Everest Group, Ltd.

Good day, ladies and gentlemen, and welcome to the Everest Regroup Limited First Quarter 2020 Earnings Conference Call. Today's conference is being recorded at this time, but now I'd like to turn the conference over to Mr. John Levinson. Please go ahead, sir.

Thank you, Nadia, and welcome to the Everest Regroup Limited 2020 First Quarter Earnings Conference Call. The Everest executives leading today's call are Juan Andrade, President and Chief Executive Officer, Craig Howey, EVP and Chief Financial Officer, and John Doucette, EVP and President and CEO of the Reinsurance Division. We are also joined today by other members of the Everest Management Team. Before we begin, I will preface the comments on today's call by noting that Everest SEC filings include extensive disclosures with respect to forward-looking statements. Management comments regarding estimates, projections, and similar are subject to the risks, uncertainties, and assumptions as noted in its filings. Management may also refer to certain non-GAAP financial measures. These items are reconciled on earnings release and financial supplement. With that, I turn the call over to Juan Andrade.

Juan Andrade Thank you, John, and good morning, everyone, and thank you for joining the call. First and foremost, I hope you, your families, your friends, and your neighbors are all staying healthy and safe. On behalf of our company, I want to offer our heartfelt condolences to all of those, including many in the Everest family who have lost loved ones during this difficult time. Our sincere thanks go to those medical professionals and first responders who are putting themselves at risk to keep everyone safe. Also, to all of those who are working hard to keep the supply chains going, the truck drivers, delivery drivers, grocery store employees, and everyone else, thank you. I also want to thank all of Everest's employees for their spirit and their unflagging commitment to serve our customers. We took early, proactive, and decisive actions to protect the health and safety of our employees, their families, and our stakeholders. As a result, Everest continues to successfully operate remotely. We are doing our part in support of a global economy by serving all of our customers and stakeholders without interruption. Our move to remote work was planful with a well executed organizational resiliency plan and an underlying technology infrastructure that performed seamlessly and an information technology organization that has performed admirably. Our employees have been flexible, resilient, and productive. We have received accolades regarding our responsiveness and our stability. We also continue to support our local communities around the world in their pandemic relief efforts. These are leadership moments for people and companies. Our culture of collaboration, thoughtful assumption of risk, humility, and relentless execution are at the bedrock of our performance. I am incredibly proud of our people and our company. Our diversified global platform with its broad mix of products, distribution, and geography remains an important source of stable capacity to our broker partners and customers. Our capital position remains a source of strength with high quality invested assets, significant liquidity, and low financial leverage. Despite the pandemic and the economic downturn, Everest remains profitable as reflected in our reported 98.6 combined ratio, or 89.9, excluding catastrophe losses and the pandemic IBNR loss provision. Additionally, Everest remains resilient as reflected by both our 21% growth rate in gross written premium and by our capital position. We have built a strong capital foundation over the years, holding 8.6 billion of shareholders equity at March 31, 2020. While this is a decrease from year end 2019, This decrease primarily results from, one, the sharp decline in the fair value of the investment portfolio, which has now substantially recovered since the end of the quarter, two, share repurchases and dividends paid, and three, the pandemic loss IBNR provision. Most importantly, our capital position continues to exceed what we need to run the business with excess capital relative to rating agency and regulatory requirements. We have substantial liquidity through the cash we hold and the cash flow from operations, which was over half a billion dollars for the quarter or up 10% from 2019. We have significant access to capital markets, including plenty of debt capacity as we carry very little debt compared to all of our peers at less than 7% of our capital. When most of our peers typically carry upwards of 20 to 30%. Lastly, Our industry-leading expense ratio also gives us operating flexibility, which is particularly critical in times of uncertainty. Turning to the first quarter of 2020, Everest remains strong and is well positioned with broad capabilities and top talent. And we remain focused on solving our clients' most critical risk transfer needs in a disciplined and profitable way. We demonstrated excellent momentum across both of our reinsurance and insurance businesses, with gross written premium growth of 16% and 33% respectively. We also continue to benefit from improved market conditions during the quarter, which I will discuss in a moment. Excluding catastrophes and the pandemic IBNR loss estimate, our underlying combined ratios for the group at 89.9 and each of our divisions, reinsurance at 87.7 and insurance at 95.6, are reflective of the strong underwriting performance across the group and the earnings generating power of the franchise. Underwriting profitability remains at the core of everything we do. Our reinsurance division had a strong January 1 renewal season. We continued to judiciously deploy capital and we underwrote a high-performing book that is focused on strong economic returns while improving the diversification and balance of our overall portfolio. We also saw stronger opportunities in several areas such as retro and facultative risk. As the quarter progressed, we saw continued momentum across the portfolio. John Doucette will provide additional details on market conditions and the underlying growth. Our insurance division's growth remained strong and consistent with recent quarters. The drivers for this growth were, number one, strong and widespread rate momentum. Excluding workers' compensation, the rate increase was plus 24%, or plus 17%, net of a handful of large deals booked in the quarter, and over 12%, including workers' compensation. This is an improvement from the fourth quarter of 2019, where the rate increase was almost plus 12, excluding workers' compensation, and plus 4, all in. We also saw continued strength in the E&S space, with strong submission flow and market conditions continuing to tighten in property and casualty in both primary and excess lines. We also had strong renewal retention in both our retail and wholesale businesses, and we had increased productivity resulting from additional underwriters higher in 2019 that are now fully onboarded and providing capacity to address the increased submission flow. The insurance growth was also balanced and diversified across our many lines of business. Strong rate and tightening terms drove the growth in the Long Tail line. Despite the impacts of the pandemic in the quarter, our underlying insurance portfolio continues to perform well, and we are seeing the benefits of our various investments and portfolio optimization efforts, all of which position as well for this environment. Turning to investments. That investment income of 148 million was up 5% from the first quarter of 2019. Our investment portfolio had been and is defensively positioned with over 75% in investment grade fixed income bonds and less than 4% allocated to public equities. Most of our risk is bond risk and we also have the ability to hold bonds until they mature. In addition, we have continued to further reposition our portfolio, moving up in fixed-income credit quality and reducing equity exposure. As per our April 23 announcement, we have taken a $150 million IBNR loss provision in the first quarter related to the COVID-19 pandemic. These losses relate to event cancellation, business interruption, and other coverages such as accident and health and workers' compensations. Our estimate was based on an analysis completed during the first quarter. This analysis was a thorough cross-functional review of the InForce portfolio by line of business, industry, and geography. The review was completed by a team of professionals representing every area of the company. Given the fluid and continuing nature of this pandemic, this is an ongoing event, and so is our analysis. While our analysis looked at all aspects of our global portfolio, our estimate does not take into account legal, regulatory or legislative intervention that could retroactively mandate or expand coverage provisions. As stated in our release, our philosophy is to recognize and react to expected future losses on a timely basis. We will be tracking pandemic losses separately from our attritional losses, and it's an ongoing event. With regard to our specialty insurance business, we have limited exposure to event cancellation, accident and health, workers' compensation, and business interruption. Our property policies have unambiguous policy language that requires direct physical laws for business interruption coverage to be triggered. Additionally, the majority of the property policies enforced contain a virus exclusion. Only a very small number of policies have endorsed sublimits typically less than $25,000 and with short duration caps, that would offer BI for a notifiable human disease. These exposures have already been recognized as part of the overall IBNR loss estimate for the quarter. The majority of the IBNR loss provision was for the reinsurance business, given the relative size of this portfolio compared to our insurance businesses. It is important to note that as a reinsurer, We have contractual terms and conditions, such as retentions, limits, event definitions, hours clauses, and other coverage provisions that will apply to this ongoing event. Thus, we do not simply follow the fortunes. It will be very fact-specific. We have also done a thorough review of our mortgage reinsurance contracts. Based on our view of the economic situation that is aided by both external information and our own proprietary internal modeling, We currently believe that our loss picks and reserves remain adequate. We will continue evaluating this business as the economic situation unfolds. In summary, Everest showed forward momentum, resiliency, and profitability in the first quarter of 2020. We effectively transitioned to running our company remotely, and as always, we remain a consistent and trusted provider of capacity to our customers. Given the uncertainties in the current public health and economic environment, there could be an adverse impact on results for the property and casualty industry and Everest for the remaining part of the year. The impact is clearly dependent on the shape and length of the recovery. While the economic environment has changed, Everest remains a high-quality franchise with broad capabilities, a global platform, and top talent. We remain focused on solving our clients' most critical risk transfer needs in a disciplined and profitable way. We have the right culture, the right platform, and relevance with our clients and trading partners, and the capital base to see us through this time. Now, let me turn it over to Craig to provide additional details on the financials. Craig?