EDGAR 10-K Filing

Company CIK: 914748
Filing Year: 2023
Filename: 914748_10-K_2023_0000914748-23-000002.json

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ITEM 1. BUSINESS
ITEM 1.
BUSINESS
The Company.
Holdings, a Delaware corporation,
is a wholly-owned subsidiary
of Holdings Ireland.
On December 30, 2008, Group
contributed
Holdings
to
its
recently
established
Irish
holding
company,
Holdings
Ireland.
Holdings
Ireland
is
a
direct
subsidiary
of
Group
and
serves
as
a
holding
company
for
the
U.S.
reinsurance
and
insurance
subsidiaries.
Group is a Bermuda
holding company whose
common shares are
publicly traded in the
U.S. on the New
York
Stock
Exchange
under
the
symbol
“RE”.
Group
files
an
annual
report
on
Form
10-K
with
the
Securities
and
Exchange
Commission (the “SEC”) with respect to its consolidated operations,
including Holdings.
The Company’s
principal
business,
conducted
through
its operating
segments,
is the
underwriting of
reinsurance
and insurance
in the
U.S.
and international
markets.
The Company
had gross
written
premiums,
in 2022,
of $9.7
billion, with approximately
61% representing reinsurance
and 39% representing
insurance.
Stockholder’s equity
at
December 31, 2022 was $5.7 billion. The Company
underwrites reinsurance both through
brokers and directly
with
ceding companies, giving
it the flexibility
to pursue
business based on
the ceding company’s
preferred reinsurance
purchasing method.
The Company underwrites insurance
through brokers
,
surplus lines brokers
and general agent
relationships.
Holdings’ active operating
subsidiaries are
each rated
A+ (“Superior”) by A.M.
Best Company
(“A.M.
Best”), a leading provider of
insurer ratings
that assigns financial strength
ratings to insurance
companies based on
their ability to meet their obligations to
policyholders.
Following is a summary of the Company’s
principal operating subsidiaries:
●
Everest
Re,
a
Delaware
insurance
company
and
a
direct
subsidiary
of
Holdings,
is
a
licensed
property
and
casualty
insurer
and/or
reinsurer
in
all
states,
the
District
of
Columbia,
Puerto
Rico
and
Guam
and
is
authorized to
conduct reinsurance
business in
Canada,
Singapore and
Brazil. Everest
Re underwrites
property
and
casualty
reinsurance
for
insurance
and
reinsurance
companies
in
the
U.S.
and
international
markets.
Everest
Re has
engaged in
reinsurance
transactions
with Bermuda
Re,
Everest
International
Reinsurance,
Ltd.
(“Everest
International”),
Mt.
Logan
Re,
Ltd.
(“Mt.
Logan
Re”)
and
Everest
Insurance
Company
of
Canada
(“Everest
Canada”),
which
are
affiliated
companies,
primarily
driven
by
enterprise
risk
and
capital
management considerations
under which
business is
transacted at
market
rates
and terms.
At December
31,
2022, Everest Re had statutory
surplus of $5.6 billion.
●
Everest
National
Insurance
Company
(“Everest
National”),
a
Delaware
insurance
company
and
a
direct
subsidiary of Everest
Re, is
licensed in
50 states,
the District
of Columbia and
Puerto Rico
and is authorized
to
write
property
and
casualty
insurance
on
an
admitted
basis
in
the
jurisdictions
in
which
it
is
licensed.
The
majority of Everest National’s
business is reinsured by its parent,
Everest Re.
●
Everest
Indemnity
Insurance
Company
(“Everest
Indemnity”),
a
Delaware
insurance
company
and
a
direct
subsidiary
of
Everest
Re,
writes
excess
and
surplus
lines
insurance
business
in
the
U.S.
on
a
non-admitted
basis. Excess and surplus lines insurance
is specialty property and liability coverage
that an insurer not licensed
to
write
insurance
in
a
particular
jurisdiction
is
permitted
to
provide
to
insureds
when
the
specific
specialty
coverage
is
unavailable
from
admitted
insurers.
Everest
Indemnity
is
a
Delaware
Domestic
Surplus
Lines
Insurer and is eligible to write business
on a non-admitted basis in all other states,
the District of Columbia and
Puerto Rico.
The majority of Everest Indemnity’s
business is reinsured by its parent, Everest
Re.
●
Everest Security
Insurance Company
(“Everest Security”), a
Georgia insurance company
and a direct subsidiary
of
Everest
Re,
writes
property
and
casualty
insurance
on
an
admitted
basis
in
Georgia
and
Alabama
and
is
approved
as
an
eligible
surplus
lines
insurer
in
Delaware.
The
majority
of
Everest
Security’s
business
is
reinsured by its parent, Everest
Re.
●
Everest
Denali Insurance
Company (“Everest
Denali”), a
Delaware
insurance
company
and a
direct subsidiary
of Everest
Re, is licensed
to write property
and casualty insurance
in all 50 states
and the District of
Columbia.
The majority of Everest Denali’s
business is reinsured by its parent, Everest
Re.
●
Everest
Premier
Insurance
Company
(“Everest
Premier”),
a
Delaware
insurance
company
and
a
direct
subsidiary of Everest
Re, is licensed to
write property and
casualty insurance
in all 50 states
and the District
of
Columbia.
The majority of Everest Premier’s
business is reinsured by its parent,
Everest Re.
●
Everest
International
Assurance,
Ltd.
(“Everest
Assurance”),
a
Bermuda
company
and
a
direct
subsidiary
of
Holdings
is
registered
in
Bermuda
as
a
Class
3A general
business
insurer
and
as a
Class C
long-term
insurer.
Everest Assurance
has made a one-time election
under section 953(d)
of the U.S. Internal
Revenue Code to
be
a
U.S.
income
tax
paying
“Controlled
Foreign
Corporation.”
By
making
this
election,
Everest
Assurance
is
authorized to write life reinsur
ance and casualty reinsurance in both
Bermuda and the U.S.
Reinsurance Industry Overview.
Reinsurance
is
an
arrangement
in
which
an
insurance
company,
the
reinsurer,
agrees
to
indemnify
another
insurance or reinsurance company,
the ceding company,
against all or a portion of the insurance risks
underwritten
by the
ceding company
under one
or more
insurance
contracts.
Reinsurance
can provide
a ceding
company
with
several
benefits,
including
a
reduction
in
its
net
liability
on
individual
risks
or
classes
of
risks,
catastrophe
protection from
large and/or
multiple losses and/or
a reduction
in operating
leverage as
measured by
the ratio
of
net premiums
and reserves
to capital.
Reinsurance
also provides
a ceding
company
with additional
underwriting
capacity by
permitting it
to accept
larger
risks
and write
more business
than would
be acceptable
relative
to
the
ceding
company’s
financial
resources.
Reinsurance
does
not
discharge
the
ceding
company
from
its
liability
to
policyholders; rather,
it reimburses the ceding company
for covered losses.
There
are
two
basic
types
of reinsurance
arrangements:
treaty
and facultative.
Treaty
reinsurance
obligates
the
ceding company
to cede
and the
reinsurer to
assume a
specified portion
of a
type or
category
of risks
insured
by
the ceding company.
Treaty
reinsurers do not
separately evaluate
each of the individual risks
assumed under their
treaties, instead,
the reinsurer relies
upon the pricing and
underwriting decisions made by
the ceding company.
In
facultative
reinsurance,
the ceding
company cedes
and the
reinsurer assumes
all or
part of
the risk
under a
single
insurance contract.
Facultative
reinsurance
is negotiated
separately for
each insurance
contract
that is
reinsured.
Facultative
reinsurance,
when
purchased
by
ceding
companies,
usually
is
intended
to
cover
individual
risks
not
covered by their reinsurance
treaties because of the dollar limits involved
or because the risk is unusual.
Both treaty
and facultative
reinsurance can
be written
on either a
pro rata
basis or
an excess
of loss
basis.
Under
pro rata reinsurance,
the ceding company and the reinsurer
share the premiums as well as
the losses and expenses
in an
agreed proportion.
Under excess
of loss
reinsurance,
the reinsurer
indemnifies the
ceding company
against
all
or
a
specified
portion
of
losses
and
expenses
in
excess
of
a
specified
dollar
amount,
known
as
the
ceding
company's retention or reinsurer's
attachment point, generally
subject to a negotiated reinsurance
contract limit.
In
pro
rata
reinsurance,
the
reinsurer
generally
pays
the
ceding
company
a
ceding
commission.
The
ceding
commission
generally
is
based
on
the
ceding
company’s
cost
of
acquiring
the
business
being
reinsured
(commissions,
premium
taxes,
assessments
and
miscellaneous
administrative
expense
and
may
contain
profit
sharing provisions,
whereby the
ceding commission
is adjusted
based on
loss experience).
Premiums
paid by
the
ceding company to a reinsurer
for excess of loss reinsurance
are not directly proportional to
the premiums that the
ceding company
receives because
the reinsurer
does not
assume a
proportionate
risk.
There is
usually no
ceding
commission on excess of loss reinsurance.
Reinsurers
may
purchase
reinsurance
to
cover
their
own
risk
exposure.
Reinsurance
of a
reinsurer's
business
is
called
a
retrocession.
Reinsurance
companies
cede
risks
under
retrocessional
agreements
to
other
reinsurers,
known
as
retrocessionaires,
for
reasons
similar
to
those
that
cause
insurers
to
purchase
reinsurance:
to
reduce
net liability on
individual or classes
of risks, protect
against catastrophic
losses, stabilize
financial ratios
and obtain
additional underwriting capacity.
Reinsurance
can
be
written
through
intermediaries,
generally
professional
reinsurance
brokers,
or
directly
with
ceding
companies.
From
a
ceding
company's
perspective,
the
broker
and
the
direct
distribution
channels
have
advantages
and disadvantages.
A ceding company's
decision to select
one distribution
channel over the
other will
be influenced
by its
perception
of such
advantages
and disadvantages
relative
to the
reinsurance
coverage
being
placed.
Business Strategy.
The
Company’s
business
strategy
is
to
sustain
its
leadership
position
within
targeted
reinsurance
and
insurance
markets,
provide
effective
management
throughout
the
property
and
casualty
underwriting
cycle
and
thereby
achieve an
attractive
return for
its stockholder.
The Company’s
underwriting strategies
seek to
capitalize
on its
i)
financial
strength
and
capacity,
ii)
global
franchise,
iii)
stable
and
experienced
management
team,
iv)
diversified
product
and
distribution
offerings,
v)
underwriting
expertise
and
disciplined
approach,
vi)
efficient
and
low-cost
operating structure and vii)
effective enterprise risk management
practices.
The Company
offers treaty
and facultative
reinsurance and
admitted and
non-admitted insurance.
The Company’s
products
include
the
full
range
of
property
and
casualty
reinsurance
and
insurance
coverages,
including
marine,
aviation,
surety,
errors
and
omissions
liability
(“E&O”),
directors’
and
officers’
liability
(“D&O”),
medical
malpractice, mortgage reinsurance,
other specialty lines, accident and health (“A&H”)
and workers’ compensation.
The Company’s underwriting strategies
emphasizes underwriting profitability over
premium volume.
Key elements
of
this
strategy
include
careful
risk
selection,
appropriate
pricing
through
strict
underwriting
discipline
and
adjustment
of the
Company’s
business mix
in response
to changing
market
conditions.
The Company
focuses
on
reinsuring
companies
that
effectively
manage
the
underwriting
cycle
through
proper
analysis
and
appropriate
pricing of underlying risks and whose underwriting guidelines and
performance are compatible with its objectives.
The
Company’s
underwriting
strategies
emphasize
flexibility
and
responsiveness
to
changing
market
conditions.
The
Company
believes
that
its
existing
strengths,
including
its
broad
underwriting
expertise,
global
presence,
strong
financial ratings
and substantial
capital, facilitate
adjustments
to its
mix of
business geographically,
by line
of
business
and
by
type
of
coverage,
allowing
it
to
fully
participate
in
market
opportunities
that
provide
the
greatest
potential
for
underwriting
profitability.
The
Company’s
insurance
operations
complement
these
strategies
by
accessing business
that is
not available
on a
reinsurance
basis.
The Company
carefully
monitors
its
mix of business across all operations
to avoid unacceptable geographic
or other risk concentrations.
Capital Transactions.
The Company’s
business operations
are in
part dependent
on its
financial strength
and financial
strength
ratings,
and the market’s
perception of
its financial strength
.
The Company
stockholder’s
equity was
$5.7 billion and
$7.0
billion
at
December
31,
and
2021,
respectively.
The
Company
possesses
significant
financial
flexibility
with
access to
the debt
markets
and, through
its ultimate
parent,
equity markets,
as a
result of
its perceived
financial
strength, as evidenced by the financial strength
ratings as assigned by independent rating
agencies. The Company’s
capital
position
remains
strong,
commensurate
with
its
financial
ratings
and the
Company
has
ample
liquidity
to
meet its financial obligations for the
foreseeable future.
Financial Strength Ratings.
The
following
table
shows
the
current
financial
strength
ratings
of
the
Company’s
operating
subsidiaries
as
reported by
A.M. Best,
S&P Global
Ratings (“S&P”)
and Moody’s.
These ratings
represent an
independent opinion
of the financial
strength, operating
performance, business
profile and
ability to meet
policyholder obligations.
The
ratings
are
not
intended
to
be
an
indication
of
the
degree
or
lack
of
risk
involved
in
a
direct
or
indirect
equity
investment
or a recommendation
to buy,
sell or hold
our securities. Additionally,
rating organizations
may change
their rating methodology,
which could have a material impact on
our financial strength ratings.
All
of
the
below-mentioned
ratings
are
continually
monitored
and
revised,
if
necessary,
by
each
of
the
rating
agencies.
The ratings presented in
the following table were in
effect as of January 31, 2023.
The Company
believes that
its ratings
are important
as they provide
the Company’s
customers and
others with
an
independent
assessment
of
the
Company’s
financial
strength
using
a
rating
scale
that
provides
for
relative
comparisons.
Strong
financial
ratings
are
particularly
important
for
reinsurance
and
insurance
companies
given
that customers
rely on a company
to pay covered
losses well into the future.
As a result, a highly rated
company is
generally preferred.
Operating Subsidiary:
A.M. Best
S&P
Moody's
Everest Reinsurance Company
A+ (Superior)
A+ (Strong)
A1 (upper-medium)
Everest National Insurance Company
A+ (Superior)
A+ (Strong)
Not Rated
Everest Indemnity Insurance Company
A+ (Superior)
A+ (Strong)
Not Rated
Everest Security Insurance Company
A+ (Superior)
A+ (Strong)
Not Rated
Everest International Assurance, Ltd.
A+ (Superior)
A+ (Strong)
Not Rated
Everest Denali Insurance Company
A+ (Superior)
A+ (Strong)
Not Rated
Everest Premier Insurance Company
A+ (Superior)
A+ (Strong)
Not Rated
A.M.
Best
states
that
the
“A+”
(“Superior”)
rating
is
assigned
to
those
companies
which,
in
its
opinion,
have
a
superior
ability
to
meet
their
ongoing
insurance
policy
and
contract
obligations
based
on
A.M.
Best’s
comprehensive
quantitative
and
qualitative
evaluation
of
a
company’s
balance
sheet
strength,
operating
performance
and
business
profile.
A.M.
Best
affirmed
these
ratings
on
June
15,
2022.
S&P
states
that
the
“A+”/”A”
ratings
are
assigned
to
those
insurance
companies
which,
in
its
opinion,
have
strong
financial
security
characteristics
with
respect
to
their
ability
to
pay
under
its
insurance
policies
and
contracts
in
accordance
with
their
terms.
S&P
affirmed
all
ratings
on
May
27,
2022.
Moody’s
states
that
an
“A1”
rating
is
assigned
to
companies that,
in their
opinion,
offer
upper-medium
grade security
and are
subject to
low credit
risk.
Moody’s
affirmed these ratings on June 17, 2022.
Subsidiaries other
than Everest
Re may
not be
rated
by some
or any
rating
agencies because
such ratings
are not
considered
essential
by the
individual subsidiary’s
customers
or because
of the
limited nature
of the
subsidiary’s
operations or because the subsidiaries
are newly established and have
not yet been rated by the agencies.
Debt Ratings.
The following table shows the debt ratings
by A.M. Best, S&P and Moody’s of the Holdings’ senior
notes due June
1, 2044, senior notes due October 15, 2050, senior notes due
October 15, 2052, and long-term notes due May
1,
2067 all of which are considered investment
grade.
Debt ratings are the rating
agencies’ current assessment of the
credit worthiness
of an obligor with respect to a specific obligation.
Instrument
A.M. Best
S&P
Moody's
Senior Notes due June 1, 2044
a-
(Strong)
A-
(Strong)
Baa1
(Medium Grade)
Senior Notes due October 15, 2050
a-
(Strong)
A-
(Strong)
Baa1
(Medium Grade)
Senior Notes due October 15, 2052
Not Rated
A-
(Strong)
Baa1
(Medium Grade)
Long-Term Notes due May 1, 2067
bbb
(Adequate)
BBB
(Adequate)
Baa2
(Medium Grade)
Competition.
The
worldwide
reinsurance
and
insurance
businesses
are
highly
competitive,
as
well
as
cyclical
by
product
and
market.
As
such,
financial
results
tend
to
fluctuate
with
periods
of
constrained
availability,
higher
rates
and
stronger
profits followed
by periods
of abundant
capacity,
lower rates
and constrained
profitability.
Competition
in
the
types
of
reinsurance
and
insurance
business
that
we
underwrite
is
based
on
many
factors,
including
the
perceived
overall
financial
strength
of
the
reinsurer
or
insurer,
ratings
of
the
reinsurer
or
insurer
by
A.M.
Best
and/or
Standard
&
Poor’s,
underwriting
expertise,
the
jurisdictions
where
the
reinsurer
or
insurer
is
licensed
or
otherwise
authorized,
capacity
and
coverages
offered,
premiums
charged,
other
terms
and
conditions
of
the
reinsurance
and
insurance
business
offered,
services
offered,
speed
of
claims
payment
and
reputation
and
experience in lines written.
Furthermore, the market impact
from these competitive factors
related to reinsurance
and
insurance
is
generally
not
consistent
across
lines
of business,
domestic
and
international
geographical
areas
and distribution channels.
We
compete
in the
U.S. and
international
reinsurance
and insurance
markets
with numerous
global competitors.
Our
competitors
include
independent
reinsurance
and
insurance
companies,
subsidiaries
or
affiliates
of
established
worldwide
insurance
companies,
reinsurance
departments
of certain
insurance
companies,
domestic
and
international
underwriting
operations,
and
certain
government
sponsored
risk
transfer
vehicles.
Some
of
these
competitors
have
greater
financial
resources
than
we
do
and
have
established
long-term
and
continuing
business relationships,
which can be a
significant competitive
advantage.
In addition, the lack
of strong barriers
to
entry
into
the
reinsurance
business
and
the
securitization
of
reinsurance
and
insurance
risks
through
capital
markets provide additional
sources of potential reinsurance
and insurance capacity and competition.
Worldwide
insurance
and
reinsurance
market
conditions
historically
have
been
competitive.
Generally,
there
is
ample
insurance
and
reinsurance
capacity
relative
to
demand,
as
well
as,
additional
capital
from
the
capital
markets through
insurance linked
financial instruments.
These financial instruments
such as side cars,
catastrophe
bonds and collateralized
reinsurance funds,
provided capital
markets with
access to insurance
and reinsurance
risk
exposure.
The capital
markets
demand for
these products
is primarily
driven by
the desire
to achieve
greater
risk
diversification
and
potentially
higher
returns
on
their
investments.
This
competition
generally
has
a
negative
impact
on
rates,
terms
and
conditions;
however,
the
impact
varies
widely
by
market
and
coverage.
Based
on
recent
competitive
behaviors
in
the
insurance
and
reinsurance
industry,
natural
catastrophe
events
and
the
macroeconomic
backdrop,
there
has
been
some
dislocation
in
the
market
which
we
expect
to
have
a
positive
impact on rates and terms and conditions
generally,
though local market specificities can
vary.
The increased frequency of
catastrophe
losses experienced throughout
2022 appears to be pressuring
the increase
of
rates.
As
business
activity
continues
to
regain
strength
after
the
pandemic
and
current
macroeconomic
uncertainty,
rates
also
appear
to
be
firming
in
most
lines
of
business,
particularly
in
the
casualty
lines
that
had
seen
significant
losses
such
as
excess
casualty
and
directors’
and
officers’
liability.
Other
casualty
lines
are
experiencing
modest
rate
increase,
while
some
lines
such
as
workers’
compensation
were
experiencing
softer
market
conditions.
It
is
too
early
to
tell
what
the
impact
on
pricing
conditions
will
be
but
it
is
likely
to
change
depending on the line of business and geography.
The war
in the
Ukraine
is ongoing
and an
evolving
event.
Economic
and legal
sanctions
have
been levied
against
Russia, specific named individuals
and entities connected
to the Russian government,
as well as businesses
located
in the
Russian Federation
and/or owned
by Russian
nationals by
numerous countries,
including the
United States.
The
significant
political
and
economic
uncertainty
surrounding
the
war
and
associated
sanctions
have
impacted
economic
and
investment
markets
both
within
Russia
and
around
the
world.
The
Company
has
recorded
$25
million of losses related to the Ukraine/Russia
war during 2022.
Human Capital Management.
Our employees
are essential
to the
success of
our business,
and so
we strive
to attract
and retain
a high
standard
of
insurance
professionals
to
meet
our
business
needs
as
well
as
the
needs
of
our
clients
and
customers.
As
of
February 1, 2023,
the Company employed
1,933 persons.
Management believes
that employee relations
are good.
None of the Company’s
employees are subject
to collective bargaining
agreements, and the
Company is not
aware
of any current efforts
to implement such agreements.
Everest is
committed to providing
our employees with an engaging
and supportive environment
so that employees
can develop
personally and
help us achieve
success as
an organization.
We consider
the ability
to attract,
develop
and
retain
a
high
caliber
of
insurance
professionals
to
be
critical
to
our
success.
Opportunities
for
continued
learning
and
talent
development
are
provided
to
all
employee
levels.
Employees
are
encouraged
to
take
ownership
of
their
development
by
using
the
tools
that
the
Company
has
made
available
to
them
including
industry
training,
mentorships
and
personal
development
classes.
Everest
actively
manages
succession
planning
throughout
our organization
and strives
to provide
job growth
and advancement
opportunities to
internal talent,
where possible.
Diversity and Inclusion.
Our strength
and success
derive
from our
diversity,
and we
are
at
our best
when we
embrace
diverse
views
and
perspectives.
Equality
in
opportunity,
career
development,
compensation
and
respect
for
all
individuals
are
fundamental human rights that are
at the forefront
of our culture and promoted not
only within our workplace but
also the
global communities
in which
we operate.
Our Board
is committed
to diversity
within its
structure
as well
as
emphasizing
its
importance
in
our
senior
executive
leadership.
We
believe
that
diversity
in
gender,
age,
ethnicity
and
skill
set
allows
for
dynamic
and
evolving
perspectives
in
governance,
strategy,
corporate
responsibility,
human rights and risk management.
Proactive diversity
recruitment is
an integral
aspect of succession
planning at both
the board level
and throughout
all
levels
in
the
organization.
Our
Talent
Development
team
works
with
senior
management
to
identify
women
and
persons
of
color
across
the
Company
as
potential
leaders.
These
individuals
are
provided
management
and
executive leadership
training and
education to
enhance their skillsets
and provide
opportunities for
advancement.
Indeed, our
executive
officers
are
measured
on their
forward-thinking
diversity
initiatives
as part
of their
annual
performance evaluations.
Such diversity
at the
most senior
levels of
our organization
reflects our
commitment to
identify and develop highly qualified women and individuals
of color to help lead our Company into
the future.
The
work
of
the
DEI
Council
has
helped
enhance
the
employee
experience
for
all
our
colleagues
across
the
organization
worldwide.
The
council
encourages
continuous
and
open
dialogue
between
executive
and
senior
management
and
traditionally
underrepresented
groups
at
all
levels,
without
fear
of
reprisal
or
retaliation,
to
identify
areas
of
improvement
and
carry
out
the
message
of
inclusion
both
inside
and
outside
our
organization.
The
DEI
council
was
instrumental
in
forming
and
supporting
additional
Employee
Resource
Groups
(“ERGs”),
developing a
Regional Representation
network and
leveraging specific
Talent
Development
and Talent
Acquisition
initiatives that will positively influence the composition
of our workforce.
Available Information.
The Company’s
Annual Reports
on Form
10-K, Quarterly
Reports on
Form 10-Q, Current
Reports on
Form 8-K
and
amendments
to
those
reports
are
available
free
of
charge
through
the
Company’s
internet
website
at
http://www.everestre
group.com
as soon
as reasonably
practicable
after such
reports
are electronically
filed with
the SEC.

---

ITEM 1A. RISK FACTORS
ITEM 1A.
RISK FACTORS
In addition
to the
other information
provided
in this
report, the
following risk
factors
should be
considered when
evaluating
an
investment
in
our
securities.
If
the
circumstances
contemplated
by
the
individual
risk
factors
materialize,
our business,
financial condition
and results
of operations
could be
materially
and adversely
affected
and our ability to service our debt, our debt ratings
and our ability to issue new debt could decline significantly.
RISKS RELATING TO
OUR BUSINESS
Our results could be adversely affected by catastrophic
events.
We
are
exposed
to
unpredictable
catastrophic
events,
including weather
-related
and other
natural
catastrophes,
as well as acts of
terrorism. The frequency and/or
severity of catastrophic
events may be impacted
in the future by
the continued
effects of
climate change.
Any material
reduction in
our operating
results caused
by the occurrence
of
one
or
more
catastrophes
could
inhibit
our
ability
to
pay
dividends
or
to
meet
our
interest
and
principal
payment obligations.
By way
of illustration,
during the past
five calendar
years, pre
-tax catastrophe
losses, net
of
reinsurance, were as follows:
Calendar year:
Pre-tax net catastrophe losses
(Dollars in millions)
$
1,713
Our losses from future catastrophic events
could exceed our projections.
We
use
projections
of
possible
losses
from
future
catastrophic
events
of
varying
types
and
magnitudes
as
a
strategic
underwriting tool.
We use
these loss
projections to
estimate our
potential catastrophe
losses in
certain
geographic
areas
and decide
on the
placement
of retrocessional
coverage
or other
actions
to
limit the
extent
of
potential
losses
in
a
given
geographic
area.
These
loss
projections
are
approximations,
reliant
on
a
mix
of
quantitative
and
qualitative
processes,
and
actual
losses
may
exceed
the
projections
by
a
material
amount,
resulting in a material adverse effect
on our financial condition and results of operations.
If our loss
reserves are inadequate
to meet our
actual losses, our
net income
would be reduced
or we could
incur a
loss.
We
are
required
to
maintain
reserves
to
cover
our
estimated
ultimate
liability
of
losses
and
loss
adjustment
expenses (“LAE”) for
both reported and
unreported claims incurred.
These reserves are only
estimates of what we
believe
the
settlement
and
administration
of claims
will
cost
based
on
facts
and circumstances
known
to
us.
In
setting reserves for
our reinsurance liabilities,
we rely on claim
data supplied by
our ceding companies and brokers
and we
employ
actuarial
and statistical
projections.
The information
received
from
our
ceding companies
is not
always
timely
or
accurate,
which
can
contribute
to
inaccuracies
in
our
loss
projections.
Because
of
the
uncertainties that
surround
our estimates
of loss
and LAE
reserves, we
cannot be
certain that
ultimate losses
and
LAE payments
will not
exceed
our estimates.
If our
reserves are
deficient, we
would be
required to
increase loss
reserves in
the period
in which
such deficiencies
are identified
which would
cause a
charge to
our earnings
and a
reduction of
capital. During
the past
five calendar
years,
the reserve
re-estimation
process
resulted in
a decrease
to our pre-tax net income in all five
years:
Calendar year:
Effect on pre-tax net income
(Dollars in millions)
$
decrease
decrease
decrease
decrease
decrease
The
difficulty
in
estimating
our
reserves
is
significantly
more
challenging
as
it
relates
to
reserving
for
potential
asbestos and
environmental (“A&E”)
liabilities.
At December 31,
2022, 1.9% of our
gross reserves were
comprised
of
A&E
reserves.
A&E
liabilities
are
especially
hard
to
estimate
for
many
reasons,
including
the
long
delays
between exposure and manifestation
of any bodily injury or property damage,
difficulty in identifying the source of
the asbestos or
environmental contamination,
long reporting delays
and difficulty in properly
allocating liability for
the asbestos
or environmental
damage.
Legal tactics
and judicial and
legislative developments
affecting the
scope
of
insurers’
liability,
which
can
be
difficult
to
predict,
also
contribute
to
uncertainties
in
estimating
reserves
for
A&E liabilities.
The
failure
to
accurately
assess
underwriting
risk
and
establish
adequate
premium
rates
could
reduce
our
net
income or result in a net loss.
Our success depends on our ability to accurately
assess the risks associated with the businesses
on which the risk is
retained.
If we
fail
to
accurately
assess
the risks
we retain,
we
may
fail
to
establish
adequate
premium
rates
to
cover our losses and LAE.
This could reduce our net income and even result
in a net loss.
In
addition,
losses
may
arise from
events
or
exposures
that
are
not
anticipated
when
the
coverage
is
priced.
In
addition to
unanticipated
events,
we also
face the
unanticipated
expansion
of our
exposures,
particularly in
long-
tail liability
lines.
An example
of this
is the
expansion
over time
of the
scope of
insurers’
legal liability
within the
mass tort arena, particularly for A&E exposures
discussed above.
Decreases in pricing for property and casualty reinsurance
and insurance could reduce our net income.
The
worldwide
reinsurance
and
insurance
businesses
are
highly
competitive,
as
well
as
cyclical
by
product
and
market.
These
cycles,
as
well
as
other
factors
that
influence
aggregate
supply
and
demand
for
property
and
casualty
insurance
and reinsurance
products,
are outside
of our
control.
The supply
of (re)insurance
is driven
by
prevailing
prices
and
levels
of
capacity
that
may
fluctuate
in
response
to
a
number
of
factors
including
large
catastrophic
losses
and investment
returns
being
realized
in
the
insurance
industry.
Demand
for
(re)insurance
is
influenced
by
underwriting
results
of
insurers
and
insureds,
including
catastrophe
losses,
and
prevailing
general
economic
conditions.
If
any
of
these
factors
were
to
result
in
a
decline
in
the
demand
for
(re)insurance
or
an
overall increase in (re)insurance
capacity, our
net income could decrease.
If rating agencies downgrade
the ratings of our insurance
subsidiaries, future prospects
for growth and profitability
could be significantly and adversely affected.
Our active
insurance
company
subsidiaries
currently
hold financial
strength
ratings
assigned by
third-party
rating
agencies which assess and
rate the claims paying
ability and financial strength
of insurers and
reinsurers.
Financial
strength
ratings
are
used
by
cedents,
agents
and
brokers
to
assess
the
financial
strength
and
credit
quality
of
reinsurers
and
insurers.
A
downgrade
or
withdrawal
of
any
of
these
ratings
could
adversely
affect
our
ability
to
market
our
reinsurance
and
insurance
products,
our
ability
to
compete
with
other
reinsurers
and
insurers,
and
could
have
a
material
and
adverse
effect
on
our
ability
to
write
new
business
that
in
turn
could
impact
our
profitability
and
operating
results.
In
December
2021,
S&P
announced
proposed
changes
to
its
rating
methodologies. The proposed
changes have
not been finalized,
so the impact,
if any,
that these changes
may have
on our financial strength ratings
is unknown.
Consistent with
market practice,
much of our
treaty reinsurance
business allows
the ceding company
to terminate
the
contract
or
seek
collateralization
of
our
obligations
in
the
event
of
a
rating
downgrade
below
a
certain
threshold. The
termination provision
would generally
be triggered
if a
rating fell
below A.M.
Best’s
A- rating
level.
To
a
lesser
extent,
Everest
Re
also
has
modest
exposure
to
reinsurance
contracts
that
contain
provisions
for
obligatory funding of outstanding
liabilities in the event of a rating
agency downgrade. Those
provisions
would also
generally be triggered if Everest
Re’s rating
fell below A.M. Best’s A- rating
level.
The failure of our insureds, intermediaries and reinsurers to
satisfy their obligations to us could reduce our income.
In
accordance
with
industry
practice,
we
have
uncollateralized
receivables
from
insureds,
agents
and
brokers
and/or
rely
on
agents
and
brokers
to
process
our
payments.
We
may
not
be
able
to
collect
amounts
due
from
insureds, agents and brokers,
resulting in a reduction to net income.
We are
subject to
credit risk
of reinsurers
in connection
with retrocessional
arrangements
because the transfer
of
risk to a
reinsurer does
not relieve
us of our
liability to the
insured. In
addition, reinsurers
may be unwilling
to pay
us even though they
are able to do so.
The failure of one or
more of our reinsurers
to honor their obligations
to us
in a timely fashion
would impact our cash
flow and reduce our
net income and could
cause us to
incur a significant
loss.
If we are unable or choose not to purchase reinsurance
and transfer risk to the reinsurance
markets, our net income
could be reduced or we could incur a net loss in the event
of unusual loss experience.
We are
generally less
reliant on
the purchase
of reinsurance
than many
of our competitors,
in part because
of our
strategic
emphasis on
underwriting discipline
and management
of the
cycles inherent
in our
business.
We
try to
separate
our risk
taking process
from our
risk mitigation
process in
order to
avoid developing
too great
a reliance
on
reinsurance.
With
the
expansion
of
the
capital
markets
into
insurance
linked
financial
instruments,
we
increased our
use of capital
market products
for catastrophe
reinsurance.
In addition, we
have increased
some of
our
quota
share
contracts
with
larger
retrocessions.
The
percentage
of
business
that
we
reinsure
may
vary
considerably
from year
to year,
depending on
our view
of the
relationship between
cost and
expected benefit
for
the contract period.
Percentage of ceded written premiums to gross written premiums
Unaffiliated
13.2
%
14.3
%
14.9
%
16.7
%
14.7
%
Affiliated
3.8
%
4.9
%
1.7
%
1.4
%
8.7
%
Our industry is highly competitive and we may not be able
to compete as successfully in the future.
Our industry
is highly
competitive
and subject
to
pricing cycles
that
can
be pronounced.
We
compete
globally in
the United
States,
international
reinsurance
and insurance
markets
with numerous
competitors.
Our competitors
include
independent
reinsurance
and
insurance
companies,
subsidiaries
or
affiliates
of
established
worldwide
insurance
companies,
reinsurance
departments
of
certain
insurance
companies
and
domestic
and
international
underwriting operations, including underwriting syndicates
at Lloyd’s
of London.
According
to S&P,
Group ranks
among the
top ten
global reinsurance
groups,
where more
than two-thirds
of the
market
share
is
concentrated.
The worldwide
net
premium
written
by
the
Top
40 global
reinsurance
groups,
for
both
life
and
non-life
business,
was
estimated
to
be
$274 billion
in
according
to
data
compiled
by
S&P.
In
addition to competitors,
the entry of alternative
capital market products
and vehicles provide additional
sources of
reinsurance and insurance
capacity.
We are dependent on our key
personnel.
Our success
has been,
and will
continue
to be,
dependent on
our ability
to retain
the services
of our
existing key
executives and
other key employees,
and to attract
and retain additional qualified
personnel in the future. The
loss
of the services of
any key
executive officer
or the inability to
hire and retain
other highly qualified personnel
in the
future,
particularly
those
experienced
in
the
property
and casualty
industry,
could
adversely
affect
our
ability
to
conduct business.
Our investment
values and
investment
income could
decline because
they are
exposed
to interest
rate, credit
and
market risks.
A significant
portion of our
investment
portfolio consists
of fixed
income securities
and smaller portions
consist of
equity
securities
and
other
investments.
Both
the
fair
value
of
our
invested
assets
and
associated
investment
income
fluctuate
depending
on
general
economic
and
market
conditions.
For
example,
the
fair
value
of
our
predominant fixed income portfolio
generally increases or decreases
inversely to fluctuations
in interest rates.
The
fair
value
of our
fixed
income
securities
could
also decrease
as a
result
of a
downturn
in
the
business
cycle
that
causes the
credit quality
of such securities
to deteriorate.
The net investment
income that
we realize
from future
investments in fixed income
securities will generally increase or decrease
with interest rates.
Interest
rate
fluctuations
also
can
cause
net
investment
income
from
fixed
income
investments
that
carry
prepayment
risk,
such
as
mortgage-backed
and
other
asset-backed
securities,
to
differ
from
the
income
anticipated
from
those
securities
at
the
time
of
purchase.
In
addition,
if
issuers
of
individual
investments
are
unable to meet their obligations, investment
income will be reduced and realized capital
losses may arise.
The
majority
of our
fixed
income
securities
are
classified
as
available
for
sale
and
temporary
changes
in
the
fair
value
of
these
investments
are
reflected
as
changes
to
our
stockholder’s
equity.
Our
actively
managed
equity
security portfolios
are fair valued
and any changes
in fair value
are reflected
as net realized
capital gains
or losses.
As a result, a decline in the value of our securities reduces our
capital or could cause us to incur a loss.
As
a
part
of our
ongoing
analysis
of our
investment
portfolio,
we
are
required
to
assess
current
expected
credit
losses for
all held-to-maturity
securities and
evaluate
expected
credit losses
for available
-for-sale securities
when
fair
value
is
below
amortized
cost,
which
considers
reasonable
and
supportable
forecasts
of
future
economic
conditions in addition to information
about past events and current
conditions. This analysis requires
a high degree
of judgment. Financial assets with similar risk characteristics
and relevant historical loss
information are included in
the development
of an estimate
of expected
lifetime losses.
Declines in relevant
stock and
other financial markets
and other
factors
impacting the
value of
our investments
could result
in an
adverse effect
on our
net income
and
other financial results.
We
have
invested
a
portion of
our
investment
portfolio
in
equity securities.
The value
of these
assets
fluctuates
with changes
in the
markets. In
times of
economic weakness,
the fair
value of
these assets
may decline,
and may
negatively
impact
net
income.
We
also
invest
in
non-traditional
investments
which
have
different
risk
characteristics
than
traditional
fixed
income
and
equity
securities.
These
alternative
investments
are
comprised
primarily
of
private
equity
limited
partnerships.
The
changes
in
value
and
investment
income/(loss)
for
these
partnerships may be more volatile
than over-the-counter securities.
Prolonged
and
severe
disruptions
in
the
overall
public
and private
debt
and
equity
markets,
such
as occurred
in
early
related
to
the
COVID-19
pandemic,
could
result
in
significant
realized
and
unrealized
losses
in
our
investment
portfolio.
There
could
also be
disruption
in individual
market
sectors,
such as
occurred
in the
energy
sector
in
recent
years.
Such
declines
in
the
financial
markets
could
result
in
significant
realized
and
unrealized
losses on investments
and could have
a material adverse
impact on our
results of operations,
equity,
business and
insurer financial strength and debt
ratings.
We may experience
foreign currency exchange losses that
reduce our net income and capital levels.
Through our
international operations,
we conduct business
in a variety
of foreign
(non-U.S.) currencies,
principally
the
Canadian
dollar
and
the
Singapore
dollar.
Assets,
liabilities,
revenues
and
expenses
denominated
in
foreign
currencies
are
exposed
to
changes
in
currency
exchange
rates.
Our
reporting
currency
is
the
U.S.
dollar,
and
exchange
rate
fluctuations,
especially
relative
to
the
U.S.
dollar,
may
materially
impact
our
results
and
financial
position.
In
2022,
we
wrote
approximately
15.2%
of
our
coverages
in
non-U.S.
currencies;
as
of
December
31,
2022,
we
maintained
approximately
8.8%
of
our
investment
portfolio
in
investments
denominated
in
non-U.S.
currencies.
During
2022,
and
2020,
the
impact
on
our
quarterly
pre-tax
net
income
from
exchange
rate
fluctuations ranged from a loss
of $11 million to a gain of $11 million.
We are subject to cybersecurity risks
that could negatively impact our business operations.
We
are
dependent
upon
our
information
technology
platform,
including
our
processing
systems,
data
and
electronic transmissions
in our business operations.
Security breaches could expose
us to the loss or misuse
of our
information,
litigation
and
potential
liability.
In
addition,
cyber
incidents
that
impact
the
availability,
reliability,
speed,
accuracy
or
other
proper
functioning
of
these
systems
could
have
a
significant
negative
impact
on
our
operations
and
possibly
our
results.
An
incident
could
also
result
in
a
violation
of
applicable
privacy
and
other
laws, damage
our reputation,
cause a
loss of
customers
or give
rise to
monetary fines
and other
penalties, which
could be
significant.
Management is
not aware
of a
cybersecurity incident
that has
had a
material impact
on our
operations.
The
NAIC
has
adopted
an
Insurance
Data
Security
Model
Law,
which,
when
adopted
by
the
states
will
require
insurers, insurance
producers and other
entities required to
be licensed under state
insurance laws to
comply with
certain
requirements
under
state
insurance
laws,
such
as
developing
and
maintaining
a
written
information
security
program,
conducting
risk assessments
and overseeing
the data
security
practices
of third
-party
vendors.
In
addition,
certain
state
insurance
regulators
are
developing
or
have
developed
regulations
that
may
impose
regulatory
requirements
relating
to
cybersecurity
on
insurance
and
reinsurance
companies
(potentially
including
insurance and reinsurance
companies that are
not domiciled, but are
licensed, in the relevant
state).
For example,
the
New
York
State
Department
of Financial
Services
has
a
regulation
pertaining
to
cybersecurity
for
all
banking
and
insurance
entities
under
its
jurisdiction,
which
was
effective
as
of
March
1,
2017,
which
applies
to
us.
We
cannot
predict
the
impact
these
laws
and
regulations
will
have
on
our
business,
financial
condition
or
results
of
operations,
but our
insurance
and reinsurance
companies
could
incur additional
costs
resulting
from
compliance
with such laws and regulations.
RISKS RELATING TO
REGULATION
Insurance laws and regulations restrict our ability to
operate and any failure to comply with
those laws and
regulations could have a material adverse effect on our
business.
We
are
subject
to
extensive
and
increasing
regulation
under
U.S.,
state
and
foreign
insurance
laws.
These
laws
limit
the
amount
of
dividends
that
can
be
paid
to
us
by
our
operating
subsidiaries,
impose
restrictions
on
the
amount and
type of
investments
that we
can hold,
prescribe solvency,
accounting
and internal
control
standards
that
must
be
met
and
maintained
and
require
us
to
maintain
reserves.
These
laws
also
require
disclosure
of
material
inter-affiliate
transactions
and
require
prior
approval
of
“extraordinary”
transactions.
Such
“extraordinary”
transactions
include
declaring
dividends
from
operating
subsidiaries
that
exceed
statutory
thresholds.
These
laws
also
generally
require
approval
of
changes
of
control
of
insurance
companies.
The
application
of
these
laws
could
affect
our
liquidity
and
ability
to
pay
dividends,
interest
and
other
payments
on
securities,
as
applicable,
and could
restrict
our
ability
to
expand
our
business
operations
through
acquisitions
of
new insurance
subsidiaries.
We may
not have
or maintain
all required
licenses and approvals
or fully comply
with
the
wide
variety
of
applicable
laws
and
regulations
or
the
relevant
authority’s
interpretation
of
the
laws
and
regulations.
If we
do
not
have
the
requisite
licenses
and approvals
or
do
not comply
with
applicable
regulatory
requirements,
the
insurance
regulatory
authorities
could
preclude
or
temporarily
suspend
us
from
carrying
on
some or all
of our activities
or monetarily penalize
us.
These types of
actions could have
a material
adverse effect
on our business.
To date,
no material fine, penalty or restriction
has been imposed on us for failure
to comply with
any insurance law or regulation.
As
a
result
of
the
previous
dislocation
of
the
financial
markets,
Congress
and
the
previous
Presidential
administration
in
the
United
States
implemented
changes
in
the
way
the
financial
services
industry
is regulated.
Some of
these changes
are also
impacting the
insurance industry.
For example,
the U.S.
Treasury
established the
Federal
Insurance
Office
with
the authority
to
monitor
all aspects
of the
insurance
sector,
monitor
the extent
to
which
traditionally
underserved
communities
and
consumers
have
access
to
affordable
non-health
insurance
products,
to
represent
the
United
States
on
prudential
aspects
of international
insurance
matters,
to
assist
with
administration
of
the
Terrorism
Risk
Insurance
Program
and
to
advise
on
important
national
and
international
insurance
matters.
In
addition,
several
European
regulatory
bodies
are
in
process
of
updating
existing
or
developing
new
capital
adequacy
directives
for
insurers
and
reinsurers.
The
future
impact
of
such
initiatives
or
new
initiatives
from
the
current
Government
Administration,
if
any,
on
our
operation,
net
income
(loss)
or
financial condition cannot be determined at this
time.
RISK RELATING TO
OUR SECURITIES
Because of
our holding
company
structure, our
ability to
pay dividends,
interest
and principal
is dependent
on our
receipt of dividends, loan payments and other funds from our subsidiaries.
We are
a holding
company,
whose most
significant asset
consists
of the
stock of
our operating
subsidiaries.
As a
result,
our ability
to pay
dividends, interest
or other
payments
on our
securities in
the future
will depend
on the
earnings
and
cash
flows
of
the
operating
subsidiaries
and
the
ability
of
the
subsidiaries
to
pay
dividends
or
to
advance
or
repay
funds
to
us.
This
ability
is
subject
to
general
economic,
financial,
competitive,
regulatory
and
other factors beyond
our control. Payment
of dividends and advances
and repayments from
some of the operating
subsidiaries are
regulated by
U.S., state
and foreign
insurance laws
and regulatory
restrictions, including
minimum
solvency
and
liquidity
thresholds.
Accordingly,
the
operating
subsidiaries
may
not
be
able
to
pay
dividends
or
advance
or
repay
funds
to
us
in
the
future,
which
could
prevent
us
from
paying
dividends,
interest
or
other
payments on our securities.
RISK RELATING TO
TAXATION
If U.S. tax law changes, our net income
may be impacted.
The 2017 TCJA
addressed what
some members
of Congress
had expressed
concern about
for several
years, which
was
U.S.
corporations
moving
their
place
of
incorporation
to
low-tax
jurisdictions
to
obtain
a
competitive
advantage over
domestic corporations
that are subject to
the U.S. corporate
income tax rate
of 21%. Specifically,
it
addressed
their
concern
over
a
perceived
competitive
advantage
that
foreign-controlled
insurers
and
reinsurers
may
have
had
over
U.S.
controlled
insurers
and
reinsurers
resulting
from
the
purchase
of
reinsurance
by
U.S.
insurers
from
affiliates
operating
in
some
foreign
jurisdictions,
including
Bermuda.
Such
affiliated
reinsurance
transactions
may
subject
the
U.S.
ceding
companies
to
a Base
Erosion
and
Anti-abuse
Tax
(“BEAT”)
of 10%
from
2019 to 2025 and 12.5% thereafter
which may exceed its
regular income tax.
In addition, new legislation as well as
proposed and final regulations may
further limit the ability of the Company
to execute alternative
capital balancing
transactions with unrelated parties.
This would further impact our net income and effective
tax rate.
On August 16, 2022, the Inflation Reduction
Act of 2022 (“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.

---

ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
None.

---

ITEM 2. PROPERTIES
ITEM 2.
PROPERTIES
Everest
Re’s
corporate
offices are
located in
approximately
321,500 square
feet of
leased office
space in
Warren,
New Jersey.
The Company’s
other 18
locations
occupy a
total
of approximately
226,500 square
feet,
all of
which
are leased.

---

ITEM 3. LEGAL PROCEEDINGS
ITEM 3.
LEGAL PROCEEDINGS
In the ordinary
course of business,
the Company is
involved in
lawsuits, arbitrations
and other formal
and informal
dispute resolution
procedures,
the outcomes
of which
will determine
the Company’s
rights and
obligations
under
insurance
and
reinsurance
agreements.
In
some
disputes,
the
Company
seeks
to
enforce
its
rights
under
an
agreement or to
collect funds owing
to it.
In other matters,
the Company is
resisting attempts
by others to
collect
funds or
enforce
alleged rights.
These disputes
arise from
time to
time and
are ultimately
resolved through
both
informal
and
formal
means,
including
negotiated
resolution,
arbitration
and
litigation.
In
all
such
matters,
the
Company believes
that its positions
are legally and
commercially reasonable.
The Company
considers the
statuses
of these proceedings when determining its reserves
for unpaid loss and loss adjustment expenses.
Aside from litigation and arbitrations
related to these insurance and
reinsurance agreements,
the Company is not a
party to any other material litigation
or arbitration.

---

ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
PART II

---

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER
MATTERS AND
ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information
and Holder of Common Stock.
As of December 31, 2022, all of the Company’s
common stock was owned by Holdings
Ireland and was not publicly
traded.
Dividend History and Restrictions.
The Company did not pay any dividend
s
in 2022, 2021 and 2020.
The declaration and payment of future
dividends,
if
any,
by
the
Company
will
be
at
the
discretion
of
the
Board
of
Directors
and
will
depend
upon
many
factors,
including
the
Company’s
earnings,
financial
condition,
business needs
and growth
objectives,
capital
and surplus
requirements
of its
operating
subsidiaries,
regulatory
restrictions,
rating
agency considerations
and other
factors.
As an insurance holding
company,
the Company is dependent
on dividends and other permitted
payments from
its
subsidiaries to pay cash dividends
to its stockholder.
The payment of dividends to Holdings by Everest
Re is subject
to limitations
imposed by
Delaware law.
Generally,
Everest
Re may
only pay
dividends out
of its
statutory
earned
surplus,
which
was
$5.6
billion
at
December
31,
2022,
and
only
after
it
has
given
days
prior
notice
to
the
Delaware
Insurance
Commissioner.
During this
10-day
period, the
Commissioner may,
by order,
limit or
disallow
the payment
of ordinary
dividends if
the Commissioner
finds the
insurer to
be presently
or potentially
in financial
distress. Further,
the maximum amount
of dividends
that may
be paid without
the prior approval
of the Delaware
Insurance Commissioner in any twelve
month period is the greater of (1)
10% of an insurer’s statutory
surplus as of
the end of the
prior calendar year
or (2) the insurer’s
statutory net
income, not including
realized capital
gains, for
the prior calendar year.
The maximum amount
that is available
for the payment
of dividends by Everest
Re in 2023
without prior regulatory approval
is $555 million.
Recent Sales of Unregistered
Securities.
None.

---

ITEM 6. SELECTED FINANCIAL DATA
ITEM 6.
SELECTED FINANCIAL DATA
Information for Item 6 is not
required pursuant to General
Instruction I(2) of Form 10-K.

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7.
MANAGEMENT’S
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND
RESULTS
OF
OPERATION
The following
is a
discussion and
analysis of
our results
of operations
and financial
condition.
It should
be read
in
conjunction with the Consolidated
Financial Statements
and accompanying notes
thereto presented
under ITEM 8,
“Financial Statements and Supplementary
Data”.
Industry Conditions.
The
worldwide
reinsurance
and
insurance
businesses
are
highly
competitive,
as
well
as
cyclical
by
product
and
market.
As
such,
financial
results
tend
to
fluctuate
with
periods
of
constrained
availability,
higher
rates
and
stronger
profits followed
by periods
of abundant
capacity,
lower rates
and constrained
profitability.
Competition
in
the
types
of
reinsurance
and
insurance
business
that
we
underwrite
is
based
on
many
factors,
including
the
perceived
overall
financial
strength
of
the
reinsurer
or
insurer,
ratings
of
the
reinsurer
or
insurer
by
A.M.
Best
and/or
Standard
&
Poor’s,
underwriting
expertise,
the
jurisdictions
where
the
reinsurer
or
insurer
is
licensed
or
otherwise
authorized,
capacity
and
coverages
offered,
premiums
charged,
other
terms
and
conditions
of
the
reinsurance
and
insurance
business
offered,
services
offered,
speed
of
claims
payment
and
reputation
and
experience in lines written.
Furthermore, the market impact
from these competitive factors
related to reinsurance
and
insurance
is
generally
not
consistent
across
lines
of business,
domestic
and
international
geographical
areas
and distribution channels.
We
compete
in the
U.S. and
international
reinsurance
and insurance
markets
with numerous
global competitors.
Our
competitors
include
independent
reinsurance
and
insurance
companies,
subsidiaries
or
affiliates
of
established
worldwide
insurance
companies,
reinsurance
departments
of certain
insurance
companies,
domestic
and
international
underwriting
operations,
and
certain
government
sponsored
risk
transfer
vehicles.
Some
of
these
competitors
have
greater
financial
resources
than
we
do
and
have
established
long-term
and
continuing
business relationships,
which can be a
significant competitive
advantage.
In addition, the lack
of strong barriers
to
entry
into
the
reinsurance
business
and
the
securitization
of
reinsurance
and
insurance
risks
through
capital
markets provide additional
sources of potential reinsurance
and insurance capacity and competition.
Worldwide
insurance
and
reinsurance
market
conditions
historically
have
been
competitive.
Generally,
there
is
ample
insurance
and
reinsurance
capacity
relative
to
demand,
as
well
as,
additional
capital
from
the
capital
markets through
insurance linked
financial instruments.
These financial instruments
such as side cars,
catastrophe
bonds and collateralized
reinsurance funds,
provided capital
markets with
access to insurance
and reinsurance
risk
exposure.
The capital
markets
demand for
these products
is primarily
driven by
the desire
to achieve
greater
risk
diversification
and
potentially
higher
returns
on
their
investments.
This
competition
generally
has
a
negative
impact
on
rates,
terms
and
conditions;
however,
the
impact
varies
widely
by
market
and
coverage.
Based
on
recent
competitive
behaviors
in
the
insurance
and
reinsurance
industry,
natural
catastrophe
events
and
the
macroeconomic
backdrop,
there
has
been
some
dislocation
in
the
market
which
we
expect
to
have
a
positive
impact on rates and terms and conditions
generally,
though local market specificities can
vary.
The increased frequency of
catastrophe
losses experienced throughout
2022 appears to be pressuring
the increase
of
rates.
As
business
activity
continues
to
regain
strength
after
the
pandemic
and
current
macroeconomic
uncertainty,
rates
also
appear
to
be
firming
in
most
lines
of
business,
particularly
in
the
casualty
lines
that
had
seen
significant
losses
such
as
excess
casualty
and
directors’
and
officers’
liability.
Other
casualty
lines
are
experiencing
modest
rate
increase,
while
some
lines
such
as
workers’
compensation
were
experiencing
softer
market
conditions.
It
is
too
early
to
tell
what
the
impact
on
pricing
conditions
will
be
but
it
is
likely
to
change
depending on the line of business and geography.
Our capital
position remains
a source
of strength,
with high
quality invested
assets, significant
liquidity and
a low
operating expense
ratio. Our diversified
global platform
with its broad mix
of products, distribution
and geography
is resilient.
The war
in the
Ukraine
is ongoing
and an
evolving
event.
Economic
and legal
sanctions
have
been levied
against
Russia, specific named individuals
and entities connected
to the Russian government,
as well as businesses
located
in the
Russian Federation
and/or owned
by Russian
nationals by
numerous countries,
including the
United States.
The
significant
political
and
economic
uncertainty
surrounding
the
war
and
associated
sanctions
have
impacted
economic
and
investment
markets
both
within
Russia
and
around
the
world.
The
Company
has
recorded
$25
million of losses related to the Ukraine
/Russia war during 2022.
Financial Summary.
We
monitor
and
evaluate
our
overall
performance
based
upon
financial
results.
The
following
table
displays
a
summary of the consolidated net income (loss), ratios
and stockholder’s equity for
the periods indicated:
Years Ended December 31,
Percentage Increase/(Decrease)
(Dollars in millions)
2022/2021
2021/2020
Gross written premiums
$
9,677
$
9,331
$
7,957
3.7%
17.3%
Net written premiums
8,032
7,719
6,639
4.0%
16.3%
REVENUES:
Premiums earned
$
7,876
$
7,179
$
6,407
9.7%
12.1%
Net investment income
-14.3%
98.2%
Net gains (losses) on investments
(982)
NM
NM
Other income (expense)
(6)
(15)
-123.7%
NM
Total revenues
7,526
8,448
6,818
-10.9%
23.9%
CLAIMS AND EXPENSES:
Incurred losses and loss adjustment expenses
5,823
5,387
4,608
8.1%
16.9%
Commission, brokerage, taxes and fees
1,632
1,513
1,373
7.9%
10.1%
Other underwriting expenses
10.5%
13.2%
Corporate expense
-22.9%
108.5%
Interest, fee and bond issue cost amortization
expense
44.3%
96.2%
Total claims and expenses
8,083
7,457
6,434
8.4%
15.9%
INCOME (LOSS) BEFORE TAXES
(557)
-156.1%
158.5%
Income tax expense (benefit)
(112)
-158.4%
NM
NET INCOME (LOSS)
$
(445)
$
$
-155.6%
127.3%
RATIOS:
Point Change
Loss ratio
73.9%
75.0%
71.9%
(1.1)
3.1
Commission and brokerage ratio
20.7%
21.1%
21.4%
(0.4)
(0.3)
Other underwriting expense ratio
6.4%
6.3%
6.3%
0.1
-
Combined ratio
101.0%
102.4%
99.6%
(1.4)
2.8
At December 31,
Percentage Increase/ (Decrease)
(Dollars in millions)
2022/2021
2021/2020
Balance sheet data:
Total investments and cash
$
19,195
$
19,719
$
15,910
-2.7%
23.9%
Total assets
27,957
27,695
23,640
0.9%
17.2%
Loss and loss adjustment expense reserves
14,977
13,121
11,578
14.1%
13.3%
Total debt
3,084
3,089
1,910
-0.2%
61.7%
Total liabilities
22,303
20,657
17,226
8.0%
19.9%
Stockholder's equity
5,654
7,038
6,414
-19.7%
9.7%
(Some amounts may not reconcile due
to rounding)
(NM, not meaningful)
Revenues.
Premiums.
Gross
written
premiums
increased
by
3.7% to
$9.7 billion
in
2022, compared
to
$9.3 billion
in
2021,
reflecting a $426
million, or 12.9%,
increase in our
insurance business
and an $81 million,
or 1.3%, decrease
in our
reinsurance
business.
The
increase
in
insurance
premiums
reflects
growth
across
most
lines
of
business,
particularly
specialty
casualty
business
and
property/short
tail
business,
driven
by
positive
rate
and
exposure
increases, new business
and strong renewal
retention.
The decrease in reinsurance
premiums was mainly due
to a
decline in property pro
rata business. Net
written premiums increased
by 4.0% to $8.0 billion in 2022,
compared to
$7.7 billion in
2021 which is
consistent
with the change
in gross
written premiums.
Premiums
earned increased by
9.7%
to
$7.9
billion
in
2022,
compared
to
$7.2
billion
in
2021.
The
change
in
premiums
earned
relative
to
net
written premiums
is the
result of
timing; premiums
are earned
ratably
over the
coverage
period whereas
written
premiums are recorded at the
initiation of the coverage period.
Other Income
(Expense).
We
recorded
other expense
of $6
million and
other income
of $23
million in
2022 and
2021, respectively.
The changes were primarily the result of fluctuations
in foreign currency exchange
rates.
Claims and Expenses.
Incurred
Losses
and
Loss
Adjustment
Expenses.
The
following
table
presents
our
incurred
losses
and
loss
adjustment expenses (“LAE”) for
the periods indicated.
Total
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
Attritional (a)
$
4,828
61.3%
$
0.1%
$
4,839
61.4%
Catastrophes
12.5%
(4)
-%
12.5%
Total
$
5,815
73.8%
$
0.1%
$
5,823
73.9%
Attritional (a)
$
4,439
61.8%
$
0.1%
$
4,447
61.9%
Catastrophes
13.1%
(3)
0.0%
13.1%
Total
$
5,382
74.9%
$
0.1%
$
5,387
75.0%
Attritional (a)
$
3,997
62.4%
$
3.3%
$
4,211
65.7%
Catastrophes
6.4%
(13)
-0.2%
6.2%
Total
$
4,408
68.8%
$
3.1%
$
4,608
71.9%
Variance 2022/2021
Attritional (a)
$
(0.5)
pts
$
-
pts
$
(0.5)
pts
Catastrophes
(0.6)
pts
(1)
-
pts
(0.6)
pts
Total
$
(1.1)
pts
$
-
pts
$
(1.1)
pts
Variance 2021/2020
Attritional (a)
$
(0.6)
pts
$
(206)
(3.2)
pts
$
(3.8)
pts
Catastrophes
6.7
pts
0.2
pts
6.9
pts
Total
$
6.1
pts
$
(195)
(3.0)
pts
$
3.1
pts
(a)
Attritional losses exclude catastrophe
losses.
(Some amounts may not reconcile due
to rounding.)
Incurred losses and LAE
increased by 8.1% to $5.8
billion in 2022 compared
to $5.4 billion in 2021,
primarily due to
an
increase
of
$389
million
in
current
year
attritional
losses
and
an
increase
of
$44
million
in
current
year
catastrophe
losses.
The increase
in current
year attritional
losses was
mainly related
to the
impact of the
increase
in premiums earned
and $25 million
of attritional losses
incurred due to
the Ukraine/Russia
war.
The current year
catastrophe
losses
of
$987
million
in
related
primarily
to
Hurricane
Ian
($768
million),
the
Australia
floods ($75 million),
the 2022 South
Africa flood ($43
million), Hurricane
Fiona ($27 million),
and the 2022
Canada
derecho ($20 million), with
the remaining losses resulting
from various storm
events.
The current year
catastrophe
losses
of
$943
million
in
primarily
related
to
Hurricane
Ida
($423
million),
the
Texas
winter
storms
($288
million), the
European floods
($108 million),
the Canada
drought loss
($80 million)
and the
Quad State
Tornadoes
($42 million), with the rest of the losses emanating
from the 2021 Australia floods.
Commission, Brokerage,
Taxes
and Fees.
Commission, brokerage,
taxes
and fees
increased to
$1.6 billion
in 2022
compared to $1.5 billion
in 2021. The increase was mainly
due to increases in premiums
earned and changes in the
mix of business.
Other Underwriting Expenses.
Other underwriting expenses
were $501 million and
$454 million in 2022
and 2021,
respectively.
The
increase
in
other
underwriting
expenses
was
mainly
due
to
the
continued
build
out
of
our
insurance operations, including an
expansion of the international insurance
platform.
Corporate
Expenses.
Corporate
expenses,
which
are
general
operating
expenses
that
are
not
allocated
to
segments,
were
$26 million
and
$33 million
for
the years
ended December
31,
2022 and
2021, respectively.
The
decrease from 2021 to 2022 was mainly due
to a decrease in variable incentive compensation.
Interest,
Fees
and
Bond
Issue
Cost
Amortization
Expense.
Interest,
fees
and
other
bond
amortization
expense
were $101
million and
$70 million
in 2022
and 2021,
respectively.
The increase
in interest
expense was
primarily
due
to
the
issuance
of
$1.0
billion
of
senior
notes
in
October
2021.
Interest
expense
was
also
impacted
by
the
movements
in the
floating interest
rate
related
to the
long-term subordinated
notes, which
is reset
quarterly per
the note agreement.
The floating rate
was 6.99% as
of December 31, 2022
compared to 2.54%
as of December 31,
2021.
Income Tax
Expense (Benefit).
The Company had
an income tax
benefit of $112
million and income
tax expense
of
$192
million
in
and
2021,
respectively.
Variations
in
income
taxes
generally
result
from
changes
in
the
relative levels
of pre-tax
income, including
the impact
of catastrophe
losses and
net gains
(losses) on
investments
as
well
as
changes
in
tax
exempt
investment
income
and
creditable
foreign
taxes.
The
change
from
income
tax
expense to income
tax benefit
resulted primarily from
increased fair
value and capital
losses as well as
an increase
in catastrophe losses.
The Coronavirus
Aid, Relief,
and Economic
Security (“CARES”)
Act, enacted
on March
27, 2020,
provided that
U.S.
companies could
carryback for
five years
net operating
losses incurred
in 2018,
2019 and/or
2020. This
beneficial
tax provision
in the CARES
Act enabled the
Company to
carryback its
significant 2018
net operating
losses to
prior
tax years
with higher effective
tax rates
of 35% versus
21% in 2018
and later
years.
As a result,
the Company
was
able to
record a
net income
tax benefit
from the
five-year
carryback of
$33 million
and obtain
federal income
tax
cash refunds of $183 million including interest
in 2020.
On August 16, 2022, the Inflation Reduction
Act of 2022 (“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.
Net Income (Loss).
Our net
loss
was
$445 million
and
net income
was
$800
million in
and 20
21, respectively
.
The change
was
primarily driven by the consolidated investment
results explained below.
Ratios.
Our
combined
ratio
decreased
by
1.4
points
to
101.0%
in
compared
to
102.4%
in
2021.
The
loss
ratio
component decreased by 1.1 points
in 2022 over the same period last year.
The decline in the ratio was mainly due
to lower loss experience.
Although both current
year attritional and
current year catastrophe
losses were higher in
than
2021,
the
rate
of
increase
in
the
current
year
losses
was
lower
than
the
rate
of
increase
in
earned
premiums
resulting
in
a
reduction
of
the
overall
loss
ratio.
The
commission
and
brokerage
ratio
component
decreased
to
20.7% in
compared
to
21.1% in
2021,
reflecting
changes
in
affiliated
reinsurance
agreements
and changes
in the
mix of
business. The
other underwriting
expense ratio
slightly increased
to 6.4%
in 2022
from
6.3% in 2021. The increase was mainly due to higher insurance
operations costs.
Stockholder's Equity.
Stockholder’s
equity decreased
by $1.4
billion to
$5.7 billion at
December 31, 2022
from $7.0
billion at
December
31,
2021,
principally
as
a
result
of
$445
million
of
net
loss,
$938
million
of
net
unrealized
depreciation
on
investments,
net
of
tax
and
$18
million
of
net
foreign
currency
translation
adjustments,
partially
offset
by
$17
million of net benefit plan obligation adjustments
.
Consolidated Investment
Results
Net Investment Income.
Net
investment
income
decreased
by
14.3%
to
$638
million
in
compared
to
$745
million
in
2021.
The
decrease was
primarily the
result of
a decline
of $249
million in
limited partnership
income, partially
offset by
an
additional
$166
million
of
income
from
fixed
maturity
investments.
The
limited
partnership
income
primarily
reflects
decreases
in
their
reported
net
asset
values.
As
such,
until
these
asset
values
are
monetized
and
the
resultant income is
distributed, they
are subject to future
increases or decreases
in the asset value,
and the results
may be volatile.
The following table shows the components
of net investment income for
the periods indicated:
Years Ended December 31,
(Dollars in millions)
Fixed maturities
$
$
$
Equity securities
Short-term investments and cash
Other invested assets
Limited partnerships
Dividends from preferred shares of affiliate
Other
Gross investment income before adjustments
Funds held interest income (expense)
Interest income from Parent
Gross investment income
Investment expenses
(52)
(43)
(36)
Net investment income
$
$
$
(Some amounts may not reconcile due
to rounding.)
The following table shows
a comparison of various investment
yields for the periods indicated:
Annualized pre-tax yield on average cash and invested assets
3.3
%
4.4
%
2.8
%
Annualized after-tax yield on average cash and invested assets
2.6
%
3.5
%
2.3
%
Net Gains (Losses) on Investments.
The following table presents the composition
of our net gains (losses) on investments
for the periods indicated:
Years Ended December 31,
2022/2021
2021/2020
(Dollars in millions)
Variance
Variance
Realized gains (losses) from dispositions:
Fixed maturity securities, available
for sale
Gains
$
$
$
$
(24)
$
Losses
(88)
(25)
(60)
(63)
Total
(79)
(36)
(87)
Equity securities
Gains
Losses
(48)
(15)
(45)
(33)
Total
(8)
Other invested assets
Gains
Losses
(5)
(4)
(6)
(1)
Total
Short Term Investments:
Gains
-
-
-
(1)
Losses
-
-
-
-
-
Total
-
-
-
(1)
Total net realized
gains (losses) from dispositions
Gains
Losses
(141)
(43)
(111)
(98)
Total
(41)
Allowances for credit losses:
(27)
(26)
(2)
(1)
(24)
Gains (losses) from fair value adjustments:
Fixed maturities
-
-
-
(2)
Equity securities
(447)
(701)
(22)
Other invested assets
(559)
(186)
(793)
Total
(1,006)
(1,494)
Total net gains
(losses) on investments
$
(982)
$
$
$
(1,483)
$
(Some amounts may not reconcile due to rounding.)
Net gains
(losses) on
investments
during 2022
primarily relate
to net
losses from
fair value
adjustments
on equity
securities of
$447 million
as a
result of
equity market
declines
in 2022,
net losses
of $559
million from
fair value
adjustments
on other
invested
assets, $51
million of
net
realized
gains
from
disposition
of
investments
and
$27
million
of
credit
allowances
on
fixed
maturity securities.
Segment Results.
The Company
manages its
reinsurance
and insurance
operations
as autonomous
units and
key
strategic
decisions
are based on the aggregate operating
results and projections for these segments
of business.
The
Reinsurance
operation
writes
risks
on
a
worldwide
basis
in
property
and
casualty
reinsurance
and
specialty
lines of business, on both a treaty and facultative
basis, through reinsurance brokers,
as well as directly with ceding
companies.
Business
is
written
in
the
United
States
as
well as
through
branches
in
Canada
and
Singapore.
The
Insurance operation
writes property and
casualty insurance directly
and through brokers,
surplus lines brokers
and
general agents within the United States.
These segments
are
managed
independently,
but conform
with corporate
guidelines
with respect
to
pricing, risk
management,
control
of
aggregate
catastrophe
exposures,
capital,
investments
and
support
operations.
Management generally monitors
and evaluates the financial performance
of these operating segments
based upon
their underwriting results.
Underwriting
results
include
earned
premium
less
losses
and
LAE
incurred,
commission
and
brokerage
expenses
and other underwriting expenses.
We measure our underwriting results
using ratios, in particular loss, commission
and brokerage
and other underwriting
expense ratios,
which respectively,
divide incurred
losses, commissions
and
brokerage and other
underwriting expenses by premiums earned.
The
Company
does
not
maintain
separate
balance
sheet
data
for
its
operating
segments.
Accordingly,
the
Company
does not
review and
evaluate
the financial
results
of its
operating
segments based
upon balance
sheet
data.
Our
loss
and
LAE
reserves
are
management’s
best
estimate
of
our
ultimate
liability
for
unpaid
claims.
We
re-
evaluate
our
estimates
on
an
ongoing
basis,
including
all
prior
period
reserves,
taking
into
consideration
all
available
information
and,
in
particular,
recently
reported
loss
claim
experience
and
trends
related
to
prior
periods.
Such
re-evaluations
are
recorded
in
incurred
losses
in
the
period
in
which
the
re-evaluation
is
made.
Management’s
best
estimate
is
developed
through
collaboration
with
actuarial,
underwriting,
claims,
legal
and
finance
departments
and
culminates
with
the
input
of
reserve
committees.
Each
segment
reserve
committee
includes the
participation of
the relevant
parties from
actuarial, finance,
claims and
segment senior
management
and
has
the
responsibility
for
recommending
and
approving
management’s
best
estimate.
Reserves
are
further
reviewed
by
Everest’s
Chief
Reserving
Actuary
and
senior
management.
The
objective
of
such
process
is
to
determine a single best estimate
viewed by management to be the best
estimate of its ultimate loss liability.
The following discusses the underwriting results for
each of our segments for the periods indicated:
Reinsurance.
The
following
table
presents
the
underwriting
results
and
ratios
for
the
Reinsurance
segment
for
the
periods
indicated.
Years Ended December 31,
2022/2021
2021/2020
(Dollars in millions)
Variance
% Change
Variance
% Change
Gross written premiums
$
5,948
$
6,028
$
5,266
$
(80)
(1.3)%
$
14.5%
Net written premiums
5,269
5,265
4,632
0.1%
13.7%
Premiums earned
$
5,212
$
4,949
$
4,485
$
5.3%
$
10.3%
Incurred losses and LAE
3,957
3,761
3,209
5.2%
17.2%
Commission and brokerage
1,326
1,250
1,120
6.1%
11.6%
Other underwriting expenses
(4)
(3.1)%
19.9%
Underwriting gain (loss)
$
(210)
$
(206)
$
$
(5)
2.2%
$
(242)
NM
Point Chg
Point Chg
Loss ratio
75.9%
76.0%
71.6%
(0.1)
4.4
Commission and brokerage ratio
25.4%
25.3%
25.0%
0.1
0.3
Other underwriting expense
ratio
2.7%
2.9%
2.6%
(0.2)
0.3
Combined ratio
104.0%
104.2%
99.2%
(0.2)
5.0
(Some amounts may not reconcile due
to rounding)
Premiums.
Gross written
premiums decreased
by 1.3%
to $5.9
billion in
2022 from
$6.0 billion
in 2021,
primarily
due
to
a
decline
in
property
pro
rata
business.
Net
written
premiums
remained
flat
at
$5.3
billion
in
and
2021. The
difference
in the
percentage
change in
gross written
premiums compared
to the
percentage
change in
net
written
premiums
was
primarily
due
to
the
reduction
in
business
ceded
to
the
segregated
accounts
of
Mt.
Logan
Re
during
compared
to
2021.
Premiums
earned
increased
5.3%
to
$5.2
billion
in
compared
to
$4.9
billion
in
2021.
The
change
in
premiums
earned
relative
to
net
written
premiums
is
the
result
of
timing;
premiums are earned
ratably over
the coverage period
whereas written premiums
are recorded
at the initiation of
the coverage period.
Incurred Losses and LAE.
The following table presents
the incurred losses and LAE for the
Reinsurance segment for
the periods indicated.
Years Ended December 31,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
Attritional
$
3,115
59.8%
$
(26)
(0.5)%
$
3,089
59.3%
Catastrophes
16.7%
(3)
(0.1)%
16.6%
Total segment
$
3,985
76.5%
$
(29)
(0.6)%
$
3,957
75.9%
Attritional
$
3,004
60.7%
$
(32)
(0.6)%
$
2,972
60.1%
Catastrophes
16.0%
(3)
(0.1)%
15.9%
Total segment
$
3,796
76.7%
$
(35)
(0.7)%
$
3,761
76.0%
Attritional
$
2,692
60.0%
$
4.2%
$
2,880
64.2%
Catastrophes
7.6%
(13)
(0.3)%
7.4%
Total segment
$
3,035
67.7%
$
3.9%
$
3,209
71.6%
Variance 2022/2021
Attritional
$
(0.9)
pts
$
0.1
pts
$
(0.8)
pts
Catastrophes
0.7
pts
-
-
pts
0.7
pts
Total segment
$
(0.2)
pts
$
0.1
pts
$
(0.1)
pts
Variance 2021/2020
Attritional
$
0.7
pts
$
(219)
(4.8)
pts
$
(4.1)
pts
Catastrophes
8.4
pts
0.2
pts
8.5
pts
Total segment
$
9.0
pts
$
(209)
(4.6)
pts
$
4.4
pts
(Some amounts may not reconcile due
to rounding.)
Incurred
losses
increased
by
5.2%
to
$4.0
billion
in
compared
to
$3.8
billion
in
2021.
The
increase
was
primarily
due
to
an
increase
of
$111
million
in
current
year
attritional
losses
and
an
increase
of
$78
million
in
current year
catastrophe
losses. The
increase in
current year
attritional losses
was primarily
related to
the impact
of the
increase
in premiums
earned and
$25 million
of attritional
losses
incurred due
to the
Ukraine/Russia
war.
The current
year catastrophe
losses of
$870 million
in 2022
related
primarily to
Hurricane
Ian ($669
million), the
2022 Australia floods ($75 million), the 2022
South Africa flood ($43 million), Hurricane Fiona
($24 million), and the
Canada
derecho
($20
million),
with
the
remaining
losses
resulting
from
various
storm
events.
The
current
year catastr
ophe losses
of $792
million in
2021 primarily
related to
Hurricane Ida
($345 million),
the Texas
winter
storms
($231
million),
the
European
floods
($108
million),
the
Canada
drought
loss
($80
million)
and
the
Quad
State Tornadoes
($27 million), with the rest of the losses emanating
from the 2021 Australia floods.
Segment
Expenses.
Commission
and
brokerage
increased
to
$1.33
billion
in
compared
to
$1.25
billion
in
2021. The increase
was due
to the impact
of the increase
in premiums earned
and changes in
the mix of
business.
Segment other underwriting expenses decreased
slightly to $139 million in 2022 from $143 million in 2021.
Insurance.
The
following
table
presents
the
underwriting
results
and
ratios
for
the
Insurance
segment
for
the
periods
indicated.
Years Ended December 31,
2022/2021
2021/2020
(Dollars in millions)
Variance
% Change
Variance
% Change
Gross written premiums
$
3,729
$
3,303
$
2,691
$
12.9%
$
22.7%
Net written premiums
2,763
2,455
2,006
12.5%
22.3%
Premiums earned
$
2,664
$
2,230
$
1,922
$
19.5%
$
16.0%
Incurred losses and LAE
1,865
1,626
1,399
14.7%
16.2%
Commission and brokerage
16.8%
3.6%
Other underwriting expenses
16.7%
10.4%
Underwriting gain (loss)
$
$
$
(12)
$
NM
$
NM
Point Chg
Point Chg
Loss ratio
70.0%
72.9%
72.8%
(2.9)
0.1
Commission and brokerage ratio
11.5%
11.8%
13.2%
(0.3)
(1.4)
Other underwriting expense
ratio
13.6%
13.9%
14.6%
(0.3)
(0.7)
Combined ratio
95.1%
98.6%
100.6%
(3.5)
(2.0)
(Some amounts may not reconcile due
to rounding)
(NM, not meaningful)
Premiums.
Gross
written
premiums
increased
by 12.9%
to
$3.7 billion
in 2022
compared
to $3.3
billion in
2021.
The
increase
in
insurance
premiums
reflects
growth
across
most
lines
of business,
particularly
specialty
casualty
business and property/short
tail business, driven
by positive rate
and exposure increases,
new business and strong
renewal
retention.
Net written
premiums
increased
by
12.5% to
$2.8 billion
in 2022
compared
to
$2.5 billion
in
which
is
consistent
with
the
change
in
gross
written
premiums.
Premiums
earned
increased
19.5%
to
$2.7
billion in 2022
compared to
$2.2 billion in
2021. The change
in premiums
earned is the
result of timing;
premiums
are
earned
ratably
over
the
coverage
period
whereas
written
premiums
are
recorded
at
the
initiation
of
the
coverage period.
Incurred Losses
and LAE.
The following
table presents
the incurred
losses and
LAE for
the Insurance
segment for
the periods indicated.
Years Ended December 31,
Current
Ratio %/
Prior
Ratio %/
Total
Ratio %/
(Dollars in millions)
Year
Pt Change
Years
Pt Change
Incurred
Pt Change
Attritional
$
1,712
64.3%
$
1.4%
$
1,749
65.7%
Catastrophes
4.4%
(1)
-%
4.4%
Total segment
$
1,829
68.7%
$
1.4%
$
1,865
70.0%
Attritional
$
1,435
64.4%
$
1.8%
$
1,475
66.1%
Catastrophes
6.8%
-
-%
6.8%
Total segment
$
1,586
71.1%
$
1.8%
$
1,626
72.9%
Attritional
$
1,305
67.9%
$
1.4%
$
1,331
69.3%
Catastrophes
3.5%
-
-%
3.5%
Total segment
$
1,373
71.4%
$
1.3%
$
1,399
72.8%
Variance 2022/2021
Attritional
$
(0.1)
pts
$
(3)
(0.4)
pts
$
(0.4)
pts
Catastrophes
(34)
(2.4)
pts
(1)
-
pts
(35)
(2.4)
pts
Total segment
$
(2.4)
pts
$
(4)
(0.4)
pts
$
(2.9)
pts
Variance 2021/2020
Attritional
$
(3.5)
pts
$
0.4
pts
$
(3.2)
pts
Catastrophes
3.3
pts
-
-
pts
3.3
pts
Total segment
$
(0.3)
pts
$
0.5
pts
$
0.1
pts
(Some amounts may not reconcile due
to rounding.)
Incurred losses
and LAE increased
by 14.7% to
$1.9 billion in
2022 compared
to $1.6 billion
in 2021, mainly
due to
an increase of
$277 million of
current year
attritional losses,
partially offset by
a decrease of $34
million in current
year catastrophe losses
.
The rise in current year attritional losses
was primarily due to the impact of the increase in
premiums
earned. The
current
year
catastrophe
losses of
$117 million
in 2022
related
primarily to
Hurricane Ian
($99
million),
with
the
remaining
losses
resulting
from
various
storm
events.
The
$151
million
of
current
year
catastrophe
losses in
2021, primarily
related
to Hurricane
Ida ($78
million), the
Texas
winter storms
($58 million)
and the Quad State Tornadoes
($15 million).
Segment
Expenses.
Commission
and
brokerage
increased
to
$306
million
in
compared
to
$262
million
in
2021. Segment
other underwriting
expenses increased
to $363
million in
2022 compared
to $311
million in
2021.
The
increases
were
mainly
due
to
the
impact
of
the
increases
in
premiums
earned
and
expenses
related
to
the
continued build out of the insurance business.
SAFE HARBOR DISCLOSURE
This report
contains forward
-looking statements
within the meaning
of the U.S.
federal securities
laws. We
intend
these forward
-looking statements
to
be covered
by
the safe
harbor
provisions
for
forward-looking
statements
in
the federal securities
laws.
In some cases, these
statements can
be identified by the
use of forward-looking
words
such
as
“may”,
“will”,
“should”,
“could”,
“anticipate”,
“estimate”,
“expect”,
“plan”,
“believe”,
“predict”,
“potential”
and “intend”.
Forward-looking
statements
contained
in
this report
include
information
regarding
our
reserves
for
losses
and
LAE,
the
impact
of
the
TCJA,
the
adequacy
of
our
provision
for
uncollectible
balances,
estimates
of
our
catastrophe
exposure,
the
effects
of
catastrophic
and
pandemic
events
on
our
financial
statements
and
the
ability
of
our
subsidiaries
to
pay
dividends.
Forward-looking
statements
only
reflect
our
expectations
and
are
not
guarantees
of
performance.
These
statements
involve
risks,
uncertainties
and
assumptions.
Actual events
or results
may
differ
materially
from our
expectations.
Important
factors
that could
cause our
actual events
or results
to be
materially different
from our
expectations
include those
discussed under
the caption
ITEM 1A, “Risk
Factors”.
We undertake
no obligation
to update
or revise
publicly any
forward-looking
statements, whether as a result
of new information, future events
or otherwise.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
Market Sensitive Instruments.
The
SEC’s
Financial
Reporting
Release
#48
requires
registrants
to
clarify
and
expand
upon
the
existing
financial
statement
disclosure
requirements
for
derivative
financial
instruments,
derivative
commodity
instruments
and
other financial
instruments
(collectively,
“market
sensitive
instruments”).
We
do not
generally
enter into
market
sensitive instruments for trading
purposes.
Our
current
investment
strategy
seeks
to
maximize
after-tax
income
through
a
high
quality,
diversified,
fixed
maturity
portfolio,
while
maintaining
an
adequate
level
of
liquidity.
Our
mix
of
taxable
and
tax-preferenced
investments
is
adjusted
periodically,
consistent
with
our
current
and
projected
operating
results,
market
conditions
and
our
tax
position.
The
fixed
maturity
securities
in
the
investment
portfolio
are
comprised
of
non-
trading securities. Additionally,
we have invested
in equity securities.
The overall investment
strategy considers
the scope of present
and anticipated Company
operations.
In particular,
estimates of
the financial
impact resulting
from non-investment
asset and
liability transactions,
together with
our
capital
structure
and
other
factors,
are
used
to
develop
a
net
liability
analysis.
This
analysis
includes
estimated
payout characteristics
for which
our investments
provide liquidity.
This analysis
is considered
in the
development
of
specific
investment
strategies
for
asset
allocation,
duration
and
credit
quality.
The
change
in
overall
market
sensitive risk exposure principally reflects
the asset changes that took place during the period.
Interest
Rate Risk.
Our $19.2
billion investment
portfolio,
at December 31,
2022, is
principally comprised
of fixed
maturity securities,
which are
generally subject
to interest
rate risk
and some
foreign currency
exchange
rate risk,
and some equity securities, which are subject to price fluctuations
and some foreign exchange
rate risk. The overall
economic impact
of the foreign
exchange risks
on the investment
portfolio is
partially mitigated
by changes
in the
dollar value of foreign currency
denominated liabilities and their associated
income statement impact.
Interest
rate
risk
is
the
potential
change
in
value
of
the
fixed
maturity
securities
portfolio,
including
short-term
investments,
from
a
change
in
market
interest
rates.
In
a
declining
interest
rate
environment,
it
includes
prepayment
risk
on
the
$2.1
billion
of
mortgage-backed
securities
in
the
$13.5
billion
fixed
maturity
portfolio.
Prepayment
risk results
from potential
accelerated
principal
payments
that shorten
the average
life and
thus the
expected yield of the security.
The
table
below
displays
the
potential
impact
of
fair
value
fluctuations
and
after-tax
unrealized
appreciation
on
our fixed
maturity
portfolio
(including
$812 million
of short
-term investments)
for
the period
indicated
based
on
upward
and
downward
parallel
and
immediate
and
200 basis
point
shifts
in
interest
rates.
For
legal
entities
with
a
U.S.
dollar
functional
currency,
this
modeling
was
performed
on
each
security
individually.
To
generate
appropriate
price
estimate
on
mortgage-backed
securities,
changes
in
prepayment
expectations
under
different
interest rate
environments were
taken into
account. For
legal entities with
non-U.S. dollar functional
currency,
the
effective
duration
of the
involved
portfolio
of securities
was
used as
a proxy
for
the fair
value
change
under the
various interest rate
change scenarios.
Impact of Interest Rate Shift in Basis Points
At December 31, 2022
(Dollars in millions)
O
Total Fair Value
$
15,057
$
14,676
$
14,294
$
13,912
$
13,531
Fair Value Change from Base (%)
5.3
%
2.7
%
-
%
-2.7
%
-5.3
%
Change in Unrealized Appreciation
After-tax from Base ($)
$
$
$
-
$
(302)
$
(603)
Impact of Interest Rate Shift in Basis Points
At December 31, 2021
(Dollars in millions)
O
Total Fair Value
$
14,300
$
13,928
$
13,556
$
13,185
$
12,813
Fair Value Change from Base (%)
5.5
%
2.7
%
-
%
-2.7
%
-5.5
%
Change in Unrealized Appreciation
After-tax from Base ($)
$
$
$
-
$
(294)
$
(587)
We had $15.0
billion and $13.1 billion
of gross reserves
for losses and
LAE as of December 31,
2022 and December
31,
2021,
respectively.
These
amounts
are
recorded
at
their
nominal
value,
as
opposed
to
present
value,
which
would reflect
a discount
adjustment to
reflect the time
value of
money.
Since losses are
paid out over
a period of
time, the
present value
of the
reserves is
less than
the nominal
value.
As interest
rates
rise, the
present value
of
the reserves
decreases and,
conversely,
as interest
rates
decline, the
present
value increases.
These movements
are
the
opposite
of
the
interest
rate
impacts
on
the
fair
value
of
investments.
While
the
difference
between
present
value
and
nominal
value
is
not
reflected
in
our
financial
statements,
our
financial
results
will
include
investment
income
over
time
from
the
investment
portfolio
until
the
claims
are
paid.
Our
loss
and loss
reserve
obligations have an expected
duration that is reasonably consistent
with our fixed income portfolio.
Equity Risk.
Equity risk is
the potential change
in fair value
of the common
stock, preferred
stock and
mutual fund
portfolios
arising
from
changing
prices.
Our
equity
investments
consist
of
a
diversified
portfolio
of
individual
securities. The primary
objective of
the equity portfolio
is to
obtain greater
total return
relative to
our core
bonds
over time through market appreciation
and income.
The table below displays the impact on fair
value and after-tax change
in fair value of a 10% and 20% change in
equity prices up and down for the periods indicated
.
Impact of Percentage Change in Equity Fair Values
At December 31, 2022
(Dollars in millions)
-20%
-10%
0%
10%
20%
Fair Value of the Equity Portfolio
$
$
$
$
$
After-tax Change in Fair Value
(31)
(15)
-
Impact of Percentage Change in Equity Fair Values
At December 31, 2021
(Dollars in millions)
-20%
-10%
0%
10%
20%
Fair Value of the Equity Portfolio
$
1,406
$
1,582
$
1,758
$
1,934
$
2,109
After-tax Change in Fair Value
(278)
(139)
-
Foreign
Currency
Risk.
Foreign
currency
risk is
the potential
change
in value,
income
and
cash
flow arising
from
adverse changes
in foreign
currency exchange
rates.
Each of
our non-U.S.
(“foreign”)
operations
maintains capital
in the
currency
of the
country
of its
geographic
location
consistent
with local
regulatory
guidelines. Each
foreign
operation
may
conduct
business
in
its
local
currency,
as
well
as
the
currency
of
other
countries
in
which
it
operates.
The
primary
foreign
currency
exposures
for
these
foreign
operations
are
the
Singapore
and
Canadian
Dollars. We
mitigate foreign
exchange
exposure by
generally matching
the currency
and duration
of our
assets to
our corresponding
operating liabilities. In
accordance with FASB
guidance, the impact
on the fair
value of available
for
sale
fixed
maturities
due
to
changes
in
foreign
currency
exchange
rates,
in
relation
to
functional
currency,
is
reflected as
part of other
comprehensive income.
Conversely,
the impact of
changes in
foreign currency
exchange
rates,
in
relation
to
functional
currency,
on
other
assets
and
liabilities
is
reflected
through
net
income
as
a
component of other income (expense). In
addition, we translate
the assets, liabilities and income of non-U.S.
dollar
functional
currency
legal
entities
to
the U.S.
dollar.
This translation
amount is
reported
as a
component
of other
comprehensive income.
The tables
below display
the potential
impact of
a parallel
and immediate
10% and
20% increase
and decrease
in
foreign
exchange
rates
on
the
valuation
of
invested
assets
subject
to
foreign
currency
exposure
for
the
periods
indicated.
This
analysis
includes
the
after-tax
impact
of
translation
from
transactional
currency
to
functional
currency
as
well
as
the
after-tax
impact
of
translation
from
functional
currency
to
the
U.S.
dollar
reporting
currency.
Change in Foreign Exchange Rates in Percent
At December 31, 2022
(Dollars in millions)
-20%
-10%
0%
10%
20%
Total After-tax
Foreign Exchange Exposure
$
(157)
$
(79)
$
-
$
$
Change in Foreign Exchange Rates in Percent
At December 31, 2021
(Dollars in millions)
-20%
-10%
0%
10%
20%
Total After-tax
Foreign Exchange Exposure
$
(190)
$
(95)
$
-
$
$

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8.
FINANCIAL STATEMENTS
AND SUPPLEMENTARY
DATA
The financial statements and schedules
listed in the accompanying Index
to Financial Statements and Schedules on
page are filed as part of this report.

---

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As
required
by
Rule
13a-15(b)
of
the
Securities
Exchange
Act
of
(the
Exchange
Act),
our
management,
including our
Chief Executive
Officer and
Chief Financial
Officer,
has evaluated
the effectiveness
of our
disclosure
controls
and
procedures
(as
defined
in
Rule
13a-15(e)
under
the
Exchange
Act).
Based
on
that
evaluation,
the
Chief
Executive
Officer
and
Chief
Financial
Officer
have
concluded
that
our
disclosure
controls
and
procedures
were effective as of the
end of the period covered by this annual rep
ort.
Management’s Annual Report
on Internal Control Over Financial Reporting
Our
management
is
responsible
for
establishing
and
maintaining
adequate
internal
controls
over
financial
reporting.
Our internal
control over
financial reporting
is designed
to provide
reasonable assurance
regarding the
reliability
of
financial
reporting
and
the
preparation
of
our
financial
statements
for
external
purposes
in
accordance with generally accepted
accounting principles.
Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements.
Also,
projections
of any
evaluation
of effectiveness
to
future
periods are
subject
to
the risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that
the
degree
of
compliance
with
the
policies or procedures may deteriorate.
Management
has
assessed
the
effectiveness
of
our
internal
control
over
financial
reporting
as
of
December
31,
2022. In
making this
assessment, we
used the
criteria set
forth
by the
Committee
of Sponsoring
Organizations
of
the Treadway
Commission (COSO) in
Internal Control -
Integrated Framework
(2013).
Based on our assessment
we
concluded that,
as of
December 31,
2022, our
internal control
over financial
reporting is
effective
based on
those
criteria.
Attestation Report
of the Registered Public Accounting Firm
This
annual
report
does
not
include
an
attestation
report
of
the
Company’s
registered
public
accounting
firm
regarding
internal
control
over financial
reporting.
Management’s
internal
controls
are
not subject
to attestation
by the
Company’s
registered
public accounting
firm pursuant
to rules
of the
Securities and
Exchange
Commission
that permit
the Company
to provide
only management’s
report in
this annual report
due to
the Company’s
status
as a non-accelerated filer.
Changes in Internal Control Over
Financial Reporting
As
required
by
Rule
13a-15(d)
of
the
Exchange
Act,
our
management,
including
our
Chief
Executive
Officer
and
Chief
Financial
Officer,
has
evaluated
our
internal
control
over
financial
reporting
to
determine
whether
any
changes
occurred
during
the fourth
fiscal quarter
covered
by
this annual
report
that have
materially
affected,
or
are
reasonably
likely
to materially
affect,
our internal
control
over
financial reporting.
Based on
that evaluation,
there has been no such change during the fourth
quarter.

---

ITEM 9B. OTHER INFORMATION
ITEM 9B.
OTHER INFORMATION
None.

---

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE
Information for Item 10 is not
required pursuant to General
Instruction I(2) of Form 10-K.

---

ITEM 11. EXECUTIVE COMPENSATION
ITEM 11.
EXECUTIVE COMPENSATION
Information for Item 11 is not
required pursuant to General
Instruction I(2) of Form 10-K.

---

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12.
SECURITY
OWNERSHIP
OF
CERTAIN
BENEFICIAL
OWNERS
AND
MANAGEMENT
AND
RELATED
STOCKHOLDER MATTERS
Information for Item 12 is not
required pursuant to General
Instruction I(2) of Form 10-K.

---

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
Information for Item 13 is not
required pursuant to General
Instruction I(2) of Form 10-K.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14.
PRINCIPAL ACCOUNTANT
FEES AND SERVICES
The PricewaterhouseCoopers LLP (and
its worldwide affiliates) fees incurred
are as follows for the periods
indicated:
(Dollars in millions)
(1)
Audit Fees
$
3.4
$
3.6
(2)
Audit-Related Fees
0.3
0.3
(3)
Tax Fees
0.7
0.6
(4)
All Other Fees
-
-
Audit
fees
include the
annual audit
and quarterly
financial statement
reviews,
subsidiary audits,
and procedures
required to
be performed
by the
independent auditor
to be able
to form
an opinion
on our
consolidated
financial
statements. These other
procedures include information
systems and
procedural reviews
and testing performed
in
order to
understand
and place
reliance on
the systems
of internal
control,
and consultations
relating to
the audit
or quarterly review.
Audit fees may
also include statutory
audits or financial audits
for our subsidiaries or
affiliates
and services associated
with SEC registration
statements,
periodic reports
and other
documents filed with
the SEC
or other documents issued in connection with securities offerings.
Audit
-related
fees
include
assurance
and related
services that
are reasonably
related to
the performance
of the
audit
or
review
of
our
financial
statements,
including
due
diligence
services
pertaining
to
potential
business
acquisitions/dispositions,
accounting consultations
related to
accounting, financial
reporting or
disclosure matters
not
classified
as
“audit
services”; assistance
with
understanding
and
implementing
new
accounting
and
financial
reporting
guidance
from
rule
making
authorities;
financial
audits
of
employee
benefit
plans;
agreed-upon
or
expanded
audit
procedures
related
to
accounting
and/or
billing
records
required
to
respond
to
or
comply
with
financial, accounting or regulatory reporting
matters and assistance
with internal control reporting
requirements.
Tax fees
include tax compliance, tax planning
and tax advice and is granted general
pre-approval by Group’s
Audit
Committee.
All other fees represent an accounting
research subscription and software.
Under its
Charter and
the “Audit
and Non-Audit
Services Pre-Approval
Policy” (the
“Policy”), the
Audit Committee
is
required
to
pre-approve
the
audit
and
non-audit
services
to
be
performed
by
the
independent
auditors.
The
Policy
mandates
specific
approval
by
the
Audit
Committee
for
any
service
that
has
not
received
a
general
pre-
approval
or
that
exceeds
pre-approved
cost
levels
or
budgeted
amounts.
For
both
specific
and
general
pre-
approval,
the
Audit
Committee
considers
whether
such
services
are
consistent
with
the
SEC’s
rules
on
auditor
independence.
The
Audit
Committee
also
considers
whether
the
independent
auditors
are
best
positioned
to
provide
the most
effective
and efficient
service and
whether the
service might
enhance the
Company’s
ability to
manage or control
risk or improve
audit quality.
The Audit Committee
is also mindful
of the relationship
between
fees for
audit and
non-audit services in
deciding whether
to pre-approve
any such
services.
It may
determine, for
each fiscal
year,
the appropriate
ratio
between
the total
amount
of
audit, audit
-related
and tax
fees
and a
total
amount of fees
for certain
permissible non-audit
services classified below
as “All
Other Fees”.
All such factors
are
considered as
a whole,
and no
one factor
is determinative.
The Audit
Committee
further considered
whether the
performance by
PricewaterhouseCoopers
LLP of the
non-audit related
services disclosed
below is compatible
with
maintaining
their
independence.
The
Audit
Committee
approved
all
of
the
audit-related
fees,
tax
fees
and
all
other fees for 2022 and 2021.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT
SCHEDULES
Exhibits
The exhibits listed on the accompanying
Index to Exhibits on page E-1 are filed as
part of this report except that
the
certifications
in
Exhibit
are
being
furnished
to
the
SEC,
rather
than
filed
with
the
SEC,
as
permitted
under
applicable SEC rules.
Financial Statements and Schedules.
The financial statements and schedules
listed in the accompanying Index
to Financial Statements and Schedules on
page are filed as part of this report.