Item 8. ,

“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

a

portion

of

losses

and

loss

expenses

under

certain

circumstances.

Such

reinsurance

does

not

relieve us of our

obligation to

our policyholders.

In the event our

reinsurers are

unable to meet their obligations

under these agreements

or are able to successfully

challenge losses ceded by

us under the contracts,

we will not

be

able

to

realize

the

full

value

of

the

reinsurance

recoverable

balance.

In

some

cases,

we

may

hold

full

or

partial collateral

for the

receivable,

including letters

of credit,

trust assets

and cash.

Additionally,

creditworthy

foreign

reinsurers

of

business

written

in

the

U.S.,

as

well

as

capital

markets’

reinsurance

mechanisms,

are

generally required

to secure their

obligations.

We have

established reserves

for uncollectible balances

based on

our

assessment

of

the

collectability

of

the

outstanding

balances.

The

allowance

for

uncollectible

reinsurance

reflects

management’s

best

estimate

of

reinsurance

cessions

that

may

be

uncollectible

in

the

future

due

to

reinsurers’

unwillingness or

inability to pay.

The allowance for

uncollectible reinsurance

comprises an

allowance

and

an

allowance

for

disputed

balances.

Based

on

this

analysis,

the

Company

may

adjust

the

allowance

for

uncollectible reinsurance or charge

off reinsurer balances that are

determined to be uncollectible.

Due to the inherent

uncertainties as to

collection and the length

of time before reinsurance

recoverable become

due, it is possible that future adjustments

to the Company’s reinsurance

recoverable, net of the

allowance, could

be required,

which could

have a

material adverse

effect on

the Company’s

consolidated results

of operations

or

cash flows in a particular quarter or annual period.

The allowance

is

estimated

as

the

amount

of reinsurance

recoverable

exposed

to

loss multiplied

by

estimated

factors

for

the

probability

of

default.

The

reinsurance

recoverable

exposed

is

the

amount

of

reinsurance

recoverable

net of collateral

and other offsets,

considering the nature

of the collateral,

potential future

changes

in collateral

values, and

historical loss

information for

the type of

collateral obtained.

The probability

of default

factors are

historical insurer

and reinsurer

defaults for

liabilities with similar

durations to

the reinsured liabilities

as

estimated

through

multiple

economic

cycles.

Credit

ratings

are

forward-looking

and

consider

a

variety

of

economic outcomes.

The Company's

evaluation of

the required allowance

for reinsurance

recoverable

considers

the current economic environment

as well as macroeconomic scenarios.

The

Company

records

credit

loss

expenses

related

to

reinsurance

recoverable

in

Incurred

losses

and

loss

adjustment expenses in the Company’s

consolidated statements

of operations and comprehensive

income (loss).

Write-offs of

reinsurance recoverable

and any related

allowance are recorded

in the period in

which the balance

is deemed uncollectible.

Premiums

Written

and

Earned.

Premiums

written

by

us

are

earned

ratably

over

the

coverage

periods

of

the

related insurance

and reinsurance

contracts.

We

establish

unearned premium

reserves

to cover

the unexpired

portion of

each contract.

Such reserves,

for assumed

reinsurance,

are computed

using pro

rata

methods based

on statistical

data received from

ceding companies.

Premiums earned, and the

related costs,

which have not yet

been

reported

to

us,

are

estimated

and

accrued.

Because

of

the

inherent

lag

in

the

reporting

of

written

and

earned

premiums

by

our

ceding

companies,

we

use

standard

accepted

actuarial

methodologies

to

estimate

earned but not reported

premium at each financial reporting

date. These earned but

not reported premiums

are

combined

with

reported

earned

premiums

to

comprise

our

total

premiums

earned

for

determination

of

our

incurred

losses

and

loss

and

LAE

reserves.

Commission

expense

and

incurred

losses

related

to

the

change

in

earned

but

not

reported

premium are

included

in

current

period

company

and segment

financial

results.

See

also

ITEM

8,

“Financial

Statements

and

Supplementary

Data”

-

Note

of Notes

to

the

Consolidated

Financial

Statements.

The following table displays

the estimated components of net earned but

not reported premiums by segment for

the periods indicated.

At December 31,

(Dollars in millions)

2022

2021

2020

Reinsurance

$

2,255

$

2,055

$

1,774

Insurance

—

—

—

Total

$

2,255

$

2,055

$

1,774

(Some amounts may not reconcile due to rounding.)

Investment

Valuation.

Our fixed

income

investments

are

classified for

accounting

purposes

as either

available

for sale

or held to

maturity.

The available

for sale

fixed maturity

securities are

carried at fair

value and

the held

to maturity fixed

maturity portfolio

is carried at

amortized cost,

net of current

expected credit

allowance on our

consolidated

balance

sheets.

Our

equity

securities

are

all

carried

at

fair

value.

Most

securities

we

own

are

traded

on

national

exchanges

where

market

values

are

readily

available.

Some

of

our

commercial

mortgage-

backed

securities (“CMBS”)

are valued

using cash

flow models

and risk-adjusted

discount rates.

We hold

some

privately

placed securities,

less than

10% of

the portfolio,

that

are

either valued

by investment

advisors

or the

Company.

In

some

instances,

values

provided

by

an

investment

advisor

are

supported

with

opinions

from

qualified independent third parties.

The Company has procedures

in place to review the values

received from its

investment

advisors.

At

December 31,

2022 and

2021, our

investment

portfolio

included

$3.8 billion

and $2.6

billion,

respectively,

of

limited

partnership

investments

whose

values

are

reported

pursuant

to

the

equity

method

of

accounting.

We

carry

these

investments

at

values

provided

by

the

managements

of

the

limited

partnerships and

due to inherent

reporting lags,

the carrying values

are based on

values with “as

of” dates from

one month to one quarter prior to our financial statement

date.

At December 31, 2022, we had

net unrealized losses on our available

for sale fixed maturity

securities, net of tax,

of $1.7 billion

compared to

net unrealized

gains on

our available

for sale

fixed maturity

securities, net

of tax,

of

$239 million

at December

31, 2021.

Gains (losses)

from market

fluctuations on

available for

sale fixed

maturity

securities

at

fair

value

are

reflected

as

accumulated

other

comprehensive

income

(loss)

in

the

consolidated

balance sheets.

Market

value declines

for available

for sale

fixed income

portfolio,

which are

considered credit

related, are reflected

in our consolidated

statements of operations

and comprehensive income

(loss), as realized

capital

losses.

We

consider

many

factors

when

determining

whether

a

market

value

decline

is

credit

related,

including:

(1) we

have no

intent

to sell

and, more

likely than

not, will

not be

required to

sell prior

to recovery,

(2) the

length of

time the

market

value has

been below

book value,

(3) the

credit strength

of the

issuer,

(4) the

issuer’s

market

sector,

(5)

the

length

of

time

to

maturity

and

(6)

for

asset-backed

securities,

changes

in

prepayments,

credit

enhancements

and

underlying

default

rates.

If management’s

assessments

change

in

the

future, we may

ultimately record

a realized loss

after management

originally concluded that

the decline in value

was temporary.

Fixed

maturity

securities

designated

as

held

to

maturity

consist

of

debt

securities

for

which

the

Company

has

both the positive

intent and ability

to hold to

maturity or redemption

and are reported

at amortized cost,

net of

the

current

expected

credit

loss

allowance.

Interest

income

for

fixed

maturity

securities

held

to

maturity

is

determined in the

same manner as interest

income for fixed

maturity securities available

for sale.

The Company

evaluates

fixed

maturity

securities

classified as

held to

maturity

for

current

expected

credit

losses

utilizing

risk

characteristics

of

each

security,

including

credit

rating,

remaining

time

to

maturity,

adjusted

for

prepayment

considerations,

and

subordination

level,

and

applying

default

and

recovery

rates,

which

include

the

incorporation

of

historical

credit

loss

experience

and

macroeconomic

forecasts,

to

develop

an

estimate

of

current expected credit losses.

See also ITEM 8, “Financial

Statements and

Supplementary Data”

- Note 1 of Notes

to the Consolidated

Financial

Statements.

FINANCIAL CONDITION

Investments.

Total

investments were

$28.5 billion at

December 31, 2022,

an increase

of $241 million

compared

to

$28.2

billion

at

December

31,

The

rise

in

investments

was

primarily

related

to

an

increase

in

other

invested assets, partially

offset by a decline in equity

securities.

The increase in other invested

assets was due to

the inclusion

of assets held

for the implementation

of a Company

Owned Life Insurance

(“COLI”) program

in the

fourth quarter

of 2022.

A portion of

the equity securities

portfolio was

sold in order

to invest

in the COLI

assets

which accounted for the decline in equity

securities.

The

Company’s

limited

partnership

investments

are

comprised

of

limited

partnerships

that

invest

in

private

equity,

private

credit

and

private

real

estate.

Generally,

the

limited

partnerships

are

reported

on

a

month

or

quarter

lag.

We

receive

annual

audited

financial

statements

for

all

of

the

limited

partnerships

which

are

prepared using

fair value accounting

in accordance with

FASB guidance.

For the quarterly

reports, the Company

reviews

the

financial

reports

for

any

unusual

changes

in

carrying

value.

If

the

Company

becomes

aware

of

a

significant

decline in

value during

the lag

reporting

period, the

loss will

be recorded

in the

period in

which the

Company identifies the decline.

The

table

below

summarizes

the

composition

and

characteristics

of

our

investment

portfolio

as

of

the

dates

indicated.

At December 31,

2022

2021

Fixed income portfolio duration (years)

3.1

3.2

Fixed income composite credit quality

A+

A+

Reinsurance Recoverables

.

Reinsurance

recoverables

for

both

paid

and

unpaid

losses

totaled

$2.2

billion

at

December

31,

2022

and

$2.1

billion at

December 31,

At

December 31,

2022, $520

million, or

23.2%, was

recoverable

from Mt.

Logan

Re

collateralized

segregated

accounts;

$283

million,

or

12.6%,

was

recoverable

from

Munich

Re

and

$148

million, or 6.6%, was

recoverable

from Endurance

Re.

No other retrocessionaire

accounted for

more than 5% of

our recoverables.

Loss and LAE Reserves.

Gross loss and LAE reserves

totaled $22.1 billion and

$19.0 billion at December 31,

2022

and 2021, respectively.

The following

tables summarize

gross outstanding

loss and

LAE reserves

by segment,

classified by

case reserves

and IBNR reserves, for the periods indicated.

At December 31, 2022

Case

IBNR

Total

% of

(Dollars in millions)

Reserves

Reserves

Reserves

Total

Reinsurance

$

6,045

$

9,818

$

15,862

71.9%

Insurance

1,863

4,062

5,925

26.9%

Total excluding A&E

7,908

13,880

21,787

98.7%

A&E

1.3%

Total including A&E

$

8,046

$

14,019

$

22,065

100.0%

(Some amounts may not reconcile due to rounding.)

At December 31, 2021

Case

IBNR

Total

% of

(Dollars in millions)

Reserves

Reserves

Reserves

Total

Reinsurance

$

5,415

$

8,312

$

13,727

72.2%

Insurance

1,546

3,562

5,109

26.9%

Total excluding A&E

6,961

11,875

18,836

99.1%

A&E

0.9%

Total including A&E

$

7,125

$

11,885

$

19,009

100.0%

(Some amounts may not reconcile due to rounding.)

Changes

in

premiums

earned

and

business

mix,

reserve

re-estimations,

catastrophe

losses

and

changes

in

catastrophe loss reserves

and claim settlement activity all impact loss and LAE

reserves by segment and in total.

Our

carried

loss

and

LAE

reserves

represent

management’s

best

estimate

of

our

ultimate

liability

for

unpaid

claims.

We

continuously

re-evaluate

our

reserves,

including

re-estimates

of

prior

period

reserves,

taking

into

consideration

all available

information and,

in particular,

newly reported

loss and

claim experience.

Changes in

reserves resulting

from such

re-evaluations are

reflected in

incurred losses

in the period

when the re-evaluation

is

made.

Our

analytical

methods

and

processes

operate

at

multiple

levels

including

individual

contracts,

groupings of

like contracts,

classes and

lines of business,

internal business

units, segments,

accident years,

legal

entities,

and

in

the

aggregate.

In

order

to

set

appropriate

reserves,

we

make

qualitative

and

quantitative

analyses

and

judgments

at

these

various

levels.

We

utilize

actuarial

science,

business

expertise

and

management judgment

in a manner

intended to

ensure the accuracy

and consistency

of our reserving

practices.

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.

Nevertheless, our reserves are estimates,

which are subject to variation,

which may be significant.

There

can

be no

assurance

that reserves

for,

and losses

from,

claim obligations

will not

increase

in the

future,

possibly

by

a

material

amount.

However,

we

believe

that

our

existing

reserves

and

reserving

methodologies

lessen

the

probability

that

any

such

increase

would

have

a

material

adverse

effect

on

our

financial

condition,

results of operations or cash flows.

We

have

included

ranges

for

loss

reserve

estimates

determined

by

our

actuaries,

which

have

been

developed

through

a

combination

of

objective

and

subjective

criteria.

Our

presentation

of

this

information

may

not

be

directly comparable

to similar presentations

of other companies

as there are

no consistently

applied actuarial or

accounting standards

governing such presentations.

Our recorded reserves

are an aggregation

of our best

point

estimates

for

approximately

reserve

groups

and

reflect

our

best

point

estimate

of

our

liabilities.

Our

actuarial methodologies develop

point estimates

rather than ranges

and the ranges

are developed subsequently

based upon historical and prospective

variability measures.

The

following

table

below

represents

the

reserve

levels

and

ranges

for

each

of

our

business

segments

for

the

period indicated.

Outstanding Reserves and Ranges By Segment (1)

At December 31, 2022

As

Low

Low

High

High

(Dollars in millions)

Reported

Range %

Range

Range %

Range

Gross Reserves By Segment

Reinsurance

$

15,862

-7.4%

$

14,689

7.8%

$

17,095

Insurance

5,925

-9.9%

5,340

10.8%

6,565

Total Gross Reserves (excluding A&E)

21,787

-8.1%

20,029

8.6%

23,660

A&E (All Segments)

-22.9%

22.7%

Total Gross Reserves

$

22,065

-8.3%

20,243

8.8%

24,001

(Some amounts may not reconcile due

to rounding.)

---

(1)

There can be no assurance that reserves

will not ultimately exceed the

indicated ranges requiring additional

income (loss) statement expense.

Depending

on

the

specific

segment,

the

range

derived

for

the

loss

reserves,

excluding

reserves

for

A&E

exposures,

ranges

from minus

7.4% to

minus 9.9%

for the

low range

and from

plus 7.8%

to plus

10.8% for

the

high range.

Both the higher

and lower ranges

are associated

with the Insurance

segment.

The size of

the range

is

dependent

upon

the

level

of

confidence

associated

with

the

reserve

estimates.

Within

each

range,

management’s

best

estimate

of

loss

reserves

is

based

upon

the

point

estimate

derived

by

our

actuaries

in

detailed reserve

studies.

Such ranges

are necessarily

subjective due

to the

lack of

generally

accepted actuarial

standards with

respect to their

development.

There can be

no assurance that

our claim obligations

will not vary

outside of these ranges.

Additional losses, including

those relating to

latent injuries, and

other exposures, which

are as yet

unrecognized,

the type

or magnitude

of which

cannot be

foreseen

by us

or the

reinsurance

and insurance

industry

generally,

may

emerge

in

the

future.

Such

future

emergence,

to

the

extent

not

covered

by

existing

retrocessional

contracts,

could have

material

adverse

effects

on our

future financial

condition,

results of

operations

and cash

flows.

Asbestos and Environmental

Exposures.

A&E exposures represent a separate

exposure group for monitoring

and

evaluating reserve adequacy.

With

respect

to

asbestos

only,

at

December

31,

2022,

we

had

net

asbestos

loss

reserves

of

$233

million,

or

90.5%, of total net A&E reserves, all of which was

for assumed business.

See

Note

of

Notes

to

Consolidated

Financial

Statements

for

a

summary

of

Asbestos

and

Environmental

Exposures.

Ultimate

loss

projections

for

A&E

liabilities

cannot

be

accomplished

using

standard

actuarial

techniques.

We

believe

that

our

A&E

reserves

represent

management’s

best

estimate

of the

ultimate

liability;

however,

there

can be no assurance that ultimate loss

payments will not exceed such reserves,

perhaps by a significant amount.

Industry

analysts

use

the

“survival

ratio”

to

compare

the

A&E

reserves

among

companies

with

such

liabilities.

The survival ratio is typically calculated

by dividing a company’s

current net reserves by the three year

average of

annual

paid

losses.

Hence,

the

survival

ratio

equals

the

number

of

years

that

it

would

take

to

exhaust

the

current reserves

if future

loss payments

were to

continue at

historical

levels.

Using this

measurement,

our net

three

year

asbestos

survival

ratio

was

6.9

years

at

December

31,

These

metrics

can

be

skewed

by

individual large settlements

occurring in the

prior three years

and therefore,

may not be

indicative of

the timing

of future payments.

LIQUIDITY AND CAPITAL RESOURCES

Capital.

Shareholders’

equity at

December 31,

2022 and

December 31,

2021 was

$8.4 billion

and $10.1

billion,

respectively.

Management’s

objective

in

managing

capital

is

to

ensure

its

overall

capital

level,

as

well

as

the

capital

levels

of

its

operating

subsidiaries,

exceed

the

amounts

required

by

regulators,

the

amount

needed

to

support

our current

financial strength

ratings

from rating

agencies and

our own

economic capital

models.

The

Company’s capital

has historically exceeded these benchmark

levels.

Our

two

main

operating

companies

Bermuda

Re

and

Everest

Re

are

regulated

by

the

Bermuda

Monetary

Authority

(“BMA”)

and

the

State

of

Delaware,

Department

of

Insurance,

respectively.

Both

regulatory

bodies

have their

own capital

adequacy models

based on

statutory capital

as opposed

to GAAP basis

equity.

Failure to

meet

the

required

statutory

capital

levels

could

result

in

various

regulatory

restrictions,

including

business

activity and the payment of dividends to

their parent companies.

The regulatory targeted

capital and the actual statutory

capital for Bermuda Re and Everest

Re were as follows:

Bermuda Re

(1)

Everest Re

(2)

At December 31,

At December 31,

(Dollars in millions)

2022

(3)

2021

2022

2021

Regulatory targeted capital

$

—

$

2,169

$

3,353

$

2,960

Actual capital

$

2,759

$

3,184

$

5,553

$

5,717

(1)

Regulatory targeted capital represents

the target capital level from

the applicable year's BSCR calculation.

(2)

Regulatory targeted capital represents

200% of the RBC authorized control

level calculation for the applicable

year.

(3)

The 2022 BSCR calculation is not

yet due to be completed;

however,

the Company anticipates that

Bermuda Re's December

31, 2022 actual capital will

exceed

the targeted capital level.

Our financial strength

ratings as determined

by A.M. Best, Moody’s

and Standard & Poor’s

are important as

they

provide

our

customers

and

investors

with

an

independent

assessment

of

our

financial

strength

using

a

rating

scale that provides

for relative comparisons.

We continue

to possess significant

financial flexibility and

access to

debt

and

equity markets

as a

result

of our

financial

strength,

as evidenced

by

the

financial strength

ratings

as

assigned by independent rating agencies.

See also ITEM 1, Business – “Financial Strength Ratings”.

We maintain

our own economic

capital models

to monitor

and project

our overall

capital, as

well as, the

capital

at

our

operating

subsidiaries.

A

key

input

to

the

economic

models

is

projected

income

and

this

input

is

continually compared to actual results,

which may require a change in the capital

strategy.

In 2022,

we repurchased

241,273 shares

for $61

million in

the open

market

and paid

$255 million

in dividends.

During

2021,

we

repurchased

887,622

shares

for

$225

million

in

the

open

market

and

paid

$247

million

in

dividends.

We may

at times enter

into a

Rule 10b5-1 repurchase

plan agreement

to facilitate

the repurchase

of

shares.

On

May

22,

2020,

our

existing

Board

authorization

to

purchase

up

to

million

of

our

shares

was

amended to

authorize

the purchase

of up

to 32

million shares.

As of

December 31,

2022, we

had repurchased

30.8 million shares under this authorization.

We repurchased

$6 million of our

long term subordinated

notes during the

third quarter of

2022 and recognized

a gain

of $1

million on

the repurchase.

We

may continue,

from time

to time,

to

seek to

retire

portions of

our

outstanding

debt

securities

through

cash

repurchases,

in

open-market

purchases,

privately

negotiated

transactions

or

otherwise.

Such

repurchases,

if

any,

will

be

subject

to

and

depend

on

prevailing

market

conditions,

our

liquidity

requirements,

contractual

restrictions

and

other

factors.

The amounts

involved

in

any

such transactions, individually or in the aggregate,

may be material.

On October 7,

2020, we

issued

an additional

$1.0 billion of

30 year senior

notes with

an interest

coupon rate

of

3.5%.

These senior notes will mature on October

15, 2050 and will pay interest

semi-annually.

On October 4,

2021, we

issued an

additional $1.0

billion of 31

year senior

notes with

an interest

coupon rate

of

3.125%.

These senior notes will mature on October 15, 2052 and

will pay interest semi-annually.

Liquidity.

Our liquidity

requirements

are generally

met from

positive

cash flow

from operations.

Positive

cash

flow results

from reinsurance

and insurance

premiums being

collected prior

to disbursements

for claims,

which

disbursements

generally

take

place

over

an

extended

period

after

the

collection

of

premiums,

sometimes

a

period of many

years.

Collected premiums

are generally

invested,

prior to

their use in

such disbursements,

and

investment

income provides

additional funding

for loss

payments.

Our net

cash flows

from operating

activities

were $3.7

billion and

$3.8 billion

for the

years

ended December

31, 2022

and 2021,

respectively.

Additionally,

these cash

flows reflected

net catastrophe

loss payments

of $677

million and

$834 million

for the

years

ended

December 31,

2022

and 2021,

respectively

and net

tax

payments

of $171

million and

$98 million

for the

years

ended December 31, 2022 and 2021, respectively.

If disbursements

for claims

and benefits,

policy acquisition

costs and

other operating

expenses

were to

exceed

premium inflows,

cash flow

from reinsurance

and insurance

operations

would be

negative.

The effect

on cash

flow

from

insurance

operations

would

be

partially

offset

by

cash

flow

from

investment

income.

Additionally,

cash inflows

from investment

maturities - both

short-term investments

and longer

term maturities

are available

to supplement other

operating cash

flows.

We do not

expect to supplement

negative insurance

operations cash

flows from investment dispositions.

As the

timing of

payments for

claims and

benefits cannot

be predicted

with certainty,

we maintain

portfolios of

long

term

invested

assets

with

varying

maturities,

along

with

short-term

investments

that

provide

additional

liquidity

for

payment

of claims.

At

December

31,

2022

and

December

31,

2021,

we

held

cash

and short

-term

investments

of

$2.4

billion

and

$2.6

billion,

respectively.

Our

short-term

investments

are

generally

readily

marketable

and can

be converted

to cash.

In addition

to these

cash and

short-term investments,

at December

31, 2022, we had

$1.3 billion of

available for

sale fixed

maturity securities

maturing within one

year or less,

$7.5

billion maturing

within one

to

five years

and

$5.3 billion

maturing

after

five

years.

Our

$281 million

of

equity

securities

are

comprised

primarily

of

publicly

traded

securities

that

can

be

easily

liquidated.

We

believe

that

these fixed

maturity and equity securities,

in conjunction with the short

-term investments and

positive cash flow

from operations,

provide ample

sources of

liquidity for

the expected

payment

of losses

in the

near future.

We

do not anticipate selling

a significant amount

of securities or using available

credit facilities to

pay losses and LAE

but have

the ability to

do so.

Sales of securities

might result

in realized capital

gains or losses.

At December 31,

2022

we

had

$1.9

billion

of

net

pre-tax

unrealized

depreciation

related

to

available

for

sale

fixed

maturity

securities,

comprised

of

$2.0

billion

of

pre-tax

unrealized

depreciation

and

$81

million

of

pre-tax

unrealized

appreciation.

Management generally

expects annual

positive cash

flow from operations,

which reflects

the strength

of overall

pricing.

However,

given the recent

set of catastrophic

events, cash

flow from operations

may decline

and could

become negative in the near term as

significant claim payments are

made related to the catastrophes.

However,

as indicated

above,

the Company

has ample

liquidity to

settle its

catastrophe

claims and/or

any

payments

due

for its catastrophe

bond program.

In addition to our cash flows from operations

and liquid investments, we also have

multiple active credit facilities

that

provide

commitments

of

up

to

$1.5

billion

of

collateralized

standby

letters

of

credit

to

support

business

written by

our Bermuda operating

subsidiaries.

In addition, the

Company has the

ability to request

access to an

additional

$440

million

of

uncommitted

credit

facilities,

which

would

require

approval

from

the

applicable

lender.

There is

no guarantee

the uncommitted

capacity will

be available

to us

on a

future date.

See Note

5 –

Credit Facilities for further details.

Exposure to

Catastrophes.

Like other insurance

and reinsurance

companies, we are

exposed to

multiple insured

losses arising out of a

single occurrence, whether a

natural event,

such as a hurricane

or an earthquake,

or other

catastrophe,

such

as

an

explosion

at

a

major

factory.

A

large

catastrophic

event

can

be

expected

to

generate

insured

losses

to

multiple

reinsurance

treaties,

facultative

certificates

and

direct

insurance

policies

across

various lines of business.

We focus on

potential losses that

could result from

any single event,

or series of events

as part of our evaluation

and monitoring

of our

aggregate

exposures

to

catastrophic

events.

Accordingly,

we employ

various

techniques

to estimate

the amount of

loss we could

sustain from

any single catastrophic

event or series

of events in

various

geographic

areas.

These

techniques

range

from

deterministic

approaches,

such

as

tracking

aggregate

limits

exposed

in

catastrophe-prone

zones

and

applying

reasonable

damage

factors,

to

modeled

approaches

that

attempt

to

scientifically

measure

catastrophe

loss

exposure

using

sophisticated

Monte

Carlo

simulation

techniques that forecast

frequency and severity of potential losses

on a probabilistic basis.

No single

computer

model or

group

of models

is currently

capable of

projecting

the amount

and probability

of

loss in

all global geographic

regions in

which we

conduct business.

In addition,

the form,

quality and

granularity

of underwriting exposure

data furnished

by (re)insureds

is not uniformly

compatible with the

data requirements

for

our

licensed

models,

which

adds

to

the

inherent

imprecision

in

the

potential

loss

projections.

Further,

the

results

from

multiple

models

and

analytical

methods

must

be

combined

to

estimate

potential

losses

by

and

across

business

units.

Also,

while

most

models

have

been

updated

to

incorporate

claims

information

from

recent

catastrophic

events,

catastrophe

model

projections

are

still

inherently

imprecise.

In

addition,

uncertainties with respect

to future climatic patterns

and cycles could add

further uncertainty to loss

projections

from models based on historical data.

Nevertheless,

when combined

with traditional

risk management

techniques

and sound

underwriting judgment,

catastrophe

models

are

a

useful

tool

for

underwriters

to

price

catastrophe

exposed

risks

and

for

providing

management with

quantitative

analyses with

which to monitor

and manage

catastrophic

risk exposures

by zone

and across zones for individual and

multiple events.

Projected catastrophe

losses are

generally summarized

in terms

of the

PML.

We define

PML as

our anticipated

loss, taking

into account

contract

terms and

limits, caused

by a

single catastrophe

affecting

a broad

contiguous

geographic

area,

such

as

that

caused

by

a

hurricane

or

earthquake.

The

PML

will

vary

depending

upon

the

modeled simulated

losses

and the

make-up

of the

in force

book

of business.

The projected

severity

levels

are

described

in

terms

of “return

periods”,

such

as

“100-year

events”

and

“250-year

events”.

For

example,

a

100-

year PML is

the estimated loss

to the current

in-force portfolio

from a single

event which has

a 1% probability

of

being exceeded in

a twelve month

period.

In other words, it

corresponds to a

99% probability that

the loss from

a

single

event

will

fall

below

the

indicated

PML.

It

is

important

to

note

that

PMLs

are

estimates.

Modeled

events are

hypothetical events

produced by

a stochastic

model.

As a result,

there can be

no assurance

that any

actual event

will align

with the

modeled event

or that

actual losses

from events

similar to

the modeled

events

will not vary materially from the modeled event

PML.

From

an

enterprise

risk

management

perspective,

management

sets

limits

on

the

levels

of

catastrophe

loss

exposure we

may underwrite.

The limits are

revised periodically

based on a

variety of factors,

including but not

limited

to

our

financial

resources

and

expected

earnings

and

risk/reward

analyses

of

the

business

being

underwritten.

Management estimates

that the projected

net economic loss

from its largest

100-year event in

a given zone is

to

an

Earthquake

event

affecting

California

which

represents

approximately

6.9%

of

its

December

31,

2022

shareholders’

equity.

Economic

loss

is the

PML

exposure,

net of

third

party

reinsurance

including

catastrophe

industry loss

warranty

cover,

reduced by

estimated

reinstatement

premiums

to renew

coverage

and estimated

income taxes.

The impact

of income

taxes

on the

PML depends

on the

distribution

of the

losses

by corporate

entity,

which is

also affected

by

inter-affiliate

reinsurance.

Management

also monitors

and controls

its largest

PMLs at

multiple points

along the

loss distribution

curve, such

as loss

amounts at

the 20,

50, 100,

250, and

year return

periods.

This process

enables management

to identify

and control

exposure

accumulations

and to

integrate such exposures

into enterprise risk, underwriting and capital

management decisions.

Our

catastrophe

loss

projections,

segmented

by

risk

zones,

are

updated

quarterly

and

reviewed

as

part

of

a

formal risk management review

process.

We

believe

that our

greatest

worldwide 1

in 100

year

exposure

to a

single catastrophic

event

is to

a hurricane

event

affecting

Southeast

U.S.,

where

we

estimate

we

have

a

PML

exposure,

net

of

third

party

reinsurance

including catastrophe

industry loss warranty

cover,

of $878 million. See also

table under ITEM

1, “Business -

Risk

Management of Underwriting and Retrocession

Arrangements”.

If such a single catastrophe

loss were to occur,

management estimates that

the net economic loss to us would be

approximately

$515

million.

The

estimate

involves

multiple

variables,

including

which

Everest

entity

would

experience the loss, and as a result there can be no

assurance that this amount would not be exceeded.

We may

purchase reinsurance

to cover specific

business written

or the potential

accumulation or aggregation

of

exposures

across

some or

all of

our operations.

Reinsurance

purchasing

decisions

consider

both

the

potential

coverage

and

market

conditions

including

the

pricing,

terms,

conditions,

availability

and

collectability

of

coverage, with the

aim of securing cost

effective protection

from financially secure counterparts.

The amount of

reinsurance purchased has varied

over

time, reflecting our view of our exposures

and the cost of reinsurance.

Information

Technology.

Everest’s

information

technology

is

a

key

component

of

its

business

operations.

Information

technology

systems

and

services

are

hosted

at

public

and

private

cloud

service

providers

across

multiple

datacenters

with

processing

performed

at

the

office

locations

of

our

operating

subsidiaries

and

branches.

We have

implemented security

procedures,

and regularly

assess and

enhance our

security protocols,

to ensure

that our

key business

systems

are protected,

secured and

backed up

at off-site

locations so

that they

can be restored

promptly if necessary.

We have business

continuity plans and disaster

recovery plans along with

periodic testing

of those

plans

to

ensure

we are

capable

of providing

uninterrupted

technology

services in

the

event of major systems

outages with alternative secure datacenters

available in case of broader outages.

Our

business

operations

depend

on

the

proper

functioning

and

availability

of

our

information

technology

platform,

which

includes

data

processing

and

related

electronic

communications.

We

communicate

electronically

internally

and

externally

with

our

brokers,

program

managers,

clients,

third-party

vendors,

regulators,

and

others.

These

communications

and

the

data

we

handle

may

include

personal,

confidential

or

proprietary

information.

We

ensure

that

all

our

systems,

data

and

electronic

transmissions

are

appropriately

protected with the latest technology

safeguards and meet regulatory

standards.

Despite these safeguards,

a significant cyber incident,

including system

failure, security

breach and disruption

by

malware or other

damage could

interrupt or delay

our operations

and possibly our

results.

This type of incident

may result

in a

violation of

applicable data

security,

privacy,

or other

laws, damage

our reputation,

cause a

loss

of customers

or give

rise to

regulatory

scrutiny

as well

as monetary

fines and

other penalties.

Management

is

not aware of a cybersecurity incident that

has had a material impact on our operations.

Expected

Cash

Outflows.

The

following

table

shows

our

significant

expected

cash

outflows

for

the

period

indicated.

Payments due by period

Less than

More than

(Dollars in millions)

Total

1 year

1-3 years

3-5 years

5 years

Senior notes

$

2,400

$

—

$

—

$

—

$

2,400

Long term notes

—

—

—

Interest expense (1)

3,018

2,513

Operating lease agreements

Gross reserve for losses and LAE (2)

22,065

2,430

7,971

5,230

6,435

Total

$

28,409

$

3,071

$

8,211

$

5,464

$

11,662

(Some amounts may not reconcile due to rounding.)

(1)

Interest expense on long term notes is calculated

at the variable floating rate of 6.99% as of

December 31, 2022.

(2)

Loss and LAE reserves

represent management’s

best estimate of

losses from claim

and related settlement

costs.

Both the amounts

and timing of such

payments are

estimates, and

the inherent

variability of

resolving claims as

well as

changes in

market conditions

make the

timing of

cash flows

uncertain.

Therefore,

the ultimate

amount and timing of loss and LAE payments could differ

from our estimates.

The cash

outflows for

senior notes

and long

term notes

are the

responsibility

of Holdings.

We

strive to

ensure

that

we

have

sufficient

cash

flow,

liquidity,

investments

and

access

to

capital

markets

to

satisfy

these

obligations.

Holdings generally

depends upon

dividends from

Everest

Re, its

operating

insurance

subsidiary for

its funding,

capital contributions

from Group

or access

to the

capital markets.

Our various

operating

insurance

and reinsurance

subsidiaries

have

sufficient

cash

flow,

liquidity

and investments

to settle

outstanding

reserves

for losses and LAE.

Management believes that

we, and each of our entities,

have sufficient financial

resources or

ready access thereto, to

meet all obligations.

Dividends.

During 2022

and 2021,

we declared

and paid

common shareholder

dividends

of $255

million and

$247 million,

respectively.

As

an insurance

holding

company,

we

are

partially

dependent

on dividends

and other

permitted

payments from

our subsidiaries

to pay

cash dividends

to our

shareholders.

The payment

of dividends

to Group

by

Holdings

Ireland

and

Everest

Dublin

Holdings

is

subject

to

Irish

corporate

and

regulatory

restrictions;

the

payment

of

dividends

to

Holdings

Ireland

by

Holdings

and

to

Holdings

by

Everest

Re

is

subject

to

Delaware

regulatory

restrictions;

and

the

payment

of

dividends

to

Group

by

Bermuda

Re,

Everest

International,

Everest

Preferred International

Holdings (“Preferred

Holdings”), Everest

Re Advisors Ltd.

(“Advisors

Re”) or Mt. Logan

Re

is

subject

to

Bermuda

insurance

regulatory

restrictions.

Management

expects

that,

absent

extraordinary

catastrophe

losses, such restrictions

should not affect

Everest Re’s

ability to declare

and pay

dividends sufficient

to

support

Holdings’

general

corporate

needs

and

that

Holdings

Ireland,

Everest

Dublin

Holdings,

Bermuda

Re

and Everest

International will

have the

ability to declare

and pay dividends

sufficient to

support Group’s

general

corporate needs.

For the years

ended December 31, 2022

and 2021, Everest

Re paid $250 million

and $0 million

of

cash

dividends

to

Holdings.

For

the

years

ended

December

31,

2022

and

2021,

Bermuda

Re

paid

cash

dividends

to Group

of $430

million and

$300 million,

respectively;

Everest

International

paid no

cash dividends

to Group;

Preferred

Holdings paid

cash dividends

to Group

of $46 million

and $10 million,

respectively; Advisors

Re

paid

cash

dividends

to

Group

of

$0

million

and

$10

million,

respectively;

and

Mt.

Logan

Re

paid

no

cash

dividends to Group.

See ITEM 1, “Business

– Regulatory Matters

– Dividends” and ITEM 8,

“Financial Statements

and Supplementary Data” - Note 14 of Notes

to Consolidated Financial Statements.

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

investments

is

adjusted

periodically,

consistent

with

our

current

and

projected

operating

results

and

market

conditions.

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 $29.9 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

$4.0 billion

of mortgage

-backed

securities

in

the

$23.1 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 tables below

display the

potential impact

of market

value fluctuations

and after-tax

unrealized appreciation

on our

fixed maturity

portfolio (including

$1.0 billion

of short-term

investments)

for the

period indicated

based

on

upward

and

downward

parallel

and

immediate

and

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 estimates on mortgage

-backed securities, changes in prepayment

expectations under

different interest

rate environments

were taken

into account.

For legal entities

with a non-U.S. dollar

functional

currency,

the effective

duration

of the

involved portfolio

of securities

was used

as a

proxy

for the

market

value

change under the various interest

rate change scenarios.

Impact of Interest Rate Shift in Basis Points

At December 31, 2022

-200

-100

-

(Dollars in millions)

Total Fair Value

$

25,618

$

24,863

$

24,107

$

23,352

$

22,596

Fair Value Change from Base (%)

6.3%

3.1%

-%

(3.1)%

(6.3)%

Change in Unrealized Appreciation

After-tax from Base ($)

$

1,316

$

$

—

$

(658)

$

(1,316)

Impact of Interest Rate Shift in Basis Points

At December 31, 2021

-200

-100

-

(Dollars in millions)

Total Fair Value

$

24,973

$

24,230

$

23,487

$

22,744

$

22,001

Fair Value Change from Base (%)

6.3%

3.2%

-%

(3.2)%

(6.3)%

Change in Unrealized Appreciation

After-tax from Base ($)

$

1,294

$

$

—

$

(647)

$

(1,294)

We

had $22.1

billion and

$19.0 billion

of gross

reserves for

losses and

LAE as

of December

31, 2022

and 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

of

approximately

3.8

years,

which

is

reasonably

consistent

with

our

fixed

income

portfolio.

If

we

were

to

discount

our

loss

and

LAE

reserves,

net

of

ceded

reserves,

the

discount

would

be

approximately

$3.6 billion resulting

in a discounted

reserve balance

of approximately

$16.4 billion,

representing

approximately 67.9% of the value

of the fixed maturity investment

portfolio funds.

Equity Risk.

Equity risk is

the potential change

in fair and/or

market 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 and

mutual funds,

which invest

principally in

high quality

common and

preferred

stocks

that are

traded on

the major exchanges.

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 tables below display the impact on fair/market

value and after-tax change

in fair/market value

of a 10% and

20% change in equity prices up and down for the period indicated.

Impact of Percentage Change in Equity Fair/Market 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

$

(46)

$

(23)

$

—

$

$

Impact of Percentage Change in Equity Fair/Market Values

At December 31, 2021

(Dollars in millions)

-20%

-10%

0%

10%

20%

Fair Value of the Equity Portfolio

$

1,461

$

1,643

$

1,826

$

2,009

$

2,191

After-tax Change in Fair Value

$

(290)

$

(145)

$

—

$

$

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./Bermuda

(“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

Canadian

Dollar,

the

Singapore

Dollar,

the

British

Pound

Sterling

and

the

Euro.

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

market

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

$

(814)

$

(407)

$

—

$

$

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

$

(688)

$

(344)

$

—

$

$

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

Tax

Cut and

Jobs Act,

the adequacy

of

capital

in

relation

to

regulatory

required

capital,

the

adequacy

of

our

provision

for

uncollectible

balances,

estimates

of

our

catastrophe

exposure,

the

effects

of

catastrophic

and

pandemic

events

on

our

financial

statements,

the

ability

of

Everest

Re,

Holdings,

Holdings

Ireland,

Dublin

Holdings,

Bermuda

Re

and

Everest

International

to

pay

dividends

and

the

settlement

costs

of

our

specialized

equity

index

put

option

contracts.

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.