$7.62 per share in operating income as Everest premiums fall and combined ratio rises to 105.8%
Key Facts
Everest Group reported third-quarter 2026 operating income of $290 million, or $7.62 per diluted share, compared with $316 million and $7.54 per share a year earlier. This operating measure is not prepared in accordance with generally accepted accounting principles; net income under those principles was $233 million, or $6.12 per diluted share, versus $255 million and $6.09 per share in the comparable period. Operating earnings per share came in below analysts’ estimate of $8.15, while revenue was $3.74 billion against an estimate of $3.81 billion. Net premiums earned also fell to $3.156 billion from $3.855 billion, down 18.1% year over year. The results highlight lower activity and underwriting pressure in a quarter marked by a sharp increase in catastrophe losses and additions to prior-year loss reserves.
Underwriting pressure intensified as the combined ratio for core businesses rose to 105.8%, compared with 88.9% in the third quarter of 2025. The ratio measures claims and expenses against premiums; a reading of 105.8% means costs exceeded premiums on this measure. Performance varied across the group’s units: the combined ratio for reinsurance was 108.5%, compared with 97.3% for Global Wholesale and Specialty. The company said unfavorable development in prior-year loss reserves was about $268 million, adding 8.5 points to the group’s combined ratio. In reinsurance alone, net adverse development of prior-year reserves was $253 million.
The company said reserve development in reinsurance included a gross addition of about $600 million to liability loss reserves, following an addition of more than $200 million in the second quarter of 2026. These provisions came on top of catastrophe losses, which totaled $322 million before tax at the group level, compared with $50 million in the third quarter of the prior year. In reinsurance, catastrophe losses before tax reached $277 million, versus $43 million a year earlier. Everest attributed the losses primarily to an earthquake in Colombia, events in the Middle East and weather losses around the world. These items contributed to the widening of the core businesses’ combined ratio, while performance remained mixed across units.
On business volume, gross written premiums in core businesses totaled $3.7 billion, down 4.0% year over year on a comparable basis. Reinsurance premiums fell 6.2%, while premiums in Global Wholesale and Specialty rose 3.2%. The divergence puts contraction in reinsurance alongside growth in wholesale and specialty, which also posted a combined ratio of 97.3%. Chief Executive Jim Williamson said the company was focused on executing its core business strategies and deploying capital. He added that “share repurchases remain a top priority.”
Growth in investment income partly offset weaker underwriting: net investment income rose to $634 million from $540 million in the third quarter of 2025. The company attributed the increase to higher returns on alternative investments. The comparison shows investment income moving in the opposite direction from the decline in premiums earned and weaker performance in the core businesses’ combined ratio. But the reported results put investment figures alongside catastrophe losses and reserve development, both of which weighed on the period’s profitability. The company’s shares closed at $391.09 on October 27, 2026, before the results were announced.
Pre-release estimates cited by Reuters pointed to earnings of $8.15 per share and revenue of $3.81 billion, while actual operating earnings per share were $7.62 and revenue was $3.74 billion. Both figures therefore came in below the published estimates, with a $0.53 gap in operating earnings per share. Earnings per share in the second quarter of 2026 were $14.22, according to the comparison cited in the report, showing a sequential decline in profitability. The company said that, as year-end approaches and throughout 2027, it is focused on executing its core business strategies and proactively deploying capital. A call to discuss the results is scheduled for October 29, 2026, at 8:00 a.m. Eastern Time.