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November 3, 2025 • 3 min read
Everest Group, a major player in the global reinsurance and insurance market, recently released its financial results for the third quarter of 2025. While the company's total revenue held steady, a deeper dive into the numbers from its latest 10-Q filing reveals a story of diverging paths between its core business segments, leading to a significant drop in profitability.
For the quarter ending September 30, 2025, Everest Group reported total revenues of $4.32 billion, a slight increase from the $4.29 billion reported in the same period last year. However, net income was nearly halved, falling to $255 million from $509 million in Q3 2024. This sharp decline in profit, despite stable revenue, points to rising costs within the business.
The flow of revenue and expenses below illustrates how the company generated its profit for the quarter.
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A key item to note in the company's revenue stream is the "Unallocated" portion, which totals $464 million. This amount is not tied to a specific underwriting segment and consists primarily of the company's net investment income ($540 million), offset by investment losses and other expenses. For an insurer like Everest, income from investments is a critical contributor to the bottom line, separate from its core business of writing policies.
The headline numbers mask a dramatic contrast in the performance of Everest's two main business divisions: Reinsurance and Insurance.
Reinsurance Shines: The Reinsurance segment, which provides insurance for other insurance companies, was the star performer. It generated an underwriting gain of $376 million on $2.89 billion of earned premiums. An underwriting gain is the profit made directly from insurance operations (premiums minus claims and expenses) and is a key indicator of an insurer's core profitability. This result was a significant improvement over the $245 million gain in the prior-year quarter.
Insurance Struggles: In stark contrast, the primary Insurance segment faced major headwinds. It posted a substantial underwriting loss of $357 million on $939 million of earned premiums. This marks a severe downturn from the $28 million underwriting gain it recorded in Q3 2024.
The primary driver behind the company's profit decline and the Insurance segment's loss was a surge in claims. Total incurred losses for the company jumped nearly 10% to $2.84 billion.
This is reflected in the company's combined ratio, a critical metric in the insurance industry that measures the sum of incurred losses and expenses as a percentage of earned premiums. A ratio below 100% indicates an underwriting profit, while a ratio above 100% signifies a loss. Everest's overall combined ratio deteriorated from a profitable 93.1% in Q3 2024 to an unprofitable 103.4% this quarter. The Insurance segment was the main source of this weakness, with its combined ratio skyrocketing from 96.9% to a deeply unprofitable 138.1%. A significant portion of this increase was due to the company setting aside an additional $361 million for claims from prior years, suggesting that past losses were worse than originally estimated.
Everest Group's third-quarter results highlight the strength and stability of its large Reinsurance business, which continues to perform well. However, this success was completely overshadowed by severe challenges within its Insurance division. The substantial increase in reserves for prior-year claims is a significant concern that directly impacted the bottom line. While the company's investment income provides a crucial financial cushion, investors will be keenly watching for signs that management can get the Insurance segment's performance back on track and restore its core underwriting profitability.
Last updated: November 3, 2025