EG

EVEREST GROUP, LTD.

NYSE · FINANCIALS · FIRE, MARINE & CASUALTY INSURANCE

394.78

+1.59 +0.40%

USD · close Oct 21

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MKT CAP $15.1BP/E 8.4DIV YIELD —FCF YIELD —REV TTM $16.8B −5.1%NET INCOME $1.9B +137.3%NET CASH —52W 304.91 – 398.70SEC XBRL · TTM TO Invalid Date

How EG rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

56%

of sentences unchanged

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129

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sentences removed

Length

+1,966

words, now 11,857

New in FY2025

In connection with any investment decision with respect to our securities, you should carefully consider the following risk factors, as well as the other information contained in this report and our other SEC filings.
We are exposed to unpredictable catastrophic events, including, but not limited to, weather-related and other natural catastrophes, as well as acts of terrorism, wars, pandemics, political instability and significant cyber or operational incidents.
The frequency and/or severity of some catastrophic events may be impacted in the future by the continued effects of climate change.
Secondary perils, such as severe convective storms, may also become increasingly impactful.
We cannot predict the impact that changing climate conditions, if any, may have on our results, operations or our financial condition.
By way of illustration, during the past five calendar years, pre-tax catastrophe losses, net of reinsurance, were as follows: Calendar year: Pre-tax net catastrophe losses (Dollars in millions) 2025 $ 726 2024 755 2023 470 2022 1,055 2021 1,135 Our losses from future catastrophic events could exceed our projections.
These loss projections are estimates, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount.
These reserves are only estimates of what we believe the ultimate settlement and administration of claims will cost based on facts and circumstances known to us and incorporates actuarial and statistical analysis.
For example, for the year ended, December 31, 2025, the Company increased its loss reserves by $657 million, pre-tax and net of reinsurance, primarily driven by net unfavorable development on prior year reserves from elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024.
During the past five calendar years, the reserve process resulted in a decrease to our pre-tax net income in 2025 and 2024 and resulted in an increase to our pre-tax net income in 2023, 2022 and 2021: Calendar year: Effect on pre-tax net income (Dollars in millions) 2025 $ 657 decrease 2024 1,337 decrease 2023 5 increase 2022 1 increase 2021 9 increase The difficulty in estimating our reserves is significantly more challenging as it relates to reserving for potential asbestos and environmental (“A&E”) liabilities.
As of December 31, 2025, 0.6% of our gross reserves were comprised of A&E reserves.
We purchase prospective reinsurance for our insurance and reinsurance operations in order to mitigate the volatility of losses on our financial results.
From time to time, market conditions have limited, and in some cases have prevented, insurers and reinsurers from obtaining the types and amounts of reinsurance that they consider adequate for their business needs.
There is no guarantee that our desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future.
In the current environment, our ability to renew our current reinsurance or retrocessional reinsurance arrangements or obtain desired amounts of new or replacement coverage on favorable terms may be substantially reduced as a result of the impact of inflation, industry catastrophic losses to reinsurer capital and the appetite for certain lines of business.
In addition to capacity risk, the remaining capacity may not be on terms we deem appropriate or acceptable or with companies with whom we want to do business.
The percentage of business that we reinsure may vary considerably from year to year, depending on our view of the relationship between cost and expected benefit for the contract period. 2025 2024 2023 2022 2021 Percentage of ceded written premiums to gross written premiums 12.4 % 13.3 % 11.5 % 11.5 % 12.3 % If we are unable to or choose not to renew our current reinsurance or retrocessional reinsurance or purchase new or replacement coverage on favorable terms or at all, the amount of business we are willing to write may be limited or our protection from losses due to large loss events may be materially reduced and our net income could be materially reduced.
In future years, insufficient premium rates may result in reserve deficiencies to the extent that higher than expected losses are incurred.
Losses may arise from events or exposures that are not anticipated when the coverage is priced.
Moreover, certain states have enacted laws that require a property and casualty insurer to participate in assigned risk plans, reinsurance facilities, joint underwriting associations and other residual market plans.
U.S. state regulators also require that admitted insurers offer property and casualty coverage to all risks in that market and often restrict an insurer’s ability to charge the price it might otherwise charge or restrict an insurer’s ability to offer or enforce specific policy deductibles.
In these markets, we may be compelled to underwrite business at lower than desired rates or accept additional risk not contemplated in our existing rates, participate in the operating losses of residual market plans or pay assessments to fund operating deficits of state-sponsored funds, which could lead to lower than anticipated profitability.
The effects of emerging claim and coverage issues on our business are uncertain.
Examples of emerging claims and coverage issues include, but are not limited to: • judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of liability; • plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices; • social inflation trends, including higher and more frequent claims, higher awards in favor of plaintiffs and increases in the value of claims due to third-party litigation funding; • medical developments that link health issues to particular causes, resulting in liability claims; • claims relating to unanticipated consequences of current or new technologies, including cyber security-related risks; and • claims relating to potentially changing climate conditions.
Best, S&P and Moody’s has assigned a negative outlook to our financial strength ratings.
The termination provision would generally be triggered if a financial strength rating fell below A.M.
The failure of one or more of our reinsurers, including but not limited to the counterparties to the adverse development cover reinsurance agreements, to honor their obligations to us in a timely fashion would impact our cash flow and reduce our net income and could cause us to incur a significant loss.
The value of our overall investment income could decline due to changed conditions in the financial markets and prevailing general economic conditions.
A significant portion of our investment portfolio consists of fixed income securities and smaller portions consist of equity securities and other investments, such as limited partnerships and other alternative investments.
The fair value of our invested assets and associated investment income may fluctuate depending on various factors including, but not limited to the effects of economic events and conditions; governmental policies; changes in interest rates, currency exchange rates, inflation and credit spreads; credit ratings; loss frequency and severity; and market volatility.
In addition, rapid or unprecedented changes in credit and equity market conditions could materially impact the valuation of securities.
The volatility of our losses may force us to liquidate securities, which may cause us to incur capital losses.
Realized and unrealized losses in our investment portfolio and changes in our estimates of current expected credit loss allowance can affect our financial condition, results of operations or liquidity and our ability to conduct business.
Our investment portfolio is subject to the risk of loss due to default or deterioration in the credit quality, financial condition or future recovery prospects of the underlying issuers of our fixed income securities.
As a part of our ongoing analysis of our investment portfolio, we are required to assess and estimate current expected credit losses for all held-to-maturity securities and evaluate expected credit losses for available-for-sale securities when fair value is below amortized cost, which considers reasonable and supportable forecasts of future economic conditions and estimated future cash flows in addition to information about past events and current conditions.
If the issuers or other obligors of individual investments are unable to meet their obligations, investment income will be reduced and realized capital losses may arise.
We have exposure to counterparties through a variety of commercial transactions and arrangements, including reinsurance transactions and agreements with banks, hedge funds, private funds and other investment vehicles that expose us to credit risk in the event a counterparty or an underlying issuer or borrower fails to perform its obligations.
Our future capital requirements depend on many factors, including rating agency and new regulatory requirements, the performance of our investment portfolio, our ability to write business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and loss reserves at levels sufficient to cover losses.
In 2025, we wrote approximately 31.7% of our coverages in non-U.S. currencies; as of December 31, 2025, we maintained approximately 26.9% of our investment portfolio in investments denominated in non-U.S. currencies.
Higher inflation could lead to higher interest rates, which would negatively impact the value of our existing fixed income or other investments.

and 89 more.

Gone since FY2024

In connection with any investment decision with respect to our securities, you should carefully consider the following risk factors, as well as the other information contained in this report and our other filings with the SEC.
We are exposed to unpredictable catastrophic events, including, but not limited to, weather-related and other natural catastrophes, as well as acts of terrorism and wars.
The frequency and/or severity of catastrophic events may be impacted in the future by the continued effects of climate change.
We cannot predict the impact that changing climate conditions, if any, may have on our results of operations or our financial condition.
By way of illustration, during the past five calendar years, pre-tax catastrophe losses, net of reinsurance, were as follows: Calendar year: Pre-tax net catastrophe losses (Dollars in millions) 2024 $ 755 2023 470 2022 1,055 2021 1,135 2020 425 Our losses from future catastrophic events could exceed our projections.
These loss projections are approximations, reliant on a mix of quantitative and qualitative processes, and actual losses may exceed the projections by a material amount.
These reserves are only estimates of what we believe the ultimate settlement and administration of claims will cost based on facts and circumstances known to us and actuarial and statistical analysis.
For example, in the quarter ended December 31, 2024, the Company increased its loss reserves by $1.7 billion, pre-tax, primarily driven by unfavorable development in U.S. casualty insurance lines of business.
During the past five calendar years, the reserve refinement process resulted in a decrease to our pre-tax net income in 2024 and 2020 and resulted in an increase to our pre-tax net income in 2023, 2022 and 2021: Calendar year: Effect on pre-tax net income (Dollars in millions) 2024 $ 1,337 decrease 2023 5 increase 2022 1 increase 2021 9 increase 2020 401 decrease The difficulty in estimating our reserves is significantly more challenging as it relates to reserving for potential A&E liabilities.
As of December 31, 2024, 0.9% of our gross reserves were comprised of A&E reserves.
In addition, losses may arise from events or exposures that are not anticipated when the coverage is priced.
We are generally less reliant on the purchase of reinsurance than many of our competitors, in part because of our strategic emphasis on underwriting discipline and management of the cycles inherent in our business.
We try to separate our risk-taking process from our risk mitigation process to avoid developing too great a reliance on reinsurance.
With the expansion of the capital markets into insurance linked financial instruments, we increased our use of capital market products for catastrophe reinsurance.
In addition, we have increased some of our quota share contracts with larger retrocessionaires.
The percentage of business that we reinsure may vary considerably from year to year, depending on our view of the relationship between cost and expected benefit for the contract period. 2024 2023 2022 2021 2020 Percentage of ceded written premiums to gross written premiums 13.3 % 11.5 % 11.5 % 12.3 % 13.0 % The effects of emerging claim and coverage issues on our business are uncertain.
Examples of emerging claims and coverage issues include, but are not limited to: • judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of liability; • plaintiffs targeting property and casualty insurers in purported class action litigation relating to claims-handling and other practices; • social inflation trends, including higher and more frequent claims, higher awards in favor of plaintiffs and increases in the value of claims due to third party funding; • medical developments that link health issues to particular causes, resulting in liability claims; • claims relating to unanticipated consequences of current or new technologies, including cyber security-related risks; and • claims relating to potentially changing climate conditions.
The termination provision would generally be triggered if a rating fell below A.M.
The failure of one or more of our reinsurers to honor their obligations to us in a timely fashion would impact our cash flow and reduce our net income and could cause us to incur a significant loss.
Our investment values and investment income could decline due to changed conditions in the financial markets.
A significant portion of our investment portfolio consists of fixed income securities and smaller portions consist of equity securities and other investments.
The fair value of our invested assets and associated investment income may fluctuate depending on various factors including the effects of economic events and conditions, governmental policies, changes in interest rates and credit spreads and market volatility.
Our investment portfolio is subject to the risk of loss due to default or deterioration in credit quality.
As a part of our ongoing analysis of our investment portfolio, we are required to assess current expected credit losses for all held-to-maturity securities and evaluate expected credit losses for available-for-sale securities when fair value is below amortized cost, which considers reasonable and supportable forecasts of future economic conditions in addition to information about past events and current conditions.
If issuers of individual investments are unable to meet their obligations, investment income will be reduced and realized capital losses may arise.
We have exposure to counterparties through a variety of commercial transactions and arrangements, including reinsurance transactions and agreements with banks, hedge funds and other investment vehicles that expose us to credit risk in the event our counterparty fails to perform its obligations.
Our future capital requirements depend on many factors, including rating agency and regulatory requirements, the performance of our investment portfolio, our ability to write new business successfully, the frequency and severity of catastrophe events and our ability to establish premium rates and loss reserves at levels sufficient to cover losses.
In 2024, we wrote approximately 29.1% of our coverages in non-U.S. currencies; as of December 31, 2024, we maintained approximately 22.7% of our investment portfolio in investments denominated in non-U.S. currencies.
In January 2025, James Williamson, Executive Vice President and Chief Operating Officer, was appointed President and CEO and member of the Board of Directors after the departure of our former President and CEO, Juan Andrade.
The loss of the services of any key executive officer , the failure to successfully effectuate a permanent leadership transition or the inability to hire and retain other highly qualified personnel in the future, particularly those experienced in the property and casualty industry, could adversely affect our ability to conduct business.
A work permit is only granted or extended if the employer can show that, after a proper public advertisement, no Bermudian, spouse of a Bermudian or individual holding a permanent or working resident certificate is available who meets the minimum standards reasonably required for the position.
The Bermuda government places a six-year term limit on individuals with work permits, subject to specified exemptions for persons deemed to be key employees of businesses with a significant physical presence in Bermuda.
Currently, all our Bermuda-based professional employees who require work permits have been granted permits by the Bermuda government that expire at various times between March 2025 and March 2030.
We rely on our processes, people and systems to maintain and execute our operations.
We cannot provide total assurance that these processes will effectively identify or control all risks, or that our employees and third-party agents will effectively execute them.
Losses may result from, among other things, actual or alleged fraud; errors; or failure to document transactions properly, obtain proper internal authorization, comply with underwriting or other internal guidelines or comply with regulatory requirements.
It is not always possible to deter or prevent employee misconduct, and the precautions that we take to prevent and detect this activity may not be effective in all cases.
The cybersecurity regulatory environment is evolving, in particular with respect to emerging technologies, such as artificial intelligence, and it is likely that the costs of complying with new or developing regulatory requirements will increase.
We are not aware of a cybersecurity incident that materially affected the Company, including its business strategy, results of operations or financial condition.
Exposure to cybersecurity risk is increasing systematically due to greater digital dependence and increased possible losses due to a catastrophic cybersecurity event.

and 31 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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