AM Best Comments on Credit Ratings of Everest Group, Ltd. and Its Subsidiaries Following Recent Earnings Release
AM Best has maintained its ratings for Everest Group [NYSE: EG] following the company's recent announcement of a $1.7 billion net reserve strengthening. The Financial Strength Rating remains at A+ (Superior) and the Long-Term Issuer Credit Ratings at 'aa-' (Superior) with a stable outlook.
The ratings reflect Everest's strongest balance sheet strength, adequate operating performance, very favorable business profile, and appropriate enterprise risk management. The reserve strengthening primarily relates to unfavorable loss trends in U.S. casualty business. AM Best's analysis indicates no material impact on risk-adjusted capitalization, though management's initiatives to improve underwriting may result in reduced premium volume.
AM Best notes that social inflation trends continue to drive adverse reserve development across the U.S. casualty (re)insurance market, with no clear signs of improvement in the near future. The agency will continue monitoring Everest's reserve adequacy and profitability.
AM Best ha mantenuto i suoi rating per Everest Group [NYSE: EG] in seguito all'annuncio recente della società di un rafforzamento delle riserve nette di 1,7 miliardi di dollari. Il rating di Solidità Finanziaria rimane a A+ (Superiore) e i Rating di Credito a Lungo Termine dell'Emittente a 'aa-' (Superiore) con un outlook stabile.
I rating riflettono la forza del bilancio di Everest, un'adeguata performance operativa, un profilo aziendale molto favorevole e una gestione appropriata del rischio d'impresa. Il rafforzamento delle riserve riguarda principalmente le tendenze di perdita sfavorevoli nel business delle responsabilità civilistiche negli Stati Uniti. L'analisi di AM Best indica nessun impatto materiale sulla capitalizzazione aggiustata per il rischio, anche se le iniziative della direzione per migliorare l'underwriting potrebbero comportare una riduzione del volume dei premi.
AM Best osserva che le tendenze di inflazione sociale continuano a guidare lo sviluppo negativo delle riserve nel mercato (ri)assicurativo delle responsabilità negli Stati Uniti, senza segni chiari di miglioramento nel prossimo futuro. L'agenzia continuerà a monitorare l'adeguatezza delle riserve e la redditività di Everest.
AM Best ha mantenido sus calificaciones para Everest Group [NYSE: EG] tras el reciente anuncio de la compañía de un refuerzo neto de reservas de 1.7 mil millones de dólares. La calificación de Solidez Financiera se mantiene en A+ (Superior) y las Calificaciones de Crédito del Emisor a Largo Plazo en 'aa-' (Superior) con una perspectiva estable.
Las calificaciones reflejan la fuerza del balance de Everest, un rendimiento operativo adecuado, un perfil comercial muy favorable y una gestión adecuada del riesgo empresarial. El refuerzo de reservas se relaciona principalmente con tendencias de pérdidas desfavorables en el negocio de responsabilidad civil en EE. UU. El análisis de AM Best indica que no hay un impacto material en la capitalización ajustada por riesgo, aunque las iniciativas de la dirección para mejorar la suscripción podrían resultar en una disminución del volumen de primas.
AM Best señala que las tendencias de inflación social continúan impulsando un desarrollo adverso de reservas en el mercado de (re)aseguramiento de responsabilidad en EE. UU., sin señales claras de mejora en un futuro cercano. La agencia continuará monitoreando la adecuación de reservas y la rentabilidad de Everest.
AM Best는 Everest Group [NYSE: EG]에 대한 등급을 유지했습니다. 이는 회사가 최근 발표한 17억 달러의 순 준비금 강화와 관련이 있습니다. 재무 건전성 등급은 A+ (우수)로 유지되고, 장기 발행자 신용 등급은 'aa-' (우수)로 안정적인 전망을 보이고 있습니다.
이 등급은 Everest의 강력한 재무 건전성, 적절한 운영 성과, 매우 유리한 비즈니스 프로필 및 적절한 기업 위험 관리 반영합니다. 준비금 강화는 주로 미국 손해보험 사업에서 불리한 손실 추세와 관련이 있습니다. AM Best의 분석에 따르면 위험 조정 자본에 대한 실질적 영향은 없지만, 인수 방식 개선을 위한 경영진의 노력으로 인해 보험료 규모가 감소할 수 있습니다.
AM Best는 사회적 인플레이션 추세가 미국 손해(재)보험 시장에서 불리한 준비금 개발을 이끌고 있으며, 가까운 미래에 개선의 뚜렷한 징후가 없음을 지적합니다. 이 기관은 Everest의 준비금 적절성과 수익성을 계속 모니터링할 것입니다.
AM Best a maintenu ses notations pour Everest Group [NYSE: EG] suite à l'annonce récente de la société concernant un renforcement net des réserves de 1,7 milliard de dollars. La note de Solidité Financière reste à A+ (Supérieur) et les Notes de Crédit à Long Terme de l'Émetteur à 'aa-' (Supérieur) avec une perspective stable.
Les notations reflètent la force du bilan d'Everest, une performance opérationnelle adéquate, un profil commercial très favorable et une gestion des risques d'entreprise appropriée. Le renforcement des réserves se rapporte principalement à des tendances de pertes défavorables dans le domaine de la responsabilité civile aux États-Unis. L'analyse d'AM Best indique qu'il n'y a pas d'impact matériel sur la capitalisation ajustée au risque, bien que les initiatives de la direction visant à améliorer l'underwriting puissent entraîner une réduction du volume des primes.
AM Best note que les tendances d'inflation sociale continuent de provoquer un développement négatif des réserves sur le marché de l'(re)assurance responsabilité aux États-Unis, sans signes clairs d'amélioration à court terme. L'agence continuera à surveiller l'adéquation des réserves et la rentabilité d'Everest.
AM Best hat die Ratings für Everest Group [NYSE: EG] beibehalten, nachdem das Unternehmen kürzlich die Ankündigung eines Netto-Reservenverstärkung von 1,7 Milliarden Dollar gemacht hat. Die Finanzstärke bleibt bei A+ (Überlegen) und die langfristigen Emittentenkreditratings bei 'aa-' (Überlegen) mit einem stabilen Ausblick.
Die Ratings spiegeln die starke Bilanz von Everest, die angemessene operative Leistung, das sehr günstige Geschäftsprofil und das angemessene Risikomanagement im Unternehmen wider. Die Stärkung der Reserven bezieht sich hauptsächlich auf ungünstige Verlusttrends im US-Haftpflichtgeschäft. Die Analyse von AM Best zeigt, dass es keinen wesentlichen Einfluss auf die risikoadjustierte Kapitalisierung gibt, obwohl die Initiativen des Managements zur Verbesserung der Zeichnungsrichtlinien möglicherweise zu einem Rückgang des Prämienvolumens führen könnten.
AM Best stellt fest, dass soziale Inflations-Trends weiterhin die ungünstige Reserveentwicklung im amerikanischen Haftpflicht-(Rück-)Versicherungsmarkt antreiben, ohne dass es in naher Zukunft klare Anzeichen für Verbesserungen gibt. Die Agentur wird die Angemessenheit der Reserven und die Rentabilität von Everest weiterhin überwachen.
- Maintained A+ (Superior) Financial Strength Rating
- Balance sheet strength assessed as 'strongest'
- No material impact on risk-adjusted capitalization despite reserve strengthening
- Very favorable business profile assessment maintained
- $1.7 billion net reserve strengthening required
- Unfavorable loss trends in U.S. casualty business
- Potential decline in premium volume due to underwriting initiatives
- Ongoing exposure to social inflation risks
Insights
The
The maintenance of Everest's A+ (Superior) rating by AM Best is particularly noteworthy, as it indicates that the company's capital position remains robust enough to absorb this substantial reserve increase. This resilience is attributed to Everest's "strongest" balance sheet strength assessment, which provides a important buffer for such adverse developments.
The reserve strengthening primarily affects the U.S. casualty business, reflecting broader industry-wide challenges with social inflation - a phenomenon where insurance claim costs rise above general economic inflation due to factors like increasing litigation costs and larger jury awards. This is not unique to Everest, as several major insurers have faced similar pressures.
Management's proactive response through implementing new underwriting and reserving initiatives signals a strategic pivot that could lead to reduced premium volume but improved profitability. This trade-off between growth and profitability demonstrates a prudent risk management approach that should benefit long-term stability.
However, investors should monitor several key aspects: 1) The effectiveness of the new underwriting initiatives in improving casualty business performance 2) Any signs of additional reserve strengthening needs in upcoming quarters 3) The impact of potentially reduced premium volume on market share and competitive positioning.
The broader industry implications suggest continued pressure on casualty insurers, with social inflation trends showing no signs of abating. This environment could lead to further market hardening and rate increases, potentially benefiting well-capitalized insurers like Everest in the medium term.
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
AM Best recognizes that social inflation trends, and to a lesser extent economic inflation, have driven adverse reserve development across the
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Dan Hofmeister, CFA, FRM, CAIA, CPCU
Associate Director
+1 908 882 1893
dan.hofmeister@ambest.com
Christopher Sharkey
Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com
Gregory Dickerson
Director
+1 908 882 1737
gregory.dickerson@ambest.com
Al Slavin
Senior Public Relations Specialist
+1 908 882 2318
al.slavin@ambest.com
Source: AM Best
FAQ
What is the impact of Everest Group's $1.7 billion reserve strengthening on its credit ratings?
Why did Everest Group (EG) need to strengthen its reserves in 2024?
How will Everest Group's underwriting initiatives affect its business in 2024?
What could trigger a review of Everest Group's (EG) credit ratings?
