Everest Group recorded an increase in its quarterly profit on Monday, as the insurer benefited from better underwriting and a better return on its investments.
Backed by government-mandated, employer-guaranteed policies, insurance has lived up to its status as a “recession-proof” industry by remaining resilient despite economic downturns.
The company said its gross written premiums increased 17.9% to $4.41 billion during the quarter.
It posted a combined ratio of 88.8%, up from 91.2% the previous year. A ratio below 100% means that the insurer has collected more in premiums than it has paid in claims.
Insurers also use their cash to shore up their portfolios, primarily by purchasing safe assets such as U.S. Treasuries and other investment-grade corporate bonds. The Federal Reserve’s multiple rate hikes over the past year have allowed insurers to earn higher interest on these investments.
Everest’s net investment income increased to $457 million from $260 million the year before, driven by a larger asset base and strong returns on core fixed income securities .
Gross premiums written in the reinsurance sector increased by 20.4% in constant dollars.
Operating profit was $709 million, or $16.32 per share, for the quarter ended March 31, compared with $443 million, or $11.31 per share, a year ago. . (Reporting by Sri Hari NS in Bengaluru; Editing by Pooja Desai)
