Everest Group, Ltd.

Good day and welcome to the Everest Group Limited fourth quarter 2024 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 a touch-tone phone. To withdraw your question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Matt Rardman, Head of Investor Relations. Please go ahead.

Thanks, Dave. Good morning, everyone, and welcome to the Evers Group Limited fourth quarter of 2024 earnings conference call. The Evers executives leading today's call are Jim Williamson, our President and CEO, and Mark Koscielczyk, Safer Vice President and CFO. We are also joined by the members of the Evers 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 have to take no obligation to publicly update forward-looking statements. Management comments regarding estimates, projections, and similar are subject to risk, uncertainties, and assumptions, as noted ever since you see filings. Management may also refer to certain non-GAAP financial measures. Viable explanations or reconciliations to GAAP can be found in our earnings release and financial supplement on our website.

With that, I'll turn the call over to Jim. Thanks, Matt, and good morning, everyone. Let me begin by addressing two recent tragedies, the wildfires in California and the plane crash in Washington, D.C. last Wednesday. The human toll of both events is devastating. Our thoughts and prayers are with the people, families, and communities affected. We are particularly grateful to the first responders who worked tirelessly during and in the aftermath of these events. Everest stands ready to put its financial resources to work and fulfill its societal mission of aiding recovery. Both of these events remain ongoing from a loss assessment perspective. Regarding the LA wildfires, I would expect Everest to take a pre-tax net loss for the group of between $350 and $450 million, equating to a 1% market share. Most of this loss will impact our reinsurance division. We are confident in the underwriting of this exposure by both our insurance and reinsurance teams, and our share of loss reflects careful client selection. Most sedans are unable to provide expected loss ranges, except in those cases where a total loss to their reinsurance program is nearly certain. As a result, this loss estimate remains a broad range based on the most widely used industry loss figures. Specific to the aviation tragedy, it's too early to provide a loss estimate for the event, but we expect it to be well managed in our Q1 results. Moving on to our fourth quarter results. As we discussed last week, Everest's decisive reserve action added $1.7 billion to net reserves, including over $200 million of additions to our 2024 loss picks. It's worth emphasizing that despite the impact of our reserve strengthening, Everest earned $1.3 billion in operating income for the year and achieved a 9% operating return on equity. While these results are not consistent with the goals for our company, they speak to the resilience of our business As strong income streams in reinsurance and investments more than offset needed reserve strengthening, predominantly in U.S. casualty lines. Putting aside the reserving action for a moment, let me unpack our current period business performance, starting with reinsurance, where results were once again excellent. Despite an elevated CAT year, including a major hurricane in the fourth quarter, we earned $286 million and $1.2 billion in of underwriting income for the quarter and year respectively. The fourth quarter all-in combined ratio, excluding the impact of prior year favorable CAT development and profit commissions due to reserve releases in our mortgage book, is 91.5%. This result clearly demonstrates Everest's ability to absorb significant CAT activity and still deliver. Premium growth in the quarter, excluding the impact of reinstatement premiums, was 12.6%. This is a result of strong execution with our core clients, particularly in property lines, as well as selective expansion in some of our specialty underwriting areas and international business. This growth was offset by the effects of the discipline we're exercising in U.S. exposed treaty casualty. Our casualty pro rata book was down more than 7% in the quarter, which really understates the extent of our discipline actions, which were offset by growth in non-U.S. casualty. Everest has been an early and consistent voice regarding the changes needed in the U.S. casualty quota share market. Seeding commissions are too high, and capacity is generally available regardless of the quality of the seedings. Faced with those conditions, we've maintained our singular focus on underwriting discipline and seeding selection. To highlight the point, since the January 1, 2024 renewal, We've walked away from nearly $750 million in North American casualty quota share business. Our approach in this line is simple. We conduct a thorough, ground-up underwriting and lost cost review of each treaty, and we cut back anything that doesn't meet our return expectations, period. Moving on to the January 1st, 2025 renewal, where our team again executed at the highest levels. Overall, our total reinsurance division bound premium was down by about 3% during the renewal, driven mostly by the aforementioned casualty discipline, which was offset by growth on the very best deals in the market, mostly in property and specialty lines. Although property cap prices were down generally between 5% and 15% for loss-free programs, overall rate levels remain above what we need to be willing to deploy capacity in most markets. An exception to my view on the property cat market is continental Europe. European cat activity in the form of severe conductive storm, hail, and flooding is clearly a rising trend. Those events drove significant annual losses. France, Germany, Italy, and Eastern Europe have all been particularly affected over the last several years. After a thorough review of our modeling and analytics for these perils, we reached the conclusion that we needed to charge more for European cat exposure. in some cases significantly more. As a result, our average model loss costs increased by about 10%. We fully exited over 20 deals, significantly cut back on many others, while increasing moderately on the most profitable layers and programs. Going forward, we expect the California wildfires to serve as a reminder, as if one was needed, to all property reinsurance underwriters of the need to maintain pricing discipline and achieve adequate rates The global property cat reinsurance market overall remains attractive for Everest's capacity. As I have said, our customers prefer to do more business with Everest when they can, which means we will continue to enjoy the option of choosing where to put our capacity to work. Moving to insurance, overall gross rent and premium was down marginally due to our casualty remediation, offset by growth in short tail and specialty lines. Of course, the published combined ratios for the quarter and year are unacceptable. But if you look at it purely on a current period basis, our 2024 combined ratio is 100.7%. That is certainly not good, but it gives us a launching point for our portfolio remediation that we can work with. Our international operation continues to grow with a strong overall written premium increase in key short tail and specialty lines. Despite substantial investments in people and infrastructure, The international insurance business earned an underwriting profit in 2024. Our loss ratio in that business is excellent, and consistent actual versus expected data in what is largely a short-tail portfolio gives us confidence in our loss picks. 2025, we're focused on increasing scale in the 12 markets we're operating in. We do not expect to enter additional markets this year, which will result in greater premium leverage against expenses as we move forward. Finally, our North American insurance business is making great strides in remediating our casualty portfolio. Consistent with our actions in Q3, 40% of our casualty premiums in the fourth quarter were not renewed, including actions in our Eversports portfolio, now captured in our other segment. In our ongoing insurance business, this results in a premium reduction in our U.S. specialty casualty business of approximately 23%. This is despite accelerated rate achievement in GL, auto liability, and umbrella access ranging from 14% to 27%. Loss-cost inflation remains steady at an elevated level, and as we discussed last week, we will be assuming 12-plus points of average trend across those lines. Also, the last quarter affected by the runoff of our medical stop-loss business. Impact in the quarter was $75 million. Our team in the field has done a good job pipelining and underwriting a number of large risk management accounts. These are well-structured with sophisticated clients who understand the need to manage exposure in a heavy social inflation environment. Recent wins in this business include a multi-line solution for a leading global industrial firm, property cross-sell to an existing casualty account in the public advocacy arena, and a large deductible casualty program for a consumer products company. We set ourselves apart from the competition on these deals through the quality of our relationships, breadth of our offering, and specialized services. Results of our portfolio remediation, coupled with the targeted growth, are already being reflected in our data. Our specialty casualty business made up 25% of our global insurance premiums in Q4, down from over 30% one year ago, and the quality of the accounts has improved dramatically. As I said on our pre-release call, we will take no credit in our loss picks for this, but I certainly expect it to yield increasing margin over time. And now I'll turn it over to Mark to discuss the financials in more detail.