RESERVE FOR CLAIMS AND CLAIM EXPENSES

6 Months Ended

Jun. 30, 2026

The Company believes the most significant accounting judgment made by management is its estimate of claims and claim expense reserves. Claims and claim expense reserves represent estimates, including actuarial and statistical projections at a given point in time, of the ultimate settlement and administration costs for unpaid claims and claim expenses arising from the insurance and reinsurance contracts the Company sells. The Company’s reserve for claims and claim expenses is a combination of case reserves, additional case reserves (“ACR”) and incurred but not reported losses and incurred but not enough reported losses (collectively referred to as “IBNR”). Case reserves are losses reported to the Company by insureds and ceding companies, but which have not yet been paid. If deemed necessary and in certain situations, either the Company establishes, or the Company’s clients report, ACR. Client reported ACR represents the client’s estimate of additional contract specific claims in excess of the case reserves they have reported to the Company. ACR established by the Company represents the Company’s estimates for claims related to specific contracts which the Company believes may not be adequately estimated by the client as of that date or is not within the IBNR. The Company establishes IBNR using actuarial techniques and expert judgment to represent the anticipated cost of claims which have not been reported to the Company yet, or where the Company anticipates increased reporting. The Company’s reserving committee, which includes members of the Company’s senior management, reviews, discusses, and assesses the reasonableness and adequacy of the reserving estimates included in the unaudited consolidated financial statements.

The following table summarizes the Company’s reserve for claims and claim expenses by segment, allocated between case reserves, ACR and IBNR:



At June 30, 2026	Case Reserves		ACR		IBNR		Total
Property	$	1,618,503	$	1,436,824	$	1,972,558	$	5,027,885
Casualty and Specialty	3,769,361		451,036		13,020,852		17,241,249
Total	$	5,387,864	$	1,887,860	$	14,993,410	$	22,269,134

At December 31, 2025
Property	$	1,797,427	$	1,679,848	$	2,208,709	$	5,685,984
Casualty and Specialty	3,393,451		327,941		12,894,969		16,616,361
Total	$	5,190,878	$	2,007,789	$	15,103,678	$	22,302,345

Activity in the reserve for claims and claim expenses is summarized as follows:



Six months ended June 30,	2026		2025
Reserve for claims and claim expenses, net of reinsurance recoverable, beginning of period	$	18,402,432	$	16,822,101
Net incurred related to:
Current year	2,287,789		4,251,465
Prior years	(361,440)		(465,584)
Total net incurred	1,926,349		3,785,881
Net paid related to:
Current year	110,465		678,357
Prior years	1,784,294		1,598,704
Total net paid	1,894,759		2,277,061
Foreign exchange and other (1)	(28,374)		281,869
Reserve for claims and claim expenses, net of reinsurance recoverable, end of period	18,405,648		18,612,790
Reinsurance recoverable, end of period	3,863,486		4,300,973
Reserve for claims and claim expenses, end of period	$	22,269,134	$	22,913,763

(1) Reflects the impact of the foreign exchange revaluation of the reserve for claims and claim expenses, net of reinsurance recoverable, denominated in non-U.S. dollars as at the balance sheet date, as well as reinsurance transactions accounted for under retroactive reinsurance accounting.

Prior Year Development of the Reserve for Net Claims and Claim Expenses

The Company’s estimates of claims and claim expense reserves are not precise in that, among other things, they are based on predictions of future developments and estimates of future trends and other variable factors. Some, but not all, of the Company’s reserves are further subject to the uncertainty inherent in actuarial methodologies and estimates. Because a reserve estimate is simply an insurer’s estimate at a point in time of its ultimate liability, and because there are numerous factors that affect reserves and claims payments that cannot be determined with certainty in advance, the Company’s ultimate payments will vary, perhaps materially, from its estimates of reserves. If the Company determines in a subsequent period that adjustments to its previously established reserves are appropriate, such adjustments are recorded in the period in which they are identified. On a net basis, the Company’s cumulative favorable or unfavorable development is generally reduced by offsetting changes in its reinsurance recoverable, as well as changes to loss related premiums such as reinstatement premiums and redeemable noncontrolling interest, all of which generally move in the opposite direction to changes in the Company’s ultimate claims and claim expenses.

The following table details the Company’s net (favorable) adverse development of prior accident years net claims and claim expenses by segment:



Six months ended June 30,	2026		2025
Property	$	(418,213)	$	(453,634)
Casualty and Specialty	56,773		(11,950)
Total net (favorable) adverse development of prior accident years net claims and claim expenses (1)	$	(361,440)	$	(465,584)

(1)In the six months ended June 30, 2026, the total net (favorable) adverse development of prior accident years net claims and claim expenses included amortization of fair value adjustments of $14.7 million, principally related to the Validus Acquisition (June 30, 2025 - $20.6 million)

Changes to prior year estimated net claims and claim expenses increased net income by $361.4 million during the six months ended June 30, 2026 (June 30, 2025 - $465.6 million), excluding the consideration of changes in reinstatement, adjustment or other premium changes, profit commissions, redeemable noncontrolling interests - DaVinci, Fontana and Vermeer and income tax.

Property Segment

The following tables detail the net (favorable) adverse development of prior accident years net claims and claim expenses of the Company’s liability for net unpaid claims and claim expenses for its Property segment, allocated between large catastrophe events and small catastrophe events and attritional loss movements:



Six months ended June 30,	2026		2025
Catastrophe net claims and claim expenses
Large catastrophe events
2025 Large Loss Events (1)	$	(26,424)	$	—
2024 Large Loss Events (2)	(78,291)		(10,415)
2023 Large Loss Events (3)	(26,479)		(52,710)
2022 Weather-Related Large Losses (4)	(37,433)		(63,586)
2021 Weather-Related Large Losses (5)	(26,371)		(27,372)
2020 Weather-Related Large Loss Events (6)	3,096		(144)
2019 Large Loss Events (7)	(862)		(1,074)
2018 Large Loss Events (8)	594		(4,874)
2017 Large Loss Events (9)	(3,258)		(14,664)

Total large catastrophe events	(195,428)		(174,839)
Total small catastrophe events and attritional loss movements (10)	(197,085)		(245,695)
Total catastrophe and attritional net claims and claim expenses	(392,513)		(420,534)
Actuarial assumption changes	(25,700)		(33,100)
Total net (favorable) adverse development of prior accident years net claims and claim expenses	$	(418,213)	$	(453,634)

(1)“2025 Large Loss Events” includes the California Wildfires, Hurricane Melissa, the crash of American Airlines flight 5342, certain refinery fires in the first quarter of 2025, the crash of UPS Airlines flight 2976 and the Grasberg mine landslide.

(2)“2024 Large Loss Events” includes Hurricanes Milton, Helene, Debby and Beryl, the Baltimore Bridge Collapse, a series of severe convective storms impacting the Southern and Midwest United States, the Hualien earthquake which impacted Taiwan in April 2024, a severe hailstorm which impacted Calgary in August 2024, and certain aggregate loss contracts triggered during 2024.

(3)“2023 Large Loss Events” includes earthquakes in Southern and Central Turkey, Cyclone Gabrielle, flooding in northern New Zealand, various wind and thunderstorm events in both the Southern and Midwest U.S., severe weather events in Texas and other Southern and Central U.S. states, wildfires in Hawaii, Hurricanes Idalia and Otis, Storm Ciaran, and certain aggregate loss contracts triggered during 2023.

(4)“2022 Weather-Related Large Losses” includes Hurricanes Ian, Fiona and Nicole, floods in Eastern Australia, Storm Eunice, severe weather in France, typhoons in Asia, Winter Storm Elliott, and loss estimates associated with certain aggregate loss contracts.

(5)“2021 Weather-Related Large Losses” includes Winter Storm Uri, European Floods, Hurricane Ida, hail storm in Europe, wildfires in California, tornadoes in the Central and Midwest U.S., the Midwest Derecho, and losses associated with aggregate loss contracts.

(6)“2020 Weather-Related Large Loss Events” includes Hurricanes Laura, Sally, Isaias, Delta, Zeta and Eta, the California, Oregon and Washington wildfires, Typhoon Maysak, the August 2020 Derecho, and losses associated with aggregate loss contracts.

(7)“2019 Large Loss Events” includes Hurricane Dorian and Typhoons Faxai and Hagibis and certain losses associated with aggregate loss contracts.

(8)“2018 Large Loss Events” includes Typhoons Jebi, Mangkhut and Trami, Hurricanes Florence and Michael, wildfires in California, and certain losses associated with aggregate loss contracts.

(9)“2017 Large Loss Events” includes Hurricanes Harvey, Irma and Maria, the Mexico City Earthquake, wildfires in California, and certain losses associated with aggregate loss contracts.

(10)In the six months ended June 30, 2026, total small catastrophe events and attritional loss movements included amortization of fair value adjustments of $3.7 million, principally related to the Validus Acquisition (June 30, 2025 - $5.2 million).

2026

The net favorable development of prior accident years net claims and claim expenses on the large catastrophe events was primarily driven by better than expected loss emergence across the 2021 to 2025 accident years.

2025

The net favorable development on small catastrophe events and attritional loss movements was primarily related to the other property class where the Company principally estimates net claims and claim expenses using traditional actuarial methods, in addition to net favorable development related to actuarial assumption changes within the catastrophe and other property classes.

Casualty and Specialty Segment

The following table details the net (favorable) adverse development of prior accident years net claims and claim expenses of the Company’s liability for net unpaid claims and claim expenses for its Casualty and Specialty segment:



Six months ended June 30,	2026		2025
Actuarial methods - actual reported claims less than expected claims (1)	$	(39,052)	$	(31,789)
Actuarial assumption changes	95,825		19,839
Total net (favorable) adverse development of prior accident years net claims and claim expenses	$	56,773	$	(11,950)

(1)In the six months ended June 30, 2026, actuarial methods included amortization of fair value adjustments of $11.1 million, principally related to the Validus Acquisition (June 30, 2025 - $15.4 million).

The Company principally estimates net claims and claim expenses for the Casualty and Specialty segment using traditional actuarial methods.

The net adverse development of prior accident years net claims and claim expenses during the six months ended June 30, 2026, was largely driven by actuarial assumption changes primarily impacting the general liability line of business, partially offset by net favorable development within the Company’s other specialty and credit classes, mainly driven by reported losses coming in lower than expected on attritional net claims and claim expenses. Net adverse development also included $54.0 million from a shift of previously reported loss estimates for the Baltimore Bridge Collapse to Casualty and Specialty from the other property class.

The net favorable development of prior accident years net claims and claim expenses during the six months ended June 30, 2025 was primarily due to reported losses generally coming in lower than expected on attritional net claims and claim expenses. Net favorable development arose principally within the Company’s other specialty, professional liability and credit classes, partially offset by adverse development in the general liability line of business.