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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.22pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.22pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.22pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
losses+8
adversely+6
loss+5
adverse+4
litigation+3
Positive rising
desired+3
able+2
strength+2
favorable+2
satisfy+2
Risk Factors (Item 1A)
11,917 words
ITEM 1A. RISK FACTORS
Our business, results of operations and financial conditions are subject to numerous risks and uncertainties. While we seek to identify, manage and mitigate risks to our business, risk and uncertainty cannot be eliminated or necessarily predicted. In connection with any investment decision with respect to our securities, you should carefully consider the following risk factors, as well as the other information contained in this report and our other SEC filings. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. Should any of these risks materialize, actual results may differ materially from the disclosed information, the trading value of our securities could be negatively impacted and our business, financial condition and results of operations could be materially and adversely affected.
UNDERWRITING
Our results could be adversely affected by catastrophic events.
We are exposed to unpredictable events, including, but not limited to, weather-related and other natural , as well as acts of terrorism, wars, pandemics, political and significant cyber or operational .
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+20
losses+16
adverse+11
unfavorable+6
claims+3
Positive rising
gain+4
beautiful+3
gains+1
favorable+1
effective+1
MD&A (Item 7)
17,875 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Overview.
Everest is a global underwriting leader providing best-in-class property, casualty and specialty reinsurance and insurance solutions. As part of the Standard & Poor’s (“S&P”) 500 Index, we are a leading financial services institution focused on value creation for our shareholders while diversifying our portfolio and geographic presence. Through our direct and indirect subsidiaries operating in the U.S. and internationally, we serve a diverse group of clients worldwide, providing what we believe are extensive product and distribution capabilities, a strong balance sheet, an innovative culture and access to world-class talent.
During 2024, we formed a new “Other” segment, primarily comprised of the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off asbestos and environmental (“A&E”) exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related . These segment presentation changes have been reflected retrospectively. As of December 31, 2025, the Company has two reportable segments consistent with how the business is managed. See Note 7 of the Notes to the Consolidated Financial Statements for a summary of segment results.
The frequency and/or severity of some catastrophic events may be impacted in the future by the continued effects of climate change. Secondary perils, such as severe convective storms, may also become increasingly impactful. Climate change and resulting changes in global temperatures, weather patterns and sea levels may both increase the frequency and severity of natural catastrophes and the resulting losses in the future and impact our risk modeling assumptions. We cannot predict the impact that changing climate conditions, if any, may have on our results, operations or our financial condition. Additionally, we cannot predict how legal, regulatory and/or social responses to concerns around global climate change and the resulting impact on various sectors of the economy may impact our business. Any material reduction in our operating results caused by the occurrence of one or more catastrophes could inhibit our ability to pay dividends or to meet our interest and principal payment obligations. By way of illustration, during the past five calendar years, pre-tax catastrophelosses, net of reinsurance, were as follows:
Calendar year:
Pre-tax net catastrophelosses
(Dollars in millions)
Our losses from future catastrophic events could exceed our projections.
We use projections of possible losses from future catastrophic events of varying types and magnitudes as a strategic underwriting tool. We use these loss projections to estimate our potential catastrophelosses in certain geographic areas and decide on the placement of retrocessional coverage or other actions to limit the extent of potential losses in a given geographic area. These loss projections are estimates, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount.
Unfavorableloss development may adversely affect our business, financial condition, results of operations or liquidity.
We are required to maintain reserves to cover our ultimate liability of losses and LAE for both reported and unreportedclaims. These reserves are only estimates of what we believe the ultimate settlement and administration of claims will cost based on facts and circumstances known to us and incorporates actuarial and statistical analysis. Loss reserve estimates are reconsidered, as necessary, as experience develops and to reflect other changes in circumstances that may affect our estimate of ultimate loss, and this could potentially result in increases to our reserves. In setting reserves for our reinsurance liabilities, we rely on claims data supplied by our ceding companies and brokers, along with other data that may affect our estimate of ultimate loss and actuarial and statistical analysis to arrive at an estimate of ultimate liability for losses and LAE. The information received from our ceding companies is not always timely or accurate, which can contribute to inaccuracies in our loss projections. For the insurance and reinsurance businesses, ultimate losses may differ materially from our expectations at the time we underwrite the business. Because of the uncertainties that
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surround our estimates of loss and LAE reserves, we cannot be certain that ultimate losses and LAE payments will not exceed the estimates we make at any given time. For example, for the year ended, December 31, 2025, the Company increased its loss reserves by $657 million, pre-tax and net of reinsurance, primarily driven by net unfavorable development on prior year reserves from elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024. Loss experience in these lines of business is very unpredictable and has been exacerbated by social inflation factors such as uncertain legal system outcomes, increased frequency of high-severityclaims and third-party litigation funding. If our reserves are deficient in future periods, we may be required to increase loss reserves in the period in which such deficiencies are identified which would cause a charge to our earnings, a reduction of capital and could result in adverse effects on our business, financial condition, results of operation or liquidity.
During the past five calendar years, the reserve process resulted in a decrease to our pre-tax net income in 2025 and 2024 and resulted in an increase to our pre-tax net income in 2023, 2022 and 2021:
Calendar year:
Effect on pre-tax net income
(Dollars in millions)
decrease
decrease
increase
increase
increase
The difficulty in estimating our reserves is significantly more challenging as it relates to reserving for potential asbestos and environmental (“A&E”) liabilities. As of December 31, 2025, 0.6% of our gross reserves were comprised of A&E reserves. A&E liabilities are especially hard to estimate for many reasons, including the long delays between exposure and manifestation of any bodily injury or property damage, difficulty in identifying the source of the asbestos or environmental contamination, long reporting delays and difficulty in properly allocating liability for the asbestos or environmental damage. Legal tactics and judicial and legislative developments affecting the scope of insurers’ liability, which can be difficult to predict, also contribute to uncertainties in estimating reserves for A&E liabilities. In addition, since reserve estimates of aggregate loss costs for prior years are sometimes factored into pricing our insurance products, inaccurate reserves can lead to our products not being priced adequately to cover actual losses and related loss expenses in order to generate a profit.
If we are unable to or choose not to purchase reinsurance and transfer risk to the reinsurance markets, our net income could be reduced or we could incur a net loss in the event of unusual loss experience.
We purchase prospective reinsurance for our insurance and reinsurance operations in order to mitigate the volatility of losses on our financial results. From time to time, market conditions have limited, and in some cases have prevented, insurers and reinsurers from obtaining the types and amounts of reinsurance that they consider adequate for their business needs. There is no guarantee that our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future. In the current environment, our ability to renew our current reinsurance or retrocessional reinsurance arrangements or obtain desired amounts of new or replacement coverage on favorable terms may be substantially reduced as a result of the impact of inflation, industry catastrophiclosses to reinsurer capital and the appetite for certain lines of business. In addition to capacity risk, the remaining capacity may not be on terms we deem appropriate or acceptable or with companies with whom we want to do business.
The percentage of business that we reinsure may vary considerably from year to year, depending on our view of the relationship between cost and expected benefit for the contract period.
Percentage of ceded written premiums to gross written premiums
If we are unable to or choose not to renew our current reinsurance or retrocessional reinsurance or purchase new or replacement coverage on favorable terms or at all, the amount of business we are willing to write may be limited or our protection from losses due to large loss events may be materially reduced and our net income could be materially reduced.
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The failure to accurately assess underwriting risk and establish adequate premium rates could reduce our net income or result in a net loss.
Our success depends on our ability to accurately assess the risks associated with the businesses on which the risk is retained. If we fail to accurately assess the risks we retain, we may fail to establish adequate premium rates or contract terms (i.e. limits, deductibles, etc.) to cover our losses and LAE. In future years, insufficient premium rates may result in reserve deficiencies to the extent that higher than expected losses are incurred. This could reduce our net income and even result in a net loss.
Losses may arise from events or exposures that are not anticipated when the coverage is priced. In addition to such unanticipated events, we also face the unanticipated expansion of our exposures, particularly in long-tail liability lines. An example of this is the expansion over time of the scope of insurers’ legal liability within the mass tort cases, particularly for A&E exposures discussed above.
Decreases in pricing for property and casualty reinsurance and insurance could reduce our net income.
The worldwide reinsurance and insurance businesses are highly competitive, as well as cyclical by product and market. These cycles, as well as other factors that influence aggregate supply and demand for property and casualty insurance and reinsurance products, are outside of our control. The supply of (re)insurance is driven by prevailing prices and levels of capacity that may fluctuate in response to a number of factors, including large catastrophiclosses and investment returns being realized in the insurance industry. Demand for (re)insurance is influenced by underwriting results of insurers and insureds, including catastrophelosses, and prevailing general economic conditions. If any of these factors were to result in a decline in the demand for (re)insurance or an overall increase in (re)insurance capacity, our net income could decrease.
Moreover, certain states have enacted laws that require a property and casualty insurer to participate in assigned risk plans, reinsurance facilities, joint underwriting associations and other residual market plans. U.S. state regulators also require that admitted insurers offer property and casualty coverage to all risks in that market and often restrict an insurer’s ability to charge the price it might otherwise charge or restrict an insurer’s ability to offer or enforce specific policy deductibles. In these markets, we may be compelled to underwrite business at lower than desired rates or accept additional risk not contemplated in our existing rates, participate in the operating losses of residual market plans or pay assessments to fund operating deficits of state-sponsored funds, which could lead to lower than anticipated profitability.
The effects of emerging claim and coverage issues on our business are uncertain.
As industry practices and legislative, regulatory, judicial, social, financial, technological and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the frequency and severity of claims. Examples of emerging claims and coverage issues include, but are not limited to:
• judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of liability;
• plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices;
• social inflation trends, including higher and more frequent claims, higher awards in favor of plaintiffs and increases in the value of claims due to third-party litigation funding;
• medical developments that link health issues to particular causes, resulting in liability claims;
• claims relating to unanticipated consequences of current or new technologies, including cyber security-related risks; and
• claims relating to potentially changing climate conditions.
In some instances, these emerging issues may not become apparent for some time after we have issued the affected insurance policies. As a result, the full extent of liability under our insurance or reinsurance contracts may not be known for many years after issuance.
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FINANCIAL
A decline in our financial strength ratings could adversely affect our standing among cedents and broker partners and our ability to grow premiums and earnings.
Our active insurance company subsidiaries currently hold financial strength ratings assigned by third-party rating agencies which assess and rate the claims paying ability and financial strength of insurers and reinsurers. Financial strength ratings are used by cedents, agents and brokers to assess the financial strength and credit quality of reinsurers and insurers. As noted above, each of A.M. Best, S&P and Moody’s has assigned a negative outlook to our financial strength ratings. A downgrade or withdrawal of any of these ratings could adversely affect our ability to market our reinsurance and insurance products, our ability to compete with other reinsurers and insurers and our ability to write new business, which in turn could impact our profitability and results.
Consistent with market practice, much of our treaty reinsurance business allows the ceding company to terminate the contract or seek collateralization of our obligations in the event of a rating downgrade below a certain threshold. The termination provision would generally be triggered if a financial strength rating fell below A.M. Best’s or S&P A- rating level. To a lesser extent, Everest Re also has modest exposure to reinsurance contracts that contain provisions for obligatory funding of outstanding liabilities in the event of a rating agency downgrade. Those provisions would also generally be triggered if Everest Re’s rating fell below A.M. Best’s or S&P A- rating level.
See also ITEM 1, “Financial Strength Ratings”.
A decline in our debt ratings could increase our borrowing costs and adversely affect our ability to access capital markets at attractive rates.
If our debt ratings are downgraded, we could incur higher borrowing costs, higher cost of capital, increased collateral requirements and our ability to access the capital markets at attractive rates could be impacted. We are unable to provide assurances as to whether or not our ratings may be downgraded by any of the rating agencies in the future.
See also ITEM 1, “Debt Ratings”.
The failure of our insureds, intermediaries and reinsurers to satisfy their obligations to us could reduce our income.
In accordance with industry practice, we have uncollateralized receivables from insureds, agents and brokers and/or rely on agents and brokers to process our payments. We may not be able to collect amounts due from insureds, agents and brokers, resulting in a reduction to net income. We are subject to credit risk of reinsurers in connection with retrocessional arrangements because the transfer of risk to a reinsurer does not relieve us of our liability to the insured. In addition, reinsurers may be unwilling to pay us even though they are able to do so. The failure of one or more of our reinsurers, including but not limited to the counterparties to the adverse development cover reinsurance agreements, to honor their obligations to us in a timely fashion would impact our cash flow and reduce our net income and could cause us to incur a significant loss.
The value of our overall investment income could decline due to changed conditions in the financial markets and prevailing general economic conditions.
A significant portion of our investment portfolio consists of fixed income securities and smaller portions consist of equity securities and other investments, such as limited partnerships and other alternative investments. The fair value of our invested assets and associated investment income may fluctuate depending on various factors including, but not limited to the effects of economic events and conditions; governmental policies; changes in interest rates, currency exchange rates, inflation and credit spreads; credit ratings; loss frequency and severity; and market volatility. In addition, rapid or unprecedented changes in credit and equity market conditions could materially impact the valuation of securities. The volatility of our losses may force us to liquidate securities, which may cause us to incur capital losses. Realized and unrealized losses in our investment portfolio and changes in our estimates of current expected credit loss allowance can affect our financial condition, results of operations or liquidity and our ability to conduct business.
Interest Rate Risk.
Most of our fixed income securities are classified as available for sale, and temporary changes in the fair value of these investments due to interest rate fluctuations are reflected as changes to our shareholders’ equity. Additionally, net
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investment income from fixed income investments that carry prepayment risk, such as mortgage-backed and other asset-backed securities, can differ from the income anticipated from those securities at the time of purchase.
Credit Risk.
Our investment portfolio is subject to the risk of loss due to default or deterioration in the credit quality, financial condition or future recovery prospects of the underlying issuers of our fixed income securities. As a part of our ongoing analysis of our investment portfolio, we are required to assess and estimate current expected credit losses for all held-to-maturity securities and evaluate expected credit losses for available-for-sale securities when fair value is below amortized cost, which considers reasonable and supportable forecasts of future economic conditions and estimated future cash flows in addition to information about past events and current conditions. If the issuers or other obligors of individual investments are unable to meet their obligations, investment income will be reduced and realized capital losses may arise.
We have exposure to counterparties through a variety of commercial transactions and arrangements, including reinsurance transactions and agreements with banks, hedge funds, private funds and other investment vehicles that expose us to credit risk in the event a counterparty or an underlying issuer or borrower fails to perform its obligations.
Equity Risk.
We have invested a portion of our investment portfolio in equity securities. The value of these assets fluctuates with changes in the markets. In times of economic weakness, the fair value of these assets may decline. We also invest in non-traditional investments which have different risk characteristics than traditional fixed income and equity securities. These alternative investments are comprised primarily of private equity limited partnerships.
The failure to maintain access to enough cash, readily salable or unencumbered financial assets to meet near-term financial obligations may adversely impact business relations and creditworthiness.
Liquidity risk is a manifestation of events that are driven by other risk types (insurance, investment, operational). A liquidity shortfall may arise in the event of insufficient access to internal and external funding sources to meet an immediate and significant need for cash or collateral. Additionally, a rapid increase in interest rates can create a short-term pressure on regulatory capital models.
The Company's liquidity could be affected by a broad market illiquidity event, default by significant market participant, inability to sell assets, inability to access bank accounts, inability to access capital and credit markets, concentration of catastrophe events or unforeseen capital needs. A failure to have sufficient cashflow to meet obligations may adversely affect business relations and the creditworthiness of the Company.
We may require additional capital or financing sources in the future, which may not be available or may be available only on unfavorable terms.
Our future capital requirements depend on many factors, including rating agency and new regulatory requirements, the performance of our investment portfolio, our ability to write business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and loss reserves at levels sufficient to cover losses. We may need to raise additional funds through debt or equity financings or access funds through existing or new credit facilities or through short-term repurchase agreements. We may also from time to time seek to refinance debt as amounts become due or commitments expire. Any equity or debt financing or refinancing, if available at all, may be on terms that are not favorable to us. In the case of equity financings, dilution to our shareholders could result, and in any case, such securities may have rights, preferences and privileges that are senior to those of our common shares. Our access to funds under existing credit facilities is dependent on the ability of the banks that are party to the facilities to meet their funding commitments.
Because of our holding company structure, our ability to pay dividends, interest and principal is dependent on receiving dividends, loan payments and other funds from our subsidiaries.
Each of Group and Holdings is a holding company whose most significant asset is the stock of its operating subsidiaries. As a result, each of Group’s and Holdings’ ability to pay dividends, interest or other payments on its securities in the future will depend on the earnings and cash flows of its respective operating subsidiaries and the ability of the subsidiaries to pay dividends or to advance or repay funds to it. This ability is subject to general economic, financial, competitive, regulatory and other factors beyond our control. Payment of dividends and advances and repayments from
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some of the operating subsidiaries are regulated by U.S. states and foreign insurance laws and regulatory restrictions, including minimum solvency and liquidity thresholds. Accordingly, the operating subsidiaries may not be able to pay dividends or advance or repay funds to Group and Holdings in the future, which could prevent us from paying dividends or interest or making other payments on our securities.
We may experience foreign currency exchange losses that reduce our net income and capital levels.
We conduct business in a variety of non-U.S. currencies, principally the Euro, the British pound and the Canadian dollar. Assets, liabilities, revenues and expenses denominated in foreign currencies are exposed to changes in currency exchange rates. Our reporting currency is the U.S. dollar, and exchange rate fluctuations, especially relative to the U.S. dollar, may materially impact our results and financial position. In 2025, we wrote approximately 31.7% of our coverages in non-U.S. currencies; as of December 31, 2025, we maintained approximately 26.9% of our investment portfolio in investments denominated in non-U.S. currencies.
Our business is sensitive to unanticipated levels of inflation.
While consideration is given to the levels of inflation and how that may impact premiums and claims, the impacts of inflation may be different than anticipated. Premiums are established before actual losses are known, which may result in some underpricing if inflation rises more rapidly than expected, ultimately creating a deficiency that may impact our financial position. Higher inflation could lead to higher interest rates, which would negatively impact the value of our existing fixed income or other investments.
Measures taken by domestic or foreign governments could have effects on our business.
The potential political, economic, military and social risks that can emerge from a nation's involvement in international affairs can manifest into elevated geopolitical risk. For financial institutions, there are direct and indirect effects that can result from these events, including effects to the growth of business, return in foreign investments, claims patterns and local operations.
Global economic conditions could adversely affect our business, results of operations or financial condition.
The global economic environment continues to be impacted by fiscal or monetary policies; uncertainty concerning the future path of interest rates; the effect of social, economic and political conditions and geopolitical events, supply chain disruptions; the implementation of tariffs and other protectionist trade policies; and the possibility of a recession, government shutdowns, debt ceilings and funding. Ongoing global economic uncertainties and evolving market conditions may affect our results of operations, financial condition and capital resources.
OPERATIONAL
We are dependent on our key personnel.
In 2025, the Company had various promotions and new executive leadership appointments. Our success has been, and will continue to be, dependent on our ability to retain the services of our existing key executives and other key employees, and to attract and retain additional qualified personnel in the future. The loss of the services of any key executive officer, the failure to successfully effectuate a permanent leadership transition or the inability to hire and retain other highly qualified personnel in the future could adversely affect our ability to conduct business. Changes to or turnover among senior management or key executives could also disrupt the Company’s strategic focus, operational capabilities and may impede our ability to act quickly and efficiently in executing our business strategy. Additionally, the emergence of new technologies, including artificial intelligence (“AI”), requiring in new skill sets and changes in local employment legislation, taxation and the approach of regulatory bodies to compensation practices within our operating jurisdictions may result in difficulty in attracting, developing and retaining key personnel. Special considerations apply to our Bermuda operations. Under Bermuda law, non-Bermudians, other than spouses of Bermudians and individuals holding permanent or working resident certificates, are not permitted to engage in any gainful occupation in Bermuda without a work permit issued by the Bermuda government. Currently, all of our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda government that expire at various times between June 2027 and March 2030.
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We rely on our processes, people and systems to maintain our operations and manage the operational risks inherent to our business. Any errors, omissions or misconduct by our employees or third-party agents in the execution of these processes could adversely affect our business, results of operations and financial condition.
We seek to monitor and control our exposure to risks arising from these processes through an enterprise risk management framework, internal controls, management review and other processes. Our processes, people and systems may not effectively identify or control all risks, and our employees and third-party agents may not effectively execute them. Losses may result from, among other things, actual or allegedfraud; errors; employee misconduct or failure to document transactions properly, obtain proper internal authorization, comply with underwriting or other internal guidelines or comply with regulatory requirements. Resulting losses could adversely affect our business, results of operations and financial condition.
We are subject to cybersecuri ty risks that could negatively impact our business operations.
Cybersecurity threats and incidents have increased in recent years, heightening related risks. AI technologies are quickly evolving and being adopted, which may also increase or intensify potential cybersecurity risks. We are dependent upon our information technology platform, including our processing systems, data and electronic transmissions in our business operations. Security breaches and other cyber threats, including those at third parties that have our information, could expose us to the loss or misuse of our technology systems or information, litigation and potential liability. In addition, cyber incidents that impact the confidentiality, integrity, availability, authenticity or other proper functioning of these systems could have a significant negative impact on our operations and possibly our financial results. An incident could also result in a violation of applicable privacy and other laws, damage our reputation, cause a loss of customers, result in regulatory action or give rise to monetary fines and other penalties, which could be significant, and ultimately have a material adverse effect on our business or operations. We may be unable to anticipate cybersecurity threats, react in a timely manner and may be required to devote substantial additional resources to modify or enhance our information security systems, networks and cybersecurity program and to defray the costs of complying with new or developing regulatory requirements. While we are not aware of a cybersecurity incident that materially affected the Company, including its business strategy, results of operations or financial condition, a future cybersecurity incident could have a material impact on us.
Exposure to cybersecurity risk is increasing systematically due to greater digital dependence, emerging technologies such as AI and increased possible losses due to a catastrophic cybersecurity event. Cybersecurity incidents are not bound by time or geographic limitations. Related perils do not have well-established definitions and fundamental physical properties and may be engineered specifically to evade established loss mitigation controls. Any losses incurred from these risks are also dependent on our clients’ and our third-party service providers' cybersecurity practices and defenses, as well as how contract terms and conditions interact with the evolving threat landscape which is out of our control. Some of our service providers may store or have access to our data and may not have effective controls, processes or practices to protect our information. A vulnerability in our service providers’ software or systems or failure of safeguards, policies or procedures, could result in a cyberattack or other incident which could harm our business.
See Item 1C, “Cybersecurity” for additional information.
We are dependent on brokers and agents for business developments.
We rely on brokers and agents. Our relationship with this distribution network is based on quality of underwriting, claim services, financial strength and other factors, which could weaken. Deterioration in relationships with our broker and agent distribution network or their increased promotion and distribution of our competitors’ products could adversely affect our ability to sell our products. Loss of all or a substantial portion of the business provided by one or more of these brokers or agents could have an adverse effect on our business.
Analytical models used in decision making and estimates, assumptions and valuations in these models could vary materially from actual results, which could have an adverse impact on the financial condition, results of operations and cash flows of the Company.
As a financial services company, we are exposed to model risk. We utilize financial models to derive metrics and drive analysis to assist in decision making across key areas, such as pricing, underwriting, reserving, investment management, ceding business, capital allocation and risk management. These models incorporate numerous assumptions and forecasts about the future level of financial metrics, including interest rates, inflation, credit spreads and equity markets. These models may not operate properly, may contain incorrect information and errors and may rely on assumptions and projections that are inherently uncertain which could lead to material variations from actual results.
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Our operations are subject to business continuation and resiliency risk.
Across our global business centers, there is risk that our operations, systems or data, or those of third parties on whom we rely, may be disrupted. We may experience a disruption in business continuity as a result of pandemic and public health crises, geopolitical risks including armed conflict and civil unrest, terrorist events, natural disasters, cyber or other information technology related-incidents affecting technology services, supply-chain disruptions, as well as governmental, business and societal responses to such events, such as restrictions on public gatherings, sanctions, trade restrictions and increased unemployment. All such events may ultimately result in workforce unavailability among other operational impacts.
STRATEGIC
Our industry is highly competitive and rapidly evolving, and we may not be able to compete successfully in the future.
Our industry is highly competitive and subject to pricing cycles that can be pronounced. We compete globally in the United States, Bermuda and international reinsurance and insurance markets with numerous competitors. Our competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies and domestic and international underwriting operations, including underwriting syndicates at Lloyd’s of London.
According to S&P, Everest ranks among the top ten global property and casualty reinsurance groups. The worldwide net premium written by the Top 40 global reinsurance groups for both life and non-life business was estimated to be $347 billion in 2024 according to data compiled by S&P. In addition to existing competitors, the entry of alternative capital market products and new company formations, such as Insurtech companies, provide additional sources of reinsurance and insurance capacity, which could reduce our market share and adversely affect our business, results of operations and financial condition.
Recent technological advancements in the insurance industry and information technology industry including in underwriting, claims, distribution and operations present new and fast-evolving competitive risks as participants seek to increase the speed of transactions, lower costs and create new opportunities. We will be at a competitive disadvantage if, over time, our competitors are more effective than us in their utilization of technology and evolving data analytics. If we do not anticipate or keep pace with these technological and other changes impacting the insurance industry, it could adversely affect our business results of operations and financial condition.
Business or asset acquisitions and dispositions may expose us to certain risks.
The completion of any business or asset acquisition or sale is subject to certain risks, including those relating to the receipt of required regulatory approvals, the terms and conditions of regulatory approvals including any financial accommodations required by regulators, our ability to satisfy such terms, conditions and accommodations, the occurrence of any event, change or other circumstances that could give rise to the termination of a transaction and the risk that parties may not be willing or able to satisfy the conditions to a transaction. As a result, there can be no assurance that any business or asset acquisition or sale will be completed as contemplated, or at all, or regarding the expected timing of the completion of the acquisition or disposition. Additionally, acquisitions and divestitures may not produce the anticipated benefits and may result in unintended consequences, which could have a material adverse impact on our financial condition and results of operations. We may not be able to achieve expected synergies as a result of acquisitions or divestitures. In the case of business or asset dispositions, we may have continued financial exposure to the divested businesses through reinsurance, indemnification or other financial arrangements following the transaction. The expected benefits of acquired or divested businesses may not be realized and involve additional uncertainties, continuing costs and risks that may negatively impact our business, financial condition, results of operations or liquidity.
For example, in October 2025, the Company entered into definitive agreements to sell the renewal rights for certain lines of the commercial retail insurance business in the U.S., U.K., E.U. and Asia Pacific to AIG There can be no assurance that we will realize the anticipated economic, strategic or other benefits of the transaction. We may also incur other related costs and our existing businesses could also be negatively impacted.
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SHAREHOLDERS, LEGAL & REGULATION
Applicable insurance laws may have an anti-takeover effect.
Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance commissioner of the state where that insurance company is domiciled or deemed commercially domiciled. Prior to granting approval of an application to acquire control of a domestic insurance company, a state insurance commissioner will consider such factors as the financial strength of the applicant, the integrity and competence of the applicant’s board of directors and executive officers, the acquiror’s plans for the future operations of the insurance company and any anti-competitive results that may arise from the consummation of the acquisition of control. Because any person who acquired control of Group would thereby acquire indirect control of its insurance company subsidiaries in the United States, the insurance change of control laws of Delaware and California would apply to such a transaction. This could have the effect of delaying or even preventing such a change of control.
We may be subject to legal, governmental or regulatory proceedings.
In the normal course of business, we are subject to regulatory and governmental investigations, document requests, subpoenas and civil actions, litigation and other forms of dispute resolution in various domestic and foreign jurisdictions. In addition, we are involved in litigation and arbitration concerning our rights and obligations under policies and contracts issued by us and under reinsurance contracts with third parties. Such investigations, inquiries, document requests, subpoenas or examinations could develop into administrative, civil or criminal proceedings or enforcement actions, including class-actions, in which remedies could include fines, penalties, restitution, remedial actions, enhanced supervision or alterations in our business practices, and could result in additional expenses, limitations on certain business activities and reputational damage.
The ownership of common shares of Group by Everest Re Advisors, Ltd., a direct subsidiary of Group, may have an impact on securing approval of shareholder proposals that Group’s management supports.
As of December 31, 2025, Everest Re Advisors, Ltd. (Bermuda) owned 9,719,971 or 19.3% of the outstanding common shares of Group. Under Group’s bye-laws, the total voting power of any shareholder owning more than 9.9% of the common shares is reduced to 9.9% of the total voting power of the common shares. Nevertheless, Everest Re Advisors, Ltd., which is controlled by Group, has the ability to vote 9.9% of the total voting power of Group’s common shares.
Provisions in Group’s bye-laws could have an anti-takeover effect, which could diminish the value of its common shares.
Group’s bye-laws contain provisions that could delay or prevent a change of control that a shareholder might consider favorable. The effect of these provisions could be to prevent a shareholder from receiving the benefit from any premium over the market price of our common shares offered by a bidder in a potential takeover. Even in the absence of an attempt to effect a change in management or a takeover attempt, these provisions may adversely affect the prevailing market price of our common shares if they are viewed as discouraging takeover attempts in the future.
For example, Group’s bye-laws contain the following provisions that could have an anti-takeover effect:
• the total voting power of any shareholder owning more than 9.9% of the common shares will be reduced to 9.9% of the total voting power of the common shares;
• the board of directors may decline to register any transfer of common shares if it has reason to believe that the transfer would result in:
i. any person that is not an investment company beneficially owning more than 5.0% of any class of the issued and outstanding share capital of Group,
ii. any person holding controlled shares in excess of 9.9% of any class of the issued and outstanding share capital of Group, or
iii. any adverse tax, regulatory or legal consequences to Group, any of its subsidiaries or any of its shareholders;
• Group also has the option to redeem or purchase all or part of a shareholder’s common shares to the extent the board of directors determines it is necessary or advisable to avoid or cure any adverse or potential adverse consequences if:
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i. any person that is not an investment company beneficially owns more than 5.0% of any class of the issued and outstanding share capital of Group,
ii. any person holds controlled shares in excess of 9.9% of any class of the issued and outstanding share capital of Group, or
iii. share ownership by any person may result in adverse tax, regulatory or legal consequences to Group, any of its subsidiaries or any other shareholder.
The Board has indicated that it will apply these bye-law provisions in such manner that “passive institutional investors” will be treated similarly to investment companies. For this purpose, “passive institutional investors” include all persons who are eligible, pursuant to Rule 13d-1(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to file a short-form statement on Schedule 13G, other than an insurance company or any parent holding company or control person of an insurance company.
Investors in Group may have more difficulty in protecting their interests than investors in a U.S. corporation.
The Companies Act 1981 of Bermuda (the “Companies Act”), differs in material respects from the laws applicable to U.S. corporations and their shareholders. The following is a summary of material differences between the Companies Act, as modified in some instances by provisions of Group’s bye-laws, and Delaware corporate law that could make it more difficult for investors in Group to protect their interests than investors in a U.S. corporation. Because the following statements are summaries, they do not address all aspects of Bermuda law that may be relevant to Group and its shareholders.
Alternate Directors.
Group’s bye-laws provide, as permitted by Bermuda law, that each director may appoint an alternate director, who shall have the power to attend and vote at any meeting of the Board or committee at which that director is not personally present and to sign written consents in place of that director. Delaware law permits a director to appoint another director as an alternate to attend any board committee meeting. However, Delaware law does not provide for the designation of alternate directors with authority to attend or vote at a meeting of the Board.
Committees of the Board of Directors.
Group’s bye-laws provide, as permitted by Bermuda law, that the Board may delegate any of its powers to committees that the Board appoints, and those committees may consist partly or entirely of non-directors. Delaware law allows the board of directors of a corporation to delegate many of its powers to committees, but those committees may consist only of directors.
Interested Directors.
Bermuda law and Group’s bye-laws provide that if a director has a personal interest in a transaction to which the company is also a party and if the director discloses the nature of this personal interest at the first opportunity, either at a meeting of directors or in writing to the directors, then the company will not be able to declare the transaction void solely due to the existence of that personal interest and the director will not be liable to the company for any profit realized from the transaction. In addition, after a director has made the declaration of interest referred to above, he or she is allowed to be counted for purposes of determining whether a quorum is present and to vote on a transaction in which he or she has an interest, unless disqualified from doing so by the chairman of the relevant board meeting. Under Delaware law, an interested director could be held liable for a transaction in which that director derived an improper personal benefit. Additionally, under Delaware law, a corporation may be able to declare a transaction with an interested director to be void unless one of the following conditions is fulfilled:
• the material facts as to the interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors;
• the material facts are disclosed or are known to the shareholders entitled to vote on the transaction and the transaction is specifically approved in good faith by the holders of a majority of the voting shares; or
• the transaction is fair to the corporation as of the time it is authorized, approved or ratified.
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Transactions with Significant Shareholders.
As a Bermuda company, Group may enter into business transactions with its significant shareholders, including asset sales, in which a significant shareholder receives, or could receive, a financial benefit that is greater than that received, or to be received, by other shareholders with prior approval from Group’s board of directors but without obtaining prior approval from the shareholders. In the case of an amalgamation, in which two or more companies join together and continue as a single company, a resolution of shareholders approved by a majority of at least 75% of the votes cast is required in addition to the approval of the board of directors, except in the case of an amalgamation with and between wholly-owned subsidiaries. If Group was a Delaware corporation, any business combination with an interested shareholder (which, for this purpose, would include mergers and asset sales of greater than 10% of Group’s assets that would otherwise be considered transactions in the ordinary course of business) within a period of three years from the time the person became an interested shareholder would require prior approval from shareholders holding at least 66 2/3% of Group’s outstanding common shares not owned by the interested shareholder, unless the transaction qualified for one of the exemptions in the relevant Delaware statute or Group opted out of the statute. For purposes of the Delaware statute, an “interested shareholder” is generally defined as a person who together with that person’s affiliates and associates owns, or within the previous three years did own, 15% or more of a corporation’s outstanding voting shares.
Takeovers.
Under Bermuda law, if an acquiror makes an offer for shares of a company and, within four months of the offer, the holders of not less than 90% of the shares that are the subject of the offer tender their shares, the acquiror may give the nontendering shareholders notice requiring them to transfer their shares on the terms of the offer. Within one month of receiving the notice, dissenting shareholders may apply to the court objecting to the transfer. The burden is on the dissenting shareholders to show that the court should exercise its discretion to enjoin the transfer. The court will be unlikely to do this unless there is evidence of fraud or bad faith or collusion between the acquiror and the tendering shareholders aimed at unfairlyforcing out minority shareholders. Under another provision of Bermuda law, the holders of 95% of the shares of a company (the “acquiring shareholders”) may give notice to the remaining shareholders requiring them to sell their shares on the terms described in the notice. Within one month of receiving the notice, dissenting shareholders may apply to the court for an appraisal of their shares. Within one month of the court’s appraisal, the acquiring shareholders are entitled either to acquire all shares involved at the price fixed by the court or cancel the notice given to the remaining shareholders. If shares were acquired under the notice at a price below the court’s appraisal price, the acquiring shareholders must either pay the difference in price or cancel the notice and return the shares thus acquired to the shareholder, who must then refund the purchase price. There are no comparable provisions under Delaware law.
Inspection of Corporate Records.
Members of the general public have the right to inspect the public documents of Group available at the office of the Registrar of Companies and Group’s registered office, both in Bermuda. These documents include the memorandum of association, which describes Group’s permitted purposes and powers, any amendments to the memorandum of association and documents relating to any increase or reduction in Group’s authorized share capital. Shareholders of Group have the additional right to inspect Group’s bye-laws, minutes of general meetings of shareholders and audited financial statements that must be presented to the annual general meeting of shareholders. The register of shareholders of Group also is open to inspection by shareholders and to members of the public without charge. Group is required to maintain its share register at its registered office in Bermuda. Group also maintains a branch register in the offices of its transfer agent in the United States, which is open for public inspection as required under the Companies Act. Group is required to keep at its registered office a register of its directors and officers that is open for inspection by members of the public without charge. However, Bermuda law does not provide a general right for shareholders to inspect or obtain copies of any other corporate records. Under Delaware law, any shareholder may inspect or obtain copies of a corporation’s shareholder list and its other books and records for any purpose reasonably related to that person’s interest as a shareholder.
Shareholders’ Suits.
The rights of shareholders under Bermuda law are not as extensive as the rights of shareholders under legislation or judicial precedent in many U.S. jurisdictions. Class actions and derivative actions are generally not available to shareholders under the laws of Bermuda. However, the Bermuda courts ordinarily would be expected to follow English case law precedent, which would permit a shareholder to bring an action in the name of Group to remedy a wrong done
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to Group where the act complained of is alleged to be beyond the corporate power of Group or illegal or would result in the violation of Group’s memorandum of association or bye-laws. Furthermore, the court would give consideration to acts that are alleged to constitute a fraudagainst the minority shareholders or where an act requires the approval of a greater percentage of Group’s shareholders than actually approved it. The winning party in an action of this type generally would be able to recover a portion of attorneys’ fees incurred in connection with the action. Under Delaware law, class actions and derivative actions generally are available to stockholders for breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In these types of actions, the court has discretion to permit the winning party to recover its attorneys’ fees.
Limitation of Liability of Directors and Officers.
Group’s bye-laws provide that Group and its shareholders waive all claims or rights of action that they might have, individually or in the right of the Company, against any director or officer for any act or failure to act in the performance of that director’s or officer’s duties. However, this waiver does not apply to claims or rights of action that arise out of fraud or dishonesty. This waiver may have the effect of barring claims arising under U.S. federal securities laws. Under Delaware law, a corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its stockholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentionalmisconduct or a knowing violation of law, the authorization of unlawful dividends, stock repurchases or stock redemptions, or any transaction from which a director derived an improper personal benefit. Moreover, Delaware provisions would not be likely to bar claims arising under U.S. federal securities laws.
Indemnification of Directors and Officers.
Group’s bye-laws provide that Group shall indemnify its directors or officers to the full extent permitted by law against all actions, costs, charges, liabilities, loss, damage or expense incurred or suffered by them by reason of any act done, concurred in or omitted in the conduct of Group’s business or in the discharge of their duties. Under Bermuda law, this indemnification may not extend to any matter involving fraud or dishonesty of which a director or officer may be guilty in relation to the company, as determined in a final judgment or decree not subject to appeal. Under Delaware law, a corporation may indemnify a director or officer who becomes a party to an action, suit or proceeding because of his position as a director or officer if (1) the director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and (2) if the action or proceeding involves a criminal offense, the director or officer had no reasonable cause to believe his or her conduct was unlawful.
Enforcement of Civil Liabilities.
Group is organized under the laws of Bermuda. Some of its directors and officers may reside outside the United States. A substantial portion of our assets are or may be located in jurisdictions outside the United States. As a result, a person may not be able to affect service of process within the United States on directors and officers of Group and those experts who reside outside the United States. A person also may not be able to recover against them or Group on judgments of U.S. courts or to obtain original judgments against them or Group in Bermuda courts, including judgments predicated upon civil liability provisions of the U.S. federal securities laws.
Dividends.
Bermuda law does not allow a company to declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that the company, after the payment is made, would be unable to pay its liabilities as they become due, or that the realizable value of the company’s assets would be less, as a result of the payment, than the aggregate of its liabilities and its issued share capital and share premium accounts. The share capital account represents the aggregate par value of issued shares, and the share premium account represents the aggregate amount paid for issued shares over and above their par value. Under Delaware law, subject to any restrictions contained in a company’s certificate of incorporation, a company may pay dividends out of the surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. Surplus is the amount by which the net assets of a corporation exceed its stated capital. Delaware law also provides that dividends may not be paid out of net profits at any time when stated capital is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.
Insurance laws and regulations restrict our ability to operate and any failure to comply with those laws and regulations could have a material adverse effect on our business.
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We are subject to extensive and increasing regulation under U.S. federal, state and foreign insurance laws. These laws limit the amount of dividends that can be paid to us by our operating subsidiaries, impose restrictions on the amount and type of investments that we can hold, prescribe solvency, accounting and internal control standards that must be met and maintained and require us to maintain reserves. These laws also require disclosure of material inter-affiliate transactions and require prior approval of “extraordinary” transactions. Such “extraordinary” transactions include declaring dividends from operating subsidiaries that exceed statutory thresholds. These laws also generally require approval of changes of control of insurance companies. The application of these laws could affect our liquidity and ability to pay dividends, interest and other payments on securities, as applicable, and could restrict our ability to expand our business operations through acquisitions of new insurance subsidiaries. We may not have or maintain all required licenses and approvals or fully comply with the wide variety of applicable laws and regulations or the relevant authority’s interpretation of the laws and regulations. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or fine us. These types of actions could have a material adverse effect on our business. To date, no material fine, penalty or restriction has been imposed on us for failure to comply with any insurance law or regulation.
The insurance and reinsurance regulatory framework continues to be subject to increased scrutiny in many jurisdictions, including the U.S., Bermuda and Europe. The International Association of Insurance Supervisors has in place a Common Framework for the supervision of Internationally Active Insurance Groups (“IAIGs”), which is focused on the group-wide supervision of IAIGs. As described above in “Regulatory Matters”, the Company may become subject to the group supervision requirements promulgated by the BMA under the Amendment Act. Groups subject to BMA group supervision have a 12-month transition period to take steps required for compliance with the BMA authorized to grant extensions of up to an additional 12 months upon application. Under the Amendment Act, the Company may become subject to group-level solvency and capital requirements, consolidated financial reporting and auditing obligations, recovery planning requirements and prior notification or approval requirements for certain material changes within the group. As Group Supervisor, the BMA will also chair a Supervisory College, coordinating with other regulators that supervise Everest’s licensed entities in other jurisdictions. Assessing and complying with the Amendment Act’s requirements may require the Company to allocate considerable time and resources that could impact the domicile and operations of our insurance and/or non-insurance subsidiaries, result in increased costs and affect our financial condition. Group supervision by the BMA, including any future holding company designation, could affect our prescribed capital requirements, the terms of current and future debt, intercompany capital transactions, ratings and may significantly increase our cost of regulatory compliance.
As a result of the previous dislocation of the financial markets, the U.S. government implemented changes in the way the financial services industry is regulated. Some of these changes are also impacting the insurance industry. For example, the U.S. Treasury established the Federal Insurance Office with the authority to monitor all aspects of the insurance sector, monitor the extent to which traditionally underserved communities and consumers have access to affordable non-health insurance products, to represent the United States on prudential aspects of international insurance matters, to assist with administration of the Terrorism Risk Insurance Program and to advise on important national and international insurance matters. In addition, several European regulatory bodies are in the process of updating existing regulations or developing new capital adequacy directives for insurers and reinsurers. The future impact of such initiatives or new initiatives from the current governmental authorities, if any, on our operation, net income (loss) or financial condition cannot be determined at this time.
Our business is subject to certain laws and regulations relating to sanctions and foreign corrupt practices, the violation of which could adversely affect our operations.
We must comply with all applicable economic sanctions and anti-bribery laws and regulations of the United States and other jurisdictions. U.S. laws and regulations that may be applicable to us include economic trade sanctions laws and regulations administered by the U.S. Treasury’s Office of Foreign Assets Control, as well as certain laws administered by the U.S. Department of State. The sanctions laws and regulations of non-U.S. jurisdictions in which we operate may differ from those of the United States and these differences may also expose us to sanctions violations. In addition, we are subject to the Foreign Corrupt Practices Act and other anti-bribery laws that generally prohibit corrupt payments or improper gifts to non-U.S. governments or officials. It is possible that personnel could fail to comply with applicable laws and regulations. In such event, we could be exposed to civil penalties, criminalpenalties and other sanctions, including fines or other punitive actions, which could damage our business and reputation, and could adversely affect our financial condition and results of operations.
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Regulatory challenges in the United States could adversely affect the ability of Bermuda Re to conduct business.
Bermuda Re does not intend to be licensed or admitted as an insurer or reinsurer in any U.S. jurisdiction. Under current law, Bermuda Re generally will be permitted to reinsure U.S. risks from its office in Bermuda without obtaining those licenses. However, the insurance and reinsurance regulatory framework is subject to periodic legislative review and revision. In the past, there have been congressional and other initiatives in the United States regarding increased supervision and regulation of the insurance industry, including proposals to supervise and regulate reinsurers domiciled outside the United States. If Bermuda Re were to become subject to any insurance laws of the United States or any U.S. state at any time in the future, it might be required to post deposits or maintain minimum surplus levels and might be prohibited from engaging in lines of business or from writing certain types of policies. Complying with those laws could have a material adverse effect on our ability to conduct business in Bermuda and international markets.
Bermuda Re may need to be licensed or admitted in additional jurisdictions to develop its business.
As Bermuda Re’s business develops, it will monitor the need to obtain licenses in jurisdictions other than Bermuda and the U.K., where it has an authorized branch, in order to comply with applicable law or to be able to engage in additional insurance-related activities. In addition, Bermuda Re may be at a competitive disadvantage in jurisdictions where it is not licensed or does not enjoy an exemption from licensing relative to competitors that are so licensed or exempt from licensing. Bermuda Re may not be able to obtain any additional licenses that it determines are necessary or desirable. Furthermore, the process of obtaining those licenses is often costly and may take a long time.
Bermuda Re’s ability to write reinsurance may be severely limited if it is unable to arrange for security to back its reinsurance.
Many jurisdictions do not permit insurance companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their statutory financial statements without appropriate security. Bermuda Re’s reinsurance clients typically require it to post a letter of credit or enter into other security arrangements. If Bermuda Re is unable to obtain or maintain a letter of credit facility on commercially acceptable terms or is unable to arrange for other types of security, its ability to operate its business may be severely limited. If Bermuda Re defaults on any letter of credit that it obtains, it may be required to prematurelyliquidate a substantial portion of its investment portfolio and other assets pledged as collateral.
Regulatory and legislative developments, as well as executive orders, related to cybersecurity, privacy, data protection and AI could have an adverse impact on our business.
The NAIC”s Insurance Data Security Model Law (the “IDSML”), which established standards for data security and for the investigation and notification of data breaches applicable to insurance licensees has been adopted in 28 states. The IDSML requires insurers, and other entities required to be licensed under state insurance laws, to comply with certain requirements, such as developing and maintaining a written information security program, conducting risk assessments and overseeing the data security practices of third-party vendors. In addition, certain state insurance regulators are developing or have developed their own regulations that may impose additional regulatory requirements relating to cybersecurity on insurance and reinsurance companies. For example, the New York State Department of Financial Services has an applicable regulation pertaining to cybersecurity for all banking and insurance entities under its jurisdiction. Regulation of cybersecurity, privacy and data protection, operational resiliency and AI has also developed globally including but not limited to Bermuda’s Personal Information Protection Act, the UK’s Data Protection Act and EU’s General Data Protection Regulation. In 2024, European Union lawmakers also signed the Artificial Intelligence Act, which regulates certain use of AI within the European Union. We cannot predict the full impact these laws and regulations will have on our business, financial condition or results of operations, but our insurance and reinsurance companies could incur additional costs resulting from compliance with such laws and regulations.
If international tax laws change, our net income may be impacted.
The Organization for Economic Co-operation and Development (the “OECD”) and its member countries, including the United States, had been focusing for an extended period on issues related to the taxation of multinational corporations, such as the comprehensive plan set forth by the OECD to create an agreed set of international tax rules for preventing base erosion and profit shifting. The OECD agreed upon a broad framework for overhauling the taxation of multinational corporations that includes, among other things, profit reallocation rules (Pillar One) and a 15% global minimum corporate income tax rate (Pillar Two). The Pillar Two model rules have been enacted in several of the jurisdictions in which the Company and its subsidiaries operate; thus, the Company or its subsidiaries are liable to pay a top-up tax for any deficiency between the minimum tax rate of 15% and the effective tax rate per jurisdiction.
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Group and/or various Group companies may be subject to additional income taxes, which would reduce our net income.
If United St ates ta x law changes, our net income may be impacted.
The 2017 Tax Cuts and Jobs Act (the “TCJA”) was adopted to address incorporation by U.S. corporations in low-tax jurisdictions to obtain a competitive advantage over domestic corporations that are subject to the U.S. corporate income tax rate of 21%. Specifically, the TCJA addressed concern over a perceived competitive advantage that foreign-controlled insurers and reinsurers may have had over U.S. controlled insurers and reinsurers, resulting from the purchase of reinsurance by U.S. insurers from affiliates operating in certain foreign jurisdictions, including Bermuda. Such affiliated reinsurance transactions may subject the U.S. ceding companies to a Base Erosion and Anti-abuse Tax of 10% from 2019 to 2025 and 10.5% thereafter, which may exceed its regular income tax. In addition, new legislation, as well as proposed and final regulations, may further limit the ability of the Company to execute alternative capital balancing transactions with unrelated parties. This would further impact our net income and effective tax rate.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase excise tax and do not expect the legislation to have a material impact on our results of operations.
On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (“The 2023 Act”), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The 2023 Act includes a provision referred to as “The Economic Transition Adjustment” (the “ETA”), which is intended to provide a fair and equitable transition into the new tax regime, and results in a deferred tax benefit for the Company. However, on January 15, 2025, the OECD issued guidance related to “deferred tax assets arising from tax benefits provided by General Government” whereby it has restricted the utilization of those deferred tax benefits against the computation of its Pillar Two Global Minimum Taxes to approximately 20% of the originally calculated amounts and only for a grace period of two years through 2026. If the Bermuda Ministry of Finance amends The 2023 Act in response to this guidance, the exact impact of any such amendments is uncertain but there is a risk that it results in a reduction in the Company's Deferred Tax Assets.
On January 20, 2025, President Trump issued a memorandum announcing that the OECD framework has “no force or effect in the United States” and disavowing any commitments previously made by the United States with respect to the framework. The memorandum also directs the U.S. Secretary of the Treasury to develop and present to President Trump a list of protective measures or other options towards foreign countries that are either not in compliance with any tax treaty with the United States or have tax rules that are “extraterritorial or disproportionately affect American companies.” The possible uneven enactment of the OECD framework by various jurisdictions coupled with the United States’ response to these rules could cause uncertainties to and increases in our income taxes.
On January 5, 2026, the OECD released Administrative Guidance containing the side-by-side (SbS) package on the OECD’s global minimum tax. The SbS Administrative Guidance introduced, among other things, new safe harbors, including a SbS safe harbor for multi-national groups headquartered in certain eligible jurisdictions, now limited to the US. Qualification for this safe harbor would exempt companies from the OECD global minimum tax. We expect additional Administrative Guidance in the future providing implementation guidance on the SbS. Accordingly, the OECD’s global minimum tax could be subject to further changes that will continue to cause uncertainties related to income taxes payable by our company.
Group and/or Bermuda Re may be subje ct to U.S. corporate income tax, which would reduce our net income.
Bermuda Re. The income of Bermuda Re is a sizable portion of our worldwide income from operations. We have established guidelines for the conduct of our operations that are designed to ensure that Bermuda Re is not engaged in the conduct of a trade or business in the United States. Based on its compliance with those guidelines, we believe that Bermuda Re should not be required to pay U.S. corporate income tax, other than withholding tax on U.S. source dividend income. However, if the U.S. Internal Revenue Service (the “IRS”) were to successfully assert that Bermuda Re was engaged in a U.S. trade or business, Bermuda Re would be required to pay U.S. corporate income tax on all its income and possibly also the U.S. branch profits tax. However, if the IRS were to successfully assert that Bermuda Re was engaged in a U.S. trade or business, we believe the U.S.-Bermuda tax treaty would preclude the IRS from taxing Bermuda Re’s income except to the extent that its income was attributable to a U.S. permanent establishment maintained by Bermuda Re. We do not believe that Bermuda Re has a permanent establishment in the United States. If the IRS were to successfully assert that Bermuda Re did have income attributable to a permanent establishment in the United States., Bermuda Re would be subject to U.S. tax only on that income. This would reduce our net income.
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Group. We conduct our operations in a manner designed to minimize our U.S. tax exposures. Based on our compliance with guidelines designed to ensure that we generate only immaterial amounts, if any, of income that is subject to the U.S. taxing jurisdiction, we believe that we should be required to pay only immaterial amounts, if any, of U.S. corporate income tax, other than withholding tax on U.S. source dividend income. However, if the IRS successfully asserted that we had material amounts of income that were subject to the U.S. taxing jurisdiction, we would be required to pay U.S. corporate income tax on that income, and possibly the U.S. branch profits tax. The imposition of such tax would reduce our net income.
Bermuda Re and Group. If Bermuda Re became subject to U.S. income tax on its income, or if Group became subject to U.S. income tax, our income could also be subject to U.S. branch profits tax. In that event, Group and Bermuda Re would be subject to taxation at a higher combined effective rate than if they were organized as U.S. corporations. The combined effect of the 21% U.S. corporate income tax rate and the 30% branch profits tax rate is a net tax rate of 44.7%. The imposition of these taxes would reduce our net income.
Our net income will be reduced if U.S. excise and withholding taxes are increased.
Group and/or Bermuda Re may become subject to Bermuda tax, which would reduce our net income.
Reinsurance and insurance premiums paid to Bermuda Re with respect to risks located in the United States are subject to a U.S. federal excise tax of one percent. In addition, Bermuda Re is subject to withholding tax on dividend income from U.S. sources. These taxes could increase, and other taxes could be imposed in the future on Bermuda Re’s business, which would reduce our net income.
If U.S. tax law changes, our U.S. shareholders net income may be impacted.
In January 2022, the U.S. Treasury and the IRS released proposed regulations regarding the determination and inclusion of related-person insurance income (“RPII”). The regulations, if finalized without modifications, could cause RPII to be attributable to the Company’s U.S. shareholders prospectively and therefore would incur additional income tax. The imposition of such tax could reduce our U.S. shareholders return on investment in the Company. Our U.S. shareholders pre-tax income and tax liabilities might be increased, reducing their net income .
losses
Our net income of $1.6 billion for the year ended December 31, 2025 is inclusive of unfavorable development of prior-year loss reserves of $657 million. Our net income of $1.4 billion for the year ended December 31, 2024 is inclusive of unfavorable development of prior-year loss reserves of $1.5 billion. We have significantly fortified our U.S. casualty reserves, while taking aggressive underwriting action in certain classes exposed to social inflation, bolstering talent and investing in our platform as we head into 2026. In addition, we have entered into an adverse development reinsurance agreement reinsuring potential adverseloss development for accident years 2024 and prior arising out of North American liabilities within our Insurance and Other Segments and sold the renewal rights to certain lines of commercial retail insurance business. Refer to management’s discussion of consolidated and segment results below.
The following is a discussion and analysis of our results of operations, financial condition and liquidity and capital resources for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements and related notes, under ITEM 8 of this Form 10-K. Comparisons between 2024 and 2023 have been omitted from this Form 10-K but can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2024.
All comparisons in this discussion are to the corresponding prior year unless otherwise indicated.
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Recent Developments.
Adverse Development Cover Reinsurance Agreements
Effective October 1, 2025, the Company, through its subsidiaries Everest Re and Bermuda Re (the “Ceding Companies”), entered into adverse development reinsurance agreements with State National Insurance Company, Inc. and MS Transverse Insurance Company (collectively the “Reinsurers”). The Reinsurance Agreements are supported on a retrocessional basis by Longtail Re, an affiliate of Stone Ridge Capital.
The agreements reinsure potential adverseloss development for accident years 2024 and prior arising from substantially all of the Ceding Companies’ North American liabilities within the Insurance and Other segments (“Subject Business”) up to a gross limit of $1.2 billion. Certain liabilities are excluded from the subject business, including among others those related to the Asbestos and Environmental (“A&E”) reserves included in the Other segment. The carried reserves held for the Subject Business were $5.4 billion as of September 30, 2025 and $5.0 billion as of December 31, 2025, respectively.
The adverse development cover (“ADC”) is composed of three layers. The first layer is an “in the money” layer whereby the ADC attachment point was $1,250 billion below the Company’s North American Insurance and Other segment liability subject reserves of $5.4 billion held as of September 30, 2025. The second layer is $700 million in excess of the $5.4 billion. The Company transferred $1,250 million of in-the-money reserves in consideration for the first two layers upon closing of the transaction. The third layer is $500 million, for which the Company paid approximately $122 million of consideration upon closing of the transaction. The Company has a co-participation of $100 million in each of the second and third layers. For more details, see Form 8-K filed with the SEC on October 27, 2025 and the adverse development reinsurance agreements attached thereto and incorporated by reference in Exhibits 10.59 and 10.60. At December 31, 2025, the total covered losses ceded to State National Reinsurer were $1,253 million. The aggregated unexpired limit was $597 million for State National Reinsurer and $400 million for MS Transverse Reinsurer, respectively.
Sale of Certain Commercial Retail Insurance Renewal Rights
On October 26, 2025, the Company entered into an agreement with American International Group, Inc. (“AIG”) to sell the renewal rights for certain lines of commercial retail insurance business written by the Company in the U.S., U.K. and Asia Pacific, for an aggregate purchase price of $252 million. AIG paid the Company $30 million for originating and structuring the transaction.
In addition, on October 26, 2025, the Company entered into an agreement with AIG to sell the renewal rights for certain lines of commercial retail insurance business written by the Company in certain countries in the European Union, for an aggregate purchase price of $49 million.
Under the agreements, AIG agreed to pay the Company a total of $10 million per month for nine months starting January 1, 2026 for specified transition services. For more details, see Form 8-K filed with the SEC on October 28, 2025 and the Master Transaction Agreements incorporated by reference in Exhibit 10.59.
These transactions sharpen the Company’s focus on its core global reinsurance business as well as its global wholesale and specialty insurance businesses. The renewal rights of these businesses total an estimated $2 billion of aggregate gross premiums written.
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Financial Summary.
We monitor and evaluate our overall performance based upon financial results. The following table displays a summary of the consolidated net income (loss), ratios and shareholders’ equity for the periods indicated:
Years Ended December 31,
Percentage Increase/(Decrease)
(Dollars in millions)
Gross written premiums
Net written premiums
REVENUES:
Premiums earned
Net investment income
Net gains (losses) on investments
Other income (expense)
Total revenues
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
Commission, brokerage, taxes and fees
Other underwriting expenses
Corporate expenses
Interest, fees and bond issue cost amortization expense
Total claims and expenses
INCOME (LOSS) BEFORE TAXES
Income tax expense (benefit)
NET INCOME (LOSS)
RATIOS:
Point Change
Loss ratio
Commission and brokerage ratio
Other underwriting expense ratio
Combined ratio
At December 31,
Percentage Increase/(Decrease)
(Dollars in millions, except per share amounts)
Balance sheet data:
Total investments and cash
Total assets
Loss and loss adjustment expense reserves
Total debt
Total liabilities
Shareholders' equity
Book value per share
(NM - not meaningful)
(Some amounts may not reconcile due to rounding.)
Revenues.
Premiums. Gross written premiums decreased by 2.9% to $17.7 billion in 2025, compared to $18.2 billion in 2024, reflecting a $288 million, or 5.7% decrease in our insurance business, a $122 million, or 57.3% decrease in business within the Other segment and a $116 million, or 0.9% decrease in our reinsurance business. The decrease in insurance premiums reflects portfolio actions taken in casualty lines of business partially offset by growth in accident and health and other specialty lines. Gross written premiums within Other decreased by $122 million as this segment generally represents lines of business that have been discontinued. The decrease in reinsurance premiums was primarily due to North America casualty pro rata and casualty excess of loss lines of business, partially offset by an increase in the property and financial lines of business.
Net written premiums decreased by 1.9% to $15.5 billion in 2025, compared to $15.8 billion in 2024, primarily driven by overall mix of business.
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Premiums earned increased by 2.5% to $15.6 billion in 2025, compared to $15.2 billion in 2024. The change in premiums earned relative to net written premiums was primarily the result of timing as the higher base premium written in 2024 is being earned through the 2025 period; premiums are earned ratably over the coverage period whereas written premiums are generally recorded at the initiation of the coverage period.
Other Income (Expense). We recorded other expense of $45 million and other income of $121 million in 2025 and 2024, respectively. The change was primarily the result of fluctuations in foreign currency exchange rates, in particular, the movement in the Euro and British Pound Sterling, partially offset by the gain from the sale of the renewal rights.
The following table shows the components of other income (expense) for the periods indicated:
Years ended December 31,
(Dollars in millions)
Mt. Logan cell income
Foreign currency exchange income (expense)
Gain on pension plan settlement
Gain (loss) from sale of renewal rights
Gain (loss) from sale of sports and leisure business
Other
Total other income (expense)
Claims and Expenses.
Incurred Losses and Loss Adjustment Expenses (“LAE”). The following table presents our incurred losses and LAE for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Current
Year
Ratio %/
Pt Change
Prior
Years
Ratio %/
Pt Change
Total
Incurred
Ratio %/
Pt Change
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Variance 2025/2024
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
Variance 2024/2023
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
(Some amounts may not reconcile due to rounding.)
Incurred losses and LAE decreased by 3.9% to $10.9 billion in 2025, compared to $11.3 billion in 2024, primarily due to a decrease in unfavorable development on prior year attritional losses of $725 million and a decrease of $73 million in
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current year catastrophelosses, partially offset by an increase of $308 million in current year attritional losses and a decrease in favorable development on prior year catastrophelosses of $45 million.
The increase in current year attritional losses was mainly due to the strengthening of U.S. casualty reserves. Unfavorable development on prior year attritional losses was $751 million in 2025 compared to unfavorable development of $1.5 billion in 2024. The net unfavorable development on prior year attritional reserves of $751 million in 2025 is comprised of $471 million of unfavorable development on prior years attritional losses from the Insurance segment due to reserve strengthening in U.S. casualty lines of business driven by elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024, and $163 million of unfavorable development in our Other segment which was driven by U.S. casualty lines, primarily from our sports and leisure business. In addition, the Reinsurance segment recorded unfavorable development on prior year, primarily related to aviation losses associated with the Russia/Ukraine war and casualty reserves, partially offset by favorable development booked on well-seasoned reserves in the property and mortgage lines. Embedded in the amounts noted above is $122 million of prior year losses related to the ADC.
The current year catastrophelosses of $819 million in 2025 related primarily to the 2025 Southern California wildfires ($512 million), Hurricane Melissa ($159 million), the 2025 Australian Storms ($47 million), Myanmar earthquake ($28 million), Typhoon Ragasa ($20 million) and the 2025 U.S. September floods ($19 million), with the remaining losses resulting from various events. The $893 million of current year catastrophelosses in 2024 related primarily to Hurricane Milton ($320 million), Hurricane Helene ($94 million), Hurricane Beryl ($64 million), Hurricane Debby ($56 million), the 2024 European flood Boris ($56 million), the 2024 Baltimore bridgecollapse ($55 million), the third quarter 2024 Calgary Alberta storms ($54 million), the 2024 Brazil Floods ($41 million), the 2024 Dubai floods ($32 million), the 2024 Germany floods ($31 million), the 2024 New Caledonia Riots ($31 million) and the 2024 Taiwan earthquake ($27 million), with the remaining losses resulting from various events. For 2025, the favorable development on prior year catastrophelosses of $94 million was mainly related to reserves released related to the 2022 Hurricane Ian event.
Catastrophelosses and loss expenses typically have a material effect on our incurred losses and LAE results and can vary significantly from period to period. Losses from natural catastrophes contributed 5.3 percentage points to the combined ratio in 2025, compared with 5.9 percentage points in 2024.
Refer to the “Ratios” section for loss ratio analysis discussion.
Commission, Brokerage, Taxes and Fees. Commission, brokerage, taxes and fees increased by 4.9% to $3.5 billion for the year ended December 31, 2025 compared to $3.3 billion for the year ended December 31, 2024. The increase was primarily due to the impact of the increase in premiums earned and changes in the mix of business. Refer to the “Ratios” section for commission and brokerage ratio analysis discussion.
Other Underwriting Expenses. Other underwriting expenses were $1.0 billion and $938 million in 2025 and 2024, respectively. The increase in other underwriting expenses was mainly due to the impact of the increase in premiums earned as well as strategic actions taken in insurance operations. Refer to the “Ratios” section for other underwriting expense ratio analysis discussion.
Corporate Expenses. Corporate expenses, which are general operating expenses that are not allocated to segments, were $109 million and $95 million for the years ended December 31, 2025 and 2024, respectively. The increase in 2025 compared to 2024 was primarily due to an increase in other professional services related to consulting fees for corporate initiatives and an increase in lease rent expenses.
Interest, Fees and Bond Issue Cost Amortization Expense. Interest, fees and other bond amortization expense was $151 million and $149 million in 2025 and 2024, respectively. The increase was primarily driven by higher interest costs on the Federal Home Loan Bank of New York (“FHLBNY”), partially offset by the change in the floating interest rate related to the Company’s outstanding fixed to floating rate long-term subordinated notes, which is reset quarterly per the note agreement. The floating rate was 6.50% as of December 31, 2025, compared to 7.17% as of December 31, 2024.
Income Tax Expense (Benefit). Income tax expense was $296 million and $120 million in 2025 and 2024, respectively. An income tax expense/benefit is primarily a function of the geographic location of the Company’s pre-tax income and the statutory tax rates in those jurisdictions. The effective tax rate (“ETR”) is primarily affected by tax-exempt investment income, foreign tax credits and dividends. Variations in the ETR generally result from changes in the relative levels of pre-tax income, including the impact of catastrophelosses and net capital gains (losses), among jurisdictions with different tax rates.
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On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (the “2023 Act”), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The 2023 Act includes a provision referred to as “The Economic Transition Adjustment” (the “ETA”), which is intended to provide a fair and equitable transition into the new tax regime, and results in a deferred tax benefit for the Company. However, on January 15, 2025, the OECD issued guidance related to “deferred tax assets arising from tax benefits provided by General Government” whereby it has restricted the utilization of those deferred tax benefits against the computation of its Pillar Two Global Minimum Taxes to approximately 20% of the originally calculated amounts and only for a grace period of two years through 2026. If the Bermuda Ministry of Finance amends The 2023 Act in response to this guidance, the exact impact of any such amendments is uncertain but there is a risk that it results in a reduction in the Company's Deferred Tax Assets.
On July 4, 2025, the One Big Beautiful Bill was signed into law. The One Big Beautiful Bill did not have a material impact on our results of operations, financial condition, or cash flows upon enactment in 2025, and we do not expect it to have a material impact in the future; however, we will continue to evaluate the impact of the One Big Beautiful Bill.
On January 20, 2025, President Trump issued a memorandum announcing that the OECD framework has “no force or effect in the United States” and disavowing any commitments previously made by the United States with respect to the framework. The memorandum also directs the U.S. Secretary of the Treasury to develop and present to President Trump a list of protective measures or other options towards foreign countries that are either not in compliance with any tax treaty with the United States or have tax rules that are “extraterritorial or disproportionately affect American companies.” The possible uneven enactment of the OECD framework by various jurisdictions coupled with the United States’ response to these rules could cause uncertainties to and increases in our income taxes.
On January 5, 2026, the OECD released Administrative Guidance containing the side-by-side (SbS) package on the OECD’s global minimum tax. The SbS Administrative Guidance introduced, among other things, new safe harbors, including a SbS safe harbor for multi-national groups headquartered in certain eligible jurisdictions, now limited to the US. Qualification for this safe harbor would exempt companies from the OECD global minimum tax. We expect additional Administrative Guidance in the future providing implementation guidance on the SbS. Accordingly, the OECD’s global minimum tax could be subject to further changes that will continue to cause uncertainties related to income taxes payable by our company.
Net Income (Loss).
Our net income was $1.6 billion and $1.4 billion in 2025 and 2024, respectiv ely. The period over period changes in net income were primarily driven by the financial component fluctuations explained above.
Ratios.
Our combined ratio decreased by 3.7 points to 98.6% in 2025, compared to 102.3% in 2024. The current year decrease is primarily due to lower unfavorable prior year development on attritional losses and lower current year catastrophelosses.
The loss ratio component decreased by 4.6 points to 69.8% in 2025, compared to 74.4% in 2024. The decrease was mainly due to a decrease of $73 million in current year catastrophelosses and lower unfavorable prior year development on attritional losses.
The commission and brokerage ratio components increased to 22.2% in 2025, compared to 21.7% in 2024. The increase was mainly due to changes in the mix of business.
The other underwriting expense ratio increased to 6.6% in 2025, compared to 6.2% in 2024. The increase was due to higher Insurance segment expenses driven by strategic actions, offset by Reinsurance segment continued leverage against its premium base.
Shareholders’ Equity.
Shareholders’ equity increased by $1.6 billion to $15.5 billion at December 31, 2025 from $13.9 billion at December 31, 2024, principally as a result of $1.6 billion of net income, $854 million of unrealized appreciation on fixed income available for sale securities, net of tax and $242 million of net foreign currency translation gains, partially offset by $797 million of share repurchases and $335 million of shareholder dividends.
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Consolidated Investment Results
Net Investment Income.
Net investment income increased by 8.7% to $2.1 billion in 2025, compared with net investment income of $2.0 billion in 2024. The increase was primarily the result of an increase of $91 million in fixed maturities, an increase of $71 million in income from limited partnerships and an increase of $20 million in income from other alternative investments. The limited partnership income primarily reflects changes in their reported net asset values. As such, until these asset values are monetized and the resultant income is distributed, they are subject to volatile results of future increases or decreases in the asset value.
The following table shows the components of net investment income for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Fixed maturities
Equity securities
Short-term investments and cash
Other invested assets
Limited partnerships
Other
Gross investment income before adjustments
Funds held interest income (expense)
Future policy benefit reserve income (expense)
Gross investment income
Investment expenses
Net investment income
(Some amounts may not reconcile due to rounding.)
The following tables show a comparison of various investment yields for the periods indicated:
Annualized pre-tax yield on average cash and invested assets
Annualized after-tax yield on average cash and invested assets
Annualized return on invested assets
Fixed income portfolio total return
Bloomberg U.S. Aggregate Index
Common equity portfolio total return
S&P 500 index
Other invested asset portfolio total return
The pre-tax equivalent total return for the bond portfolio was approximately 8.5% and 4.0%, respectively, in 2025 and 2024. The pre-tax equivalent return adjusts the yield on tax-exempt bonds to the fully taxable equivalent.
Invested Assets.
The Company’s cash and invested assets totaled $45.4 billion at December 31, 2025, which consisted of 86.8% fixed maturities, short term investments and cash and 13.2% of other invested assets and equity securities. Of the total fixed maturities, 98.1% were investment grade. Additionally, the average maturity of fixed maturity securities was 4.9 years at December 31, 2025, and their overall average duration was 3.4 years.
As of December 31, 2025, the Company did not have any direct investments in commercial real estate, direct commercial mortgages or securities of issuers that are experiencing cash flow difficulty to an extent that the Company’s management believes that the issuer’s ability to meet debt service payments, except where an allowance for credit losses has been recognized, is threatened.
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The Company’s investment portfolio includes structured commercial mortgage-backed securities (“CMBS”) with a book value of $1.6 billion and a fair value of $1.5 billion. As of December 31, 2025, 64.3% of CMBS securities in our investment portfolio are rated AAA by nationally recognized rating agencies. The remainder of CMBS securities in our investment portfolio are rated investment grade by nationally recognized rating agencies.
The following table represents the credit quality distribution of the Company’s fixed maturities for the periods indicated:
At December 31,
(Dollars in millions)
Fair Value/
Amortized Cost (1)
Percent of
Total
Fair Value/
Amortized Cost (1)
Percent of
Total
Rating Agency Credit Quality Distribution:
AAA
BBB
Rated below B
Other
Total
(Some amounts may not reconcile due to rounding.)
(1) Fixed maturities-available for sale are at fair value and fixed maturities-held to maturity are at amortized cost, net of allowances for credit losses.
The following table summarizes fixed maturities by contractual maturity for the periods indicated:
At December 31,
(Dollars in millions)
Fair Value/
Amortized Cost (1) (2)
Percent of
Total
Fair Value/
Amortized Cost (1) (2)
Percent of
Total
Fixed maturity securities
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Asset-backed securities
Mortgage-backed securities
Total fixed maturity securities
(Some amounts may not reconcile due to rounding.)
(1) Fixed maturities-available for sale are at fair value and fixed maturities-held to maturity are at amortized cost, net of allowances for credit losses.
(2) The amortized cost and fair value of fixed maturity securities are shown by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.
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Net Gains (Losses) on Investments.
The following table presents the composition of our net gains (losses) on investments for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Variance
Variance
Realized gains (losses) from dispositions:
Fixed maturity securities - available for sale
Gains
Losses
Total
Fixed maturity securities - held to maturity
Gains
Losses
Total
Equity securities
Gains
Losses
Total
Other Invested Assets
Gains
Losses
Total
Short Term Investments
Gains
Losses
Total
Total net realized gains (losses) from dispositions
Gains
Losses
Total
Allowance for credit losses
Gains (losses) from fair value adjustments
Equity securities
Total
Total net gains (losses) on investments
(Some amounts may not reconcile due to rounding.)
Total net gains (losses) on invest ments in 2025 primarily consist of $112 million of net losses due to the disposition of investments and an increase to the allowance for credit losses of $30 million.
Segment Results.
Our two reportable segments, Reinsurance and Insurance, each have executive leadership who are responsible for the overall performance of their respective segments and who are directly accountable to our chief operating decision maker (“CODM”), the Chief Executive Officer of Everest Group, Ltd., who is ultimately responsible for reviewing the business to assess performance, make operating decisions and allocate resources. We report the results of our operations consistent with the manner in which our CODM reviews the business.
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During the fourth quarter of 2024, the Company revised its classification and presentation of certain run-off business, previously included within the Reinsurance and Insurance reportable segments, as part of a new segment called "Other". The Other segment includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses. These segment presentation changes have been reflected retrospectively.
The Company does not review and evaluate the financial results of its segments based upon balance sheet data. Management generally monitors and evaluates the financial performance of these segments based upon their underwriting results. Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. The Company measures its underwriting results using ratios, in particular, loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned. Management has determined that these measures are appropriate and align with how the business is managed. We continue to evaluate our segments as our business evolves and may further refine our segments and financial performance measures.
The following discusses the underwriting results for each of our segments for the periods indicated.
Reinsurance.
The following table presents the underwriting results and ratios for the Reinsurance segment for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Variance
% Change
Variance
% Change
Gross written premiums
Net written premiums
Premiums earned
Incurred losses and LAE
Commission and brokerage
Other underwriting expenses
Underwriting gain (loss)
Point Chg
Point Chg
Loss ratio
Commission and brokerage ratio
Other underwriting expense ratio
Combined ratio
(NM, not meaningful)
(Some amounts may not reconcile due to rounding.)
Premiums. Gross written premiums decreased by 0.9% to $12.8 billion in 2025 from $12.9 billion in 2024. The decrease in gross written premiums was primarily due to North America casualty pro rata and casualty excess of loss lines of business, partially offset by an increase in the property book of business and financial lines business.
Net written premiums decreased by 1.5% to $11.8 billion in 2025, compared to $12.0 billion in 2024. The current year over prior year decrease was primarily due to changes in cessions and overall mix of business
Premiums earned increased by 2.8% to $11.7 billion in 2025, compared to $11.4 billion in 2024, primarily driven by increased property pro rata business written that was recorded over the prior quarters which are now being earned, partially offset by casualty pro rata lines. The change in premiums earned relative to net written premiums is the result of timing; premiums are earned ratably over the coverage period, whereas written premiums are generally recorded at the initiation of the coverage period.
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Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Reinsurance segment for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Current
Year
Ratio %/
Pt Change
Prior
Years
Ratio %/
Pt Change
Total
Incurred
Ratio %/
Pt Change
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Variance 2025/2024
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
Variance 2024/2023
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
(Some amounts may not reconcile due to rounding.)
Incurred losses increased by 5.8% to $7.5 billion in 2025, compared to $7.1 billion in 2024. The increase was primarily due to an increase of $264 million in current year attritional losses, an increase in unfavorable development on prior year attritional reserves of $117 million and a decrease in favorable development on prior year catastrophelosses of $36 million, partially offset by a decrease of $3 million in current year catastrophelosses.
The increase in current year attritional losses was mainly related to the impact of the increase in premiums earned, the impact of the Washington D.C. aviation accident during the first quarter and reserve strengthening on the U.S. casualty business. The unfavorable development on prior year attritional reserves was mainly driven by aviation losses associated with the Russia/Ukraine war and casualty reserves, partially offset by favorable development booked on well-seasoned reserves in the property and mortgage lines.
The current year catastrophelosses of $768 million in 2025 related primarily to the 2025 Southern California wildfires ($502 million), Hurricane Melissa ($143 million), the 2025 Australian Storms ($47 million), Myanmar earthquake ($20 million) and Typhoon Ragasa ($20 million), with the remaining losses resulting from various events. The $772 million of current year catastrophelosses in 2024 related primarily to Hurricane Milton ($275 million), Hurricane Helene ($64 million), Hurricane Debby ($55 million), Hurricane Beryl ($54 million), the 2024 European flood Boris ($50 million), the 2024 Baltimore bridgecollapse ($50 million), the third quarter 2024 Calgary Alberta storms ($45 million) and the 2024 Brazil Floods ($41 million), the 2024 Dubai floods ($32 million), the 2024 New Caledonia Riots ($31 million), the 2024 Germany floods ($28 million) and the 2024 Taiwan earthquake ($25 million), with the remaining losses resulting from various events. For 2025, the favorable development on prior year catastrophelosses of $89 million was mainly related to reserves released related to the 2022 Hurricane Ian and older well-seasoned CAT events.
Segment Expenses. Commission and brokerage expense increased by 4.0% to $3.0 billion in 2025, compared to $2.8 billion in 2024. The increase was mainly due to the impact of the increase in premiums earned, contingent commissions and changes in the mix of business. Segment other underwriting expenses increased to $291 million in 2025 from $290 million in 2024. The other underwriting expenses remained relatively flat to prior year due to expense management.
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Insurance.
The following table presents the underwriting results and ratios for the Insurance segment for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Variance
% Change
Variance
% Change
Gross written premiums
Net written premiums
Premiums earned
Incurred losses and LAE
Commission and brokerage
Other underwriting expenses
Underwriting gain (loss)
Point Chg
Point Chg
Loss ratio
Commission and brokerage ratio
Other underwriting expense ratio
Combined ratio
(Some amounts may not reconcile due to rounding.)
Premiums. Gross written premiums decreased by 5.7% to $4.8 billion in 2025, compared to $5.1 billion in 2024. The decrease in insurance premiums was primarily due to portfolio actions taken on specialty casualty lines of business as well as the impact of the sale of renewal rights, partially offset by an increase in other specialty business and accident and health business.
Net written premiums decreased by 1.1% to $3.6 billion in 2025, compared to $3.7 billion in 2024. The decrease in net written is due to the reduction gross written premium partially offset by business mix and higher retentions in certain lines of business.
Premiums earned increased by 3.9% to $3.7 billion in 2025, compared to $3.6 billion in 2024. The change in premiums earned relative to net written premiums was primarily the result of timing as the higher base premium written in 2024 is being earned through the 2025 period; premiums are earned ratably over the coverage period whereas written premiums are generally recorded at the initiation of the coverage period.
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Incurred Losses and LAE. The following table presents the incurred losses and LAE for the Insurance segment for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Current
Year
Ratio %/
Pt Change
Prior
Years
Ratio %/
Pt Change
Total
Incurred
Ratio %/
Pt Change
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Attritional
Catastrophes
Total segment
Variance 2025/2024
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
Variance 2024/2023
Attritional
pts
pts
pts
Catastrophes
pts
pts
pts
Total segment
pts
pts
pts
(Some amounts may not reconcile due to rounding.)
Incurred losses and LAE decreased by 15.8% to $3.1 billion in 2025, compared to $3.6 billion in 2024. The decrease was mainly due to a decrease in unfavorable development on prior years attritional losses of $601 million and a decrease in current year catastrophelosses of $79 million, partially offset by an increase of $101 million in current year attritional losses and a decrease in favorable development on prior years catastrophelosses of $9 million.
The increase in current year attritional losses and the 2025 unfavorable development on prior years attritional losses of $471 million were both primarily due to reserve strengthening in U.S. casualty lines of business driven by elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024.
The current year catastrophelosses of $41 million primarily related to Hurricane Melissa ($16 million), the first quarter 2025 Myanmar earthquake ($8 million) and the 2025 Southern California wildfires ($7 million), with the remaining losses resulting from various events. The $120 million of current year catastrophelosses in 2024 primarily related to Hurricane Milton ($44 million), Hurricane Helene ($29 million), Hurricane Beryl ($10 million) and the third quarter 2024 Calgary Alberta storms ($9 million), with the remaining losses resulting from various events. For 2025, the favorable development on prior year catastrophelosses of $5 million was related to multiple events from 2024 and prior.
Segment Expenses. Commission and brokerage increased by 11.2% to $488 million in 2025, compared to $439 million in 2024. Segment other underwriting expenses increased to $721 million in 2025, compared to $615 million in 2024. The change in commission and brokerage expenses is driven by mix as the international portfolio increases which carries a higher net commission rate. The increase in other underwriting expenses was mainly due to the impact of strategic actions in insurance operations.
Other.
The Other segment includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain
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discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses.
The following table presents the underwriting results and ratios for the Other segment for the periods indicated:
Years Ended December 31,
(Dollars in millions)
Gross written premiums
Net written premiums
Premiums earned
Incurred losses and LAE
Commission and brokerage
Other underwriting expenses
Underwriting gain (loss)
(Some amounts may not reconcile due to rounding.)
Incurred Losses and LAE. Incurred losses and LAE decreased to $292 million in 2025, compared to $580 million in 2024. The decrease was mainly due to a decrease in unfavorable development on prior years attritional losses of $240 million. During 2025, the unfavorable development on prior year attritional losses for the Company’s Other segment of $163 million was mainly related to unfavorable development on prior year attritional losses driven by U.S. casualty lines, primarily from our sports and leisure business.
Critical Accounting Estimates
The following is a summary of the critical accounting estimates related to accounting estimates that (1) require management to make assumptions about highly uncertain matters and (2) could materially impact the consolidated financial statements if management made different assumptions.
Loss and LAE Reserves. Our most critical accounting estimate is the determination of our loss and LAE reserves. We maintain reserves equal to management’s estimated ultimate liability for losses and LAE for reported and unreportedclaims for our insurance and reinsurance businesses. Because reserves are based on estimates of ultimate losses and LAE by underwriting or accident year, we use a variety of statistical and actuarial techniques to monitor reserve adequacy over time, evaluate new information as it becomes known and adjust reserves whenever an adjustment appears warranted. We consider many factors when setting reserves including: (1) our exposure base and projected ultimate premiums earned; (2) our expected loss ratios by product and class of business, which are developed collaboratively by underwriters and actuaries; (3) actuarial methodologies and assumptions which analyze our loss reporting and payment experience, size of loss distribution, reports from ceding companies and historical trends, such as reserving patterns, loss payments and product mix; (4) current legal interpretations of coverage and liability; and (5) economic conditions including but not limited to social inflation. Management’s best estimate is developed through collaboration with actuarial, underwriting, claims, legal and finance departments and culminates with the input of reserve committees. Each segment reserve committee includes the participation of the relevant parties from actuarial, finance, claims and segment senior management. Reserves are further reviewed by Everest’s Chief Reserving Actuary and senior management. The objective of such process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability. Our insurance and reinsurance loss and LAE reserves represent management’s best estimate of our ultimate liability. Actual losses and LAE ultimately paid may deviate, perhaps substantially, from such reserves. Net income (loss) will be impacted in a period in which the change in estimated ultimate losses and LAE is recorded. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements.
It is more difficult to accurately estimate loss reserves for reinsurance liabilities than for insurance liabilities. At December 31, 2025, we had reinsurance loss reserves of $22.7 billion, insurance loss reserves of $10.2 billion and other loss reserves of $1.4 billion, of which $209 million were loss reserves for A&E liabilities. A detailed discussion of additional considerations related to A&E exposures follows later in this section.
The detailed data required to evaluate ultimate losses for our insurance business is accumulated from our underwriting and claim systems. Reserving for reinsurance requires evaluation of loss information received from ceding companies. Ceding companies report losses to us in many ways depending on the type of contract and the agreed or contractual reporting requirements. Generally, proportional/quota share contracts require the submission of a monthly/quarterly account, which includes premium and loss activity for the period with corresponding reserves as established by the ceding company. This information is recorded into our records. For certain proportional contracts, we may require a
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detailed loss report for claims that exceed a certain dollar threshold or relate to a particular type of loss. Excess of loss and facultative contracts generally require individual loss reporting with precautionary notices provided when a loss reaches a significant percentage of the attachment point of the contract or when certain causes of loss or types of injury occur. Our experienced Claims staff handles individual loss reports and supporting claim information. Based on our evaluation of a claim, we may establish additional case reserves in addition to the case reserves reported by the ceding company. To ensure ceding companies are submitting required and accurate data, the Underwriting, Claim, Reinsurance Accounting and Internal Audit departments of the Company perform various reviews of our ceding companies, particularly larger ceding companies, including on-site audits.
We sort our reserves by segment into exposure groupings for actuarial analysis. We assign our business to exposure groupings so that the underlying exposures have reasonably homogeneous loss development characteristics and are large enough to facilitate credible estimation of ultimate losses. We periodically review our exposure groupings, and we may change our groupings over time as our business changes. We currently use approximately 250 exposure groupings to develop our reserve estimates. One of the key selection characteristics for the exposure groupings is the historical duration of the claims settlement process. Business in which claims are reported and settled relatively quickly are commonly referred to as short tail lines, principally property lines. Casualty claims tend to take longer to be reported and settled and casualty lines are generally referred to as long tail lines. Our estimates of ultimate losses for shorter tail lines, with the exception of loss estimates for large catastrophic events, generally exhibit less uncertainty than those for the longer tail lines.
We use a variety of actuarial methodologies, such as expected loss ratio, chain ladder reserving methods and Bornhuetter-Ferguson, supplemented by judgment where appropriate, to estimate our ultimate losses and LAE for each exposure group. Although we use similar actuarial methodologies for both short tail and long tail lines, the faster reporting of experience for the short tail lines allows us to have greater confidence in our estimates of ultimate losses at an earlier stage than for long tail lines. For immature underwriting or accident years, the initial expected loss ratios are key inputs that involve management judgment and are based on a variety of factors, including: (1) expected loss ratios developed during our pricing process; (2) historical loss ratios adjusted for rate change and trend; and (3) industry benchmarks for similar business. These judgments take into account our view of past, current and future factors that may influence ultimate losses, including: (1) market conditions; (2) changes in the business underwritten; (3) changes in timing of the emergence of claims; and (4) other factors. The determination of when reported losses are sufficient and credible to warrant selection of an ultimate loss ratio different from the initial expected loss ratio also requires judgment.
Our carried reserves at each reporting date are management’s best estimate of ultimate unpaidlosses and LAE at that date. We complete detailed reserve studies for each exposure group annually for our reinsurance and insurance operations. The completed annual reserve studies are “rolled forward” for each accounting period until the subsequent reserve study is completed. Analyzing the roll-forward process involves comparing actual reported losses to expected losses based on the most recent reserve study. The Company analyzes significant variances between actual and expected losses and also considers recent market, underwriting and management criteria to determine management’s best estimate of ultimate unpaidlosses and LAE.
Certain reserves, including losses from widespread catastrophic events, cannot be estimated using traditional actuarial method. Rather, loss and LAE reserves are estimated by completing an in-depth analysis of the individual contracts which may potentially be impacted by the loss. The analysis uses inputs from various sources and methodology, to build up a comprehensive perspective. Such analysis generally involves: 1) estimating the size of insured industry losses; 2) reviewing portfolios to identify contracts which are exposed; 3) reviewing information reported or otherwise provided by customers and brokers; 4) discussing the loss with customers and brokers; and 5) estimating the ultimate expected cost to settle all claims and administrative costs arising from the loss on a contract-by-contract basis and in aggregate for the event. Due to the inherent uniqueness or specific nature of a catastrophic event, each event has its own unique assessment, and different weights may be applied to various inputs based on our judgment. Once a loss has occurred, during the then current reporting period, we record our best estimate of the ultimate expected cost to settle all claims arising from the loss. Our estimate of loss and LAE reserves is then determined by deducting cumulative paid losses from its estimate of the ultimate expected loss. Our estimate of incurred but not reported (“IBNR”) is determined by deducting cumulative paid losses, case reserves and additional case reserves from its estimate of the ultimate expected loss.
Because catastrophelosses are typically due to prominent, public events such as hurricanes and earthquakes, we are often able to use independent reports as part of our loss reserve estimation process. We also review catastrophe bulletins published by various statistical modeling agencies to assist in determining the size of the industry loss, although these reports may not be available for some time after an event. For smaller events including localized severe weather events such as windstorms, hail, ice, snow, flooding, freezing and tornadoes, which are not necessarily prominent, public
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occurrences, we initially place greater reliance on catastrophe bulletins published by statistical modeling agencies to assist in determining what events occurred during the reporting period than we do for large events. This includes reviewing catastrophe bulletins published by Property Claim Services for U.S. catastrophes. We set our initial estimates of reserves for loss and LAE for these smaller events based on a combination of its historical market share for these types of losses and the estimate of the total insured industry property losses as reported by statistical modeling agencies, although we may make significant adjustments based on our current exposure to the geographic region involved as well as the size of the loss and the peril involved.
In general, reserves for more recent large losses are subject to greater uncertainty and, therefore, greater potential variability, and are likely to experience material changes from one period to the next. This is due to the uncertainty as to the size of the industry losses, uncertainty as to which contracts have been exposed, uncertainty due to complex legal and coverage issues that can arise out of large or complex losses, and uncertainty as to the magnitude of claims incurred by our customers. As our losses age, more information becomes available, and we believe our estimates become more certain.
Given the inherent variability in our loss reserves, we have developed an estimated range of possible gross reserve levels. A table of ranges by segment, accompanied by commentary on potential and historical variability, is included in “Financial Condition - Loss and LAE Reserves”. The ranges are developed using the exposure groups used in the published global loss triangles. For each exposure group, our actuaries calculate a range of possible ultimate losses for each accident year. These ranges are calculated by applying a variety of different acceptable actuarial methods, and varying the parameter selections within a reasonable set of possibilities. Our estimates of our reserve variability may not be comparable to those of other companies because there are no consistently applied actuarial or accounting standards governing such presentations. Our recorded reserves reflect our best point estimate of our liabilities, and our actuarial methodologies focus on developing such point estimates. We calculate the ranges subsequently, based on the historical variability of such reserves.
A&E Exposures. We continue to receive claims under expired insurance and reinsurance contracts asserting injuries and/or damages relating to or resulting from environmental pollution and hazardous substances, including asbestos. Environmental claims typically assert liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damage caused by the release of hazardous substances into the land, air or water. Asbestos claims typically assert liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos. The results of run-off A&E exposures are included within the Company’s Other segment.
Our reserves include an estimate of our ultimate liability for A&E claims. There are significant uncertainties surrounding our estimates of our potential losses from A&E claims. Among the uncertainties are: (a) potentially long waiting periods between exposure and manifestation of any bodily injury or property damage; (b) difficulty in identifying sources of asbestos or environmental contamination; (c) difficulty in properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure.
Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves and such variation could have a material adverse effect on our financial condition, results of operations and/or cash flows. See also ITEM 8, “Financial Statements and Supplementary Data” - Notes 1 and 4 of Notes to the Consolidated Financial Statements.
Reinsurance Recoverables. We have purchased reinsurance to reduce our exposure to adverse claim experience, large claims and catastrophicloss occurrences. Our ceded reinsurance provides for recovery from reinsurers of a portion of losses and loss expenses under certain circumstances. Such reinsurance does not relieve us of our obligation to our policyholders. In the event our reinsurers are unable to meet their obligations under these agreements or are able to successfullychallengelosses ceded by us under the contracts, we will not be able to realize the full value of the reinsurance recoverable balance. In some cases, we may hold full or partial collateral for the receivable, including letters of credit, trust assets and cash. Additionally, creditworthy foreign reinsurers of business written in the U.S., as well as capital markets’ reinsurance mechanisms, are generally required to secure their obligations.
We have established reserves for uncollectible balances based on our assessment of the collectability of the outstanding balances. The allowance for uncollectible reinsurance reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The allowance for uncollectible
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reinsurance recoverable includes an allowance for disputed balances. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance or charge off reinsurer balances that are determined to be uncollectible. Reinsurance recoverable balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods.
Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverable become due, it is possible that future adjustments to the Company’s reinsurance recoverable, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.
The allowance is estimated as the amount of reinsurance recoverable exposed to loss multiplied by estimated factors for the probability of default. The reinsurance recoverable exposed is the amount of reinsurance recoverable net of collateral and other offsets, considering the nature of the collateral, potential future changes in collateral values, and historical loss information for the type of collateral obtained. The probability of default factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The Company's evaluation of the required allowance for reinsurance recoverable considers the current economic environment as well as macroeconomic scenarios. To manage reinsurer credit risk, a reinsurance security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer.
The Company records credit loss expenses related to reinsurance recoverable in incurred losses and LAE in the Company’s consolidated statements of operations and comprehensive income (loss). Write-offs of reinsurance recoverable and any related allowance are recorded in the period in which the balance is deemed uncollectible.
Retroactive Reinsurance.
Retroactive reinsurance agreements are reinsurance agreements under which a reinsurer agrees to reimburse the Company as a result of loss development related to past insurable events. For these agreements, the excess of the amounts ultimately collectible under the agreement over the consideration paid is recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves. The amount of deferred gain liability is recalculated each period based on cumulative recoveries not yet collected relative to the latest estimate of ultimate losses to be recovered. If the consideration paid exceeds the ultimate losses collectible under the agreement, the net loss on the agreement is recognized in income immediately in incurred losses and loss adjustment expenses in the Company’s consolidated statement of operations. In any given period, the change in deferred gain included in net income includes amortization of the deferred gain based on the percentage of ultimate ceded losses collected plus any change in the deferred liability due to change in the estimated losses to be recovered. The amounts are recalculated each period based on loss payments and updated loss reserves estimates.
Premiums Written and Earned. Premiums written by us are earned ratably over the coverage periods of the related insurance and reinsurance contracts. We establish unearned premium reserves to cover the unexpired portion of each contract. Such reserves, for assumed reinsurance, are computed using pro rata methods based on statistical data received from ceding companies. Premiums earned, and the related costs, which have not yet been reported to us, are estimated and accrued. Premiums written are based on contract and policy terms and include estimates based on information received from both insureds and ceding companies. Differences between such estimates and actual amounts are recorded in the period in which the estimates are changed, or the actual amounts are determined. These earned but not reported premiums are combined with reported earned premiums to comprise our total premiums earned for determination of our incurred losses and loss and LAE reserves. Commission expense and incurred losses related to the change in earned but not reported premium are included in current period company and segment financial results. See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements.
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The following table displays the estimated components of net earned but not reported premiums by segment for the periods indicated:
At December 31,
(Dollars in millions)
Reinsurance
Insurance
Other
Total
(Some amounts may not reconcile due to rounding.)
Investment Valuation. Our fixed income securities are classified for accounting purposes as either available for sale or held to maturity. The available for sale fixed maturity securities are carried at fair value and the held to maturity fixed maturity portfolio is carried at amortized cost, net of current expected credit allowance on our consolidated balance sheets. Our equity securities are all carried at fair value. Some of our CMBS are valued using cash flow models and risk-adjusted discount rates. We hold privately placed securities which are either valued by investment advisors or the Company. In some instances, values provided by an investment advisor are supported with opinions from qualified independent third parties. The Company has procedures in place to review the values received from its investment advisors. At December 31, 2025 and 2024, our investment portfolio included a total of $5.5 billion and $5.1 billion of limited partnership investments, whose values are reported pursuant to the equity method of accounting, and corporate-owned life insurance (“COLI”) policies, whose values are reported at cash surrender value. We carry the limited partnership investments at values provided by the managements of the limited partnerships and due to inherent reporting lags, the carrying values are based on values with “as of” dates from generally one month to one quarter prior to our financial statement date.
At December 31, 2025, we had net unrealized gains on our fixed maturity securities, net of tax, of $5 million, compared to net unrealized losses on our fixed maturity securities, net of tax, of $849 million at December 31, 2024. Gains (losses) from fair value fluctuations on available for sale fixed maturity securities are reflected as accumulated other comprehensive income (loss) in the consolidated balance sheets. Fair value declines for the available for sale fixed income portfolio, which are considered credit related, are reflected in our consolidated statements of operations and comprehensive income (loss), as realized losses on investments. We consider many factors when determining whether a fair value decline is credit related, including: (1) we have no intent to sell and, more likely than not, will not be required to sell prior to recovery, (2) the credit strength of the issuer, (3) the issuer’s market sector, (4) the length of time to maturity and (5) for asset-backed securities, changes in prepayments, credit enhancements and underlying default rates. If management’s assessments change in the future, we may ultimately record a realized loss after management originally concluded that the decline in value was not attributed to credit related factors.
Fixed maturity securities designated as held to maturity consist of debt securities for which the Company has both the positive intent and ability to hold to maturity or redemption and are reported at amortized cost, net of the current expected credit loss allowance. Interest income for fixed maturity securities held to maturity is determined in the same manner as interest income for fixed maturity securities available for sale. The Company evaluates fixed maturity securities classified as held to maturity for current expected credit losses utilizing risk characteristics of each security, including credit rating, remaining time to maturity, adjusted for prepayment considerations, and subordination level, and applying default and recovery rates, which include the incorporation of historical credit loss experience and macroeconomic forecasts, to develop an estimate of current expected credit losses.
Tax. On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (the “2023 Act”), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The 2023 Act includes a provision referred to as “The Economic Transition Adjustment” (the “ETA”), which is intended to provide a fair and equitable transition into the new tax regime, and results in a deferred tax benefit for the Company. However, on January 15, 2025, the OECD issued guidance related to “deferred tax assets arising from tax benefits provided by General Government” restricting the utilization of those deferred tax benefits against the computation of its Pillar Two Global Minimum Taxes to approximately 20% of the originally calculated amounts and only for a grace period of two years through 2026. If the Bermuda Ministry of Finance amends the 2023 Act in response to this guidance, the exact impact of any such amendments is uncertain but there is a risk that it results in a reduction in the Company's Deferred Tax Assets.
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The net deferred tax assets principally relate to the identifiable intangible assets. We estimated the fair value of the identifiable intangible assets using discounted future cash flow models. The significant assumptions utilized in the discounted future cash flow models include the forecasted revenues and expected profits to be generated by the identifiable intangible assets and discount rates.
See also ITEM 8, “Financial Statements and Supplementary Data” - Note 1 of Notes to the Consolidated Financial Statements.
FINANCIAL CONDITION
Investments. Total investments were $44.1 billion at December 31, 2025, an increase of $4.1 billion compared to $40.0 billion at December 31, 2024. The rise in investments was primarily related to an increase in fixed maturities - available for sale due to an overall net purchase of $4.3 billion of fixed maturities - available for sale in 2025.
The Company’s limited partnership investments are comprised of limited partnerships that invest in private equity, private credit and private real estate. Generally, the limited partnerships are reported on a month or quarter lag. We receive annual audited financial statements for all of the limited partnerships which are primarily prepared using fair value accounting in accordance with GAAP guidance. For the quarterly reports, the Company reviews the financial reports for any unusual changes in carrying value. If the Company becomes aware of a significant decline in value during the lag reporting period, the loss will be recorded in the period in which the Company identifies the decline.
The table below summarizes the composition and characteristics of our investment portfolio as of the dates indicated:
At December 31,
Fixed income portfolio duration (years)
Fixed income composite credit quality
Reinsurance Recoverables. Reinsurance recoverables for both paid and unpaidlosses totaled $5.1 billion at December 31, 2025 and $3.1 billion at December 31, 2024. At December 31, 2025, in connection with the ADC reinsurance agreements, $1,253 million was recoverable from State National Insurance Company, Inc. Additionally at December 31, 2025, $411 million, or 8.1%, was recoverable from Mt. Logan Re, Ltd. (“Mt. Logan Re”) collateralized segregated accounts and $289 million, or 5.7%, was recoverable from Munich Reinsurance America, Inc. No other retrocessionaire accounted for more than 5% of our recoverables.
Loss and LAE Reserves. Gross loss and LAE reserves totaled $34.3 billion and $29.9 billion at December 31, 2025 and 2024, respectively.
The following tables summarize gross outstanding loss and LAE reserves by segment, classified by case reserves and IBNR reserves, for the periods indicated:
At December 31, 2025
(Dollars in millions)
Case
Reserves
IBNR
Reserves
Total
Reserves
Total
Reinsurance
Insurance
Other (1)
Total
(Some amounts may not reconcile due to rounding.)
(1) Reserves for A&E exposures are included within Other. At December 31, 2025, A&E Case and IBNR reserves totaled $150 million and $59 million, respectively.
At December 31, 2024
(Dollars in millions)
Case
Reserves
IBNR
Reserves
Total
Reserves
Total
Reinsurance
Insurance
Other (1)
Total
(Some amounts may not reconcile due to rounding.)
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(1) Reserves for A&E exposures are included within Other. At December 31, 2024, A&E Case and IBNR reserves totaled $149 million and $111 million, respectively.
Changes in premiums earned and business mix, reserve refinement, catastrophelosses and changes in catastropheloss reserves and claim settlement activity all impact loss and LAE reserves by segment and in total.
Our carried loss and LAE reserves represent management’s best estimate of our ultimate liability for unpaidclaims. We continuously re-evaluate our reserves, including re-estimates of prior period reserves, taking into consideration all available information and, in particular, newly reported loss and claim experience. Changes in reserves resulting from such re-evaluations are reflected in incurred losses in the period when the re-evaluation is made. Our analytical methods and processes operate at multiple levels including individual contracts, groupings of like contracts, classes and lines of business, internal business units, segments, accident years, legal entities and in the aggregate. In order to set appropriate reserves, we make qualitative and quantitative analyses and judgments at these various levels. We utilize actuarial science, business expertise and management judgment in a manner intended to ensure the accuracy and consistency of our reserving practices. Management’s best estimate is developed through collaboration with actuarial, underwriting, claims, legal and finance departments and culminates with the input of reserve committees. Each segment reserve committee includes the participation of the relevant parties from actuarial, finance, claims and segment senior management. Reserves are further reviewed by Everest’s Chief Reserving Actuary and senior management. The objective of such process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability. Nevertheless, our reserves are estimates, which are subject to variation, which may be significant.
There can be no assurance that reserves for, and losses from, claim obligations will not increase in the future, possibly by a material amount. However, we believe that our existing reserves and reserving methodologies lessen the probability that any such increase would have a material adverse effect on our financial condition, results of operations or cash flows.
We have included ranges for loss reserve estimates determined by our actuaries, which have been developed through a combination of objective and subjective criteria. Our presentation of this information may not be directly comparable to similar presentations of other companies as there are no consistently applied actuarial or accounting standards governing such presentations. Our recorded reserves are an aggregation of our best point estimates for approximately 250 reserve groups and reflect our best point estimate of our liabilities. Our actuarial methodologies develop point estimates rather than ranges and the ranges are developed subsequently based upon historical and prospective variability measures.
The following table below represents the reserve levels and ranges for each of our business segments for the period indicated:
Outstanding Reserves and Ranges By Segment (1)
At December 31, 2025
(Dollars in millions)
Reported
Low
Range %
Low
Range
High
Range %
High
Range
Gross Reserves By Segment
Reinsurance
Insurance
Other (excluding A&E)
Total Gross Reserves (excluding A&E)
A&E (Other Segment)
Total Gross Reserves
(Some amounts may not reconcile due to rounding.)
(1) There can be no assurance that reserves will not ultimately exceed the indicated ranges requiring additional income (loss) statement expense.
The size of the range is dependent upon the level of confidence associated with the reserve estimates. Within each range, management’s best estimate of loss reserves is based upon the point estimate derived by our actuaries in detailed reserve studies. Such ranges are necessarily subjective due to the lack of generally accepted actuarial standards with respect to their development. There can be no assurance that our claim obligations will not vary outside of these ranges.
Additional losses, including those relating to latent injuries, and other exposures, which are as yet unrecognized, the type or magnitude of which cannot be foreseen by us or the reinsurance and insurance industry generally, may emerge in the future. Such future emergence, to the extent not covered by existing retrocessional contracts, could have material adverse effects on our future financial condition, results of operations and cash flows.
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A&E Exposures. A&E exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The results of run-off A&E exposures are included within the Company’s Other segment.
With respect to asbestos only, at December 31, 2025, we had net asbestos loss reserves of $170 million, or 87.9%, of total net A&E reserves, all of which was for assumed business. At December 31, 2025, we had gross asbestos loss reserves of $186 million, or 88.8% of total gross A&E reserves, all of which was for assumed business. See Note 4 of the Notes to the Consolidated Financial Statements for a summary of A&E Exposures.
Ultimate loss projections for A&E liabilities cannot be accomplished using standard actuarial techniques. We believe that our A&E reserves represent management’s best estimate of the ultimate liability; however, there can be no assurance that ultimate loss payments will not exceed such reserves, perhaps by a significant amount.
Industry analysts use the “survival ratio” to compare the A&E reserves among companies with such liabilities. The survival ratio is typically calculated by dividing a company’s current net reserves by the three-year average of annual paid losses. Hence, the survival ratio equals the number of years that it would take to exhaust the current reserves if future loss payments were to continue at historical levels. Using this measurement, our net three-year asbestos survival ratio was 4.7 years at December 31, 2025. These metrics can be skewed by individual large settlements occurring in the prior three years and therefore, may not be indicative of the timing of future payments.
LIQUIDITY AND CAPITAL RESOURCES
Capital. Shareholders’ equity at December 31, 2025 and December 31, 2024 was $15.5 billion and $13.9 billion, respectively. Management’s objective in managing capital is to ensure that the Company’s overall capital level, as well as the capital levels of its operating subsidiaries, exceed the amounts required by regulators, the amount needed to support our current financial strength ratings from rating agencies and our own economic capital models. The Company’s capital has historically exceeded these benchmark levels.
Our two main operating companies, Bermuda Re and Everest Re, are regulated by the Bermuda Monetary Authority (the “BMA”) and the State of Delaware’s Department of Insurance, respectively. Both regulatory bodies have their own capital adequacy models based on statutory capital as opposed to GAAP basis equity. Bermuda Re is subject to the Bermuda Solvency Capital Requirement (“BSCR”) administered by the BMA and Everest Re is subject to the RBC developed by the U.S. National Association of Insurance Commissioners (“NAIC”). Failure to meet the required statutory capital levels could result in various regulatory restrictions, including restrictions on business activity and the payment of dividends to their parent companies.
The regulatory targeted capital and the actual statutory capital for Bermuda Re and Everest Re were as follows:
Bermuda Re (1)
At December 31,
Everest Re (2)
At December 31,
(Dollars in millions)
Regulatory targeted capital
Actual capital
(1) Regulatory targeted capital represents the target capital level from the applicable year's BSCR calculation.
(2) Regulatory targeted capital represents 200% of the RBC authorized control level calculation for the applicable year.
(3) The 2025 BSCR calculation is not yet due to be completed; however, the Company anticipates that Bermuda Re's December 31, 2025 actual capital will exceed the targeted capital level. In accordance with guidance issued by the BMA in 2025, Bermuda Re has reflected the impacts of the ETA recognized in response to the 2023 Act in its 2024 regulatory targeted capital and actual capital.
Our financial strength ratings, as determined by A.M. Best Company (“A.M. Best”), Moody’s and S&P, are important, as they provide our customers and investors with an independent assessment of our financial strength using a rating scale that provides for relative comparisons. We continue to possess significant financial flexibility and access to debt and equity markets as a result of our financial strength, as evidenced by the financial strength ratings assigned by independent rating agencies. See also ITEM 1, “Financial Strength Ratings”.
We maintain our own economic capital models to monitor and project our overall capital, as well as the capital at our operating subsidiaries. A key input to the economic models is projected income, and this input is continually compared to actual results, which may require a change in the capital strategy.
In 2025, we repurchased 2,394,763 of our common shares at a cost of $797 million in the open market and paid $335 million in common share dividends to adjust our capital position and enhance long-term expected returns to our shareholders. During 2024, we repurchased 536,469 of our common shares at a cost of $200 million in the open market
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and paid $334 million in dividends. We may at times enter into a Rule 10b5-1 repurchase plan agreement to facilitate the repurchase of shares. On November 7, 2024, our existing Board authorization to purchase up to 32 million of our shares was increased by 10 million shares to authorize the purchase of up to 42 million shares. As of December 31, 2025, we had repurchased 33.7 million shares under this authorization. During the fourth quarter of 2025, the Company’s Board of Directors declared a quarterly common stock dividend of $2.00 per share. The common stock dividend was paid on December 12, 2025 for holders of record as of November 26, 2025.
On May 19, 2023, the Company completed the public offering of 4,140,000 common shares, which included full exercise of the underwriters’ option to purchase an additional 540,000 common shares, at a public offering price of $360.00 per share. Total net proceeds from the public offering were $1,445 million, after underwriting discount and expenses. The Company’s intent was to use the net proceeds from this offering for long-term reinsurance opportunity and continued build out of the global insurance business.
Liquidity. Our liquidity requirements are generally met from positive cash flow from operations. Positive cash flow results from reinsurance and insurance premiums being collected prior to disbursements for claims, with disbursements generally taking place over an extended period after the collection of premiums, sometimes a period of many years. Collected premiums are generally invested, prior to their use in such disbursements, and investment income provides additional funding for loss payments. Our net cash flows from operating activities were $3.1 billion and $5.0 billion for the years ended December 31, 2025 and 2024, respectively. Additionally, these cash flows reflected net catastropheloss payments of $852 million and $693 million for the years ended December 31, 2025 and 2024, respectively, and net tax payments of $150 million and $397 million for the years ended December 31, 2025 and 2024, respectively.
If disbursements for losses and LAE, policy acquisition costs and other operating expenses were to exceed premium inflows, cash flow from reinsurance and insurance operations would be negative. The effect on cash flow from operations would be partially offset by cash flow from investment income. Additionally, cash inflows from investment maturities of both short-term investments and longer-term maturities are available to supplement other operating cash flows. We do not expect to supplement negative operations cash flows with investment dispositions.
As the timing of payments for losses and LAE cannot be predicted with certainty, we maintain portfolios of long-term invested assets with varying maturities, along with short-term investments that provide additional liquidity for payment of claims. At December 31, 2025 and December 31, 2024, we held cash and short-term investments of $4.3 billion and $6.3 billion, respectively. Our short-term investments are generally readily marketable and can be converted to cash. In addition to these cash and short-term investments, we had $1.4 billion of fixed maturity securities - available for sale maturing within one year or less, $10.8 billion maturing within one to five years and $8.6 billion maturing after five years at December 31, 2025. We believe that these fixed maturity securities, in conjunction with the short-term investments and positive cash flow from operations, provide ample sources of liquidity for the expected payment of losses and LAE in the near future. We do not anticipate selling a significant amount of securities to pay losses and LAE. At December 31, 2025, we had $21 million of net pre-tax unrealized appreciation related to fixed maturity - available for sale securities, comprised of $619 million of pre-tax unrealized depreciation and $640 million of pre-tax unrealized appreciation.
Management generally expects annual positive cash flow from operations. However, given catastrophic events observed in recent periods, cash flow from operations may decline and could become negative in the near term as significant claim payments are made related to the catastrophes. However, as indicated above, the Company has access to ample liquidity to settle its catastropheclaims and also may receive payments under the catastrophe bond program and the Mt. Logan Re collateralized reinsurance arrangement.
In addition to our cash flows from operations and liquid investments, Everest Re is a member of the FHLBNY, which allows Everest Re to borrow up to 10% of its statutory admitted assets. As of December 31, 2025, Everest Re had statutory admitted assets of approximately $32.6 billion which provides borrowing capacity of up to approximately $3.3 billion. As of December 31, 2025, Everest Re had $1.0 billion of borrowings outstanding, which begin to expire in 2026. See Note 8 - Credit Facilities to the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K for further details.
Exposure to Prior Year Development. We are required to maintain reserves to cover our ultimate liability of losses and LAE for both reported and unreportedclaims. These reserves are only estimates of what we believe the ultimate settlement and administration of claims will cost based on facts and circumstances known to us and actuarial and statistical analysis. Loss reserve estimates are reconsidered, as necessary, as experience develops and to reflect other changes in circumstances that may affect our estimate of ultimate loss, and this could potentially result in increases to our reserves. For the insurance and reinsurance businesses, ultimate losses may differ materially from our expectations
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at the time we underwrite the business. Because of the uncertainties that surround our estimates of loss and LAE reserves, we cannot be certain that ultimate losses and LAE payments will not exceed the estimates we make at any given time. Loss experience in our lines of business is very unpredictable and has been exacerbated by social inflation factors such as uncertain legal system outcomes, increased frequency of high-severityclaims and third-party litigation funding. If our reserves are deficient in future periods, we may be required to increase loss reserves in the period in which such deficiencies are identified which would cause a charge to our earnings, a reduction of capital and could result in adverse effects on our business, financial condition, results of operation or liquidity. We have entered into certain adverse development reinsurance agreements to reinsure against potential adverseloss development for accident years 2024 and prior arising out of North American insurance liabilities within our Insurance and Other segments subject to exclusions for certain liabilities, including among others those related to Asbestos & Environmental reserves.
Exposure to Catastrophes. Like other insurance and reinsurance companies, we are exposed to multiple insured losses arising out of a single occurrence, whether a natural event, such as a hurricane or an earthquake, or other catastrophe, such as an explosion at a major factory. A large catastrophic event can be expected to generate insured losses to multiple reinsurance treaties, facultative certificates and direct insurance policies across various lines of business.
We focus on potential losses that could result from any single event, or series of events as part of our evaluation and monitoring of our aggregate exposures to catastrophic events. Accordingly, we employ various techniques to estimate the amount of loss we could sustain from any single catastrophic event or series of events in various geographic areas. These techniques range from deterministic approaches, such as tracking aggregate limits exposed in catastrophe-prone zones and applying reasonable damage factors, to modeled approaches that attempt to scientifically measure catastropheloss exposure using sophisticated Monte Carlo simulation techniques that forecast frequency and severity of potential losses on a probabilistic basis.
No single computer model or group of models is currently capable of projecting the amount and probability of loss in all global geographic regions in which we conduct business. In addition, the form, quality and granularity of underwriting exposure data furnished by (re)insureds is not uniformly compatible with the data requirements for our licensed models, which adds to the inherent imprecision in the potential loss projections. Further, the results from multiple models and analytical methods must be combined to estimate potential losses by and across business units. Also, while most models have been updated to incorporate claims information from recent catastrophic events, catastrophe model projections are still inherently imprecise. In addition, uncertainties with respect to future climatic patterns and cycles could add further uncertainty to loss projections from models based on historical data.
Nevertheless, when combined with traditional risk management techniques and sound underwriting judgment, catastrophe models are a useful tool for underwriters to price catastropheexposed risks and for providing management with quantitative analyses with which to monitor and manage catastrophic risk exposures by zone and across zones for individual and multiple events.
Projected catastrophelosses are generally summarized in terms of the probable maximum loss (“PML”). We define PML as our anticipated loss, taking into account contract terms and limits, caused by a single catastrophe affecting a broad contiguous geographic area, such as that caused by a hurricane or earthquake. The PML will vary depending upon the modeled simulated losses and the make-up of the in-force book of business. The projected severity levels are described in terms of “return periods”, such as “100-year events” and “250-year events”. For example, a 100-year PML is the estimated loss to the current in-force portfolio from a single event which has a 1% probability of being exceeded in a twelve-month period. In other words, it corresponds to a 99% probability that the loss from a single event will fall below the indicated PML. It is important to note that PMLs are estimates. Modeled events are hypothetical events produced by a stochastic model. As a result, there can be no assurance that any actual event will align with the modeled event or that actual losses from events similar to the modeled events will not vary materially from the modeled event PML.
From an enterprise risk management perspective, the Board of Directors of the Company and each of the Company’s operating subsidiaries, in connection with management, sets limits on the levels of catastropheloss exposure we may underwrite. The limits are revised periodically based on a variety of factors, including but not limited to our financial resources and expected earnings and risk/reward analyses of the business being underwritten.
Economic loss is the PML exposure, net of third-party reinsurance including catastrophe industry loss warranty cover, reduced by estimated reinstatement premiums to renew coverage and estimated income taxes. The impact of income taxes on the PML depends on the distribution of the losses by corporate entity, which is also affected by inter-affiliate reinsurance. Management also monitors and controls its largest PMLs at multiple points along the loss distribution curve, such as loss amounts at the 20, 50, 100, 250 and 500-year return periods. This process enables management to identify
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and control exposure accumulations and to integrate such exposures into enterprise risk, underwriting and capital management decisions.
Our catastropheloss projections, segmented by risk zones, are updated quarterly and reviewed as part of a formal risk management review process. Each segment and business unit manages its underwriting risk in accordance with established guidelines. These guidelines place dollar limits on the amount of business that can be written based on a variety of factors, including (re)insured company profile, line of business, geographic location and risk hazards. In each case, the guidelines permit limited exceptions, which must be authorized by the Company’s senior management. Management regularly reviews and revises these guidelines in response to changes in business unit product offerings, market conditions, risk versus reward analyses and our enterprise and underwriting risk management processes.
Our operating results and financial condition can be adversely affected by catastrophe and other large losses. We manage our exposure to catastrophes and other large losses by:
• selective underwriting practices;
• diversifying our risk portfolio by geographic area and by types and classes of business;
• limiting our aggregate catastropheloss exposure in any particular geographic zone and contiguous zones;
• purchasing reinsurance and/or retrocessional protection to the extent that such coverage can be secured cost-effectively.
We believe that our methods of monitoring, analyzing and managing catastrophe exposures provide a credible risk management framework, which is integrated with our enterprise risk management, underwriting and capital management plans. However, there is much uncertainty and imprecision inherent in the catastrophe models and the catastropheloss estimation process generally. As a result, there can be no assurance that we will not experience losses from individual events that exceed the PML or other return period projections, perhaps by a material amount. Nor can there be assurance that we will not experience events impacting multiple zones, or multiple severe events that could, in the aggregate, exceed our PML expectations by a significant amount.
The table below reflects our PML exposure, net of third-party reinsurance including catastrophe industry loss warranty cover, at various return periods for our top zones/perils (as ranked by the largest 1 in 100-year economic loss) based on loss projection data as of January 1, 2026:
Return Periods (in years)
Exceeding Probability
(Dollars in millions)
Zone
Peril
Southeast U.S.
Wind
California
Earthquake
Texas
Wind
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The projected net economic losses, defined as PML exposures, net of third-party reinsurance including catastrophe industry loss warranty cover, reinstatement premiums and estimated income taxes, for the top zones/perils scheduled above are as follows:
Return Periods (in years)
Exceeding Probability
(Dollars in millions)
Zone
Peril
Southeast U.S.
Wind
California
Earthquake
Texas
Wind
We believe that our greatest worldwide 1 in 100-year exposure to a single catastrophic event is to a wind event affecting the Southeast U.S., where we estimate we have a PML exposure, net of third party reinsurance including catastrophe industry loss warranty cover, of $2.4 billion which represents approximately 11.0% of our December 31, 2025 shareholders’ equity.
If such a single catastropheloss were to occur, management estimates that the net economic loss to us would be approximately $1.7 billion. The estimate involves multiple variables, including which Everest entity would experience the loss, and as a result there can be no assurance that this amount would not be exceeded.
We may purchase reinsurance to cover specific business written or the potential accumulation or aggregation of exposures across some or all of our operations. Reinsurance purchasing decisions consider both the potential coverage and market conditions including the pricing, terms, conditions, availability and collectability of coverage, with the aim of securing cost-effective protection from financially secure counterparts. The amount of reinsurance purchased has varied over time, reflecting our view of our exposures and the cost of reinsurance. In recent years, we have increased our use of reinsurance offered through capital market facilities.
We participate in “common account” retrocessional arrangements for certain reinsurance treaties whereby a ceding company purchases reinsurance for the benefit of itself and its reinsurers under one or more of its reinsurance treaties. Common account retrocessional arrangements reduce the effect of individual or aggregate losses to all participating companies, including the ceding company, with respect to the involved treaties.
Information Technology. Everest’s information technology is a key component of its business operations. Information technology systems and services are hosted at public and private cloud service providers across multiple data centers with processing performed at the office locations of our operating subsidiaries and branches. We have implemented security procedures, and regularly assess and enhance our security protocols, to ensure that our key business systems are protected, secured and backed up at off-site locations so that they can be restored promptly if necessary. We have business continuity plans and disaster recovery plans along with periodic testing of those plans to ensure we are capable of providing uninterrupted technology services in the event of major systems outages with alternative secure data centers available in case of broader outages.
Our business operations depend on the proper functioning and availability of our information technology platform, which includes data processing and related electronic communications. We communicate electronically internally and externally with our brokers, program managers, clients, third-party vendors, regulators and others. These communications and the data we handle may include personal, confidential or proprietary information. We ensure that all our systems, data and electronic transmissions are appropriately protected with the latest technology safeguards and meet regulatory standards.
Despite these safeguards, a significant cyber incident, including system failure, security breach and disruption by malware or other damage could interrupt or delay our operations and possibly our results. This type of incident may result in a violation of applicable data security, privacy, or other laws, damage our reputation, cause a loss of customers or give rise to regulatory scrutiny as well as monetary fines and other penalties. Management is not aware of a cybersecurity incident that has had a material impact on our operations. See also ITEM 1A, “Risk Factors” and ITEM 1C, “Cybersecurity”.
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Expected Cash Outflows. The following table shows our significant expected cash outflows for the period indicated.
Payments due by period
(Dollars in millions)
Total
Less than
1 year
1-3 years
3-5 years
More than
5 years
Senior notes
Long term notes
Federal Home Loan Bank of New York
Interest expense (1)
Operating lease agreements
Gross reserve for losses and LAE (2)
Total
(Some amounts may not reconcile due to rounding.)
(1) Interest expense on long-term notes is calculated at the variable floating rate of 6.50%, as of December 31, 2025. This excludes interest on Federal Home Loan Bank of New York borrowings.
(2) Loss and LAE reserves represent management’s best estimate of losses from claim and related settlement costs. Both the amounts and timing of such payments are estimates, and the inherent variability of resolving claims as well as changes in market conditions make the timing of cash flows uncertain. Therefore, the ultimate amount and timing of loss and LAE payments could differ from our estimates.
The cash outflows for senior notes and long-term notes are the responsibility of Holdings. We strive to ensure that we have sufficient cash flow, liquidity, investments and access to capital markets to satisfy these obligations. Holdings generally depends upon dividends from Everest Re, its operating insurance subsidiary for its funding, capital contributions from Group or access to the capital markets.
Our various operating insurance and reinsurance subsidiaries have sufficient cash flow, liquidity and investments to settle outstanding reserves for losses and LAE. Additionally, the Company has entered into ADC reinsurance agreements to reinsure potential adverseloss development which resulted in reinsurance recoverables of $1,253 million as of December 31, 2025. Management believes that we, and each of our entities, have sufficient financial resources or ready access thereto, to meet all obligations.
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Dividends.
During 2025 and 2024, we declared and paid common shareholder dividends of $335 million and $334 million, respectively. As an insurance holding company, we are partially dependent on dividends and other permitted payments from our subsidiaries to pay cash dividends to our shareholders. The payment of dividends to Group by Holdings Ireland and Everest Dublin Holdings is subject to Irish corporate and regulatory restrictions; the payment of dividends to Holdings Ireland by Holdings and to Holdings by Everest Re is subject to Delaware regulatory restrictions; and the payment of dividends to Group by Bermuda Re, Everest International, Everest Preferred International Holdings (“Preferred Holdings”), Everest Re Advisors Ltd. (“Advisors Re”) or Mt. Logan Re is subject to Bermuda insurance regulatory restrictions. Management expects that, absent extraordinary catastrophelosses, such restrictions should not affect Everest Re’s ability to declare and pay dividends sufficient to support Holdings’ general corporate needs and that Holdings Ireland, Everest Dublin Holdings, Bermuda Re and Everest International will have the ability to declare and pay dividends sufficient to support Group’s general corporate needs. For the year ended December 31, 2025, Everest Re paid $200 million cash dividends to Holdings. For the year ended December 31, 2024, Everest Re paid no cash dividends to Holdings. For the years ended December 31, 2025 and 2024, Bermuda Re paid cash dividends to Group of $1.1 billion and $750 million, respectively; Everest International paid cash dividends to Group of $325 million and $100 million, respectively; Preferred Holdings paid cash dividends to Group of $36 million and $46 million, respectively; and Advisors Re paid cash dividends to Group of $76 million and $74 million, respectively. For the year ended December 31, 2025, Mt. Logan Re paid $35 million cash dividends to Group. For the year ended December 31, 2024, Mt. Logan Re paid no cash dividends to Group. See ITEM 1, “Regulatory Matters - Dividends” and ITEM 8, “Financial Statements and Supplementary Data” - Note 18 of Notes to Consolidated Financial Statements.
Market Sensitive Instruments.
Our current investment strategy seeks to maximize after-tax income through a high quality, diversified, fixed maturity portfolio, while maintaining an adequate level of liquidity. Our mix of investments is adjusted periodically, consistent with our current and projected operating results and market conditions. The fixed maturity securities in the investment portfolio are comprised of available for sale and held to maturity securities. Additionally, we have invested in equity securities.
The overall investment strategy considers the scope of present and anticipated Company operations. In particular, estimates of the financial impact resulting from non-investment asset and liability transactions, together with our capital structure and other factors, are used to develop a net liability analysis. This analysis includes estimated payout characteristics for which our investments provide liquidity. This analysis is considered in the development of specific investment strategies for asset allocation, duration and credit quality. The change in overall market sensitive risk exposure principally reflects the asset changes that took place during the period.
Our $45.4 billion investment portfolio at December 31, 2025, is principally comprised of fixed maturity securities, which are generally subject to interest rate risk and some foreign currency exchange rate risk, and some equity securities, which are subject to price fluctuations and some foreign exchange rate risk. The overall economic impact of the foreign exchange risks on the investment portfolio is partially mitigated by changes in the dollar value of foreign currency denominated liabilities and their associated income statement impact.
Interest Rate Risk. Interest rate risk is the potential change in value of the fixed maturity securities portfolio from a change in market interest rates. In a declining interest rate environment, interest rate risk includes prepayment risk on the $8.7 billion of mortgage-backed securities in the $35.1 billion fixed maturity portfolio. Prepayment risk results from potential accelerated principal payments that shorten the average life and thus the expected yield of the security.
The tables below display the potential impact of fair value fluctuations and after-tax unrealized appreciation on our fixed maturity portfolio (including $3.0 billion of short-term investments) for the period indicated based on upward and downward parallel and immediate 100 and 200 basis point shifts in interest rates. For legal entities with a U.S. dollar functional currency, this modeling was performed on each security individually. To generate appropriate price estimates on mortgage-backed securities, changes in prepayment expectations under different interest rate environments were taken into account. For legal entities with a non-U.S. dollar functional currency, the effective duration of the involved portfolio of securities was used as a proxy for the fair value change under the various interest rate change scenarios.
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Impact of Interest Rate Shift in Basis Points
At December 31, 2025
(Dollars in millions)
Total Fair Value
Fair Value Change from Base (%)
Change in Unrealized Appreciation
After-tax from Base ($)
Impact of Interest Rate Shift in Basis Points
At December 31, 2024
(Dollars in millions)
Total Fair Value
Fair Value Change from Base (%)
Change in Unrealized Appreciation
After-tax from Base ($)
We had $34.3 billion and $29.9 billion of gross reserves for losses and LAE as of December 31, 2025 and 2024, respectively. These amounts are recorded at their nominal value, as opposed to present value, which would reflect a discount adjustment to reflect the time value of money. Since losses are paid out over a period of time, the present value of the reserves is less than the nominal value. As interest rates rise, the present value of the reserves decreases and, conversely, as interest rates decline, the present value increases. These movements are similar to the interest rate impacts on the fair value of investments held. While the difference between present value and nominal value is not reflected in our financial statements, our financial results will include investment income over time from the investment portfolio until the claims are paid. Our loss and loss reserve obligations have an expected duration of approximately 4.0 years, which is reasonably consistent with our fixed income portfolio. If we were to discount our loss and LAE reserves, net of ceded reserves, the discount would be approximately $5.1 billion resulting in a discounted reserve balance of approximately $25.5 billion, representing approximately 66.8% of the value of the fixed maturity investment portfolio funds.
Foreign Currency Risk. Foreign currency risk is the potential change in value, income and cash flow arising from adverse changes in foreign currency exchange rates. Each of our non-U.S./Bermuda operations maintains capital in the currency of the country of its geographic location consistent with local regulatory guidelines. Each non-U.S. operation may conduct business in its local currency, as well as the currency of other countries in which it operates. The primary foreign currency exposures for these non-U.S. operations are the Canadian Dollar, the Singapore Dollar, the British Pound Sterling and the Euro. Generally, we mitigate foreign exchange exposure by matching the currency and duration of our assets to our corresponding operating liabilities. In accordance with GAAP, the impact on the fair value of available for sale fixed maturities due to changes in foreign currency exchange rates, in relation to functional currency, is reflected as part of other comprehensive income. Conversely, the impact of changes in foreign currency exchange rates, in relation to functional currency, on other assets and liabilities is reflected through net income as a component of other income (expense). In addition, we translate the assets, liabilities and income of non-U.S. dollar functional currency legal entities to the U.S. dollar. This translation amount is reported as a component of other comprehensive income.
The tables below display the potential impact of a parallel and immediate 10% and 20% increase and decrease in foreign exchange rates on the valuation of invested assets subject to foreign currency exposure for the periods indicated. This analysis includes the after-tax impact of translation from transactional currency to functional currency as well as the after-tax impact of translation from functional currency to the U.S. dollar reporting currency.
