % |
Net written premiums | | | 130.2 | | | | 141.3 | | | | (11.1 | ) | | | -7.9 | % | | | 345.4 | | | | 353.4 | | | | (8.1 | ) | | | -2.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 123.9 | | | $ | 128.4 | | | $ | (4.4 | ) | | | -3.5 | % | | $ | 355.4 | | | $ | 372.8 | | | $ | (17.5 | ) | | | -4.7 | % |
Incurred losses and LAE | | | 410.5 | | | | 41.8 | | | | 368.7 | | | NM | | | 557.4 | | | | 206.7 | | | | 350.7 | | | | 169.7 | % |
Commission and brokerage | | | 25.1 | | | | 30.2 | | | | (5.1 | ) | | | -16.9 | % | | | 72.4 | | | | 82.4 | | | | (10.0 | ) | | | -12.2 | % |
Other underwriting expenses | | | 8.2 | | | | 9.2 | | | | (1.0 | ) | | | -10.6 | % | | | 26.3 | | | | 25.0 | | | | 1.3 | | | | 5.1 | % |
Underwriting gain (loss) | | $ | (320.0 | ) | | $ | 47.1 | | | $ | (367.1 | ) | | NM | | $ | (300.8 | ) | | $ | 58.7 | | | $ | (359.5 | ) | | NM |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Point Chg | | | | | | | | | | | | | | | Point Chg | |
Loss ratio | | | 331.3 | % | | | 32.6 | % | | | | | | | 298.7 | | | | 156.9 | % | | | 55.4 | % | | | | | | | 101.5 | |
Commission and brokerage ratio | | | 20.3 | % | | | 23.5 | % | | | | | | | (3.3 | ) | | | 20.4 | % | | | 22.1 | % | | | | | | | (1.7 | ) |
Other underwriting ratio | | | 6.6 | % | | | 7.2 | % | | | | | | | (0.6 | ) | | | 7.3 | % | | | 6.8 | % | | | | | | | 0.5 | |
Combined ratio | | | 358.2 | % | | | 63.3 | % | | | | | | | 294.9 | | | | 184.6 | % | | | 84.3 | % | | | | | | | 100.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(NM, not meaningful) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums. Gross written premiums increased by 2.8% to $363.2 million for the three months ended
September 30, 2017 compared to $353.2 million for the three months ended September 30, 2016, primarily due to the increase in Middle East, African March31, 2022.Incurred Lossesand
Asian business, partially offset by a decline in Latin American business and a negative impact of $5.6 million from the movement of foreign exchange rates. Net written premiums decreased by 7.9% to $130.2 million for the three months ended September 30, 2017 compared to $141.3 million for the three months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts, including affiliated quota share contracts. Premiums earned decreased 3.5% to $123.9 million for the three months ended September 30, 2017 compared to $128.4 million for the three months ended September 30, 2016. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Gross written premiums increased by 3.8% to $975.3 million for the nine months ended September 30, 2017 compared to $939.9 million for the nine months ended September 30, 2016, primarily due to increases in Middle East, African and Asian business and the positive impact of $17.7 million from the movement of foreign exchange rates. Net written premiums decreased by 2.3% to $345.4 million for the nine months ended September 30, 2017 compared to $353.4 million for the nine months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to varying utilization of reinsurance related to the quota share contracts, including affiliated quota share contracts. Premiums earned decreased 4.7% to $355.4 million for the nine months ended September 30, 2017 compared to $372.8 million for the nine months ended September 30, 2016. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.LAE.
Incurred Losses and LAE.The following
table presents tables presentthe incurred
losses and
LAE for
the
International Insurancesegment for
Three Months Ended March 31,
| | Three Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 64.0 | | | | 51.7 | % | | | $ | 0.7 | | | | 0.6 | % | | | $ | 64.7 | | | | 52.3 | % | |
Catastrophes | | | 346.6 | | | | 279.7 | % | | | | (0.8 | ) | | | -0.7 | % | | | | 345.8 | | | | 279.0 | % | |
Total segment | | $ | 410.6 | | | | 331.4 | % | | | $ | (0.1 | ) | | | -0.1 | % | | | $ | 410.5 | | | | 331.3 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 49.3 | | | | 38.4 | % | | | $ | - | | | | 0.0 | % | | | $ | 49.3 | | | | 38.4 | % | |
Catastrophes | | | 6.5 | | | | 5.1 | % | | | | (14.0 | ) | | | -10.9 | % | | | | (7.5 | ) | | | -5.8 | % | |
Total segment | | $ | 55.8 | | | | 43.5 | % | | | $ | (14.0 | ) | | | -10.9 | % | | | $ | 41.8 | | | | 32.6 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 14.7 | | | | 13.3 | | pts | | $ | 0.7 | | | | 0.6 | | pts | | $ | 15.4 | | | | 13.9 | | pts |
Catastrophes | | | 340.1 | | | | 274.6 | | pts | | | 13.2 | | | | 10.2 | | pts | | | 353.3 | | | | 284.8 | | pts |
Total segment | | $ | 354.8 | | | | 287.9 | | pts | | $ | 13.9 | | | | 10.8 | | pts | | $ | 368.7 | | | | 298.7 | | pts |
Current
| | Nine Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 182.9 | | | | 51.5 | % | | | $ | 2.6 | | | | 0.7 | % | | | $ | 185.5 | | | | 52.2 | % | |
Catastrophes | | | 371.7 | | | | 104.6 | % | | | | 0.2 | | | | 0.1 | % | | | | 371.9 | | | | 104.7 | % | |
Total segment | | $ | 554.6 | | | | 156.1 | % | | | $ | 2.8 | | | | 0.8 | % | | | $ | 557.4 | | | | 156.9 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 185.6 | | | | 49.8 | % | | | $ | (3.4 | ) | | | -0.9 | % | | | $ | 182.3 | | | | 48.9 | % | |
Catastrophes | | | 45.2 | | | | 12.1 | % | | | | (20.8 | ) | | | -5.6 | % | | | | 24.4 | | | | 6.5 | % | |
Total segment | | $ | 230.8 | | | | 61.9 | % | | | $ | (24.1 | ) | | | -6.5 | % | | | $ | 206.7 | | | | 55.4 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | (2.7 | ) | | | 1.7 | | pts | | $ | 6.0 | | | | 1.6 | | pts | | $ | 3.2 | | | | 3.3 | | pts |
Catastrophes | | | 326.5 | | | | 92.5 | | pts | | | 21.0 | | | | 5.7 | | pts | | | 347.5 | | | | 98.2 | | pts |
Total segment | | $ | 323.8 | | | | 94.2 | | pts | | $ | 26.9 | | | | 7.3 | | pts | | $ | 350.7 | | | | 101.5 | | pts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
2023
Attritional
$
466
66.4%
$
(2)
-0.3%
$
464
66.1%
Catastrophes
2
0.2%
-
-0.1%
1
0.2%
Total segment
$
468
66.6%
$
(3)
-0.4%
$
465
66.2%
2022
Attritional
$
401
64.7%
$
-
-0.1%
$
400
64.7%
Catastrophes
5
0.8%
-
0.0%
5
0.8%
Total segment
$
406
65.5%
$
(1)
-0.1%
$
405
65.4%
Variance 2023/2022
Attritional
$
65
1.7
pts
$
(2)
(0.2)
pts
$
63
1.4
pts
Catastrophes
(3)
(0.6)
pts
-
(0.1)
pts
(4)
(0.6)
pts
Total segment
$
62
1.1
pts
$
(2)
(0.3)
pts
$
60
0.8
pts
Incurred losses and
LAE increased
by14.7% to
$410.5$465 million
for the three
months ended
September 30, 2017March31, 2023 compared
to$405 millionforthe threemonthsended March31, 2022,mainly duetoan increaseof $65millionin current year attritionallosses whichis primarilyrelated tothe impactof theincrease inpremiums earned.The $2million of currentyear catastrophelosses forthe threemonths endedMarch 31,2023, relatedto
$41.8the2023 NewZealand 40
storms. The$5 million
of currentyear catastrophe lossesfor the
three months
ended
September 30, 2016,March31, 2022,related to the 2022 MarchU.S. storms.Prior yearincurred developmentof $3 millionfor thethree monthsended March31, 2023 is primarily
due to an increase of $340.1 million in current year catastrophe losses, an increase of $14.7 million in current year attritional losses and $14.0 million ofdriven by favorable
developmentmovement on prior year
catastrophe losses in 2016, which did not recur in 2017. The current year catastrophe losses of $346.6 million for the three months ended September 30, 2017 related to Hurricane Maria ($236.2 million), Hurricane Irma ($77.5 million), the Mexico City earthquake ($31.1 million) and Hurricane Harvey ($1.4 million). The $6.5 million of current year catastrophe losses for the three months ended September 30, 2016 were related to the Fort McMurray Canada Wildfire ($3.7 million), the Taiwan earthquake ($2.3 million), 2016 U.S. Storms ($0.3 million) and the Ecuador earthquake ($0.2 million).catastrophes. SegmentExpenses.Incurred losses
Commissionand
LAE brokerageincreased
by
169.7% 9.0%to
$557.4 $76million
for
the
nine threemonths
ended September 30, 2017 compared to $206.7 million for the nine months ended September 30, 2016, primarily due to an increase of $326.5 million in current catastrophe losses and $20.8 million of favorable development on prior year catastrophe losses in 2016 which did not recur in 2017. The current year catastrophe losses of $371.7 million for the nine months ended September 30, 2017 related to Hurricane Maria ($236.2 million), Hurricane Irma ($77.5 million), the Mexico City earthquake ($31.1 million), the South Africa Knysna fires ($10.1 million), Cyclone Debbie in Australia ($8.3 million), the Peru storms ($7.1 million) and Hurricane Harvey ($1.4 million). The $45.2 million of current year catastrophe losses for the nine months ended
March46
31,2023 comparedto$69 millionforthethreemonthsendedMarch31,2022. Theincreasewasmainly
September 30, 2016 were due to the Fort McMurray Canada wildfire ($25.4 million), the Ecuador earthquake ($11.8 million), the Taiwan earthquake ($7.6 million) and U.S. Storms ($0.3 million).
Segment Expenses. Commission and brokerage decreased 16.9% to $25.1 million for the three months ended September 30, 2017 compared to $30.2 million for the three months ended September 30, 2016. Commission and brokerage decreased 12.2% to $72.4 million for the nine months ended September 30, 2017 compared to $82.4 million for the nine months ended September 30, 2016. The decreases were due to the impact of the
decreasesincrease in premiums earned
the impact of affiliated quota share agreements and
changes in the mix of business.
Segment
other
underwriting
expenses
decreasedincreasedto$100millionforthethreemonthsendedMarch31,2023compared to$87 millionfor thethree monthsended March31, 2022.The increasewas mainlydue tothe impact of theincreaseinpremiumsearnedandincreasedexpensesrelatedtothecontinuedbuild outof theinsurance platform.
Liquidity and Capital Resources
Capital.Stockholder’sequityatMarch31,2023andDecember31,2022was$6.0billionand$5.7billion, respectively.Management’s objective in managingcapital is to
$8.2ensure its overallcapital level, as well as the capital levels of itsoperating subsidiaries,exceed theamounts requiredby regulators,the amount neededto support our currentfinancialstrengthratingsfromratingagenciesandourowneconomiccapitalmodels.TheCompany’s capital has historically exceededthese benchmark levels. Ourmainoperatingcompany,EverestReisregulatedbytheStateofDelaware,DepartmentofInsurance.The regulatory bodyhas its owncapital adequacymodels basedon statutorycapital asopposed toGAAP basisequity. Failure to meet the requiredstatutory capitallevels could result in various regulatoryrestrictions. The regulatory targetedcapital and the actual statutorycapital for EverestRe was as follows: Everest Re (1)
At December 31,
(Dollars in millions)
2022
2021
Regulatory targeted capital
$3,353
$2,960
Actual capital
$5,553
$5,717
(1)
Regulatory targeted capital represents200% of the RBC authorized control level calculation forthe applicable year. Our financialstrengthratingsas determinedby A.M.Best, Standard& Poor’sand Moody’sare importantas they provide our customersand investorswith an independentassessment of ourfinancial strengthusing a ratingscale that providesfor relativecomparisons.Wecontinuetopossesssignificantfinancial flexibilityand accessto debt and equitymarkets asa resultof ourfinancial strength,as evidencedby thefinancial strengthratings asassigned by independent rating agencies. We maintainour owneconomic capitalmodels to monitorand projectour overallcapital, aswell as thecapital at our operatingsubsidiaries.A keyinput tothe economicmodels isprojectedincome andthis inputis continually compared to actual results, which mayrequire a change in the capital strategy. Wemaycontinue,fromtimetotime, toseektoretireportionsof ouroutstandingdebt securitiesthroughcash repurchases,in open-marketpurchases,privatelynegotiatedtransactionsor otherwise.Such repurchases,if any, will be subjectto anddepend onprevailing marketconditions, ourliquidity requirements,contractualrestrictions andotherfactors.Theamountsinvolvedinanysuchtransactions,individuallyorintheaggregate,maybe material.
Liquidity.Our liquidity requirements are generallymet from positive cash flowfrom operations.Positive cash flow resultsfromreinsuranceandinsurancepremiumsbeingcollectedpriortodisbursementsforclaims,which disbursements generallytake placeover an extendedperiod afterthe collection ofpremiums, sometimesa period 41
ofmanyyears.Collectedpremiumsaregenerallyinvested,priortotheiruseinsuchdisbursements,and investmentincomeprovidesadditionalfundingforlosspayments.Ournetcashflowsfromoperatingactivities were $384 million and $531 million for the three
months ended
September 30, 2017March 31, 2023 and 2022, respectively. Ifdisbursementsforclaimsandbenefits,policyacquisitioncostsandotheroperatingexpensesweretoexceed premium inflows, cash flow from
$9.2reinsurance and insuranceoperations would be negative.The effect on cash flow frominsuranceoperationswouldbepartiallyoffsetbycashflowfrominvestmentincome.Additionally,cash inflowsfrominvestmentmaturities-bothshort-terminvestmentsandlonger-termmaturitiesareavailableto supplementotheroperatingcashflows.Wedonotexpecttosupplementnegativeinsuranceoperationscash flows from investment dispositions.
Asthetimingof paymentsforclaimsandbenefitscannotbe predictedwithcertainty,wemaintainportfoliosof long-terminvestedassetswithvaryingmaturities,alongwithshort-terminvestmentsthatprovideadditional liquidityforpaymentofclaims.AtMarch31,2023andDecember31,2022,weheldcashandshort-term investmentsof$1.31billionand$1.29billion,respectively.Ourshort-terminvestmentsaregenerallyreadily marketableandcanbeconvertedtocash.Inadditiontothesecashandshort-terminvestments,atMarch31, 2023, wehad$694 million
offixedmaturitysecurities- availablefor
the three months ended September 30, 2016. The decrease for the three month period issalematuringwithinoneyearorless,$3.5 billionmaturingwithinonetofiveyearsand$2.7billionmaturingafterfiveyears.Our$158millionofequity securities are comprised primarily
due of publiclytraded securities that we believecan be easily liquidated.We believe that thesefixedmaturity andequity securities,in conjunctionwith theshort-terminvestmentsand positivecash flowfromoperations,provideamplesourcesofliquidityfortheexpectedpaymentoflossesinthenearfuture. Wedo notanticipateselling asignificantamountof securitiesto
lower variable compensation costs. Segment other underwriting expenses increased slightly to $26.3 million for the nine months ended September 30, 2017 from $25.0 million for the nine months ended September 30, 2016.paylosses andLAE.AtMarch 31,2023 wehad $834millionofnetpre-taxunrealizeddepreciationrelatedtofixedmaturity-availableforsalesecurities, Insurance.
The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
(Dollars in millions) | | 2017 | | | 2016 | | | Variance | | | % Change | | | 2017 | | | 2016 | | | Variance | | | % Change | |
Gross written premiums | | $ | 429.6 | | | $ | 498.0 | | | $ | (68.4 | ) | | | -13.7 | % | | $ | 1,351.5 | | | $ | 1,276.8 | | | $ | 74.7 | | | | 5.9 | % |
Net written premiums | | | 144.9 | | | | 154.1 | | | | (9.1 | ) | | | -5.9 | % | | | 442.2 | | | | 462.8 | | | | (20.6 | ) | | | -4.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 152.2 | | | $ | 179.1 | | | $ | (26.9 | ) | | | -15.0 | % | | $ | 449.4 | | | $ | 445.6 | | | $ | 3.9 | | | | 0.9 | % |
Incurred losses and LAE | | | 242.1 | | | | 122.5 | | | | 119.6 | | | | 97.6 | % | | | 442.0 | | | | 366.0 | | | | 76.0 | | | | 20.8 | % |
Commission and brokerage | | | (22.3 | ) | | | 4.5 | | | | (26.7 | ) | | NM | | | (40.1 | ) | | | (10.9 | ) | | | (29.2 | ) | | NM |
Other underwriting expenses | | | 37.4 | | | | 40.7 | | | | (3.3 | ) | | | -8.1 | % | | | 114.9 | | | | 116.8 | | | | (2.0 | ) | | | -1.7 | % |
Underwriting gain (loss) | | $ | (105.0 | ) | | $ | 11.4 | | | $ | (116.4 | ) | | NM | | $ | (67.3 | ) | | $ | (26.4 | ) | | $ | (40.9 | ) | | NM |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Point Chg | | | | | | | | | | | | | | | Point Chg | |
Loss ratio | | | 159.0 | % | | | 68.4 | % | | | | | | | 90.6 | | | | 98.3 | % | | | 82.1 | % | | | | | | | 16.2 | |
Commission and brokerage ratio | | | -14.6 | % | | | 2.5 | % | | | | | | | (17.1 | ) | | | -8.9 | % | | | -2.5 | % | | | | | | | (6.4 | ) |
Other underwriting ratio | | | 24.5 | % | | | 22.7 | % | | | | | | | 1.8 | | | | 25.6 | % | | | 26.3 | % | | | | | | | (0.7 | ) |
Combined ratio | | | 168.9 | % | | | 93.6 | % | | | | | | | 75.3 | | | | 115.0 | % | | | 105.9 | % | | | | | | | 9.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(NM, not meaningful) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums. Gross written premiums decreased by 13.7% to $429.6 million for the three months ended September 30, 2017 compared to $498.0 million for the three months ended September 30, 2016. This decrease was primarily due to the salecomprised of
Heartland, which accounted for $162.4$871 million of
gross written premiums in the third quarter of 2016. Excluding the impact of Heartland, gross written premiums increased by $94.0 million due to higher production from many lines of business, including retail casualty, suretypre-tax unrealizeddepreciation and
accident and health. Net written premiums decreased by 5.9% to $144.9 million for the three months ended September 30, 2017 compared to $154.1 million for the three months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the more conservative reinsurance position we have taken to support our expanded insurance business and the impact of affiliated quota share agreements. Premiums earned decreased 15.0% to $152.2 million for the three months ended September 30, 2017 compared to $179.1 million for the three months ended September 30, 2016. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.
Gross written premiums increased by 5.9% to $1,351.5 million for the nine months ended September 30, 2017 compared to $1,276.8 million for the nine months ended September 30, 2016. Excluding the impact of the sale of Heartland, which accounted for $229.9$37 million of
gross written premiums pre-taxunrealized appreciation.Managementgenerallyexpectsannualpositivecashflow fromoperations,whichreflectsthestrengthof overall pricing.However,giventherecentset ofcatastrophicevents,cashflow fromoperationsmaydecline andcould become negativein the
nine monthsnear termas significant47
claim payments
ended September 30, 2016, gross written premiums increased $304.6 million. This increase was primarily driven by expansion of many lines of business, including retail casualty, retail property, surety and accident and health. Net written premiums decreased by 4.4% to $442.2 million for the nine months ended September 30, 2017 compared to $462.8 million for the nine months ended September 30, 2016. The difference between the change in gross written premiums compared to the change in net written premiums is primarily due to the more conservative reinsurance position we have taken to support our new business and the impact of affiliated quota share agreements. Premiums earned increased 0.9% to $449.4 million for the nine months ended September 30, 2017 compared to $445.6 million for the nine months ended September 30, 2016. The change in premiums earned relative to net written premiums is the result of timing; premiums are
earned ratably over the coverage period whereas written premiums are recorded at the initiation of the coverage period.made
Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated.
| | Three Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 133.6 | | | | 87.7 | % | | | $ | (1.2 | ) | | | -0.8 | % | | | $ | 132.4 | | | | 86.9 | % | |
Catastrophes | | | 109.6 | | | | 72.0 | % | | | | 0.1 | | | | 0.1 | % | | | | 109.7 | | | | 72.1 | % | |
Total segment | | $ | 243.2 | | | | 159.7 | % | | | $ | (1.1 | ) | | | -0.7 | % | | | $ | 242.1 | | | | 159.0 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 121.4 | | | | 67.8 | % | | | $ | 1.1 | | | | 0.6 | % | | | $ | 122.5 | | | | 68.4 | % | |
Catastrophes | | | - | | | | 0.0 | % | | | | - | | | | 0.0 | % | | | | - | | | | 0.0 | % | |
Total segment | | $ | 121.4 | | | | 67.8 | % | | | $ | 1.1 | | | | 0.6 | % | | | $ | 122.5 | | | | 68.4 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 12.2 | | | | 19.9 | | pts | | $ | (2.3 | ) | | | (1.4 | ) | pts | | $ | 9.9 | | | | 18.5 | | pts |
Catastrophes | | | 109.6 | | | | 72.0 | | pts | | | 0.1 | | | | 0.1 | | pts | | | 109.7 | | | | 72.1 | | pts |
Total segment | | $ | 121.8 | | | | 91.9 | | pts | | $ | (2.2 | ) | | | (1.3 | ) | pts | | $ | 119.6 | | | | 90.6 | | pts |
| | Nine Months Ended September 30, |
| | Current | | | Ratio %/ | | Prior | | | Ratio %/ | | Total | | | Ratio %/ |
(Dollars in millions) | | Year | | | Pt Change | | Years | | | Pt Change | | Incurred | | | Pt Change |
2017 | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 321.2 | | | | 71.4 | % | | | $ | 6.5 | | | | 1.4 | % | | | $ | 327.7 | | | | 72.8 | % | |
Catastrophes | | | 114.4 | | | | 25.5 | % | | | | (0.1 | ) | | | 0.0 | % | | | | 114.3 | | | | 25.5 | % | |
Total segment | | $ | 435.6 | | | | 96.9 | % | | | $ | 6.4 | | | | 1.4 | % | | | $ | 442.0 | | | | 98.3 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | 343.8 | | | | 77.1 | % | | | $ | 5.6 | | | | 1.3 | % | | | $ | 349.4 | | | | 78.4 | % | |
Catastrophes | | | 16.7 | | | | 3.7 | % | | | | (0.2 | ) | | | 0.0 | % | | | | 16.5 | | | | 3.7 | % | |
Total segment | | $ | 360.5 | | | | 80.8 | % | | | $ | 5.4 | | | | 1.3 | % | | | $ | 366.0 | | | | 82.1 | % | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Variance 2017/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Attritional | | $ | (22.6 | ) | | | (5.7 | ) | pts | | $ | 0.9 | | | | 0.1 | | pts | | $ | (21.7 | ) | | | (5.6 | ) | pts |
Catastrophes | | | 97.7 | | | | 21.8 | | pts | | | 0.1 | | | | - | | pts | | | 97.8 | | | | 21.8 | | pts |
Total segment | | $ | 75.1 | | | | 16.1 | | pts | | $ | 1.0 | | | | 0.1 | | pts | | $ | 76.0 | | | | 16.2 | | pts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Some amounts may not reconcile due to rounding.) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Incurred losses and LAE increased by 97.6% to $242.1 million for the three months ended September 30, 2017 compared to $122.5 million for the three months ended September 30, 2016, mainly due to an increase of $109.6 million in current year catastrophe losses and an increase of $12.2 million in current year attritional losses. The current year catastrophe losses of $109.6 million for the three months ended September 30, 2017 related to Hurricane Harvey ($50.8 million), Hurricane Irma ($50.1 million) and Hurricane Maria ($8.7 million). There were no current yearthe catastrophes.However,as indicatedabove, theCompany hasample liquidity tosettle itscatastropheclaims and/orany paymentsdue for its catastrophe
losses for the three months ended September 30, 2016.bond prograIncurred losses and LAE increased by 20.8% to $442.0 million for the nine months ended September 30, 2017 compared to $366.0 million for the nine months ended September 30, 2016, mainly due to an increase of $97.7 million in current catastrophe losses, partially offset by a decrease of $22.6 million in current year attritional losses. The decrease in current year attritional losses primarily related to changes in the mix of business and the impact of affiliated quota share agreements. The current year catastrophe losses of $114.4 million for the nine months ended September 30, 2017 primarily related to Hurricane Harvey ($50.8 million), Hurricane Irma ($50.1 million), Hurricane Maria ($8.7 million) and the 2017 US Midwest Storms ($4.8 million). The $16.7 million of current year catastrophe losses for the nine months ended September 30, 2016 were due to the 2016 U.S. storms ($15.0 million) and the Fort McMurray Canada wildfire ($1.7 million).
Segment Expenses. Commission and brokerage decreased to ($22.3) million for the three months ended September 30, 2017 compared to $4.5 million for the three months ended September 30, 2016. Commission and brokerage decreased to ($40.1) million for the nine months ended September 30, 2017 compared to ($10.9) million for the nine months ended September 30, 2016. The decreases were mainly due to the impact of changes in the mix of business and the impacts from affiliated quota share agreements.
Segment other underwriting expenses decreased to $37.4 million for the three months ended September 30, 2017 compared to $40.7 million for the three months ended September 30, 2016. Segment other underwriting expenses decreased to $114.9 million for the nine months ended September 30, 2017 compared to $116.8 million for the nine months ended September 30, 2016. These decreases were mainly due to lower variable compensation costs.
m.
Market Sensitive Instruments.
The
SEC's SEC’sFinancial
Reporting
Release
#48
requires
registrants
to
clarify
and
expand
upon
the
existing
financial
statement
disclosure
requirements
for
derivative
financial
instruments,
derivative
commodity
instruments
and
other financial
instruments
(collectively, "market (collectively,“marketsensitive
instruments"instruments”).
We
do not
generally
enter into
market
sensitive instruments for trading
purposes.
Our
current
investment
strategy
seeks
to
maximize
after-tax
income
through
a
high
quality,
diversified,
taxable
and
tax-preferenced tax-preferencedfixed
maturity
portfolio,
while maintaining
an adequate
level of
liquidity.
Our mix
of taxable
and
tax-preferenced
investments
is
adjusted
periodically,
consistent
with
our
current
and
projected
operating
results,
market
conditions
and
our
tax
position.
The
fixed
maturity
securities
in
the
investment
portfolio
are
comprised of non-trading available
for sale securities. Additionally,
we have invested
in equity securities.
The overall
investment strategy
considers the
scope of present
and anticipated
Company operations.
In particular,
estimates of
the financial
impact resulting
from non-investment
asset and
liability transactions,
together with
ourcapitalstructureandotherfactors,areusedtodevelopanetliabilityanalysis.Thisanalysisincludesestimated payoutcharacteristicsfor whichour
capital structure and other factors, are used to develop a net liability analysis. investmentsprovide liquidity.This analysis
includes estimated payout characteristics for which our investments provide liquidity. This analysis is considered
in the
development
of
specific
investment
strategies
for
asset
allocation,
duration
and
credit
quality.
The
change
in
overall
market
sensitive risk exposure principally reflects
the asset changes that took place during the period.
42
Interest
Rate
Risk.
Our
$10.2 $20.0billion
investment
portfolio,
at
September 30, 2017, March31,2023,is
principally
comprised
of
fixed
maturity securities,
which are
generally subject
to interest
rate risk
and some
foreign currency
exchange
rate risk,
and some equity securities, which are subject to price fluctuations
and some foreign exchange
rate risk. The overall
economic impact
of the foreign
exchange risks
on the investment
portfolio is
partially mitigated
by changes
in the
dollar value of foreign currency
denominated liabilities and their associated
income statement impact.
Interest
rate
risk
is
the
potential
change
in
value
of
the
fixed
maturity
securities
portfolio,
including
short-term
investments,
from
a
change
in
market
interest
rates.
In
a
declining
interest
rate
environment,
it
includes
prepayment
risk
on
the
$736.9 million $2.2billionof
mortgage-backed
securities
in
the
$6,039.4 million $14.2billionfixed
maturity
portfolio.
Prepayment
risk results
from potential
accelerated
principal
payments
that shorten
the average
life and
thus the
expected yield of the security.
The
table
below
displays
the
potential
impact
of
market fairvalue
fluctuations
and
after-tax
unrealized
appreciation
on
our fixed
maturity
portfolio
(including $230.0(including$822 million
of
short-termshort-term investments)
for
the period
indicated
based
on
upward
and
downward
parallel
and
immediate
100
and
200 basis
point
shifts
in
interestrates.ForlegalentitieswithaU.S.dollarfunctionalcurrency,thismodelingwasperformedoneachsecurityindividually.Togenerate appropriatepriceestimateonmortgage-backedsecurities,changesinprepaymentexpectationsunderdifferent interest
rates.rateenvironments weretaken intoaccount. For
legal entities with
a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price estimate on mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with non-U.S. dollar functional
currency,
the
effective
duration
of the
involved
portfolio
of securities
was
used as
a proxy
for
the
market fairvalue
change
under the
various interest rate
change scenarios.
Impact of Interest Rate Shift in Basis Points
| | Impact of Interest Rate Shift in Basis Points | |
| | At September 30, 2017 | |
(Dollars in millions) | | | -200 | | | | -100 | | | | 0 | | | | 100 | | | | 200 | |
Total Market/Fair Value | | $ | 6,634.4 | | | $ | 6,454.2 | | | $ | 6,269.4 | | | $ | 6,077.2 | | | $ | 5,883.9 | |
Market/Fair Value Change from Base (%) | | | 5.8 | % | | | 2.9 | % | | | 0.0 | % | | | -3.1 | % | | | -6.1 | % |
Change in Unrealized Appreciation | | | | | | | | | | | | | | | | | | | | |
After-tax from Base ($) | | $ | 237.3 | | | $ | 120.1 | | | $ | - | | | $ | (124.9 | ) | | $ | (250.6 | ) |
At March 31, 2023
(Dollars in millions)
-200
-100
0
100
200
Total Fair Value
$
15,735
$
15,384
$
15,033
$
14,682
$
14,331
Fair Value Change from Base (%)
4.7%
2.3%
0.0%
-2.3%
-4.7%
Change in Unrealized Appreciation
After-tax from Base ($)
$
554
$
277
$
-
$
(277)
$
(554)
We had
$9,969.1 million$15.3 billion and
$8,331.3 million$15.0billion of gross
reserves for losses
and LAE as of
September 30, 2017March 31, 2023 and
December 31,
2016,2022, respectively.
These amounts
are recorded
at their nominal
value, as
opposed to present
value, which
would
reflect a
discount
adjustment
to reflect
the time
value of
money.
Since losses
are paid
out over
a period
of time,
thepresentvalueofthereservesislessthanthenominalvalue.Asinterestratesrise,thepresentvalueofthe reservesdecreasesand,conversely,asinterestratesdecline,thepresentvalueincreases.These movementsare the
present oppositeof theinterestrateimpacts onthe fairvalue of
the reserves is less than the nominal value. As interest rates rise, the present value of the reserves decreases and, conversely, as interest rates decline, the present value increases. These movements are the opposite of the interest rate impacts on the fair value of investments.
While the
difference
between present
value
and nominal
value
is not
reflected
in our
financial
statements,
our financial
results
will include
investment
income
over
time
from
the
investment
portfolio
until
the
claims
are
paid.
Our
loss
and
loss
reserve
obligations
have an expected duration
that is reasonably consistent
with our fixed income portfolio.
Equity Risk.Equity risk
is the potential
change in fair
and/or market value of
the common
stock, preferred
stock and
mutual fund
portfolios
arising
from
changing
prices.
Our
equity
investments
consist
of
a
diversified
portfolio
of
individual
securities. The primary
objective of
the equity portfolio
is to
obtain greater
total return
relative to
our core
bonds
over time through market appreciation
and income.
The table
below
displays
the impact
on
fair/market fairvalue
and
after-tax after-taxchange
in
fair/market fairvalue
of a
10% and
20% change
in
equity prices up and down for the periods indicated.
| | Impact of Percentage Change in Equity Fair/Market Values | |
| | At September 30, 2017 | |
(Dollars in millions) | | | -20% | | | -10% | | | 0% | | | 10% | | | 20% |
Fair/Market Value of the Equity Portfolio | | $ | 798.5 | | | $ | 898.3 | | | $ | 998.1 | | | $ | 1,097.9 | | | $ | 1,197.7 | |
After-tax Change in Fair/Market Value | | | (129.7 | ) | | | (64.9 | ) | | | - | | | | 64.9 | | | | 129.7 | |
Impact of Percentage Change in Equity Fair Value
Foreign Currency Risk. Foreign currency risk is the potential changeAt March 31, 2023
(Dollars in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S. ("foreign") operations maintains capital in the currencymillions)
-20%
-10%
0%
10%
20%
Fair Value of the Equity Portfolio
$
127
$
142
$
158
$
174
$
190
After-tax Change in Fair Value
(25)
(13)
-
13
25
43
ForeignCurrencyRisk.Foreigncurrencyrisk isthe potentialchangein value,incomeandcashflow arisingfrom adverse changesin foreigncurrency exchangerates.Each ofour non-U.S.(“foreign”)operationsmaintains capital in thecurrencyof thecountry
of its
geographic
location
consistent
with local
regulatory
guidelines. Each
foreign
operation
may
conduct
business
in
its
local
currency,
as
well
as
thecurrencyofothercountriesinwhichitoperates.TheprimaryforeigncurrencyexposuresfortheseforeignoperationsaretheSingaporeandCanadian Dollars. Wemitigate foreignexchangeexposure bygenerally matchingthe currency
of other countries in which it operates. The primary foreign currency exposures for these foreign operations are the Singapore and Canadian Dollars. We mitigate foreign exchange exposure by generally matching the currency and duration
of our
assets to
our corresponding
operating liabilities. In
accordance with FASB
guidance, the impact
on the
market fairvalue of available
for
sale
fixed
maturities
due
to
changes
in
foreign
currency
exchange
rates,
in
relation
to
functional
currency,
is
reflected as
part of other
comprehensive income.
Conversely,
the impact of
changes in
foreign currency
exchange
rates,
in
relation
to
functional
currency,
on
other
assets
and
liabilities
is
reflected
through
net
income
as
a
component of other income (expense). In
addition, we translate
the assets, liabilities and income of non-U.S.
dollar
functional currency
legal entities
to the
U.S. dollar.
This translation
amount is
reported as
a component
of other
comprehensive income.
SAFE HARBOR DISCLOSURE
This report
contains
forward-lookingforward-looking statements
within the meaning
of the U.S.
federal securities
laws. We
intend
these
forward-looking statements forward-looking statementsto
be covered
by
the safe
harbor
provisions
for
forward-looking
statements
in
the federal
securities laws.
In some cases,
these statements
can be identified
by the use
of forward-looking
words
such
as
"may"“may”,
"will"“will”,
"should"“should”,
"could"“could”,
"anticipate"“anticipate”,
"estimate"“estimate”,
"expect"“expect”,
"plan"“plan”,
"believe"“believe”,
"predict"“predict”,
"potential"“potential” and
"intend"“intend”.
Forward-looking statements
contained in this report
include include: ●
the effects of catastrophicand pandemic events on our financial statements; ●
estimates of our catastropheexposure; ●
information regarding our
reserves for losses and
LAE, LAE;●
our failure to accuratelyassess underwriting risk; ●
decreases in pricing for propertyand casualty reinsurance and insurance; ●
our ability to maintain our financial strengthratings; ●
the failure of our insured, intermediariesand reinsurers to satisfy theirobligations; ●
our inability or failure to purchase reinsurance;
●
consolidation of competitors,customers and insurance and reinsurancebrokers; ●
theeffectonourbusinessof thehighlycompetitivenatureof ourindustry,includingtheeffectofnew entrants to, competingproducts for and consolidation inthe (re)insurance industry; ●
ourabilitytoretainourkeyexecutiveofficersandtoattractorretaintheexecutivesandemployees necessary to manage our business; ●
the performance of our investmentportfolio; ●
our ability to determine any impairmentstaken on our investments; ●
foreign currency exchangerate fluctuations; ●
the effect of cybersecurity risks,including technology breaches or failure, onour business; ●
the CARES Act;
●
the impact of the TaxCut and Jobs Act and; ●
the adequacy of
capital in relation toregulatory required capital.Forward-lookingstatementsonlyreflectour
provision for uncollectible balances, estimates expectationsandarenotguaranteesof
performance.These statementsinvolverisks,uncertaintiesandassumptions.Actualeventsorresultsmaydiffermateriallyfromour
catastrophe exposure, the effects of catastrophic events on expectations.Importantfactorsthatcouldcauseour
financial statements and the ability of our subsidiaries to pay dividends. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause our actual events
or
results
to
be materially
different
from
our
expectations include those discussed
under the caption ITEM 1A,
"Risk Factors" “Risk Factors”in the
Company's Company’smost recent 10-K
filing. We undertake
no obligation to update
or revise publicly any
forward-lookingforward-looking statements,
whether as a result
of new information, future events
or otherwise.
44
ITEM 3.
QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
See
"Market“Market Sensitive
Instruments" Instruments”in PART I – ITEM 2.
ITEM 4.
CONTROLS AND PROCEDURES
Asoftheendoftheperiodcoveredbythisreport,ourmanagementcarriedoutanevaluation,withthe As participationof
the
end ChiefExecutiveOfficerandChiefFinancialOfficer,of
the
period covered by this report, effectivenessofour
management carried out an evaluation, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure
controls
and procedures
(as(as defined
in Rule
13a-15(e)
under the
Securities Exchange
Act of
1934 (the
"Exchange Act"“ExchangeAct”)).
Based
on
their
evaluation,
the
Chief
Executive
Officer
and
Chief
Financial
Officer
concluded
that
our
disclosure
controls
and procedures
are effective
to ensure
that information
required
to
be disclosed
by us
in the
reports
that we
file or
submit under
the Exchange
Act are
recorded,
processed,
summarized
and reported
within
the time
periods specified
in the
Securities and
Exchange
Commission's Commission’srules and
forms.
Our management,
with
the
participation
of
the
Chief
Executive
Officer
and
Chief
Financial
Officer,
also
conducted
an
evaluation
of
our
internal control over financial
reporting to determine whether any
changes occurred during the quarter covered
bythisreportthathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontrolover financial reporting.Based onthat evaluation,there hasbeen nosuch changeduring thequarter coveredby this
report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the quarter covered by this report. report.
PART II
In the ordinary
course of business,
the Company is
involved in
lawsuits, arbitrations
and other formal
and informal
dispute resolution
procedures,
the outcomes
of which
will determine
the
Company's Company’srights and
obligations
under
insurance
and
reinsurance
agreements.
In
some
disputes,
the
Company
seeks
to
enforce
its
rights
under
an
agreement or to
collect funds owing
to it.
In other matters,
the Company is
resisting attempts
by others to
collect
funds or
enforce
alleged rights.
These disputes
arise from
time to
time and
are ultimately
resolved through
both
informal
and
formal
means,
including
negotiated
resolution,
arbitration
and
litigation.
In
all
such
matters,
the
Company believes
that its positions
are legally and
commercially reasonable.
The Company
considers the
statuses
of these proceedings when determining its reserves for
unpaid loss and loss adjustment expenses.
Aside from litigation and arbitrations
related to these insurance and
reinsurance agreements,
the Company is not a
party to any other material litigation
or arbitration.
No material changes.
ITEM 2.
UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
None.
ITEM 3.
DEFAULTS
UPON SENIOR SECURITIES
None.
None.
45
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
None.None.
Exhibit Index: | | |
| | |
Exhibit No.
| Description
| |
| | |
31.1 | Section 302 Certification of Dominic J. Addesso | |
| | |
31.2 | Section 302 Certification of Craig Howie | |
| | |
32.1 | Section 906 Certification of Dominic J. Addesso and Craig Howie | |
| | |
101.INS | XBRL Instance Document | |
| | |
101.SCH | XBRL Taxonomy Extension Schema | |
| | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
| | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
| | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase | |
| | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |
| | |
Exhibit Index:
Exhibit No.
Description
31.1
31.2
32.1
101.INS
XBRL Instance Document
101.SCH
XBRL TaxonomyExtension Schema 101.CAL
XBRL TaxonomyExtension Calculation Linkbase 101.DEF
XBRL TaxonomyExtension Definition Linkbase 101.LAB
XBRL TaxonomyExtension Labels Linkbase 101.PRE
XBRL TaxonomyExtension Presentation Linkbase 104
Cover Page InteractiveData File (embedded within the Inline XBRL document) Everest Reinsurance
Holdings, Inc.
Signatures
Pursuant to
the requirements
of the Securities
Exchange Act
of 1934, the
registrant
has duly
caused this
report to
be signed on its behalf by the undersigned thereunto
duly authorized.
Everest ReinsuranceHoldings, Inc.
(Registrant)
/S/ MARK KOCIANCIC
Mark Kociancic
| |
Everest Reinsurance Holdings, Inc. | |
(Registrant) | |
| |
| |
/S/ CRAIG HOWIE | |
Craig Howie | |
Executive Vice President and | |
| Chief Financial Officer | |
| | |
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
Dated:
November 14, 2017May 11, 2023