Everest Group Q2 Earnings Beat Estimates on Lower Expenses

EG's Q2 Operating Update

Gross written premiums declined 19.4% year over year to $3.77 billion. Our estimate was $3.8 billion. The decrease reflected the continued runoff of the Legacy business and targeted reductions in selected Reinsurance Treaty lines. Net premiums earned fell 12.6% to $3.49 billion, reflecting lower business volumes. Our estimate was $3.6 billion.

Total claims and expenses fell 10.8% year over year to $3.28 billion. Our estimate was $3.4 billion. Incurred losses and loss-adjustment expenses declined 12.2%, while commission, brokerage, taxes and fees decreased 7.5%. Other underwriting expenses fell 11.4%.

Everest's Core Underwriting Results

Core gross written premiums decreased 5.9% year over year to $3.68 billion. On a comparable basis, excluding foreign-exchange movements and catastrophe reinstatement premiums, the decline was 7.1%. Growth in specialty lines was offset by lower property premiums and targeted reductions in U.S. casualty business.

Core underwriting income totaled $317 million and declined 29.2% year over year. The combined ratio deteriorated 300 basis points to 90%, reflecting higher catastrophe losses and underwriting expenses. The attritional combined ratio, which excludes catastrophes and prior-year reserve development, increased 170 basis points to 87.3%.

EG's Reinsurance Treaty Performance

Reinsurance Treaty gross written premiums declined 7.8% year over year to $2.72 billion. Our estimate was $2.6 billion. On a comparable basis, premiums fell 9.1%, led by reductions in Casualty XOL, Casualty Pro-Rata and property excess-of-loss business. Growth in Property Pro-Rata partly offset the decline.

The segment generated underwriting income of $283 million, which declined 31.5% year over year. Our estimate was $271.21 million. Its combined ratio increased 360 basis points to 88.5%, while the attritional combined ratio rose 220 basis points to 85.4%. Excluding elevated non-catastrophe weather losses, the attritional combined ratio would have been 82.7%.

Everest's Specialty Business Trends

Global Wholesale & Specialty gross written premiums were nearly unchanged at $958 million. Our estimate was $911.3 million. On a comparable basis, premiums declined 1%. Lower Workers’ Compensation and Specialty Casualty premiums were largely offset by growth in Other Specialty, Professional Liability and Accident and Health.

The segment recorded underwriting income of $34 million, which declined 2.9% year over year. Our estimate was $41.3 million. The combined ratio remained unchanged at 95.2%, while the attritional combined ratio improved 110 basis points to 93.8%. The attritional loss ratio improved 390 basis points, benefiting from changes in portfolio mix and underwriting actions.

EG's Investment and Expense Picture

Net investment income declined 1.7% year over year to $523 million because of lower alternative investment returns. Our estimate was $561.5 million. The annualized return on invested assets was 4.5% compared with 4.8% in the prior-year quarter.

Total investments and cash totaled $44.86 billion as of June 30, 2026, up 1.3% year over year. The fixed-maturity portfolio’s book yield was 4.5%. New money yields continued to exceed the portfolio yield, supporting future investment income generation.

Everest's Financial Position and Capital Return

Everest reported net income of $559 million, or $14.22 per share, compared with $680 million, or $16.10 per share, a year earlier. Annualized net operating return on equity was 14.9%, which contracted 470 basis points year over year, while annualized total shareholder return was 16.8%, which expanded 200 basis points year over year.

The company repurchased $395 million of shares during the quarter and paid $78 million in dividends. Book value per share increased to $398.83, up 5% from 2025-end. Cash flow from operations was $291 million, which declined 73% from the year-ago quarter.

Zacks Rank

Everest Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Arch Capital Group Ltd. ACGL reported second-quarter 2026 operating income of $2.56 per share, which beat the Zacks Consensus Estimate by 2.8%. The bottom line decreased 0.8% year over year. Revenues of $4.43 billion declined 6.9% year over year and missed the consensus mark by 3.1%. 

Gross premiums written declined 1.1% year over year to $6.13 billion. Net premiums written decreased 6.9% to $4.05 billion, reflecting lower volumes in the Insurance and Reinsurance segments. Net premiums earned fell 8.1% to $3.99 billion. Underwriting income fell 19.7% to $657 million. The combined ratio, which measures claims and expenses as a percentage of premiums, deteriorated 230 basis points to 83.5%. 

Selective Insurance Group, Inc. SIGI reported second-quarter 2026 operating earnings of $1.95 per share, which beat the Zacks Consensus Estimate by 13.4%. The bottom line increased 48.9% year over year. Revenues of $1.37 billion rose 4.5% from the year-ago quarter and topped the consensus estimate by 0.7%. 

Net premiums written declined 5% year over year to $1.22 billion due to a 6% decrease in Standard Commercial Lines, an 8% fall in Standard Personal Lines, and a 2% decline in Excess and Surplus Lines. Our estimate was $1.33 billion. Net premiums earned increased 2.3%. Direct new business fell to $206.1 million from $248.1 million. 

Cincinnati Financial Corporation CINF reported second-quarter 2026 operating income of $1.43 per share, which missed the Zacks Consensus Estimate by 21.4%. The bottom line declined 27.4% from the year-ago quarter. Total operating revenues for the second quarter were $3 billion, reflecting a 6.8% year-over-year increase. The figure, however, missed the Zacks Consensus Estimate by 1.4%. Earned premiums climbed 6.3% year over year to $2.6 billion. The figure marginally missed the Zacks Consensus Estimate by 1.5%.

Net investment income, net of expenses, increased 12% year over year to $319 million, primarily due to a 14% rise in interest income from fixed-maturity securities and a 3% jump in equity portfolio dividends. The figure marginally beat the Zacks Consensus Estimate by 1.8%. 

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