a) In reinsurance transactions, an insurance company transfers, or cedes, all or part of its exposure in return for a premium. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policies, and the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. A credit risk exists with ceded reinsurance to the extent that any reinsurer is unable to meet the obligations assumed under the reinsurance contracts. The Company attempts to mitigate credit risk by selecting well capitalized, highly rated authorized capacity providers or requiring that the capacity provider post substantial collateral to secure the reinsured risks.

An allowance is established for credit losses expected to be incurred over the life of the reinsurance recoverable, which is presented net of this allowance on the consolidated balance sheets. The Company records the provision for expected credit losses in losses and loss adjustment expenses for its underwriting operations and services and other expenses for its fronting operations. The following table summarizes the Company's allowance for credit losses associated with its reinsurance recoverables.

For the six months ended June 30, 2026, the change in the allowance for expected credit losses included a $205.3 million provision for expected credit losses related to the Company's program services fronting operations within the Company's Financial segment. This provision related to one capacity provider that is currently in bankruptcy. As of December 31, 2025, the Company held collateral from this capacity provider in excess of the related reinsurance recoverables.

In the second quarter of 2026, the Company completed an actuarial reserve assessment on the programs in which this capacity provider participated which included a third-party actuarial reserve study. Based on the loss trends observed in this analysis, the Company increased its gross and ceded losses related to programs with this capacity provider, with the related reserves reflecting a level consistent with the Company's more likely redundant than deficient loss reserving philosophy. The Company does not expect to be able to obtain additional collateral from the capacity provider to secure the related increase in reinsurance recoverables. As a result, the Company recognized a $205.3 million provision for expected credit losses as an allowance for the uncollateralized reinsurance recoverables. The Company continues to pursue additional collateral and other contractual means of recovery and will revise its allowance for expected credit losses to reflect any changes in its expectations in subsequent periods.

In the first half of 2026, there were no other material changes in the Company's credit risk exposures within its program services fronting operations. Additionally, there were no material changes in the Company's credit risk exposures within its underwriting operations.

b) The following tables summarize the effect of reinsurance and retrocessional reinsurance on premiums written and earned. Fronting premiums are attributable to business written on behalf of third-party capacity providers, substantially all of which are ceded.


	Quarter Ended June 30,
	2026								2025
(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums		Direct		Assumed		Ceded		Net Premiums
Underwriting:
Written	$	2,282,932	$	184,138	$	(343,419)	$	2,123,651	$	2,414,799	$	471,869	$	(643,567)	$	2,243,101
Earned	$	2,209,012	$	316,465	$	(453,697)	$	2,071,780	$	2,210,284	$	451,071	$	(519,923)	$	2,141,432
Fronting:
Written	1,135,318		969,786		(2,105,099)		5		821,727		1,436,096		(2,257,573)		250
Earned	853,492		504,203		(1,357,697)		(2)		832,497		317,130		(1,149,368)		259
Consolidated:
Written	$	3,418,250	$	1,153,924	$	(2,448,518)	$	2,123,656	$	3,236,526	$	1,907,965	$	(2,901,140)	$	2,243,351
Earned	$	3,062,504	$	820,668	$	(1,811,394)	$	2,071,778	$	3,042,781	$	768,201	$	(1,669,291)	$	2,141,691


	Six Months Ended June 30,
	2026								2025
(dollars in thousands)	Direct		Assumed		Ceded		Net Premiums		Direct		Assumed		Ceded		Net Premiums
Underwriting:
Written	$	4,352,386	$	403,912	$	(787,764)	$	3,968,534	$	4,550,772	$	1,200,912	$	(1,198,292)	$	4,553,392
Earned	$	4,431,670	$	657,134	$	(968,255)	$	4,120,549	$	4,405,767	$	889,116	$	(1,064,079)	$	4,230,804
Fronting:
Written	2,063,054		1,537,844		(3,600,730)		168		1,595,411		2,015,626		(3,610,787)		250
Earned	1,711,032		872,112		(2,583,029)		115		1,571,742		561,436		(2,132,917)		261
Consolidated:
Written	$	6,415,440	$	1,941,756	$	(4,388,494)	$	3,968,702	$	6,146,183	$	3,216,538	$	(4,809,079)	$	4,553,642
Earned	$	6,142,702	$	1,529,246	$	(3,551,284)	$	4,120,664	$	5,977,509	$	1,450,552	$	(3,196,996)	$	4,231,065


	Quarter Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Underwriting:
Ceded earned premiums to gross earned premiums	18	%	20	%	19	%	20	%
Assumed earned premiums to net earned premiums	15	%	21	%	16	%	21	%
Consolidated:
Ceded earned premiums to gross earned premiums	47	%	44	%	46	%	43	%
Assumed earned premiums to net earned premiums	40	%	36	%	37	%	34	%


	Quarter Ended June 30,				Six Months Ended June 30,
(dollars in thousands)	2026		2025		2026		2025
Gross losses and loss adjustment expenses	$	1,808,626	$	1,659,756	$	3,242,622	$	3,333,265
Ceded losses and loss adjustment expenses	(621,126)		(371,564)		(888,606)		(790,491)
Net losses and loss adjustment expenses	$	1,187,500	$	1,288,192	$	2,354,016	$	2,542,774