Everest Group (EG) Understated Casualty Insurance Loss Reserves and Misleading Underwriting Practices Case
$EG investors filed a securities class action against Everest Group for allegedly misleading investors about the Company's casualty insurance risks, understating loss reserves, and overstating earnings while concealing the financial consequences of its aggressive expansion into high-risk U.S. casualty insurance markets.
On October 27, 2025, Everest disclosed an additional $478 million reserve charge and purchased protection against further losses. Following these revelations, $EG declined 11.4%, or $39.07 per share, closing at $304.91 on October 28, 2025.
$EG investors can join this case to be notified about potential recovery.
Case Details:
Everest Group is a Bermuda-based commercial property and casualty insurance and reinsurance company. Its operations include underwriting insurance policies for businesses and providing reinsurance coverage to other insurers. A critical component of its financial performance is maintaining adequate reserves to cover future insurance claims, particularly in casualty insurance, where claims may take years to resolve and costs can rise significantly because of litigation expenses and larger settlements.
Beginning in 2020, Everest aggressively expanded its U.S. casualty insurance business. Throughout the Class Period, management represented that this expansion was supported by disciplined underwriting, improved policy pricing, conservative loss estimates, and reduced exposure to high-risk insurance categories. The Company repeatedly assured investors that its reserves adequately accounted for rising claim costs, including the effects of social inflation.
On February 7, 2024, Everest announced a $392 million reserve increase primarily related to casualty insurance policies from accident years 2016 through 2019. During its February 8 earnings call, management emphasized that the reserve adjustment concerned older policies and maintained that policies written between 2020 and 2023 remained adequately priced and conservatively reserved. Executives stated that Everest had strengthened its underwriting standards, increased premiums, reduced policy limits, and exited certain high-risk insurance categories.
Throughout 2024, Everest continued assuring investors that its casualty insurance portfolio was performing as expected. Management repeatedly emphasized that insurance premiums were increasing faster than expected claim costs and that the Company had implemented effective measures to reduce exposure to social inflation. According to the lawsuit, these representations concealed significant weaknesses in Everest's underwriting practices and insufficient reserves for potential insurance losses.
On October 30, 2024, Everest reported its third-quarter results and disclosed that casualty insurance claim activity had increased sharply, particularly in excess casualty, general liability, and commercial automobile insurance. Management acknowledged increasing caution regarding certain insurance categories and disclosed that a comprehensive reserve review was underway. Following these revelations, Everest shares declined 6.4% on October 31, 2024.
On December 3, 2024, Michael Karmilowicz resigned from his leadership position at Everest Global Insurance. On January 8, 2025, CEO Juan Andrade also departed. These developments prompted analysts to question whether Everest's existing reserves were sufficient to cover rising casualty insurance losses.
On January 27, 2025, Everest announced a substantial $1.7 billion reserve charge, including approximately $1.3 billion related to U.S. casualty insurance losses, primarily from accident years 2020 through 2024. During a January 28 business update, newly appointed CEO James Williamson acknowledged that previous underwriting decisions had contributed significantly to the losses, including exposure to large commercial automobile fleets and insurance programs that left Everest particularly vulnerable to rising claim costs.
On October 27, 2025, Everest disclosed an additional $478 million reserve charge, principally related to adverse developments in U.S. casualty insurance claims from accident years 2022 through 2024. The Company also announced that it had obtained up to $1.2 billion in protection against additional adverse reserve development and would transfer renewal rights for certain global retail commercial insurance businesses to AIG. These businesses represented approximately $2 billion in annual gross written premiums.
Following the October 2025 announcements, Everest shares declined 11.4%, falling $39.07 to close at $304.91 on October 28, 2025.
Based on these events, $EG investors filed a claim against Everest Group, alleging the Company:
Materially understated its exposure to high-risk U.S. casualty insurance policies affected by escalating claim costs and social inflation.
Misrepresented the effectiveness of its underwriting practices, risk selection procedures, and insurance pricing strategies.
Failed to adequately price certain casualty insurance policies to account for expected claims and litigation-related expenses.
Investors argue that had the true extent of Everest's casualty insurance exposure, inadequate loss reserves, and weaknesses in underwriting and risk management been disclosed.