Jim Williamson, Chief Executive Officer (CEO) of Bermuda-based Everest Group, is confident that the firm’s reinsurance team will deliver an “excellent portfolio” for the firm to enjoy in 2027 in spite of the competitive environment, but emphasised that Everest is fairly bearish on the casualty reinsurance space heading into next year.
In the third quarter of 2026, gross written premiums (GWP) for Everest’s core business, which includes the Reinsurance Treaty and Global Wholesale & Specialty segments, decreased 3% to $3.7 billion, as net written premiums fell by 12% to $2.9 billion, and net premiums earned decreased 11% to $2.9 billion.
Within the reinsurance business, GWP decreased by more than 6% year-on-year to $2.7 billion, driven by decreases of 24.8% in casualty XOL and 15.8% in casualty pro-rata, while property decreased 1.8%, when adjusting for reinstatement premiums. The re/insurer cut its property cat XOL book by 10.2%, while property non-cat XOL decreased by 15.8%.
Notably, Everest decided to strengthen its casualty reinsurance reserves by $600 million in the third quarter, which follows $200 million of reserve strengthening in the second quarter, as the firm continued its mission to strengthen the balance sheet.
In light of the continued portfolio optimisation at Everest and the increasingly competitive operating environment in both property and casualty reinsurance, CEO Williamson was questioned on the outlook for the January 1 renewals, during today’s earnings call with analysts.
“Our expectation on 1.1, and particularly as it relates to cat renewals and peak zones, is it’ll be another competitive renewal. You’re looking at some additional rate decreases. Obviously, our view, as I stated in prior calls, is that current rate levels continue to deliver a very strong expected return, and which is why we continue to deploy capital,” said the CEO. “But as rates compress, more and more of the programs will look a little less favorable, and we respond very quickly to that, and you saw that certainly in this quarter’s results, where our cat XOL written premium decreased in a reasonable way. And I wouldn’t be surprised if we continue to get more selective as we go into ’27.”
Williamson went on to say that ahead of 1.1, Everest is really focused on best-in-class cedents, terms and conditions, and portfolio optimisation and shifting capital from lower return to higher return opportunities.
“You’re going to see all that play out. I’m really confident that our reinsurance team, notwithstanding some of the competitiveness we’ve seen, will deliver an excellent portfolio for us to enjoy in 2027,” he said.
While the CEO’s outlook for property was optimistic, the same could not be said for the casualty reinsurance space. Williamson stating that Everest’s view of the sector is “a fairly bearish one” for numerous factors.
“One, the underlying environment remains very challenging, and that’s driven by social inflation and legal system abuse in the U.S. The plaintiffs’ bar has not let up on their aggression in that space. And while there is some, I think, very encouraging signs that states are beginning to wake up to how destructive this process has been to the U.S. economy, it’s still pretty limited. So, the underlying environment isn’t great.
“Rate, while I think in a number of areas continues to stay abreast of loss trend, I am starting to see more competition, which I think is problematic. And I think for a lot of new entrants, in particular into the primary liability space, I think they’re kidding themselves a little bit around the idea that the industry has somehow achieved excellent rate adequacy in that space, and that it’s a place to make a lot of money. We just don’t see it that way.
“And then lastly, ceding commissions are stubbornly high, and I think are not justified by the underlying performance, which is why you certainly saw in this quarter’s results our written premium for casualty pro rata was down by 18%, and we will continue to critically evaluate that portfolio,” he explained.
In terms of good news surrounding casualty reinsurance, Williamson noted that given all of the work the company has done in the space, it is now down to a core portfolio “of really exceptional underwriters where we have a lot of confidence in what they’re doing.”
“And so, we can be, I think, selective and have a lot of confidence in the performance of the existing portfolio. But I certainly don’t see us going out from here and trying to regrow that portfolio until conditions improve materially,” said Williamson.
As markets become more competitive, the need for underwriting discipline increases, and Williamson gave some insight into how Everest maintains discipline in this type of landscape.
“We’ve proven over multiple cycles that we can effectively prune exposures when we think the economic terms available are below our standards, and then reaccelerate into the hard market. In fact, I would take you back to the 2023 hardening. In the year prior to that, we substantially cut our cat book. What allowed us to reaccelerate is core to Everest’s value proposition, which is we are an incredibly nimble organization. We’re very lean. We have empowered leaders in each of the regions who have deep customer relationships. We tend to participate, given our depth and breadth of expertise across many lines of business. We’re a top-tier market, and we’re welcomed on the reinsurance panels of all the lead market underwriters. And, I think, that they will be more than willing to find more room for Everest when the time comes. And that’s frankly when they’ll need our capacity most.
“So, we deliver a real service to our clients in that fashion. There’s nothing about what we’re doing now that even gets close to the idea of changing our relevance or the quality of our value proposition.”
