Everest Group’s latest quarter was marked by significant strategic actions that overshadowed its underlying business operations, leading to a negative market reaction. Management highlighted two main drivers behind the weak results: the decision to exit global retail insurance operations and a substantial reserve strengthening in the North America insurance division. CEO James Williamson described this as a quarter of “action and clarity,” focused on confronting legacy casualty issues and repositioning the company for future profitability. Williamson acknowledged, “The difference [in operating income] is almost entirely attributable to the reserve adjustment I mentioned earlier,” emphasizing the impact of these one-time charges.
Is now the time to buy EG? Find out in our full research report (it’s free for active Edge members).
Everest Group (EG) Q3 CY2025 Highlights:
- Revenue: $4.32 billion vs analyst estimates of $4.43 billion (flat year on year, 2.5% miss)
- Adjusted EPS: $7.54 vs analyst expectations of $14.52 (48.1% miss)
- Adjusted Operating Income: $269 million vs analyst estimates of $725 million (6.2% margin, 62.9% miss)
- Market Capitalization: $13.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Everest Group’s Q3 Earnings Call
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Meyer Shields (Bank of America): Asked about the impact of the specialty insurance business’s combined ratio and the implications for capital release after the retail exit. CFO Mark Kociancic explained that capital relief from the retail insurance runoff will become more visible in late 2026.
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Joshua Shanker (Bank of America): Questioned the absence of a clear capital return plan and appetite for share repurchases. Kociancic responded that share buybacks are expected to resume and will be supported as more capital is freed up through these strategic changes.
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Charles Peters (Raymond James): Sought clarification on the risk that casualty reserve issues could spill over from insurance into the reinsurance portfolio. CEO James Williamson highlighted that the reinsurance portfolio is managed differently and has historically performed in the top quartile, making spillover unlikely.
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Taylor Scott (Barclays): Inquired about the sizing and rationale behind the $1.2 billion adverse development cover. Williamson and Kociancic detailed that the size was chosen to create finality and provide substantial protection against adverse reserve development.
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Hristian Getsov (Wells Fargo): Asked whether international expansion remains a focus after the retail exit and about the role of organic growth versus M&A for the Wholesale & Specialty segment. Williamson confirmed there will be continued emphasis on organic growth in this segment, with selective M&A considered for bolt-on capabilities.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of capital redeployment following the retail insurance exit, (2) the impact of reserve actions and the adverse development cover on profitability and volatility, and (3) signs of sustainable growth in the Reinsurance and Wholesale & Specialty businesses. Additional attention will be paid to any announced share repurchase activity and evolving underwriting standards in a shifting risk environment.
Everest Group currently trades at $314.52, down from $343.99 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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