Everest Group, Ltd.

Welcome to the Everest Regroup Earnings Conference Call. This call is being webcast and will also be available for replay on the Everest website later today. I'd now like to turn the call over to John Levinson, Head of Investor Relations.

Good morning and welcome to the Everest Regroup Limited 2020 Fourth Quarter and Year-End Earnings Conference Call. The Everest executives leading today's call are Juan Andrade, President and Chief Executive Officer, Mark Koscianczyk, Executive Vice President and Chief Financial Officer. We are also joined 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 these filings. Management may also refer to certain non-GAAP financial measures. These items are reconciled in our earnings release and financial supplement. With that, I turn the call over to Juan Andrade.

Thank you, John. Good morning, everyone, and thank you for joining the call. 2020 had its share of global challenges, but COVID-19 leads any discussion of the year. The pandemic affected all our communities, our way of life, and resulted in an unimaginable death toll. It affected all aspects of the world's economies, including the insurance and reinsurance industry. Despite unprecedented challenges and through the resilience and dedication of our team, Everest delivered solid 2020 results with excellent growth and improved underlying profitability. Key steps we took last year include adding to our deep and talented management team, strengthening our balance sheet, enhancing our enterprise risk management and operational discipline, and further diversifying our business. Most importantly, we have been a valued partner to our distributors and customers during a very perilous time. With a strong foundation in place, we remain confident in continued operational and financial success across our business. We are bullish about 2021. We will continue to profitably grow the insurance segment while continuing to grow and strengthen our position as a global and leading PNC reinsurer. As we think about our positioning in the market amongst our clients, partners, and investors, we are guided by the following principles by which Everest will seize opportunities and increase the value of our company. First, we will deliver superior growth in book value per share over the cycle. Second, we are an underwriting company. One of our core competencies is the identification, underwriting, pricing, and management of risk. Diversification by line of business and geography is critical. We have clearly defined and quantified risk appetites, and we maintain strong enterprise risk management and performance monitoring. Third, investment returns are a critical value driver, and investment management is also a core competency. we are further optimizing our invested assets via portfolio management strategy that is complementary to our underwriting risk. With a sizable invested asset base and significant cash flow, we seek to add value and diversify the sources of income to the company. Fourth, we manage our capital to fuel long-term profitable growth while continuing to expand our third-party capital capabilities. And fifth, we will maintain our industry-leading financial strength We complement our core strengths with a low-cost expense base and a flat entrepreneurial and responsive organization. Our diversified reinsurance and insurance franchise, financial strength, deep distribution relationships, and leading customer solutions enable our continued performance in today's market. We have robust momentum coming into 2021, and we are well-positioned to continue diversifying our business for sustained profitable growth. I will now discuss our group reinsurance and insurance results, starting with the fourth quarter, followed by our full year 2020, and how these results position us well for 2021. Starting with group results, in the fourth quarter, we grew gross written premiums by 13% and net written premiums by 16%, with strong growth across both segments. Our growth stems from a combination of new business opportunities, improved terms and conditions and rate levels, expanded shares on attractive renewals, and high retention rates on our existing book. Our underlying combined ratio was 86.3, a four-point improvement over the fourth quarter of 2019, with both segments showing significant improvement in loss and expense ratios. Net investment income was very strong at $222 million, compared to $146 million in the prior year quarter. For 2020, Everest grew gross written premiums 15% and net written premiums 17% year over year. We delivered $514 million in net income and $300 million in operating income despite the COVID-19 loss provision, the prior year reserve strengthening, and an active CAT year. Our dividend-adjusted book value per share grew over 11%. We are focused on delivering superior growth in book value per share over the market cycle. The underlying combined ratio improved almost a point to 87.5 year-over-year, with our insurance segment improving 2.3 points to 94.2. Net investment income was in line with prior year, despite the market volatility. These results demonstrate the earnings power of Everest and our ability to thrive in any market. We continue to diligently manage our portfolios to improve returns with a broad array of underwriting actions, including managing attachment points, limits, terms and conditions, targeted non-renewals, and many other actions. This is the hard work of building and sustaining a profitable book. Underwriting profitability remains at the core of everything that we do. As previously announced, in the fourth quarter, we strengthened prior accident year reserves in our reinsurance segment by $400 million. The reserve strengthening does not change our view of current accident year loss picks, as we had already selected more conservative loss picks in response to general loss trends. We are confident in the prior year reserving actions we took in the quarter and the quality of the in-force portfolio. These decisive actions will serve us well. In the fourth quarter, We also added 76 million, primarily for third-party lines, to our COVID-19 loss provision. Despite a high frequency of storms in the fourth quarter, our manageable catastrophe losses of 70 million resulted from disciplined underwriting and the purposeful reduction of volatility over the last two years in our reinsurance portfolio. Mark Koscianczyk and Jim Williamson are on this call and can provide more detail on these actions during Q&A. For our reinsurance division, the fourth quarter continued our strong growth. Gross written premiums grew 12% in the quarter and 15% in 2020. The attritional combined ratio ex-COVID was 83.9, an improvement from 87.4 in the prior fourth quarter. January 1 is our largest renewal date, and this one was one of the strongest in many years. The rate environment improved across most territories and lines of business, with loss-impacted business seeing material increases. Capacity is abundant, but reinsurers remain disciplined on pricing and terms and conditions. There is a flight to quality where Everest's strong balance sheet and highly rated financial strength set us apart. Customer and broker demand for Everest's capacity is strong, as highlighted by our increased shares and preferential signings on treaties. counterparties actively want to do more business with Everest. Our responsiveness, ability to deploy significant capital, and reputation as problem solvers in the market were critical to a successful renewal season. We saw outstanding results in Latin America, in the US and Canada, as well as meaningful growth in continental Europe. We had notable wins on large deals and increased our share with core customers and in territories and classes we found the most attractive, including facultative business. We continue to expand and diversify the portfolio as we execute to achieve a stronger, more diversified, and more profitable book. Specific to our January 1 property book, total limit outstanding increased with an increase in rate online and significant improvements in the combined ratio, ROE, risk-adjusted return, and increased dollars of expected margins. we have a stronger and more profitable portfolio. John Doucette is available to provide additional details during the Q&A. Our insurance division continued its solid execution as evidenced by our results in both the fourth quarter and the full year of 2020. Gross written premiums grew 15% or 18% excluding terminated programs, with gross written premium of $872 million in the quarter and over $3.2 billion for 2020. Both four-quarter and full-year 2020 revenues are milestones for the insurance division. This growth is driven by disciplined cycle management, strong rate and target classes, and improving activity in certain lines of business, such as transactional liability, that was partially offset by reductions in economically impacted areas, such as energy, sports, leisure, and entertainment. Everest Insurance delivered an improved attritional combined ratio of 93.8 for the fourth quarter, a 4.3-point improvement over the fourth quarter of 2019, and 94.2 for the full year 2020, a 2.3-point improvement over 2019. These results are driven by portfolio and expense management and are consistent with expanding insurance margins. We achieved record renewal rate increases of 21% in the fourth quarter, excluding workers' compensation, and up 14%, including workers' compensation, where we are seeing rates flatten. Rate is outpacing our expected loss trend, and renewal retention across the entire portfolio is strong. The rate we achieved is a function of market conditions and disciplined, proactive underwriting actions across our businesses. After years of soft pricing, and rising loss costs, pricing adjustments are necessary, and we expect they will continue throughout 2021. Consistent with prior quarters, these increases are led by property up 21%, excess casualty up 50%, D&O up 35%, and commercial auto up 17%. We are also seeing widespread increases in other lines of business, which have been slower to turn, most notably general liability, now up 9%. We are managing the insurance portfolio to build a diversified business and steer our mixed or product lines that are in higher long-term margins. Our position in both the E&S and retail channels give us access to a wide set of opportunities. Mike Karmilovich is available to provide additional details during the Q&A. We have a vibrant and well-diversified reinsurance and insurance business with experienced teams providing industry-leading solutions to our customers. Building on the achievements of 2020, we will continue diversifying our business for profitable growth and sustained momentum throughout 2021. The company is on solid ground with excellent financial strength ratings, top talent, and a prudent capital management philosophy. We are focused on sustained profitable growth, a more diversified mix of business, and superior risk adjusted returns. The relentless execution of our strategies result in maximizing shareholder returns. I am confident in Everest's future and on our ability to deliver the commitments to our customers, shareholders, and the marketplace. 2020 showed us all just how resilient we truly are. Now, let me turn the call over to Mark Koscianczyk for additional details on the financials. Mark?