Everest Group, Ltd.

Welcome to the Everest Regroup Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to John Levinson, Head of Investor Relations.

Good morning and welcome to the Everest Regroup Earnings 2021 Second Quarter Earnings Conference Call. The Everest executives leading today's call are Juan Andrade, President and Chief Executive Officer, Mark Kosciancic, 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.

Juan Andrade Thank you, John. Good morning, everyone, and thank you for joining the call. Everest delivered an outstanding second quarter with strong growth and excellent underwriting and investment performance. We set multiple records for our company on both the top and bottom lines. These results serve as the foundation for our exceptional net income result of over $1 billion through the first half of 2021, and they're another important step to achieving our three-year strategic plan objectives and the delivery of superior results to our shareholders. Everest achieved an annualized total shareholder return of 22.5% through the first half of 2021, while exceeding our three-year strategic plan target of 13%. We capitalized on market opportunities to expand our franchises in both reinsurance and insurance, driven by relentless execution and the strength of our value proposition to our clients and brokers. Discipline underwriting drove strong profitability in both reinsurance and insurance, and our investment return was a quarterly record for the company. The standout performance this quarter demonstrates the progress we have made in executing our strategy and the quality of Everest's diversified earnings. As I discussed on our investor day in June, our strategy has three building blocks. First is building our underwriting franchises. We are growing our specialty P&C insurance platform while expanding its margins. We are solidifying our leadership position in global P&C reinsurance while we are growing and diversifying this business. Our investment portfolio is a core tool to generate solid returns, and we're optimizing the portfolio while sharpening our strategy. Second, we continuously pursue operational excellence. This starts with underwriting discipline supported by a system of management oversight and checks and balances. Beyond underwriting, we are transforming the operating model of the company to achieve greater scalability over time. We are also optimizing capital within our underwriting and investment portfolios. Capital is valued and respected. We are using the most efficient sources of underwriting capital from the capital markets, including ILS investors. In our industry, Those who execute best win. We're leveraging our flat, agile organization to deliver best-in-class service and risk solutions to our brokers and customers. They routinely cite our responsiveness and capabilities as a key reason why they choose to do more business with Everest. Finally, ESG principles are core to Everest. This includes focusing on the culture of our company. Culture is one of our key differentiators. and it is one of the reasons we can attract and keep top talent. Our culture fuels our success by helping our team be the best it can possibly be. We're investing in the talent of the organization as well as the diversity of our team. At Everest, we have three drivers of earnings. The first driver is about building a high-quality specialty commercial P&C insurer through underwriting excellence and a compelling value proposition. We are embedding data and analytics across the organization, enabling more effective pricing and decision making. This means we make better underwriting decisions at improved loss ratios. We are improving our claims outcomes while delivering excellent service to our clients. And we're focusing our distribution efforts to be more sales and results oriented. Our second driver of earnings is Everest's leading global P&C reinsurance platform. We enjoy the leading market position of a fully scaled platform, and we are focused on continuing to grow and optimize our reinsurance business. We're executing an underwriting transformation by improving operational oversight, governance, and controls. Our reinsurance division is entrepreneurial and nimble. We will maintain it within a framework of pricing, reserving, and process discipline. We're further diversifying into higher margin opportunities. And finally, we're expanding our risk financing by further partnering with capital markets and ILS investors. The third core driver of earnings is the investment portfolio. We have a high quality portfolio and we're focused on the efficient use of capital. The successful execution of our strategies in all three drivers of earnings is clearly evident in our results. I will now discuss our group reinsurance and insurance first quarter 2021 results. Starting with the group results, we grew gross written premiums by 35% and net written premiums by 39%. Our growth was broad and diversified, stemming from one, increased exposures and new business opportunities as the U.S. economy recovers, two, continued double-digit rate increases, three, expanded shares on attractive renewals, and four, strong renewal retention. The combined ratio was 89.3%, an eight-point improvement year over year. The attritional combined ratio was 87.6%, almost a full point better than prior year, with both segments expanding margins. We generated $274 million in underwriting profit, compared to $51 million in the second quarter last year. Underwriting profitability remains at the core of everything we do. Net investment income was simply outstanding at $407 million compared to $38 million in the prior year's second quarter. These strong operating results led to a net income for the quarter of $680 million, resulting in an annualized return on equity of over 28%. Gross written premiums and reinsurance were up 40%, over the second quarter of 2020. We are pleased with the ongoing execution of our 2021 plan. This growth was broad-based in the areas we discussed during investor day as attractive. We achieved this growth while also coming off or reducing shares on less attractive business. We drove continued targeted growth in property cap, which we achieved while lowering our PMLs in peak zones, thus reducing expected volatility and improving risk adjusted economics. Much of our growth came from our core trading partners that are looking to grow with Everest because of our strong ratings and balance sheet, significant capacity, and the ability to ride across all lines. The attritional combined ratio ex-COVID-19 pandemic impacts was 86.1 for the quarter, a 60 basis point improvement year over year resulting from our continued focus on loss and expense management. We see risk-adjusted returns expanding in almost all treaties and classes of business globally. We're also benefiting from investments in data and analytics. As you can see in our results, our focused actions improve the quality and profitability of the book. We are writing a more balanced portfolio with improved economics at an appropriate level of risk. We have achieved improved portfolio economics across all of our 2021 property renewal dates. We improved in every dimension. We increased top line, increased margin, and achieved higher ROEs. In casualty and professional lines, primary rate increases continue to outpace expected loss trends. Jim Williamson is available to provide additional details during the Q&A. Our insurance division, continued its strong performance with excellent growth and underwriting results. We continue to expand margins as we execute our strategy. We wrote over $1 billion in gross written premiums for the first time in a quarter. This represents 25% growth year-over-year or 30% growth excluding workers' compensation. This growth is driven by disciplined cycle management, new business opportunities, continued double-digit rate increase, and strong renewal retention on existing business. We're also starting to see a steady improvement in overall economic activity. The growth was well diversified in target classes of business where market conditions are primed for profitable growth, including specialty casualty, professional liability, property, transactional liability, and trade credit and political risk. We are pleased with this diversification as it is a core tenet of our strategy. We also delivered strong underwriting results with a 93.5% combined ratio, a 10-point improvement over the same period last year, which was impacted by COVID. The underlying performance was also excellent with a 92.1 attritional combined ratio, a 1.6% improvement over last year, and almost four points better than the second quarter of 2019. Renewal rate increases continue to exceed our expectations for loss trend, up 14% in the quarter, excluding workers' compensation, and up 11%, including workers' compensation. Rate increases were led by excess casualty, up 22%, property, up 16%, financial lines, up 14%, and general liability, up 9%. We are building a diversified portfolio steering our mix towards product lines with better rate adequacy and higher long-term margins. We also continue to manage average limits deployed to mitigate volatility. We are pleased with the progress we have made, and this strategic direction and granular portfolio management should continue to possibly impact our results going forward. We continue to thoughtfully manage the workers' compensation line, which now represents 10% of our second quarter premiums down from 14% year over year. While this line remains profitable, we have pared back monoline guaranteed cost writings and shifted to more loss-sensitive, loss-rateable business, where we share more risk with our customers with more focus on risk mitigation. Workers' compensation is an area of expertise at Everest, and we're monitoring market conditions closely for potential opportunities. But these efforts illustrate our disciplined cycle management. Lastly, our strong position in both the E&S and retail channels continues to give us access to a wide set of opportunities. Mike Karmalovich is available to provide additional details during the Q&A. In summary, Everest had an outstanding second quarter with strong growth and exceptional underwriting and investment performance. We have vibrant and well-diversified reinsurance and insurance businesses with experienced leadership and underwriting teams providing industry-leading solutions to our customers. We have significant momentum as we continue to execute our strategic plan. The company has excellent financial strength, top talent, and a prudent capital management philosophy. We are focused on sustained profitable growth, a more diversified, targeted, and deliberate mix of business, and superior risk-adjusted returns. We believe the relentless and disciplined execution of our strategy will result in maximizing shareholder returns. I am confident in Everett's future and our ability to deliver on our commitments to customers and shareholders. Now let me turn the call over to Mark Koscianczyk for additional details on the financials. Mark?