Everest Group, Ltd.

Good day, and welcome to the Everest Group Limited Third Quarter 2024 Earnings Conference Call. All participants will be on 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 throw out your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Matthew Orman, Senior Vice President, Head of Investor Relations. Please go ahead.

Good morning, everyone, and welcome to the Everest Group Limited third quarter of 2024 earnings conference call. The Everest executives leading today's call are Juan Andrade, President and CEO, and Marcos Yancic, Executive Vice President and CFO. We are also joined by other members of the Everest management team. Before we begin, I'll preface the comments by noting that today's call will include forward-looking statements. Actual results may differ materially, and we undertake no obligation to publicly update forward-looking statements. Management comments regarding estimates, projections, and similar are subject to the risk, uncertainties, and assumptions as noted in Everest SEC filings. Management may also refer to certain non-GAAP financial measures. Available explanation and reconciliations to GAAP can be found in the earnings release and financial supplement on our website. With that, I will turn the call over to Juan.

Thank you, Matt. Good morning, everyone. Thank you for joining us. We delivered another successful quarter. with strong operating income driven by healthy underwriting results and investment income. This resulted in an annualized total shareholder return of 19.4% and an annualized operating return on equity of 18.7% year-to-date. These results reflect our underwriting discipline and prudent risk management, which position the company to generate leading returns despite what has already been another year in which industry catastrophe losses were higher than normal. Our thoughts are with all the people affected by these catastrophes across the globe, from Hurricane Beryl's impact in the Caribbean, to Storm Boris in Europe, and most recently in the U.S., first hit hard by Hurricane Helene in late September, and then by Hurricane Milton in early October. It has been an active third quarter, and the impact of these natural catastrophes further strengthen our conviction that we have the right strategy. Our reinsurance franchise is generating excellent results, and it's differentiating itself as a lead market. We are well positioned to benefit from attractive market conditions in a number of lines of business as we approach the January 1 renewals and beyond. In our insurance segment, we made progress on a number of including improving the portfolio mix by growing in lines of business with higher expected profit trajectories and pulling back in less attractive lines, and continuing to gain traction internationally. Our primary focus in insurance remains on building an increasingly profitable, resilient, and diversified portfolio. Additionally, our investment portfolio continued to outperform, generating nearly 500 million of net investment income in the third quarter. With that backdrop, I will now turn to our third quarter financial highlights, beginning at the group level. We grew the company with a focus on property and specialty lines, where we see the highest expected risk-adjusted returns. Growth in these lines is well into the double digits for both segments. Concurrently, We are pulling back in certain casualty lines and subclasses in North America that are less attractive and are more prone to social inflation pressures. These disciplined cycle and portfolio management actions contributed to an improvement of 50 basis points in our attritional loss ratio. The combined ratio included approximately eight points of catastrophe losses from three hurricanes, Canadian storms, and wildfires. and a major flood event in Europe. Over the past few years, we have proactively exited or reduced our exposure to the largest sedents in Florida. We have lowered our share with Florida specialists, and we have optimized our diversification throughout the state. And we have reduced our overall exposure to U.S. accounts that are heavily exposed to secondary perils, including flooding. These actions have allowed us to grow our property catastrophe portfolio with higher levels of expected profitability and drive strong results even when events happen. The success of these portfolio management efforts is illustrated by our Helene loss of $78 million net of recoveries and reinstatement premiums. Based on our preliminary assessment to date, we estimate that losses from Hurricane Milton, which made landfall as a Category 3 in early October will impact Everest's fourth quarter results in the range of $300 million to $400 million on a pre-tax basis, net of recoveries, and reinstatement premiums. Our estimated range is based on information that is preliminarily available, which projects a total insurance industry loss of $25 to $35 billion. This, again, reinforces the importance of our actions to manage natural catastrophe volatility and build a resilient portfolio. Turning now to our reinsurance business, where third quarter results were once again excellent. We continued to execute on our portfolio and cycle management initiatives to maximize risk-adjusted returns. This was evident in growth in the quarter, driven by property catastrophe excess of loss and property pro rata, which remain attractive and where we grew in the mid to high teens. Conversely, as a result of our prudence in casualty lines, casualty pro rata, and casualty excess of loss premium, growth rates decreased to levels in the mid-single-digit range. This is a result of the actions we have discussed in prior calls all year. So far year-to-date, we have actively shed over $400 million of casualty renewal premium as we see these lines as less attractive and in need of further correction in terms of underlying pricing and seating commissions. We continue to see strong opportunities to expand the portfolio in those lines with the best expected returns, primarily property and specialty. Both the attritional loss and attritional combined ratios improved, resulting in $245 million of underwriting profits. The quarter included catastrophe losses of $239 million, net of recoveries, and reinstatement premiums, again, reflecting the resilience we have built into this business. Our strategy to focus on top-tier seedings further enables us to produce consistent returns throughout the cycle. In the aftermath of Milton and other international events, we expect property catastrophe pricing in North America and Europe to firm heading into the January 1 renewals. Demand for our capacity has also increased. Following recent catastrophe events and high-quality students continue to expand their relationship with us. In addition, Everest's underwriting strategies have allowed us to build what we believe to be meaningful embedded margin in our reinsurance reserves. Our reinsurance segment is well positioned to continue generating strong margins. Now turning to insurance. Our increasingly diversified insurance platform positions us to be agile as evidenced by our discipline this quarter. For example, we have favorable market conditions and well-priced short tail and specialty lines and strong capabilities in our expanding international business. So we leaned into this and we grew by double digits. Conversely, We are increasingly cautious in certain casualty lines in the U.S. as the environment remains challenging. This is the long-term value of the increasingly diversified platform that we have created. We can play offense and defense to pursue the most economically attractive opportunities. With regard to North America, we achieved an average rate increase of 11% across the portfolio excluding workers' compensation and financial lines. Rate, indeed aggregate, remains above expected loss strength. In casualty lines, such as general liability, commercial auto liability, and excess liability, rate accelerated well into the high teens. These rate increases are necessary to respond to the elevated loss activity that we're experiencing as an industry and as a company. Everest continues to closely monitor the persistent problem of social inflation and legal system abuse in the United States. In U.S. casualty lines, we are focused on continuing to take action in classes exposed to this trend, for example, real estate, habitational, and leisure accounts, and we are taking decisive underwriting actions. Our teams are selective on new business, achieving strong rate increases, and non-renewing underperforming accounts. As a disciplined underwriting company, our goal is to ensure we are writing business only where pricing is adequate to earn our target risk-adjusted return. We expect a combination of these actions to result in a higher margin and more consistently profitable book. In addition to our standard quarterly reserve review process, We will conclude our annual long-tail deep dive reserve studies within the insurance segment in the back half of the fourth quarter. And we will continue to take a conservative approach to the findings. In conclusion, let me step back and summarize the status of our businesses. Our reinsurance business is firing on all cylinders. We are the lead treaty market for most of our global clients. and we have a nimble and profitable facultative business with a global footprint. In insurance, our short tail and specialty underwriting in the U.S. is strong, and we are increasingly local and relevant to our key brokers and markets across the country. We have upgraded important talent, and we are investing in people and automation to keep driving that business. Similarly, our international insurance expansion is exceeding expectations. We have hired the best leaders in the business to drive that initiative. They've built an excellent book of business, and all of our performance indicators are pointing in the right direction. That leaves one area of the portfolio where we are taking ongoing and aggressive actions, segments of our insurance casualty book in the U.S. that are exposed to the real issues of legal system abuse. So looking ahead, we will remain disciplined, and opportunistic in our underwriting, while building franchise value through best-in-class execution for our clients. Our diversified businesses and our high-performing investment portfolio, coupled with our very strong balance sheet and our significant capital strength, give us the flexibility and the optionality to position Everest for the long term as we focus on delivering industry-leading returns through the cycle. With that, I'll turn it over to Mark. to review the financials in more detail.