BERKLEY W R CORP

Previous wording

The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The ultimate adequacy of premium rates is not known with certainty at the time an insurance policy is issued because premiums are determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court decisions that define and change the extent of coverage and the effects of economic and social inflation on the amount of compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of capital employed in the industry, and the industry’s willingness to deploy that capital.

Current wording

The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The ultimate adequacy of premium rates is not known with certainty at the time an insurance policy is issued because premiums are determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court decisions that define and change the extent of coverage and the effects of economic inflation on the amount of compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of capital employed in the industry, and the industry’s willingness to deploy that capital.

Previous wording

The Company’s profitability is also affected by its investment income and investment gains (losses). The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities.

Current wording

The Company’s profitability is also affected by its investment income and investment gains. The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities.

Previous wording

Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include auto, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of business with short reporting lags than for lines of business with long reporting lags.

Current wording

Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of business with short reporting lags than for lines of business with long reporting lags.

Previous wording

Our net reserves for losses and loss expenses of approximately $17.0 billion as of September 30, 2024 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Current wording

Our net reserves for losses and loss expenses of approximately $17.7 billion as of March 31, 2025 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Previous wording

Approximately $3.3 billion, or 19.7%, of the Company’s net loss reserves as of September 30, 2024 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves, which predominantly comprise these reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.

Current wording

Approximately $3.3 billion, or 18.8%, of the Company’s net loss reserves as of March 31, 2025 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves, which predominantly comprise these reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.

Previous wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $399 million and $390 million as of September 30, 2024 and December 31, 2023, respectively.

Current wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $413 million and $405 million as of March 31, 2025 and December 31, 2024, respectively.

Previous wording

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the nine months ended September 30, 2024 and 2023 are as follows:

Current wording

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the three months ended March 31, 2025 and 2024 are as follows:

Previous wording

During the nine months ended September 30, 2024, favorable prior year development (net of additional and return premiums) of $3 million included $5 million for the Reinsurance & Monoline Excess segment partially offset by $2 million of adverse prior year development for the Insurance segment.

Current wording

During the three months ended March 31, 2025, favorable prior year development (net of additional and return premiums) of $1 million included $12 million for the Reinsurance & Monoline Excess segment largely offset by $11 million of adverse prior year development for the Insurance segment.

Previous wording

For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the nine months ended September 30, 2023 included adverse prior year development on casualty lines for the 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2020 through 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the general liability line of business, and to a lesser degree professional liability, including medical professional, and commercial auto liability. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

Current wording

For the Insurance segment, the adverse development during the first quarter of 2025 was driven primarily by excess other liability, including umbrella, and was partially offset by favorable development for short tail lines of business, including commercial property and commercial auto physical damage. The adverse excess other liability, including umbrella, development was concentrated in accident years 2018 through 2022, and included a significant component stemming from underlying auto exposures. The Company believes that auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others. The favorable development for short tail property lines of business during the first quarter of 2025 related to the 2024 accident year, and resulted from favorable settlements of both catastrophe and non-catastrophe claims below our expectations.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the nine months ended September 30, 2023 was driven mainly by favorable development in excess workers’ compensation, largely offset by adverse development in property (discussed above), non-proportional reinsurance assumed liability, and commercial auto liability lines of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The adverse development on reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020. The adverse development on commercial auto liability was concentrated in the 2022 accident year and related to commercial auto program business.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first quarter of 2025 was driven mainly by favorable development in non-proportional reinsurance assumed property, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. Similar to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related to the 2024 accident year. The unfavorable development for non-proportional reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance businesses, and was concentrated mainly in accident years 2018 through 2021.

Previous wording

During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of $20 million included $21 million of adverse development for the Insurance segment, partially offset by $1 million of favorable development for the Reinsurance & Monoline Excess segment.

Current wording

During the three months ended March 31, 2024, favorable prior year development (net of additional and return premiums) of $1 million included $9 million for the Reinsurance & Monoline Excess segment largely offset by $8 million for the Insurance segment.

Previous wording

For the Insurance segment, the adverse development during the first nine months of 2024 was driven by commercial auto liability and other liability (mainly umbrella and excess liability), which was largely offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2020 through 2023. The other liability development was mainly driven by umbrella and excess liability claims, and was focused in accident years 2017 through 2021. A significant portion of the umbrella and excess liability development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.

Current wording

For the Insurance segment, the adverse development during the first quarter of 2024 was driven by commercial auto liability and excess other liability, including umbrella, and was partially offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2019 through 2023, while the excess other liability, including umbrella, development was focused in accident years 2017 through 2021. A significant portion of the excess other liability, including umbrella, development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs' bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

Previous wording

The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2017 through 2023, while the favorable professional liability development was mainly in accident years 2020 through 2022. For workers' compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. For professional liability, reported loss experience for accident years 2020 through 2022 was better than expected, which drove the favorable reserve development. These accident years also feature business written at peak pricing levels, which the Company now believes will result in higher profitability than initially anticipated.

Current wording

The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2018 through 2023, while the favorable professional liability development was mainly in accident years 2021 and 2022. For workers’ compensation, favorable reported claim frequency, below expectations, continued to drive the favorable reserve development. For professional liability, the reported loss experience for the 2021 and 2022 accident years was better than expected. These accident years also feature business written at peak pricing levels, which the Company believed would result in higher profitability than initially anticipated.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first nine months of 2024 was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2015 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2017 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including accounts reinsuring construction projects.

Previous wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,346 million and $1,352 million at September 30, 2024 and December 31, 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $399 million and $390 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.5%.

Current wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,379 million and $1,358 million at March 31, 2025 and December 31, 2024, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $413 million and $405 million at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.6%.

Previous wording

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $55 million at September 30, 2024 and $65 million at December 31, 2023. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Current wording

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $65 million at March 31, 2025 and $51 million at December 31, 2024. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Previous wording

As of September 30, 2024, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $7 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

Current wording

As of March 31, 2025, the Company recorded an allowance for expected credit losses on fixed maturity securities of $0.3 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

Previous wording

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $1 million and $3 million as of September 30, 2024 and December 31, 2023, respectively.

Current wording

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $1 million as of both March 31, 2025 and December 31, 2024.

Previous wording

The Company reported net income to common stockholders of $366 million in 2024 compared to $334 million in 2023. The $32 million increase in net income was primarily due to an after-tax increase in net investment income of $41 million mainly due to higher interest rates and a larger fixed maturity securities portfolio, an after-tax reduction in net investment losses of $26 million mainly due to an impairment recognized on a real estate investment and reversal of prior unrealized gains on equity securities in 2023, an after-tax increase in underwriting income of $5 million, an after-tax increase in profit from insurance service businesses of $4 million, an after-tax reduction in corporate expenses of $1 million and an after-tax increase in profits from non-insurance businesses of $1 million, partially offset by an after-tax increase in foreign currency losses of $36 million mainly due to the U.S. dollar weakening against other major currencies in 2024 and an increase of $10 million in tax expense due to a change in the effective tax rate. The number of weighted average diluted shares decreased 5.4 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024 and 2023.

Current wording

The Company reported net income to common stockholders of $418 million in 2025 compared to $442 million in 2024. The $24 million reduction of net income was primarily due to an after-tax decrease in underwriting income of $28 million mainly due to California wildfire losses in 2025, an after-tax decrease in foreign currency gains of $25 million due to the weakening U.S. dollar against other major currencies in 2025 and an after-tax decrease in net investment gains of $7 million, partially offset by an after-tax increase of $31 million in income from investment funds primarily due to transportation funds and financial services funds, a $3 million reduction in tax expense due to a change in the effective tax rate and an after-tax increase of $2 million in profit from insurance service businesses. The number of weighted average diluted shares decreased 5.9 million for 2025 compared to 2024, mainly reflecting shares repurchased in 2024.

Previous wording

Premiums. Gross premiums written were $3,633 million in 2024, an increase of 8% from $3,353 million in 2023. The increase was due to a $253 million increase in the Insurance segment and a $27 million increase in the Reinsurance & Monoline Excess segment. Approximately 81.1% of premiums expiring in 2024 and 80.5% of premiums expiring in 2023 were renewed.

Current wording

Premiums. Gross premiums written were $3,684 million in 2025, an increase of 10% from $3,363 million in 2024. The increase was due to a $296 million increase in the Insurance segment and a $25 million increase in the Reinsurance & Monoline Excess segment. Approximately 81% of premiums expiring in 2025 and 2024 were renewed.

Previous wording

Average renewal rates (per unit of exposure) for insurance and facultative reinsurance increased 7.0% in 2024, and increased 8.0% excluding workers' compensation.

Current wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 7.3% in 2025 and increased 8.3% excluding workers' compensation.

Previous wording

•Reinsurance & Monoline Excess - gross premiums increased 5% to $1,213 million in 2024 from $1,153 million in 2023. Gross premiums increased $61 million (20%) for property and $23 million (10%) for monoline excess, partially offset by a reduction of $24 million (4%) for casualty.

Current wording

•Reinsurance & Monoline Excess - gross premiums increased 6% to $467 million in 2025 from $442 million in 2024. Gross premiums increased $35 million (31%) for property and $1 million (1%) for monoline excess, partially offset by a reduction of $11 million (6%) for casualty.

Previous wording

Net premiums written were $9,035 million in 2024, an increase of 10% from $8,235 million in 2023. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in 2024 and 15% in 2023.

Current wording

Net premiums written were $3,133 million in 2025, an increase of 10% from $2,851 million in 2024. Ceded reinsurance premiums as a percentage of gross written premiums was 15% in both 2025 and 2024.

Previous wording

Premiums earned increased 11% to $8,538 million in 2024 from $7,686 million in 2023. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $270 million in 2024 compared with $271 million in 2023.

Current wording

Premiums earned increased 9% to $3,012 million in 2025 from $2,764 million in 2024. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in 2025 are related to business written during both 2025 and 2024. Audit premiums were $83 million in 2025 compared with $88 million in 2024.

Previous wording

Net investment income increased 37% to $1,016 million in 2024 from $739 million in 2023 due primarily to a $302 million increase in income from fixed maturity securities mainly driven by higher interest rates, a larger fixed maturity securities portfolio and our Argentine inflation-linked securities which is not expected to continue at this level (see below for further discussion), partially offset by a $13 million decrease in real estate, a $6 million decrease in equity securities, a $5 million decrease in income from investment funds and a $1 million increase in investment expenses. The Company expects investment income to benefit as it continues to invest maturing securities at the current higher rates. The Company maintained the shortened duration of 2.4 years for its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including cash and cash equivalents), were $28.6 billion in 2024, up 9% from $26.1 billion in 2023.

Current wording

Net investment income increased 13% to $360 million in 2025 from $320 million in 2024 due primarily to a $56 million increase in income from investment funds primarily due to transportation funds and financial services funds and a $9 million increase in real estate, partially offset by a $22 million decrease in income from fixed maturity securities mainly due to higher income from the Argentine inflation-linked securities in 2024, a $2 million decrease in equity securities and a $1 million increase in investment expenses. Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 4.9% in 2025 and 5.9% in 2024. The effective duration of the fixed maturity portfolio was 2.7 years at March 31, 2025 and 2.6 years at December 31, 2024. Average invested assets, at cost (including cash and cash equivalents), were $30.5 billion in 2025 up 9.3% from $27.9 billion in 2024.

Previous wording

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees increased to $29 million in 2024 from $23 million in 2023 due to an acquisition in the insurance distribution business in late 2023.

Current wording

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees increased to $29 million in 2025 from $25 million in 2024 mainly due to organic growth within the business.

Previous wording

Net Realized and Unrealized (Losses) Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized losses on investments were $23 million in 2024 compared with $41 million in 2023. The losses of $23 million in 2024 reflected net realized losses on investments of $22 million and an increase in unrealized losses on equity securities of $1 million. The losses of $41 million in 2023 reflected net realized losses on investments of $22 million (primarily due to an impairment of $21 million recognized on a real estate investment) and an increase in unrealized losses on equity securities of $19 million.

Current wording

Net Realized and Unrealized Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized gains on investments were $16 million in 2025 compared with $12 million in 2024. The gains of $16 million in 2025 reflected an increase in unrealized gains on equity securities of $20 million, partially offset by net realized losses on investments of $4 million. The gains of $12 million in 2024 reflected an increase in unrealized gains on equity securities of $26 million, partially offset by net realized losses on investments of $14 million.

Previous wording

Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments reflected in net investment (losses) gains, decreased by $15 million ($12 million after-tax) in 2024 due to improved pricing associated with foreign government securities, and increased by $2 million ($1 million after-tax) in 2023 due to a change in estimate.

Current wording

Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments, which are reflected in net investment gains, decreased by $0.6 million ($0.5 million after-tax) in 2025 and $14 million ($11 million after-tax) in 2024, primarily due to improved pricing related to fixed maturity securities.

Previous wording

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses decreased to $129 million in 2024 from $137 million in 2023 mainly due to the aviation-related business.

Current wording

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were $129 million in 2025 and $121 million in 2024. The increase mainly relates to aviation-related business and commercial and residential textile business, partially offset by the reduction in promotional merchandise business.

Previous wording

Losses and Loss Expenses. Losses and loss expenses increased to $1,826 million in 2024 from $1,636 million in 2023. The consolidated loss ratio was 62.4% in 2024 and 61.9% in 2023. Catastrophe losses, net of reinsurance recoveries were $98 million in 2024, primarily due to four hurricanes during the quarter with Helene having the largest impact, and $62 million in 2023. Favorable prior year reserve development (net of premium offsets) was $1 million in both 2024 and 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased by 0.5 points to 59.1% in 2024 from 59.6% in 2023, due to lower attritional property losses and change in business mix.

Current wording

Losses and Loss Expenses. Losses and loss expenses increased to $1,901 million in 2025 from $1,664 million in 2024. The consolidated loss ratio was 63.1% in 2025 and 60.2% in 2024. Catastrophe losses, net of reinsurance recoveries, were $111 million in 2025 mainly due to California wildfire losses, up from $31 million in 2024. Favorable prior year reserve development (net of premium offsets) was $1 million in both 2025 and 2024. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.3 points to 59.4% in 2025 from 59.1% in 2024 largely due to a change in business mix.

Previous wording

•Reinsurance & Monoline Excess - The loss ratio was 53.2% in 2024 and 54.8% in 2023. Catastrophe losses were $27 million in 2024 compared with $24 million in 2023. Favorable prior year reserve development was $5 million in 2024 and $1 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 1.4 points to 51.2% in 2024 from 52.6% in 2023.

Current wording

•Reinsurance & Monoline Excess - The loss ratio was 57.7% in 2025 and 49.8% in 2024. Catastrophe losses were $40 million in 2025 and $3 million in 2024. Favorable prior year reserve development was $12 million in 2025 and $9 million in 2024. The loss ratio excluding catastrophe losses and prior year reserve development decreased 1.4 points to 50.0% in 2025 from 51.4% in 2024.

Previous wording

Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 12% and net premiums earned increased 11% from 2023. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased 0.2 points to 28.6% in 2024 from 28.4% in 2023 mainly due to investments in the business, new start-up operating units, change in business mix and reinsurance structures.

Current wording

Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 6.0% and net premiums earned increased 9.0% from 2024. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) decreased 0.8 points to 27.8% in 2025 from 28.6% in 2024 mainly due to growth in net premiums earned and a non-recurring benefit associated with compensation costs.

Previous wording

Service expenses, which represent the costs associated with the fee-based businesses, were $22 million in 2024 and $21 million in 2023.

Current wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $23 million in 2025 and $21 million in 2024.

Previous wording

Net foreign currency (losses) gains result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $25 million in 2024 compared with the gains of $22 million in 2023, primarily due to the U.S. dollar weakening against other major currencies in 2024.

Current wording

Net foreign currency (gains) losses result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $19 million in 2025 compared to gains of $13 million in 2024, primarily due to other major currencies strengthening against the U.S. dollar in 2025.

Previous wording

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses decreased to $62 million in 2024 from $63 million in 2023.

Current wording

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses were $69 million in both 2025 and 2024.

Previous wording

Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses decreased to $125 million in 2024 from $134 million in 2023 mainly due to aviation-related business.

Current wording

Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses were $126 million in 2025 compared to $119 million in 2024. The increase mainly relates to aviation-related business and commercial and residential textile business, partially offset by the reduction in promotional merchandise.

Previous wording

Income Taxes. The effective income tax rate was 23.2% and 21.4% for the nine months ended September 30, 2024 and 2023, respectively. The higher effective income tax rate for the nine months ended September 30, 2024, as compared to the earlier period, was primarily due to the geographical mix of earnings and larger amounts being subject to tax at a rate greater than the U.S. statutory rate.

Current wording

Income Taxes. The effective income tax rate was 22.5% and 23.0% for the three months ended March 31, 2025 and 2024, respectively. The lower effective income tax rate for the three months ended March 31, 2025, as compared to the earlier period, was primarily due to an improved geographical mix of earnings which are subject to tax at a rate greater than the U.S. statutory rate.

Previous wording

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $445 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will be immaterial.

Current wording

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $506 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will be immaterial.

Previous wording

Starting in 2023, as part of the Inflation Reduction Act of 2022, a 1% excise tax is imposed on common share repurchase activity, net of common share issuances, and is included in the cost of treasury stock acquired.

Current wording

As part of the Inflation Reduction Act of 2022, a 1% excise tax is imposed on common share repurchases, net of common share issuances, and included in the cost of treasury stock acquired. During the three months ended March 31, 2025, the Company repurchased 850,000 shares of its common stock.

Previous wording

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was 2.4 years at both September 30, 2024 and December 31, 2023. The Company’s fixed maturity investment portfolio and investment-related assets as of September 30, 2024 were as follows:

Current wording

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was 2.7 years at March 31, 2025 and 2.6 years at December 31, 2024. The Company’s fixed maturity investment portfolio and investment-related assets as of March 31, 2025 were as follows: