By Michael Loney

April 30 - (The Insurer) - Everest Group has reported a 13.9 point deterioration in its combined ratio to 102.7% for the first quarter, including 13.9 points from $472 million of catastrophe losses.

Everest reported net operating income of $276 million for the quarter, down from $709 million in the same period of last year.

The operating income of $6.45 per diluted share missed the $7.59 consensus estimate of 14 analysts as per MarketWatch, and was down from $16.32 in Q1 2024.

Everest swung to a pre-tax underwriting loss of $104 million for the group compared with $409 million underwriting income in the prior-year period.

The underwriting loss was $96 million for reinsurance ($347 million income in Q1 2024), $5 million for insurance ($71 million income), and $3 million for other ($8 million loss).

The GAAP combined ratio of 102.7% was a 13.9 point deterioration from the 88.8% in the first quarter of 2024. This included 13.9 points of catastrophe losses in this year’s first quarter versus 2.3 points in the prior-year period.

The reinsurance combined ratio deteriorated 16.0 points to 103.3% from 87.3%, while the insurance combined ratio deteriorated 8.7 points to 100.5% from 91.9%.

Catastrophe losses contributed 18.0 points to the reinsurance and 1.1 points to the insurance combined ratios.

This year’s first quarter included $472 million of pre-tax catastrophe losses net of recoveries and reinstatement premiums – $461 million from reinsurance and $10 million from insurance – versus $85 million in Q1 2024.

The California wildfires accounted for $442 million of the quarter’s catastrophe losses in the reinsurance segment, net of estimated recoveries and reinstatement premiums. Reinstatement premiums were $62 million, while the prior year quarter was not impacted by reinstatement premiums.

The attritional combined ratios of 90.2% for the group compared with 88.8% in Q1 2024. This metric for reinsurance was 87.1% compared with 84.4% in the prior-year period and for insurance was 99.1% compared with 91.3%.

Washington, D.C. aviation losses, net of recoveries and reinstatement premiums, contributed 2.0 points to the group, 2.4 points to the reinsurance and 0.9 points to the insurance attritional loss ratios.

The group’s $4.39 billion in gross written premium was down 0.5% from the $4.41 billion in Q1 2024.

Reinsurance GWP was up 1.4% to $3.22 billion while insurance was down 1.3% to $1.15 billion.

Everest said that on a comparable basis (constant dollar basis and excluding reinstatement premiums) GWP was down 2.0% for the group, 1.1% for reinsurance and 0.1% for insurance.

The company said that strong double-digit growth in property and specialty lines across both segments was offset by reductions in certain casualty lines.

Jim Williamson, Everest president and CEO, said the Q1 results were affected by the highest level of Q1 industry cat losses in more than a decade but said Everest’s losses were within its expected range.

“We continue to see opportunities to deploy capital at excellent expected returns, as evidenced by our successful execution of the January and April first reinsurance renewals. In insurance, the execution of our U.S. casualty remediation remains on track to be completed later this year, while we still see significant opportunities in property and specialty lines,” he said.