A month has gone by since the last earnings report for Everest Group (EG). Shares have added about 1.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Everest Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Everest Group Q2 Earnings Beat Estimates, Revenues Increase Y/Y
Everest Group, Ltd.’s second-quarter 2025 operating income of $17.36 per share beat the Zacks Consensus Estimate by 14.7%. The bottom line increased 3% year over year. The quarterly results reflected higher written premiums and improved combined ratio of the Reinsurance segment, partially offset by the weakness in the Insurance segment.
Operational Update
Everest Group’s total operating revenues of $4.5 billion increased 6.3% year over year on higher premiums earned and net investment income. The top line beat the consensus mark by 2%. Gross written premiums deteriorated 0.7% year over year to $4.7 billion due to a decline of 3.3% in Insurance, partially offset by 1.6% growth in Reinsurance. Our estimate was $5 billion.
Net investment income was $532 million, which increased 0.7% year over year. The upside was driven by a larger asset base as well as strong core fixed income and alternative investment returns. Our estimate was $475.6 million. The Zacks Consensus Estimate was pegged at $495 million.
Total claims and expenses rose 8.3% year over year to $3.6 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. Our estimate was $3.5 billion.
Underwriting income was $385 million, which increased 7.5% year over year. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $20 million, narrower than the loss of $135 million in the year-ago quarter.
The combined ratio deteriorated 10 basis points (bps) year over year to 90.4 in the reported quarter. The Zacks Consensus Estimate was 91, while our estimate was 85.4.
Segment Update
The Reinsurance segment’s gross written premiums were $3.2 billion, up 1.6% year over year. Growth was primarily led by a 15.2% increase in Property Catastrophe XOL and an 8.5% increase in Property Pro-Rata, partially offset by a 14.9% decrease in Casualty Pro-Rata, when adjusting for reinstatement premiums. Our estimate was $3.5 billion. The combined ratio of the Reinsurance segment improved 330 bps to 85.6. The Zacks Consensus Estimate was 88. Our estimate was 85.3.
The Insurance segment generated gross written premiums of $1.4 billion, down 3.3sa% year over year. Everest Insurance grew 39.7% in Other Specialty and 24.1% in Accident and Health. Growth was offset by decreases of 27.3% in Specialty Casualty and 7.2% in Workers' Compensation. Our estimate was $1.5 billion. The combined ratio deteriorated 820 bps to 102 for the Insurance segment. Our estimate was 89. The Zacks Consensus Estimate was pinned at 98.
Financial Update
Everest Group exited the second quarter of 2025 with total investments and cash of $44.3 billion, up 6.7% from the 2024-end level. Shareholder equity at the end of the reported quarter increased 7.9% from the figure at the end of 2024 to $15 billion. Book value per share was $358.08 as of June 30, 2025, up 10.8% from the 2024-end level. The annualized net income return on equity was 18.2%, which contracted 140 bps from the year-ago quarter. Everest Group’s cash flow from operations was $1.1 billion in the quarter, down 19.2% year over year. The company paid common share dividends of $84 million during the quarter and bought back shares worth $200 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, Everest Group has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Everest Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Everest Group, Ltd. (EG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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