EVEREST GROUP, LTD. - Quarter Report: 2024 March (Form 10-Q)

)          ) ))  )   )   ) )))  ) ))))          ) )          )       Asset-Backed
SecuritiesForeign
Corporate
Securities    Asset-Backed
SecuritiesForeign
Corporate
Securities     )

(Some amounts may not reconcile due to rounding.)

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 valuations. At December 31, 2023, $ billion of fixed maturities were fair valued using unobservable inputs.

Table of Contents

$ $ $ Obligations of U.S. States and political subdivisions Corporate securities Asset-backed securities Mortgage-backed securitiesCommercial Agency residential Non-agency residential Foreign government securities Foreign corporate securities Total fixed maturities - available for sale Equity securities, fair value )) ) ) ))) )))

(Some amounts may not reconcile due to rounding.)

Table of Contents

billion as of March 31, 2024. The Company also has additional uncommitted letter of credit facilities of up to $ million which may be accessible via written request and corresponding authorization from the applicable lender. There is no guarantee the uncommitted capacity will be available to us on a future date.

The terms and outstanding amounts for each facility are discussed below. See Note 10 for collateral posted related to secured letters of credit.

Bermuda Re Wells Fargo Bilateral Letter of Credit Facility

Effective February 23, 2021, Everest Reinsurance (Bermuda) Ltd. (“Bermuda Re”) entered into a letter of credit issuance facility with Wells Fargo, referred to as the “2021 Bermuda Re Wells Fargo Bilateral Letter of Credit Facility.” The Bermuda Re Wells Fargo Bilateral Letter of Credit Facility originally provided for the issuance of up to $ million of secured letters of credit. Effective May 5, 2021, the agreement was amended to provide for the issuance of up to $ million of secured letters of credit. Effective May 2, 2023, the agreement was amended to extend the availability of committed issuance for an additional year.

$ 12/31/2024$ $ 6/24/2024 6/28/2024 12/31/2024 $ $ $ $

(Some amounts may not reconcile due to rounding.)

Bermuda Re Citibank Letter of Credit Facility

Effective August 9, 2021, Bermuda Re entered into a letter of credit issuance facility with Citibank N.A., referred to as the “Bermuda Re Citibank Letter of Credit Facility”. The Bermuda Re Citibank Letter of Credit Facility provides for the committed issuance of up to $ million of secured letters of credit. In addition, the facility provided for the uncommitted issuance of up the $ million, which may be accessible via written request by the Company and corresponding authorization from Citibank N.A. Effective December 13, 2023, the agreement was amended to extend the availability of committed issuance for an additional .

Table of Contents

$ 12/31/2024$ $ 1/21/2024 1/21/2025 2/29/2024 2/28/2025 3/1/2024 3/1/2025 9/23/2024 3/15/2025 12/1/2024 3/16/2025 12/16/2024 8/15/2025 12/20/2024 9/23/2025 12/31/2024 12/1/2025 8/15/2025 12/16/2025 12/20/2025 12/31/2025 12/31/2024 12/31/2024 12/30/2027 12/30/2027 3/30/2028 $ $ $

(Some amounts may not reconcile due to rounding.)

Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility

Effective August 27, 2021, Bermuda Re entered into a letter of credit issuance facility with Bayerische Landesbank, an agreement referred to as the “Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility”. The Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility provides for the committed issuance of up to $ million of secured letters of credit.

$ 12/31/2024$ $ 12/31/2024

(Some amounts may not reconcile due to rounding.)

Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility

Effective December 30, 2022, Bermuda Re entered into a new additional letter of credit issuance facility with Bayerische Landesbank, New York Branch, referred to as the “Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility”. The Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility provides for the committed issuance of up to $ million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor.

$ 12/31/2024$ $ 12/31/2024

(Some amounts may not reconcile due to rounding.)

Bermuda Re Lloyd’s Bank Letter of Credit Facility

Effective December 27, 2023, Bermuda Re entered into an amended and restated letter of credit issuance facility with Lloyd’s Bank Corporate Markets PLC, to add Ireland Insurance as an account party with access to a $ million sub-limit for the issuance of letters of credit, an agreement referred to as the “Bermuda Re Lloyd’s Bank Letter of Credit Facility”,

Table of Contents

million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor. $ 12/31/2024$ $ 12/31/2024

(Some amounts may not reconcile due to rounding.)

Bermuda Re Barclays Bank Credit Facility

Effective November 3, 2021, Bermuda Re entered into a letter of credit issuance facility with Barclays Bank PLC, an agreement referred to as the “Bermuda Re Barclays Credit Facility”. The Bermuda Re Barclays Credit Facility provides for the committed issuance of up to $ million of secured letters of credit.

$ 12/30/2024$ $ 12/30/2024 12/31/2024Total Bermuda Re Barclays Bilateral Letter of Credit Facility$ $ $ $ $

10.

Table of Contents

%%%3.3 %

Table of Contents

Net Gains (Losses) on Investments.

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


(Dollars in millions)	2024		2023		Variance
Realized gains (losses) from dispositions:
Fixed maturity securities - available for sale
Gains	$	11	$	11	$	—
Losses	(18)		(9)		(9)
Total	(7)		2		(9)

Equity securities
Gains	1		7		(6)
Losses	—		—		—
Total	1		7		(6)

Other Invested Assets
Gains	—		—		—
Losses	—		—		—
Total	—		—		—

Total net realized gains (losses) from dispositions
Gains	12		18		(7)
Losses	(18)		(9)		(9)
Total	(6)		9		(16)

Allowance for credit losses	2		(8)		10

Gains (losses) from fair value adjustments
Equity securities	(2)		4		(7)
Total	(2)		4		(7)

Total net gains (losses) on investments	$	(7)	$	5	$	(12)

%92.3 %0.8

(NM not meaningful)

(Some amounts may not reconcile due to rounding.)

Premiums. Gross written premiums increased by 10.1% to $1.2 billion for the three months ended March 31, 2024 compared to $1.1 billion for the three months ended March 31, 2023. The increase in insurance premiums was primarily due to increases in property/short tail business, other specialty lines of business, and specialty casualty business. Net written premiums increased by 7.5% to $958 million for the three months ended March 31, 2024, compared to $891 million for the three months ended March 31, 2023. The lower percentage change in net written premiums compared to gross written premiums is due to lower net retention resulting from changes in the mix of business. Premiums earned increased by 5.6% to $923 million for the three months ended March 31, 2024, compared to $874 million for the three months ended March 31, 2023.

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


	Three Months Ended March 31,
(Dollars in millions)	Current Year		Ratio %/ Pt Change		Prior Years		Ratio %/ Pt Change		Total Incurred		Ratio %/ Pt Change
2024
Attritional	$	591	64.0	%	$	—	—	%	591		64.0	%
Catastrophes	5		0.5	%	—		—	%	5		0.5	%
Total Segment	$	596	64.5	%	$	—	—	%	$	596	64.5	%

2023
Attritional	$	563	64.4	%	$	—	—	%	563		64.4	%
Catastrophes	2		0.2	%	—		—	%	2		0.2	%
Total Segment	$	565	64.6	%	$	—	—	%	$	565	64.6	%

Variance 2024/2023
Attritional	$	27	(0.4)	pts	$	—	—	pts	$	27	(0.4)	pts
Catastrophes	3		0.3	pts	—		—	pts	3		0.3	pts
Total Segment	$	30	(0.1)	pts	$	—	—	pts	$	30	(0.1)	pts

(Some amounts may not reconcile due to rounding.)

Table of Contents

Incurred losses and LAE increased by 5.4% to $596 million for the three months ended March 31, 2024, compared to $565 million for the three months ended March 31, 2023. The increase was mainly due to an increase of $27 million in current year attritional losses and an increase of $3 million in current year catastrophe losses. The increase in current year attritional losses was primarily due to the impact of the increase in premiums earned and changes in mix of business. The $5 million of current year catastrophe losses for the three months ended March 31, 2024 related to the 2024 Baltimore bridge collapse. The $2 million of current year catastrophe losses for the three months ended March 31, 2023 related to the 2023 New Zealand storms.

Segment Expenses. Commission and brokerage increased by 5.3% to $111 million for the three months ended March 31, 2024 compared to $105 million for the three months ended March 31, 2023. Segment other underwriting expenses increased to $153 million for the three months ended March 31, 2024 compared to $137 million for the three months ended March 31, 2023. The 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, including an expansion of the international insurance platform.

FINANCIAL CONDITION

Investments. Total investments were $36.6 billion at March 31, 2024, an increase of $898 million compared to $35.7 billion at December 31, 2023. The rise in investments was primarily related to an increase in fixed maturities - available for sale due to an overall net purchase of $828 million of fixed maturities - available for sale during the three months ended March 31, 2024.

The Company’s limited partnership investments are comprised of limited partnerships that invest in private equity, private credit and private real estate. Generally, the limited partnerships are reported on a month or quarter lag. We receive annual audited financial statements for all the limited partnerships, which are prepared using fair value accounting in accordance with FASB guidance. For the quarterly reports, the Company reviews the financial reports for any unusual changes in carrying value. If the Company becomes aware of a significant decline in value during the lag reporting period, the loss will be recorded in the period in which the Company identifies the decline.

The table below summarizes the composition and characteristics of our investment portfolio for the periods indicated.


	At March 31, 2024	At December 31, 2023
Fixed income portfolio duration (years)	3.4	3.3
Fixed income composite credit quality	AA-	AA-

Reinsurance Recoverables.

Reinsurance recoverables for both paid and unpaid losses totaled $2.3 billion and $2.3 billion at March 31, 2024 and December 31, 2023, respectively. At March 31, 2024, $403 million, or 17.4%, was receivable from Mt. Logan Re collateralized segregated accounts; $248 million, or 10.7%, was receivable from Munich Reinsurance America, Inc. and $171 million, or 7.4% was receivable from Endurance Specialty Holdings, Ltd. No other retrocessionaire accounted for more than 5% of our recoverables.

Table of Contents

Loss and LAE Reserves. Gross loss and LAE reserves totaled $25.2 billion and $24.6 billion at March 31, 2024 and December 31, 2023, respectively.

The following tables summarize gross outstanding loss and LAE reserves by segment, classified by case reserves and IBNR reserves, for the periods indicated.


	At March 31, 2024
(Dollars in millions)	Case Reserves		IBNR Reserves		Total Reserves		% of Total
Reinsurance	$	6,347	$	11,547	$	17,894	71.0	%
Insurance	2,051		5,033		7,084		28.1	%
Total excluding A&E	8,398		16,580		24,978		99.1	%
A&E	153		80		233		0.9	%
Total including A&E	$	8,551	$	16,660	$	25,211	100.0	%

(Some amounts may not reconcile due to rounding.)


	At December 31, 2023
(Dollars in millions)	Case Reserves		IBNR Reserves		Total Reserves		% of Total
Reinsurance	$	6,355	$	11,051	$	17,406	70.7	%
Insurance	2,027		4,924		6,952		28.3	%
Total excluding A&E	8,383		15,975		24,357		99.0	%
A&E	159		88		246		1.0	%
Total including A&E	$	8,541	$	16,063	$	24,604	100.0	%

(Some amounts may not reconcile due to rounding.)

Changes in premiums earned and business mix, reserve re-estimations, catastrophe losses and changes in catastrophe loss reserves and claim settlement activity all impact loss and LAE reserves by segment and in total.

Our carried loss and LAE reserves represent management’s best estimate of our ultimate liability for unpaid claims. We continuously re-evaluate our reserves, including re-estimates of prior period reserves, taking into consideration all available information and, in particular, newly reported loss and claim experience. Changes in reserves resulting from such re-evaluations are reflected in incurred losses in the period when the re-evaluation is made. Our analytical methods and processes operate at multiple levels, including individual contracts, groupings of like contracts, classes and lines of business, internal business units, segments, accident years, legal entities, and in the aggregate. In order to set appropriate reserves, we make qualitative and quantitative analyses and judgments at these various levels. We utilize actuarial science, business expertise and management judgment in a manner intended to ensure the accuracy and consistency of our reserving practices. 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 this process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability. Nevertheless, our reserves are estimates and are subject to variation, which may be significant.

There can be no assurance that reserves for, and losses from, claim obligations will not increase in the future, possibly by a material amount. However, we believe that our existing reserves and reserving methodologies lessen the probability that any such increase would have a material adverse effect on our financial condition, results of operations or cash flows.

Table of Contents

Asbestos and Environmental Exposures. Asbestos and Environmental (“A&E”) exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The following table summarizes the outstanding loss reserves with respect to A&E reserves on both a gross and net of retrocessions basis for the periods indicated.


	At March 31,		At December 31,
(Dollars in millions)	2024		2023
Gross reserves	$	233	$	247
Ceded reserves	(13)		(15)
Net reserves	$	220	$	232

(Some amounts may not reconcile due to rounding.)

With respect to asbestos only, at March 31, 2024, we had net asbestos loss reserves of $200 million, or 90.9%, of total net A&E reserves, all of which was for assumed business.

Ultimate loss projections for A&E liabilities cannot be accomplished using standard actuarial techniques. We believe that our A&E reserves represent management’s best estimate of the ultimate liability; however, there can be no assurance that ultimate loss payments will not exceed such reserves, perhaps by a significant amount.

Industry analysts use the “survival ratio” to compare the A&E reserves among companies with such liabilities. The survival ratio is typically calculated by dividing a company’s current net reserves by the three-year average of annual paid losses. Hence, the survival ratio equals the number of years that it would take to exhaust the current reserves if future loss payments were to continue at historical levels. Using this measurement, our net three-year asbestos survival ratio was 6.4 years at March 31, 2024. These metrics can be skewed by individual large settlements occurring in the prior three years and therefore may not be indicative of the timing of future payments.

LIQUIDITY AND CAPITAL RESOURCES

Capital. Shareholders’ equity at March 31, 2024 and December 31, 2023 was $13.6 billion and $13.2 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 two main operating companies, Bermuda Re and Everest Re, are regulated by the Bermuda Monetary Authority and the State of Delaware’s Department of Insurance, respectively. Both regulatory bodies have their 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, including business activity and the payment of dividends to their parent companies.

The regulatory targeted capital and the actual statutory capital for Bermuda Re and Everest Re were as follows:


	Bermuda Re (1)				Everest Re (2)
	At December 31,				At December 31,
(Dollars in millions)	2023		2022		2023		2022
Regulatory targeted capital	$	2,669	$	2,217	$	4,242	$	3,353
Actual capital	$	3,711	$	2,759	$	6,963	$	5,553

(1)Regulatory targeted capital represents the target capital level from the applicable year's BSCR calculation.

(2)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.

Table of Contents

During the first quarter of 2024, we repurchased 0.1 million of our shares at a cost of $35 million in the open market. We paid $76 million in dividends to adjust our capital position and enhance long-term expected returns to our shareholders. In 2023, we repurchased no shares in the open market and paid $288 million in dividends. On May 22, 2020, our existing Board authorization to purchase up to 30 million of our shares was amended to authorize the purchase of up to 32 million shares. As of March 31, 2024, we had repurchased 30.9 million shares under this authorization.

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.

On May 19, 2023, the Company completed the public offering of 4,140,000 common shares, which includes full exercise of the underwriters’ option to purchase an additional 540,000 common shares, at a public offering price of $360.00 per share. Total net proceeds from the public offering were $1,445 million, after underwriting discount and expenses. The Company intends to use the net proceeds from this offering for long-term reinsurance opportunity and continuing build out of the global insurance business.

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 $1.1 billion and $1.1 billion for the three months ended March 31, 2024 and 2023, respectively. Additionally, these cash flows reflected net catastrophe loss payments of $229 million and $198 million for the three months ended March 31, 2024 and 2023, respectively, and net tax payments of $16 million and $2 million for the three months ended March 31, 2024 and 2023, 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 March 31, 2024 and December 31, 2023, we held cash and short-term investments of $3.9 billion and $3.6 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 March 31, 2024, we had $1.5 billion of available for sale fixed maturity securities maturing within one year or less, $6.9 billion maturing within one to five years and $8.4 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 March 31, 2024, we had $1.0 billion of net pre-tax unrealized depreciation related to fixed maturity - available for sale securities, comprised of $1.2 billion of pre-tax unrealized depreciation and $240 million of pre-tax unrealized appreciation.

Management generally expects annual positive cash flow from operations, which reflects the strength of overall pricing. However, given 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.

In addition to our cash flows from operations and liquid investments, we also have multiple active credit facilities that provide commitments of up to $1.7 billion of collateralized standby letters of credit to support business written by our Bermuda operating subsidiaries. In addition, the Company has the ability to request access to an additional $240 million of uncommitted credit facilities, which would require approval from the applicable lender. There is no guarantee the uncommitted capacity will be available to us on a future date. See Note 7 – Credit Facilities for further details.

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

Table of Contents

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, fixed maturity portfolio, while maintaining an adequate level of liquidity. Our mix of investments is adjusted periodically, consistent with our current and projected operating results and market conditions. The fixed maturity securities in the investment portfolio are comprised of available for sale and held to maturity 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 $38.1 billion investment portfolio at March 31, 2024 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 $6.3 billion of mortgage-backed securities in the $29.1 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 market value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including $2.4 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 estimates on mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with a non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the market value change under the various interest rate change scenarios.


	Impact of Interest Rate Shift in Basis Points At March 31, 2024
	-200			-100			0			100			200
(Dollars in millions)
Total Fair Value	$	33,746		$	32,640		$	31,533		$	30,427		$	29,320
Fair Value Change from Base (%)	7.0		%	3.5		%	—		%	(3.5)		%	(7.0)		%
Change in Unrealized Appreciation
After-tax from Base ($)	$	1,914		$	957		$	—		$	(957)		$	(1,914)

We had $25.2 billion and $24.6 billion of gross reserves for losses and LAE as of March 31, 2024 and December 31, 2023, 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 of approximately 3.9 years, which is reasonably consistent with our fixed income portfolio. If we were to discount our loss and LAE reserves, net of ceded reserves, the discount would be approximately $4.3 billion resulting in a discounted reserve balance of approximately $18.8 billion, representing approximately 59.6% of the value of the fixed maturity investment portfolio funds.

Table of Contents

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./Bermuda operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each 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 non-U.S. operations are the Canadian Dollar, the Singapore Dollar, the British Pound Sterling and the Euro. We mitigate foreign exchange exposure by generally matching the currency and duration of our assets to our corresponding operating liabilities. In accordance with FASB guidance, the impact on the 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Instruments. See “Liquidity and Capital Resources - 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 it files or submits under the Exchange Act is 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.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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.

ITEM 1A. RISK FACTORS

No material changes.

Table of Contents

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

Issuer Purchases of Equity Securities.


Issuer Purchases of Equity Securities
	(a)	(b)		(c)	(d)
Period	Total Number of Shares (or Units) Purchased (2)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
January 1 - 31, 2024	154	$	374.32	—	1,228,908
February 1 - 29, 2024	45,250	$	369.7883	—	1,228,908
March 1 - 31, 2024	101,438	$	387.5345	90,291	1,138,617
Total	146,842	$	—	90,291	1,138,617

(1)On May 22, 2020, the Company’s executive committee of the Board of Directors approved an amendment to the share repurchase program authorizing the Company and/or its subsidiary Holdings, to purchase up to a current aggregate of 32.0 million of the Company’s shares (recognizing that the number of shares authorized for repurchase has been reduced by those shares that have already been purchased) in open market transactions, privately negotiated transactions or both. Currently, the Company and/or its subsidiary Holdings have repurchased (0.1) million of the Company’s shares.

(2)Shares that have not been repurchased through a publicly announced plan or program consist of shares repurchased by the Company from employees in order to satisfy tax withholding obligations on vestings and/or settlements of share-based compensation awards.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the fiscal quarter ended March 31, 2024, none of our directors or officers (as defined in Exchange Act Rule 16a-1(f)) , modified or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Table of Contents

ITEM 6. EXHIBITS

Exhibit Index


Exhibit No.						Description
3.2						B ye-Laws of Everest Group , Ltd.

10.1*						Ame nd ment to Employment A greement between Everest G lobal Services, Inc., Everest Group , Ltd., Everest Reinsurance Holdings Inc. and Juan C. Andrade dated April 22, 2024

10.2*						Amended and R estated Employment A greement between Everest Global Services, Inc. and Mark Kociancic dated April 2 5, 202 4

10.3*						Amended and Restated Employment A greement between Everest G lobal Services, Inc . and J ames Williamson dated April 26, 2024

10.4*						Amended and Restated Employment A greement between Everest National Insurance Company and Mi chael Karmilowicz dated March 24, 2024

10.5*						Amended and Restated Employment A greement between Everest Global Services, Inc. and Ricardo Anzaldua dated April 22, 2024

10.6*						Everest Reinsurance Group, Ltd. Senior Executive Change of Control Plan, as amended and restated effective November 17, 2015

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)

_________________

*Management contract or compensatory plan or arrangement

Table of Contents

Everest Group, Ltd.

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 Group, Ltd.
			(Registrant)


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

			(Duly Authorized Officer and Principal Financial Officer)

Dated: May 3, 2024

EVEREST GROUP, LTD. - Quarter Report: 2024 March (Form 10-Q)

Similar companies