The awkward thing about selling insurance is that the sale happens before you know the cost. A manufacturer can count its steel. A restaurant can price its potatoes. A casualty insurer may wait years for a lawsuit to reveal whether yesterday’s policy was a sensible bargain. Everest’s recent history turns on that delay.
- Everest takes on risks for insurance companies and businesses.
- Expensive U.S. casualty claims helped force a strategic reset.
- The company is concentrating on treaty reinsurance and wholesale and specialty insurance.
In 2025, Everest reported a 91.7% combined ratio in reinsurance and 114.6% in insurance. Those numbers explain more than a page of corporate adjectives. Broadly, the ratio compares claims and underwriting expenses with earned premiums. Below 100% means an underwriting profit; above it means a loss, before investment income. One business was earning its keep. The other needed work.
The bill arrives late
Everest’s roots stretch to a Prudential reinsurance operation established in 1973. Prudential sold its holding through an IPO in 1995. The business grew into a global carrier, supplying protection both to insurers and to companies facing property, liability and specialist exposures. Its public promise is compact: “We underwrite opportunity.” The difficult word is underwrite.
Consider the distinction. A factory buys insurance against specified losses. Its insurer, worried about taking too much exposure, buys reinsurance. Everest can stand on either side of that second transaction, accepting a share of a portfolio through treaty reinsurance or assessing an individual exposure through facultative cover. The customer gains capacity to carry risks that would otherwise weigh too heavily on one balance sheet.
The dividing line is 100%
The trouble lay partly in older promises. Everest’s 2024 results included approximately $1.5 billion of net unfavorable prior-year reserve development in the fourth quarter. In plain English, it increased its estimate of what past claims would cost. U.S. casualty exposures were central to the problem. Social inflation, including rising litigation costs, mattered; so did concentrations in particular lines.
This was a problem with the assumptions underneath the business. A policy can look attractive when written and deteriorate as claims develop. More sales do little good if their eventual costs outrun their price. Jim Williamson, appointed permanent chief executive in January 2025, inherited a company that had to revisit which premium dollars it wanted.
The decision to stop renewing
In October 2025, Everest announced agreements giving AIG renewal rights to commercial retail businesses across the United States, United Kingdom, Europe and Asia Pacific. The affected portfolio represented about $2 billion in gross written premiums. Renewal rights concern the opportunity to write customers’ next policies. Selling them does not magically cancel the seller’s obligations on policies already issued.
Everest addressed that older risk separately. It arranged adverse development cover supported by Longtail Re, effective October 1, 2025, with $1.2 billion of gross protection against further deterioration in covered North American insurance liabilities. The structure involved transferring $1.25 billion of existing reserves and paying about $122 million for the second layer. Everest retained $100 million participation in each layer and responsibility for handling claims.
Those figures describe different things: reserves transferred, additional consideration and protection purchased. Adding them into a single “turnaround cost” would obscure the transaction. The protection also has limits. It applies to specified past liabilities, with retained exposure; it is no blanket guarantee against future underwriting mistakes.
“These changes were driven by poor results within certain U.S. casualty lines”
John A. Graf • Chairman • 2025 annual report
The retreat continued geographically. Everest completed the sale of its Canadian retail operation to Wawanesa on October 1, 2026. Separate agreements would send Colombia’s operation to AIG and Mexico’s to Fairfax, with closings expected in 2027 and subject to approvals. The direction is clear: concentrate capital and management attention where Everest believes its underwriting has an advantage.
Where the specialists go
The remaining offer still has range. Treaty reinsurance serves insurers seeking portfolio protection. Global Wholesale & Specialty brings together specialist insurance, programs, London-market operations and facultative capabilities. Everest Evolution, its U.S. wholesale-exclusive brand, targets excess and surplus risks in areas including property, casualty, construction, environmental and energy coverage.
Picture a business whose exposures do not fit comfortably inside a routine policy. Evolution offers wholesale brokers dedicated underwriting teams and access to specialist products. That distribution choice is part of its pitch: an explicit commitment to wholesale partners. Buyers are comparing coverage, exclusions, limits, claims service and financial strength, rather than choosing a familiar logo.
Each contract defines what moves, what stays and who pays.
Everest competes in a market populated by Munich Re, Swiss Re, Hannover Re and other reinsurers, alongside specialty carriers. Its combination of reinsurance relationships and specialist insurance gives it several routes to a risk. None of that eliminates competition over price and terms. Expertise earns its value account by account.
A smaller target, a sharper test
There are early numbers to inspect. In the second quarter of 2026, Everest’s core treaty reinsurance and wholesale and specialty segments produced a 90.0% combined ratio. The whole group reported 92.0%, including legacy operations. These are different segments and a shorter period than the 2025 figures above; they offer evidence of progress, rather than a tidy before-and-after experiment.
Everest is also sharing risk with outside capital. Its June 2026 Annapurna Re launch with Stone Point envisaged about $600 million of third-party capital supporting casualty and specialty reinsurance over three underwriting years. That is capital for a risk vehicle, rather than a venture funding round for Everest.
The useful lesson travels beyond insurance: measure what a sale leaves behind. Separate new business from old obligations. Give someone responsibility for both. This approach depends on credible claims estimates, suitable prices and capital that can absorb surprises. If losses outrun the models or contracts exclude the damage a customer actually suffers, specialization alone will not rescue the economics. Everest’s next test arrives with the claims.