Everest Group, Ltd.

And welcome to the Everest Group fourth quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Matt Rohrman, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Good morning, everyone, and welcome to the Everest Group Limited fourth quarter of 2023 earnings conference call. The Everest executives leading today's call are Juan Andrade, President and CEO, and Marco Ciencik, Executive Vice President and CFO. We're also joined by members of the Everest management team. Before we begin, I'll preface the comments on today's call by knowing that Everest SEC filings, including 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'll turn the call over to Juan.

Thank you, Matt. Good morning, everyone. Thank you for joining us. 2023. was the most profitable year in our history. We delivered exceptional full-year results. We achieved record underwriting income, record net investment income, record operating income, record net income, and record operating cash flow. We executed on our objectives and delivered a 2023 operating ROE of over 23%. and a total shareholder return of over 26%. The strength and quality of our franchise was evident as we achieved these results in another elevated catastrophe year, while also taking prudent actions to further strengthen our balance sheet. Everest capitalized on the hard market to grow in attractive lines across our businesses. Our precise execution at the 2024 January reinsurance renewal created excellent outcomes. We completed the deployment of our $1.5 billion equity capital race on schedule and at superb risk-adjusted returns. We expanded key client relationships while improving the scale, quality, and profit potential of our portfolio, giving us a strong start to the year. Market conditions remain strong. We are not seeing any meaningful new capacity enter the market, and we expect conditions for upcoming renewals to remain excellent. Our capital strength positions us to profitably grow both underwriting businesses. At Everest Investor Day last November, we outlined our progress, strategy, and financial objectives for the next three years. As you have seen from our 2023 results, we are on track to achieve these goals. Our primary objective is to generate industry-leading financial returns consistently and across market cycles, and we have delivered. We are building on momentum created by our actions to transform Everest over the past four years. Operating as one Everest, we elevated all aspects of our business. Everest is a more diversified and higher-margin business with a strong underwriting culture of execution and accountability. This guides our underwriting decisions and our drive to outperform, and it allows us to deliver on our long-term objectives. Turning to the full-year financial highlights, beginning with the group, The group delivered outstanding results in 2023. As I said, we achieved new company profitability records, including annual operating income and net income, which both exceeded $2.5 billion for the year. We grew by 21% in constant dollars, ending the year at nearly $17 billion in gross written premium. Our performance was supported by the execution of our strategies and our ability to take advantage of strong market conditions and reinsurance and insurance. We generated $1.2 billion in underwriting profit, also a company record, and we improved the combined ratio more than five points to 90.9, despite industry catastrophe losses exceeding $120 billion. we achieved a six-point year-over-year improvement in the group loss ratio, contributing to our excellent underwriting results. Building the strength and flexibility of Everest Balance Sheet has been a priority for this management team since we took over this company. This was reflected in the quarter through our modest favorable development as we built additional strength into our already strong reserve positions. Mark will provide more detail on these actions. Turning to investments, we achieved another record with annual net investment income of 1.4 billion, driven by our actions to capitalize on the rising interest rate environment. Now for the underwriting segments, beginning with reinsurance. The reinsurance division had an exceptional year. Our discipline planning and execution in 2023 allowed us to capitalize on the generational hard property market, delivering outstanding top-line growth and bottom-line results. For the full year 2023, growth was 26% in constant dollars and excluding reinstatement premiums, with $11.5 billion in total gross written premiums. Growth was broad-based as we expanded with core seedings, grew in targeted markets, and allocated capital to higher return opportunities. We grew our core North America property catastrophe portfolio by over 30% at exceptional risk-adjusted returns. Internationally, we grew our total property portfolio by over 40%, with strong and targeted growth in Europe and Asia. We also leaned into growth opportunities outside of property catastrophe, including in targeted proportional property deals, aviation, marine, and in faculty, with strong expected returns in these lines. The division delivered $1.3 billion in underwriting profit for the year. The attritional loss ratio improved by a full point to 57.7, and the attritional combined ratio was down 110 basis points from 2022 when adjusted for prior year commissions related to the reserve releases. We leveraged deep client and broker relationships in our strong balance sheet to build a more profitable and higher margin book, which culminated in outstanding results at the January 2024 renewal. At 1-1-24, we grew our total property catastrophe portfolio by over 25%. compared to expiring premium. Following the significant increases in 2023, we saw further property catastrophe rate increases at 1.1, broadly across geographies. In North America, the property cat XOL risk-adjusted rate change was approximately 7%. Internationally, rates on our portfolio were up 14%. This trend also continued in specialty lines, particularly marine and aviation. The flight to quality in the reinsurance market continued. Our leading market position allowed Everest to grow market share on oversubscribed deals with leading clients on the best quality property CAT, cyber, and specialty lines treaties and in geographies around the world. Our clients signed down other carriers to make more room for Everest. We also played a leading role in several of the increased cap limit purchases being made by some of the best primary insurance underwriters in the business. This reflects the strength of our franchise and reputation in the market. To illustrate the point, we generated close to $300 million in additional premium growth through increased shares on existing property treaties. The favorable terms and conditions that we achieved during the 2023 renewals held, while attachment points, which increased significantly last year, were maintained. We were also surgical in our approach toward certain casualty lines at 1-1. We non-renewed 16% of our casualty and professional liability pro rata business, particularly when seating commissions did not meet our thresholds. These targeted actions, however, were partially offset by expanding shares on attractive casualty programs with select top clients. We achieved our objectives at 1.1. Executing with the same discipline and focus, Everest has consistently applied to shaping and diversifying the portfolio. We do not right the market. We selectively underwrite risks that meet our requirements. our priority is growing the bottom line to deliver leading financial returns. Coming out of the 1-1 renewal, the quality of our book is excellent. We are positioned to drive sustainable margin expansion while continuing to distinguish ourselves as the preferred lead market platform. Now turning to our primary insurance division. 2023 was a pivotal year for Everest Insurance, we advanced our key objectives while establishing strong foundations. We solidified and enhanced the division's global leadership team with top talent in the right places, operating through a regionalized structure aligned to customer needs. In 2023, we grew the insurance business by 10% in constant dollars, achieving record annual premium of over $5 billion. Growth was balanced and diversified by product, business line, and geography. We saw excellent opportunities in property and specialty lines, including marine, aviation, trade credit, and political risk. We are disciplined. The modest growth in certain casualty lines was primarily driven by robust rate increases as we remain prudent in our writings and focus on lines of business meeting our return thresholds. We continue to shift to shorter tail lines with favorable pricing and a strong profit trajectory. For both the year and the fourth quarter, we achieved a broad-based 12% rate increase in our core portfolio, excluding workers' compensation and financial lines. Beyond property, pricing accelerated and was particularly strong in marine and other specialty lines, commercial auto, general liability, and access liability. Overall, rate remains ahead of loss strength. We will only grow where we can do it profitably. We will remain disciplined in less attractive lines, including D&O, workers' compensation, and commercial auto. The combined ratio increase was driven by our reserve strengthening to address the impacts of social inflation on long-tail lines in the 2016 to 2019 period. The core underlying performance of the book is strong. We advance our disciplined international strategy, led by a proven entrepreneurial team of industry leaders and local underwriting talent. They accomplished a great deal in 2023, scaling our insurance platform across Latin America, the UK and Ireland, continental Europe, and Asia Pacific, where our value proposition is differentiated and eagerly welcomed. We made strides implementing systems and capabilities, enabling us to operate from common platforms and drive efficiencies. We are on track for new openings this year in Colombia and Mexico and Australia. While we have tremendous headroom in lucrative markets, we are focused only on the most accretive opportunities. Since this management team took over in 2020, We have significantly increased prudence around risk selection and deployed a disciplined underwriting strategy. We rebuilt the underwriting engine from top to bottom, investing in top-tier underwriting tools and experienced talent. We significantly strengthened our underwriting guidelines and risk selection parameters. Additionally, we pushed rate in excess of trend, broadly raised our inflation assumptions and initial loss picks. We added more loss-sensitive features, raised deductibles, and lowered limits. We exited certain social inflation-prone industry classes and invested in additional claims technology. As I said, if business doesn't meet our underwriting criteria, we just won't write it. As we head into 2024, the insurance division is executing from a strong foundation. and is well positioned to deliver on the targets we set out for the business at Investor Day. Our financial results led to the most profitable year in Everest history. We are building on this momentum with an outstanding start to 2024. As favorable market conditions persist, we are leaning into robust tailwinds across our reinsurance and insurance businesses with the full power of Everest behind us. And we will make the most of the opportunities in front of us. We have the right team driving a clear strategy with multiple avenues to deliver on our primary goal of generating consistent leading financial returns. We are confident about delivering on our objectives. With that, I'll turn it over to Mark to review the financials in more detail.