Everest has walked away from more than $1 billion of casualty business

Everest held its Q2 2026 earnings call on July 30. Here are the key takeaways.

Everest has walked away from more than $1 billion of casualty business

Everest continues to shrink casualty where pricing, structure or expected returns do not meet its requirements. Management said the company has withdrawn from more than $1 billion of casualty business over the past several quarters.

“You’ve seen us withdraw from a number of casualty deals and a fair bit of business over $1 billion over the last few quarters as a result of that gross underwriting discipline.”

Casualty premium declined 19%

Treaty reinsurance premium declined approximately 9% on a comparable basis, including a 19% reduction in casualty. Management said the decline reflects deliberate underwriting decisions rather than a lack of available business.

Everest sees irresponsible underwriting

Management is concerned that growing competition is encouraging some market participants to accept inadequate prices or structures.

“We are not, however, declaring victory. I am seeing more signs of irresponsible underwriting in the market.”

Everest is reserving cautiously for US casualty

The company strengthened North American casualty reinsurance reserves by just under $200 million. Although the adverse emergence came from older accident years, Everest applied the adjustment across most years.

Current casualty loss assumptions remain unchanged

Everest did not increase its 2026 casualty loss picks during the quarter, saying they already contain sufficient prudence. Its annual long-tail reserve review will be completed during the third quarter.

Everest isn’t counting on tort reform

The company has not reduced its reserves or loss assumptions to reflect recent tort reforms. It is also not yet taking credit for underwriting improvements that have not appeared in reported results.

The property market fell faster than Everest’s book

Property catastrophe rates declined between 15% and 20% at the June and July renewals. Everest limited the reduction across its own portfolio to approximately 10%.

“While property pricing in the market was down in the range of 15% to 20% at both 6/1 and 7/1, pricing on our property cat portfolio between both renewal periods finished down approximately 10%.”

Everest moved higher in reinsurance towers

The company repositioned its participation toward layers further removed from expected losses. It also moved capacity toward better-priced clients and away from weaker programs.

Property catastrophe remains profitable

Despite falling rates, Everest believes current property-catastrophe pricing can still generate returns above its minimum requirements.

“My view of property cat rates at this point is they’re still in such a place that it allows us to get an expected return that’s above our threshold for continuing to write that business.”

The January renewals will remain competitive

Everest expects competition to continue through the January 2027 reinsurance renewals unless a major catastrophe or another external event removes capacity from the market.

“Looking ahead to the 1/1/27 renewals, we expect market conditions to remain competitive, absent large cat losses or other external shocks.”

Everest is targeting data centers and renewable energy

The company is expanding in specialty markets where it believes it has differentiated underwriting expertise and where risk-adjusted returns remain attractive.

“Our strategy of building deep underwriting capabilities in specific segments allows us to capture emerging opportunities like data centers as well as new markets within construction and renewable energy.”

Annapurna Re will take $200 million of premium per quarter

Everest expects to cede approximately $200 million of casualty and specialty premium each quarter to its new sidecar over the next three years. The transaction should reduce net casualty exposure and generate fee income.

“We expect to cede roughly $200 million of premium a quarter over the next three years to Annapurna Re.”

Third-party capital won’t change underwriting decisions

Everest said it will not write additional business simply because Annapurna provides more capacity. Every policy must first satisfy Everest’s own underwriting standards.

“We’re not going to stretch to go find more gross as a result of this transaction.”

Everest won’t send weaker risks to investors

Annapurna receives a predetermined quota-share portion of Everest’s business, meaning Everest and its third-party investors participate in the same portfolio.

“We’re not cherry-picking deals to go into the sidecar. These are quota-share structures that take a predefined sliver of everything we write.”

Mount Logan reached $3.4 billion in assets

Everest’s third-party capital platform had approximately $3.4 billion in assets under management as of July 1, an increase of 89% from the beginning of 2025.

“Our third-party capital platform, Mount Logan Capital Management, has approximately $3.4 billion of AUM as of July 1, up 89% from the beginning of 2025.”

Buybacks have reduced the share count by more than 10%

Everest has spent $1.5 billion repurchasing shares since Jim Williamson became CEO in January 2025. Management believes the company’s share price understates its earnings power and balance-sheet strength.

$300 million is the quarterly buyback floor

Everest repurchased $395 million of shares during the second quarter. Management expects quarterly repurchases to exceed $300 million when conditions support doing so.

More than $1 billion supports the legacy portfolio

Capital will become available as the legacy commercial retail insurance reserves run off. Everest said this capital could support additional buybacks or other shareholder returns.

“We’ve got over $1 billion of capital sitting behind legacy. That amount will free up over time as the reserves in legacy come down.”

The AIG transition is nearing completion

Everest has approximately $250 million of net premium remaining to be earned from the commercial retail insurance business transferred to AIG.

Everest is separating its future from its past

The company began reporting combined results for Treaty Reinsurance and Global Wholesale and Specialty as its core businesses. The legacy segment will become an immaterial earnings contributor as it runs off.

“These businesses represent the future of Everest.”

Middle East instability is creating specialty opportunities

The conflict contributed to catastrophe losses during the quarter, but it is also producing higher rates and new opportunities in political violence and marine insurance.

“We see that as an opportunity. We are obviously an active underwriter in the region.”