Q3 Net Income Slips to $233M as $268M Reserve Charge Pushes Combined Ratio to 105.8%
EG sits 28% above its 52-week low of $302.44.
Summary
Everest's Q3 net income fell to $233 million, or $6.12 per diluted share, from $255 million a year ago, while net operating income dropped to $290 million ($7.62 per share) from $316 million. The headline problem is reserves: $268 million of net unfavorable prior-year development added 8.5 points to the group combined ratio, and the Reinsurance Treaty segment took $253 million of that, including roughly $600 million of gross casualty strengthening on top of more than $200 million in Q2. Catastrophe losses also jumped to $322 million from $50 million, driven by the Colombia earthquake and Middle East events, pushing the Core combined ratio to 105.8% and group underwriting to a $223 million loss. Offsets: net investment income rose to $634 million from $540 million, book value per share ex-unrealized gains climbed to $414.00 from $379.70 at year-end, and they bought back $474 million of stock in the quarter. This follows the October 19 8-K recasting five quarters of segment data under refined NOI and underwriting definitions, so the reserve trend is the number to focus on. Q3 call is 8:00 a.m. ET October 29.
At the time of this announcement, EG was trading at $386.88 on NYSE in the Finance sector, with a market capitalization of approximately $14.8B. The 52-week trading range was $302.44 to $409.82. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: BusinessWire.