UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


X			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~June~~September 30, 2023


			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-14527

EVEREST REINSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware						22-3263609
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


100 Everest Way Warren, New Jersey						07059
(Address of principal executive offices)						(Zip Code)

(908) 604-3000

(Registrant’s ~~Telephone~~telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated ~~Filer~~filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange ~~act.~~Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


						Number of Shares Outstanding
Class						At ~~August~~November 1, 2023
Common Shares, $0.01 par value						1,000

The Registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H of Form 10-Q.

EVEREST REINSURANCE HOLDINGS, INC.

Table of Contents

Form 10-Q


		Page
PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of ~~June~~September 30, 2023 (unaudited) and December 31, 2022	1

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	2

	Consolidated Statements of Changes in Stockholder’s Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	3

	Consolidated Statements of Cash Flows for the~~six~~ nine months ended ~~June~~September 30, 2023 and 2022 (unaudited)	4

	Notes to Consolidated Interim Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2728

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4143

Item 4.	Controls and Procedures	4143

PART II

OTHER INFORMATION

Item 1.	Legal Proceedings	4244

Item 1A.	Risk Factors	4244

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4244

Item 3.	Defaults Upon Senior Securities	4244

Item 4.	Mine Safety Disclosures	4244

Item 5.	Other Information	4244

Item 6.	Exhibits	4345

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


		June 30,		December 31,			September 30,		December 31,
(Dollars in millions, except share amounts and par value per share)	(Dollars in millions, except share amounts and par value per share)	2023		2022		(Dollars in millions, except share amounts and par value per share)	2023		2022
		(unaudited)					(unaudited)
ASSETS:	ASSETS:					ASSETS:
Fixed maturities - available for sale, at fair value (amortized cost: 2023, $15,141; 2022, $13,699, credit allowances: 2023, $(57); 2022, $(46))		$	14,202	$	12,671
Fixed maturities - held to maturity, at amortized cost (fair value: 2023, $771; 2022, $793, net of credit allowances: 2023, $(8); 2022, $(9))		788		811
Fixed maturities - available for sale, at fair value						Fixed maturities - available for sale, at fair value	$	14,434	$	12,671
(amortized cost: 2023, $15,520; 2022, $13,699, credit allowances: 2023, $(58); 2022, $(46))						(amortized cost: 2023, $15,520; 2022, $13,699, credit allowances: 2023, $(58); 2022, $(46))
Fixed maturities - held to maturity, at amortized cost						Fixed maturities - held to maturity, at amortized cost
(fair value: 2023, $759; 2022, $793, net of credit allowances: 2023, $(8); 2022, $(9))						(fair value: 2023, $759; 2022, $793, net of credit allowances: 2023, $(8); 2022, $(9))	782		811
Equity securities, at fair value	Equity securities, at fair value	167		194		Equity securities, at fair value	79		194
Other invested assets	Other invested assets	2,853		2,754		Other invested assets	2,916		2,754
Other invested assets, at fair value	Other invested assets, at fair value	1,474		1,472		Other invested assets, at fair value	1,440		1,472
Short-term investments	Short-term investments	1,095		812		Short-term investments	1,660		812
Cash	Cash	478		481		Cash	531		481
Total investments and cash	Total investments and cash	21,056		19,195		Total investments and cash	21,841		19,195
Notes receivable - affiliated	Notes receivable - affiliated	—		840		Notes receivable - affiliated	—		840
Accrued investment income	Accrued investment income	187		150		Accrued investment income	212		150
Premiums receivable (net of credit allowances:2023, $(22); 2022, $(21))		2,084		1,721
Reinsurance recoverables - unaffiliated (net of credit allowances:2023, $(21); 2022, $(21))		1,960		1,841
Premiums receivable (net of credit allowances:2023, $(25); 2022, $(21))						Premiums receivable (net of credit allowances:2023, $(25); 2022, $(21))	2,106		1,721
Reinsurance recoverables - unaffiliated (net of credit allowances: 2023, $(22); 2022, $(21))						Reinsurance recoverables - unaffiliated (net of credit allowances: 2023, $(22); 2022, $(21))	1,981		1,841
Reinsurance recoverables - affiliated	Reinsurance recoverables - affiliated	1,830		1,935		Reinsurance recoverables - affiliated	1,650		1,935
Income tax asset, net	Income tax asset, net	201		288		Income tax asset, net	328		288
Funds held by reinsureds	Funds held by reinsureds	295		303		Funds held by reinsureds	302		303
Deferred acquisition costs	Deferred acquisition costs	530		499		Deferred acquisition costs	596		499
Prepaid reinsurance premiums	Prepaid reinsurance premiums	522		463		Prepaid reinsurance premiums	580		463
Other assets (net of credit allowances: 2023, $(7); 2022, $(5))		830		722
Other assets (net of credit allowances: 2023, $(8); 2022, $(5))						Other assets (net of credit allowances: 2023, $(8); 2022, $(5))	838		722
TOTAL ASSETS	TOTAL ASSETS	$	29,494	$	27,957	TOTAL ASSETS	$	30,434	$	27,957

LIABILITIES:	LIABILITIES:					LIABILITIES:
Reserve for losses and loss adjustment expenses	Reserve for losses and loss adjustment expenses	$	15,512	$	14,977	Reserve for losses and loss adjustment expenses	$	15,669	$	14,977
Unearned premium reserve	Unearned premium reserve	3,497		3,177		Unearned premium reserve	3,761		3,177
Funds held under reinsurance treaties	Funds held under reinsurance treaties	55		43		Funds held under reinsurance treaties	57		43
Amounts due to reinsurers	Amounts due to reinsurers	509		436		Amounts due to reinsurers	651		436
Losses in course of payment	Losses in course of payment	72		77		Losses in course of payment	233		77

Senior notes	Senior notes	2,348		2,347		Senior notes	2,348		2,347
Long-term notes	Long-term notes	218		218		Long-term notes	218		218
Borrowings from FHLB	Borrowings from FHLB	519		519		Borrowings from FHLB	519		519
Accrued interest on debt and borrowings	Accrued interest on debt and borrowings	19		19		Accrued interest on debt and borrowings	41		19
Unsettled securities payable	Unsettled securities payable	10		1		Unsettled securities payable	111		1
Other liabilities	Other liabilities	446		489		Other liabilities	438		489
Total liabilities	Total liabilities	23,204		22,303		Total liabilities	24,047		22,303

Commitments and Contingencies (Note 11)	Commitments and Contingencies (Note 11)					Commitments and Contingencies (Note 11)

STOCKHOLDER'S EQUITY:	STOCKHOLDER'S EQUITY:					STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized; 1,000 shares issued and outstanding (2023 and 2022)		—		—
Common stock, par value: $0.01; 3,000 shares authorized;						Common stock, par value: $0.01; 3,000 shares authorized;
1,000 shares issued and outstanding (2023 and 2022)						1,000 shares issued and outstanding (2023 and 2022)	—		—
Additional paid-in capital	Additional paid-in capital	1,102		1,102		Additional paid-in capital	1,102		1,102
Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of $(202) at 2023 and $(225) at 2022		(762)		(848)
Accumulated other comprehensive income (loss), net of deferred income tax						Accumulated other comprehensive income (loss), net of deferred income tax
expense (benefit) of $(236) at 2023 and $(225) at 2022						expense (benefit) of $(236) at 2023 and $(225) at 2022	(886)		(848)
Retained earnings	Retained earnings	5,950		5,400		Retained earnings	6,171		5,400
Total stockholder's equity	Total stockholder's equity	6,290		5,654		Total stockholder's equity	6,388		5,654
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	29,494	$	27,957	TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	30,434	$	27,957

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
		(unaudited)				(unaudited)					(unaudited)				(unaudited)
REVENUES:	REVENUES:									REVENUES:
Premiums earned	Premiums earned	$	2,131	$	1,954	$	4,200	$	3,783	Premiums earned	$	2,139	$	2,104	$	6,339	$	5,887
Net investment income	Net investment income	242		176		432		333		Net investment income	278		124		711		457
Total net gains (losses) on investments	Total net gains (losses) on investments	(22)		(378)		—		(605)		Total net gains (losses) on investments	(59)		(237)		(59)		(842)
Other income (expense)	Other income (expense)	(10)		—		(15)		(9)		Other income (expense)	2		7		(12)		(2)
Total revenues	Total revenues	2,341		1,753		4,618		3,502		Total revenues	2,361		1,998		6,979		5,500

CLAIMS AND EXPENSES:	CLAIMS AND EXPENSES:									CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	Incurred losses and loss adjustment expenses	1,325		1,304		2,719		2,530		Incurred losses and loss adjustment expenses	1,471		2,094		4,190		4,624
Commission, brokerage, taxes and fees	Commission, brokerage, taxes and fees	433		409		869		793		Commission, brokerage, taxes and fees	454		423		1,323		1,216
Other underwriting expenses	Other underwriting expenses	136		120		275		238		Other underwriting expenses	149		127		424		365
Corporate expenses	Corporate expenses	4		6		10		12		Corporate expenses	8		5		18		17
Interest, fees and bond issue cost amortization expense	Interest, fees and bond issue cost amortization expense	33		24		65		48		Interest, fees and bond issue cost amortization expense	34		26		99		74
Total claims and expenses	Total claims and expenses	1,930		1,863		3,938		3,621		Total claims and expenses	2,115		2,675		6,053		6,296

INCOME (LOSS) BEFORE TAXES	INCOME (LOSS) BEFORE TAXES	411		(110)		679		(119)		INCOME (LOSS) BEFORE TAXES	246		(677)		926		(796)
Income tax expense (benefit)	Income tax expense (benefit)	81		(25)		130		(35)		Income tax expense (benefit)	25		(135)		154		(170)

NET INCOME (LOSS)	NET INCOME (LOSS)	$	330	$	(86)	$	549	$	(85)	NET INCOME (LOSS)	$	222	$	(542)	$	771	$	(626)

Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period	Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period	(44)		(411)		68		(805)		Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period	(124)		(282)		(56)		(1,087)
Less: reclassification adjustment for realized losses (gains) included in net income (loss)	Less: reclassification adjustment for realized losses (gains) included in net income (loss)	6		6		15		8		Less: reclassification adjustment for realized losses (gains) included in net income (loss)	11		40		26		48
Total URA(D) on securities arising during the period	Total URA(D) on securities arising during the period	(38)		(405)		83		(797)		Total URA(D) on securities arising during the period	(113)		(242)		(31)		(1,039)

Foreign currency translation adjustments	Foreign currency translation adjustments	(4)		(10)		2		(12)		Foreign currency translation adjustments	(11)		(29)		(9)		(41)

Reclassification adjustment for amortization of net (gain) loss included in net income (loss)	Reclassification adjustment for amortization of net (gain) loss included in net income (loss)	—		1		1		2		Reclassification adjustment for amortization of net (gain) loss included in net income (loss)	—		—		1		2
Total benefit plan net gain (loss) for the period	Total benefit plan net gain (loss) for the period	—		1		1		2		Total benefit plan net gain (loss) for the period	—		—		1		2
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	(42)		(414)		86		(807)		Total other comprehensive income (loss), net of tax	(124)		(271)		(38)		(1,078)

COMPREHENSIVE INCOME (LOSS)	COMPREHENSIVE INCOME (LOSS)	$	288	$	(500)	$	636	$	(892)	COMPREHENSIVE INCOME (LOSS)	$	97	$	(813)	$	733	$	(1,704)

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDER’S EQUITY


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions, except share amounts)	(Dollars in millions, except share amounts)	2023		2022		2023		2022		(Dollars in millions, except share amounts)	2023		2022		2023		2022
		(unaudited)				(unaudited)					(unaudited)				(unaudited)
COMMON STOCK (shares outstanding):	COMMON STOCK (shares outstanding):									COMMON STOCK (shares outstanding):
Balance, beginning of period	Balance, beginning of period	1,000		1,000		1,000		1,000		Balance, beginning of period	1,000		1,000		1,000		1,000
Balance, end of period	Balance, end of period	1,000		1,000		1,000		1,000		Balance, end of period	1,000		1,000		1,000		1,000

ADDITIONAL PAID-IN CAPITAL:	ADDITIONAL PAID-IN CAPITAL:									ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	Balance, beginning of period	$	1,102	$	1,102	$	1,102	$	1,102	Balance, beginning of period	$	1,102	$	1,102	$	1,102	$	1,102
Share-based compensation plans		—		—		—		—

Balance, end of period	Balance, end of period	1,102		1,102		1,102		1,102		Balance, end of period	1,102		1,102		1,102		1,102

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES:	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES:									ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES:
Balance, beginning of period	Balance, beginning of period	(720)		(302)		(848)		91		Balance, beginning of period	(762)		(716)		(848)		91
Net increase (decrease) during the period	Net increase (decrease) during the period	(42)		(414)		86		(807)		Net increase (decrease) during the period	(124)		(271)		(38)		(1,078)
Balance, end of period	Balance, end of period	(762)		(716)		(762)		(716)		Balance, end of period	(886)		(987)		(886)		(987)

RETAINED EARNINGS:	RETAINED EARNINGS:									RETAINED EARNINGS:
Balance, beginning of period	Balance, beginning of period	5,620		5,846		5,400		5,845		Balance, beginning of period	5,950		5,760		5,400		5,845
Net income (loss)	Net income (loss)	330		(86)		549		(85)		Net income (loss)	222		(542)		771		(626)
Balance, end of period	Balance, end of period	5,950		5,760		5,950		5,760		Balance, end of period	6,171		5,219		6,171		5,219

TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	6,290	$	6,146	$	6,290	$	6,146	TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	6,388	$	5,334	$	6,388	$	5,334

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


		Six Months Ended June 30,					Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		(Dollars in millions)	2023		2022
		(unaudited)					(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:					CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	Net income (loss)	$	549	$	(85)	Net income (loss)	$	771	$	(626)
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable	Decrease (increase) in premiums receivable	(363)		10		Decrease (increase) in premiums receivable	(389)		(50)
Decrease (increase) in funds held by reinsureds, net	Decrease (increase) in funds held by reinsureds, net	20		(6)		Decrease (increase) in funds held by reinsureds, net	15		7
Decrease (increase) in reinsurance recoverables	Decrease (increase) in reinsurance recoverables	(4)		105		Decrease (increase) in reinsurance recoverables	143		40
Decrease (increase) in income taxes	Decrease (increase) in income taxes	65		(139)		Decrease (increase) in income taxes	(24)		(341)
Decrease (increase) in prepaid reinsurance premiums	Decrease (increase) in prepaid reinsurance premiums	(57)		(44)		Decrease (increase) in prepaid reinsurance premiums	(117)		(30)
Increase (decrease) in reserve for losses and loss adjustment expenses	Increase (decrease) in reserve for losses and loss adjustment expenses	526		637		Increase (decrease) in reserve for losses and loss adjustment expenses	701		1,791
Increase (decrease) in unearned premiums	Increase (decrease) in unearned premiums	319		51		Increase (decrease) in unearned premiums	587		159
Increase (decrease) in amounts due to reinsurers	Increase (decrease) in amounts due to reinsurers	70		35		Increase (decrease) in amounts due to reinsurers	215		45
Increase (decrease) in losses in course of payment	Increase (decrease) in losses in course of payment	(5)		(175)		Increase (decrease) in losses in course of payment	157		(131)
Change in equity adjustments in limited partnerships	Change in equity adjustments in limited partnerships	(21)		(110)		Change in equity adjustments in limited partnerships	(61)		(94)
Distribution of limited partnership income	Distribution of limited partnership income	23		49		Distribution of limited partnership income	38		72
Change in other assets and liabilities, net	Change in other assets and liabilities, net	(215)		(19)		Change in other assets and liabilities, net	(300)		(62)
Non-cash compensation expense	Non-cash compensation expense	19		20		Non-cash compensation expense	29		28
Amortization of bond premium (accrual of bond discount)	Amortization of bond premium (accrual of bond discount)	(11)		15		Amortization of bond premium (accrual of bond discount)	(24)		21
Net (gains) losses on investments	Net (gains) losses on investments	—		605		Net (gains) losses on investments	59		842
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	914		948		Net cash provided by (used in) operating activities	1,799		1,671

CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:					CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale	Proceeds from fixed maturities matured/called/repaid - available for sale	543		876		Proceeds from fixed maturities matured/called/repaid - available for sale	818		1,124
Proceeds from fixed maturities sold - available for sale	Proceeds from fixed maturities sold - available for sale	109		511		Proceeds from fixed maturities sold - available for sale	318		812
Proceeds from fixed maturities matured/called/repaid - held to maturity	Proceeds from fixed maturities matured/called/repaid - held to maturity	43		—		Proceeds from fixed maturities matured/called/repaid - held to maturity	59		18
Proceeds from equity securities sold	Proceeds from equity securities sold	46		425		Proceeds from equity securities sold	126		1,016
Distributions from other invested assets	Distributions from other invested assets	60		99		Distributions from other invested assets	90		126
Cost of fixed maturities acquired - available for sale	Cost of fixed maturities acquired - available for sale	(2,100)		(2,465)		Cost of fixed maturities acquired - available for sale	(2,996)		(3,358)
Cost of fixed maturities acquired - held to maturity	Cost of fixed maturities acquired - held to maturity	(15)		(72)		Cost of fixed maturities acquired - held to maturity	(23)		(105)
Cost of equity securities acquired	Cost of equity securities acquired	(1)		(272)		Cost of equity securities acquired	(1)		(949)
Cost of other invested assets acquired	Cost of other invested assets acquired	(161)		(153)		Cost of other invested assets acquired	(234)		(224)
Net change in short-term investments	Net change in short-term investments	(269)		465		Net change in short-term investments	(821)		243
Net change in unsettled securities transactions	Net change in unsettled securities transactions	13		29		Net change in unsettled securities transactions	112		79
Proceeds from repayment (cost of issuance) of notes receivable - affiliated	Proceeds from repayment (cost of issuance) of notes receivable - affiliated	840		(215)		Proceeds from repayment (cost of issuance) of notes receivable - affiliated	840		(215)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(892)		(772)		Net cash provided by (used in) investing activities	(1,711)		(1,433)

CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:					CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation, net of expense	Tax benefit from share-based compensation, net of expense	(19)		(20)		Tax benefit from share-based compensation, net of expense	(29)		(28)

Cost of debt repurchase						Cost of debt repurchase	—		(6)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	(19)		(20)		Net cash provided by (used in) financing activities	(29)		(34)

EFFECT OF EXCHANGE RATE CHANGES ON CASH	EFFECT OF EXCHANGE RATE CHANGES ON CASH	(6)		(12)		EFFECT OF EXCHANGE RATE CHANGES ON CASH	(9)		(25)

Net increase (decrease) in cash	Net increase (decrease) in cash	(3)		144		Net increase (decrease) in cash	50		179
Cash, beginning of period	Cash, beginning of period	481		699		Cash, beginning of period	481		699
Cash, end of period	Cash, end of period	$	478	$	844	Cash, end of period	$	531	$	878

SUPPLEMENTAL CASH FLOW INFORMATION:	SUPPLEMENTAL CASH FLOW INFORMATION:					SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	Income taxes paid (recovered)	$	71	$	104	Income taxes paid (recovered)	$	181	$	170
Interest paid	Interest paid	64		48		Interest paid	75		51

NON-CASH TRANSACTIONS						NON-CASH TRANSACTIONS
Reclassification of specific investments from fixed maturity securities, available for sale at fair value						Reclassification of specific investments from fixed maturity securities, available for sale at fair value	$	—	$	722
to fixed maturity securities, held to maturity at amortized cost net of credit allowances						to fixed maturity securities, held to maturity at amortized cost net of credit allowances

The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022

1. GENERAL

Everest Reinsurance Holdings, Inc. (“Holdings”), a Delaware company and direct subsidiary of Everest Underwriting Group (Ireland) Limited, which is a direct subsidiary of Everest Group, Ltd. (“Group”), through its subsidiaries, principally provides property and casualty reinsurance and insurance in the United States of America and internationally. As used in this document, “Company” means Holdings and its subsidiaries. “Bermuda Re” means Everest Reinsurance (Bermuda), Ltd., a subsidiary of Group; “Everest Re” means Everest Reinsurance Company, a subsidiary of Holdings, and its subsidiaries (unless the context otherwise requires).

2. BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company as of ~~June~~September 30, 2023 and December 31, 2022 and for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, 2022 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2022, 2021 and 2020, included in the Company’s most recent Form 10-K filing.

The Company consolidates the results of operations and financial position of all voting interest entities ("VOE") in which the Company has a controlling financial interest and all variable interest entities ("VIE") in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.

All intercompany accounts and transactions have been eliminated.

Application of Recently Issued Accounting Standard Changes.

The Company did not adopt any new accounting standards that had a material impact during the three and ~~six~~nine months ended ~~June~~September 30, 2023. The Company assessed the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board (“FASB”) on the Company’s consolidated financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. There were no accounting standards issued in the ~~six~~nine months ended ~~June~~September 30, 2023, that are expected to have a material impact on Holdings.

Application of Methods and Assumption Changes.

During 2023, the Company refined its premium estimation methodology for its risk attaching reinsurance contracts within its Reinsurance Segment to continue to recognize gross written premium over the term of the treaty, albeit over a different pattern than what was previously used. The refined estimate resulted in an increase of gross written premium during ~~the~~the three and ~~six~~nine months ended ~~June~~September 30, 2023 periods and has further aligned the estimation methodology across the reinsurance division globally. This change had no impact on the total written premium to be recognized over the term of the treaty. There was no impact on net earned premium and therefore, no impact on income from continuing operations, net income, or any related per-share amounts.

3. INVESTMENTS

The tables below present the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) (“URA(D)”) and fair value of fixed maturity securities - available for sale for the periods indicated:


		At June 30, 2023											At September 30, 2023
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value		(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – available for sale	Fixed maturity securities – available for sale											Fixed maturity securities – available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations		$	475	$	—	$	—	$	(37)	$	439
U.S. Treasury securities and obligations of												U.S. Treasury securities and obligations of
U.S. government agencies and corporations												U.S. government agencies and corporations	$	450	$	—	$	—	$	(38)	$	412
Obligations of U.S. states and political subdivisions	Obligations of U.S. states and political subdivisions	424		—		1		(30)		395		Obligations of U.S. states and political subdivisions	406		(1)		—		(42)		363
Corporate securities	Corporate securities	4,552		(55)		21		(309)		4,209		Corporate securities	4,577		(57)		11		(371)		4,160
Asset-backed securities	Asset-backed securities	4,783		—		5		(111)		4,676		Asset-backed securities	5,029		—		14		(63)		4,980
Mortgage-backed securities	Mortgage-backed securities											Mortgage-backed securities
Commercial	Commercial	567		—		—		(63)		503		Commercial	626		—		—		(70)		556
Agency residential	Agency residential	1,817		—		3		(166)		1,654		Agency residential	1,777		—		—		(240)		1,537
Non-agency residential	Non-agency residential	60		—		—		(1)		59		Non-agency residential	216		—		—		(9)		207
Foreign government securities	Foreign government securities	735		—		3		(53)		684		Foreign government securities	749		—		1		(66)		683
Foreign corporate securities	Foreign corporate securities	1,729		(1)		5		(149)		1,583		Foreign corporate securities	1,690		(1)		2		(157)		1,534
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	15,141	$	(57)	$	37	$	(919)	$	14,202	Total fixed maturity securities - available for sale	$	15,520	$	(58)	$	29	$	(1,057)	$	14,434

(Some amounts may not reconcile due to rounding.)


		At December 31, 2022											At December 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value		(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – available for sale	Fixed maturity securities – available for sale											Fixed maturity securities – available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations		$	575	$	—	$	—	$	(40)	$	535
U.S. Treasury securities and obligations of												U.S. Treasury securities and obligations of
U.S. government agencies and corporations												U.S. government agencies and corporations	$	575	$	—	$	—	$	(40)	$	535
Obligations of U.S. states and political subdivisions	Obligations of U.S. states and political subdivisions	444		—		2		(32)		413		Obligations of U.S. states and political subdivisions	444		—		2		(32)		413
Corporate securities	Corporate securities	3,913		(45)		14		(322)		3,561		Corporate securities	3,913		(45)		14		(322)		3,561
Asset-backed securities	Asset-backed securities	4,111		—		5		(165)		3,951		Asset-backed securities	4,111		—		5		(165)		3,951
Mortgage-backed securities	Mortgage-backed securities											Mortgage-backed securities
Commercial	Commercial	569		—		—		(59)		509		Commercial	569		—		—		(59)		509
Agency residential	Agency residential	1,792		—		3		(167)		1,628		Agency residential	1,792		—		3		(167)		1,628
Non-agency residential	Non-agency residential	3		—		—		—		3		Non-agency residential	3		—		—		—		3
Foreign government securities	Foreign government securities	696		—		2		(61)		637		Foreign government securities	696		—		2		(61)		637
Foreign corporate securities	Foreign corporate securities	1,597		(1)		4		(167)		1,433		Foreign corporate securities	1,597		(1)		4		(167)		1,433
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	13,699	$	(46)	$	30	$	(1,013)	$	12,671	Total fixed maturity securities - available for sale	$	13,699	$	(46)	$	30	$	(1,013)	$	12,671

(Some amounts may not reconcile due to rounding.)

The following tables show amortized cost, allowance for credit losses, gross ~~unrealized appreciation/(depreciation)~~URA(D) and fair value of fixed maturity securities - held to maturity for the periods indicated:


		At June 30, 2023											At September 30, 2023
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value		(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – held to maturity	Fixed maturity securities – held to maturity											Fixed maturity securities – held to maturity
Corporate securities	Corporate securities	$	152	$	(2)	$	—	$	(6)	$	144	Corporate securities	$	156	$	(2)	$	1	$	(9)	$	146
Asset-backed securities	Asset-backed securities	603		(6)		2		(15)		585		Asset-backed securities	595		(5)		3		(18)		574
Mortgage-backed securities	Mortgage-backed securities											Mortgage-backed securities
Commercial	Commercial	14		—		—		—		13		Commercial	15		—		—		—		15
Foreign corporate securities	Foreign corporate securities	28		(1)		2		—		29		Foreign corporate securities	24		(1)		1		—		24
Total fixed maturity securities - held to maturity	Total fixed maturity securities - held to maturity	$	796	$	(8)	$	4	$	(21)	$	771	Total fixed maturity securities - held to maturity	$	791	$	(8)	$	4	$	(27)	$	759

(Some amounts may not reconcile due to rounding.)


	At December 31, 2022
(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities – held to maturity
Corporate securities	$	152	$	(2)	$	—	$	(6)	$	144
Asset-backed securities	634		(6)		2		(15)		614
Mortgage-backed securities
Commercial	7		—		—		—		7
Foreign corporate securities	28		(1)		2		—		28
Total fixed maturity securities - held to maturity	$	820	$	(9)	$	3	$	(22)	$	793

(Some amounts may not reconcile due to rounding.)

The amortized cost and fair value of fixed maturity securities - available for sale are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.


		At June 30, 2023				At December 31, 2022					At September 30, 2023				At December 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities – available for sale	Fixed maturity securities – available for sale									Fixed maturity securities – available for sale
Due in one year or less	Due in one year or less	$	830	$	799	$	581	$	563	Due in one year or less	$	803	$	774	$	581	$	563
Due after one year through five years	Due after one year through five years	3,673		3,429		3,684		3,429		Due after one year through five years	3,632		3,368		3,684		3,429
Due after five years through ten years	Due after five years through ten years	2,007		1,809		2,003		1,760		Due after five years through ten years	2,046		1,802		2,003		1,760
Due after ten years	Due after ten years	1,404		1,273		958		827		Due after ten years	1,391		1,210		958		827
Asset-backed securities	Asset-backed securities	4,783		4,676		4,111		3,951		Asset-backed securities	5,029		4,980		4,111		3,951
Mortgage-backed securities	Mortgage-backed securities									Mortgage-backed securities
Commercial	Commercial	567		503		569		509		Commercial	626		556		569		509
Agency residential	Agency residential	1,817		1,654		1,792		1,628		Agency residential	1,777		1,537		1,792		1,628
Non-agency residential	Non-agency residential	60		59		3		3		Non-agency residential	216		207		3		3
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	15,141	$	14,202	$	13,699	$	12,671	Total fixed maturity securities - available for sale	$	15,520	$	14,434	$	13,699	$	12,671

(Some amounts may not reconcile due to rounding.)

The amortized cost and fair value of fixed maturity securities - held to maturity - are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.


		At June 30, 2023				At December 31, 2022					At September 30, 2023				At December 31, 2022
(Dollars in millions)	(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value		(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities – held to maturity	Fixed maturity securities – held to maturity									Fixed maturity securities – held to maturity
Due in one year or less	Due in one year or less	$	5	$	5	$	5	$	5	Due in one year or less	$	5	$	5	$	5	$	5
Due after one year through five years	Due after one year through five years	64		61		63		61		Due after one year through five years	64		62		63		61
Due after five years through ten years	Due after five years through ten years	44		41		43		41		Due after five years through ten years	44		41		43		41
Due after ten years	Due after ten years	68		65		68		65		Due after ten years	68		62		68		65
Asset-backed securities	Asset-backed securities	603		585		634		614		Asset-backed securities	595		574		634		614
Mortgage-backed securities	Mortgage-backed securities									Mortgage-backed securities
Commercial	Commercial	14		13		7		7		Commercial	15		15		7		7
Total fixed maturity securities - held to maturity	Total fixed maturity securities - held to maturity	$	796	$	771	$	820	$	793	Total fixed maturity securities - held to maturity	$	791	$	759	$	820	$	793

(Some amounts may not reconcile due to rounding.)

During the third quarter of 2022, the Company re-designated a portion of its fixed maturity securities from its fixed maturity – available for sale portfolio to its fixed maturity – held to maturity portfolio. The fair value of the securities reclassified at the date of transfer was $722 million, net of allowance for current expected credit losses, which was subsequently recognized as the new amortized cost basis. As of ~~June~~September 30, 2023, these securities had an unrealized loss of ~~$46~~$44 million, which remained in accumulated other comprehensive income (“AOCI”) on the balance sheet and will be amortized into income through an adjustment to the yields of the underlying securities over the remaining life of the

securities. The fair values of these securities incorporate the use of significant unobservable inputs and therefore are classified as Level 3 within the fair value hierarchy.

The Company evaluated fixed maturity securities classified as held to maturity for current expected credit losses as of ~~June~~September 30, 2023 utilizing risk characteristics of each security, including credit rating, remaining time to maturity, adjusted for prepayment considerations, and subordination level, and applying default and recovery rates, which include the incorporation of historical credit loss experience and macroeconomic forecasts, to develop an estimate of current expected credit losses. These fixed maturities classified as held to maturity are of a high credit quality and are all rated investment grade as of ~~June~~September 30, 2023.

The changes in net ~~unrealized appreciation (depreciation)~~URA(D) for the Company’s investments are as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Increase (decrease) during the period between the fair value and cost of investments carried at fair value, and deferred taxes thereon:
Increase (decrease) during the period between the fair value and cost of										Increase (decrease) during the period between the fair value and cost of
investments carried at fair value, and deferred taxes thereon:										investments carried at fair value, and deferred taxes thereon:
Fixed maturity securities - available for sale and short-term investments	Fixed maturity securities - available for sale and short-term investments	$	(49)	$	(512)	$	105	$	(1,008)	Fixed maturity securities - available for sale and short-term investments	$	(144)	$	(307)	$	(39)	$	(1,315)
Change in unrealized appreciation (depreciation), pre-tax		(49)		(512)		105		(1,008)
Change in URA(D), pre-tax										Change in URA(D), pre-tax	(144)		(307)		(39)		(1,315)
Deferred tax benefit (expense)	Deferred tax benefit (expense)	10		107		(22)		211		Deferred tax benefit (expense)	30		65		8		276
Change in unrealized appreciation (depreciation), net of deferred taxes, included in stockholder's equity		$	(38)	$	(405)	$	83	$	(797)
Change in URA(D), net of deferred taxes, included in stockholder's equity										Change in URA(D), net of deferred taxes, included in stockholder's equity	$	(113)	$	(242)	$	(31)	$	(1,039)

(Some amounts may not reconcile due to rounding.)

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:


		Duration of Unrealized Loss at June 30, 2023 By Security Type													Duration of Unrealized Loss at September 30, 2023 By Security Type
		Less than 12 months				Greater than 12 months				Total					Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale	Fixed maturity securities - available for sale													Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations		$	30	$	(1)	$	408	$	(36)	$	438	$	(37)
U.S. Treasury securities and obligations of														U.S. Treasury securities and obligations of
U.S. government agencies and corporations														U.S. government agencies and corporations	$	28	$	(1)	$	384	$	(37)	$	412	$	(38)
Obligations of U.S. states and political subdivisions	Obligations of U.S. states and political subdivisions	77		(1)		199		(29)		276		(30)		Obligations of U.S. states and political subdivisions	108		(3)		206		(39)		314		(42)
Corporate securities	Corporate securities	1,135		(84)		2,128		(224)		3,263		(308)		Corporate securities	1,386		(120)		2,217		(249)		3,603		(369)
Asset-backed securities	Asset-backed securities	1,058		(23)		2,426		(88)		3,484		(111)		Asset-backed securities	747		(20)		2,177		(43)		2,923		(63)
Mortgage-backed securities	Mortgage-backed securities													Mortgage-backed securities
Commercial	Commercial	17		(1)		480		(62)		497		(63)		Commercial	84		(1)		472		(69)		556		(70)
Agency residential	Agency residential	319		(5)		1,166		(160)		1,485		(166)		Agency residential	393		(20)		1,143		(220)		1,536		(240)
Non-agency residential	Non-agency residential	57		(1)		3		—		59		(1)		Non-agency residential	163		(9)		3		—		166		(9)
Foreign government securities	Foreign government securities	108		(2)		484		(51)		591		(53)		Foreign government securities	137		(5)		504		(61)		642		(66)
Foreign corporate securities	Foreign corporate securities	293		(9)		1,112		(140)		1,405		(149)		Foreign corporate securities	313		(12)		1,105		(145)		1,418		(157)
Total	Total	3,092		(126)		8,406		(792)		11,498		(918)		Total	3,359		(193)		8,210		(862)		11,569		(1,055)
Securities where an allowance for credit loss was recorded	Securities where an allowance for credit loss was recorded	—		—		—		(1)		1		(1)		Securities where an allowance for credit loss was recorded	—		(1)		—		(1)		1		(1)
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	3,093	$	(127)	$	8,406	$	(792)	$	11,499	$	(919)	Total fixed maturity securities - available for sale	$	3,360	$	(194)	$	8,210	$	(863)	$	11,569	$	(1,057)

(Some amounts may not reconcile due to rounding.)


		Duration of Unrealized Loss at June 30, 2023 By Maturity													Duration of Unrealized Loss at September 30, 2023 By Maturity
		Less than 12 months				Greater than 12 months				Total					Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale	Fixed maturity securities - available for sale													Fixed maturity securities - available for sale
Due in one year or less	Due in one year or less	$	214	$	(3)	$	473	$	(15)	$	687	$	(18)	Due in one year or less	$	96	$	(1)	$	593	$	(15)	$	688	$	(16)
Due in one year through five years	Due in one year through five years	533		(16)		2,413		(228)		2,946		(244)		Due in one year through five years	477		(20)		2,447		(245)		2,923		(265)
Due in five years through ten years	Due in five years through ten years	405		(16)		1,140		(186)		1,545		(203)		Due in five years through ten years	584		(30)		1,098		(212)		1,682		(242)
Due after ten years	Due after ten years	491		(60)		304		(52)		795		(112)		Due after ten years	816		(93)		278		(58)		1,094		(151)
Asset-backed securities	Asset-backed securities	1,058		(23)		2,426		(88)		3,484		(111)		Asset-backed securities	747		(20)		2,177		(43)		2,923		(63)
Mortgage-backed securities	Mortgage-backed securities	393		(7)		1,649		(223)		2,041		(230)		Mortgage-backed securities	640		(31)		1,617		(288)		2,257		(319)
Total	Total	3,092		(126)		8,406		(792)		11,498		(918)		Total	3,359		(193)		8,210		(862)		11,569		(1,055)
Securities where an allowance for credit loss was recorded	Securities where an allowance for credit loss was recorded	—		—		—		(1)		1		(1)		Securities where an allowance for credit loss was recorded	—		(1)		—		(1)		1		(1)
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	3,093	$	(127)	$	8,406	$	(792)	$	11,499	$	(919)	Total fixed maturity securities - available for sale	$	3,360	$	(194)	$	8,210	$	(863)	$	11,569	$	(1,057)

(Some amounts may not reconcile due to rounding.)

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at ~~June~~September 30, 2023 were ~~$11.5~~$11.6 billion and ~~$919 million,~~$1.1 billion, respectively. The fair value of securities for the single issuer (the United States government), whose securities comprised the largest unrealized loss position at ~~June~~September 30, 2023, amounted to less than ~~3.1%~~2.9% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss position at ~~June~~September 30, 2023 comprised less than ~~1.9%~~0.5% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The ~~$127~~$194 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, asset-backed securities and agency residential mortgage-backed securities. Of these unrealized losses, ~~$98~~$162 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The ~~$792~~$863 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, agency residential and commercial mortgage-backed securities (“CMBS”), as well as foreign government securities and asset-backed securities. Of these unrealized losses, ~~$738~~$819 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments. Based upon the Company’s current evaluation of securities in an unrealized loss position as of ~~June~~September 30, 2023, the unrealized losses are due to changes in interest rates and non-issuer-specific credit spreads and are not ~~credit related.~~credit-related. In addition, the contractual terms of these securities do not permit these securities to be settled at a price less than their amortized cost.

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:


		Duration of Unrealized Loss at December 31, 2022 By Security Type													Duration of Unrealized Loss at December 31, 2022 By Security Type
		Less than 12 months				Greater than 12 months				Total					Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale	Fixed maturity securities - available for sale													Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations		$	290	$	(14)	$	245	$	(26)	$	535	$	(40)
U.S. Treasury securities and obligations of														U.S. Treasury securities and obligations of
U.S. government agencies and corporations														U.S. government agencies and corporations	$	290	$	(14)	$	245	$	(26)	$	535	$	(40)
Obligations of U.S. states and political subdivisions	Obligations of U.S. states and political subdivisions	235		(23)		27		(9)		261		(32)		Obligations of U.S. states and political subdivisions	235		(23)		27		(9)		261		(32)
Corporate securities	Corporate securities	2,138		(175)		841		(146)		2,979		(321)		Corporate securities	2,138		(175)		841		(146)		2,979		(321)
Asset-backed securities	Asset-backed securities	3,120		(138)		436		(27)		3,556		(165)		Asset-backed securities	3,120		(138)		436		(27)		3,556		(165)
Mortgage-backed securities	Mortgage-backed securities													Mortgage-backed securities
Commercial	Commercial	464		(50)		36		(9)		500		(59)		Commercial	464		(50)		36		(9)		500		(59)
Agency residential	Agency residential	852		(54)		605		(113)		1,456		(167)		Agency residential	852		(54)		605		(113)		1,456		(167)
Non-agency residential	Non-agency residential	2		—		1		—		3		—		Non-agency residential	2		—		1		—		3		—
Foreign government securities	Foreign government securities	455		(36)		144		(25)		599		(61)		Foreign government securities	455		(36)		144		(25)		599		(61)
Foreign corporate securities	Foreign corporate securities	967		(100)		365		(67)		1,332		(167)		Foreign corporate securities	967		(100)		365		(67)		1,332		(167)
Total	Total	$	8,522	$	(591)	$	2,698	$	(421)	$	11,220	$	(1,012)	Total	$	8,522	$	(591)	$	2,698	$	(421)	$	11,220	$	(1,012)
Securities where an allowance for credit loss was recorded	Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)		Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	Total fixed maturity securities - available for sale	$	8,524	$	(591)	$	2,698	$	(421)	$	11,222	$	(1,013)	Total fixed maturity securities - available for sale	$	8,524	$	(591)	$	2,698	$	(421)	$	11,222	$	(1,013)

(Some amounts may not reconcile due to rounding.)


	Duration of Unrealized Loss at December 31, 2022 By Maturity
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
Due in one year or less	$	463	$	(8)	$	29	$	(4)	$	491	$	(11)
Due in one year through five years	2,020		(143)		936		(107)		2,956		(250)
Due in five years through ten years	1,162		(148)		395		(98)		1,557		(246)
Due after ten years	439		(50)		262		(64)		701		(114)
Asset-backed securities	3,120		(138)		436		(27)		3,556		(165)
Mortgage-backed securities	1,318		(105)		641		(122)		1,959		(226)
Total	$	8,522	$	(591)	$	2,698	$	(421)	$	11,220	$	(1,012)
Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	$	8,524	$	(591)	$	2,698	$	(421)	$	11,222	$	(1,013)

(Some amounts may not reconcile due to rounding.)

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at December 31, 2022 were $11.2 billion and $1.0 billion, respectively. The fair value of securities for the single issuer (the United States government), whose securities comprised the largest unrealized loss position at December 31, 2022, amounted to less than 4.3% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss comprised less than 0.6% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $591 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were ~~generally~~generally comprised of domestic and foreign corporate securities, foreign government securities, asset-backed securities, as well as commercial and agency residential mortgage-backed securities. Of these unrealized losses, $520 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $421 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities as well as agency residential ~~mortgage-~~

~~backed~~mortgage-backed securities. Of these unrealized losses, $392 million were related to securities that were rated investment grade by

at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The components of net investment income are presented in the table below for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Fixed maturities	Fixed maturities	$	199	$	116	$	374	$	210	Fixed maturities	$	214	$	129	$	587	$	339
Equity securities	Equity securities	1		5		2		9		Equity securities	1		7		3		15
Short-term investments and cash	Short-term investments and cash	16		1		27		1		Short-term investments and cash	24		4		51		4
Other invested assets	Other invested assets									Other invested assets
Limited partnerships	Limited partnerships	22		45		(1)		89		Limited partnerships	31		(25)		30		63
Dividends from preferred shares of affiliate	Dividends from preferred shares of affiliate	8		8		16		16		Dividends from preferred shares of affiliate	8		8		23		23
Other	Other	6		14		27		26		Other	15		11		42		37
Gross investment income before adjustments	Gross investment income before adjustments	252		188		444		350		Gross investment income before adjustments	291		132		736		482
Funds held interest income (expense)	Funds held interest income (expense)	(1)		1		1		3		Funds held interest income (expense)	1		1		3		5
Interest income from Group	Interest income from Group	3		2		7		4		Interest income from Group	—		3		7		7
Gross investment income	Gross investment income	253		190		453		357		Gross investment income	292		137		745		494
Investment expenses	Investment expenses	(11)		(14)		(21)		(24)		Investment expenses	14		13		35		37
Net investment income	Net investment income	$	242	$	176	$	432	$	333	Net investment income	$	278	$	124	$	711	$	457

(Some amounts may not reconcile due to rounding.)

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. The net investment income from limited partnerships is dependent upon the Company’s share of the net asset values (“NAVs”) of interests underlying each limited partnership. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company ~~has~~had contractual commitments to invest up to an additional ~~$925 million~~$1.1 billion in limited partnerships and private placement loan securities at ~~June~~September 30, 2023. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2027.

During the fourth quarter of 2022, the Company entered into corporate-owned life insurance (“COLI”) policies, which are ~~primarily~~ invested in debt and~~liquid credit,~~ equity ~~and other assets, including alternative assets.~~securities. The COLI policies are carried within other invested assets at the policy cash surrender value of ~~$968~~$984 million and $939 million as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

The Company participates in a private placement liquidity sweep facility (“the facility”). The primary purpose of the facility is to enhance the Company’s return on its short-term investments and cash positions. The facility invests in high quality, short-duration securities and permits daily liquidity. The Company consolidates its participation in the facility. As of ~~June~~September 30, 2023, the fair value of investments in the facility consolidated within the Company’s balance sheets was ~~$449~~$316 million.

Other invested assets, at fair value, as of ~~June~~September 30, 2023 and December 31, 2022, were comprised of preferred shares held in Everest Preferred International Holdings, Ltd. (“Preferred Holdings”), a wholly-owned subsidiary of Group.

Variable Interest Entities

The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs primarily as an investor through normal investment activities but also as an investment manager. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling

financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially

be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements. As of ~~June~~September 30, 2023 and December 31, 2022, the Company did not hold any securities for which it is the primary beneficiary.

The Company, through normal investment activities, makes passive investments in general and limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of ~~June~~September 30, 2023 and December 31, 2022 is limited to the total carrying value of $2.9 billion and $2.8 billion, respectively, which are included in general and limited partnerships and other alternative investments in Other Invested Assets in the Company's Consolidated Balance Sheets. As of ~~June~~September 30, 2023, the Company has outstanding commitments totaling ~~$871 million~~$1.0 billion whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in asset-backed securities, which includes collateralized loan obligations and are classified as fixed maturities. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, credit subordination that reduces the Company’s obligation to absorb losses or right to receive benefits or the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

The components of net gains (losses) on investments are presented in the table below for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Fixed maturity securities	Fixed maturity securities									Fixed maturity securities
Allowances for credit losses	Allowances for credit losses	$	—	$	2	$	(10)	$	—	Allowances for credit losses	$	(1)	$	(12)	$	(12)	$	(12)
Net realized gains (losses) from dispositions	Net realized gains (losses) from dispositions	(7)		(10)		(9)		(15)		Net realized gains (losses) from dispositions	(12)		(45)		(21)		(60)
Equity securities, fair value	Equity securities, fair value									Equity securities, fair value
Net realized gains (losses) from dispositions	Net realized gains (losses) from dispositions	—		(30)		7		(38)		Net realized gains (losses) from dispositions	1		57		8		19
Gains (losses) from fair value adjustments	Gains (losses) from fair value adjustments	8		(186)		11		(317)		Gains (losses) from fair value adjustments	(13)		(134)		(2)		(451)
Other invested assets	Other invested assets	—		1		—		5		Other invested assets	—		6		—		10
Other invested assets, fair value	Other invested assets, fair value									Other invested assets, fair value
Gains (losses) from fair value adjustments	Gains (losses) from fair value adjustments	(23)		(155)		1		(239)		Gains (losses) from fair value adjustments	(34)		(111)		(32)		(350)

Short-term investment gains (losses)										Short-term investment gains (losses)	—		1		—		1
Total net gains (losses) on investments	Total net gains (losses) on investments	$	(22)	$	(378)	$	—	$	(605)	Total net gains (losses) on investments	$	(59)	$	(237)	$	(59)	$	(842)

(Some amounts may not reconcile due to rounding.)

The following tables provide a roll forward of the Company’s beginning and ending balance of allowance for credit losses for the periods indicated:


		Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale																	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
		Three Months Ended June 30, 2023								Six Months Ended June 30, 2023									Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total			Corporate Securities		Municipals		Foreign Corporate Securities		Total		Corporate Securities		Municipals		Foreign Corporate Securities		Total
(Dollars in millions)	(Dollars in millions)																	(Dollars in millions)
Beginning balance	Beginning balance	$	(55)	$	—	$	(1)	$	(56)	$	(45)	$	—	$	(1)	$	(46)	Beginning balance	$	(55)	$	—	$	(1)	$	(57)	$	(45)	$	—	$	(1)	$	(46)
Credit losses on securities where credit losses were not previously recorded		(2)		—		—		(2)		(14)		—		—		(14)
Increases in allowance on previously impaired securities		—		—		—		—		—		—		—		—
Decreases in allowance on previously impaired securities		—		—		—		—		—		—		—		—
Credit losses on securities where credit																		Credit losses on securities where credit
losses were not previously recorded																		losses were not previously recorded	(3)		—		—		(3)		(17)		—		—		(17)
Increases in allowance on previously																		Increases in allowance on previously
impaired securities																		impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously																		Decreases in allowance on previously
impaired securities																		impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	Reduction in allowance due to disposals	1		—		—		1		4		—		—		4		Reduction in allowance due to disposals	2		—		—		2		5		—		—		5
Balance, end of period	Balance, end of period	$	(55)	$	—	$	(1)	$	(57)	$	(55)	$	—	$	(1)	$	(57)	Balance, end of period	$	(57)	$	(1)	$	(1)	$	(58)	$	(57)	$	(1)	$	(1)	$	(58)

(Some amounts may not reconcile due to rounding.)


		Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale																	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
		Three Months Ended June 30, 2022								Six Months Ended June 30, 2022									Three Months Ended September 30, 2022								Nine Months Ended September 30, 2022
(Dollars in millions)	(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
Beginning balance	Beginning balance	$	(20)	$	(8)	$	(1)	$	(29)	$	(19)	$	(8)	$	—	$	(27)	Beginning balance	$	(26)	$	—	$	(2)	$	(27)	$	(19)	$	(8)	$	—	$	(27)
Credit losses on securities where credit losses were not previously recorded		(5)		—		—		(5)		(7)		—		(1)		(8)
Increases in allowance on previously impaired securities		(1)		—		—		(1)		(1)		—		—		(1)
Decreases in allowance on previously impaired securities		—		—		—		—		—		—		—		—
Credit losses on securities where credit																		Credit losses on securities where credit
losses were not previously recorded																		losses were not previously recorded	—		—		—		—		(7)		—		(1)		(8)
Increases in allowance on previously																		Increases in allowance on previously
impaired securities																		impaired securities	(3)		—		—		(3)		(4)		—		—		(4)
Decreases in allowance on previously																		Decreases in allowance on previously
impaired securities																		impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	Reduction in allowance due to disposals	—		8		—		8		1		8		—		9		Reduction in allowance due to disposals	—		—		—		—		1		8		1		9
Balance, end of period	Balance, end of period	$	(26)	$	—	$	(2)	$	(27)	$	(26)	$	—	$	(2)	$	(27)	Balance, end of period	$	(29)	$	—	$	(1)	$	(30)	$	(29)	$	—	$	(1)	$	(30)

(Some amounts may not reconcile due to rounding.)


		Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity																	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity
		Three Months Ended June 30, 2023								Six Months Ended June 30, 2023									Three Months Ended September 30, 2023								Nine Months Ended September 30, 2023
		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total			Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
(Dollars in millions)	(Dollars in millions)																	(Dollars in millions)
Beginning balance	Beginning balance	$	(2)	$	(6)	$	(1)	$	(9)	$	(2)	$	(6)	$	(1)	$	(9)	Beginning balance	$	(2)	$	(6)	$	(1)	$	(8)	$	(2)	$	(6)	$	(1)	$	(9)
Credit losses on securities where credit losses were not previously recorded		—		—		—		—		—		—		—		—
Increases in allowance on previously impaired securities		—		—		—		—		—		—		—		—
Decreases in allowance on previously impaired securities		—		—		—		—		—		—		—		—
Credit losses on securities where credit																		Credit losses on securities where credit
losses were not previously recorded																		losses were not previously recorded	—		—		—		—		—		—		—		—
Increases in allowance on previously																		Increases in allowance on previously
impaired securities																		impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously																		Decreases in allowance on previously
impaired securities																		impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	Reduction in allowance due to disposals	—		—		—		—		—		—		—		—		Reduction in allowance due to disposals	—		—		—		—		—		—		—		—
Balance, end of period	Balance, end of period	$	(2)	$	(6)	$	(1)	$	(8)	$	(2)	$	(6)	$	(1)	$	(8)	Balance, end of period	$	(2)	$	(5)	$	(1)	$	(8)	$	(2)	$	(5)	$	(1)	$	(8)

(Some amounts may not reconcile due to rounding.)


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity
	Three Months Ended September 30, 2022								Nine Months Ended September 30, 2022
(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
Beginning balance	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Credit losses on securities where credit
losses were not previously recorded	(2)		(6)		(1)		(9)		(2)		(6)		(1)		(9)
Increases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	—		—		—		—		—		—		—		—
Balance, end of period	$	(2)	$	(6)	$	(1)	$	(9)	$	(2)	$	(6)	$	(1)	$	(9)

(Some amounts may not reconcile due to rounding.)

The proceeds and split between gross gains and losses from dispositions of fixed maturity and equity securities are presented in the table below for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Proceeds from sales of fixed maturity securities - available for sale	Proceeds from sales of fixed maturity securities - available for sale	$	59	$	245	$	109	$	511	Proceeds from sales of fixed maturity securities - available for sale	$	209	$	301	$	318	$	812
Gross gains from dispositions	Gross gains from dispositions	1		3		4		6		Gross gains from dispositions	1		1		4		7
Gross losses from dispositions	Gross losses from dispositions	(8)		(13)		(12)		(21)		Gross losses from dispositions	(13)		(46)		(25)		(67)

Proceeds from sales of equity securities	Proceeds from sales of equity securities	$	—	$	343	$	46	$	425	Proceeds from sales of equity securities	$	80	$	591	$	126	$	1,016
Gross gains from dispositions	Gross gains from dispositions	—		4		7		8		Gross gains from dispositions	2		59		8		67
Gross losses from dispositions	Gross losses from dispositions	—		(34)		—		(46)		Gross losses from dispositions	—		(2)		—		(48)

(Some amounts may not reconcile due to rounding.)

4. FAIR VALUE

GAAP guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:

Level 1: Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market;

Level 2: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument;

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s fixed maturity and equity securities are primarily managed by ~~third party~~third-party investment asset managers. The investment asset managers managing publicly traded securities obtain prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. They use pricing applications that vary by asset class and incorporate available market information, and when fixed maturity securities do not trade on a daily basis, the services will apply available information through processes such as benchmark curves, benchmarking of

like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

The investment asset managers do not make any changes to prices received from either the pricing services or the investment brokers. In addition, the investment asset managers have procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. The Company also continually performs quantitative and qualitative analysis of prices, including but not limited to initial and ongoing review of pricing methodologies, review of prices obtained from pricing services and ~~third party~~third-party investment asset managers, review of pricing statistics and trends, and comparison of prices for certain securities with a secondary price source for reasonableness. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value. At ~~June~~September 30, 2023, ~~$1.8~~$1.9 billion of fixed maturities were fair valued using unobservable inputs. The majority of these fixed maturities were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties. The Company has procedures in place to evaluate these independent ~~third party~~third-party valuations. At December 31, 2022, $1.7 billion of fixed maturities were fair valued using unobservable inputs.

The Company internally manages a portfolio of assets which had a fair value at ~~June~~September 30, 2023 and December 31, 2022 of ~~$4.0~~$5.0 billion and $2.7 billion, respectively, primarily comprised of collateralized loan obligations included in asset-backed securities ~~preferred stock~~ and U.S. treasury fixed maturities. All prices for these securities were obtained from publicly published sources or nationally recognized pricing vendors.

Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as Level 1 since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as Level 2 due to the added input of a foreign exchange conversion rate to determine fair value. The Company uses foreign currency exchange rates published by nationally recognized sources.

Fixed maturity securities listed in the tables below are generally categorized as Level 2, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. For foreign government securities and foreign corporate securities, the fair values are provided by the ~~third party~~third-party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

In addition to the valuations from investment managers, some of the fixed maturities with fair values categorized as Level 3 result when prices are not available from the nationally recognized pricing services and are derived using unobservable inputs. The Company will value the securities with unobservable inputs using comparable market information or receive fair values from investment managers. The investment managers may obtain non-binding price quotes for the securities from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the ~~third party~~third-party investment asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

The composition and valuation inputs for the presented fixed maturities categories Level 1 and Level 2 are as follows:

•U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds, and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;

•Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

•Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

•Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;

•Foreign government securities are comprised of global non-U.S. sovereign bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source;

•Foreign corporate securities are comprised of global non-U.S. corporate bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, converted to U.S. dollars using an exchange rate from a nationally recognized source.

The following tables present the fair value measurement levels for all assets, which the Company has recorded at fair value as of the periods indicated:


				Fair Value Measurement Using									Fair Value Measurement Using
(Dollars in millions)	(Dollars in millions)	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		(Dollars in millions)	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	Assets:									Assets:
Fixed maturities - available for sale	Fixed maturities - available for sale									Fixed maturities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations		$	439	$	—	$	439	$	—
U.S. Treasury securities and obligations of U.S. government										U.S. Treasury securities and obligations of U.S. government
agencies and corporations										agencies and corporations	$	412	$	—	$	412	$	—
Obligations of U.S. states and political subdivisions	Obligations of U.S. states and political subdivisions	395		—		395		—		Obligations of U.S. states and political subdivisions	363		—		363		—
Corporate securities	Corporate securities	4,209		—		3,498		711		Corporate securities	4,160		—		3,436		725
Asset-backed securities	Asset-backed securities	4,676		—		3,561		1,115		Asset-backed securities	4,980		—		3,800		1,180
Mortgage-backed securities	Mortgage-backed securities									Mortgage-backed securities
Commercial	Commercial	503		—		503		—		Commercial	556		—		556		—
Agency residential	Agency residential	1,654		—		1,654		—		Agency residential	1,537		—		1,537		—
Non-agency residential	Non-agency residential	59		—		59		—		Non-agency residential	207		—		207		—
Foreign government securities	Foreign government securities	684		—		684		—		Foreign government securities	683		—		683		—
Foreign corporate securities	Foreign corporate securities	1,583		—		1,567		16		Foreign corporate securities	1,534		—		1,518		16
Total fixed maturities - available for sale	Total fixed maturities - available for sale	14,202		—		12,360		1,842		Total fixed maturities - available for sale	14,434		—		12,513		1,921

Equity securities, fair value	Equity securities, fair value	167		145		22		—		Equity securities, fair value	79		58		21		—
Other invested assets, fair value	Other invested assets, fair value	1,474		—		—		1,474		Other invested assets, fair value	1,440		—		—		1,440

(Some amounts may not reconcile due to rounding.)

Fair Value Measurement Using
(Dollars in millions) December 31, 2022 Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Assets:
Fixed maturities - available for sale
U.S. Treasury securities and obligations of U.S. government agencies and corporations $ 535 $ — $ 535 $ —
Obligations of U.S. states and political subdivisions 413 — 413 —
Corporate securities 3,561 — 2,846 715
Asset-backed securities 3,951 — 2,957 994
Mortgage-backed securities
Commercial 509 — 509 —
Agency residential 1,628 — 1,628 —
Non-agency residential 3 — 3 —
Foreign government securities 637 — 637 —
Foreign corporate securities 1,433 — 1,417 16
Total fixed maturities - available for sale 12,671 — 10,946 1,725
Equity securities, fair value 194 132 63 —
Other invested assets, fair value 1,472 — — 1,472


	Fair Value Measurement Using
(Dollars in millions)	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed maturities - available for sale
U.S. Treasury securities and obligations of U.S. government
agencies and corporations	$	535	$	—	$	535	$	—
Obligations of U.S. states and political subdivisions	413		—		413		—
Corporate securities	3,561		—		2,846		715
Asset-backed securities	3,951		—		2,957		994
Mortgage-backed securities
Commercial	509		—		509		—
Agency residential	1,628		—		1,628		—
Non-agency residential	3		—		3		—
Foreign government securities	637		—		637		—
Foreign corporate securities	1,433		—		1,417		16
Total fixed maturities - available for sale	12,671		—		10,946		1,725

Equity securities, fair value	194		132		63		—
Other invested assets, fair value	1,472		—		—		1,472

(Some amounts may not reconcile due to rounding.)

In addition, ~~$293~~$284 million and $292 million of investments within other invested assets on the consolidated balance sheets as of ~~June~~September 30, 2023 and December 31, 2022, respectively, are not included within the fair value hierarchy tables, as the assets are measured at NAV as a practical expedient to determine fair value.

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturities - available for sale, for the periods indicated:


		Total Fixed Maturities - Available for Sale												Total Fixed Maturities - Available for Sale
		Three Months Ended June 30, 2023						Six Months Ended June 30, 2023						Three Months Ended September 30, 2023										Nine Months Ended September 30, 2023
(Dollars in millions)	(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate		Total		Corporate Securities		Asset Backed Securities			Foreign Corporate		Total		(Dollars in millions)	Corporate Securities		Asset Backed Securities			Foreign Corporate		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate		Total
Beginning balance of fixed maturities	Beginning balance of fixed maturities	$	709	$	1,020	$	16	$	1,745	$	715	$	994		$	16	$	1,725	Beginning balance of fixed maturities	$	711	$	1,115		$	16	$	1,842	$	715	$	994	$	16	$	1,725
Total gains or (losses) (realized/unrealized)	Total gains or (losses) (realized/unrealized)																		Total gains or (losses) (realized/unrealized)
Included in earnings	Included in earnings	1		—		—		1		2		—			—		2		Included in earnings	1		—			—		1		3		—		—		3
Included in other comprehensive income (loss)	Included in other comprehensive income (loss)	(2)		(8)		—		(9)		(6)		10			—		4		Included in other comprehensive income (loss)	—		(3)			—		(3)		(5)		7		—		2
Purchases, issuances and settlements	Purchases, issuances and settlements	3		103		—		105		—		111			—		111		Purchases, issuances and settlements	12		68			—		80		12		179		—		191
Transfers in (out) of Level 3 and reclassification of securities in/(out) investment categories		—		—		—		—		—		—			—		—
Transfers in/(out) of Level 3 and reclassification of securities in/(out) investment categories																			Transfers in/(out) of Level 3 and reclassification of securities in/(out) investment categories	—		—			—		—		—		—		—		—
Ending balance of fixed maturities	Ending balance of fixed maturities	$	711	$	1,115	$	16	$	1,842	$	711	$	1,115		$	16	$	1,842	Ending balance of fixed maturities	$	725	$	1,180		$	16	$	1,921	$	725	$	1,180	$	16	$	1,921

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	—	$	—	$	—	$	—	$	—	$	—		$	—	$	—	The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	—	$	—		$	—	$	—	$	1	$	—	$	—	$	1

(Some amounts may not reconcile due to rounding.)

Total Fixed Maturities - Available for Sale
Three Months Ended June 30, 2022 Six Months Ended June 30, 2022
(Dollars in millions) Corporate
Securities Asset Backed
Securities CMBS Foreign
Corporate Total Corporate
Securities Asset Backed
Securities CMBS Foreign
Corporate Total
Beginning balance of fixed maturities $ 715 $ 1,389 $ 6 $ 16 $ 2,125 $ 730 $ 1,251 $ — $ 16 $ 1,997
Total gains or (losses) (realized/unrealized)
Included in earnings (5) — — — (4) (3) — — — (3)
Included in other comprehensive income (loss) (3) (47) — (4) (54) (7) (76) — (4) (87)
Purchases, issuances and settlements 28 62 — 8 97 15 228 6 8 256
Transfers in (out) of Level 3 and reclassification of securities in/(out) investment categories 128 (148) — 20 — 128 (148) — 20 —
Ending balance of fixed maturities $ 862 $ 1,255 $ 6 $ 40 $ 2,163 $ 862 $ 1,255 $ 6 $ 40 $ 2,163
The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date $ (5) $ 8 $ — $ — $ 2 $ (5) $ 8 $ — $ — $ 3


	Total Fixed Maturities - Available for Sale
	Three Months Ended September 30, 2022										Nine Months Ended September 30, 2022
(Dollars in millions)	Corporate Securities		Asset Backed Securities		CMBS		Foreign Corporate		Total		Corporate Securities		Asset Backed Securities		CMBS		Foreign Corporate		Total
Beginning balance of fixed maturities	$	862	$	1,255	$	6	$	40	$	2,163	$	730	$	1,251	$	—	$	16	$	1,997
Total gains or (losses) (realized/unrealized)
Included in earnings	(3)		—		—		—		(3)		(6)		—		—		—		(6)
Included in other comprehensive income (loss)	(6)		65		—		—		59		(13)		(11)		—		(4)		(28)
Purchases, issuances and settlements	27		159		—		—		186		42		387		6		8		443
Transfers in/(out) of Level 3 and reclassification of securities in/(out) investment categories	(163)		(587)		(6)		(24)		(779)		(35)		(735)		(6)		(4)		(779)
Ending balance of fixed maturities	$	719	$	893	$	—	$	16	$	1,628	$	719	$	893	$	—	$	16	$	1,628

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	(3)	$	—	$	—	$	—	$	(3)	$	(8)	$	8	$	—	$	—	$	—

(Some amounts may not reconcile due to rounding.)

There were no transfers of assets in/(out) of Level 3 for the three and ~~six~~nine months ended ~~June~~September 30, ~~2023~~2023.

The $779 million shown as transfers in/(out) of Level 3 and reclassification of securities in/(out) of investment categories for the three and nine months ended September 30, 2022 ~~respectively.~~

relate mainly to previously designated Level 3 securities that the Company has reclassified from “fixed maturities – available for sale” to “fixed maturities – held to maturity” during the third quarter of 2022. As “fixed maturities – held to maturity" are carried at amortized cost, net of credit allowances rather than at fair value as “fixed maturities – available for sale”, these securities are no longer included within the fair value hierarchy table or in the roll forward of Level 3 securities. The fair values of these securities are determined in a similar manner as the Company’s fixed maturity securities available for sale as described above. The fair values of these securities incorporate the use of significant unobservable inputs and therefore are classified as Level 3 within the fair value hierarchy as of September 30, 2022.

Financial Instruments Disclosed, But Not Reported, at Fair Value

Certain financial instruments disclosed, but not reported, at fair value are excluded from the fair value hierarchy tables above. Fair values and valuation hierarchy of fixed maturity securities - held to maturity, senior notes and long-term subordinated notes can be found within Notes 3, 7 and 8, respectively. Fair values of long-term notes receivable from affiliates can be found within Note 13. Short-term investments are stated at cost, which approximates fair value.

1718

5. RESERVES FOR LOSSES, LAE AND FUTURE POLICY BENEFIT RESERVE

Activity in the reserve for losses and loss adjustment expenses (“LAE”) is summarized for the periods indicated:


		Six Months Ended June 30,					Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		(Dollars in millions)	2023		2022
Gross reserves beginning of period	Gross reserves beginning of period	$	14,977	$	13,121	Gross reserves beginning of period	$	14,977	$	13,121
Less reinsurance recoverables on unpaid losses	Less reinsurance recoverables on unpaid losses	(3,684)		(3,651)		Less reinsurance recoverables on unpaid losses	(3,684)		(3,651)
Net reserves beginning of period	Net reserves beginning of period	11,294		9,470		Net reserves beginning of period	11,294		9,470

Incurred related to:	Incurred related to:					Incurred related to:
Current year	Current year	2,720		2,521		Current year	4,159		4,606
Prior years	Prior years	(1)		9		Prior years	31		18
Total incurred losses and LAE	Total incurred losses and LAE	2,719		2,530		Total incurred losses and LAE	4,190		4,624

Paid related to:	Paid related to:					Paid related to:
Current year	Current year	937		775		Current year	1,737		1,502
Prior years	Prior years	1,019		1,063		Prior years	1,380		1,303
Total paid losses and LAE	Total paid losses and LAE	1,956		1,838		Total paid losses and LAE	3,118		2,805

Foreign exchange/translation adjustment	Foreign exchange/translation adjustment	15		(17)		Foreign exchange/translation adjustment	—		(70)

Net reserves end of period	Net reserves end of period	12,072		10,145		Net reserves end of period	12,365		11,221
Plus reinsurance recoverables on unpaid losses	Plus reinsurance recoverables on unpaid losses	3,440		3,593		Plus reinsurance recoverables on unpaid losses	3,304		3,628
Gross reserves end of period	Gross reserves end of period	$	15,512	$	13,738	Gross reserves end of period	$	15,669	$	14,849

(Some amounts may not reconcile due to rounding.)

Current year incurred losses were ~~$2.7~~$4.2 billion and ~~$2.5~~$4.6 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. Gross and net reserves increased for the ~~six~~nine months ended ~~June~~September 30, 2023, reflecting an increase in underlying exposure due to earned premium growth, year over year, ~~and the impact of~~amounting to approximately $275 million in 2023 current year attritional losses compared to 2022, offset by a decrease of ~~$24~~$723 million in current year catastrophe losses in ~~2023 compared to 2022. The Company has estimated~~2023. Prior year incurred development of $31 million is primarily driven by the commutation of stop loss agreements between Everest Re and ~~recognized $25 million of reinsurance recoveries related to Hurricane Ian.~~Bermuda Re that were effective for 2018 and 2019. Additional details can be found within Note 13.

6. SEGMENT REPORTING

The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the United States and Bermuda as well as through branches in Canada and Singapore. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the United States and Bermuda.

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.

Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. The Company measures its underwriting results using ratios, in particular loss, commission and brokerage and other underwriting expense ratios, which, respectively, result from dividing incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

The Company does not maintain separate balance sheet data for its operating segments. Accordingly, the Company does not review and evaluate the financial results of its operating segments based upon balance sheet data.

1819

The following tables present the underwriting results for the operating segments for the periods indicated:


		Three Months Ended June 30, 2023						Six Months Ended June 30, 2023							Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total		(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total
Gross written premiums	Gross written premiums	$	1,791	$	1,125	$	2,915	$	3,434	$	1,977	$	5,411	Gross written premiums	$	1,985	$	884	$	2,869	$	5,420	$	2,860	$	8,280
Net written premiums	Net written premiums	1,580		816		2,396		2,953		1,506		4,459		Net written premiums	1,703		647		2,350		4,656		2,153		6,809

Premiums earned	Premiums earned	$	1,417	$	714	$	2,131	$	2,784	$	1,416	$	4,200	Premiums earned	$	1,437	$	702	$	2,139	$	4,220	$	2,118	$	6,339
Incurred losses and LAE	Incurred losses and LAE	864		460		1,325		1,794		925		2,719		Incurred losses and LAE	1,010		460		1,471		2,804		1,386		4,190
Commission and brokerage	Commission and brokerage	363		70		433		724		145		869		Commission and brokerage	378		76		454		1,102		221		1,323
Other underwriting expenses	Other underwriting expenses	36		100		136		75		200		275		Other underwriting expenses	46		103		149		121		303		424
Underwriting gain (loss)	Underwriting gain (loss)	$	153	$	84	$	237	$	191	$	145	$	336	Underwriting gain (loss)	$	3	$	63	$	66	$	194	$	208	$	402

Net investment income	Net investment income					242						432		Net investment income					278						711
Net gains (losses) on investments	Net gains (losses) on investments					(22)						—		Net gains (losses) on investments					(59)						(59)
Corporate expense						(4)						(10)
Corporate expenses														Corporate expenses					(8)						(18)
Interest, fee and bond issue cost amortization expense	Interest, fee and bond issue cost amortization expense					(33)						(65)		Interest, fee and bond issue cost amortization expense					(34)						(99)
Other income (expense)	Other income (expense)					(10)						(15)		Other income (expense)					2						(12)
Income (loss) before taxes	Income (loss) before taxes					$	411					$	679	Income (loss) before taxes					$	246					$	926

(Some amounts may not reconcile due to rounding)


		Three Months Ended June 30, 2022						Six Months Ended June 30, 2022							Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in millions)	(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total		(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total
Gross written premiums	Gross written premiums	$	1,394	$	1,043	$	2,437	$	2,774	$	1,868	$	4,642	Gross written premiums	$	1,681	$	905	$	2,585	$	4,454	$	2,773	$	7,227
Net written premiums	Net written premiums	1,245		750		1,995		2,430		1,360		3,791		Net written premiums	1,506		722		2,228		3,936		2,083		6,019

Premiums earned	Premiums earned	$	1,295	$	659	$	1,954	$	2,504	$	1,279	$	3,783	Premiums earned	$	1,398	$	706	$	2,104	$	3,902	$	1,985	$	5,887
Incurred losses and LAE	Incurred losses and LAE	875		429		1,304		1,696		834		2,530		Incurred losses and LAE	1,531		564		2,094		3,227		1,398		4,624
Commission and brokerage	Commission and brokerage	332		77		409		647		146		793		Commission and brokerage	337		85		423		985		231		1,216
Other underwriting expenses	Other underwriting expenses	32		88		120		63		175		238		Other underwriting expenses	33		94		127		97		269		365
Underwriting gain (loss)	Underwriting gain (loss)	$	55	$	66	$	121	$	98	$	124	$	222	Underwriting gain (loss)	$	(504)	$	(37)	$	(541)	$	(406)	$	87	$	(319)

Net investment income	Net investment income					176						333		Net investment income					124						457
Net gains (losses) on investments	Net gains (losses) on investments					(378)						(605)		Net gains (losses) on investments					(237)						(842)
Corporate expense						(6)						(12)
Corporate expenses														Corporate expenses					(5)						(17)
Interest, fee and bond issue cost amortization expense	Interest, fee and bond issue cost amortization expense					(24)						(48)		Interest, fee and bond issue cost amortization expense					(26)						(74)
Other income (expense)	Other income (expense)					—						(9)		Other income (expense)					7						(2)
Income (loss) before taxes	Income (loss) before taxes					$	(110)					$	(119)	Income (loss) before taxes					$	(677)					$	(796)

(Some amounts may not reconcile due to rounding)

7. SENIOR NOTES

The table below displays Holdings’ outstanding senior notes. Fair value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.


					June 30, 2023				December 31, 2022									September 30, 2023				December 31, 2022
(Dollars in millions)	(Dollars in millions)	Date Issued	Date Due	Principal Amounts	Consolidated Balance Sheet Amount		Fair Value		Consolidated Balance Sheet Amount		Fair Value		(Dollars in millions)	Date Issued	Date Due	Principal Amounts		Consolidated Balance Sheet Amount		Fair Value		Consolidated Balance Sheet Amount		Fair Value
4.868% Senior notes	4.868% Senior notes	6/5/2014	6/1/2044	400	$	397	$	360	$	397	$	343	4.868% Senior notes	6/5/2014	6/1/2044	$	400	$	398	$	331	$	397	$	343
3.5% Senior notes	3.5% Senior notes	10/7/2020	10/15/2050	1,000	981		714		981		677		3.5% Senior notes	10/7/2020	10/15/2050	1,000		981		642		981		677
3.125% Senior notes	3.125% Senior notes	10/4/2021	10/15/2052	1,000	970		664		969		627		3.125% Senior notes	10/4/2021	10/15/2052	1,000		970		595		969		627
				2,400	$	2,348	$	1,738	$	2,347	$	1,647				$	2,400	$	2,348	$	1,567	$	2,347	$	1,647

(Some amounts may not reconcile due to rounding.)

1920

Interest expense incurred in connection with these senior notes is as follows for the periods indicated:


				Three Months Ended June 30,				Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Interest Paid	Payable Dates	2023		2022		2023		2022		(Dollars in millions)	Interest Paid	Payable Dates	2023		2022		2023		2022
4.868% Senior notes	4.868% Senior notes	semi-annually	June 1/December 1	$	5	$	5	$	10	$	10	4.868% Senior notes	semi-annually	June 1/December 1	$	5	$	5	$	15	$	15
3.5% Senior notes	3.5% Senior notes	semi-annually	April 15/October 15	9		9		18		18		3.5% Senior notes	semi-annually	April 15/October 15	9		9		26		26
3.125% Senior notes	3.125% Senior notes	semi-annually	April 15/October 15	8		8		16		16		3.125% Senior notes	semi-annually	April 15/October 15	8		8		24		24
				$	22	$	22	$	43	$	43				$	22	$	22	$	65	$	65

(Some amounts may not reconcile due to rounding.)

8. LONG-TERM SUBORDINATED NOTES

The table below displays Holdings’ outstanding fixed to floating rate long-term subordinated notes (“Subordinated Notes Issued 2007”). Fair value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

June 30, 2023

December 31, 2022

September 30, 2023

December 31, 2022

Original
Principal
Amount

Maturity Date

Consolidated
Balance
Sheet Amount

Fair
Value

Consolidated
Balance
Sheet Amount

Fair
Value

Original
Principal
Amount

Maturity Date

Consolidated
Balance
Sheet Amount

Fair
Value

Consolidated
Balance
Sheet Amount

Fair
Value

(Dollars in millions)

Date Issued

Scheduled

Final

(Dollars in millions)

Date Issued

Scheduled

Final

Long-term subordinated notes

4/26/2007

400

5/15/2037

5/1/2067

218

187

218

187

Long-term subordinated notes

4/26/2007

400

5/15/2037

5/1/2067

218

197

218

187

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest was at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007. During the floating rate interest period from May 15, 2017 through maturity, interest will be based on the 3 month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including May 15, 2017. The reset quarterly interest rate for ~~May~~August 15, 2023 to ~~August~~November 14, 2023 is ~~7.71%~~8.01%. Following the cessation of LIBOR, for periods from and ~~including~~including August 15, 2023, interest will be based on ~~three-month~~3-month CME Term SOFR plus a spread.

Holdings may redeem the long-term subordinated notes on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of certain senior note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the subordinated notes. The Company’s 4.868% senior notes, due on June 1, 2044, 3.5% senior notes due on October 15, 2050 and 3.125% senior notes due on October 15, 2052 are the Company’s long-term indebtedness that rank senior to the long-term subordinated notes.

In 2009, the Company had reduced its outstanding amount of long-term subordinated notes through the initiation of a cash tender offer for any and all of the long-term subordinated notes.

Interest expense incurred in connection with these long-term subordinated notes is as follows for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Interest expense incurred	Interest expense incurred	$	4	$	2	$	8	$	3	Interest expense incurred	$	4	$	3	$	12	$	6

9. FEDERAL HOME LOAN BANK MEMBERSHIP

Everest Re is a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10% of its statutory admitted assets. As of ~~June~~September 30, 2023, Everest Re had admitted assets of approximately ~~$24~~$25 billion which provides borrowing capacity in excess of $2$2.5 billion. As of ~~June~~September 30, 2023, Everest Re ~~has~~had $519 million of borrowings outstanding, all of which ~~expire~~expires in 2023. Everest Re incurred interest expense of $7 million and $0.8 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively. Everest Re incurred interest expense of ~~$13~~$21 million and $2 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The FHLBNY membership agreement requires that 4.5% of borrowed funds be used to acquire additional membership stock.

2021

10. COLLATERALIZED REINSURANCE AND TRUST AGREEMENTS

A subsidiary of the Company, Everest Re, has established a trust agreement, which effectively uses Everest Re’s investments as collateral, as security for assumed losses payable to certain non-affiliated ceding companies. At ~~June~~September 30, 2023, the total amount on deposit in the trust account was ~~$717~~$702 million, which included ~~$82 million of restricted cash. At June 30, 2022, the total amount on deposit in the trust account was $554 million, which included $187~~$100 million of restricted cash.

The Company entered into various collateralized reinsurance agreements with Kilimanjaro Re Limited (“Kilimanjaro”), a Bermuda-based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The table below summarizes the various agreements:

(Dollars in millions)

Class

Description

Effective Date

Expiration Date

Limit

Coverage Basis

Series 2019-1 Class A-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2023

150

Occurrence

Series 2019-1 Class B-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2023

275

Aggregate

Series 2019-1 Class A-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2024

150

Occurrence

Series 2019-1 Class B-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2024

275

Aggregate

Series 2021-1 Class A-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

150

Occurrence

Series 2021-1 Class B-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

Aggregate

Series 2021-1 Class C-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

Aggregate

Series 2021-1 Class A-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

150

Occurrence

Series 2021-1 Class B-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

Aggregate

Series 2021-1 Class C-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

Aggregate

Series 2022-1 Class A

US, Canada, Puerto Rico – Named Storm and Earthquake Events

6/22/2022

6/25/2025

300

Aggregate

Total available limit as of ~~June~~September 30, 2023

1,800

Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry level insured losses from covered events, as well as the geographic location of the events. The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses. As of ~~June~~September 30, 2023, the Company ~~has~~had up to $350 million of catastrophe bond protection (“CAT Bond”) that attaches at a $48.1 billion Property Claims Services (“PCS”) Industry loss threshold. This recovery would be recognized on a pro-rata basis up to a $63.8 billion PCS Industry loss level. PCS’s current industry estimate of ~~$49.4~~$48.4 billion issued in ~~July~~October 2023 exceeds the attachment point. ~~The~~As of September 30, 2023, the recovery under the CAT Bond, included in the Company’s financial results, is currently estimated to be ~~$25~~$20 million, subject to further revision of the industry loss estimate.

Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors. The proceeds from the issuance of the catastrophe bonds are held in reinsurance trusts throughout the duration of the applicable reinsurance agreements and invested solely in U.S. government money market funds with a rating of at least “AAAm” by Standard & Poor’s. The catastrophe bonds’ issue ~~date,~~dates, maturity ~~date~~dates and ~~amount~~amounts correspond to the reinsurance agreements listed above.

11. COMMITMENTS AND CONTINGENCIES

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 rights 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 LAE.

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.

2122

12. OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:


		Three Months Ended June 30, 2023						Six Months Ended June 30, 2023							Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax		(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related		$	(56)	$	12	$	(44)	$	86	$	(18)	$	68
URA(D) on securities - non-credit related														URA(D) on securities - non-credit related	$	(157)	$	33	$	(124)	$	(72)	$	15	$	(56)
Reclassification of net realized losses (gains) included in net income (loss)	Reclassification of net realized losses (gains) included in net income (loss)	8		(2)		6		19		(4)		15		Reclassification of net realized losses (gains) included in net income (loss)	14		(3)		11		33		(7)		26
Foreign currency translation adjustments	Foreign currency translation adjustments	(5)		1		(4)		3		(1)		2		Foreign currency translation adjustments	(14)		3		(11)		(11)		2		(9)
Reclassification of amortization of net gain (loss) included in net income (loss)	Reclassification of amortization of net gain (loss) included in net income (loss)	1		—		—		1		—		1		Reclassification of amortization of net gain (loss) included in net income (loss)	1		—		—		2		—		1
Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	(53)	$	11	$	(42)	$	109	$	(23)	$	86	Total other comprehensive income (loss)	$	(157)	$	33	$	(124)	$	(48)	$	10	$	(38)

(Some amounts may not reconcile due to rounding)


		Three Months Ended June 30, 2022						Six Months Ended June 30, 2022							Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in millions)	(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax		(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related		$	(520)	$	109	$	(411)	$	(1,019)	$	213	$	(805)
URA(D) on securities - non-credit related														URA(D) on securities - non-credit related	$	(357)	$	75	$	(282)	$	(1,376)	$	288	$	(1,087)
Reclassification of net realized losses (gains) included in net income (loss)	Reclassification of net realized losses (gains) included in net income (loss)	8		(2)		6		11		(2)		8		Reclassification of net realized losses (gains) included in net income (loss)	50		(11)		40		61		(13)		48
Foreign currency translation adjustments	Foreign currency translation adjustments	(12)		3		(10)		(15)		3		(12)		Foreign currency translation adjustments	(37)		8		(29)		(52)		11		(41)
Reclassification of amortization of net gain (loss) included in net income (loss)	Reclassification of amortization of net gain (loss) included in net income (loss)	1		—		1		2		—		2		Reclassification of amortization of net gain (loss) included in net income (loss)	—		—		—		3		(1)		2
Total other comprehensive income (loss)	Total other comprehensive income (loss)	$	(524)	$	110	$	(414)	$	(1,021)	$	214	$	(807)	Total other comprehensive income (loss)	$	(343)	$	72	$	(271)	$	(1,364)	$	285	$	(1,078)

(Some amounts may not reconcile due to rounding)

The following table presents details of the amounts reclassified from AOCI for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,				Affected line item within the statements of operations and comprehensive income (loss)		Three Months Ended September 30,				Nine Months Ended September 30,				Affected line item within the statements of operations and comprehensive income (loss)
AOCI component	AOCI component	2023		2022		2023		2022			AOCI component	2023		2022		2023		2022
(Dollars in millions)	(Dollars in millions)										(Dollars in millions)
URA(D) on securities	URA(D) on securities	$	8	$	8	$	19	$	11	Other net gains (losses) on investments	URA(D) on securities	$	14	$	50	$	33	$	61	Other net gains (losses) on investments
		(2)		(2)		(4)		(2)		Income tax expense (benefit)		(3)		(11)		(7)		(13)		Income tax expense (benefit)
		$	6	$	6	$	15	$	8	Net income (loss)		$	11	$	40	$	26	$	48	Net income (loss)

Benefit plan net gain (loss)	Benefit plan net gain (loss)	$	1	$	1	$	1	$	2	Other underwriting expenses	Benefit plan net gain (loss)	$	1	$	—	$	2	$	3	Other underwriting expenses
		—		—		—		—		Income tax expense (benefit)		—		—		—		(1)		Income tax expense (benefit)
		$	—	$	1	$	1	$	2	Net income (loss)		$	—	$	—	$	1	$	2	Net income (loss)

(Some amounts may not reconcile due to rounding)

2223

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Beginning balance of URA(D) on securities	Beginning balance of URA(D) on securities	$	(695)	$	(270)	$	(816)	$	122	Beginning balance of URA(D) on securities	$	(734)	$	(675)	$	(816)	$	122
Current period change in URA(D) of investments - non-credit related	Current period change in URA(D) of investments - non-credit related	(38)		(405)		83		(797)		Current period change in URA(D) of investments - non-credit related	(113)		(242)		(31)		(1,039)
Ending balance of URA(D) on securities	Ending balance of URA(D) on securities	(734)		(675)		(734)		(675)		Ending balance of URA(D) on securities	(847)		(917)		(847)		(917)

Beginning balance of foreign currency translation adjustments	Beginning balance of foreign currency translation adjustments	8		18		2		20		Beginning balance of foreign currency translation adjustments	4		8		2		20
Current period change in foreign currency translation adjustments	Current period change in foreign currency translation adjustments	(4)		(10)		2		(12)		Current period change in foreign currency translation adjustments	(11)		(29)		(9)		(41)
Ending balance of foreign currency translation adjustments	Ending balance of foreign currency translation adjustments	4		8		4		8		Ending balance of foreign currency translation adjustments	(7)		(21)		(7)		(21)

Beginning balance of benefit plan net gain (loss)	Beginning balance of benefit plan net gain (loss)	(33)		(50)		(33)		(51)		Beginning balance of benefit plan net gain (loss)	(32)		(49)		(33)		(51)
Current period change in benefit plan net gain (loss)	Current period change in benefit plan net gain (loss)	—		1		1		2		Current period change in benefit plan net gain (loss)	—		—		1		2
Ending balance of benefit plan net gain (loss)	Ending balance of benefit plan net gain (loss)	(32)		(49)		(32)		(49)		Ending balance of benefit plan net gain (loss)	(32)		(49)		(32)		(49)

Ending balance of accumulated other comprehensive income (loss)	Ending balance of accumulated other comprehensive income (loss)	$	(762)	$	(716)	$	(762)	$	(716)	Ending balance of accumulated other comprehensive income (loss)	$	(886)	$	(987)	$	(886)	$	(987)

(Some amounts may not reconcile due to rounding.)

13. RELATED-PARTY TRANSACTIONS

The table below displays long-term note agreements that Group entered into with Everest Re for the periods indicated. These transactions are presented as Notes Receivable – Affiliated in the Consolidated Balance Sheet of Holdings. All note agreements listed were repaid in full during the second quarter of 2023 and are no longer outstanding as of ~~June~~September 30, 2023. ~~Fair~~The fair value of these long-term notes is considered Level 2 in the fair value hierarchy.


					June 30, 2023				December 31, 2022									September 30, 2023				December 31, 2022
(Dollars in millions)	(Dollars in millions)	Date Issued	Date Due	Principal Amounts	Consolidated Balance Sheet Amount		Fair Value		Consolidated Balance Sheet Amount		Fair Value		(Dollars in millions)	Date Issued	Date Due	Principal Amounts		Consolidated Balance Sheet Amount		Fair Value		Consolidated Balance Sheet Amount		Fair Value
1.69% Long-term Note	1.69% Long-term Note	12/17/2019	12/17/2028	300	$	—	$	—	$	300	$	242	1.69% Long-term Note	12/17/2019	12/17/2028	$	300	$	—	$	—	$	300	$	242
1.00% Long-term Note	1.00% Long-term Note	8/5/2021	8/5/2030	200	—		—		200		151		1.00% Long-term Note	8/5/2021	8/5/2030	200		—		—		200		151
3.11% Long-term Note	3.11% Long-term Note	6/14/2022	6/14/2052	215	—		—		215		171		3.11% Long-term Note	6/14/2022	6/14/2052	215		—		—		215		171
4.34%Long-term Note	4.34%Long-term Note	12/12/2022	12/12/2052	125	—		—		125		125		4.34%Long-term Note	12/12/2022	12/12/2052	125		—		—		125		125
				840	$	—	$	—	$	840	$	689				$	840	$	—	$	—	$	840	$	689

(Some amounts may not reconcile due to rounding)

Interest income recognized in connection with these long-term notes is as follows for the periods indicated:


				Three Months Ended June 30,				Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Interest Received	Receivable Dates	2023		2022		2023		2022		(Dollars in millions)	Interest Received	Receivable Dates	2023		2022		2023		2022
1.69% Long-term Note	1.69% Long-term Note	annually	December 17	$	1	$	1	$	2	$	3	1.69% Long-term Note	annually	December 17	$	—	$	1	$	2	$	4
1.00% Long-term Note	1.00% Long-term Note	annually	August 5	—		1		1		1		1.00% Long-term Note	annually	August 5	—		1		1		2
3.11% Long-term Note	3.11% Long-term Note	annually	June 14	1		—		3		—		3.11% Long-term Note	annually	June 14	—		2		3		2
4.34% Long-term Note	4.34% Long-term Note	annually	December 12	1		—		2		—		4.34% Long-term Note	annually	December 12	—		—		2		—
				$	3	$	2	$	7	$	4				$	—	$	3	$	7	$	7

(Some amounts may not reconcile due to rounding)

Holdings holds 1,773.214 preferred shares of Preferred Holdings with a $1 million par value and 1.75% annual dividend rate. Holdings received these shares in December 2015 in exchange for previously held 9,719,971 common shares of Group. After the exchange, Holdings no longer holds any shares or has any ownership interest in Group. Holdings has reported the preferred shares in Preferred Holdings, as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net gains (losses) on investments in the consolidated

2324

statements of operations and comprehensive income (loss). The following table presents the dividends received on the preferred shares of Preferred Holdings that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Dividends received on preferred stock of affiliate	Dividends received on preferred stock of affiliate	$	8	$	8	$	16	$	16	Dividends received on preferred stock of affiliate	$	8	$	8	$	23	$	23

Affiliates

The Company has engaged in reinsurance transactions with Bermuda Re, Everest Reinsurance Company (Ireland) dac (“Ireland Re”), Everest Insurance (Ireland) dac (“Ireland Insurance”), Everest International Reinsurance Ltd. (“Everest International”), Everest Insurance Company of Canada (“Everest Canada”), Lloyd’s Syndicate 2786 and Mt. Logan Re, which are affiliated companies primarily driven by enterprise risk and capital management considerations under which business is ceded at market rates and terms.

The table below represents affiliated quota share reinsurance agreements for all new and renewal business for the indicated coverage period:


(Dollars in millions)	(Dollars in millions)										(Dollars in millions)
Coverage Period	Coverage Period	Ceding Company	Percent Ceded		Assuming Company	Type of Business	Single Occurrence Limit		Aggregate Limit		Coverage Period	Ceding Company	Percent Ceded		Assuming Company	Type of Business	Single Occurrence Limit		Aggregate Limit
01/01/2010-12/31/2010	01/01/2010-12/31/2010	Everest Re	44.0	%	Bermuda Re	property / casualty business	150		325		01/01/2010-12/31/2010	Everest Re	44.0	%	Bermuda Re	property / casualty business	150		325
01/01/2011-12/31/2011	01/01/2011-12/31/2011	Everest Re	50.0	%	Bermuda Re	property / casualty business	150		300		01/01/2011-12/31/2011	Everest Re	50.0	%	Bermuda Re	property / casualty business	150		300
01/01/2012-12/31/2014	01/01/2012-12/31/2014	Everest Re	50.0	%	Bermuda Re	property / casualty business	100		200		01/01/2012-12/31/2014	Everest Re	50.0	%	Bermuda Re	property / casualty business	100		200
01/01/2015-12/31/2016	01/01/2015-12/31/2016	Everest Re	50.0	%	Bermuda Re	property / casualty business	163		325		01/01/2015-12/31/2016	Everest Re	50.0	%	Bermuda Re	property / casualty business	163		325
01/01/2017-12/31/2017	01/01/2017-12/31/2017	Everest Re	60.0	%	Bermuda Re	property / casualty business	219		438		01/01/2017-12/31/2017	Everest Re	60.0	%	Bermuda Re	property / casualty business	219		438
01/01/2010-12/31/2010	01/01/2010-12/31/2010	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350	(1)	—		01/01/2010-12/31/2010	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350	(1)	—
01/01/2011-12/31/2011	01/01/2011-12/31/2011	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350	(1)	—		01/01/2011-12/31/2011	Everest Re- Canadian Branch	60.0	%	Bermuda Re	property business	350	(1)	—
01/01/2012-12/31/2012	01/01/2012-12/31/2012	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	206	(1)	413	(1)	01/01/2012-12/31/2012	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	206	(1)	413	(1)
01/01/2013-12/31/2013	01/01/2013-12/31/2013	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	150	(1)	413	(1)	01/01/2013-12/31/2013	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	150	(1)	413	(1)
01/01/2014-12/31/2017	01/01/2014-12/31/2017	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	263	(1)	413	(1)	01/01/2014-12/31/2017	Everest Re- Canadian Branch	75.0	%	Bermuda Re	property / casualty business	263	(1)	413	(1)
01/01/2012-12/31/2017	01/01/2012-12/31/2017	Everest Canada	80.0	%	Everest Re- Canadian Branch	property business	—		—		01/01/2012-12/31/2017	Everest Canada	80.0	%	Everest Re- Canadian Branch	property business	—		—
01/01/2020		Everest International Assurance	100.0	%	Bermuda Re	life business	—		—
01/01/2018											01/01/2018	Everest International Assurance	100.0	%	Bermuda Re	life business	—		—

(1)Amounts shown are Canadian dollars.

Effective January 1, 2018, Everest Re entered into a twelve month whole account aggregate stop loss reinsurance contract (“stop loss agreement”) with Bermuda Re. The stop loss agreement provides coverage for ultimate net losses on applicable net earned premiums above a retention level, subject to certain other coverage limits and conditions. The stop loss agreement was most recently renewed effective January 1, 2023.

The stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019 were both commuted during the third quarter of 2023. The commutations of the agreements resulted in the recognition of an aggregate loss of $37 million for Everest Re.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Bermuda Re (UK Branch), effective January 1, 2021 through December 31, 2021. The contract provides Bermuda Re (UK Branch) with up to £110 million of reinsurance coverage for each catastrophe occurrence above £29 million. Bermuda Re (UK Branch) paid Everest Re £4 million for this coverage. This contract was most recently renewed effective January 1, 2023.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Ireland Re, effective February 1, 2023 through January 31, 2024. The contract provides Ireland Re with up to €121 million of reinsurance coverage for each catastrophe occurrence above €18 million. Ireland Re paid Everest Re €10 million for this coverage.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Ireland Re, effective March 31, 2023 through January 31, 2024. The contract provides Ireland Re with up to €61 million of reinsurance coverage for each catastrophe occurrence above €139 million. Ireland Re paid Everest Re €2 million for this coverage.

The table below represents loss portfolio transfer (“LPT”) reinsurance agreements whereby net insurance exposures and reserves were transferred to an ~~affiliate.~~affiliate:

(Dollars in millions)

Effective Date

Transferring Company

Assuming Company

% of Business or Amount of Transfer

Covered Period of Transfer

10/01/2001

Everest Re (Belgium Branch)

Bermuda Re

100

All years

10/01/2008

Everest Re

Bermuda Re

747

01/01/2002-12/31/2007

12/31/2017

Everest Re

Bermuda Re

970

All years

On December 31, 2017, the Company entered into a LPT agreement with Bermuda Re. The LPT agreement covers subject loss reserves of $2.3 billion for accident years 2017 and prior. As a result of the LPT agreement, the Company transferred $1.0 billion of cash and fixed maturity securities and transferred $970 million of loss reserves to Bermuda Re. As part of the LPT agreement, Bermuda Re will provide an additional $500 million of adverse development coverage on the subject loss reserves. As of ~~June~~September 30, 2023 and December 31, 2022, the Company has a reinsurance recoverable of ~~$803~~$804 million and $804 million, respectively, recorded on its balance sheet due from Bermuda Re.

The following tables summarize the significant premiums and losses ceded and assumed by the Company to affiliated entities:


Bermuda Re	Bermuda Re	Three Months Ended June 30,				Six Months Ended June 30,				Bermuda Re	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Ceded written premiums	Ceded written premiums	$	107	$	91	$	214	$	184	Ceded written premiums	$	107	$	95	$	321	$	279
Ceded earned premiums	Ceded earned premiums	107		91		213		184		Ceded earned premiums	107		95		321		279
Ceded losses and LAE	Ceded losses and LAE	(5)		3		(9)		1		Ceded losses and LAE	(40)		(2)		(49)		(1)

Assumed written premiums	Assumed written premiums	4		1		4		3		Assumed written premiums	1		—		5		3
Assumed earned premiums	Assumed earned premiums	3		1		3		5		Assumed earned premiums	1		—		4		5
Assumed losses and LAE	Assumed losses and LAE	—		—		—		—		Assumed losses and LAE	—		—		—		—


Ireland Re	Ireland Re	Three Months Ended June 30,				Six Months Ended June 30,				Ireland Re	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Assumed written premiums	Assumed written premiums	$	3	$	2	$	6	$	4	Assumed written premiums	$	3	$	2	$	9	$	6
Assumed earned premiums	Assumed earned premiums	3		2		6		5		Assumed earned premiums	3		2		9		6
Assumed losses and LAE	Assumed losses and LAE	1		—		1		2		Assumed losses and LAE	1		(4)		2		(2)


Ireland Insurance	Ireland Insurance	Three Months Ended June 30,				Six Months Ended June 30,				Ireland Insurance	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Assumed written premiums	Assumed written premiums	$	11	$	2	$	12	$	4	Assumed written premiums	$	1	$	3	$	13	$	7
Assumed earned premiums	Assumed earned premiums	8		2		10		4		Assumed earned premiums	4		2		14		6
Assumed losses and LAE	Assumed losses and LAE	2		(5)		4		2		Assumed losses and LAE	1		1		4		3

2526

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts:


Mt. Logan Re Segregated Accounts	Mt. Logan Re Segregated Accounts	Three Months Ended June 30,				Six Months Ended June 30,				Mt. Logan Re Segregated Accounts	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Ceded written premiums	Ceded written premiums	$	40	$	22	$	82	$	62	Ceded written premiums	$	76	$	60	$	158	$	122
Ceded earned premiums	Ceded earned premiums	44		29		82		72		Ceded earned premiums	65		51		147		122
Ceded losses and LAE	Ceded losses and LAE	19		23		32		60		Ceded losses and LAE	17		82		49		142

14. INCOME TAXES

The Company is domiciled in the United States and has subsidiaries domiciled within the United States with significant branches in Canada and Singapore. The Company’s non-U.S. branches are subject to income taxation at varying rates in their respective domiciles.

The Company generally applies the estimated annual effective tax rate (“AETR”) approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting. Under the estimated AETR approach, the estimated AETR is applied to the interim year-to-date pre-tax income/(loss) to determine the income tax expense or benefit for the year-to-date period. The tax expense or benefit for the quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual pre-tax income/(loss) and AETR.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted. We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase excise tax and do not expect the legislation to have a material impact on our results of operations. As the IRS issues additional guidance, we will evaluate any impact to our consolidated financial statements.

15. SUBSEQUENT EVENTS

The Company has evaluated known recognized and non-recognized subsequent events. The Company does not have any subsequent events to report.

2627

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Industry Conditions.

The worldwide reinsurance and insurance businesses are highly competitive, as well as cyclical by product and market. As a result, financial results tend to fluctuate with periods of constrained availability, higher rates and stronger profits followed by periods of abundant capacity, lower rates and constrained profitability. Competition in the types of reinsurance and insurance business that we underwrite is based on many factors, including the perceived overall financial strength of the reinsurer or insurer, ratings of the reinsurer or insurer by A.M. Best and/or Standard & Poor’s, underwriting expertise, the jurisdictions where the reinsurer or insurer is licensed or otherwise authorized, capacity and coverages offered, premiums charged, other terms and conditions of the reinsurance and insurance business offered, services offered, speed of claims payment and reputation and experience in lines written. Furthermore, the market impact from these competitive factors related to reinsurance and insurance is generally not consistent across lines of business, domestic and international geographical areas and distribution channels.

We compete in the U.S. and international reinsurance and insurance markets with numerous global competitors. Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies, domestic and international underwriting operations, and certain government sponsored risk transfer vehicles. Some of these competitors have greater financial resources than we do and have established long-term and continuing business relationships, which can be a significant competitive advantage. In addition, the lack of strong barriers to entry into the reinsurance business and the securitization of reinsurance and insurance risks through capital markets provide additional sources of potential reinsurance and insurance capacity and competition.

Worldwide reinsurance and insurance market conditions historically have been competitive. Generally, there is ample reinsurance and insurance capacity relative to demand, as well as additional capital from the capital markets through insurance-linked financial instruments. These financial instruments such as side cars, catastrophe bonds and collateralized reinsurance funds, provide capital markets with access to reinsurance and insurance risk exposure. The capital markets demand for these products is primarily driven by the desire to achieve greater risk diversification and potentially higher returns on their investments. This competition generally has a negative impact on rates, terms and conditions; however, the impact varies widely by market and coverage. Based on recent competitive behaviors in the reinsurance and insurance industry, natural catastrophe events and the macroeconomic backdrop, there has been dislocation in the market which has had a positive impact on rates and terms and conditions, generally, though specifics in local markets can vary.

Specifically, recent market conditions in property, particularly catastrophe excess of loss, have resulted in rate increases. As a result of the rate increases, most of the lines within property have been affected. Other casualty lines have been experiencing modest rate increases, while some lines such as workers’ compensation and directors and officers liability have been experiencing softer market conditions. The impact on pricing conditions is likely to change depending on the line of business and geography.

Our capital position is a source of strength, with high-quality invested assets, significant liquidity and a low operating expense ratio. Our diversified global platform with its broad mix of products, distribution and geography is resilient.

Therecent emergence of the Middle East war and the ongoing war in the Ukraine ~~is ongoing and an~~are evolving ~~event.~~events. Economic and legal sanctions have been levied against Russia, specific named individuals and entities connected to the Russian government, as well as businesses located in the Russian Federation and/or owned by Russian nationals in numerous countries, including the United States. The significant political and economic uncertainty surrounding ~~the war~~these wars and associated sanctions have impacted economic and investment markets both within Russia, Ukraine, the Middle East region, and around the world.

2728

Financial Summary.

We monitor and evaluate our overall performance based upon financial results. The following table displays a summary of the consolidated net income (loss), ratios and stockholder’s equity for the periods indicated:


		Three Months Ended June 30,						Percentage Increase/ (Decrease)				Six Months Ended June 30,											Percentage Increase/ (Decrease)			Three Months Ended September 30,										Percentage Increase/ (Decrease)			Nine Months Ended September 30,						Percentage Increase/ (Decrease)
(Dollars in millions)	(Dollars in millions)	2023			2022					2023					2022					(Dollars in millions)		2023					2022							2023					2022
Gross written premiums	Gross written premiums	$	2,915		$	2,437				19.6	%				$	5,411				$	4,642					16.6		%	Gross written premiums	$	2,869				$		2,585		11.0		%	$	8,280		$	7,227		14.6	%
Net written premiums	Net written premiums	2,396			1,995			20.1	%			4,459					3,791						17.6	%	Net written premiums	2,350					2,228					5.5		%	6,809			6,019			13.1		%

REVENUES:	REVENUES:																								REVENUES:
Premiums earned	Premiums earned	$	2,131		$	1,954		9.0	%			$	4,200				$	3,783					11.0	%	Premiums earned	$	2,139				$	2,104				1.7		%	$	6,339		$	5,887		7.7		%
Net investment income	Net investment income	242			176			37.3	%			432					333						30.0	%	Net investment income	278					124					NM			711			457			55.5		%
Net gains (losses) on investments	Net gains (losses) on investments	(22)			(378)			-94.2	%			—					(605)						NM		Net gains (losses) on investments	(59)					(237)					(75.1)		%	(59)			(842)			(93.0)		%
Other income (expense)	Other income (expense)	(10)			—			NM				(15)					(9)						65.9	%	Other income (expense)	2					7					(63.2)		%	(12)			(2)			NM
Total revenues	Total revenues	2,341			1,753			33.5	%			4,618					3,502						31.9	%	Total revenues	2,361					1,998					18.2		%	6,979			5,500			26.9		%

CLAIMS AND EXPENSES:	CLAIMS AND EXPENSES:																								CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	Incurred losses and loss adjustment expenses	1,325			1,304			1.6	%			2,719					2,530						7.5	%	Incurred losses and loss adjustment expenses	1,471					2,094					(29.8)		%	4,190			4,624			(9.4)		%
Commission, brokerage, taxes and fees	Commission, brokerage, taxes and fees	433			409			5.9	%			869					793						9.6	%	Commission, brokerage, taxes and fees	454					423					7.3		%	1,323			1,216			8.8		%
Other underwriting expenses	Other underwriting expenses	136			120			13.1	%			275					238						15.5	%	Other underwriting expenses	149					127					17.0		%	424			365			16.1		%
Corporate expenses	Corporate expenses	4			6			-36.3	%			10					12						-12.6	%	Corporate expenses	8					5					54.4		%	18			17			7.3		%
Interest, fees and bond issue cost amortization expense	Interest, fees and bond issue cost amortization expense	33			24			35.0	%			65					48						34.0	%	Interest, fees and bond issue cost amortization expense	34					26					33.4		%	99			74			33.8		%
Total claims and expenses	Total claims and expenses	1,930			1,863			3.6	%			3,938					3,621						8.8	%	Total claims and expenses	2,115					2,675					(21.0)		%	6,053			6,296			(3.9)		%

INCOME (LOSS) BEFORE TAXES	INCOME (LOSS) BEFORE TAXES	411			(110)			NM				679					(119)						NM		INCOME (LOSS) BEFORE TAXES	246					(677)					NM			926			(796)			NM
Income tax expense (benefit)	Income tax expense (benefit)	81			(25)			NM				130					(35)						NM		Income tax expense (benefit)	25					(135)					NM			154			(170)			NM
NET INCOME (LOSS)	NET INCOME (LOSS)	$	330		$	(86)		NM				$	549				$	(85)					NM		NET INCOME (LOSS)	$	222				$	(542)				NM			$	771		$	(626)		NM

RATIOS:	RATIOS:							Point Change															Point Change		RATIOS:											Point Change									Point Change
Loss ratio	Loss ratio	62.2		%	66.7		%	(4.6)				64.7		%			66.9		%				(2.1)		Loss ratio	68.8		%			99.6		%			(30.8)			66.1		%	78.6		%	(12.5)
Commission and brokerage ratio	Commission and brokerage ratio	20.3		%	20.9		%	(0.6)				20.7		%			21.0		%				(0.3)		Commission and brokerage ratio	21.2		%			20.1		%			1.1			20.9		%	20.7		%	0.2
Other underwriting expense ratio	Other underwriting expense ratio	6.4		%	6.2		%	0.2				6.5		%			6.3		%				0.3		Other underwriting expense ratio	7.0		%			6.1		%			0.9			6.7		%	6.2		%	0.5
Combined ratio	Combined ratio	88.9		%	93.8		%	(4.9)				92.0		%			94.1		%				(2.1)		Combined ratio	96.9		%			125.7		%			(28.8)			93.7		%	105.4		%	(11.7)


		At June 30,		At December 31,		Percentage Increase/ (Decrease)			At September 30,		At December 31,		Percentage Increase/ (Decrease)
(Dollars in millions)	(Dollars in millions)	2023		2022				(Dollars in millions)	2023		2022
Balance sheet data:	Balance sheet data:							Balance sheet data:
Total investments and cash	Total investments and cash	$	21,056	$	19,195	9.7	%	Total investments and cash	$	21,841	$	19,195	13.8	%
Total assets	Total assets	29,494		27,957		5.5	%	Total assets	30,434		27,957		8.9	%
Loss and loss adjustment expense reserves	Loss and loss adjustment expense reserves	15,512		14,977		3.6	%	Loss and loss adjustment expense reserves	15,669		14,977		4.6	%
Total debt	Total debt	3,085		3,084		—	%	Total debt	3,085		3,084		—	%
Total liabilities	Total liabilities	23,204		22,303		4.0	%	Total liabilities	24,047		22,303		7.8	%
Stockholder's equity	Stockholder's equity	6,290		5,654		11.2	%	Stockholder's equity	6,388		5,654		13.0	%

(NM, not meaningful)

(Some amounts may not reconcile due to rounding)

Revenues.

Premiums. Gross written premiums increased by ~~19.6%~~11.0% to $2.9 billion for the three months ended ~~June~~September 30, 2023, compared to ~~$2.4~~$2.6 billion for the three months ended ~~June~~September 30, 2022, reflecting a ~~$397~~$305 million, or ~~28.5%~~18.1%, increase in our reinsurance business and an ~~$82~~$21 million, or ~~7.8%~~2.4%, ~~increase~~decrease in our insurance business. The increase in reinsurance premiums was ~~primarily~~ due to increases across all lines of business, particularly property pro rata business, casualty pro rata business and casualty excess of loss business. The ~~increase~~decrease in insurance premiums was primarily due

to lower workers’ compensation and financial lines business, partially offset by increases in ~~property/short tail business~~property and ~~other~~ specialty lines of business. Gross written premiums increased by ~~16.6%~~14.6% to ~~$5.4~~$8.3 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$4.6~~$7.2 billion for the ~~six~~nine months ended ~~June~~September 30, 2022, reflecting a ~~$660~~$965 million, or ~~23.8%~~21.7%, increase in our reinsurance business and a ~~$109~~$87 million, or ~~5.8%~~3.2%, increase in our insurance business. The increase in reinsurance premiums was mainly

due to increases across all lines of business, particularly property pro rata business and casualty pro rata business. The increase in insurance premiums reflects increases in property/short tail business and other specialty lines of business.

Net written premiums increased by ~~20.1%~~5.5% to $2.4 billion for the three months ended ~~June~~September 30, 2023, compared to ~~$2.0~~$2.2 billion for the three months ended ~~June~~September 30, 2022 and increased by ~~17.6%~~13.1% to ~~$4.5~~$6.8 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$3.8~~$6.0 billion for the ~~six~~nine months ended ~~June~~September 30, 2022. Premiums earned generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Premiums earned increased by ~~9.0%~~1.7% to ~~$2.1~~$2.14 billion for the three months ended ~~June~~September 30, 2023, compared to ~~$2.0~~$2.10 billion for the three months ended ~~June~~September 30, 2022 and increased by ~~11.0%~~7.7% to ~~$4.2~~$6.3 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$3.8~~$5.9 billion for the ~~six~~nine months ended ~~June~~September 30, 2022.

Other Income (Expense). We recorded other ~~expense~~income of ~~$10~~$2 million and ~~other income of $0.5~~$7 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively. We recorded other expense of ~~$15~~$12 million and ~~other expense of $9~~$2 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates.

Net Investment Income. Refer to Consolidated Investments Results Section below.

Net Gains (Losses) on Investments. Refer to Consolidated Investments Results Section below.

Claims and Expenses.

Incurred Losses and Loss Adjustment Expenses. The following ~~table presents~~tables present our incurred losses and LAE for the periods indicated:


		Three Months Ended June 30,													Three Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	1,297	60.9	%	$	1	0.1	%	$	1,299	61.0	%	Attritional	$	1,313	61.4	%	$	38	1.8	%	$	1,350	63.1	%
Catastrophes	Catastrophes	19		0.9	%	7		0.3	%	26		1.2	%	Catastrophes	127		5.9	%	(7)		(0.3)	%	120		5.6	%
Total	Total	$	1,316	61.8	%	$	8	0.4	%	$	1,325	62.2	%	Total	$	1,440	67.3	%	$	31	1.5	%	$	1,471	68.8	%

2022	2022													2022
Attritional	Attritional	$	1,237	63.3	%	$	—	—	%	$	1,237	63.3	%	Attritional	$	1,260	59.9	%	$	7	0.3	%	$	1,267	60.2	%
Catastrophes	Catastrophes	65		3.3	%	2		0.1	%	67		3.4	%	Catastrophes	826		39.2	%	1		0.1	%	827		39.3	%
Total	Total	$	1,302	66.6	%	$	2	0.1	%	$	1,304	66.7	%	Total	$	2,086	99.1	%	$	8	0.4	%	$	2,094	99.6	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	61	(2.4)	pts	$	1	0.1	pts	$	62	(2.3)	pts	Attritional	$	52	1.5	pts	$	31	1.4	pts	$	83	2.9	pts
Catastrophes	Catastrophes	(46)		(2.4)	pts	5		0.2	pts	(41)		(2.2)	pts	Catastrophes	(699)		(33.3)	pts	(8)		(0.4)	pts	(707)		(33.7)	pts
Total	Total	$	15	(4.8)	pts	$	6	0.3	pts	$	21	(4.6)	pts	Total	$	(646)	(31.8)	pts	$	23	1.0	pts	$	(623)	(30.8)	pts

2930


		Six Months Ended June 30,													Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	2,598	61.9	%	$	—	—	%	$	2,598	61.9	%	Attritional	$	3,911	61.7	%	$	37	0.6	%	$	3,948	62.3	%
Catastrophes	Catastrophes	122		2.9	%	—		—	%	121		2.9	%	Catastrophes	249		3.9	%	(7)		(0.1)	%	242		3.8	%
Total	Total	$	2,720	64.8	%	$	(1)	—	%	$	2,719	64.7	%	Total	$	4,159	65.6	%	$	31	0.5	%	$	4,190	66.1	%

2022	2022													2022
Attritional	Attritional	$	2,375	62.8	%	$	—	—	%	$	2,375	62.8	%	Attritional	$	3,636	61.8	%	$	7	0.1	%	$	3,643	61.9	%
Catastrophes	Catastrophes	145		3.8	%	9		0.2	%	155		4.1	%	Catastrophes	971		16.5	%	10		0.2	%	981		16.7	%
Total	Total	$	2,521	66.6	%	$	9	0.2	%	$	2,530	66.9	%	Total	$	4,606	78.3	%	$	18	0.3	%	$	4,624	78.6	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	223	(0.9)	pts	$	—	—	pts	222		(0.9)	pts	Attritional	$	275	(0.1)	pts	$	30	0.5	pts	305		0.4	pts
Catastrophes	Catastrophes	(24)		(1.0)	pts	(9)		(0.2)	pts	(33)		(1.2)	pts	Catastrophes	(723)		(12.6)	pts	(17)		(0.3)	pts	(740)		(12.9)	pts
Total	Total	$	199	(1.9)	pts	$	(10)	(0.3)	pts	$	189	(2.1)	pts	Total	$	(447)	(12.6)	pts	$	13	0.2	pts	$	(434)	(12.5)	pts

(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE ~~increased~~decreased by ~~1.6%~~29.8% to ~~$1.3~~$1.5 billion for the three months ended ~~June~~September 30, 2023 compared to ~~$1.3~~$2.1 billion for the three months ended ~~June~~September 30, 2022, primarily due to ~~an increase~~a decrease of ~~$61~~$699 million in current year ~~attritional~~catastrophe losses, ~~and a decrease~~offset by an increase of ~~$46~~$52 million in current year ~~catastrophe~~attritional losses. The increase in current year attritional losses was mainly due to the impact of the increase in underlying exposures due to increased premiums earned. The current year catastrophe losses of ~~$19~~$127 million for the three months ended ~~June~~September 30, 2023 mainly related to the 2023 ~~Turkey earthquakes~~Morocco earthquake ($1840 million), ~~Typhoon Mawar~~Hurricane Idalia ($1240 million), the 2023 Hawaii wildfire ($28 million), and the 2023 ~~2nd~~3rd quarter U.S. storms ($1020 million)~~, partially offset by $25 million of reinsurance recoveries related to Hurricane Ian.~~. The current year catastrophe losses of ~~$65~~$826 million for the three months ended ~~June~~September 30, 2022 related to ~~2022 South Africa flood~~Hurricane Ian ($38769 million), ~~the 2022 Canada derecho~~Hurricane Fiona ($1625 million), Typhoon Nanmadol ($20 million), and the 2022 2nd ~~quarter U.S. storms~~Western Europe hailstorms ($129 million). Prior year incurred development of $8$31 million for the three months ended ~~June~~September 30, 2023 is primarily driven by ~~unfavorable movement on prior year catastrophes.~~the commutation of stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019.

Incurred losses and LAE ~~increased~~decreased by ~~7.5%~~9.4% to ~~$2.7~~$4.2 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$2.5~~$4.6 billion for the ~~six~~nine months ended ~~June~~September 30, 2022, primarily due to ~~an increase~~a decrease of ~~$223~~$723 million in current year ~~attritional~~catastrophe losses, ~~and a decrease~~partially offset by an increase of ~~$24~~$275 million in current year ~~catastrophe~~attritional losses. The increase in current year attritional losses was mainly due to the impact of the increase in underlying exposures due to increased premiums earned. The current year catastrophe losses of ~~$122~~$249 million for the ~~six~~nine months ended ~~June~~September 30, 2023 related to 2023 Turkey earthquakes ($8384 million), the 2023 New Zealand storms ($42 million), the 2023 Morocco earthquake ($40 million), Hurricane Idalia ($40 million), the 2023 Hawaii wildfire ($28 million), the 2023 3rd quarter U.S. storms ($20 million), Typhoon Mawar ($1211 million), and the 2023 2nd quarter U.S. storms ($104 million), partially offset by ~~$25~~$20 million of reinsurance ~~recoveries~~recoverables related to Hurricane Ian. The current year catastrophe losses of ~~$145~~$971 million for the ~~six~~nine months ended ~~June~~September 30, 2022 primarily related to Hurricane Ian ($769 million), the 2022 Australia floods ($7174 million), the 2022 South Africa flood ($38 million), Hurricane Fiona ($25 million), Typhoon Nanmadol ($20 million), the 2022 Canada derecho ($16 million), the 2022 2nd2nd quarter U.S. storms ($12 million), the 2022 Western Europe hailstorms ($9 million) and the 2022 March U.S. storms ($98 million). Prior year incurred development of $31 million for the nine months ended September 30, 2023 is primarily driven by the commutation of stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019.

Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees increased to ~~$433~~$454 million for the three months ended ~~June~~September 30, 2023 compared to ~~$409~~$423 million for the three months ended ~~June~~September 30, 2022. Commission, brokerage, taxes and fees increased to ~~$869 million~~$1.3 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$793 million~~$1.2 billion for the ~~six~~nine months ended ~~June~~September 30, 2022. The increases were mainly due to the impact of the increase in premiums earned and changes in the mix of business.

Other Underwriting Expenses. Other underwriting expenses increased to ~~$136~~$149 million for the three months ended ~~June~~September 30, 2023 compared to ~~$120~~$127 million for the three months ended ~~June~~September 30, 2022. Other underwriting expenses increased to ~~$275~~$424 million for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$238~~$365 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increases were mainly due to the impact of the increase in premiums earned and costs incurred to support the expansion of the insurance business.

Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, have ~~decreased~~increased to $4$8 million from $6$5 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and ~~decreased~~increased slightly to ~~$10~~$18 million from ~~$12~~$17 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The ~~variances~~increases are mainly due to changes in variable incentive compensation expenses.

Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was ~~$33~~$34 million and ~~$24~~$26 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively. Interest, fees and other bond amortization expense was ~~$65~~$99 million and ~~$48~~$74 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The increases were mainly due to higher interest costs on the FHLBNY borrowing as a result of the rising interest rate environment. Interest expense was also impacted by the movements in the floating interest rate related to the Company’s long-term Subordinated Notes, ~~Issued 2007,~~ which is reset quarterly per the note agreement. The floating rate was ~~7.71%~~8.01% as of ~~June~~September 30, 2023.

Income Tax Expense (Benefit). We had income tax expense of ~~$81~~$25 million and ~~$130~~$154 million for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively. We had income tax benefit of ~~$25~~$135 million and ~~$35~~$170 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. Income tax expense is primarily a function of the geographic location of the Company’s pre-tax income and the statutory tax rates in those jurisdictions. The effective tax rate (“ETR”) is primarily affected by tax-exempt investment income, foreign tax credits and dividends. Variations in the ETR generally result from changes in the relative levels of pre-tax income, including the impact of catastrophe losses, foreign exchange gains (losses) and net gains (losses) on investments, among jurisdictions with different tax rates.

Net Income (Loss).

Our net income was ~~$330~~$222 million and our net loss was ~~$86~~$542 million, for the three months ended ~~June~~September 30, 2023 and 2022, respectively. Our net income was ~~$549~~$771 million and our net loss was ~~$85~~$626 million, for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. The changes were primarily driven by the financial component fluctuations explained above.

Ratios.

Our combined ratio decreased by ~~4.9~~28.8 points to ~~88.9%~~96.9% for the three months ended ~~June~~September 30, 2023, compared to ~~93.8%~~125.7% for the three months ended ~~June~~September 30, 2022 and decreased by ~~2.1~~11.7 points to ~~92.0%~~93.7% for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~94.1%~~105.4% for the ~~six~~nine months ended ~~June~~September 30, 2022. The loss ratio component decreased by ~~4.6~~30.8 points for the three months ended ~~June~~September 30, 2023 over the corresponding period last year primarily due to a decrease of ~~$46~~$699 million in current year catastrophe ~~losses and lack of losses from the war in Ukraine in 2023. In the second quarter 2022, the Company established reserves of $45 million for losses from the war in the Ukraine.~~losses. The loss ratio component decreased by ~~2.1~~12.5 points for the ~~six~~nine months ended ~~June~~September 30, 2023 over the corresponding period last year primarily due to a decrease of ~~$24~~$723 million in current year catastrophe losses and no losses from the war in Ukraine in 2023. The commission and brokerage ratio components ~~decreased slightly~~increased to ~~20.3%~~21.2% for the three months ended ~~June~~September 30, 2023 compared to ~~20.9%~~20.1% for the three months ended ~~June~~September 30, 2022 and ~~decreased~~increased slightly to 20.9% for the nine months ended September 30, 2023 compared to 20.7% for the ~~six~~nine months ended ~~June 30, 2023 compared to 21.0% for the six months ended June~~September 30, 2022. These changes were mainly due to changes in the mix of business. The other underwriting expense ratios increased to ~~6.4%~~7.0% from ~~6.2%~~6.1% for the three months ended ~~June~~September 30, 2023 and 2022, respectively, and increased to ~~6.5%~~6.7% from ~~6.3%~~6.2% for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively. These increases were mainly due to insurance operations costs associated with the continued build out of the insurance platform.

Stockholder’s Equity.

Stockholder’s equity increased by ~~$636~~$733 million to ~~$6.3~~$6.4 billion at ~~June~~September 30, 2023 from $5.7 billion at December 31, 2022, principally as a result of ~~$549~~$771 million of net income, ~~$83~~partially offset by $31 million of net unrealized ~~appreciation~~depreciation on investments, net of tax and $2$9 million of net foreign currency translation adjustments. The movement in the unrealized ~~appreciation~~depreciation on investments was driven by the change in interest rates on the Company’s fixed maturity - available for sale portfolio.

Consolidated Investment Results

Net Investment Income.

Net investment income increased to ~~$242~~$278 million for the three months ended ~~June~~September 30, 2023, compared to ~~$176~~$124 million for the three months ended ~~June 30, 2022. Net investment income increased to $432 million for the six months ended June 30, 2023, compared to $333 million for the six months ended June~~September 30, 2022. The ~~increases were~~increase for the three months ended September 30, 2023 was primarily the result of an increase of $85 million in income from fixed maturity securities and an increase of $20 million from short term investments mainly due to the rising interest rate environment as well as an increase of $56 million from limited partnership income. Net investment income increased to $711 million for the nine months ended September 30, 2023, compared to $457 million for the nine months ended September 30, 2022. The increase for the nine months ended September 30, 2023 was primarily the result of an increase of $249 million in income from fixed maturity securities and an increase of $46 million from short-term investments, partially offset by ~~reductions in income~~a decrease of $34 million from limited ~~partnerships. The limited~~ partnership ~~income primarily reflects changes in their reported NAVs.~~income. Accordingly, until these asset values are monetized and the resultant income is distributed, they are subject to future increases or decreases in the NAV, and the results may be volatile.

The following table shows the components of net investment income for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		2023		2022		(Dollars in millions)	2023		2022		2023		2022
Fixed maturities	Fixed maturities	$	199	$	116	$	374	$	210	Fixed maturities	$	214	$	129	$	587	$	339
Equity securities	Equity securities	1		5		2		9		Equity securities	1		7		3		15
Short-term investments and cash	Short-term investments and cash	16		1		27		1		Short-term investments and cash	24		4		51		4
Other invested assets	Other invested assets									Other invested assets
Limited partnerships	Limited partnerships	22		45		(1)		89		Limited partnerships	31		(25)		30		63
Dividends from preferred shares of affiliate	Dividends from preferred shares of affiliate	8		8		16		16		Dividends from preferred shares of affiliate	8		8		23		23
Other	Other	6		14		27		26		Other	15		11		42		37
Gross investment income before adjustments	Gross investment income before adjustments	252		188		444		350		Gross investment income before adjustments	291		132		736		482
Funds held interest income (expense)	Funds held interest income (expense)	(1)		1		1		3		Funds held interest income (expense)	1		1		3		5
Interest income from Group	Interest income from Group	3		2		7		4		Interest income from Group	—		3		7		7
Gross investment income	Gross investment income	253		190		453		357		Gross investment income	292		137		745		494
Investment expenses	Investment expenses	(11)		(14)		(21)		(24)		Investment expenses	14		13		35		37
Net investment income	Net investment income	$	242	$	176	$	432	$	333	Net investment income	$	278	$	124	$	711	$	457

(Some amounts may not reconcile due to rounding.)

The following table shows a comparison of various investment yields for the periods indicated:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Annualized pre-tax yield on average cash and invested assets	Annualized pre-tax yield on average cash and invested assets	4.5	%	3.6	%	4.1	%	3.5	%	Annualized pre-tax yield on average cash and invested assets	4.9	%	2.5	%	4.4	%	3.1	%
Annualized after-tax yield on average cash and invested assets	Annualized after-tax yield on average cash and invested assets	3.6	%	2.9	%	3.3	%	2.8	%	Annualized after-tax yield on average cash and invested assets	4.0	%	2.0	%	3.5	%	2.5	%

3233

Net Gains (Losses) on Investments.

The following table presents the composition of our net gains (losses) on investments for the periods indicated:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		Variance		2023		2022		Variance		(Dollars in millions)	2023		2022		Variance		2023		2022		Variance
Realized gains (losses) from dispositions:	Realized gains (losses) from dispositions:													Realized gains (losses) from dispositions:
Fixed maturity securities - available for sale	Fixed maturity securities - available for sale													Fixed maturity securities - available for sale
Gains	Gains	$	1	$	3	$	(2)	$	4	$	6	(3)		Gains	$	1	$	1	$	—	$	4	$	7	(2)
Losses	Losses	(8)		(13)		5		(12)		(21)		9		Losses	(13)		(46)		32		(25)		(67)		41
Total	Total	(7)		(10)		2		(9)		(15)		6		Total	(12)		(45)		33		(21)		(60)		39

Equity securities	Equity securities													Equity securities
Gains	Gains	—		4		(4)		7		8		(1)		Gains	2		59		(58)		8		67		(59)
Losses	Losses	—		(34)		34		—		(46)		46		Losses	—		(2)		2		—		(48)		48
Total	Total	—		(30)		30		7		(38)		45		Total	1		57		(56)		8		19		(11)

Other Invested Assets	Other Invested Assets													Other Invested Assets
Gains	Gains	—		3		(3)		—		8		(8)		Gains	—		7		(7)		—		15		(15)
Losses	Losses	—		(3)		3		—		(3)		3		Losses	—		(1)		1		—		(4)		4
Total	Total	—		1		(1)		—		5		(5)		Total	—		6		(6)		—		10		(10)

Short-Term Investments	Short-Term Investments													Short-Term Investments
Gains	Gains	1		—		1		1		—		1		Gains	—		1		(1)		1		1		—
Losses	Losses	—		—		—		—		—		—		Losses	—		—		—		—		—		—
Total	Total	—		—		—		—		—		1		Total	—		1		(1)		—		1		(1)

Total net realized gains (losses) from dispositions	Total net realized gains (losses) from dispositions													Total net realized gains (losses) from dispositions
Gains	Gains	1		11		(9)		11		22		(11)		Gains	2		68		(66)		13		90		(76)
Losses	Losses	(8)		(50)		41		(12)		(70)		58		Losses	(13)		(49)		36		(26)		(119)		94
Total	Total	(7)		(39)		32		(1)		(49)		47		Total	(11)		20		(30)		(12)		(29)		17

Allowance for credit losses	Allowance for credit losses	—		2		(2)		(10)		—		(10)		Allowance for credit losses	(1)		(12)		10		(12)		(12)		—

Gains (losses) from fair value adjustments	Gains (losses) from fair value adjustments													Gains (losses) from fair value adjustments
Equity securities	Equity securities	8		(186)		194		11		(317)		328		Equity securities	(13)		(134)		121		(2)		(451)		449
Other invested assets	Other invested assets	(23)		(155)		132		1		(239)		241		Other invested assets	(34)		(111)		78		(32)		(350)		318
Total	Total	(15)		(341)		326		12		(556)		568		Total	(47)		(245)		199		(34)		(801)		767

Total net gains (losses) on investments	Total net gains (losses) on investments	$	(22)	$	(378)	$	356	$	—	$	(605)	$	605	Total net gains (losses) on investments	$	(59)	$	(237)	$	178	$	(59)	$	(842)	$	784

(Some amounts may not reconcile due to rounding.)

Net gains (losses) on investments during the three months ended ~~June~~September 30, 2023 primarily related to net losses from fair value adjustments of ~~$15 million as a result of market declines during the second quarter of 2023.~~$47 million. In addition, we recorded ~~$7 million of net realized losses from disposition of investments. There were no allowances for credit losses during the second quarter of 2023.~~

Net gains (losses) on investments during the six months ended June 30, 2023 primarily related to net gains from fair value adjustments of $12 million as a result of equity market increases during 2023, partially offset by $1$11 million of net realized losses from disposition of investments and ~~$10~~$1 million of credit allowances on fixed maturity securities.

Net gains (losses) on investments during the nine months ended September 30, 2023 primarily related to net losses from fair value adjustments of $34 million. In addition, we recorded $12 million of net realized losses from disposition of investments and $12 million of credit allowances on fixed maturity securities.

Segment Results.

The Company manages its reinsurance and insurance operations as autonomous units, and key strategic decisions are based on the aggregate operating results and projections for these segments of business.

3334

The Reinsurance operation writes risks on a worldwide basis in property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. We write reinsurance business from entities chartered in the United States and Bermuda as well as through branches of those entities established in Canada and Singapore. The Insurance operation writes property and casualty insurance directly and through brokers, surplus lines brokers and general agents within the United States and Bermuda.

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 brokerage and other underwriting expense ratios, which, respectively, result from dividing incurred losses, commissions and brokerage and other underwriting expenses by premiums earned.

Our loss and LAE reserves are management’s best estimate of our 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. Management’s best estimate is developed through collaboration with actuarial, underwriting, claims, legal and finance departments and culminates with the input of reserve committees. Each segment reserve committee includes the participation of the relevant parties from actuarial, finance, claims and segment senior management and has the responsibility for recommending and approving management’s best estimate. Reserves are further reviewed by Everest’s Chief Reserving Actuary and senior management. The objective of such process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability.

The following discusses the underwriting results for each of our segments for the periods indicated:

Reinsurance.

The following table presents the underwriting results and ratios for the Reinsurance segment for the periods indicated:


		Three Months Ended June 30,										Six Months Ended June 30,											Three Months Ended September 30,										Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023			2022			Variance		% Change		2023			2022			Variance		% Change		(Dollars in millions)	2023			2022			Variance		% Change		2023			2022			Variance		% Change
Gross written premiums	Gross written premiums	$	1,791		$	1,394		397		28.5	%	$	3,434		$	2,774		$	660	23.8	%	Gross written premiums	$	1,985		$	1,681		305		18.1	%	$	5,420		$	4,454		$	965	21.7	%
Net written premiums	Net written premiums	1,580			1,245			335		26.9	%	2,953			2,430			523		21.5	%	Net written premiums	1,703			1,506			198		13.1	%	4,656			3,936			720		18.3	%

Premiums earned	Premiums earned	$	1,417		$	1,295		$	122	9.4	%	$	2,784		$	2,504		$	279	11.2	%	Premiums earned	$	1,437		$	1,398		$	39	2.8	%	$	4,220		$	3,902		$	318	8.2	%
Incurred losses and LAE	Incurred losses and LAE	864			875			(11)		(1.3)	%	1,794			1,696			98		5.8	%	Incurred losses and LAE	1,010			1,531			(520)		(34.0)	%	2,804			3,227			(423)		(13.1)	%
Commission and brokerage	Commission and brokerage	363			332			31		9.4	%	724			647			77		11.9	%	Commission and brokerage	378			337			40		11.9	%	1,102			985			117		11.9	%
Other underwriting expenses	Other underwriting expenses	36			32			4		11.7	%	75			63			12		18.2	%	Other underwriting expenses	46			33			13		38.4	%	121			97			24		25.1	%
Underwriting gain (loss)	Underwriting gain (loss)	$	153		$	55		$	98	NM		$	191		$	98		$	93	95.7	%	Underwriting gain (loss)	$	3		$	(504)		$	506	NM		$	194		$	(406)		$	600	NM

										Point Chg										Point Chg											Point Chg										Point Chg
Loss ratio	Loss ratio	61.0		%	67.6		%			(6.6)		64.4		%	67.7		%			(3.3)		Loss ratio	70.3		%	109.5		%			(39.2)		66.4		%	82.7		%			(16.3)
Commission and brokerage ratio	Commission and brokerage ratio	25.6		%	25.6		%			—		26.0		%	25.8		%			0.2		Commission and brokerage ratio	26.3		%	24.1		%			2.1		26.1		%	25.2		%			0.9
Other underwriting expense ratio	Other underwriting expense ratio	2.6		%	2.5		%			0.1		2.7		%	2.5		%			0.2		Other underwriting expense ratio	3.2		%	2.4		%			0.8		2.9		%	2.5		%			0.4
Combined ratio	Combined ratio	89.2		%	95.7		%			(6.6)		93.1		%	96.1		%			(3.0)		Combined ratio	99.8		%	136.0		%			(36.2)		95.4		%	110.4		%			(15.0)

(Some amounts may not reconcile due to rounding.)

(NM, not meaningful)

Premiums. Gross written premiums increased by ~~28.5%~~18.1% to ~~$1.8~~$2.0 billion for the three months ended ~~June~~September 30, 2023 from ~~$1.4~~$1.7 billion for the three months ended ~~June~~September 30, 2022, ~~primarily~~ due to increases across all lines of business, particularly property pro rata business, casualty pro rata business and casualty excess of loss business. Net written

premiums increased by ~~26.9%~~13.1% to ~~$1.6~~$1.7 billion for the three months ended ~~June~~September 30, 2023, compared to ~~$1.2~~$1.5 billion for the

three months ended ~~June~~September 30, 2022, which is consistent with the percentage change in gross written premiums. Premiums earned generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Premiums earned increased by ~~9.4%~~2.8% to ~~$1.4~~$1.44 billion for the three months ended ~~June~~September 30, 2023 compared to ~~$1.3~~$1.40 billion for the three months ended ~~June~~September 30, 2022.

Gross written premiums increased by ~~23.8%~~21.7% to ~~$3.4~~$5.4 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 from ~~$2.8~~$4.5 billion for the ~~six~~nine months ended ~~June~~September 30, 2022 primarily due to ~~a decline in~~increases across all lines of business, particularly property pro rata business ~~partially offset by an increase in~~and casualty pro rata business. Net written premiums increased by ~~21.5%~~18.3% to ~~$3.0~~$4.7 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$2.4~~$3.9 billion for the ~~six~~nine months ended ~~June~~September 30, 2022, which is consistent with the change in gross written premiums. Premiums earned generally reflect the portion of net premiums written that was recorded as revenues for the period as the exposure periods expire. Premiums earned increased by ~~11.2%~~8.2% to ~~$2.8~~$4.2 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$2.5~~$3.9 billion for the ~~six~~nine months ended ~~June~~September 30, 2022.

Incurred Losses and LAE. The following tables present the incurred losses and LAE for the Reinsurance segment for the periods indicated:


		Three Months Ended June 30,													Three Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	836	59.0	%	$	1	0.1	%	838		59.1	%	Attritional	$	862	60.0	%	$	38	2.6	%	900		62.6	%
Catastrophes	Catastrophes	19		1.4	%	7		0.5	%	27		1.9	%	Catastrophes	117		8.2	%	(6)		(0.4)	%	111		7.7	%
Total Segment	Total Segment	$	855	60.4	%	$	9	0.6	%	$	864	61.0	%	Total Segment	$	979	68.1	%	$	32	2.2	%	$	1,010	70.3	%

2022	2022													2022
Attritional	Attritional	$	813	62.8	%	$	—	0.0	%	813		62.8	%	Attritional	$	800	57.2	%	$	7	0.5	%	807		57.7	%
Catastrophes	Catastrophes	60		4.6	%	3		0.2	%	63		4.8	%	Catastrophes	722		51.7	%	2		0.1	%	724		51.8	%
Total Segment	Total Segment	$	873	67.4	%	$	3	0.2	%	$	875	67.6	%	Total Segment	$	1,522	108.9	%	$	9	0.6	%	$	1,531	109.5	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	24	(3.7)	pts	$	1	0.1	pts	$	25	(3.6)	pts	Attritional	$	62	2.8	pts	$	31	2.1	pts	$	93	4.9	pts
Catastrophes	Catastrophes	(41)		(3.3)	pts	5		0.3	pts	(36)		(3.0)	pts	Catastrophes	(605)		(43.5)	pts	(8)		(0.6)	pts	(613)		(44.1)	pts
Total Segment	Total Segment	$	(17)	(7.0)	pts	$	6	0.4	pts	$	(11)	(6.6)	pts	Total Segment	$	(543)	(40.7)	pts	$	22	1.5	pts	$	(520)	(39.2)	pts

(Some amounts may not reconcile due to rounding.)


		Six Months Ended June 30,													Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	1,671	60.0	%	$	2	0.1	%	1,673		60.1	%	Attritional	$	2,532	60.0	%	$	40	0.9	%	2,572		60.9	%
Catastrophes	Catastrophes	120		4.3	%	1		—	%	121		4.3	%	Catastrophes	237		5.6	%	(6)		(0.1)	%	232		5.5	%
Total Segment	Total Segment	$	1,791	64.3	%	$	3	0.1	%	$	1,794	64.4	%	Total Segment	$	2,770	65.6	%	$	34	0.8	%	$	2,804	66.4	%

2022	2022													2022
Attritional	Attritional	$	1,550	61.9	%	$	—	—	%	1,551		61.9	%	Attritional	$	2,350	60.2	%	$	8	0.2	%	2,358		60.4	%
Catastrophes	Catastrophes	135		5.4	%	10		0.4	%	145		5.8	%	Catastrophes	857		22.0	%	11		0.3	%	868		22.3	%
Total Segment	Total Segment	$	1,686	67.3	%	$	10	0.4	%	$	1,696	67.7	%	Total Segment	$	3,207	82.2	%	$	19	0.5	%	$	3,227	82.7	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	120	(1.9)	pts	$	2	0.1	pts	$	122	(1.8)	pts	Attritional	$	182	(0.2)	pts	$	32	0.7	pts	$	214	0.5	pts
Catastrophes	Catastrophes	$	(15)	(1.1)	pts	(9)		(0.4)	pts	(24)		(1.4)	pts	Catastrophes	$	(620)	(16.4)	pts	(17)		(0.4)	pts	(636)		(16.8)	pts
Total Segment	Total Segment	$	105	(3.0)	pts	$	(7)	(0.3)	pts	$	98	(3.3)	pts	Total Segment	$	(437)	(16.6)	pts	$	15	0.3	pts	$	(423)	(16.3)	pts

(Some amounts may not reconcile due to rounding.)

Incurred losses decreased by ~~1.3%~~34.0% to ~~$864 million~~$1.0 billion for the three months ended ~~June~~September 30, 2023, compared to ~~$875 million~~$1.5 billion for the three months ended ~~June~~September 30, 2022. The decrease was primarily due to a decrease of ~~$41~~$605 million in current year catastrophe losses, partially offset by an increase of ~~$24 million in current year attritional losses. The increase in current~~

year attritional losses was mainly related to the impact of the increase in premiums earned. The current year catastrophe losses of $19 million for the three months ended June 30, 2023 related primarily to the 2023 Turkey earthquakes ($18 million), Typhoon Mawar ($12 million), and the 2023 2nd quarter U.S. storms ($10 million), partially offset by $25 million of reinsurance recoveries related to Hurricane Ian. The $60 million of current year catastrophe losses for the three months ended June 30, 2022 related primarily to 2022 South Africa flood ($38 million), the 2022 Canada derecho ($16 million) and the 2022 2nd ~~quarter U.S. storms ($7 million). Prior year incurred development of $9 million for the three months ended June 30, 2023 is primarily driven by unfavorable movement on prior year catastrophes.~~

Incurred losses increased by 5.8% to $1.8 billion for the six months ended June 30, 2023, compared to $1.7 billion for the six months ended June 30, 2022. The increase was primarily due to a decrease of $15 million in current year catastrophe losses and an increase of $120$62 million in current year attritional losses. The increase in current year attritional losses was mainly related to the impact of the increase in premiums earned. The current year catastrophe losses of ~~$120~~$117 million for the ~~six~~three months ended ~~June~~September 30, 2023 related primarily to the 2023 Morocco earthquake ($40 million), Hurricane Idalia ($40 million), the 2023 Hawaii wildfire ($23 million), and the 2023 3rd quarter U.S. storms ($15 million). The $722 million of current year catastrophe losses for the three months ended September 30, 2022 related primarily to Hurricane Ian ($670 million), Typhoon Nanmadol ($20 million), Hurricane Fiona ($20 million) and the Western Europe hailstorms ($9 million). Prior year incurred development of $32 million for the three months ended September 30, 2023 is primarily driven by the commutation of stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019.

Incurred losses decreased by 13.1% to $2.8 billion for the nine months ended September 30, 2023, compared to $3.2 billion for the nine months ended September 30, 2022. The decrease was primarily due to a decrease of $620 million in current year catastrophe losses, partially offset by an increase of $182 million in current year attritional losses. The increase in current year attritional losses was mainly related to the impact of the increase in premiums earned. The current year catastrophe losses of $237 million for the nine months ended September 30, 2023 related primarily to 2023 Turkey earthquakes ($8384 million), the 2023 New Zealand storms ($41 million), the 2023 Morocco earthquake ($40 million), Hurricane Idalia ($40 million), the 2023 Hawaii wildfire ($23 million), the 2023 3rd quarter U.S. storms ($15 million), Typhoon Mawar ($1211 million), and the 2023 2nd quarter U.S. storms ($104 million), partially offset by ~~$25~~$20 million of reinsurance ~~recoveries~~recoverables related to Hurricane Ian. The ~~$135~~$857 million of current year catastrophe losses for the ~~six~~nine months ended ~~June~~September 30, 2022 related primarily to Hurricane Ian ($670 million), the 2022 Australia floods ($7174 million), the 2022 South Africa flood ($38 million), Hurricane Fiona ($20 million), Typhoon Nanmadol ($20 million), the 2022 Canada derecho ($16 million), the 2022 2ndWestern Europe hailstorms ($9 million), the 2022 2nd quarter U.S. storms ($7 million), and the 2022 March U.S. storms ($4 million). Prior year incurred development of $34 million for the nine months ended September 30, 2023 is primarily driven by the commutation of stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019.

Segment Expenses. Commission and brokerage expense increased by ~~9.4%~~11.9% to ~~$363~~$378 million for the three months ended ~~June~~September 30, 2023, compared to ~~$332~~$337 million for the three months ended ~~June~~September 30, 2022. Commission and brokerage expense increased by 11.9% to ~~$724 million~~$1.1 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$647~~$985 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increases were mainly due to changes in the mix of ~~business.~~business and the impact of the increases in premiums earned.

Segment other underwriting expenses increased to ~~$36~~$46 million for the three months ended ~~June~~September 30, 2023 from ~~$32~~$33 million for the three months ended ~~June~~September 30, 2022. Segment other underwriting expenses increased to ~~$75~~$121 million for the ~~six~~nine months ended ~~June~~September 30, 2023 from ~~$63~~$97 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increases were mainly due to the impact of the increase in premiums earned.

Insurance.

The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated.


		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended September 30,								Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	2023		2022		Variance		% Change		2023		2022		Variance		% Change		(Dollars in millions)	2023		2022		Variance		% Change		2023		2022		Variance		% Change
Gross written premiums	Gross written premiums	$	1,125	$	1,043	$	82	7.8	%	$	1,977	$	1,868	$	109	5.8	%	Gross written premiums	$	884	$	905	$	(21)	(2.4)	%	$	2,860	$	2,773	$	87	3.2	%
Net written premiums	Net written premiums	816		750		67		8.9	%	1,506		1,360		145		10.7	%	Net written premiums	647		722		(75)		(10.4)	%	2,153		2,083		70		3.4	%

Premiums earned	Premiums earned	$	714	$	659	$	55	8.3	%	$	1,416	$	1,279	$	137	10.7	%	Premiums earned	$	702	$	706	$	(4)	(0.5)	%	$	2,118	$	1,985	$	134	6.7	%
Incurred losses and LAE	Incurred losses and LAE	460		429		32		7.5	%	925		834		92		11.0	%	Incurred losses and LAE	460		564		(104)		(18.4)	%	1,386		1,398		(12)		(0.9)	%
Commission and brokerage	Commission and brokerage	70		77		(7)		(9.3)	%	145		146		(1)		(0.6)	%	Commission and brokerage	76		85		(9)		(11.1)	%	221		231		(10)		(4.5)	%
Other underwriting expenses	Other underwriting expenses	100		88		12		13.6	%	200		175		25		14.6	%	Other underwriting expenses	103		94		9		9.5	%	303		269		34		12.8	%
Underwriting gain (loss)	Underwriting gain (loss)	$	84	$	66	$	18	27.0	%	$	145	$	124	$	21	16.9	%	Underwriting gain (loss)	$	63	$	(37)	$	101	NM		$	208	$	87	$	122	NM

								Point Chg								Point Chg									Point Chg								Point Chg
Loss ratio	Loss ratio	64.5%		65.0%				(0.5)		65.4%		65.2%				0.2		Loss ratio	65.5%		79.9%				(14.3)		65.4%		70.4%				(5.0)
Commission and brokerage ratio	Commission and brokerage ratio	9.7%		11.6%				-1.9		10.3%		11.4%				(1.2)		Commission and brokerage ratio	10.8%		12.1%				(1.3)		10.4%		11.7%				(1.2)
Other underwriting expense ratio	Other underwriting expense ratio	14.0%		13.3%				0.7		14.1%		13.7%				0.5		Other underwriting expense ratio	14.7%		13.3%				1.3		14.3%		13.5%				0.8
Combined ratio	Combined ratio	88.2%		90.0%				(1.7)		89.7%		90.3%				(0.5)		Combined ratio	91.0%		105.3%				(14.3)		90.2%		95.6%				(5.5)

(Some amounts may not reconcile due to rounding.)

(NM, not meaningful)

Premiums. Gross written premiums ~~increased~~decreased by ~~7.8%~~2.4% to ~~$1.1 billion~~$884 million for the three months ended ~~June~~September 30, 2023, compared to ~~$1.0 billion~~$905 million for the three months ended ~~June~~September 30, 2022. The ~~increase~~decrease in insurance premiums was primarily due to lower workers’ compensation and financial lines business, partially offset by increases in ~~property/short tail business~~property and ~~other~~ specialty lines of business. Net written premiums ~~increased~~decreased by ~~8.9%~~10.4% to ~~$816~~$647 million for the three months ended ~~June~~September 30, 2023, compared to ~~$750~~$722 million for the three months ended ~~June~~September 30, 2022. The ~~higher~~lower percentage of net written premiums compared to gross written premiums was mainly due to business mix and ~~higher~~lower retention in certain lines of business. Premiums earned ~~increased 8.3%~~decreased 0.5% to ~~$714~~$702 million for the three months ended ~~June~~September 30, 2023, compared to ~~$659~~$706 million for the three months ended ~~June~~September 30, 2022.

Gross written premiums increased by ~~5.8%~~3.2% to ~~$2.0~~$2.9 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$1.9~~$2.8 billion for the ~~six~~nine months ended ~~June~~September 30, 2022. The increase in insurance premiums reflects increases in property/short tail business and other specialty lines of business. Net written premiums increased by ~~10.7%~~3.4% to ~~$1.5~~$2.2 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$1.4~~$2.1 billion for the ~~six~~nine months ended ~~June~~September 30, ~~2022.~~ ~~The higher~~2022, which is consistent with the percentage ~~of net written premiums compared to~~change in gross written ~~premiums was mainly due to business mix and higher retention in certain lines of business~~.premiums. Premiums earned increased by ~~10.7%~~6.7% to ~~$1.4~~$2.1 billion for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$1.3~~$2.0 billion for the ~~six~~nine months ended ~~June~~September 30, 2022. The change in premiums earned 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.

Incurred Losses and LAE. The following tables present the incurred losses and LAE for the Insurance segment for the periods indicated.


		Three Months Ended June 30,													Three Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	461	64.6	%	$	—	—	%	461		64.6	%	Attritional	$	451	64.2	%	$	—	—	%	451		64.2	%
Catastrophes	Catastrophes	—		—	%	—		(0.1)	%	(1)		(0.1)	%	Catastrophes	10		1.4	%	—		(0.1)	%	9		1.3	%
Total Segment	Total Segment	$	461	64.6	%	$	—	(0.1)	%	$	460	64.5	%	Total Segment	$	461	65.6	%	$	—	(0.1)	%	$	460	65.5	%

2022	2022													2022
Attritional	Attritional	$	424	64.3	%	$	—	—	%	424		64.3	%	Attritional	$	461	65.3	%	$	—	—	%	461		65.3	%
Catastrophes	Catastrophes	5		0.8	%	—		—	%	5		0.7	%	Catastrophes	104		14.7	%	—		(0.1)	%	104		14.6	%
Total Segment	Total Segment	$	429	65.0	%	$	—	—	%	$	429	65.0	%	Total Segment	$	565	80.0	%	$	—	(0.1)	%	$	564	79.9	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	37	0.3	pts	$	—	—	pts	$	37	0.3	pts	Attritional	$	(10)	(1.1)	pts	$	—	—	pts	$	(10)	(1.1)	pts
Catastrophes	Catastrophes	(5)		(0.8)	pts	—		—	pts	(6)		(0.8)	pts	Catastrophes	(94)		(13.3)	pts	—		—	pts	(95)		(13.3)	pts
Total Segment	Total Segment	$	32	(0.5)	pts	$	—	—	pts	$	32	(0.5)	pts	Total Segment	$	(104)	(14.4)	pts	$	—	—	pts	$	(103)	(14.3)	pts

(Some amounts may not reconcile due to rounding.)


		Six Months Ended June 30,													Nine Months Ended September 30,
(Dollars in millions)	(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change		(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2023	2023													2023
Attritional	Attritional	$	927	65.5	%	$	(2)	(0.2)	%	925		65.3	%	Attritional	$	1,378	65.1	%	$	(2)	(0.1)	%	1,376		65.0	%
Catastrophes	Catastrophes	1		0.1	%	(1)		(0.1)	%	1		—	%	Catastrophes	11		0.5	%	(1)		(0.1)	%	10		0.5	%
Total Segment	Total Segment	$	929	65.6	%	$	(3)	(0.3)	%	$	925	65.4	%	Total Segment	$	1,389	65.6	%	$	(4)	(0.2)	%	$	1,386	65.4	%

2022	2022													2022
Attritional	Attritional	$	825	64.5	%	$	—	—	%	824		64.5	%	Attritional	$	1,285	64.8	%	$	—	—	%	1,285		64.8	%
Catastrophes	Catastrophes	10		0.8	%	(1)		—	%	9		0.7	%	Catastrophes	114		5.7	%	(1)		(0.1)	%	113		5.6	%
Total Segment	Total Segment	$	835	65.3	%	$	(1)	-0.1	%	$	834	65.2	%	Total Segment	$	1,399	70.5	%	$	(1)	(0.1)	%	$	1,398	70.4	%

Variance 2023/2022	Variance 2023/2022													Variance 2023/2022
Attritional	Attritional	$	103	1.0	pts	$	(2)	(0.1)	pts	101		0.9	pts	Attritional	$	93	0.3	pts	$	(2)	(0.1)	pts	91		0.2	pts
Catastrophes	Catastrophes	(9)		(0.7)	pts	—		—	pts	(9)		(0.7)	pts	Catastrophes	(102)		(5.2)	pts	—		—	pts	(103)		(5.1)	pts
Total Segment	Total Segment	$	94	0.3	pts	$	(2)	(0.2)	pts	$	92	0.2	pts	Total Segment	$	(10)	(4.9)	pts	$	(2)	(0.1)	pts	$	(12)	(4.9)	pts

(Some amounts may not reconcile due to rounding.)

Incurred losses and LAE ~~increased~~decreased by ~~7.5%~~18.4% to $460 million for the three months ended ~~June~~September 30, 2023, compared to ~~$429~~$564 million for the three months ended ~~June~~September 30, 2022, mainly due to ~~an increase~~a decrease of ~~$37~~$94 million in current year ~~attritional losses which is primarily related to a change in mix of business. There were no current year~~ catastrophe losses ~~for the three months ended June 30, 2023. The $5 million~~and a decrease of ~~current year catastrophe losses for the three months ended June 30, 2022, related to the 2022 2~~nd ~~quarter U.S. storms.~~

~~Incurred losses and LAE increased by 11.0% to $925 million for the six months ended June 30, 2023 compared to $834 million for the six months ended June 30, 2022, mainly due to an increase of $103~~$10 million in current year attritional losses, which is primarily related to a change in mix of business. The $1current year catastrophe losses of $10 million for the three months ended September 30, 2023 related to the 2023 Hawaii wildfire ($5 million) and the 2023 3rd quarter U.S. storms ($5 million). The $104 million of current year catastrophe losses for the ~~six~~three months ended ~~June~~September 30, 2022, related to Hurricane Ian ($99 million) and Hurricane Fiona ($5 million).

Incurred losses and LAE decreased slightly by 0.9% to $1.39 billion for the nine months ended September 30, 2023 compared to $1.40 billion for the nine months ended September 30, 2022, mainly due to a decrease of $102 million in current year catastrophe losses, partially offset by an increase of $93 million in current year attritional losses, which is primarily related to ~~the 2023 New Zealand storms.~~a change in mix of business. The ~~$10~~$11 million of current year catastrophe losses for the ~~six~~nine months ended ~~June~~September 30, 2023, related to the 2023 Hawaii wildfire ($5 million), the 2023 3rd quarter U.S. storms ($5 million), and the 2023 New Zealand storms ($1 million). The $114 million of current year catastrophe losses for the nine months ended September 30, 2022, related to Hurricane Ian ($99 million), Hurricane Fiona ($5 million), the 2022 2nd ~~quarter~~March U.S. storms ($5 million) and the 2022 ~~March~~2nd quarter U.S. storms ($5 million).

Segment Expenses. Commission and brokerage expenses decreased by ~~9.3%~~11.1% to ~~$70~~$76 million for the three months ended ~~June~~September 30, 2023 compared to ~~$77~~$85 million for the three months ended ~~June~~September 30, 2022. Commission and brokerage expenses decreased by ~~0.6%~~4.5% to ~~$145~~$221 million for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$146~~$231 million for the ~~six~~nine months ended ~~June~~September 30, 2022. These decreases were mainly due to changes in the mix of business.

Segment other underwriting expenses increased to ~~$100~~$103 million for the three months ended ~~June~~September 30, 2023, compared to ~~$88~~$94 million for the three months ended ~~June~~September 30, 2022. Segment other underwriting expenses increased to ~~$200~~$303 million for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~$175~~$269 million for the ~~six~~nine months ended ~~June~~September 30, 2022. These increases were mainly due to the impact of the increase in premiums earned and increased expenses related to the continued build out of the insurance business.

LIQUIDITY AND CAPITAL RESOURCES

Capital. Stockholder’s equity at ~~June~~September 30, 2023 and December 31, 2022 was ~~$6.3~~$6.4 billion and $5.7 billion, respectively. Management’s objective in managing capital is to ensure its overall capital level, as well as the capital levels of its operating subsidiaries, exceed the amounts required by regulators, the amount needed to support our current financial strength ratings from rating agencies and our own economic capital models. The Company’s capital has historically exceeded these benchmark levels.

Our main operating company, Everest Re, is regulated by the State of Delaware’s Department of Insurance. The regulatory body has its own capital adequacy models based on statutory capital as opposed to GAAP basis equity. Failure to meet the required statutory capital levels could result in various regulatory restrictions.

The regulatory targeted capital and the actual statutory capital for Everest Re 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 represents 200% of the RBC authorized control level calculation for the applicable year.

Our financial strength ratings as determined by A.M. Best, Standard & Poor’s and Moody’s are important as they provide our customers and investors with an independent assessment of our financial strength using a rating scale that provides for relative comparisons. We continue to possess significant financial flexibility and access to debt and equity markets as a result of our financial strength, as evidenced by the financial strength ratings as assigned by independent rating agencies.

We maintain our own economic capital models to monitor and project our overall capital, as well as the capital at our operating subsidiaries. A key input to the economic models is projected income, and this input is continually compared to actual results, which may require a change in the capital strategy.

We may continue, from time to time, to seek to retire portions of our outstanding debt securities through cash repurchases, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be subject to and depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any such transactions, individually or in the aggregate, may be material.

Liquidity. Our liquidity requirements are generally met from positive cash flow from operations. Positive cash flow results from reinsurance and insurance premiums being collected prior to disbursements for claims, which disbursements

generally take place over an extended period after the collection of premiums, sometimes a period of many years. Collected premiums are generally invested, prior to their use in such disbursements, and investment income provides additional funding for loss payments. Our net cash flows from operating activities were ~~$914 million~~$1.8 billion and ~~$948 million~~$1.7 billion for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively.

If disbursements for losses and LAE, policy acquisition costs and other operating expenses were to exceed premium inflows, cash flow from reinsurance and insurance operations would be negative. The effect on cash flow from insurance operations would be partially offset by cash flow from investment income. Additionally, cash inflows from investment maturities of both short-term investments and longer-term maturities are available to supplement other operating cash flows. We do not expect to supplement negative insurance operations cash flows with investment dispositions.

As the timing of payments for losses and LAE cannot be predicted with certainty, we maintain portfolios of long-term invested assets with varying maturities, along with short-term investments that provide additional liquidity for payment of claims. At ~~June~~September 30, 2023 and December 31, 2022, we held cash and short-term investments of ~~$1.6~~$2.2 billion and $1.3 billion, respectively. Our short-term investments are generally readily marketable and can be converted to cash. In addition to these cash and short-term investments, at ~~June~~September 30, 2023, we had ~~$799~~$774 million of fixed maturity securities - available for sale maturing within one year or less, $3.4 billion maturing within one to five years and ~~$3.1~~$3.0 billion maturing after five years. We believe that these fixed maturity securities, in conjunction with the short-term investments and positive cash flow from operations, provide ample sources of liquidity for the expected payment of losses and LAE in the near future. We do not anticipate selling a significant amount of securities to pay losses and LAE. At ~~June~~September 30, 2023, we had ~~$882 million~~$1.0 billion of net pre-tax unrealized depreciation related to fixed maturity - available for sale securities, comprised of ~~$919 million~~$1.1 billion of pre-tax unrealized depreciation and ~~$37~~$29 million of pre-tax unrealized appreciation.

Management generally expects annual positive cash flow from operations, which reflects the strength of overall pricing. However, given the catastrophic events observed in recent periods, cash flow from operations may decline and could become negative in the near term as significant claim payments are made related to the catastrophes. However, as indicated above, the Company has ample liquidity to settle its catastrophe claims and/or any payments due for its catastrophe bond program.

Market Sensitive Instruments.

The Securities and Exchange Commission’s (“SEC”) Financial 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 sensitive 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 fixed 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 our capital structure and other factors, are used to develop a net liability analysis. 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.

Interest Rate Risk. Our ~~$21.1~~$21.8 billion investment portfolio at ~~June~~September 30, 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, interest rate risk includes prepayment risk on the ~~$2.2~~$2.3 billion of mortgage-backed securities in the ~~$15.0~~$15.2 billion fixed 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 fair value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including ~~$1.1~~$1.7 billion of short-term investments) for the period indicated based on upward and

downward parallel and immediate 100 and 200 basis point shifts in interest rates. For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price ~~estimate~~estimates 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 fair value change under the various interest rate change scenarios.


		Impact of Interest Rate Shift in Basis Points At June 30, 2023																Impact of Interest Rate Shift in Basis Points At September 30, 2023
		-200			-100			0			100			200				-200			-100			0			100			200
(Dollars in millions)	(Dollars in millions)																(Dollars in millions)
Total Fair Value	Total Fair Value	$	16,791		$	16,438		$	16,084		$	15,731		$	15,378		Total Fair Value	$	17,726		$	17,301		$	16,875		$	16,450		$	16,025
Fair Value Change from Base (%)	Fair Value Change from Base (%)	4.4		%	2.2		%	—		%	(2.2)		%	(4.4)		%	Fair Value Change from Base (%)	5.0		%	2.5		%	—		%	(2.5)		%	(5.0)		%
Change in Unrealized Appreciation	Change in Unrealized Appreciation																Change in Unrealized Appreciation
After-tax from Base ($)	After-tax from Base ($)	$	558		$	279		$	—		$	(279)		$	(558)		After-tax from Base ($)	$	672		$	336		$	—		$	(336)		$	(672)

We had ~~$15.5~~$15.7 billion and $15.0 billion of gross reserves for losses and LAE as of ~~June~~September 30, 2023 and December 31, 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, the present value 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 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 value and after-tax change in fair value of a 10% and 20% change in equity prices up and down for the periods indicated:


		Impact of Percentage Change in Equity Fair Values At June 30, 2023											Impact of Percentage Change in Equity Fair Values At September 30, 2023
(Dollars in millions)	(Dollars in millions)	-20%		-10%		0%		10%		20%		(Dollars in millions)	-20%		-10%		0%		10%		20%
Fair Value of the Equity Portfolio	Fair Value of the Equity Portfolio	$	134	$	150	$	167	$	184	$	201	Fair Value of the Equity Portfolio	$	63	$	71	$	79	$	87	$	95
After-tax Change in Fair Value	After-tax Change in Fair Value	(26)		(13)		—		13		26		After-tax Change in Fair Value	(12)		(6)		—		6		12

Foreign Currency Risk. Foreign currency risk is the potential change 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 currency of the country of its geographic location consistent with local regulatory guidelines. Each ~~foreign~~non-U.S. operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these ~~foreign~~non-U.S. 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,~~U.S. GAAP, the impact on the fair value 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-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to 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”, “will”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential” and “intend”. Forward-looking statements contained in this report include:

•the effects of catastrophic and pandemic events on our financial statements;

•estimates of our catastrophe exposure;

•information regarding our reserves for losses and LAE;

•our failure to accurately assess underwriting risk;

•decreases in pricing for property and casualty reinsurance and insurance;

•our ability to maintain our financial strength ratings;

•the failure of our insured, intermediaries and reinsurers to satisfy their obligations;

•our inability or failure to purchase reinsurance;

•consolidation of competitors, customers and insurance and reinsurance brokers;

•the effect on our business of the highly competitive nature of our industry, including the effect of new entrants to, competing products for and consolidation in the (re)insurance industry;

•our ability to retain our key executive officers and to attract or retain the executives and employees necessary to manage our business;

•the performance of our investment portfolio;

•our ability to determine any impairments taken on our investments;

•foreign currency exchange rate fluctuations;

•the effect of cybersecurity risks, including technology breaches or failure, on our business;

•the CARES Act;

•the impact of the Tax Cut and Jobs Act; and

•the adequacy of capital in relation to regulatory required capital.

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” in the Company’s most recent 10-K filing. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Instruments. See “Market Sensitive Instruments” in PART I – ITEM 2.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our 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 defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). 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 SEC’s rules 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 by 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.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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.

ITEM 1A. RISK FACTORS

No material changes.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS


Exhibit Index:

Exhibit No.						Description

31.1						Section 302 Certification of Juan C. Andrade

31.2						Section 302 Certification of Mark Kociancic

32.1						Section 906 Certification of Juan C. Andrade and Mark Kociancic

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

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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 Reinsurance Holdings, Inc.
			(Registrant)

			/S/ MARK KOCIANCIC
			Mark Kociancic
			Executive Vice President and
			Chief Financial Officer

			(Duly Authorized Officer and Principal Financial Officer)

Dated: ~~August 10,~~November 8, 2023

4446