The following provides a reconciliation of the Company’s beginning and ending gross and net reserves for loss and LAE:


Consolidated	Three months ended March 31
	2026		2025
Gross balance at January 1	$	967,960	$	860,969
Less: Losses recoverable	(81,392)		(85,790)
Net balance at January 1	886,568		775,179
Incurred losses related to:
Current year	93,644		118,666
Prior years	(2,489)		4,218
Total incurred	91,155		122,884
Paid losses related to:
Current year	(5,864)		(6,352)
Prior years	(87,281)		(75,203)
Total paid	(93,144)		(81,555)
Foreign exchange and translation adjustment	(4,476)		12,129
Net balance at March 31	880,102		828,637
Add: Losses recoverable (see Note 8)	86,237		87,963
Gross balance at March 31	$	966,339	$	916,600

At March 31, 2026, the Company’s net reserves for losses and LAE include estimated amounts for several catastrophe and weather-related events (the “CAT losses”). The magnitude and volume of losses arising from CAT events is inherently uncertain. Adjustments are recorded in the period in which they are identified. Accordingly, actual losses for CAT events may ultimately differ materially from the Company’s current estimates.

During the three months ended March 31, 2026, the Company incurred CAT losses of $5.0 million relating to the Middle East conflict. There were no loss recoveries associated with this event.

During the three months ended March 31, 2025, the Company incurred CAT losses of $27.0 million relating to the California wildfires. There were no loss recoveries associated with this event.

The Company’s net favorable (adverse) prior year reserve development arises from changes to estimates for losses and LAE related to loss events that occurred in previous calendar years. The following table presents net prior year reserve development by segment and consolidated:


	Favorable (Adverse)
	Open Market		Innovations		Total Segments		Corporate		Total Consolidated
Three months ended March 31, 2026	$	2,847	$	(358)	$	2,489	$	—	$	2,489
Three months ended March 31, 2025	$	(4,896)	$	567	$	(4,329)	$	111	$	(4,218)

The net favorable reserve development for the three months ended March 31, 2026 was composed of $5.8 million better than expected loss emergence predominantly on the multiline business (mostly FAL business for 2024 and 2025 accident years) and specialty business (mostly 2022-2024 accident years). This was partially offset by $3.0

million of reserve strengthening predominantly on the casualty line (various accident years) due to current economic and social inflation trends.

The net adverse reserve development for the three months ended March 31, 2025 was composed of $23.2 million of reserve strengthening predominantly on the casualty line (various accident years) due to economic and social inflation trends. This was partially offset by $18.3 million of favorable reserve development on property (mostly 2024 accident year) and specialty lines (mostly 2022-2024 accident years) due to better than expected loss emergence.

The net adverse reserve development for the three months ended March 31, 2026 was composed of $0.6 million of reserve strengthening predominantly on the multiline business (Syndicate 3456 for 2023-2024 accident years) due to worse than expected loss emergence. This was partially offset by $0.3 million of favorable reserve development predominantly on the financial line.

The net favorable reserve development for the three months ended March 31, 2025 was due to better than expected loss emergence on multiline and specialty lines (2022-2023 underwriting years).

Corporate represents the Innovations related property runoff business. The favorable reserve development for the three months ended March 31, 2025 relate to CAT losses driven by the U.S. tornados (2021-2023 underwriting years).