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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


X			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2024


			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-14527

EVEREST REINSURANCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware						22-3263609
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


100 Everest Way Warren, New Jersey						07059
(Address of principal executive offices)						(Zip Code)

(908) 604-3000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


						Number of Shares Outstanding
Class						at November 12, 2024
Common Shares, $0.01 par value						1,000

The Registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format permitted by General Instruction H of Form 10-Q.

EVEREST REINSURANCE HOLDINGS, INC.

Table of Contents

Form 10-Q


		Page
PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	1

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023 (unaudited)	2

	Consolidated Statements of Changes in Stockholder’s Equity for the three and nine months ended September 30, 2024 and 2023 (unaudited)	3

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)	4

	Notes to Consolidated Interim Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	42

PART II

OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

Safe Harbor Disclosure.

This report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the federal securities laws. In some cases, these statements can be identified by the use of forward-looking words such as “may”, “will”, “should”, “could”, “anticipate”, “estimate”, “expect”, “plan”, “believe”, “predict”, “potential” and “intend”. Forward-looking statements only reflect our expectations and are not guarantees of performance. These statements involve risks, uncertainties and assumptions. Actual events or results may differ materially from those expressed in forward-looking statements. Important factors that could cause actual events or results to be materially different from our forward-looking statements are discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”) including, but not limited to, those described under the caption “Item 1A - Risk Factors” in our most recent Annual Report on Form 10-K (the “Form 10-K filing”). These include:

•the effects of catastrophic events on our financial results;

•losses from catastrophe exposure that exceed our projections;

•information regarding our reserves for losses and loss adjustment expenses (“LAE”);

•greater-than-expected loss ratios on business written by us and adverse development on claim and/or claim expense liabilities related to business written by our insurance and reinsurance subsidiaries;

•our failure to accurately assess underwriting risk and establish adequate premium rates;

•decreases in pricing for property and casualty reinsurance and insurance;

•our inability or failure to purchase reinsurance;

•our ability to maintain our financial strength ratings;

•the failure of our insured, intermediaries and reinsurers to satisfy their obligations to us;

•decline in our investment values and investment income due to exposure to financial markets conditions;

•the failure to maintain enough cash to meet near-term financial obligations;

•our ability to pay dividends, interest and principal, which is dependent on our ability to receive dividends, loan payments and other funds from subsidiaries in our holding company structure;

•reduced net income and capital levels due to foreign currency exchange losses;

•our sensitivity to unanticipated levels of inflation;

•the effects of measures taken by domestic or foreign governments on our business;

•our ability to retain our key executive officers and to attract or retain the executives and employees necessary to manage our business;

•the effect of cybersecurity risks, including technology breaches or failure, and regulatory and legislative developments related to cybersecurity on our business;

•our dependence on brokers and agents for business developments;

•material variation of analytical models used in decision making from actual results;

•the effects of business continuation risk on our operations;

•the effect on our business of the highly competitive nature of our industry, including the effects of new entrants to, competing products for and consolidation in the (re)insurance industry;

•an anti-takeover effect caused by insurance laws; and

•our failure to comply with insurance laws and regulations and other regulatory challenges.

We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS


	September 30,		December 31,
(In millions of U.S. dollars, par value per share)	2024		2023
	(unaudited)
ASSETS:
Fixed maturities - available for sale, at fair value	$	17,771	$	15,932
(amortized cost: 2024, $17,834; 2023, $16,304; credit allowances: 2024, $(51); 2023, $(48))
Fixed maturities - held to maturity, at amortized cost
(fair value: 2024,$799; 2023, $850; net of credit allowances: 2024, $(8); 2023, $(8))	779		851
Equity securities, at fair value	98		91
Other invested assets	3,363		3,259
Other invested assets, at fair value	1,509		1,481
Short-term investments	2,078		1,298
Cash	566		527
Total investments and cash	26,165		23,439

Accrued investment income	250		222
Premiums receivable (net of credit allowances: 2024, $(31); 2023, $(28))	2,409		2,245
Reinsurance recoverables - unaffiliated (net of credit allowances: 2024, $(26); 2023, $(22))	1,947		1,816
Reinsurance recoverables - affiliated	1,309		1,547
Income tax asset, net	95		141
Funds held by reinsureds	333		306
Deferred acquisition costs	793		659
Prepaid reinsurance premiums	663		490
Other assets (net of credit allowances: 2024, $(9); 2023, $(9))	853		774
TOTAL ASSETS	$	34,816	$	31,638

LIABILITIES:
Reserve for losses and loss adjustment expenses	$	16,867	$	15,796
Unearned premium reserve	4,280		3,886
Funds held under reinsurance treaties	46		54
Amounts due to reinsurers	730		488
Losses in course of payment	155		139
Income tax liability, net	—		29
Senior notes	2,350		2,349
Long-term notes	218		218
Borrowings from FHLB	819		819
Accrued interest on debt and borrowings	43		22
Unsettled securities payable	300		126
Other liabilities	456		526
Total liabilities	26,263		24,451

Commitments and Contingencies (Note 11)

STOCKHOLDER'S EQUITY:
Common stock, par value: $0.01; 3,000 shares authorized;
1,000 shares issued and outstanding (2024 and 2023)	—		—
Additional paid-in capital	1,103		1,102
Accumulated other comprehensive income (loss), net of deferred income tax
expense (benefit) of $1 at 2024 and $(76) at 2023	3		(287)
Retained earnings	7,447		6,372
Total stockholder's equity	8,553		7,187
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	34,816	$	31,638

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions of U.S. dollars)	2024		2023		2024		2023
	(unaudited)				(unaudited)
REVENUES:
Premiums earned	$	2,340	$	2,139	$	6,779	$	6,339
Net investment income	316		278		976		711
Total net gains (losses) on investments	39		(59)		1		(59)
Other income (expense)	(13)		2		12		(12)
Total revenues	2,681		2,361		7,768		6,979

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	1,636		1,471		4,417		4,190
Commission, brokerage, taxes and fees	498		454		1,433		1,323
Other underwriting expenses	157		149		449		424
Corporate expenses	6		8		17		18
Interest, fees and bond issue cost amortization expense	38		34		112		99
Total claims and expenses	2,334		2,115		6,428		6,053

INCOME (LOSS) BEFORE TAXES	347		246		1,340		926
Income tax expense (benefit)	67		25		266		154

NET INCOME (LOSS)	$	279	$	222	$	1,075	$	771

Other comprehensive income (loss), net of tax:
Unrealized appreciation (depreciation) ("URA(D)") of securities arising during the period	327		(124)		231		(56)
Less: reclassification adjustment for realized losses (gains) included in net income (loss)	8		11		20		26
Total URA(D) of securities arising during the period	335		(113)		252		(31)

Foreign currency translation adjustments	41		(11)		14		(9)

Reclassification adjustment for amortization of net (gain) loss included in net income (loss)	—		—		24		1
Total benefit plan net gain (loss) for the period	—		—		24		1
Total other comprehensive income (loss), net of tax	376		(124)		290		(38)

COMPREHENSIVE INCOME (LOSS)	$	655	$	97	$	1,365	$	733

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDER’S EQUITY


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions of U.S. dollars, except share amounts)	2024		2023		2024		2023
	(unaudited)				(unaudited)
COMMON STOCK (shares outstanding):
Balance, beginning of period	1,000		1,000		1,000		1,000
Balance, end of period	1,000		1,000		1,000		1,000

ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of period	$	1,103	$	1,102	$	1,102	$	1,102

Balance, end of period	1,103		1,102		1,103		1,102

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES:
Balance, beginning of period	(372)		(762)		(287)		(848)
Net increase (decrease) during the period	376		(124)		290		(38)
Balance, end of period	3		(886)		3		(886)

RETAINED EARNINGS:
Balance, beginning of period	7,167		5,950		6,372		5,400
Net income (loss)	279		222		1,075		771
Balance, end of period	7,447		6,171		7,447		6,171

TOTAL STOCKHOLDER'S EQUITY, END OF PERIOD	$	8,553	$	6,388	$	8,553	$	6,388

The accompanying notes are an integral part of the consolidated financial statements.

EVEREST REINSURANCE HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
(In millions of U.S. dollars)	2024		2023
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,075	$	771
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in premiums receivable	(157)		(389)
Decrease (increase) in funds held by reinsureds, net	(34)		15
Decrease (increase) in reinsurance recoverables	99		143
Decrease (increase) in income taxes	(59)		(24)
Decrease (increase) in prepaid reinsurance premiums	(175)		(117)
Increase (decrease) in reserve for losses and loss adjustment expenses	1,063		701
Increase (decrease) in unearned premiums	389		587
Increase (decrease) in amounts due to reinsurers	245		215
Increase (decrease) in losses in course of payment	16		157
Change in equity adjustments in limited partnerships	(138)		(61)
Distribution of limited partnership income	61		38
Change in other assets and liabilities, net	(319)		(300)
Non-cash compensation expense	39		29
Amortization of bond premium (accrual of bond discount)	(68)		(24)
Net (gains) losses on investments	(1)		59
Net cash provided by (used in) operating activities	2,035		1,799

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from fixed maturities matured/called/repaid - available for sale	1,806		818
Proceeds from fixed maturities sold - available for sale	786		318
Proceeds from fixed maturities matured/called/repaid - held to maturity	125		59
Proceeds from equity securities sold	13		126
Distributions from other invested assets	195		90
Cost of fixed maturities acquired - available for sale	(4,107)		(2,996)
Cost of fixed maturities acquired - held to maturity	(46)		(23)
Cost of equity securities acquired	(2)		(1)
Cost of other invested assets acquired	(234)		(234)
Net change in short-term investments	(735)		(821)
Net change in unsettled securities transactions	177		112
Proceeds from repayment (cost of issuance) of notes receivable - affiliated	—		840
Net cash provided by (used in) investing activities	(2,023)		(1,711)

CASH FLOWS FROM FINANCING ACTIVITIES:
Tax benefit from share-based compensation, net of expense	—		(29)

Net cash provided by (used in) financing activities	—		(29)

EFFECT OF EXCHANGE RATE CHANGES ON CASH	25		(9)

Net increase (decrease) in cash	39		50
Cash, beginning of period	527		481
Cash, end of period	$	566	$	531

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid (recovered)	$	324	$	181
Interest paid	90		75

NON-CASH TRANSACTIONS
Non-cash limited partnership distribution	$	21	$	—

The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three and Nine Months Ended September 30, 2024 and 2023

1. GENERAL

Everest Reinsurance Holdings, Inc. (“Holdings”), a Delaware company and direct subsidiary of Everest Underwriting Group (Ireland) Limited, which is a direct subsidiary of Everest Group, Ltd. (“Group”), through its subsidiaries, principally provides property and casualty reinsurance and insurance in the United States of America and internationally. As used in this document, “Company” means Holdings and its subsidiaries. “Bermuda Re” means Everest Reinsurance (Bermuda), Ltd., a subsidiary of Group; “Everest Re” means Everest Reinsurance Company, a subsidiary of Holdings, and its subsidiaries (unless the context otherwise requires).

Unless noted otherwise, all tabular dollar amounts are in millions of United States (“U.S.”) dollars (“U.S. dollars” or “$”). Some amounts may not reconcile due to rounding.

2.BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, 2023 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2023, 2022 and 2021, included in the Company’s most recent Form 10-K filing.

The Company consolidates the results of operations and financial position of all voting interest entities ("VOE") in which the Company has a controlling financial interest and all variable interest entities ("VIE") in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.

All intercompany accounts and transactions have been eliminated.

Adoption of New Accounting Standards

The Company did not adopt any new accounting standards that had a material impact during the three and nine months ended September 30, 2024.

Future Adoption of Recently Issued Accounting Standard Changes.

The Company assessed the adoption impacts of recently issued accounting standards that are effective after 2024 by the Financial Accounting Standards Board (“FASB”) on the Company’s consolidated financial statements. Additionally, the Company assessed whether there have been material updates to previously issued accounting standards that are effective after 2024. There were no accounting standards identified, other than those directly referenced below, that are expected to have a material impact on Holdings.

Improvements to Income Tax Disclosures. In December 2023, the FASB issued Accounting Standard Update No. 2023-09, which requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. The Company is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures.

3.INVESTMENTS

The following tables show the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) (“URA(D)”) and fair value of fixed maturity securities - available for sale for the periods indicated:


	At September 30, 2024
(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	291	$	—	$	—	$	(12)	$	279
Obligations of U.S. states and political subdivisions	87		—		1		(4)		84
Corporate securities	4,873		(50)		151		(105)		4,869
Asset-backed securities	5,192		—		31		(18)		5,205
Mortgage-backed securities
Commercial	493		—		1		(32)		462
Agency residential	2,682		—		46		(101)		2,627
Non-agency residential	1,179		—		32		—		1,211
Foreign government securities	1,031		—		25		(33)		1,023
Foreign corporate securities	2,006		—		65		(60)		2,011
Total fixed maturity securities - available for sale	$	17,834	$	(51)	$	352	$	(364)	$	17,771

(Some amounts may not reconcile due to rounding.)


	At December 31, 2023
(Dollars in millions)	Amortized Cost		Allowances for Credit Losses		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	265	$	—	$	—	$	(17)	$	247
Obligations of U.S. states and political subdivisions	138		—		1		(11)		128
Corporate securities	4,400		(47)		96		(160)		4,289
Asset-backed securities	5,307		—		23		(48)		5,282
Mortgage-backed securities
Commercial	575		—		—		(53)		522
Agency residential	2,532		—		27		(124)		2,435
Non-agency residential	429		—		14		(1)		441
Foreign government securities	859		—		15		(39)		835
Foreign corporate securities	1,800		—		35		(82)		1,753
Total fixed maturity securities - available for sale	$	16,304	$	(48)	$	212	$	(536)	$	15,932

(Some amounts may not reconcile due to rounding.)

The following tables show amortized cost, allowance for credit losses, gross URA(D) and fair value of fixed maturity securities - held to maturity for the periods indicated:


	At September 30, 2024
(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities - held to maturity
Corporate securities	$	182	$	(2)	$	8	$	(1)	$	187
Asset-backed securities	501		(5)		8		(4)		500
Mortgage-backed securities
Commercial	21		—		—		—		21
Foreign corporate securities	84		(1)		9		—		91
Total fixed maturity securities - held to maturity	$	788	$	(8)	$	24	$	(5)	$	799

(Some amounts may not reconcile due to rounding.)


	At December 31, 2023
(Dollars in millions)	Amortized Cost		Allowances for Credit Loss		Unrealized Appreciation		Unrealized Depreciation		Fair Value
Fixed maturity securities - held to maturity
Corporate securities	$	150	$	(2)	$	1	$	(3)	$	146
Asset-backed securities	604		(5)		4		(10)		593
Mortgage-backed securities
Commercial	21		—		—		—		21
Foreign corporate securities	84		(1)		7		—		90
Total fixed maturity securities - held to maturity	$	859	$	(8)	$	12	$	(13)	$	850

(Some amounts may not reconcile due to rounding.)

The amortized cost and fair value of fixed maturity securities - available for sale are shown in the following table by contractual maturity. 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.


	At September 30, 2024				At December 31, 2023
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities - available for sale
Due in one year or less	$	439	$	429	$	546	$	537
Due after one year through five years	3,129		3,086		2,402		2,310
Due after five years through ten years	3,214		3,255		2,842		2,784
Due after ten years	1,507		1,496		1,672		1,621
Asset-backed securities	5,192		5,205		5,307		5,282
Mortgage-backed securities
Commercial	493		462		575		522
Agency residential	2,682		2,627		2,532		2,435
Non-agency residential	1,179		1,211		429		441
Total fixed maturity securities - available for sale	$	17,834	$	17,771	$	16,304	$	15,932

(Some amounts may not reconcile due to rounding.)

The amortized cost and fair value of fixed maturity securities - held to maturity are shown in the following table by contractual maturity. 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.


	At September 30, 2024				At December 31, 2023
(Dollars in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Fixed maturity securities - held to maturity
Due in one year or less	$	12	$	12	$	5	$	5
Due after one year through five years	67		68		59		58
Due after five years through ten years	37		37		43		42
Due after ten years	150		161		127		131
Asset-backed securities	501		500		604		593
Mortgage-backed securities
Commercial	21		21		21		21
Total fixed maturity securities - held to maturity	$	788	$	799	$	859	$	850

(Some amounts may not reconcile due to rounding.)

The changes in net URA(D) for the Company’s investments are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Increase (decrease) during the period between the fair value and cost of
investments carried at fair value, and deferred taxes thereon:
Fixed maturity securities - available for sale and short-term investments	$	424	$	(144)	$	319	$	(39)
Change in URA(D), pre-tax	424		(144)		319		(39)
Deferred tax benefit (expense)	(89)		30		(67)		8
Change in URA(D), net of deferred taxes, included in stockholder's equity	$	335	$	(113)	$	252	$	(31)

(Some amounts may not reconcile due to rounding.)

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale by security type and contractual maturity, in each case subdivided according to length of time that the individual securities had been in a continuous unrealized loss position for the periods indicated:


	Duration of Unrealized Loss at September 30, 2024 By Security Type
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	56	$	(2)	$	219	$	(10)	$	275	$	(12)
Obligations of U.S. states and political subdivisions	1		—		41		(4)		42		(4)
Corporate securities	216		(4)		1,301		(99)		1,517		(104)
Asset-backed securities	196		(1)		536		(17)		731		(18)
Mortgage-backed securities
Commercial	—		—		435		(32)		435		(32)
Agency residential	457		(33)		632		(68)		1,089		(101)
Non-agency residential	35		—		24		—		59		—
Foreign government securities	37		(1)		403		(31)		440		(33)
Foreign corporate securities	147		(4)		614		(56)		761		(60)
Total	1,144		(45)		4,205		(318)		5,350		(364)
Securities where an allowance for credit loss was recorded	1		—		—		(1)		1		(1)
Total fixed maturity securities - available for sale	$	1,145	$	(45)	$	4,205	$	(319)	$	5,351	$	(364)

(Some amounts may not reconcile due to rounding.)


	Duration of Unrealized Loss at September 30, 2024 By Maturity
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
Due in one year or less	$	75	$	(3)	$	194	$	(8)	$	270	$	(11)
Due in one year through five years	303		(7)		1,363		(77)		1,666		(84)
Due in five years through ten years	27		—		677		(84)		704		(84)
Due after ten years	52		(1)		343		(32)		396		(33)
Asset-backed securities	196		(1)		536		(17)		731		(18)
Mortgage-backed securities	492		(33)		1,092		(101)		1,583		(134)
Total	1,144		(45)		4,205		(318)		5,350		(364)
Securities where an allowance for credit loss was recorded	1		—		—		(1)		1		(1)
Total fixed maturity securities - available for sale	$	1,145	$	(45)	$	4,205	$	(319)	$	5,351	$	(364)

(Some amounts may not reconcile due to rounding.)

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at September 30, 2024 were $5.4 billion and $364 million, respectively. The fair value of securities for the single issuer (the U.S. government), whose securities comprised the largest unrealized loss position at September 30, 2024, did not exceed 1.3% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss position at September 30, 2024 comprised less than 0.4% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $45 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of agency residential mortgage-backed securities. Of these unrealized losses, $43 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $319 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to agency residential mortgage-backed securities, as well as domestic and foreign corporate securities. Of these unrealized losses, $299 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments. Based upon the Company’s current evaluation of securities in an unrealized loss position as of September 30, 2024, the unrealized losses are due to changes in interest rates and non-issuer-specific credit spreads and are not credit-related. In addition, the contractual terms of these securities do not permit these securities to be settled at a price less than their amortized cost.

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:


	Duration of Unrealized Loss at December 31, 2023 By Security Type
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
U.S. Treasury securities and obligations of
U.S. government agencies and corporations	$	7	$	—	$	238	$	(17)	$	245	$	(17)
Obligations of U.S. states and political subdivisions	3		—		74		(11)		77		(11)
Corporate securities	673		(47)		1,150		(112)		1,822		(160)
Asset-backed securities	179		(2)		1,958		(46)		2,138		(48)
Mortgage-backed securities
Commercial	19		—		491		(53)		511		(53)
Agency residential	203		(2)		1,030		(123)		1,233		(124)
Non-agency residential	125		(1)		3		—		128		(1)
Foreign government securities	38		(1)		423		(38)		461		(39)
Foreign corporate securities	120		(2)		821		(80)		940		(82)
Total	$	1,367	$	(54)	$	6,187	$	(481)	$	7,554	$	(536)
Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	$	1,369	$	(55)	$	6,187	$	(481)	$	7,556	$	(536)

(Some amounts may not reconcile due to rounding.)


	Duration of Unrealized Loss at December 31, 2023 By Maturity
	Less than 12 months				Greater than 12 months				Total
(Dollars in millions)	Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation		Fair Value		Gross Unrealized Depreciation
Fixed maturity securities - available for sale
Due in one year or less	$	84	$	(1)	$	263	$	(10)	$	348	$	(11)
Due in one year through five years	227		(5)		1,317		(96)		1,544		(101)
Due in five years through ten years	150		(5)		951		(128)		1,101		(133)
Due after ten years	379		(39)		174		(25)		553		(64)
Asset-backed securities	179		(2)		1,958		(46)		2,138		(48)
Mortgage-backed securities	347		(3)		1,523		(176)		1,871		(179)
Total	$	1,367	$	(54)	$	6,187	$	(481)	$	7,554	$	(536)
Securities where an allowance for credit loss was recorded	2		(1)		—		—		2		(1)
Total fixed maturity securities - available for sale	$	1,369	$	(55)	$	6,187	$	(481)	$	7,556	$	(536)

(Some amounts may not reconcile due to rounding.)

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at December 31, 2023 were $7.6 billion and $536 million, respectively. The fair value of securities for the single issuer (the U.S. government), whose securities comprised the largest unrealized loss position at December 31, 2023, did not exceed 1.4% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss comprised less than 0.5% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $55 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, foreign government securities, asset-backed securities, as well as commercial and agency residential mortgage-backed securities. Of these unrealized losses, $39 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $481 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more

than one year related primarily to domestic and foreign corporate securities, as well as agency residential mortgage-backed securities. Of these unrealized losses, $455 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

The components of net investment income are presented in the table below for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Fixed maturities	$	257	$	214	$	757	$	587
Equity securities	1		1		3		3
Short-term investments and cash	28		24		72		51
Other invested assets
Limited partnerships	(4)		31		64		30
Dividends from preferred shares of affiliate	8		8		23		23
Other	36		15		85		42
Gross investment income before adjustments	326		291		1,005		736
Funds held interest income (expense)	1		1		6		3
Interest income from Group	—		—		—		7
Gross investment income	327		292		1,011		745
Investment expenses	11		14		35		35
Net investment income	$	316	$	278	$	976	$	711

(Some amounts may not reconcile due to rounding.)

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. The net investment income from limited partnerships is dependent upon the Company’s share of the net asset values (“NAVs”) of interests underlying each limited partnership. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one-month or quarter lag. If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional $1.6 billion in limited partnerships and private placement loans at September 30, 2024. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2034.

In 2022, the Company entered into corporate-owned life insurance (“COLI”) policies, which are invested in debt and equity securities. The COLI policies are carried within other invested assets at the policy cash surrender value of $1.4 billion and $1.3 billion as of September 30, 2024 and December 31, 2023, respectively.

Other invested assets, at fair value, as of September 30, 2024 and December 31, 2023, were comprised of preferred shares held in Everest Preferred International Holdings, Ltd. (“Preferred Holdings”), a wholly-owned subsidiary of Group. See Note 13 of the Notes to these Consolidated Financial Statements.

Variable Interest Entities

The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs, primarily as an investor through normal investment activities, but also as an investment manager. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s consolidated financial statements. As of September 30, 2024 and December 31, 2023, the Company did not hold any interests for which it is the primary beneficiary.

The Company, through normal investment activities, makes passive investments in general and limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary, as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of September 30, 2024 and December 31, 2023 is limited to the total carrying value of $3.4 billion and $3.3 billion, respectively, which are included in general and limited partnerships, COLI policies and other alternative investments in other invested assets in the Company's consolidated balance sheets. Exposure relating specifically to general and limited partnerships as of September 30, 2024 and December 31, 2023 is limited to the total carrying value of $2.0 billion and $1.9 billion.

As of September 30, 2024, the Company has outstanding commitments totaling $848 million whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in asset-backed securities, which includes collateralized loan obligations, and are classified as fixed maturities - available for sale. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

The components of net gains (losses) on investments are presented in the table below for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Fixed maturity securities
Allowances for credit losses	$	(9)	$	(1)	$	(3)	$	(12)
Net realized gains (losses) from dispositions	(2)		(12)		(23)		(21)
Equity securities, fair value
Net realized gains (losses) from dispositions	—		1		1		8
Gains (losses) from fair value adjustments	1		(13)		(2)		(2)
Other invested assets	1		—		—		—
Other invested assets, fair value
Gains (losses) from fair value adjustments	47		(34)		28		(32)

Total net gains (losses) on investments	$	39	$	(59)	$	1	$	(59)

(Some amounts may not reconcile due to rounding.)

The following tables provide a roll forward of the Company’s beginning and ending balance of allowance for credit losses for the periods indicated:


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
	Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
	Corporate Securities		Foreign Corporate Securities		Total		Corporate Securities		Foreign Corporate Securities		Total
(Dollars in millions)
Beginning balance	$	(42)	$	—	$	(42)	$	(47)	$	—	$	(48)
Credit losses on securities where credit
losses were not previously recorded	(9)		—		(9)		(9)		—		(9)
Increases in allowance on previously
impaired securities	—		—		—		—		—		—
Decreases in allowance on previously
impaired securities	—		—		—		—		—		—
Reduction in allowance due to disposals	—		—		—		5		—		5
Balance, end of period	$	(50)	$	—	$	(51)	$	(50)	$	—	$	(51)

(Some amounts may not reconcile due to rounding.)


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Available for Sale
	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	Corporate Securities		Municipals		Foreign Corporate Securities		Total		Corporate Securities		Municipals		Foreign Corporate Securities		Total
Beginning balance	$	(55)	$	—	$	(1)	$	(57)	$	(45)	$	—	$	(1)	$	(46)
Credit losses on securities where credit
losses were not previously recorded	(3)		—		—		(3)		(17)		—		—		(17)
Increases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	2		—		—		2		5		—		—		5
Balance, end of period	$	(57)	$	(1)	$	(1)	$	(58)	$	(57)	$	(1)	$	(1)	$	(58)

(Some amounts may not reconcile due to rounding.)


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity
	Three Months Ended September 30, 2024								Nine Months Ended September 30, 2024
	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
(Dollars in millions)
Beginning balance	$	(2)	$	(5)	$	(1)	$	(8)	$	(2)	$	(5)	$	(1)	$	(8)
Credit losses on securities where credit
losses were not previously recorded	—		—		—		—		—		—		(1)		(1)
Increases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	—		—		—		—		—		1		—		1
Balance, end of period	$	(2)	$	(5)	$	(1)	$	(8)	$	(2)	$	(5)	$	(1)	$	(8)

(Some amounts may not reconcile due to rounding.)


	Roll Forward of Allowance for Credit Losses – Fixed Maturities - Held to Maturity
	Three Months Ended September 30, 2023								Nine Months Ended September 30, 2023
(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate Securities		Total
Beginning balance	$	(2)	$	(6)	$	(1)	$	(8)	$	(2)	$	(6)	$	(1)	$	(9)
Credit losses on securities where credit
losses were not previously recorded	—		—		—		—		—		—		—		—
Increases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Decreases in allowance on previously
impaired securities	—		—		—		—		—		—		—		—
Reduction in allowance due to disposals	—		—		—		—		—		—		—		—
Balance, end of period	$	(2)	$	(5)	$	(1)	$	(8)	$	(2)	$	(5)	$	(1)	$	(8)

(Some amounts may not reconcile due to rounding.)

The proceeds and split between gross gains and losses from sales of fixed maturity securities - available for sale and equity securities are presented in the table below for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Proceeds from sales of fixed maturity securities - available for sale	$	138	$	209	$	786	$	318
Gross gains from dispositions	2		1		15		4
Gross losses from dispositions	(4)		(13)		(37)		(25)

Proceeds from sales of equity securities	$	—	$	80	$	13	$	126
Gross gains from dispositions	—		2		2		8
Gross losses from dispositions	—		—		—		—

(Some amounts may not reconcile due to rounding.)

4.FAIR VALUE

GAAP guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.

The levels in the hierarchy are defined as follows:


Level 1:			Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market;

Level 2:			Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument;

Level 3:			Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s fixed maturity and equity securities are managed both internally and on an external basis by independent, professional investment managers using portfolio guidelines approved by the Company. The Company obtains prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. These services use pricing applications that vary by asset class and incorporate available market information.

When fixed maturity securities do not trade on a daily basis, the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.

The Company does not make any changes to prices received from the pricing services. In addition, the Company has procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. The Company also continually performs quantitative and qualitative analysis of prices, including, but not limited to, initial and ongoing review of pricing methodologies, review of prices obtained from pricing services and third-party investment asset managers, review of pricing statistics and trends and comparison of prices for certain securities with a secondary price source for reasonableness. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.

At September 30, 2024, $2.1 billion of fixed maturities were fair valued using unobservable inputs. The majority of these fixed maturities were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties. The Company has procedures in place to evaluate these independent third-party valuations. At December 31, 2023, $2.0 billion of fixed maturities were fair valued using unobservable inputs.

Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as Level 1, since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as Level 2 due to the added input of a foreign exchange conversion rate to determine fair value. The Company uses foreign currency exchange rates published by a nationally recognized source.

Fixed maturity securities listed in the tables have been categorized as Level 2, since a particular security may not have traded, but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. For foreign government securities and foreign corporate securities, the fair values provided by the third-party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

In addition, some of the fixed maturities with fair values categorized as Level 3 result when prices are not available from the nationally recognized pricing services, are obtained from investment managers and are derived using unobservable inputs. The Company will value the securities with unobservable inputs using comparable market information or receive fair values from investment managers. The investment managers may obtain non-binding price quotes for the securities from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third-party asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources.

The composition and valuation inputs for the presented fixed maturities categories Level 1 and Level 2 are as follows:

•U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds, and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;

•Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

•Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;

•Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;

•Foreign government securities are comprised of global non-U.S. sovereign bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models

with observable inputs such as benchmark yields and credit spreads and then, where applicable, are converted to U.S. dollars using an exchange rate from a nationally recognized source; and

•Foreign corporate securities are comprised of global non-U.S. corporate bond issuances, and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, are converted to U.S. dollars using an exchange rate from a nationally recognized source.

Other invested assets, at fair value, were categorized as Level 3 at September 30, 2024 and December 31, 2023, since it represented a privately placed convertible preferred stock issued by an affiliate. The stock was received in exchange for shares of the Company’s parent. The 25-year redeemable, convertible preferred stock with a 1.75% coupon is valued using a pricing model. The pricing model includes observable inputs such as the U.S. Treasury yield curve rate T note constant maturity 10 year and the swap rate on the Company’s June 1, 2044, 4.868% senior notes, with adjustments to reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset.

The following tables present the fair value measurement levels for all assets, which the Company has recorded at fair value as of the periods indicated:


			Fair Value Measurement Using
(Dollars in millions)	September 30, 2024		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed maturities - available for sale
U.S. Treasury securities and obligations of U.S. government
agencies and corporations	$	279	$	—	$	279	$	—
Obligations of U.S. states and political subdivisions	84		—		84		—
Corporate securities	4,869		—		4,320		549
Asset-backed securities	5,205		—		3,686		1,519
Mortgage-backed securities
Commercial	462		—		462		—
Agency residential	2,627		—		2,627		—
Non-agency residential	1,211		—		1,211		—
Foreign government securities	1,023		—		1,023		—
Foreign corporate securities	2,011		—		1,997		14
Total fixed maturities - available for sale	17,771		—		15,690		2,082

Equity securities, fair value	98		72		21		5
Other invested assets, fair value	1,509		—		—		1,509

(Some amounts may not reconcile due to rounding.)


	Fair Value Measurement Using
(Dollars in millions)	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Fixed maturities - available for sale
U.S. Treasury securities and obligations of U.S. government
agencies and corporations	$	247	$	—	$	247	$	—
Obligations of U.S. states and political subdivisions	128		—		128		—
Corporate securities	4,289		—		3,617		672
Asset-backed securities	5,282		—		3,977		1,305
Mortgage-backed securities
Commercial	522		—		522		—
Agency residential	2,435		—		2,435		—
Non-agency residential	441		—		441		—
Foreign government securities	835		—		835		—
Foreign corporate securities	1,753		—		1,737		16
Total fixed maturities - available for sale	15,932		—		13,939		1,993

Equity securities, fair value	91		70		21		—
Other invested assets, fair value	1,481		—		—		1,481

(Some amounts may not reconcile due to rounding.)

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturities - available for sale, for the periods indicated:


	Total Fixed Maturities - Available for Sale
	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate		Total
Beginning balance of fixed maturities	$	589	$	1,442	$	14	$	2,045	$	672	$	1,305	$	16	$	1,993
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)	(7)		—		—		(6)		(1)		—		1		—
Included in other comprehensive income (loss)	2		4		—		7		1		15		—		16
Purchases, issuances and settlements	(36)		73		—		37		(123)		199		(2)		73
Transfers in/(out) of Level 3 and reclassification of securities in/(out) investment categories	—		—		—		—		—		—		—		—
Ending balance	$	549	$	1,519	$	14	$	2,082	$	549	$	1,519	$	14	$	2,082

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	(7)	$	—	$	—	$	(7)	$	(3)	$	—	$	—	$	(3)

(Some amounts may not reconcile due to rounding.)


	Total Fixed Maturities - Available for Sale
	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	Corporate Securities		Asset Backed Securities		Foreign Corporate		Total		Corporate Securities		Asset Backed Securities		Foreign Corporate		Total
Beginning balance of fixed maturities	$	711	$	1,115	$	16	$	1,842	$	715	$	994	$	16	$	1,725
Total gains or (losses) (realized/unrealized)
Included in earnings (or changes in net assets)	1		—		—		1		3		—		—		3
Included in other comprehensive income (loss)	—		(3)		—		(3)		(5)		7		—		2
Purchases, issuances and settlements	12		68		—		80		12		179		—		191
Transfers in/(out) of Level 3 and reclassification of securities in/(out) investment categories	—		—		—		—		—		—		—		—
Ending balance	$	725	$	1,180	$	16	$	1,921	$	725	$	1,180	$	16	$	1,921

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1

(Some amounts may not reconcile due to rounding.)

There were no transfers of assets in/(out) of Level 3 for the three and nine months ended September 30, 2024.

Financial Instruments Disclosed, But Not Reported, at Fair Value

Certain financial instruments disclosed, but not reported, at fair value are excluded from the fair value hierarchy tables above. Fair values of fixed maturity securities - held to maturity, senior notes and long-term subordinated notes can be found within Notes 3, 7 and 8 of the Notes to these Consolidated Financial Statements, respectively. Short-term investments are stated at cost, which approximates fair value.

Exempt from Fair Value Disclosure Requirements

Certain financial instruments are exempt from the requirements for fair value disclosure, such as limited partnerships accounted for under the equity method and pension and other postretirement obligations. The Company’s investments in COLI policies are recorded at their cash surrender value and are therefore not required to be included in the tables above. See Note 3 of the Notes to these Consolidated Financial Statements for details of investments in COLI policies.

In addition, $259 million and $274 million of investments within other invested assets on the consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively, are not included within the fair value hierarchy tables, as the assets are measured at NAV as a practical expedient to determine fair value.

5.RESERVES FOR LOSSES AND LAE

The following table provides a roll forward of the Company’s beginning and ending reserves for losses and LAE and is summarized for the periods indicated:


	Nine Months Ended September 30,
(Dollars in millions)	2024		2023
Gross reserves beginning of period	$	15,796	$	14,977
Less reinsurance recoverables on unpaid losses	(3,182)		(3,684)
Net reserves beginning of period	12,614		11,294

Incurred related to:
Current year	4,448		4,159
Prior years	(32)		31
Total incurred losses and LAE	4,417		4,190

Paid related to:
Current year	735		1,737
Prior years	2,250		1,380
Total paid losses and LAE	2,985		3,118

Foreign exchange/translation adjustment	(10)		—

Net reserves end of period	14,036		12,365
Plus reinsurance recoverables on unpaid losses	2,831		3,304
Gross reserves end of period	$	16,867	$	15,669

(Some amounts may not reconcile due to rounding.)

Current year incurred losses were $4.4 billion and $4.2 billion for the nine months ended September 30, 2024 and 2023, respectively. Gross and net reserves increased for the nine months ended September 30, 2024, reflecting an increase in underlying exposure due to earned premium growth, year over year, amounting to approximately $182 million current year attritional losses in 2024 compared to 2023, as well as an increase of $107 million in current year catastrophe losses in 2024. Prior year incurred net favorable development of $32 million was primarily driven by a reduction in prior year catastrophe reserves.

6.SEGMENT REPORTING

The Company operates through two operating segments: Reinsurance and Insurance. The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S, as well as through branches in Canada and Singapore. The Insurance operation writes property and casualty insurance directly and through brokers, including for surplus lines, and general agents within the United States. The two segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.

Our two operating segments each have executive leaders 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.

During the fourth quarter of 2023, the Company revised the classification and presentation of certain products related to its accident and health business within the segment groupings. These products have been realigned from within the Reinsurance segment to the Insurance segment to appropriately reflect how the business segments are managed. These changes have been reflected retrospectively.

The Company does not review and evaluate the financial results of its operating segments based upon balance sheet data. Management generally monitors and evaluates the financial performance of these operating segments based upon

their underwriting results. Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. We measure our 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 tables present the underwriting results for the operating segments for the periods indicated:


	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total
Gross written premiums	$	2,018	$	811	$	2,829	$	5,970	$	2,741	$	8,711
Net written premiums	1,677		572		2,249		5,061		1,935		6,996

Premiums earned	$	1,666	$	673	$	2,340	$	4,738	$	2,042	$	6,779
Incurred losses and LAE	1,165		470		1,636		3,034		1,383		4,417
Commission and brokerage	428		70		498		1,220		213		1,433
Other underwriting expenses	56		100		157		148		301		449
Underwriting gain (loss)	$	17	$	32	$	49	$	335	$	146	$	480

Net investment income					316						976
Net gains (losses) on investments					39						1
Corporate expenses					(6)						(17)
Interest, fees and bond issue cost amortization expense					(38)						(112)
Other income (expense)					(13)						12
Income (loss) before taxes					$	347					$	1,340

(Some amounts may not reconcile due to rounding)


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	Reinsurance		Insurance		Total		Reinsurance		Insurance		Total
Gross written premiums	$	1,964	$	904	$	2,869	$	5,363	$	2,917	$	8,280
Net written premiums	1,684		666		2,350		4,603		2,206		6,809

Premiums earned	$	1,418	$	722	$	2,139	$	4,167	$	2,172	$	6,339
Incurred losses and LAE	998		472		1,471		2,771		1,419		4,190
Commission and brokerage	373		80		454		1,089		234		1,323
Other underwriting expenses	46		103		149		120		304		424
Underwriting gain (loss)	$	—	$	65	$	66	$	188	$	214	$	402

Net investment income					278						711
Net gains (losses) on investments					(59)						(59)
Corporate expenses					(8)						(18)
Interest, fees and bond issue cost amortization expense					(34)						(99)
Other income (expense)					2						(12)
Income (loss) before taxes					$	246					$	926

(Some amounts may not reconcile due to rounding)

Further classifications of revenues by geographic location are impracticable to disclose and, therefore, are not provided.

7.SENIOR NOTES

The table below displays Holdings’ outstanding senior notes (the “Senior Notes”). Fair value is based on quoted market prices, but due to limited trading activity, the Senior Notes are considered Level 2 in the fair value hierarchy.


					September 30, 2024				December 31, 2023
(Dollars in millions)	Date Issued	Date Due	Principal Amounts		Consolidated Balance Sheet Amount		Fair Value		Consolidated Balance Sheet Amount		Fair Value
4.868% Senior notes	6/5/2014	6/1/2044	$	400	$	398	$	373	$	398	$	369
3.5% Senior notes	10/7/2020	10/15/2050	1,000		982		731		981		742
3.125% Senior notes	10/4/2021	10/15/2052	1,000		971		671		970		688
			$	2,400	$	2,350	$	1,775	$	2,349	$	1,799

(Some amounts may not reconcile due to rounding.)

Interest expense incurred in connection with the Senior Notes is as follows for the periods indicated:


			Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	Interest Paid	Payable Dates	2024		2023		2024		2023
4.868% Senior notes	semi-annually	June 1/December 1	$	5	$	5	$	15	$	15
3.5% Senior notes	semi-annually	April 15/October 15	9		9		26		26
3.125% Senior notes	semi-annually	April 15/October 15	8		8		24		24
			$	22	$	22	$	65	$	65

(Some amounts may not reconcile due to rounding.)

8.LONG-TERM SUBORDINATED NOTES

The table below displays Holdings’ outstanding fixed to floating rate long-term subordinated notes (“Subordinated Notes Issued 2007”). Fair value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

September 30, 2024

December 31, 2023

Original
Principal
Amount

Maturity Date

Consolidated
Balance
Sheet Amount

Fair
Value

Consolidated
Balance
Sheet Amount

Fair
Value

(Dollars in millions)

Date Issued

Scheduled

Final

Subordinated Notes Issued 2007

4/26/2007

400

5/15/2037

5/1/2067

218

214

218

187

During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest was at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007. During the floating rate interest period from May 15, 2017 through maturity, interest was initially based on the three-month LIBOR plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including May 15, 2017. The reset quarterly interest rate for August 15, 2024 to November 14, 2024 is 7.76%. Following the cessation of LIBOR, for periods from and including August 15, 2023, interest will be based on 3-month Chicago Mercantile Exchange (“CME”) Term Secured Overnight Financing Rate (“SOFR”) plus a spread.

Holdings may redeem the Subordinated Notes Issued 2007 on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047, is subject to a replacement capital covenant. This covenant is for the benefit of Senior Note holders and mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the Subordinated Notes Issued 2007. The Company’s Senior Notes are the Company’s long-term indebtedness that rank senior to the Subordinated Notes Issued 2007.

Interest expense incurred in connection with these long-term subordinated notes is as follows for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Interest expense incurred	$	4	$	4	$	13	$	12

9.FEDERAL HOME LOAN BANK MEMBERSHIP

Everest Re is a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10% of its statutory admitted assets. As of September 30, 2024, Everest Re had admitted assets of approximately $29.2 billion which provides borrowing capacity in excess of $2.9 billion. As of September 30, 2024, Everest Re had $819 million of borrowings outstanding, which begin to expire in 2024. Everest Re incurred interest expense of $11 million and $7 million for the three months ended September 30, 2024 and 2023, respectively. Everest Re incurred interest expense of $33 million and $21 million for the nine months ended September 30, 2024 and 2023, respectively. The FHLBNY membership agreement requires that 4.5% of borrowed funds be used to acquire additional membership stock. Additionally, the FHLBNY membership requires that members must have sufficient qualifying collateral pledged. As of September 30, 2024, Everest Re had $1.1 billion of collateral pledged.

10.COLLATERALIZED REINSURANCE, TRUST AGREEMENTS AND OTHER RESTRICTED ASSETS

The Company maintains certain restricted assets as security for potential future obligations, primarily to support its underwriting operations. The following table summarizes the Company’s restricted assets:


(Dollars in millions)	September 30, 2024		December 31, 2023
Collateral in trust for non-affiliated agreements (1)	$	749	$	825

Collateral for FHLB borrowings	1,078		1,077
Securities on deposit with or regulated by government authorities	1,482		1,447
Funds held by reinsureds	333		306
Total restricted assets	$	3,641	$	3,654

(1) At September 30, 2024 and December 31, 2023 the total amount on deposit in the trust account includes $122 million and $116 million of restricted cash, respectively.

The Company entered into various collateralized reinsurance agreements with Kilimanjaro Re Limited (“Kilimanjaro”), a Bermuda-based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The table below summarizes the various agreements:

(Dollars in millions)

Class

Description

Effective Date

Expiration Date

Limit

Coverage Basis

Series 2019-1 Class A-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2024

150

Occurrence

Series 2019-1 Class B-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

12/12/2019

12/19/2024

275

Aggregate

Series 2021-1 Class A-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

150

Occurrence

Series 2021-1 Class B-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

Aggregate

Series 2021-1 Class C-1

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/21/2025

Aggregate

Series 2021-1 Class A-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

150

Occurrence

Series 2021-1 Class B-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

Aggregate

Series 2021-1 Class C-2

US, Canada, Puerto Rico – Named Storm and Earthquake Events

4/8/2021

4/20/2026

Aggregate

Series 2022-1 Class A

US, Canada, Puerto Rico – Named Storm and Earthquake Events

6/22/2022

6/25/2025

300

Aggregate

Series 2024-1 Class A

US, Canada, Puerto Rico – Named Storm and Earthquake Events

6/27/2024

6/30/2028

Occurrence

Series 2024-1 Class B

US, Canada, Puerto Rico – Named Storm and Earthquake Events

6/27/2024

6/30/2028

125

Occurrence

Total available limit as of September 30, 2024

1,575

Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry-level insured losses from covered events, as well as the geographic location of the events. The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses.

Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors. The proceeds from the issuance of the catastrophe bonds are held in reinsurance trusts throughout the duration of the applicable reinsurance agreements and invested solely in U.S. government money market funds with a rating of at least “AAAm” by Standard & Poor’s. The catastrophe bonds’ issue dates, maturity dates and amounts correspond to the reinsurance agreements listed above.

11.COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and LAE.

Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.

12.OTHER COMPREHENSIVE INCOME (LOSS)

The following tables present the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:


	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
URA(D) on securities - non-credit related	$	414	$	(87)	$	327	$	293	$	(61)	$	231
Reclassification of net realized losses (gains) included in net income (loss)	10		(2)		8		26		(6)		20
Foreign currency translation adjustments	51		(11)		41		18		(4)		14
Reclassification of amortization of net gain (loss) included in net income (loss)	(1)		—		—		31		(6)		24
Total other comprehensive income (loss)	$	475	$	(100)	$	376	$	367	$	(77)	$	290

(Some amounts may not reconcile due to rounding)


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
(Dollars in millions)	Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
URA(D) on securities - non-credit related	$	(157)	$	33	$	(124)	$	(72)	$	15	$	(56)
Reclassification of net realized losses (gains) included in net income (loss)	14		(3)		11		33		(7)		26
Foreign currency translation adjustments	(14)		3		(11)		(11)		2		(9)
Reclassification of amortization of net gain (loss) included in net income (loss)	1		—		—		2		—		1
Total other comprehensive income (loss)	$	(157)	$	33	$	(124)	$	(48)	$	10	$	(38)

(Some amounts may not reconcile due to rounding)

The following table presents details of the amounts reclassified from AOCI for the periods indicated:


(Dollars in millions)	Three Months Ended September 30,				Nine Months Ended September 30,				Affected line item within the statements of operations and comprehensive income (loss)
AOCI component	2024		2023		2024		2023

URA(D) of securities	$	10	$	14	$	26	$	33	Other net gains (losses) on investments
	(2)		(3)		(6)		(7)		Income tax expense (benefit)
	$	8	$	11	$	20	$	26	Net income (loss)

Benefit plan net gain (loss)	$	(1)	$	1	$	31	$	2	Other underwriting expenses
	—		—		(6)		—		Income tax expense (benefit)
	$	—	$	—	$	24	$	1	Net income (loss)

(Some amounts may not reconcile due to rounding)

The following table presents the components of accumulated other comprehensive income (loss), net of tax, in the consolidated balance sheets for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Beginning balance of URA(D) of securities	$	(373)	$	(734)	$	(289)	$	(816)
Current period change in URA(D) of securities - non-credit related	335		(113)		252		(31)
Ending balance of URA(D) of securities	(38)		(847)		(38)		(847)

Beginning balance of foreign currency translation adjustments	(7)		4		19		2
Current period change in foreign currency translation adjustments	41		(11)		14		(9)
Ending balance of foreign currency translation adjustments	33		(7)		33		(7)

Beginning balance of benefit plan net gain (loss)	8		(32)		(16)		(33)
Current period change in benefit plan net gain (loss)	—		—		24		1
Ending balance of benefit plan net gain (loss)	8		(32)		8		(32)

Ending balance of accumulated other comprehensive income (loss)	$	3	$	(886)	$	3	$	(886)

(Some amounts may not reconcile due to rounding.)

13.RELATED-PARTY TRANSACTIONS

Holdings holds 1,773.214 preferred shares of Preferred Holdings with a $1.0 million par value and 1.75% annual dividend rate. Holdings received these shares in December 2015 in exchange for previously held 9,719,971 common shares of Group. After the exchange, Holdings no longer holds any shares or has any ownership interest in Group. Holdings has reported the preferred shares in Preferred Holdings, as other invested assets, fair value, in the consolidated balance sheets with changes in fair value re-measurement recorded in net gains (losses) on investments in the consolidated statements of operations and comprehensive income (loss). The following table presents the dividends received on the preferred shares of Preferred Holdings that are reported as net investment income in the consolidated statements of operations and comprehensive income (loss) for the period indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Dividends received on preferred stock of affiliate	$	8	$	8	$	23	$	23

Affiliates

The Company has engaged in reinsurance transactions with Bermuda Re, Everest Reinsurance Company (Ireland), dac (“Ireland Re”), Everest Insurance (Ireland), dac (“Ireland Insurance”), Everest International Reinsurance Ltd. (“Everest

International”), Everest Insurance Company of Canada (“Everest Canada”), Lloyd's of London (“Lloyd's”) Syndicate 2786, Everest Compañía de Seguros Generales Colombia S.A. (“Everest Colombia”), Compañía General de Seguros Everest Mexico (“Everest Mexico”), Everest Compañia de Seguros Generales Chile S.A (“Everest Chile”) and Mt. Logan Re, Ltd. (“Mt. Logan Re”), which are affiliated companies primarily driven by enterprise risk and capital management considerations under which business is ceded at market rates and terms.

Effective January 1, 2018, Everest Re entered into a twelve-month whole account aggregate stop loss reinsurance contract (the “stop loss agreement”) with Bermuda Re. The stop loss agreement provides coverage for ultimate net losses on applicable net earned premiums above a retention level, subject to certain other coverage limits and conditions. The stop loss agreement was most recently renewed effective January 1, 2024.

The stop loss agreements between Everest Re and Bermuda Re that were effective for 2018 and 2019 were both commuted during the third quarter of 2023. The commutations of the agreements resulted in the recognition of an aggregate loss of $37 million for Everest Re in the third quarter of 2023.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Bermuda Re (UK Branch), effective January 1, 2021 through December 31, 2021. The contract provides Bermuda Re (UK Branch) with up to £100 million of reinsurance coverage for each catastrophe occurrence above £80 million. Bermuda Re (UK Branch) will pay Everest Re £5 million for this coverage annually. This contract was most recently renewed effective January 1, 2024.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Ireland Insurance, effective January 1, 2021 through December 31, 2021. The contract provides Ireland Insurance with up to €750 million of reinsurance coverage for each catastrophe occurrence above €13 million. Ireland Insurance will pay Everest Re €15 million for this coverage annually. This contract was most recently renewed effective January 1, 2024.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Ireland Re, effective February 1, 2021 through January 31, 2022. The contract provides Ireland Re with up to €210 million of reinsurance coverage for each catastrophe occurrence above €18 million. Ireland Re will pay Everest Re €14 million for this coverage annually. This agreement was most recently renewed effective February 1, 2024.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Lloyd’s Syndicate 2786, effective April 1, 2024 through March 31, 2025. The contract provides Lloyd’s Syndicate 2786 with up to $30 million of reinsurance coverage for each catastrophe occurrence above $5 million. Lloyd’s Syndicate 2786 will pay Everest Re $2 million for this coverage annually.

Everest Re entered into a catastrophe excess of loss reinsurance contract with the Australia Branch of Everest International (“Everest International - Australia Branch”), effective July 1, 2023 through June 30, 2025. The contract provides Everest International - Australia Branch with up to A$30 million of reinsurance coverage for each catastrophe occurrence above A$8 million. Everest International - Australia Branch will pay Everest Re a premium 11% of net earned premium for this coverage annually.

Everest Re (Canadian Branch) entered into an excess of loss reinsurance agreement with Everest Canada, effective January 1, 2024 through December 31, 2024. Everest Canada will pay Everest Re (Canadian Branch) $2 million for this coverage annually.

Everest Re entered into a whole account quota share reinsurance agreement with Everest Columbia, effective July 1, 2024 through June 30, 2025. Quota share percentages vary based on the line of business for the premium written.

Everest Re entered into a 99% whole account quota share reinsurance agreement with Everest Mexico, effective July 1, 2024 through June 30, 2025.

Everest Re entered into a catastrophe excess of loss reinsurance agreement with Everest Chile, effective July 1, 2024 through June 30, 2025. The contract provides Everest Chile with up to $140 million of reinsurance coverage for each catastrophe occurrence above $7 million. Everest Chile will pay Everest Re $7.4 million for this coverage annually.

Everest Re had quota share reinsurance agreements in place with Bermuda Re from 2002 through the end of 2017. Quota share percentages ranged from 20% to 60% depending on the year. As of December 31, 2017, the quota share reinsurance agreements between Everest Re and Bermuda Re were not renewed and the existing quota share were put into run-off. As of September 30, 2024 and December 31, 2023, Everest Re had reinsurance recoverables on unpaid losses of $649 million and $759 million in connection with these agreements.

Everest Re (Canadian Branch) had quota share reinsurance agreements in place with Bermuda Re from 2007 through the end of 2017. Quota share percentages ranged from 60% to 75% depending on the year. As of December 31, 2017, the quota share reinsurance agreements between Everest Re (Canadian Branch) and Bermuda Re were not renewed and the existing quota share were put into run-off. As of September 30, 2024 and as of December 31, 2023, Everest Re had reinsurance recoverables on unpaid losses of $32 million and $45 million in connection with these agreements.

Everest Re had quota share reinsurance agreements in place with Everest International from 2004 through the end of 2009. Quota share percentages ranged from 2% to 8% depending on the year. As of December 31, 2009, the quota share reinsurance agreements between Everest Re and Everest International were not renewed and the existing quota shares were put into run-off. As of September 30, 2024 and as of December 31, 2023, Everest Re had reinsurance recoverables on unpaid losses of $6 million and $7 million in connection with these agreements.

Everest Re entered into a catastrophe excess of loss reinsurance contract with Ireland Re, effective March 31, 2023 through January 31, 2024. The contract provides Ireland Re with up to €61 million of reinsurance coverage for each catastrophe occurrence above €139 million. Ireland Re will pay Everest Re €2 million for this coverage annually. This agreement was not renewed for 2024.

The table below represents loss portfolio transfer (“LPT”) reinsurance agreements whereby net insurance exposures and reserves were transferred to an affiliate:

(Dollars in millions)

Effective Date

Transferring Company

Assuming Company

% of Business or Amount of Transfer

Covered Period of Transfer

12/31/2017

Everest Re

Bermuda Re

970

All years

On December 31, 2017, the Company entered into a LPT agreement with Bermuda Re. The LPT agreement covers subject loss reserves of $2.3 billion for accident years 2017 and prior. As a result of the LPT agreement, the Company transferred $1.0 billion of cash and fixed maturity securities and transferred $970 million of loss reserves to Bermuda Re. As part of the LPT agreement, Bermuda Re will provide an additional $500 million of adverse development coverage on the subject loss reserves. As of September 30, 2024 and December 31, 2023, the Company has a reinsurance recoverable of $493 million and $807 million, respectively, recorded on its balance sheet due from Bermuda Re.

The following tables summarize the significant premiums and losses ceded and assumed by the Company in transactions with affiliated entities for the periods indicated:


Bermuda Re	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Ceded written premiums	$	118	$	107	$	350	$	321
Ceded earned premiums	118		107		350		321
Ceded losses and LAE	(3)		(40)		(3)		(49)

The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts:


Mt. Logan Re Segregated Accounts	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2024		2023		2024		2023
Ceded written premiums	$	106	$	76	$	242	$	158
Ceded earned premiums	67		65		214		147
Ceded losses and LAE	45		17		75		49

14.INCOME TAXES

The Company is domiciled in the United States and has subsidiaries domiciled within the United States with significant branches in Canada and Singapore. The Company’s non-U.S. branches are subject to income taxation at varying rates in their respective domiciles.

The Company generally applies the estimated annual effective tax rate (“AETR”) approach for calculating its tax provision for interim periods as prescribed by ASC 740-270, Interim Reporting. Under the estimated AETR approach, the estimated AETR is applied to the interim year-to-date pre-tax income/(loss) to determine the income tax expense or benefit for the year-to-date period. The tax expense or benefit for the quarter represents the difference between the year-to-date tax expense or benefit for the current year-to-date period less such amount for the immediately preceding year-to-date period. Management considers the impact of all known events in its estimation of the Company’s annual pre-tax income/(loss) and AETR.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted. We have evaluated the tax provisions of the IRA, the most significant of which is the corporate alternative minimum tax, and do not expect the legislation to have a material impact on our results of operations.

15.SUBSEQUENT EVENTS

The Company has evaluated known recognized and non-recognized subsequent events. In October 2024, Hurricane Milton impacted Florida. Group is estimating pre-tax net catastrophe losses to be in the range of $300 to $400 million for the fourth quarter, net of any estimated recoveries or reinstatement premiums. Additionally, in October 2024, the Company completed the sale of certain assets of EverSports & Entertainment Insurance, Inc. to Ryan Specialty. No other material subsequent events or transactions have occurred that require recognition or disclosure in the financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our results of operations, financial condition and liquidity and capital resources for the three and nine months ended September 30, 2024. This discussion should be read in conjunction with the consolidated financial statements and related notes, under Part 1 - Item 1 of this Form 10-Q, as well as the audited consolidated financial statements and notes thereto for the year ended December 31, 2023, included in the Company’s most recent Form 10-K filing.

All comparisons in this discussion are to the corresponding prior year unless otherwise indicated.

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 stockholder’s equity for the periods indicated:


	Three Months Ended September 30,						Percentage Increase/ (Decrease)		Nine Months Ended September 30,						Percentage Increase/ (Decrease)
(Dollars in millions)	2024			2023					2024			2023
Gross written premiums	$	2,829		$	2,869		(1.4)	%	$	8,711		$	8,280		5.2	%
Net written premiums	2,249			2,350			(4.3)	%	6,996			6,809			2.7	%

REVENUES:
Premiums earned	$	2,340		$	2,139		9.4	%	$	6,779		$	6,339		7.0	%
Net investment income	316			278			13.5	%	976			711			37.2	%
Net gains (losses) on investments	39			(59)			NM		1			(59)			NM
Other income (expense)	(13)			2			NM		12			(12)			NM
Total revenues	2,681			2,361			13.6	%	7,768			6,979			11.3	%

CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses	1,636			1,471			11.2	%	4,417			4,190			5.4	%
Commission, brokerage, taxes and fees	498			454			9.8	%	1,433			1,323			8.4	%
Other underwriting expenses	157			149			5.2	%	449			424			5.9	%
Corporate expenses	6			8			(22.1)	%	17			18			(6.6)	%
Interest, fees and bond issue cost amortization expense	38			34			11.7	%	112			99			13.8	%
Total claims and expenses	2,334			2,115			10.4	%	6,428			6,053			6.2	%

INCOME (LOSS) BEFORE TAXES	347			246			40.8	%	1,340			926			44.8	%
Income tax expense (benefit)	67			25			NM		266			154			72.0	%
NET INCOME (LOSS)	$	279		$	222		26.0	%	$	1,075		$	771		39.4	%

RATIOS:							Point Change								Point Change
Loss ratio	69.9		%	68.8		%	1.2		65.1		%	66.1		%	(1.0)
Commission and brokerage ratio	21.3		%	21.2		%	0.1		21.1		%	20.9		%	0.3
Other underwriting expense ratio	6.7		%	7.0		%	(0.3)		6.6		%	6.7		%	(0.1)
Combined ratio	97.9		%	96.9		%	1.0		92.9		%	93.7		%	(0.7)


	At September 30,		At December 31,		Percentage Increase/ (Decrease)
(Dollars in millions)	2024		2023
Balance sheet data:
Total investments and cash	$	26,165	$	23,439	11.6	%
Total assets	34,816		31,638		10.0	%
Reserve for losses and loss adjustment expenses	16,867		15,796		6.8	%
Total debt	3,387		3,385		—	%
Total liabilities	26,263		24,451		7.4	%
Stockholder's equity	8,553		7,187		19.0	%

(NM, not meaningful)

(Some amounts may not reconcile due to rounding)

Revenues.

Premiums. Gross written premiums decreased by 1.4% to $2.8 billion for the three months ended September 30, 2024, compared to $2.9 billion for the three months ended September 30, 2023, reflecting a $93 million, or 10.3%, decrease in our insurance business, partially offset by a $54 million, or 2.7%, increase in our reinsurance business. The increase in reinsurance premiums was primarily due to increases in the property pro rata and property catastrophe excess of loss lines of business. The decrease in insurance premiums was primarily due to portfolio actions taken within accident and health, workers compensation and specialty casualty lines of business, partially offset by an increase in property/short tail business and specialty business. Gross written premiums increased by 5.2% to $8.7 billion for the nine months ended September 30, 2024, compared to $8.3 billion for the nine months ended September 30, 2023, reflecting a $607 million, or 11.3%, increase in our reinsurance business, partially offset by a $176 million, or 6.0%, decrease in our insurance business. The increase in reinsurance premiums was primarily driven by increases in the property and casualty pro rata lines of business and property catastrophe excess of loss lines of business. The decrease in insurance premiums reflects the impact of portfolio actions taken primarily within the accident and health and workers compensation lines of business, partially offset by increases in the property/short tail and specialty lines of business.

Net written premiums decreased by 4.3% to $2.2 billion for the three months ended September 30, 2024, compared to $2.4 billion for the three months ended September 30, 2023, primarily driven by an increase in premiums ceded to Mt. Logan Re, Ltd. (“Mt. Logan Re”) cells within the Reinsurance segment for property catastrophe excess of loss line of business, and an increase in premium cession in the Insurance segment driven by business mix and lower retention in certain lines of business. Net written premiums increased by 2.7% to $7.0 billion for the nine months ended September 30, 2024, compared to $6.8 billion for the nine months ended September 30, 2023. The current year over prior year increase remained relatively consistent with the percentage increase in gross written premiums.

Premiums earned increased by 9.4% to $2.3 billion for the three months ended September 30, 2024, compared to $2.1 billion for the three months ended September 30, 2023. Premiums earned increased by 7.0% to $6.8 billion for the nine months ended September 30, 2024, compared to $6.3 billion for the nine months ended September 30, 2023. Premiums earned generally reflect the portion of net premiums written that were recorded as revenues for the period as the exposure periods expire. The change in premiums earned relative to net written premiums is primarily the result of timing; premiums are earned ratably over the coverage period, whereas written premiums are recorded at the initiation of the coverage period.

Other Income (Expense). We recorded other expense of $13 million and other income of $2 million for the three months ended September 30, 2024 and 2023, respectively. The changes were primarily the result of fluctuations in foreign currency exchange rates. We recorded other income of $12 million and other expense of $12 million for the nine months ended September 30, 2024 and 2023, respectively. We recognized foreign currency exchange income of $4 million and foreign currency exchange expense of $19 million for the nine months ended September 30, 2024 and 2023, respectively. Additionally, the other income incurred for the nine months ended September 30, 2024 includes a $9 million pension plan curtailment gain recognized in the second quarter of 2024.

Net Investment Income. Refer to the “Consolidated Investments Results” section below.

Net Gains (Losses) on Investments. Refer to the “Consolidated Investments Results” sec

EVEREST REINSURANCE HOLDINGS INC 10-Q