Everest reported new casualty reserve strengthening in its reinsurance business on October 28. A securities suit filed the same day challenges what it told investors about an earlier period in its insurance business.
Two pension funds have sued Everest Group, a Bermuda insurer and reinsurer, alleging it misled investors about casualty reserves before it recorded approximately $2.2 billion in reserve charges. Their complaint recounts CEO James Williamson calling the performance of Everest’s U.S. casualty portfolio “unacceptable.” The funds filed the securities suit in federal court on October 28 against Everest and four current and former executives, challenging statements from February 8, 2024, through October 27, 2025. Everest’s results the same day reported a separate item in its Reinsurance Treaty segment: $253 million of net adverse prior-year reserve development, including approximately $600 million of gross casualty reserve strengthening. The investors’ claims concern an earlier period and a different business.
Everest’s third-quarter results place the approximately $600 million gross casualty strengthening in Reinsurance Treaty, its reinsurance business. The company said it came on top of more than $200 million of reserve strengthening in the second quarter of 2026. Across the group, Everest reported approximately $268 million of net unfavorable development in prior-year loss reserves. The gross and net figures measure different things; the $600 million is not the amount Everest reported as a net group loss.
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The reserve action arrived amid a pullback in casualty reinsurance premiums. Everest said gross written premiums in its Reinsurance Treaty segment fell 6.2% from a year earlier on a constant dollar basis that excludes reinstatement premiums, with decreases of 24.8% in casualty excess-of-loss business and 15.8% in casualty pro-rata business. It reported $233 million in group net income for the quarter.
Those figures describe a current reinsurance result. The shareholder suit instead challenges statements made from February 8, 2024, through October 27, 2025, principally about the reserves and underwriting of Everest’s U.S. casualty *insurance* business. The two developments share a publication date and concern casualty losses, but the new $600 million is outside the suit’s class period and is not one of the losses the complaint identifies as a corrective disclosure.
The plaintiffs are the City of Detroit General Retirement System and the City of Plantation Police Officers’ Retirement System. Their complaint names Everest; Williamson; former CEO Juan Andrade; Mark Kociancic, chief financial officer during the class period; and Michael Karmilowicz, who headed Everest’s Insurance segment. The funds allege that the defendants told investors Everest had strengthened underwriting, priced policies adequately, reduced exposure to rapidly rising casualty claim costs, and maintained sufficient reserves. The complaint alleges instead that Everest remained concentrated in risks it claimed to have reduced, underpriced some of that business, and recorded inadequate reserves.
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The complaint identifies the words the funds say investors heard. It quotes Andrade as saying Everest had exited certain classes exposed to rising litigation costs. It quotes Kociancic describing “prudent loss picks,” saying they were holding, and concluding, “we’re standing tight.” The funds allege those assurances concealed reserve deficiencies in casualty policies written in earlier accident years. That is the alleged securities fraud, not a finding by the court.
The funds trace their account through successive reserve actions. According to the complaint, Everest disclosed a $1.7 billion reserve charge in January 2025, approximately $1.3 billion of it related to U.S. casualty losses in the Insurance segment. The complaint recounts Williamson calling that portfolio’s performance “unacceptable” and identifying large guaranteed-cost programs and concentrations involving large auto fleets among the underwriting choices that increased exposure. The plaintiffs allege that defendants continued to give investors undue confidence that the charge and changes to underwriting had addressed the problem.
Then came October 2025. The complaint says Everest disclosed $478 million in net unfavorable development in prior-year reserves, principally driven by U.S. casualty losses. It also describes up to $1.2 billion of protection against further adverse development on approximately $5.4 billion of North American Insurance and Other segment reserves for accident years 2024 and earlier. According to the complaint, Everest announced that it would transfer to AIG renewal rights for portfolios representing approximately $2 billion in annual gross written premiums. The funds allege that these steps revealed how much risk had remained after the January charge. They put the reserve charges in their account at approximately $2.2 billion.
The complaint quotes Williamson as saying that 80% of the U.S. casualty development observed in 2025 came from policies Everest had eliminated during its underwriting changes. That is a sharper allegation than an unexpected rise in claims across an unchanged book: the funds contend Everest’s own review of the policies gave management information that conflicted with its assurances to investors. They must still prove that the challenged statements were misleading when made and that investors’ claimed losses resulted from them.
Everest’s later filings show why the businesses and periods need to stay distinct. Its October 19 filing with the Securities and Exchange Commission revised how a financial supplement presented results affected by the earlier loss-protection agreements. Its third-quarter release describes those agreements as covering certain North American insurance liabilities for losses dated before January 1, 2025, within its Global Wholesale & Specialty and Legacy segments. The new approximately $600 million gross strengthening appears under Reinsurance Treaty.
**P&L translation:** for litigation leaders, the filed dispute is over what the insurer knew and told shareholders as older casualty claims developed. For claims leaders, Everest’s current report adds a separate, measurable reserve change in reinsurance. Treating the two numbers as one charge would obscure both the investors’ theory and the company’s latest result.
The suit is at its opening stage, and the funds’ central allegation, that Everest’s assurances about its casualty insurance business hid reserve deficiencies, remains to be proved. The notice from plaintiffs’ law firm Labaton Keller Sucharow says investors seeking appointment to lead the case must file their motions by December 28.
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