Everest “passed up deliberately on a number of the deals that got completely clobbered” by the California wildfires, CEO Jim Williamson has said on the firm’s Q4 earning call.
The executive told analysts that the firm’s roughly 1% market share, based on its own industry loss estimate of $35bn-$45bn, was down to “the quality of the underwriting that took place”.
He said: “A number of the major contributors to that industry loss are not clients of Everest. The reason they're not clients is because we assessed the programs on offer and did not believe they offered us an adequate risk-adjusted return for the exposure involved. So we said ‘no’, and others ‘yes’.”
Losses to the ILS and reinsurance industry from the Palisades and Eaton wildfires are expected to be spotty, with sources indicating that impacts won’t be evenly spread but will vary based on providers’ exposure to specific cedants.
Loss adjusting the wildfire events was “very challenging”, said Williamson, adding he remained confident around the numbers shared.
The executive said he expected the fires to have “a positive impact on prices.”
Everest saw “a lot of increased demand in the market. And then you look at the fact that those clients, if they have their choice, would rather do more of that cover with Everest, that means there's a terrific opportunity for us to continue to be very, very selective in the deals we're writing and to get terrific economics”.
The trend of rate decreases that was evident at 1 January, with around 5%-15% off loss-free progams, is "probably ameliorated”, Williamson added.
He said: “We're not a writer of aggregate covers for the most part. In terms of our total deployed capacity, if pricing is very attractive, we're ready, willing, able to do more for sure.”