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DERIVATIVE INSTRUMENTS
 12 Months Ended
Dec. 31, 2025
Summary of Derivative Instruments [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
The Company may enter into derivative instruments to manage its foreign currency exposure, obtain exposure to a particular financial market, or for trading and to assume or hedge risk. The Company’s derivative instruments are primarily exchange traded futures, centrally cleared credit default swaps or over-the-counter foreign currency forward contracts. The over-the-counter derivatives are generally traded under International Swaps and Derivatives Association master agreements, which establish the terms of the transactions entered into with the Company’s derivative counterparties. In the event a party becomes insolvent or otherwise defaults on its obligations, a master agreement generally permits the non-defaulting party to accelerate and terminate all outstanding transactions and net the transactions’ marked-to-market values so that a single sum in a single currency will be owed by, or owed to, the non-defaulting party. Effectively, this contractual close-out netting reduces credit exposure from gross to net exposure. Where the Company has entered into master netting agreements with counterparties, or the Company has the legal and contractual right to offset positions, the derivative positions are generally netted by counterparty and are reported accordingly in other assets and other liabilities.
The Company is not aware of the existence of any credit-risk related contingent features that it believes would be triggered in its derivative instruments that are in a net liability position at December 31, 2025.
The tables below show the gross and net amounts of recognized derivative assets and liabilities at fair value for the Company’s derivative instruments:
Derivative Assets
At December 31, 2025
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
 Net Amounts Presented in the Balance Sheet (1)
Collateral Received
Net Amount
Derivative instruments not designated as hedges
Interest rate futures
$7,400 $— $7,400 $— $7,400 
Interest rate swaps
37 — 37 — 37 
Foreign currency forward contracts (2)
10,592 — 10,592 — 10,592 
Foreign currency forward contracts (3)
8 — 8 — 8 
Credit default swaps
310 — 310 — 310 
Total$18,347 $— $18,347 $— $18,347 
Derivative Liabilities
At December 31, 2025
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
 Net Amounts Presented in the Balance Sheet
Collateral Pledged
Net Amount
Derivative instruments not designated as hedges
Interest rate futures
$8,236 $— $8,236 $7,940 $296 
Foreign currency forward contracts (2)
5,519 — 5,519 5,425 94 
Foreign currency forward contracts (3)
3,097 — 3,097 1,201 1,896 
Credit default swaps
627 — 627 627 — 
Equity futures
9,861 — 9,861 9,861 — 
Commodity futures
12,380 — 12,380 — 12,380 
Total derivative instruments not designated as hedges
39,720 — 39,720 25,054 14,666 
Derivative instruments designated as hedges
Foreign currency forward contracts (4)
1,480 — 1,480 — 1,480 
Total$41,200 $— $41,200 $25,054 $16,146 
(1)Net derivative assets and liabilities are included within other assets and other liabilities, respectively, in the consolidated balance sheets.
(2)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(3)Contracts used to manage foreign currency risks in investment operations.
(4)Contracts designated as hedges of net investments in a foreign operation.
Derivative Assets
At December 31, 2024
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
 Net Amounts Presented in the Balance Sheet (1)
Collateral Received
Net Amount
Derivative instruments not designated as hedges
Interest rate futures
$4,198 $— $4,198 $— $4,198 
Foreign currency forward contracts (2)
16,275 — 16,275 — 16,275 
Foreign currency forward contracts (3)
4,085 — 4,085 — 4,085 
Commodity futures5,933 — 5,933 — 5,933 
Commodity options483 — 483 — 483 
Total derivative instruments not designated as hedges30,974 — 30,974 — 30,974 
Derivative instruments designated as hedges
Foreign currency forward contracts (4)
3,564 — 3,564 — 3,564 
Total
$34,538 $— $34,538 $— $34,538 
Derivative Liabilities
At December 31, 2024
Gross Amounts Recognized
Gross Amounts Offset in the Balance Sheet
 Net Amounts Presented in the Balance Sheet (1)
Collateral Received
Net Amount
Derivative instruments not designated as hedges
Interest rate futures
$6,178 $— $6,178 $5,408 $770 
Foreign currency forward contracts (2)
53,160 — 53,160 5,632 47,528 
Foreign currency forward contracts (3)
13,171 — 13,171 — 13,171 
Credit default swaps
1,675 — 1,675 1,675 — 
Equity futures1,694 — 1,694 — 1,694 
Total
$75,878 $— $75,878 $12,715 $63,163 
(1)Net derivative assets and liabilities are included within other assets and other liabilities, respectively, in the consolidated balance sheets.
(2)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(3)Contracts used to manage foreign currency risks in investment operations.
(4)Contracts designated as hedges of net investments in a foreign operation.
The table below shows the notional exposure by underlying risk of the Company’s recognized derivative contracts:
At December 31,20252024
Notional Long Exposure
Notional Short Exposure
Notional Long Exposure
Notional Short Exposure
Derivative instruments not designated as hedges
Interest rate risk
Interest rate futures
$7,575,688 $4,179,575 $7,144,308 $3,061,769 
Interest rate swaps (1)
— 29,600 — — 
Foreign currency risk
Foreign currency forward contracts - underwriting and non-investment operations
1,102,740 412,005 1,035,036 508,847 
Foreign currency forward contracts - investment operations
159,267 186,854 344,967 106,970 
Credit risk
Credit default swaps (2)
39,500 847,864 — 1,350,509 
Equity price risk
Equity futures1,729,226 — 437,168 — 
Commodity price risk
Commodity futures
1,189,027 — 684,283 — 
Commodity options (3)
— — 483 — 
Derivative instruments designated as hedges
Foreign currency risk
Foreign currency forward contracts - net investments in foreign operations
— 64,142 — 60,969 
(1)Notional long exposure amounts are positions receiving a fixed rate and notional short exposure amounts are positions paying a fixed rate.
(2)Notional long exposure amounts are positions which assume credit risk and notional short exposure amounts are positions to protect the investment portfolio against increasing credit risk.
(3)Notional exposure for commodity options are based on the fair value of the underlying commodities as if the options were exercised at the reporting date.
The location and amount of the gain (loss) recognized in the Company’s consolidated statements of operations and consolidated statements of changes in shareholders’ equity related to its derivative instruments are shown in the following table:
Amount of Gain (Loss) Recognized on
Derivatives
Year ended December 31,202520242023
Derivative instruments not designated as hedges
Net realized and unrealized gains (losses) on investments (1)
Interest rate futures$67,183 $(81,400)$3,877 
Credit default swaps17,031 (54,757)(70,924)
Interest rate swaps(71)— — 
Total fixed maturity investment-related derivatives
84,143 (136,157)(67,047)
Equity futures138,896 3,379 (1,928)
Warrants— (1,046)— 
Total equity investment-related derivatives
138,896 2,333 (1,928)
Commodity futures418,097 81,062 5,256 
Commodity options(2,602)(4,517)(4,553)
Total commodity-related derivatives
415,495 76,545 703 
Total net realized and unrealized gains (losses) on investments (1)
638,534 (57,279)(68,272)
Net foreign exchange gains (losses)
Foreign currency forward contracts (2)
37,795 (27,918)(877)
Foreign currency forward contracts (3)
(14,822)(32,687)(11,761)
Total net foreign exchange gains (losses)22,973 (60,605)(12,638)
Total derivative instruments not designated as hedges
661,507 (117,884)(80,910)
Derivative instruments designated as hedges
Accumulated other comprehensive income (loss)
Foreign currency forward contracts (4)
(4,385)6,194 205 
Total$657,122 $(111,690)$(80,705)
(1)Amount of gain (loss) is included in net realized and unrealized gains (losses) on investment-related derivatives. See “Note 5. Investments” for additional information.
(2)Contracts used to manage foreign currency risks in underwriting and non-investment operations.
(3)Contracts used to manage foreign currency risks in investment operations.
(4)Contracts designated as hedges of net investments in a foreign operation. Amount of gain (loss) is included in foreign currency translation adjustments, net of tax.
Derivative Instruments Not Designated as Hedges
Interest Rate Derivatives
The Company uses interest rate futures within its portfolio of fixed maturity investments to manage its exposure to interest rate risk, which may result in increasing or decreasing its exposure to this risk.
Interest Rate Futures
The fair value of interest rate futures is determined using exchange traded prices. The Company’s exposure is primarily in U.S. treasury and non-U.S. government bond futures contracts.
Interest Rate Swaps
The fair value of interest rate swaps is determined using the relevant exchange traded price where available or a discounted cash flow model based on the terms of the contract and inputs, including, where applicable, observable yield curves.
Foreign Currency Derivatives
The Company’s functional currency is the U.S. dollar. The Company writes a portion of its business in currencies other than U.S. dollars and may, from time to time, experience foreign exchange gains and losses in the Company’s consolidated financial statements. The impact of changes in exchange rates on the Company’s assets and liabilities denominated in currencies other than the U.S. dollar, excluding non-monetary assets and liabilities, are recognized in the Company’s consolidated statements of operations.
Underwriting and Non-investment Operations Related Foreign Currency Contracts
The Company’s foreign currency policy with regard to its underwriting operations is generally to enter into foreign currency forward and option contracts for notional values that approximate the foreign currency liabilities, including claims and claim expense reserves and reinsurance balances payable, net of any cash, investments and receivables held in the respective foreign currency. The Company’s use of foreign currency forward and option contracts is intended to minimize the effect of fluctuating foreign currencies on the value of non-U.S. dollar denominated assets and liabilities associated with its underwriting and non-investment operations. The Company may determine not to match a portion of its projected underwriting and non-investments related assets or liabilities with underlying foreign currency exposure with investments in the same currencies, which would increase its exposure to foreign currency fluctuations and potentially increase the impact and volatility of foreign exchange gains and losses on its results of operations. The fair value of the Company’s underwriting and non-investment operations related foreign currency contracts is determined using indicative pricing obtained from counterparties or broker quotes.
Investment Operations Related Foreign Currency Forward Contracts
The Company’s investment operations are exposed to currency fluctuations through its investments in non-U.S. dollar fixed maturity investments, short term investments and other investments. From time to time, the Company may employ foreign currency forward contracts in its investment portfolio to either assume foreign currency risk or to economically hedge its exposure to currency fluctuations from these investments. The fair value of the Company’s investment portfolio related foreign currency forward contracts is determined using an interpolated rate based on closing forward market rates.
Credit Derivatives
The Company’s exposure to credit risk is primarily due to its fixed maturity investments, short term investments, premiums receivable and reinsurance recoverable. From time to time, the Company may purchase credit derivatives to manage its exposures in the insurance industry, and to assist in managing the credit risk associated with ceded reinsurance. The Company also employs credit derivatives in its investment portfolio to either assume credit risk or manage its credit exposure.
Credit Default Swaps
The fair value of the Company’s credit default swaps is determined using industry valuation models, broker bid indications or internal pricing valuation techniques. The fair value of these credit default swaps can change based on a variety of factors including changes in credit spreads, default rates and recovery rates, the correlation of credit risk between the referenced credit and the counterparty, and market rate inputs such as interest rates.
Equity Derivatives
Equity Futures
From time to time, the Company uses equity derivatives in its investment portfolio to either assume equity risk or hedge its equity exposure. The fair value of the Company’s equity futures is determined using market-based prices from pricing vendors.
Commodity Derivatives
The Company uses commodity derivatives within its investments portfolio to assume or hedge risk. Commodity derivatives expose the Company to potentially unfavorable price changes to the underlying commodities.
Commodity Futures
The fair value of the Company’s commodity futures is determined using market-based prices from pricing vendors. The Company’s exposure is primarily in gold futures contracts.
Commodity Options
The fair value of these derivatives is determined using market-based prices from pricing vendors.
Derivative Instruments Designated as Hedges of Net Investments in Foreign Operations
Foreign Currency Derivatives
Hedges of Net Investments in Foreign Operations
One of the Company’s subsidiaries currently uses a non-U.S. dollar functional currency. The Company, from time to time, enters into foreign exchange forwards to hedge non-U.S. dollar functional currencies, on an after-tax basis, from changes in the exchange rate between the U.S. dollar and these currencies.
As of December 31, 2025 and 2024, this included the Australian dollar net investment in a foreign operation. These foreign exchange forward contracts were formally designated as hedges of its investment in subsidiaries with non-U.S. dollar functional currencies and there was no ineffectiveness in these transactions. The weighted average U.S. dollar equivalent of foreign denominated net assets (liabilities) that were hedged during the year ended December 31, 2025 was $60.2 million (2024 - $61.1 million).