What changed in this filing

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Item 1. Financial Statements

2023-11-01 compared with 2023-08-03 · 210 added, 140 removed, 916 unchanged (28% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, December 31,

(Dollars and share amounts in millions, except par value per share) 2023 2022

September 30, December 31,

(Dollar and share amounts in millions, except par value per share) (unaudited)

Fixed maturities - available for sale, at fair value $ 25,159 $ 22,236

4 unchanged sentences

2022, $( 54 ))

$ 24,489 $ 22,236

Fixed maturities - held to maturity, at amortized cost

61 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions, except per share amounts) 2023 2022 2023 2022

32 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(Dollars in millions, except dividends per share amounts) 2023 2022 2023 2022

September 30, Nine Months Ended

September 30,

(Dollars and share amounts in millions, except dividends per share amounts) 2023 2022 2023 2022

(unaudited) (unaudited)

32 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(Dollars in millions) 2023 2022

37 unchanged sentences

Dividends paid to shareholders ( 212 ) ( 191 )

Cost of debt repurchase — ( 6 )

Cost of shares withheld on settlements of share-based compensation awards ( 22 ) ( 19 )

7 unchanged sentences

Interest paid 75 51

NON-CASH TRANSACTIONS:

Reclassification of specific investments from fixed maturity securities, available for sale at fair value

to fixed maturity securities, held to maturity at amortized cost net of credit allowances $ — $ 722

The accompanying notes are an integral part of the consolidated financial statements.

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

For the Three and Six Months Ended June 30, 2023 and 2022

For the Three and Nine Months Ended September 30, 2023 and 2022

Everest Group, Ltd .

(“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets.

(“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and other international markets.

As used in this document, “Company” means Group and its subsidiaries.

Effective July 10, 2023, the Company changed its name to Everest Group, Ltd.

Effective July 10, 2023, the Company changed Group’s name to Everest Group, Ltd.

from Everest Re Group, Ltd.

to reflect its evolution, global growth and diversification strategy.

to reflect the evolution, global growth and diversification strategy of the Company.

BASIS OF PRESENTATION

The unaudited consolidated financial statements of the Company as of June 30, 2023 and December 31, 2022 and for the three and six months ended June 30, 2023 and 2022 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis.

The unaudited consolidated financial statements of the Company as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis.

Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes.

The December 31, 2022 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.

The results for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the results for a full year.

The results for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results for a full year.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2022, 2021 and 2020, included in the Company’s most recent Form 10-K filing.

5 unchanged sentences

Application of Recently Issued Accounting Standard Changes.

The Company did not adopt any new accounting standards that had a material impact during the three and six months ended June 30, 2023.

The Company did not adopt any new accounting standards that had a material impact during the three and nine months ended September 30, 2023.

The Company assessed the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board (“FASB”) on the Company’s consolidated financial statements as well as material updates to previous assessments, if any, from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

There were no accounting standards issued in the six months ended June 30, 2023, that are expected to have a material impact to Group.

There were no accounting standards issued in the nine months ended September 30, 2023, that are expected to have a material impact to Group.

Application of Methods and Assumption changes

During 2023, the Company refined its premium estimation methodology for its risk attaching reinsurance contracts within its Reinsurance Segment to continue to recognize gross written premium over the term of the treaty, albeit over a different pattern than what was previously used.

The refined estimate resulted in an increase of gross written premium during the three and six months ended June 30, 2023 periods and has further aligned the estimation methodology across the reinsurance division globally.

The refined estimate resulted in an increase of gross written premium during the three and nine months ended September 30, 2023 periods and has further aligned the estimation methodology across the reinsurance division globally.

This change had no impact on the total written premium to be recognized over the term of the treaty.

There was no impact on net earned premium and therefore, no impact on income from continuing operations, net income, or any related per-share amounts.

The tables below present the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and fair value of fixed maturity securities - available for sale for the periods indicated:

At June 30, 2023

The tables below present the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) (“URA(D)”) and fair value of fixed maturity securities - available for sale for the periods indicated:

At September 30, 2023

(Dollars in millions) Amortized

4 unchanged sentences

Fixed maturity securities - available for sale

Treasury securities and obligations of U.S.

Treasury securities and obligations of

government agencies and corporations $ 1,198 $ — $ 4 $ ( 81 ) 1,121

18 unchanged sentences

Fixed maturity securities - available for sale

Treasury securities and obligations of U.S.

Treasury securities and obligations of

government agencies and corporations $ 1,334 $ — $ 6 $ ( 82 ) $ 1,257

11 unchanged sentences

(Some amounts may not reconcile due to rounding.)

The following tables show amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) and fair value of fixed maturity securities - held to maturity for the periods indicated:

At June 30, 2023

The following tables show amortized cost, allowance for credit losses, gross URA(D) and fair value of fixed maturity securities - held to maturity for the periods indicated:

At September 30, 2023

(Dollars in millions) Amortized

27 unchanged sentences

As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

At June 30, 2023 At December 31, 2022

At September 30, 2023 At December 31, 2022

(Dollars in millions) Amortized

14 unchanged sentences

As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

At June 30, 2023 At December 31, 2022

At September 30, 2023 At December 31, 2022

(Dollars in millions) Amortized

12 unchanged sentences

The fair value of the securities reclassified at the date of transfer was $ 722 million, net of allowance for current expected credit losses, which was subsequently recognized as the new amortized cost basis.

As of June 30, 2023, these securities had an unrealized loss of $ 46 million, which remained in accumulated other comprehensive income (“AOCI”) on the balance sheet and will be

amortized into income through an adjustment to the yields of the underlying securities over the remaining life of the securities.

As of September 30, 2023, these securities had an unrealized loss of $ 44 million, which remained in accumulated other comprehensive income (“AOCI”) on the balance sheet and will be amortized into income through an adjustment to the yields of the underlying securities over the remaining life of the

The fair values of these securities incorporate the use of significant unobservable inputs and therefore are classified as Level 3 within the fair value hierarchy.

The Company evaluated fixed maturity securities classified as held to maturity for current expected credit losses as of June 30, 2023 utilizing risk characteristics of each security, including credit rating, remaining time to maturity, adjusted for prepayment considerations, and subordination level, and applying default and recovery rates, which include the incorporation of historical credit loss experience and macroeconomic forecasts, to develop an estimate of current expected credit losses.

These fixed maturities classified as held to maturity are of a high credit quality and are all rated investment grade as of June 30, 2023.

The changes in net unrealized appreciation (depreciation) for the Company’s investments are as follows:

The Company evaluated fixed maturity securities classified as held to maturity for current expected credit losses as of September 30, 2023 utilizing risk characteristics of each security, including credit rating, remaining time to maturity, adjusted for prepayment considerations, and subordination level, and applying default and recovery rates, which include the incorporation of historical credit loss experience and macroeconomic forecasts, to develop an estimate of current expected credit losses.

These fixed maturities classified as held to maturity are of a high credit quality and are all rated investment grade as of September 30, 2023.

The changes in net URA(D) for the Company’s investments are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

Increase (decrease) during the period between the fair value and cost of investments carried at fair value, and deferred taxes thereon:

Increase (decrease) during the period between the fair value and cost of

investments carried at fair value, and deferred taxes thereon:

Fixed maturity securities - available for sale and short-term investments $ ( 264 ) $ ( 724 ) $ ( 180 ) $ ( 2,484 )

Change in unrealized appreciation (depreciation), pre-tax ( 195 ) ( 832 ) 84 ( 1,760 )

Change in URA(D), pre-tax ( 264 ) ( 724 ) ( 180 ) $ ( 2,484 )

Deferred tax benefit (expense) 22 53 20 $ 285

Change in unrealized appreciation (depreciation), net of deferred taxes, included in shareholders’ equity $ ( 167 ) $ ( 717 ) $ 82 $ ( 1,528 )

Change in URA(D), net of deferred taxes, included in shareholders’ equity $ ( 242 ) $ ( 671 ) $ ( 159 ) $ ( 2,199 )

(Some amounts may not reconcile due to rounding.)

The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

Duration of Unrealized Loss at June 30, 2023 By Security Type

Duration of Unrealized Loss at September 30, 2023 By Security Type

Less than 12 months Greater than 12 months Total

3 unchanged sentences

Fixed maturity securities - available for sale

Treasury securities and obligations of U.S.

Treasury securities and obligations of

government agencies and corporations $ 197 $ ( 11 ) $ 841 $ ( 70 ) $ 1,038 $ ( 81 )

13 unchanged sentences

(Some amounts may not reconcile due to rounding.)

Duration of Unrealized Loss at June 30, 2023 By Maturity

Duration of Unrealized Loss at September 30, 2023 By Maturity

Less than 12 months Greater than 12 months Total

13 unchanged sentences

(Some amounts may not reconcile due to rounding.)

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at June 30, 2023 were $ 20.7 billion and $ 1.9 billion, respectively.

The fair value of securities for the single issuer (the United States government), whose securities comprised the largest unrealized loss position at June 30, 2023, amounted to less than 4.4 % of the overall fair value of the Company’s fixed maturity securities available for sale.

The fair value of the securities for the issuer with the second largest unrealized loss position at June 30, 2023 comprised less than 0.8 % of the Company’s fixed maturity securities available for sale.

The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at September 30, 2023 were $ 21.4 billion and $ 2.1 billion, respectively.

The fair value of securities for the single issuer (the United States government), whose securities comprised the largest unrealized loss position at September 30, 2023, amounted to less than 4.2 % of the overall fair value of the Company’s fixed maturity securities available for sale.

The fair value of the securities for the issuer with the second largest unrealized loss position at September 30, 2023 comprised less than 0.7 % of the Company’s fixed maturity securities available for sale.

In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector.

The $ 252 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, agency residential and non-agency residential mortgage-backed securities and asset-backed securities.

The $ 320 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, agency residential mortgage-backed securities, foreign government securities and asset-backed securities.

Of these unrealized losses, $ 288 million were related to securities that were rated investment grade by at least one nationally recognized rating agency.

The $ 1.6 billion of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to foreign and domestic corporate securities, agency residential mortgage-backed securities, foreign government securities, commercial mortgage-backed securities and asset-backed securities.

The $ 1.8 billion of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, agency residential mortgage-backed securities, foreign government securities and commercial mortgage-backed securities.

Of these unrealized losses, $ 1.5 billion were related to securities that were rated investment grade by at least one nationally recognized rating agency.

1 unchanged sentence

The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

Based upon the Company’s current evaluation of securities in an unrealized loss position as of June 30, 2023, the unrealized losses are due to changes in interest rates and non-issuer-specific credit spreads and are not credit-related.

Based upon the Company’s current evaluation of securities in an unrealized loss position as of September 30, 2023, the unrealized losses are due to changes in interest rates and non-issuer-specific credit spreads and are not credit-related.

In addition, the contractual terms of these securities do not permit these securities to be settled at a price less than their amortized cost.

9 unchanged sentences

Fixed maturity securities - available for sale

Treasury securities and obligations of U.S.

Treasury securities and obligations of

government agencies and corporations $ 668 $ ( 31 ) $ 487 $ ( 52 ) $ 1,155 $ ( 82 )

42 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

16 unchanged sentences

If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

The Company had contractual commitments to invest up to an additional $ 2.8 billion in limited partnerships and private placement loan securities at June 30, 2023.

The Company had contractual commitments to invest up to an additional $ 2.8 billion in limited partnerships and private placement loan securities at September 30, 2023.

These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2027.

During the fourth quarter of 2022, the Company entered into corporate-owned life insurance (COLI) policies, which are primarily invested in liquid credit, equity, and other assets, including alternative assets.

The COLI policies are carried within other invested assets at policy cash surrender value of $ 968 million and $ 939 million as of June 30, 2023 and December 31, 2022, respectively.

During the fourth quarter of 2022, the Company entered into corporate-owned life insurance (“COLI”) policies, which are invested in debt and equity securities.

The COLI policies are carried within other invested assets at policy cash surrender value of $ 984 million and $ 939 million as of September 30, 2023 and December 31, 2022, respectively.

Variable Interest Entities

4 unchanged sentences

Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements.

As of June 30, 2023 and December 31, 2022, the Company did not hold any securities for which it is the primary beneficiary.

As of September 30, 2023 and December 31, 2022, the Company did not hold any securities for which it is the primary beneficiary.

The Company, through normal investment activities, makes passive investments in general and limited partnerships and other alternative investments.

For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments.

The Company’s maximum exposure to loss as of June 30, 2023 and December 31, 2022 is limited to the total carrying value of $ 4.3 billion and $ 4.1 billion, respectively, which are included in general and limited partnerships

and other alternative investments in Other Invested Assets in the Company's Consolidated Balance Sheets.

As of June 30, 2023, the Company has outstanding commitments totaling $ 2.2 billion whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses.

The Company’s maximum exposure to loss as of September 30, 2023 and December 31, 2022 is limited to the total carrying value of $ 4.4 billion and $ 4.1 billion, respectively, which are included in general and limited partnerships and other alternative investments in Other Invested Assets in the Company's Consolidated Balance Sheets.

As of September 30, 2023, the Company has outstanding commitments totaling $ 2.2 billion whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses.

These investments are generally of a passive nature in that the Company does not take an active role in management.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

6 unchanged sentences

Other invested assets — 6 — 11

Short-term investments gain (loss) — 1 — 1

Total net gains (losses) on investments $ ( 31 ) $ ( 129 ) $ ( 21 ) $ ( 519 )

2 unchanged sentences

Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(Dollars in millions) Corporate

Securities Municipals Foreign

Securities Total Corporate

Securities Municipals Foreign

Securities Total

Beginning balance $ ( 56 ) $ — $ ( 7 ) $ ( 63 ) $ ( 45 ) $ — $ ( 10 ) $ ( 54 )

Credit losses on securities where credit

losses were not previously recorded ( 3 ) — — ( 3 ) ( 17 ) — — ( 17 )

Increases in allowance on previously

impaired securities — — — — — — — —

Decreases in allowance on previously

impaired securities — — — — — — — —

Reduction in allowance due to disposals $ 2 $ — $ 4 $ 6 $ 6 $ — $ 6 $ 12

Balance, end of period $ ( 57 ) $ ( 1 ) $ ( 3 ) $ ( 60 ) $ ( 57 ) $ ( 1 ) $ ( 3 ) $ ( 60 )

(Some amounts may not reconcile due to rounding.)

Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

(Dollars in millions) Corporate

Securities Asset-Backed

5 unchanged sentences

Beginning balance $ ( 26 ) $ — $ ( 17 ) $ ( 43 ) $ ( 19 ) $ ( 8 ) $ ( 3 ) $ ( 30 )

Credit losses on securities where credit losses were not previously recorded ( 2 ) — — ( 2 ) ( 14 ) — — ( 14 )

Increases in allowance on previously impaired securities — — — — — — — —

Decreases in allowance on previously impaired securities — — — — — — — —

Credit losses on securities where credit

losses were not previously recorded — — — — ( 7 ) — ( 16 ) ( 23 )

Increases in allowance on previously

impaired securities ( 3 ) — — ( 3 ) ( 4 ) — ( 1 ) ( 4 )

Decreases in allowance on previously

impaired securities — — — — — — — —

Reduction in allowance due to disposals — — 8 8 1 8 10 19

1 unchanged sentence

(Some amounts may not reconcile due to rounding.)

Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Roll Forward of Allowance for Credit Losses - Fixed Maturities - Held to Maturity

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(Dollars in millions) Corporate

6 unchanged sentences

Beginning balance $ ( 2 ) $ ( 6 ) $ ( 1 ) $ ( 8 ) $ ( 2 ) $ ( 6 ) $ ( 1 ) $ ( 9 )

Credit losses on securities where credit losses were not previously recorded ( 5 ) — ( 5 ) ( 10 ) ( 7 ) — ( 16 ) ( 23 )

Increases in allowance on previously impaired securities ( 1 ) — ( 1 ) ( 1 ) ( 1 ) — ( 1 ) ( 1 )

Decreases in allowance on previously impaired securities — — — — — —

Credit losses on securities where credit

losses were not previously recorded — — — — — — — —

Increases in allowance on previously

impaired securities — — — — — — — —

Decreases in allowance on previously

impaired securities — — — — — — — —

Reduction in allowance due to disposals — — — — — — — —

2 unchanged sentences

Roll Forward of Allowance for Credit Losses - Fixed Maturities - Held to Maturity

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

(Dollars in millions) Corporate

6 unchanged sentences

Beginning balance $ — $ — $ — — $ — $ — $ — $ —

Credit losses on securities where credit losses were not previously recorded — — — — — — — —

Increases in allowance on previously impaired securities — — — — — — — —

Decreases in allowance on previously impaired securities — — — — — — — —

Credit losses on securities where credit

losses were not previously recorded ( 2 ) ( 6 ) ( 1 ) ( 9 ) ( 2 ) ( 6 ) ( 1 ) ( 9 )

Increases in allowance on previously

impaired securities — — — — — — — —

Decreases in allowance on previously

impaired securities — — — — — — — —

Reduction in allowance due to disposals — — — — — — — —

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

5 unchanged sentences

Gross losses from dispositions — ( 2 ) — ( 53 )

(Some amounts may not reconcile due to rounding.)

GAAP guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP.

17 unchanged sentences

In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.

At June 30, 2023, $ 1.8 billion of fixed maturities were fair valued using unobservable inputs.

At September 30, 2023, $ 1.9 billion of fixed maturities were fair valued using unobservable inputs.

The majority of these fixed maturities were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties.

1 unchanged sentence

At December 31, 2022, $ 1.7 billion of fixed maturities were fair valued using unobservable inputs.

The Company internally manages a portfolio of assets which had a fair value at June 30, 2023 and December 31, 2022 of $ 4.3 billion and $ 2.7 billion, respectively, primarily comprised of collateralized loan obligations included in asset-backed securities and U.S.

The Company internally manages a portfolio of assets which had a fair value at September 30, 2023 and December 31, 2022 of $ 5.6 billion and $ 2.7 billion, respectively, primarily comprised of collateralized loan obligations included in asset-backed securities and U.S.

treasury fixed maturities.

11 unchanged sentences

The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes.

The prices received from brokers are reviewed for reasonableness by the third party asset managers and the Company.

The prices received from brokers are reviewed for reasonableness by the third-party investment asset managers and the Company.

If the broker quotes are for foreign denominated securities, the quotes are converted to U.S.

17 unchanged sentences

Fair Value Measurement Using

June 30, 2023 Quoted Prices

September 30, 2023 Quoted Prices

(Level 1) Significant

3 unchanged sentences

Treasury securities and obligations of U.S.

government agencies and corporations $ 1,145 $ — $ 1,145 $ —

agencies and corporations $ 1,121 $ — $ 1,121 $ —

Obligations of U.S.

17 unchanged sentences

Treasury securities and obligations of U.S.

government agencies and corporations $ 1,257 $ — $ 1,257 $ —

agencies and corporations $ 1,257 $ — $ 1,257 $ —

Obligations of U.S.

11 unchanged sentences

(Some amounts may not reconcile due to rounding.)

In addition, $ 293 million and $ 292 million of investments within other invested assets on the consolidated balance sheets as of June 30, 2023 and December 31, 2022, respectively, are not included within the fair value hierarchy tables, as the assets are measured at NAV as a practical expedient to determine fair value.

In addition, $ 284 million and $ 292 million of investments within other invested assets on the consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively, are not included within the fair value hierarchy tables, as the assets are measured at NAV as a practical expedient to determine fair value.

The following tables present the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturities - available for sale, for the periods indicated:

Total Fixed Maturities - Available for Sale

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(Dollars in millions) Corporate

10 unchanged sentences

Purchases, issuances and settlements 12 68 — 80 12 179 — 191

Transfers in/(out) of Level 3 and reclassification of securities in/(out) of investment categories — — — — — — — —

Transfers in/(out) of Level 3 and reclassification of

securities in/(out) of investment categories — — — — — — — —

Ending balance of fixed maturities $ 725 $ 1,180 $ 16 $ 1,921 $ 725 $ 1,180 $ 16 $ 1,921

The amount of total gains or losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets still held at the reporting date $ — $ — $ — $ — $ — $ — $ — $ —

The amount of total gains or losses for the period

included in earnings (or changes in net assets)

attributable to the change in unrealized gains

or losses relating to assets still held at

the reporting date $ — $ — $ — $ — $ 1 $ — $ — $ 1

(Some amounts may not reconcile due to rounding.)

Total Fixed Maturities - Available for Sale

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

(Dollars in millions) Corporate

10 unchanged sentences

Purchases, issuances and settlements 27 159 — — 186 ( 43 ) 387 6 8 358

Transfers in/(out) of Level 3 and reclassification of securities in/(out) of investment categories 128 ( 148 ) — 20 — 128 ( 148 ) — 20 —

Transfers in/(out) of Level 3 and reclassification of

securities in/(out) of investment categories ( 163 ) ( 587 ) ( 6 ) ( 24 ) ( 779 ) ( 35 ) ( 735 ) ( 6 ) ( 4 ) ( 779 )

Ending balance of fixed maturities $ 719 $ 893 $ — $ 16 $ 1,628 $ 719 $ 893 $ — $ 16 $ 1,628

The amount of total gains or losses for the period

included in earnings (or changes in net assets)

attributable to the change in unrealized gains

or losses relating to assets still held at

the reporting date $ ( 3 ) $ — $ — $ — $ ( 3 ) $ ( 8 ) $ 8 $ — $ — $ —

(Some amounts may not reconcile due to rounding.)

There were no transfers of assets in/(out) of Level 3 for the three and six months ended June 30, 2023 and 2022, respectively.

There were no transfers of assets in/(out) of Level 3 for the three and nine months ended September 30, 2023.

The $ 779 million shown as transfers in/(out) of Level 3 and reclassification of securities in/(out) of investment categories for the three and nine months ended September 30, 2022 relate mainly to previously designated Level 3 securities that the Company has reclassified from “fixed maturities – available for sale” to “fixed maturities – held to maturity” during the third quarter of 2022.

As “fixed maturities – held to maturity" are carried at amortized cost, net of credit allowances rather than at fair value as “fixed maturities – available for sale”, these securities are no longer included within the fair value hierarchy table or in the roll forward of Level 3 securities.

The fair values of these securities are determined in a similar manner as the Company’s fixed maturity securities available for sale as described above.

The fair values of these securities incorporate the use of significant unobservable inputs and therefore are classified as Level 3 within the fair value hierarchy as of September 30, 2022.

Financial Instruments Disclosed, But Not Reported, at Fair Value

4 unchanged sentences

Activity in the reserve for losses and loss adjustment expenses (“LAE”) is summarized for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(Dollars in millions)

15 unchanged sentences

(Some amounts may not reconcile due to rounding.)

Current year incurred losses were $ 3.9 billion and $ 3.7 billion for the six months ended June 30, 2023 and 2022, respectively.

Gross and net reserves increased for the six months ended June 30, 2023, reflecting an increase in underlying exposure due to earned premium growth, year over year, and an increase of $ 317 million in 2023 current year attritional losses compared to 2022, partially offset by a decrease of $ 58 million in 2023 current year catastrophe losses.

The Company has estimated and recognized $ 30 million of reinsurance recoveries related to Hurricane Ian.

Current year incurred losses were $ 6.2 billion and $ 6.3 billion for the nine months ended September 30, 2023 and 2022, respectively.

Gross and net reserves increased for the nine months ended September 30, 2023, reflecting an increase in underlying exposure due to earned premium growth, year over year, amounting to approximately $ 604 million in 2023 current year attritional losses compared to 2022, offset by a decrease of $ 723 million in 2023 current year catastrophe losses.

SEGMENT REPORTING

9 unchanged sentences

The following tables present the underwriting results for the operating segments for the periods indicated:

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(Dollars in millions) Reinsurance Insurance Total Reinsurance Insurance Total

13 unchanged sentences

(Some amounts may not reconcile due to rounding.)

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

(Dollars in millions) Reinsurance Insurance Total Reinsurance Insurance Total

14 unchanged sentences

CREDIT FACILITIES

The Company has multiple active committed letter of credit facilities with a total commitment of up to $ 1.5 billion as of June 30, 2023.

The Company has multiple active committed letter of credit facilities with a total commitment of up to $ 1.7 billion as of September 30, 2023.

The Company also has additional uncommitted letter of credit facilities of up to $ 240 million which may be accessible via written request and corresponding authorization from the applicable lender.

7 unchanged sentences

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

Wells Fargo Bank Bilateral LOC Agreement $ 500 $ 266 12/29/2023 $ 500 $ 463 12/29/2023

121 12/31/2023 —

23 6/28/2024 —

24 12/31/2024 —

$ 500 $ 434 $ 500 $ 463

(Some amounts may not reconcile due to rounding.)

5 unchanged sentences

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

5 unchanged sentences

1 12/1/2024 212 12/31/2023

6 12/31/2024 —

1 8/15/2025 —

Bermuda Re Citibank LOC Facility - Uncommitted 140 105 12/31/2023 140 87 12/31/2023

6 unchanged sentences

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

3 unchanged sentences

Effective December 30, 2022, Bermuda Re entered into a new additional letter of credit issuance facility with Bayerische Landesbank, New York Branch, referred to as the “Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility”.

The Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility provides for the committed issuance of up to $ 150 million of unsecured letters of credit.

The Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility provides for the committed issuance

of up to $ 150 million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

1 unchanged sentence

(Some amounts may not reconcile due to rounding.)

Bermuda Re Lloyd’s Bank Credit Facility

Effective October 8, 2021, Bermuda Re entered into a letter of credit issuance facility with Lloyd’s Bank Corporate Markets PLC, an agreement referred to as the “Bermuda Re Lloyd’s Bank Credit Facility”.

The Bermuda Re Lloyd’s Bank Credit Facility provides for the committed issuance of up to $ 50 million of secured letters of credit, and subject to credit approval a maximum total facility amount of $ 250 million.

Bermuda Re Lloyd’s Bank Letter of Credit Facility

Effective August 18, 2023, Bermuda Re entered into a new letter of credit issuance facility with Lloyd’s Bank Corporate Markets PLC, an agreement referred to as the “Bermuda Re Lloyd’s Bank Letter of Credit Facility”, which superseded the previous letter of credit issuance facility with Lloyd’s Bank that was effective October 8, 2021.

The Bermuda Re Lloyd’s Bank Letter of Credit Facility provides for the committed issuance of up to $ 250 million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor.

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

Bermuda Re Lloyd's Bank Credit Facility-Committed $ 50 $ 50 12/31/2023 $ 50 $ 50 12/31/2023

Bermuda Re Lloyd's Bank Credit Facility-Uncommitted 200 156 12/31/2023 200 136 12/31/2023

Total Bermuda Re Lloyd's Bank Credit Facility $ 250 $ 206 $ 250 $ 186

Bermuda Re Lloyd's Bank LOC Facility-Committed $ 250 $ 158 12/31/2023 $ 50 $ 50 12/31/2023

48 12/31/2024

Bermuda Re Lloyd's Bank LOC Facility-Uncommitted — — 200 136 12/31/2023

Total Bermuda Re Lloyd's Bank LOC Facility $ 250 $ 206 $ 250 $ 186

(Some amounts may not reconcile due to rounding.)

3 unchanged sentences

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

4 unchanged sentences

The following table summarizes the outstanding letters of credit for the periods indicated:

(Dollars in millions) At June 30, 2023 At December 31, 2022

(Dollars in millions) At September 30, 2023 At December 31, 2022

Bank Commitment In Use Date of Expiry Commitment In Use Date of Expiry

5 unchanged sentences

Everest Reinsurance Company (“Everest Re”) is a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10 % of its statutory admitted assets.

As of June 30, 2023, Everest Re had admitted assets of approximately $ 24 billion which provides borrowing capacity in excess of $ 2 billion.

As of June 30, 2023, Everest Re has $ 519 million of borrowings outstanding, all of which expire in 2023.

Everest Re incurred interest expense of $ 7 million and $ 0.8 million for the three months ended June 30, 2023 and 2022, respectively.

Everest Re incurred interest expense of $ 13 million and $ 2 million for the six months ended June 30, 2023 and 2022, respectively.

As of September 30, 2023, Everest Re had admitted assets of approximately $ 25 billion which provides borrowing capacity in excess of $ 2.5 billion.

As of September 30, 2023, Everest Re has $ 519 million of borrowings outstanding, all of which expire in 2023.

Everest Re incurred interest expense of $ 7 million and $ 0.8 million for the three months ended September 30, 2023 and 2022, respectively.

Everest Re incurred interest expense of $ 21 million and $ 2 million for the nine months ended September 30, 2023 and 2022, respectively.

The FHLBNY membership agreement requires that 4.5 % of borrowed funds be used to acquire additional membership stock.

1 unchanged sentence

Fair value is based on quoted market prices, but due to limited trading activity, these senior notes are considered Level 2 in the fair value hierarchy.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(Dollars in millions) Date Issued Date Due Principal

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) Interest Paid Payable Dates 2023 2022 2023 2022

10 unchanged sentences

Fair value is based on quoted market prices, but due to limited trading activity, these subordinated notes are considered Level 2 in the fair value hierarchy.

Maturity Date June 30, 2023 December 31, 2022

Maturity Date September 30, 2023 December 31, 2022

(Dollars in millions) Date Issued Original

6 unchanged sentences

Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including May 15, 2017.

The reset quarterly interest rate for May 15, 2023 to August 14, 2023 is 7.71 %.

Following the cessation of LIBOR, for periods from and including August 15, 2023, interest will be based on three-month CME Term SOFR plus a spread.

The reset quarterly interest rate for August 15, 2023 to November 14, 2023 is 8.01 %.

Following the cessation of LIBOR, for periods from and including August 15, 2023, interest will be based on 3-month CME Term SOFR plus a spread.

Holdings may redeem the long-term subordinated notes on or after May 15, 2017, in whole or in part at 100 % of the principal amount plus accrued and unpaid interest;

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

2 unchanged sentences

Certain subsidiaries of Group have established trust agreements, which effectively use the Company’s investments as collateral, as security for assumed losses payable to certain non-affiliated ceding companies.

At June 30, 2023, the total amount on deposit in trust accounts was $ 2.5 billion, which included $ 268 million of restricted cash.

At June 30, 2022, the total amount on deposit in trust accounts was $ 2.0 billion, which included $ 502 million of restricted cash.

At September 30, 2023, the total amount on deposit in trust accounts was $ 2.5 billion, which included $ 253 million of restricted cash.

At September 30, 2022, the total amount on deposit in trust accounts was $ 2.2 billion, which included $ 431 million of restricted cash.

The Company reinsures some of its catastrophe exposures with the segregated accounts of subsidiary Mt.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Logan Re Segregated Accounts 2023 2022 2023 2022

22 unchanged sentences

Series 2022-1 Class A US, Canada, Puerto Rico – Named Storm and Earthquake Events 6/22/2022 6/25/2025 300 Aggregate

Total available limit as of June 30, 2023 $ 1,800

Total available limit as of September 30, 2023 $ 1,800

Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry level insured losses from covered events, as well as the geographic location of the events.

The estimated

industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses.

As of June 30, 2023, the Company has up to $ 350 million of catastrophe bond protection (“CAT Bond”) that attaches at a $48.1 billion Property Claims Services (“PCS”) Industry loss threshold.

The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses.

The Company has up to $ 350 million of catastrophe bond protection (“CAT Bond”) that attaches at a $48.1 billion Property Claims Services (“PCS”) Industry loss threshold.

This recovery would be recognized on a pro-rata basis up to a $63.8 billion PCS Industry loss level.

PCS’s current industry estimate of $49.4 billion issued in July 2023 exceeds the attachment point.

The recovery under the CAT Bond, included in the Company’s financial results, is currently estimated to be $ 25 million, subject to further revision of the industry loss estimate.

PCS’s current industry estimate of $48.4 billion issued in October 2023 exceeds the attachment point.

As of September 30, 2023, the recovery under the CAT Bond, included in the Company’s financial results, is currently estimated to be $ 20 million, subject to further revision of the industry loss estimate.

Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors.

1 unchanged sentence

government money market funds with a rating of at least “AAAm” by Standard & Poor’s.

The catastrophe bonds’ issue date, maturity date and amount correspond to the reinsurance agreements listed above.

The catastrophe bonds’ issue dates, maturity dates and amounts correspond to the reinsurance agreements listed above.

COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

The following tables present the components of comprehensive income (loss) in the consolidated statements of operations for the periods indicated:

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

(Dollars in millions) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax

Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related $ ( 199 ) $ 30 $ ( 169 ) $ 75 $ 2 $ 77

Reclassification of net realized losses (gains) included in net income (loss) 4 ( 2 ) 2 10 ( 4 ) 5

URA(D) on securities - non-credit related $ ( 281 ) $ 24 $ ( 257 ) $ ( 206 ) $ 26 $ ( 180 )

Reclassification of net realized losses (gains) included

in net income (loss) 17 ( 2 ) 15 26 ( 6 ) 21

Foreign currency translation adjustments ( 50 ) 3 ( 47 ) ( 19 ) 2 ( 17 )

Reclassification of benefit plan liability amortization included in net income (loss) 1 — — 1 — 1

Reclassification of benefit plan liability amortization included

in net income (loss) 1 — — 2 — 1

Total other comprehensive income (loss) $ ( 313 ) $ 25 $ ( 288 ) $ ( 197 ) $ 22 $ ( 175 )

(Some amounts may not reconcile due to rounding)

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

(Dollars in millions) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax

Unrealized appreciation (depreciation) ("URA(D)") on securities - non-credit related $ ( 849 ) $ 116 $ ( 732 ) $ ( 1,781 ) $ 233 $ ( 1,548 )

Reclassification of net realized losses (gains) included in net income (loss) 16 ( 1 ) 16 21 ( 1 ) 20

URA(D) on securities - non-credit related $ ( 776 ) $ 64 $ ( 712 ) $ ( 2,557 ) $ 297 $ ( 2,260 )

Reclassification of net realized losses (gains) included

in net income (loss) 51 ( 10 ) 41 73 ( 12 ) 61

Foreign currency translation adjustments ( 109 ) 8 ( 101 ) ( 174 ) 11 ( 163 )

Reclassification of benefit plan liability amortization included in net income (loss) 1 — 1 2 — 2

Reclassification of benefit plan liability amortization included

in net income (loss) 2 ( 1 ) 1 3 ( 1 ) 2

Total other comprehensive income (loss) $ ( 832 ) $ 61 $ ( 771 ) $ ( 2,655 ) $ 295 $ ( 2,360 )

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

June 30, Affected line item within the statements of operations and comprehensive income (loss)

September 30, Nine Months Ended

September 30, Affected line item within the statements of operations and comprehensive income (loss)

AOCI component 2023 2022 2023 2022

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions) 2023 2022 2023 2022

11 unchanged sentences

SHARE-BASED COMPENSATION PLANS

For the three months ended June 30, 2023, a total of 925 restricted stock awards were granted on May 18, 2023, with a fair value of $ 372.91 per share.

For the three months ended June 30, 2022, a total of 2,330 restricted stock awards were granted on May 10, 2022 with a fair value of $ 280.98 per share.

For the six months ended June 30, 2023, a total of 175,096 restricted stock awards were granted:

174,171 and 925 restricted share awards were granted on February 23, 2023 and May 18, 2023 with a fair value of $ 382.39 per share and $ 372.91 per share, respectively.

For the three months ended September 30, 2023, a total of 4,580 restricted stock awards were granted on September 8, 2023, with a fair value of $ 369.15 per share.

For the three months ended September 30, 2022, a total of 4,070 restricted stock awards were granted on September 8, 2022 with a fair value of $ 283.72 per share.

For the nine months ended September 30, 2023, a total of 179,676 restricted stock awards were granted:

174,171 , 925 and 4,580 restricted share awards were granted on February 23, 2023, May 18, 2023 and September 8, 2023 with a fair value of $ 382.39 per share, $ 372.91 per share and $ 369.15 per share, respectively.

Also, 14,975 performance share unit awards were granted on February 23, 2023, with a fair value of $ 382.39 per share.

For the six months ended June 30, 2022, a total of 199,138 restricted stock awards were granted:

187,760 , 9,048 and 2,330 restricted share awards were granted on February 23, 2022, February 24, 2022 and May 10, 2022, with a fair value of $ 301.54 per share, $ 287.94 per share and $ 280.98 per share, respectively.

For the nine months ended September 30, 2022, a total of 203,208 restricted stock awards were granted:

187,760 , 9,048 , 2,330 and 4,070 restricted share awards were granted on February 23, 2022, February 24, 2022, May 10, 2022 and September 8, 2022, with a fair value of $ 301.54 per share, $ 287.94 per share, $ 280.98 per share and $ 283.72 per share, respectively.

Additionally, 18,340 performance share unit awards were granted on February 23, 2022, with a fair value of $ 301.54 per unit.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(Dollars in millions, except per share amounts) 2023 2022 2023 2022

20 unchanged sentences

(Some amounts may not reconcile due to rounding.)

There were no options outstanding as of June 30, 2023.

There were no options outstanding as of September 30, 2023.

Options granted under share-based compensation plans have all expired as of September 19, 2022.

6 unchanged sentences

Management considers the impact of all known events in its estimation of the Company’s annual pre-tax income/(loss) and AETR.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted.

We have evaluated the tax provisions of the IRA, the most significant of which are the corporate alternative minimum tax and the share repurchase excise tax and do not expect the legislation to have a material impact on our results of operations.

As the IRS issues additional guidance, we will evaluate any impact to our consolidated financial statements.

SUBSEQUENT EVENTS

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements