The Company regularly updates its reserve estimates as new information becomes available and further events occur which may impact the resolution of unsettled claims. Reserve adjustments are reflected in results of operations as adjustments to losses and loss adjustment expenses (“LAE”). Often these adjustments are recognized in periods subsequent to the period in which the underlying policy was written and loss event occurred. These types of subsequent adjustments are described as loss and LAE “development.” Such development can be either favorable or unfavorable to the Company’s financial results and may vary by line of business. In this section, all amounts presented include catastrophe losses and LAE, unless otherwise indicated.

The table below provides a reconciliation of the gross beginning and ending reserve for unpaid losses and loss adjustment expenses.


	Three Months Ended
	March 31,
(in millions)	2026			2025
Gross reserve for losses and LAE, beginning of period	$	7,755.2		$	7,461.2
Reinsurance recoverable on unpaid losses		1,850.3			1,829.8
Net reserve for losses and LAE, beginning of period		5,904.9			5,631.4
Net incurred losses and LAE in respect of losses occurring in:
Current year		1,031.4			987.3
Prior years		(73.8	)		(32.0	)
Total incurred losses and LAE		957.6			955.3
Net payments of losses and LAE in respect of losses occurring in:
Current year		234.1			236.5
Prior years		606.3			613.2
Total payments		840.4			849.7
Net reserve for losses and LAE, end of period		6,022.1			5,737.0
Reinsurance recoverable on unpaid losses		1,889.0			1,871.9
Gross reserve for losses and LAE, end of period	$	7,911.1		$	7,608.9

As a result of continuing trends in the Company’s business, reserves, including catastrophes, have been re-estimated for all prior accident years and were decreased by $73.8 million and $32.0 million in 2026 and 2025, respectively.

For the three months ended March 31, 2026, net favorable loss and LAE development was $73.8 million. Personal Lines favorable loss and LAE development of $30.5 million was due to lower than expected catastrophe and non-catastrophe losses in the homeowners line of $20.2 million and $10.1 million, respectively. The favorable catastrophe development is related to lower than expected homeowners loss severity related to several convective storms across multiple states for accident years 2025 and 2024. Core Commercial favorable loss and LAE development of $23.3 million was primarily due to lower than expected large commercial multiple peril catastrophe losses of $17.0 million, primarily related to several convective storms across multiple states from accident years 2025 and 2024. Specialty favorable loss and LAE development of $20.0 million was primarily due to lower than expected losses in the Surety and Other division and lower than expected non-catastrophe losses in the Marine and Industrial Property and E&S and Alternative Markets divisions.

For the three months ended March 31, 2025, net favorable loss and LAE development was $32.0 million. Specialty favorable loss and LAE development of $18.4 million was primarily due to lower than expected non-catastrophe losses in the Marine and Industrial Property division and, to a lesser extent, in the Professional and Executive Lines division. Core Commercial favorable loss and LAE development of $9.8 million was primarily due to lower than expected catastrophe losses in our commercial multiple peril line related to events from accident years 2021 through 2023, including several convective storms across multiple states and Winter Storm Elliot. Additionally, favorable development resulting from lower than expected non-catastrophe losses in the workers’ compensation line was largely offset by higher than expected non-catastrophe losses in the commercial automobile line. Personal Lines favorable loss and LAE development was primarily due to lower than expected non-catastrophe losses in the homeowners and personal automobile lines.