Everest Group (EG) 10-K risk factor changes: FY2022 vs FY2021

[removed: RISKS] [added: RISKS] RELATING TO [removed: OUR BUSINESS]

[removed: *Our] [added: Our] results could be adversely affected by catastrophic [removed: events.*]

[removed: | Calendar year: |] Pre-tax [added: net] catastrophe losses [removed: | |]

[removed: |] (Dollars in millions) [removed: | | |]

[removed: |] 2021 [removed: | $ | 1,135.0 |]

[removed: |] 2020 [removed: | | 425.0 |]

[removed: |] 2019 [removed: | | 575.5 |]

[removed: |] 2018 [removed: | | 1,800.2 |]

[removed: |] 2017 [removed: | | 1,472.6 |]

[removed: *Our] [added: Our] losses from future catastrophic events [removed: could exceed our projections.*]

[removed: | Calendar year: |] Effect on pre-tax net income [removed: | | | | |]

[removed: |] (Dollars in millions) [removed: | | | | | |]

environmental [removed: damage.]

[removed: Our success depends on our ability to accurately] assess the risks associated with the businesses [removed: on which the risk is retained.]

This could reduce our net income and even result [removed: in a net loss.]

[removed: *Decreases] [added: Decreases] in pricing for property and casualty reinsurance [removed: and insurance could reduce our net income.*]

In December 2021, S&P announced proposed [removed: changes to its rating methodologies.]

[removed: The termination provision would generally be triggered if a] rating fell below A.M. Best’s [removed: A- rating level.]

[removed: |] Percentage of ceded written premiums to gross [removed: written premiums | 12.3% | | 13.0% | | 14.3% | | 12.5% | | 13.0% |]

[removed: *Our] [added: Our] industry is highly competitive and we may not be able [removed: to compete as successfully in the future.*]

[removed: *We] [added: We] are dependent on our key [removed: personnel.*]

[removed: engage] in [removed: any gainful occupation in] Bermuda without a work permit issued by the Bermuda [removed: government.]

As a result, a decline in the value of our securities reduces [removed: our capital or could cause us to incur a loss.]

[removed: The value of these assets fluctuates] with changes in the markets.

[removed: *We may experience foreign currency exchange losses that] reduce our net income and capital [removed: levels.*][added: levels.]

[removed: *We are subject to cybersecurity risks] that could negatively impact our business [removed: operations.*][added: operations.]

[removed: Risks Relating to Regulation][added: RISKS RELATING TO]

[removed: These types of actions] [added: regulations] could have a material adverse effect on [removed: our business.]

Some of these changes are also impacting the insurance [removed: industry.]

[removed: *Regulatory challenges in the United States] could adversely affect the ability of Bermuda Re to [removed: conduct business.*]

[removed: *Bermuda] [added: Bermuda] Re may need to be licensed or admitted [removed: in additional jurisdictions to develop its business.*]

[removed: Risks Relating to Group’s Securities][added: RISKS RELATING TO]

[removed: *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 [removed: subsidiaries.*][added: subsidiaries.]

[removed:  the total voting power of any shareholder owning more than] 9.9% of the [removed: common shares will be reduced to 9.9% of the] total voting power of the common shares;

[removed: *Applicable] [added: Applicable] insurance laws may also have an anti-takeover [removed: effect.*]

[removed: *Investors] [added: Investors] in Group may have more difficulty in protecting [removed: their interests than investors in a U.S. corporation.*]

[removed: Committees of] the [removed: Board] [added: board] of [removed: Directors.][added: directors.]

Interested [removed: Directors.]

[removed: ] the transaction is fair to the corporation [removed: as of the time it is authorized, approved or ratified.]

[removed: Transactions] with Significant Shareholders.

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 the trading price of our common shares could

decline significantly.

OUR BUSINESS

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

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 the trading price of our common shares could decline significantly.

*Fluctuations in the financial markets could result in investment losses.*

Prolonged and severe disruptions in the overall public and private debt and equity markets, such as occurred during 2008, or temporary disruption as occurred in early 2020 related to the COVID-19 pandemic, could result in significant realized and unrealized losses in our investment portfolio.

Although financial markets have significantly improved since 2008, they could deteriorate in the future.

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 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:

| --- | --- | --- |

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 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 an increase to our pre-tax net income in 2021, 2019 and 2017 and resulted in a decrease to our pre-tax net income in 2020 and 2018:

| --- | --- | --- | --- | --- | --- |

| 2021 | | $ | 9.1 | | increase |

| 2020 | | | 401.4 | | decrease |

| 2019 | | | 63.6 | | increase |

| 2018 | | | 387.1 | | decrease |

| 2017 | | | 293.4 | | increase |

The difficulty in estimating our reserves is significantly more challenging as it relates to reserving for potential A&E liabilities.

At year-end 2021, 0.9% 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

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.*

If we fail to accurately assess the risks we retain, we may fail to establish adequate premium rates to cover our losses and LAE.

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.

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.

All comparisons in this discussion are to the corresponding [removed: prior year unless otherwise indicated.]

[removed: Industry Conditions.][added: Industry Conditions.]

[removed: 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.

[removed: Financial Summary.][added: Financial Summary.]

[removed: We monitor and evaluate] our overall performance based upon [removed: financial results.]

[removed: | |] Years Ended December 31, [removed: | | | | | | | | | Percentage Increase/(Decrease) | | |]

[removed: |] (Dollars in millions) [removed: | 2021 | | | 2020 | | | 2019 | | | 2021/2020 | | 2020/2019 |]

[removed: |] REVENUES: [removed: | | | | | | | | | | | | |]

[removed: |] Net [removed: realized capital gains (losses) | | 257.9 | | | 267.6 | | | 185.0 | | (3.6)% | | 44.7% |][added: Realized Capital Gains (Losses).]

[removed: |] Other income (expense) [removed: | | 37.0 | | | 6.5 | | | (4.6) | | NM | | (39.2)% |]

[removed: |] CLAIMS AND EXPENSES: [removed: | | | | | | | | | | | | |]

[removed: |] Incurred losses and loss adjustment expenses [removed: | | 7,391.3 | | | 6,550.8 | | | 4,922.9 | | 12.8% | | 33.1% |]

[removed: |] Total claims and expenses [removed: | | 10,320.6 | | | 9,012.8 | | | 7,132.2 | | 14.5% | | 26.4% |]

[removed: |] INCOME (LOSS) BEFORE TAXES [removed: | | 1,545.6 | | | 585.3 | | | 1,099.0 | | 164.1% | | (46.7)% |]

[removed: |] Income tax expense (benefit) [removed: | | 166.5 | | | 71.2 | | | 89.5 | | 133.9% | | (20.5)% |]

[removed: | RATIOS: | | | | | | | | | |] Point Change [removed: | | |]

[removed: |] Commission and brokerage ratio [removed: | | 21.2% | | | 21.6% | | | 23.0% | | (0.4) | | (1.4) |]

[removed: |] Other underwriting expense ratio [removed: | | 5.6% | | | 5.8% | | | 6.0% | | (0.2) | | (0.2) |]

[removed: | | At December 31, | | | | | | | | |] Percentage Increase/(Decrease) [removed: | | |]

[removed: |] (Dollars in millions, except per share amounts) [removed: | 2021 | | | 2020 | | | 2019 | | | 2021/2020 | | 2020/2019 |]

[removed: |] Balance sheet data: [removed: | | | | | | | | | | | | |]

[removed: |] Loss and loss adjustment expense reserves [removed: | | 19,009.5 | | | 16,322.1 | | | 13,531.3 | | 16.5% | | 20.6% |]

[removed: |] Book value per share [removed: | | 258.21 | | | 243.25 | | | 223.85 | | 6.2% | | 8.7% |]

[removed: |] (NM, not meaningful) [removed: | | | | | | | | | | | | |]

[removed: |] (Some amounts may not reconcile due to rounding.) [removed: | | | | | | | | | | | | |]

[removed: Revenues.][added: Revenues.]

Other Income [removed: (Expense).]

The changes were primarily [removed: the result of fluctuations in foreign currency exchange rates.]

[removed: Claims] [added: Claims] and [removed: Expenses.][added: Expenses.]

Incurred Losses and [removed: Loss Adjustment Expenses.]

[removed: | |] Years Ended December 31, [removed: | | | | | | | | | | | | | | | | |]

[removed: |] 2021 [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] 2020 [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] Variance 2021/2020 [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] Variance [removed: 2020/2019 | | | | | | | | | | | | | | | | | |][added: 2021/2020]

[removed: |] (Some amounts may not reconcile due to rounding.) [removed: | | | | | | | | | | | | | | | | | |]

Commission, [removed: Brokerage, Taxes and Fees.][added: brokerage, taxes]

Other [removed: Underwriting Expenses.][added: underwriting expenses]

Corporate [removed: Expenses.]

Interest, [removed: Fees] [added: fees] and [removed: Bond Issue Cost Amortization Expense.][added: bond issue]

year ended December 31, 2020.

prior year unless otherwise indicated.

The worldwide

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

The following is a discussion and analysis of our results of operations and financial condition for the years ended December 31, 2021 and 2020.

This discussion should be read in conjunction with the Consolidated Financial Statements and related Notes, under ITEM 8 of this Form 10-K.

Pursuant to the FAST Act Modernization and Simplification of Regulation S-K, comparisons between 2020 and 2019 have been omitted from this Form 10-K but can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2020.

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., Bermuda 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, including underwriting syndicates at Lloyd’s of London 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 recently, 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 was 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 was being primarily driven by a low interest environment and the desire to achieve greater risk diversification and potentially higher returns on their investments.

This increased competition was generally having a negative impact on rates, terms and conditions; however, the impact varies widely by market and coverage.

The industry continues to deal with the impacts of a global pandemic, COVID-19 and its subsequent variants.

We activated our operational resiliency plan across our global footprint and all of our critical operations are functioning effectively from remote locations.

We continue to service and meet the needs of our clients while ensuring the safety and health of our employees and customers.

Prior to the pandemic, there was a growing industry consensus that there was some firming of (re)insurance rates for the areas impacted by the recent catastrophes.

The increased frequency of catastrophe losses in 2020 and 2021 appears to be further pressuring the increase of rates.

As business activity continues to regain strength, 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.

While we are unable to predict the full impact the pandemic will have on the insurance industry as it continues to have a negative impact on the global economy, we are well positioned to continue to service our clients.

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 following table displays a summary of the consolidated net income (loss), ratios and shareholders’ equity for the periods indicated.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross written premiums | $ | 13,049.8 | | $ | 10,482.4 | | $ | 9,133.4 | | 24.5% | | 14.8% |

| Net written premiums | | 11,445.5 | | | 9,117.0 | | | 7,824.4 | | 25.5% | | 16.5% |

| | | | | | | | | | | | | |

| Premiums earned | $ | 10,406.4 | | $ | 8,681.5 | | $ | 7,403.7 | | 19.9% | | 17.3% |

| Net investment income | | 1,164.9 | | | 642.5 | | | 647.1 | | 81.3% | | (0.7)% |

| Total revenues | | 11,866.3 | | | 9,598.1 | | | 8,231.2 | | 23.6% | | 16.6% |

| Commission, brokerage, taxes and fees | | 2,208.8 | | | 1,873.3 | | | 1,703.7 | | 17.9% | | 10.0% |

| Other underwriting expenses | | 582.6 | | | 511.2 | | | 440.9 | | 14.0% | | 16.0% |

| Corporate expenses | | 67.8 | | | 41.1 | | | 33.0 | | 65.0% | | 24.7% |

| Interest, fees and bond issue cost amortization expense | | 70.1 | | | 36.3 | | | 31.7 | | 93.1% | | 14.6% |

| NET INCOME (LOSS) | $ | 1,379.1 | | $ | 514.2 | | $ | 1,009.5 | | 168.2% | | (49.1)% |

See “Market Sensitive Instruments” [removed: in ITEM 7.]

QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

in ITEM 7.

ITEM 8.

FINANCIAL STATEMENTS

AND SUPPLEMENTARY

DATA

The financial

statements

and schedules

listed in

the accompanying

Index to

Financial Statements

and Schedules

on page F-1 are filed as part of this report.

ITEM 9.

CHANGES

IN

AND

DISAGREEMENTS

WITH

ACCOUNTANTS

ON

ACCOUNTING

AND

FINANCIAL

DISCLOSURE

None.

[removed: The Company.][added: The Company.]

[removed: On February 24, 2000, a corporate restructuring was completed and Group] became the new parent holding company [removed: of Holdings.]

[removed: Prior to the restructuring, Group had no significant assets] or [removed: capitalization and had not engaged in any business or] prior activities other than in connection with the restructuring.

[removed: On October 6,] 1995, The Prudential sold its entire interest [removed: in Holdings in an initial public offering.]

Following is a summary of the Company’s [removed: principal operating subsidiaries:]

[removed: At December 31, 2021, Everest] Re had statutory surplus of [removed: $5.8] [added: $5.6] billion.

[removed: The majority of Everest National’s] business is reinsured by its parent, [removed: Everest Re.]

[removed: The majority of Everest Indemnity’s] business is reinsured by its parent, [removed: Everest Re.]

[removed: Reinsurance] [added: Reinsurance] Industry [removed: Overview.][added: Overview.]

There are two basic [removed: types of reinsurance arrangements: treaty and facultative.]

[removed: There is usually no] ceding commission on excess of loss [removed: reinsurance.]

[removed: advantages] and disadvantages.

[removed: Business Strategy.][added: Business Strategy.]

[removed: Marketing.][added: Marketing.]

[removed: Segment Results.][added: Segment Results.]

[removed: Underwriting Operations.][added: Underwriting Operations.]

[removed: | |] Gross Written Premiums by Segment [removed: | | | | | | | | | | | | | | | | | | |]

[removed: | |] Years Ended December 31, [removed: | | | | | | | | | | | | | | | | | | |]

[removed: | Reinsurance | | | | | | | | | | | | | | | | | | | |][added: reinsurance]

[removed: | Insurance | | | | | | | | | | | | | | | | | | | |][added: insurance]

[removed: | (1)] For purposes of the presentation above, pro rata includes all insurance and reinsurance [removed: attaching to the first dollar of loss incurred by the ceding company. | | | | | | | | | | | | | | | | | | | |]

[removed: | (2)] Certain totals and subtotals may not reconcile due to rounding. [removed: | | | | | | | | | | | | | | | | | | | |]

[removed: Reinsurance Segment.][added: reinsurance]

[removed: In] addition, [removed: the]

[removed: Logan Re] Ltd. [removed: (Bermuda) (“Mt.][added: (“Bermuda]

[removed: Underwriting.][added: Underwriting.]

[removed: Risk] [added: Risk] Management of Underwriting and Reinsurance [removed: Arrangements]

Underwriting Risk [removed: and Accumulation Controls.]

The operating results and financial condition [removed: of the Company can be adversely affected by catastrophe and other large losses.]

The Company manages its [removed: exposure to catastrophes and other large losses by:]

[removed: ] selective underwriting practices;

[removed: ] diversifying its risk portfolio by geographic [removed: area and by types and classes of business;]

See “Reinsurance and Retrocession [removed: Arrangements”.]

[removed: |] Return Periods (in years) [removed: | 1 in 20 | | | 1 in 50 | | | 1 in 100 | | | 1 in 250 | | | 1 in 500 | | | 1 in 1,000 | |]

[removed: |] (Dollars in millions) [removed: | | | | | | | | | | | | | | | | | |]

[removed: |] Zone/ Peril [removed: | | | | | | | | | | | | | | | | | |]

Terrorism [removed: Risk.]

Reinsurance and Retrocession [removed: Arrangements.]

[removed: See ITEM 7, “Management’s] Discussion and Analysis of Financial Condition and Results [removed: of Operations – Financial Condition”.]

[removed: Claims.][added: Claims.]

BUSINESS

Group, a Bermuda company,

was established in

1999 as a wholly-owned

subsidiary of Holdings.

On February 24,

2000, a corporate restructuring

was completed and Group

of Holdings.

Holdings

continues

to

be the

holding

company

for

the Company’s

U.S.

based

operations.

Holders

of shares

of

common

stock

of

Holdings

automatically

became

holders

of

the

same

number

of

common

shares

of

Group.

Prior to the

Group, a Bermuda company, was established in 1999 as a wholly-owned subsidiary of Holdings.

Holdings continues to be the holding company for the Company’s U.S. based operations.

Holders of shares of common stock of Holdings automatically became holders of the same number of common shares of Group.

In connection with the February 24, 2000 restructuring, Group established a Bermuda-based reinsurance subsidiary, Everest Reinsurance (Bermuda), Ltd. (“Bermuda Re”), which commenced business in the second half of 2000.

Group also formed Everest Global Services, Inc., a Delaware subsidiary, to perform administrative functions for Group and its U.S. based and non-U.S. based subsidiaries.

On December 30, 2008, Group contributed Holdings to its Irish holding company, Holdings Ireland.

Holdings Ireland is a direct subsidiary of Group and was established to serve as a holding company for the U.S. and Irish reinsurance and insurance subsidiaries.

Effective July 1, 2016, the Company established a new Irish holding company, Everest Dublin Insurance Holdings Limited (Ireland) (“Everest Dublin Holdings”) and contributed Ireland Re to Everest Dublin Holdings.

Holdings, a Delaware corporation, was established in 1993 to serve as the parent holding company of Everest Re, a Delaware property and casualty reinsurer formed in 1973.

Until October 6, 1995, Holdings was an indirect wholly-owned subsidiary of The Prudential Insurance Company of America (“The Prudential”).

The Company’s principal business, conducted through its operating segments, is the underwriting of reinsurance and insurance in the U.S., Bermuda and international markets.

The Company had gross written premiums, in 2021, of $13.0 billion with approximately 69.5% representing reinsurance and 30.5% representing insurance.

Shareholders’ equity at December 31, 2021 was $10.1 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 principally through brokers, surplus lines brokers and general agent relationships.

Group’s 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.

 Bermuda Re, a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and long-term insurer and is authorized to write both reinsurance and insurance property and casualty and life and annuity business.

Bermuda Re’s UK branch writes property and casualty reinsurance to the United Kingdom and European markets.

At December 31, 2021, Bermuda Re had shareholder’s equity of $3.1 billion.

 Everest International Reinsurance, Ltd. (“Everest International”), a Bermuda insurance company and a direct subsidiary of Group, is registered in Bermuda as a Class 4 insurer and is authorized to write property and casualty business.

All of Everest International’s business has been inter-affiliate quota share reinsurance assumed from Everest Re, the UK branch of Bermuda Re, Ireland Re and Ireland Insurance.

At December 31, 2021, Everest International had shareholder’s equity of $1.0 billion.

 Ireland Re, an Ireland reinsurance company and an indirect subsidiary of Group, is licensed to write non-life reinsurance, both directly and through brokers, for the London and European markets.

 Ireland Insurance, an Ireland insurance company and an indirect subsidiary of Group, is licensed to write insurance for the European markets.

 Everest Re, a Delaware reinsurance 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 Insurance Company of Canada (“Everest Canada”), a Canadian insurance company and direct subsidiary of Holdings Ireland, is licensed to write property and casualty insurance in all Canadian provinces.

 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.

 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 licensed in Delaware and is eligible to write business on a non-admitted basis in all other states, the District of Columbia and Puerto Rico.

 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 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 reinsurance and casualty reinsurance in both Bermuda and the U.S.

 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.

 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.

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.

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

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.

Washington, D.C. [removed: 20549]

[removed: FORM 10-K][added: FORM]

[removed: _X_ Annual] [added: Annual] Report Pursuant to Section [removed: 13 or 15(d) of the Securities Exchange Act of 1934]

For the fiscal year ended [removed: December 31, 2021]

[removed: ___ Transition Report Pursuant] to Section 13 or 15(d) of the Securities Exchange [removed: Act of 1934]

Commission file number [removed: 1-15731]

[removed: EVEREST] [added: EVEREST] RE GROUP, [removed: LTD.][added: LTD.]

(Exact name of registrant as specified [removed: in its charter)]

[removed: | Bermuda | | 98-0365432 |][added: Bermuda]

Seon Place – 4 [removed: Floor]

[removed: HamiltonHM 19,] Bermuda

[removed: 441-295-0006][added: 295-0006]

(Address, including zip code, and telephone number, [removed: including area code, of registrant’s principal executive office)]

Securities registered pursuant [removed: to Section 12(g) of the Act: None]

[removed: Indicate by check mark if the registrant is a well-known seasoned issuer,] as defined in Rule 405 of the Securities Act.

[removed: | |] YES [removed: | X | | NO | | |]

Indicate by check mark if the registrant [removed: is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.]

[removed: | |] YES [removed: | | | NO | X | |]

[removed: | Large] [added: large] accelerated [removed: filer | X | | Accelerated filer | |][added: filer,]

[removed: | Non-accelerated filer | | | Smaller reporting company | |][added: a non-accelerated filer,]

[removed: | | | |] Emerging growth company [removed: | |]

Indicate by check mark whether the registrant [removed: is a shell company (as defined in Rule 12b-2 of the Exchange Act).]

Securities registered pursuant [removed: to Section 12(b) of the Act:]

[removed: | Common] [added: Common] Shares, $0.01 par [removed: value | RE | New York Stock Exchange | 39,271,864 |][added: value]

DOCUMENTS INCORPORATED BY [removed: REFERENCE]

[removed: EVEREST] [added: EVEREST] RE GROUP, [removed: LTD]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

[removed: FORM 10-K][added: Form 10-K]

[removed: | | | Page |][added: Page]

[removed: | PART I | | |][added: PART I]

[removed: |] Item 1. [removed: | [Business](#BUSINESS) | 1 |]

[removed: |] Item 1A. [removed: | [Risk Factors](#RISKFACTORS) | 23 |]

[removed: | PART II | | |][added: into Part]

[removed: | PART III | | |][added: by reference in Part III]

20549

10-K

_X_

13 or 15(d) of the Securities Exchange Act of

1934

December 31, 2022

___

Transition Report Pursuant

Act of 1934

1-15731

in its charter)

98-0365432

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

th

Floor

Hamilton

HM 19

\-

including area code, of registrant’s

principal executive office)

to Section 12(g) of the Act:

None

is a well-known seasoned issuer,

NO

Indicate by check mark if the registrant

is not required to file reports pursuant

to Section 13 or Section 15(d) of the Act.

NO

Indicate by check

mark whether the registrant:

(1) has filed all reports

required to be

filed by Section 13

or 15(d) of the

Securities Exchange Act

of 1934 during the

preceding 12 months

| --- | --- | --- |

| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |

| --- | --- | --- | --- | --- | --- | --- |

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

\[ \]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| --- | --- | --- | --- | --- |

Indicate by check mark if the registrant is an emerging growth company and has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

The aggregate market value on June 30, 2021, the last business day of the registrant’s most recently completed second quarter, of the voting shares held by non-affiliates of the registrant was $10.1 billion.

| Class | Trading Symbol | Name of Exchange where Registered | Number of Shares Outstanding At February 1, 2022 |

| --- | --- | --- | --- |

Certain information required by Items 10, 11, 12, 13 and 14 of Form 10-K is incorporated by reference into Part III hereof from the registrant’s proxy statement for the 2022 Annual General Meeting of Shareholders, which will be filed with the Securities and Exchange Commission within 120 days of the close of the registrant’s fiscal year ended December 31, 2021.

| | | |

| Item 1B. | [Unresolved Staff Comments](#UNRESOLVEDSTAFFCOMMENTS) | 37 |

| Item 2. | [Properties](#PROPERTIES) | 37 |

| Item 3. | [Legal Proceedings](#LEGALPROCEEDINGS) | 37 |

| Item 4. | [Mine Safety Disclosures](#MINESAFETYDISCLOSURES) | 37 |

| Item 5. | [Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#MARKETFORREGISTRANTSCOMMONEQUITY) | 38 |

| Item 6. | [Selected Financial Data](#SELECTEDFINANCIALDATA) | 41 |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#MDAA) | 42 |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#QUANTANDQUAL) | 69 |

| Item 8. | [Financial Statements and Supplementary Data](#FINANCIALSTATEMENTSANDDATA) | 69 |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#CHANGESINANDDISAGREEMENTS) | 69 |

| Item 9A. | [Controls and Procedures](#CONTROLSANDPROCEDURES) | 69 |

| Item 9B. | [Other Information](#OTHERINFORMATION) | 70 |

| Item 9C. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#item9c) | 70 |

| Item 10. | [Directors, Executive Officers and Corporate Governance](#DIRECTORSEXECUTIVEOFFICERSANDCORP) | 70 |

| Item 11. | [Executive Compensation](#EXECUTIVECOMPENSATION) | 70 |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#SECURITYOWNERSHIPOFCERTAINBEHAVIORS) | 70 |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#CERTAINRELATIONSHIPSANDRELATEDTRANSACTIO) | 70 |

| Item 14. | [Principal Accountant Fees and Services](#PRINCIPALACCOUNTANTFEESANDSERVICES) | 71 |

| PART IV | | |

| Item 15. | [Exhibits and Financial Statement Schedules](#EXHIBITSANDFINANCIALSTATEMENTSCHEDULES) | 71 |

PART I

Unless otherwise indicated, all financial data in this document have been prepared using accounting principles generally accepted in the United States of America (“GAAP”).

As used in this document, “Group” means Everest Re Group, Ltd.; “Holdings Ireland” means Everest Underwriting Group (Ireland) Limited; “Ireland Re” means Everest Reinsurance Company (Ireland), designated activity company; “Holdings” means Everest Reinsurance Holdings, Inc.; “Everest Re” means Everest Reinsurance Company and its subsidiaries (unless the context otherwise requires); and the “Company”, “we”, “us”, and “our” means Everest Re Group, Ltd. and its subsidiaries.

[Unresolved Staff Comments](#a6478)

Item 2.

[Properties](#a6483)

Item 3.

[Legal Proceedings](#a6508)

Item 4.

[Mine Safety Disclosures](#a6536)

PART II

Item 5.

[Market for Registrant’s Common Equity, Related Shareholder Matters and](#a6550)

[Issuer Purchases of Equity Securities](#a6550)

Item 6.

[(Reserved)](#a7156)

Item 7.

[Management’s Discussion and Analysis of Financial Condition and Results of](#a7195)

[Operations](#a7195)

Item 7A.

[Quantitative and Qualitative Disclosures About Market Risk](#a16296)

Item 8.

[Financial Statements and Supplementary Data](#a16305)

None.

[Changes in and Disagreements With](#a16320)

[Accountants on Accounting and Financial](#a16320)

[Disclosure](#a16320)

Item 9A.

[Controls and Procedures](#a16329)

None.

[Other Information](#a16405)

None.

[removed: PART III][added: PART III]

[Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#a16413)

Item 10.

[Directors, Executive Officers and Corporate Governance](#a16425)

Item 11.

[Executive Compensation](#a16448)

Item 12.

[Security Ownership of Certain Beneficial Owners and Management and](#a16461)

[Related Shareholder Matters](#a16461)

Item 13.

[Certain Relationships and Related Transactions, and Director Independence](#a16470)

Item 14.

[Principal Accountant Fees and Services](#a16480)

PART IV

Item 15.

[Exhibits and Financial Statement Schedules](#a16492)

PART I

Unless otherwise

indicated,

all financial

data

in this

document have

been prepared

using

accounting

principles

generally accepted

in the United

States of America

(“GAAP”).

As used in

this document, “Group”

means Everest

Re

Group,

Ltd.;

“Holdings

Ireland”

means

Everest

None.

[removed: The Company’s other 23 locations occupy a total of approximately 254,000] square feet, all of which are leased.

PROPERTIES

Everest Re’s

corporate offices are

located in approximately

321,500 square feet of

leased office space in Warren,

New

Jersey.

Bermuda

Re’s

corporate

offices

are

located

in

approximately

12,300

total

square

feet

of

leased

office space

in Hamilton,

Bermuda.

The Company’s

other 24

locations occupy

a total

of approximately

271,200

Everest Re’s corporate offices are located in approximately 321,500 square feet of leased office space in Warren, New Jersey.

Bermuda Re’s corporate offices are located in approximately 12,300 total square feet of leased office space in Hamilton, Bermuda.

[removed: PART II][added: PART II]

MINE SAFETY DISCLOSURES

[removed: Market Information.][added: Market Information.]

[removed: The quarterly high and low closing market prices of Group’s] common shares for the periods indicated [removed: were:]

[removed: | |] 2021 [removed: | | | | | | 2020 | | | | |]

[removed: | |] High [removed: | | | Low | | | High | | | Low | |]

[removed: Number] [added: Number] of Holders of Common [removed: Shares.][added: Shares.]

[removed: Dividend] [added: Dividend] History and [removed: Restrictions.][added: Restrictions.]

[removed: Purchases] [added: Purchases] of Equity Securities by the Issuer and [removed: Affiliated Purchasers]

[removed: |] Issuer Purchases of Equity Securities [removed: | | | | | | | |]

[removed: | | | | | | | |] Maximum Number (or [removed: |]

[removed: | | | | | |] Total Number of [removed: | | Approximate Dollar |]

[removed: | | | | | |] Shares (or Units) [removed: | | Value) of Shares (or |]

[removed: | | | | | | Purchased as Part | |] Units) that May Yet [removed: |]

[removed: | |] Total Number of [removed: | | | | of Publicly | | Be Purchased Under |]

[removed: | *Period* | Purchased | |] per Share (or Unit) [removed: | | Programs | | Programs (1) |]

[removed: Currently, the Company and/or] its subsidiary Holdings have repurchased [removed: 30.5 million of the Company’s shares.]

[removed: Recent] [added: Recent] Sales of Unregistered [removed: Securities.]

[removed: Performance Graph.][added: Performance Graph.]

[removed: ][added: ]

*$100 invested on [removed: 12/31/15] [added: 12/31/22] in stock or index, including reinvestment of dividends.

MARKET

FOR

REGISTRANT’S

COMMON

EQUITY,

RELATED

SHAREHOLDER

MATTERS

AND

ISSUER

PURCHASES OF EQUITY SECURITIES

The common shares of Group

trade on the New York

Stock Exchange under

the symbol, “RE”.

The quarterly high

and low closing market prices of Group’s

were:

2022

Low

High

Low

First Quarter

304.72

267.35

255.97

211.08

Second Quarter

307.10

265.00

276.95

236.21

Third Quarter

285.67

245.79

273.68

236.68

Fourth Quarter

337.94

260.84

The common shares of Group trade on the New York Stock Exchange under the symbol, “RE”.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| First Quarter | $ | 255.97 | | $ | 211.08 | | $ | 291.78 | | $ | 171.96 |

| Second Quarter | | 276.95 | | | 236.21 | | | 231.07 | | | 161.72 |

| Third Quarter | | 273.68 | | | 236.68 | | | 232.19 | | | 197.10 |

| Fourth Quarter | | 286.62 | | | 250.41 | | | 241.54 | | | 196.20 |

The number of record holders of common shares as of February 1, 2022 was 630.

That number does not include the beneficial owners of shares held in “street” name or held through participants in depositories, such as The Depository Trust Company.

In 1995, the Board of Directors of the Company established a policy of declaring regular quarterly cash dividends and has paid a regular quarterly dividend in each quarter since the fourth quarter of 1995.

The Company declared and paid its quarterly cash dividend of $1.55 per share for the four quarters of 2020.

The Company declared and paid its quarterly cash dividend of $1.55 per share for the four quarters of 2021.

On February 24, 2022, the Company’s Board of Directors declared a dividend of $1.55 per share, payable on or before March 30, 2022 to shareholders of record on March 16, 2022.

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 partially dependent on dividends and other permitted payments from its subsidiaries to pay cash dividends to its shareholders.

The payment of dividends to Group by Holdings and to Holdings by Everest Re is subject to Delaware regulatory restrictions and the payment of dividends to Group by Bermuda Re is subject to Bermuda insurance regulatory restrictions.

See “Regulatory Matters – Dividends” and ITEM 8, “Financial Statements and Supplementary Data” - Note 14 of Notes to Consolidated Financial Statements.

| --- | --- | --- | --- | --- | --- | --- | --- |

| | (a) | | (b) | | (c) | | (d) |

| | Shares (or Units) | | Average Price Paid | | Announced Plans or | | the Plans or |

| January 1 - 31, 2021 | — | $ | — | | — | | 2,357,803 |

| February 1 - 28, 2021 | 49,610 | $ | 241.4919 | | 4,100 | | 2,353,703 |

| March 1 - 31, 2021 | 93,362 | $ | 241.7088 | | 93,362 | | 2,260,341 |

| April 1 - 30, 2021 | — | $ | — | | — | | 2,260,341 |

| May 1 - 31, 2021 | 2,378 | $ | 267.0901 | | — | | 2,260,341 |

| June 1 - 30, 2021 | 68,100 | $ | 246.4414 | | 68,100 | | 2,192,241 |

| July 1 - 31, 2021 | 133,949 | $ | 248.8612 | | 133,949 | | 2,058,292 |

| August 1 - 31, 2021 | 191,560 | $ | 257.2113 | | 191,560 | | 1,866,732 |

| September 1 - 30, 2021 | 305,222 | $ | 257.1626 | | 299,849 | | 1,566,883 |

| October 1 - 31, 2021 | 2,062 | $ | 269.4910 | | — | | 1,566,883 |

| November 1 - 30, 2021 | 4,232 | $ | 274.4150 | | — | | 1,566,883 |

| December 1 - 31, 2021 | 97,186 | $ | 259.3518 | | 96,702 | | 1,470,181 |

| Total | 947,661 | $ | — | | 887,622 | | 1,470,181 |

(1)On May 22, 2020, the Company’s executive committee of the Board of Directors approved an amendment to the share repurchase program authorizing the Company and/or its subsidiary Holdings, to purchase up to a current aggregate of 32.0 million of the Company’s shares (recognizing that the number of shares authorized for repurchase has been reduced by those shares that have already been purchased) in open market transactions, privately negotiated transactions or both.

The following Performance Graph compares cumulative total shareholder returns on the Common Shares (assuming reinvestment of dividends) from December 31, 2016 through December 31, 2021, with the cumulative total return of the Standard & Poor’s 500 Index and the Standard & Poor’s Insurance (Property and Casualty) Index.

| | 12/16 | | 12/17 | | 12/18 | | 12/19 | | 12/20 | | 12/21 |

| Everest Re Group, Ltd. | 100.00 | | 104.43 | | 105.19 | | 136.92 | | 119.04 | | 142.66 |

| S&P 500 | 100.00 | | 121.83 | | 116.49 | | 153.17 | | 181.35 | | 233.41 |

| S&P Property & Casualty Insurance | 100.00 | | 122.39 | | 116.64 | | 146.82 | | 157.04 | | 187.31 |

[removed: | | Years Ended December 31, | | | | | | | | | | | | | |][added: years ended]

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

OF

FINANCIAL

CONDITION

AND

RESULTS

OF

OPERATION

The following is

a discussion and analysis

of our results of

operations and financial

condition for the

December

31,

2022

and

2021.

This

discussion

should

be

read

in

conjunction

with

the

Consolidated

Financial

Statements

and

related

The following selected consolidated GAAP financial data of the Company as of and for the years ended December 31, 2021, 2020, 2019, 2018 and 2017, were derived from the audited consolidated financial statements of the Company.

The following financial data should be read in conjunction with the Consolidated Financial Statements and accompanying notes.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (Dollars in millions, except per share amounts) | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |

| Operating data: | | | | | | | | | | | | | | |

| Gross written premiums | $ | 13,049.8 | | $ | 10,482.4 | | $ | 9,133.4 | | $ | 8,475.2 | | $ | 7,173.9 |

| Net written premiums | | 11,445.5 | | | 9,117.0 | | | 7,824.4 | | | 7,414.4 | | | 6,244.7 |

| Premiums earned | | 10,406.4 | | | 8,681.5 | | | 7,403.7 | | | 6,931.7 | | | 5,937.8 |

| Net investment income | | 1,164.9 | | | 642.5 | | | 647.1 | | | 581.2 | | | 542.9 |

| Net realized capital gains (losses) | | 257.9 | | | 267.6 | | | 185.0 | | | (127.1) | | | 153.2 |

| Incurred losses and loss adjustment | | | | | | | | | | | | | | |

| expenses (including catastrophes) | | 7,391.3 | | | 6,550.8 | | | 4,922.9 | | | 5,651.4 | | | 4,522.6 |

| Net catastrophe losses (1) | | 1,065.0 | | | 415.0 | | | 550.0 | | | 1,669.8 | | | 1,339.1 |

| Commission, brokerage, taxes and fees | | 2,208.8 | | | 1,873.3 | | | 1,703.7 | | | 1,519.0 | | | 1,304.0 |

| Other underwriting expenses | | 582.6 | | | 511.2 | | | 440.9 | | | 371.5 | | | 318.8 |

| Corporate expenses | | 67.8 | | | 41.1 | | | 33.0 | | | 30.7 | | | 25.9 |

| Interest, fees and bond issue cost | | | | | | | | | | | | | | |

| amortization expense | | 70.1 | | | 36.3 | | | 31.7 | | | 31.0 | | | 31.6 |

| Income (loss) before taxes | | 1,545.6 | | | 585.3 | | | 1,099.0 | | | (242.2) | | | 419.4 |

| Income tax expense (benefit) | | 166.5 | | | 71.2 | | | 89.5 | | | (331.2) | | | (63.4) |

| Net income (loss) (2) | | 1,379.1 | | | 514.2 | | | 1,009.5 | | | 89.0 | | | 482.8 |

| | | | | | | | | | | | | | | |

| EARNINGS PER COMMON SHARE: | | | | | | | | | | | | | | |

| Basic (3) | $ | 34.66 | | $ | 12.81 | | $ | 24.77 | | $ | 2.18 | | $ | 11.77 |

| Diluted (4) | $ | 34.62 | | $ | 12.78 | | $ | 24.70 | | $ | 2.17 | | $ | 11.70 |

| Dividends declared | $ | 6.20 | | $ | 6.20 | | $ | 5.75 | | $ | 5.30 | | $ | 5.05 |

| Certain GAAP financial ratios: (5) | | | | | | | | | | | | | | |

| Loss ratio | | 71.0% | | | 75.5% | | | 66.5% | | | 81.5% | | | 76.2% |

| Other underwriting expense ratio | | 26.8% | | | 27.4% | | | 29.0% | | | 27.3% | | | 27.3% |

| Combined ratio (2) | | 97.8% | | | 102.9% | | | 95.5% | | | 108.8% | | | 103.5% |

| Balance sheet data (at end of period): | | | | | | | | | | | | | | |

| Total investments and cash | $ | 29,673.3 | | $ | 25,461.6 | | $ | 20,748.5 | | $ | 18,433.1 | | $ | 18,626.5 |

| Total assets | | 38,185.3 | | | 32,711.5 | | | 27,244.0 | | | 24,773.1 | | | 23,577.6 |

| Loss and LAE reserves | | 19,009.5 | | | 16,322.1 | | | 13,531.3 | | | 13,098.2 | | | 11,870.1 |

| Total debt | | 3,088.6 | | | 1,910.4 | | | 633.8 | | | 633.6 | | | 633.4 |

| Total liabilities | | 28,046.1 | | | 22,985.3 | | | 18,111.1 | | | 16,869.3 | | | 15,208.4 |

| Shareholders' equity | | 10,139.2 | | | 9,726.2 | | | 9,132.9 | | | 7,860.8 | | | 8,340.7 |

| Book value per share (6) | | 258.21 | | | 243.25 | | | 223.85 | | | 193.37 | | | 204.25 |

(1) Catastrophe losses are presented net of reinsurance and reinstatement premiums.

Catastrophe insurance provides coverage for one event.

“Financial Statements

and

Supplementary Data” - Notes 1 and 3

of Notes to the Consolidated Financial Statements.

Reinsurance

Recoverables.

We

have

purchased

reinsurance

to

reduce

our

exposure

to

adverse

claim

experience,

large

claims

and catastrophic

loss

occurrences.

Our ceded

reinsurance

provides

for

recovery

from

reinsurers

of

portion

of

losses

and

loss

expenses

under

certain

circumstances.

The financial statements and schedules listed in the accompanying Index to Financial Statements and Schedules on page F-1 are filed as part of this report.

[removed: Disclosure] [added: Disclosure] Controls and [removed: Procedures.][added: Procedures.]

[removed: Management’s Report] on Internal Control Over Financial [removed: Reporting.][added: Reporting.]

[removed: Changes] [added: Changes] in Internal Control over [removed: Financial Reporting.]

[removed: Based on that evaluation,] there has been no such change during the fourth [removed: quarter.]

CONTROLS AND PROCEDURES

As

required

by

Rule

13a-15(b)

of

the

Securities

Exchange

Act

of

1934

(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

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (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 report.

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, 2021.

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, 2021, our internal control over financial reporting is effective based on those criteria.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears herein.

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.

DIRECTORS, EXECUTIVE OFFICERS

AND CORPORATE GOVERNANCE

Reference

is

made

to

the

sections

captioned

“Information

Concerning

Nominees”,

“Information

Concerning

Continuing

Directors

and

Executive

Officers”,

“Audit

Committee”,

“Nominating

and

Governance

Committee”,

“Code

of

Ethics

for

CEO

and

Senior

Financial

Officers”

and

“Section

16(a)

Beneficial

Ownership

Reporting

Reference is made to the sections captioned “Information Concerning Nominees”, “Information Concerning Continuing Directors and Executive Officers”, “Audit Committee”, “Nominating and Governance Committee”, “Code of Ethics for CEO and Senior Financial Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our proxy statement for the 2022 Annual General Meeting of Shareholders, which will be filed with the Commission within 120 days of the close of our fiscal year ended December 31, 2021 (the “Proxy Statement”), which sections are incorporated herein by reference.

EXECUTIVE COMPENSATION

Reference

is

made

to

the

sections

captioned

“Directors’

Compensation”

and

“Compensation

of

Executive

Officers” in the Proxy Statement,

which are incorporated herein

by reference.

Reference is made to the sections captioned “Directors’ Compensation” and “Compensation of Executive Officers” in the Proxy Statement, which are incorporated herein by reference.

SECURITY

OWNERSHIP

OF

CERTAIN

BENEFICIAL

OWNERS

AND

MANAGEMENT

AND

RELATED

SHAREHOLDER MATTERS

Reference

is

made to

the

sections

captioned

“Common

Share

Ownership

by

Directors

and

Executive

Officers”,

“Principal

Beneficial

Owners

of

Common

Shares”

and

“Securities

Authorized

for

Issuance

Under

Equity

Compensation Plans” in the Proxy Statement,

which are incorporated herein

Reference is made to the sections captioned “Common Share Ownership by Directors and Executive Officers”, “Principal Beneficial Owners of Common Shares” and “Securities Authorized for Issuance Under Equity Compensation Plans” in the Proxy Statement, which are incorporated herein by reference.

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS,

AND DIRECTOR INDEPENDENCE

Reference

is made to

the section captioned

“Certain Transactions

with Directors”

in the Proxy

Statement, which

is incorporated herein by

reference.

Reference is made to the section captioned “Certain Transactions with Directors” in the Proxy Statement, which is incorporated herein by reference.

[removed: PART IV][added: PART IV]

PRINCIPAL ACCOUNTANT

FEES AND SERVICES

Reference is made to the section

captioned “Audit

Committee Report” in the Proxy Statement,

which is

incorporated herein by

reference.

Reference is made to the section captioned “Audit Committee Report” in the Proxy Statement, which is incorporated herein by reference.

[removed: Financial] [added: Financial] Statements and [removed: Schedules.][added: Schedules.]

[removed: The financial statements and schedules listed in the accompanying Index to Financial Statements and Schedules] on page F-1 are filed as part of this report.

[removed: Exhibits.][added: Exhibits.]

[removed: SIGNATURES][added: SIGNATURES]

[removed: | |] EVEREST RE GROUP, [removed: LTD. | | |]

[removed: | | By: |] /S/ JUAN C. [removed: ANDRADE | |]

[removed: | | |] Juan C. [removed: Andrade | |]

[removed: | | |] (President and Chief Executive [removed: Officer) | |]

[removed: | /S/ JUAN C. ANDRADE | |] President and Chief Executive [removed: Officer (Principal Executive Officer) | | February 28, 2022 | | |]

[removed: | Juan] [added: /S/ JUAN] C. [removed: Andrade | | | | | | |]

[removed: | /S/ MARK KOCIANCIC | |] Executive Vice President and Chief [removed: Financial Officer | | February 28, 2022 | | |]

[removed: | Mark Kociancic | | | | | | |][added: /S/ MARK KOCIANCIC]

[removed: | /S/ ROBERT J. FREILING | |] Senior Vice President and Chief [removed: | | February 28, 2022 | | |]

[removed: | Robert J. Freiling | |] Accounting Officer [removed: | | | | |]

[removed: | Joseph] [added: /S/ JOSEPH] V. [removed: Taranto | | | | | | |]

[removed: | John] [added: /S/ JOHN] J. [removed: Amore | | | | | | |]

[removed: | William F.] Galtney, Jr. [removed: | | | | | | |]

[removed: |] John [removed: A. Graf | | | | | | |][added: J.]

[removed: |] /S/ MERYL HARTZBAND [removed: | | Director | | February 28, 2022 | | |]

[removed: |] Meryl Hartzband [removed: | | | | | | |]

[removed: |] /S/ GERALDINE LOSQUADRO [removed: | | Director | | February 28, 2022 | | |]

[removed: |] Geraldine Losquadro [removed: | | | | | | |]

[removed: | Roger] [added: /S/ ROGER] M. [removed: Singer | | | | | | |]

[removed: | John] [added: /S/ JOHN] A. [removed: Weber | | | | | | |]

[removed: | INDEX] [added: INDEX] TO [removed: EXHIBITS | | | | |][added: EXHIBITS]

[removed: |] Exhibit No. [removed: | | | | |]

[removed: | | | 2. | 1 | [Agreement and Plan of Merger among Everest Reinsurance Holdings, Inc., Everest Re Group, Ltd.] [added: [Ltd.] and Everest Re Merger Corporation, incorporated herein by reference to Exhibit 2.1 to [removed: the Registration Statement on Form S-4 (No. 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199005385/0000950131-99-005385.txt) |][added: the](http://www.sec.gov/Archives/edgar/data/1095073/000095013199005385/0000950131-99-005385.txt)]

[removed: | | | 3. | 1 | [Memorandum of Association of Everest Re Group, Ltd., incorporated herein by reference to Exhibit] [added: [Exhibit] 3.1 to the Registration Statement on Form S-4 (No. 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199005385/0000950131-99-005385.txt) [removed: |]

[removed: | | | 3. | 2 | [Bye-Laws of Everest Re Group, Ltd., incorporated herein by reference to exhibit 3.2 to the Everest] [added: [Everest] Re Group, Ltd., Quarterly Report for Form 10-Q for the quarter ended June 30, 2011 [removed: (the “second quarter 2011 10-Q”)](http://www.sec.gov/Archives/edgar/data/1095073/000109507311000053/bylawsexhibit.htm) |][added: (the](http://www.sec.gov/Archives/edgar/data/1095073/000109507311000053/bylawsexhibit.htm)]

[removed: | | | 4. | 1 |] [Specimen Everest Re Group, Ltd. common share certificate, incorporated herein by reference [removed: to Exhibit 4.1 of the Registration Statement on Form S-4 (No. 333-87361)](http://www.sec.gov/Archives/edgar/data/1095073/000095013199006791/0000950131-99-006791.txt) |][added: to](http://www.sec.gov/Archives/edgar/data/1095073/000095013199006791/0000950131-99-006791.txt)]

[removed: | | | 4. | 2 |] [Indenture, dated March 14, 2000, between Everest Reinsurance Holdings, Inc. and The [removed: Chase Manhattan Bank (now known as JPMorgan Chase Bank), as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on March 15, 2000](http://www.sec.gov/Archives/edgar/data/914748/000095013100001763/0000950131-00-001763.txt) |][added: Chase](http://www.sec.gov/Archives/edgar/data/914748/000095013100001763/0000950131-00-001763.txt)]

[removed: | | | 4. | 3 | [Fourth Supplemental Indenture relating to Holdings $400.0 million 4.868% Senior Notes due June] [added: [June] 1, 2044, dated June 5, 2014, between Holdings and The Bank of New York Mellon, [removed: as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on June 5, 2014](http://www.sec.gov/Archives/edgar/data/914748/000119312514226501/d736264dex41.htm) |][added: as](http://www.sec.gov/Archives/edgar/data/914748/000119312514226501/d736264dex41.htm)]

[removed: | | | 4. | 4 |] [Fifth Supplemental Indenture relating to Holdings $1.0 billion 3.5% Senior Notes due [removed: October 15, 2050, dated October 7, 2020, between Holdings and The Bank of New York Mellon, as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on October 7, 2020](http://www.sec.gov/Archives/edgar/data/914748/000119312520265240/d17079dex41.htm) |][added: October](http://www.sec.gov/Archives/edgar/data/914748/000119312520265240/d17079dex41.htm)]

[removed: | | | 4. | 5 |] [Sixth Supplemental Indenture relating to Holdings $1.0 billion 3.125% Senior Notes due [removed: October 15, 2052, dated October 4, 2021, between Holdings and The Bank of New York Mellon, as Trustee, incorporated herein by reference to Exhibit 4.1 to Everest Reinsurance Holdings, Inc. Form 8-K filed on October 4, 2021](http://www.sec.gov/Archives/edgar/data/914748/000119312521290543/d233237dex41.htm) |][added: October](http://www.sec.gov/Archives/edgar/data/914748/000119312521290543/d233237dex41.htm)]

[removed: | | | *10. | 1 |] [Everest Re Group, Ltd. Annual Incentive Plan effective January 1, 1999, incorporated herein [removed: by reference to Exhibit 10.1 to Everest Reinsurance Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 1998 (the “1998 10-K”)](http://www.sec.gov/Archives/edgar/data/914748/0000914748-99-000002.txt) |][added: by](http://www.sec.gov/Archives/edgar/data/914748/0000914748-99-000002.txt)]

[removed: | | | *10. | 2 |] [Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation Plan, [removed: incorporated herein by reference to Exhibit 4.1 to the Registration Statement on Form S-8 (No. 333-105483)](http://www.sec.gov/Archives/edgar/data/1095073/000095013103003076/dex41.htm) |][added: incorporated](http://www.sec.gov/Archives/edgar/data/1095073/000095013103003076/dex41.htm)]

[removed: | | | *10. | 3 |] [Form of Non-Qualified Stock Option Award Agreement under the Everest Re Group, Ltd. [removed: 2003 Non-Employee Director Equity Compensation Plan, incorporated herein by reference to Exhibit 10.47 to Everest Re Group, Ltd., Report on Form 10-K for the year ended December 31, 2004](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000008/exh10-47.htm) |][added: 2003](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000008/exh10-47.htm)]

[removed: | | | *10. | 4 |] [Amendment of Everest Re Group, Ltd. 2003 Non-Employee Director Equity Compensation [removed: Plan adopted by shareholders at the annual general meeting on May 25, 2005, incorporated herein by reference to Appendix B to the 2005 Proxy Statement filed on April 14, 2005](http://www.sec.gov/Archives/edgar/data/1095073/000093041305002626/c36781_def14a.htm) |][added: Plan](http://www.sec.gov/Archives/edgar/data/1095073/000093041305002626/c36781_def14a.htm)]

[removed: | | | *10. | 5 |] [Form of Restricted Stock Award Agreement under the Everest Re Group, Ltd. 2003 [removed: Non-Employee Director Equity Compensation Plan, incorporated by reference to Exhibit 10.1 to Everest Re Group, Ltd. Form 8-K filed on September 22, 2005](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000031/exh101.htm) |][added: Non-](http://www.sec.gov/Archives/edgar/data/1095073/000109507305000031/exh101.htm)]

[removed: | | | 10. | 6 | [Completion of Tender Offer relating to Everest Reinsurance Holdings, Inc. 6.60% Fixed to Floating Rate Long Term Subordinated Notes (LoTSSM) dated March 19, 2009, incorporated herein] [added: [herein] by reference to Exhibit 99.1 to Everest Re Group, Ltd. Form 8-K filed on March 31, 2009](http://www.sec.gov/Archives/edgar/data/1095073/000109507309000014/tenderoffercompletion8k2009.htm) [removed: |]

EXHIBITS AND FINANCIAL STATEMENT

The financial

statements

and schedules

listed in

the accompanying

Index to

Financial Statements

and Schedules

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 32

are being furnished

to the SEC,

rather than

filed with the

SEC, as permitted

under

applicable SEC rules.

Pursuant

to the

requirements

of Section

13 or

15(d) of

the Securities

Exchange

Act of

1934, the

registrant

has

duly caused this report

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 32 are being furnished to the SEC, rather than filed with the SEC, as permitted under applicable SEC rules.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 28, 2022.

| --- | --- | --- | --- |

| | | | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

| Signature | | Title | | Date | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| /S/ JOSEPH V. TARANTO | | Chairman | | February 28, 2022 | | |

| /S/ JOHN J. AMORE | | Director | | February 28, 2022 | | |

| /S/ WILLIAM F. GALTNEY, JR. | | Director | | February 28, 2022 | | |

| /S/ JOHN A. GRAF | | Director | | February 28, 2022 | | |

| /S/ ROGER M. SINGER | | Director | | February 28, 2022 | | |

| /S/ JOHN A. WEBER | | Director | | February 28, 2022 | | |

| --- | --- | --- | --- | --- |

| | | | | |

E-1

| | | 10. | 16 | [Credit Agreement, dated May 26, 2016, between Everest Re Group, Ltd., Everest Reinsurance (Bermuda), Ltd. and Everest International Reinsurance, Ltd., certain lenders party thereto and Wells Fargo Bank, N.A. as administrative agent, providing for an $800.0 million four year senior credit facility, incorporated herein by reference to Exhibit 10.31 to Everest Re Group, Ltd. Form 10-Q filed on August 9, 2016. This new agreement replaces the June 22, 2012 four year, $800.0 million senior credit facility](http://www.sec.gov/Archives/edgar/data/1095073/000109507316000109/thirdamendcreditagree.htm) |

E-2

E-3

E-4

| | 101. | | SCH | XBRL Taxonomy Extension Schema |

E-5

| EVEREST RE GROUP, LTD. | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| Schedules other than those listed above are omitted for the reason that they are not applicable or the information is otherwise contained in the Financial Statements. | | | | | |

We have audited the accompanying consolidated balance sheets of Everest Re Group, Ltd. and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income (loss), of changes in shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedules listed in the index appearing on page F-1 (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.