Everest Group reported a $98mn charge in Q2 tied to aviation losses stemming from the Russia–Ukraine war. The loss follows a U.K. High Court decision that confirmed insurer liability for aircraft stranded in Russia after its 2022 invasion of Ukraine.
CEO Jim Williamson said Everest delayed reserving for the loss until the legal outcome became clear.
The ruling, which favored aircraft lessors pursuing claims under war and allied perils policies, prompted the group to finalize its exposure.
CFO Mark Kociancic noted the total aviation-related impact included $14mn in reinstatement premiums, leaving Everest with a net loss of $84mn. This contributed 3.2 points to the group’s reinsurance combined ratio.
At the center of the dispute was AerCap Holdings N.V., which successfully claimed a $1 bn indemnity from insurers, including Everest.
The court found AerCap Ireland had valid grounds to recover under its contingent and possessed coverage.
The ruling requires insurers, including Fidelis Insurance Holdings Ltd., to pay the indemnity by July 2, 2025. Fidelis expressed disagreement with the outcome and is considering an appeal, stating in a U.S. SEC filing that it will review all available options.
The payment will contribute to AerCap’s broader recovery effort, which began after the company took a $2.7 bn pretax net charge in 2022.
That charge reflected full write-offs of assets stranded in Russia and Ukraine and impairments on partially recovered assets. AerCap has already recovered $1.3 bn in 2023 and $195 mn in 2024.
With the new award, total pretax recoveries related to the conflict will reach around $2.5 bn.
Williamson said the decision brought necessary legal clarity. At the time of the aircraft seizures, Everest lacked the legal and contractual certainty to accurately assess its risk. With the court’s confirmation, Everest considers the matter closed unless new litigation arises.
Everest’s strategy continues to shift. Since early 2024, the group has withdrawn from $800mn in U.S. casualty pro rata business.
While primary casualty rates are climbing, Williamson said elevated ceding commissions and ongoing litigation pressures justify a conservative stance. He also referenced U.S. legal system abuse as a key factor shaping the group’s cautious approach.
Reinsurance premiums rose 1.1% in Q2, but insurance premiums dropped 3.1% as Everest rebalanced its portfolio.
Williamson emphasized improvements in the quality of the group’s U.S. casualty book. Everest remains selective but willing to write casualty risks with adequate structure and pricing.
Property reinsurance remains a growth focus. Midyear renewals met pricing expectations, and risk-adjusted returns in the catastrophe segment remain favorable.
According to Williamson, terms and conditions held firm. June 1 property catastrophe rates were flat, with most placements occurring at preferred pricing levels.
Everest is also seeing early signs of positive impact from Florida tort reform, which has not yet been factored into its pricing. July 1 renewals aligned with trends seen earlier in the year. The group continues expanding in property markets across the U.S., Asia, and Latin America.
