Moody’s Ratings has affirmed the credit strength of Bermuda-based Everest Reinsurance, maintaining a stable outlook despite a sharp drop in profits last year linked to reserve charges in its casualty lines.

The agency confirmed Everest Reinsurance (Bermuda) Limited’s A1 insurance financial strength rating, as well as the Baa1 senior unsecured debt rating of Everest Reinsurance Holdings, Inc.

The decision reflects the group’s “established presence in the global reinsurance market with longstanding client relationships and broad product capabilities,” Moody’s said in a statement.

The affirmation comes even as Everest reported a net income of $1.4 billion in 2024, down from $2.5 billion in 2023. The decline was driven by a $1.7 billion adverse reserve development, largely tied to general liability, excess/umbrella and commercial auto lines written in the US between 2020 and 2024.

Moody’s said these lines were affected by “increased frequency and higher claim severity stemming from the effects of aggressive attorney involvement, higher jury verdicts and litigation funding.” The group’s insurance segment absorbed about $1.3 billion of the reserve charges.

Still, Moody’s noted that Everest has taken steps to improve profitability, including organisational changes and re-underwriting its primary segment. The group’s combined ratio rose to 102.3 per cent for 2024, up from 90.9 per cent the year before, but strong investment income helped support overall performance.

“Our stable outlook on Everest reflects our expectation that the group will report solid underwriting profitability over the next 12–18 months,” Moody’s said. “We also expect Everest to continue to prudently manage its aggregate catastrophe exposure while maintaining solid capital adequacy.”

Everest Group writes property and casualty insurance and reinsurance worldwide. As of December 31, 2024, the company reported net premiums written of $15.8 billion and shareholders’ equity of $13.9 billion.