AM Best has commented that the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa-” (Superior) of the operating subsidiaries of Everest Group, Ltd. (Bermuda) [NYSE: EG] (collectively referred to as Everest) remain unchanged following the recent earnings release and associated $1.7 billion of net reserve strengthening reported. Additionally, AM Best has commented that the Long-Term ICRs of “a-” (Excellent) of Everest Group, Ltd. and Everest Reinsurance Holdings, Inc. (Delaware), and the Long-Term Issue Credit Ratings (Long-Term IR) of Everest Reinsurance Holdings, Inc. remain unchanged as well. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect Everest’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, very favorable business profile and appropriate enterprise risk management for the group’s risk profile.

Everest reported total net reserve strengthening of $1.7 billion for year-end 2024, which primarily reflects unfavorable loss trends in its U.S. casualty business, including more recent accident years. AM Best has analyzed the impact of the reserve strengthening on risk-adjusted capitalization and does not expect a material impact. Furthermore, Everest’s operating performance trends remain in line with other companies assessed at the adequate level on a five-year basis, inclusive of the reserve strengthening actions. Management has already implemented initiatives to improve underwriting and reserving trends going forward, which could result in a decline in top line premium. However, AM Best does not anticipate that this will have a material impact on the current business profile assessment of Everest.

AM Best recognizes that social inflation trends, and to a lesser extent economic inflation, have driven adverse reserve development across the U.S. casualty (re)insurance market for the past several calendar years. That trend appears likely to continue for the foreseeable future, as there are no clear signs suggesting any dissipation of key factors that are currently promoting social inflation. AM Best will continue to monitor Everest’s reserve adequacy and overall profitability in the aftermath of this reserve strengthening and the ongoing underwriting actions taken to improve the performance of its casualty portfolio. If Everest is required to take additional, material reserve strengthening in the near to medium term, it could cause AM Best to revisit the potential impact to the company’s ratings.

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