(Reuters) - Everest Group's operating profit more than doubled in the fourth quarter on Wednesday, as the insurer benefited from stronger underwriting and better returns on its investments.
Buoyed by employer-guaranteed and government-mandated policies, the demand for insurance remains resilient amid significant corporate and consumer cutback in spending, reinforcing its reputation as "recession-proof".
Everest said its gross written premium increased 18.3% on a constant currency basis to $4.3 billion in the quarter. It posted a combined ratio of 93.2%, compared with 87.8% a year earlier. A ratio below 100% means the insurer earned more in premiums than it paid out in claims.
Insurers also use their cash to buy a portfolio of assets, chiefly safe-haven such as U.S. Treasuries and other high-grade corporate bonds. Multiple rate hikes by the U.S. Federal Reserve have helped insurers earn higher interest from such investments.
Everest's net investment income improved to $411 million, compared with $210 million a year earlier, driven by strong fixed income and alternative investment returns.
Gross written premiums in its reinsurance segment grew 21.9% on a constant dollar basis. The gains come in line with the broader upbeat sentiment in the market as higher insurance sales also drum up demand for reinsurance.
Everest's operating income came in at $1.09 billion, or $25.18 per share, for the three months ended Dec. 31, compared with $478 million, or $12.21 per share, a year ago.