Reserve for Losses and Loss Adjustment Expenses

The following table represents an analysis of losses and loss adjustment expenses and a reconciliation of the beginning and ending reserve for losses and loss adjustment expenses:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Reserve for losses and loss adjustment expenses at beginning of period	$	34,105	$	30,946	$	33,547	$	29,369
Unpaid losses and loss adjustment expenses recoverable	9,142		8,379		9,054		7,821
Net reserve for losses and loss adjustment expenses at beginning of period	24,963		22,567		24,493		21,548

Net incurred losses and loss adjustment expenses relating to losses occurring in:
Current year	2,365		2,456		4,674		5,240
Prior years	(169)		(153)		(389)		(350)
Total net incurred losses and loss adjustment expenses	2,196		2,303		4,285		4,890

Net losses and loss adjustment expense reserves of acquired businesses (1)	—		50		—		50





Net foreign exchange (gains) losses and other	2		400		(68)		593

Net paid losses and loss adjustment expenses relating to losses occurring in:
Current year	(269)		(424)		(329)		(865)
Prior years	(1,428)		(1,320)		(2,917)		(2,640)
Total net paid losses and loss adjustment expenses	(1,697)		(1,744)		(3,246)		(3,505)

Net reserve for losses and loss adjustment expenses at end of period	25,464		23,576		25,464		23,576
Unpaid losses and loss adjustment expenses recoverable	9,311		8,513		9,311		8,513
Reserve for losses and loss adjustment expenses at end of period	$	34,775	$	32,089	$	34,775	$	32,089

(1) Activity in the 2025 periods related to the MCE Acquisition (see note 2).

Prior year development (“PYD”) arises from changes in loss estimates during the current period related to events occurring in prior calendar years. Long-tailed lines include lines of business that typically take many years for claims to settle, such as third-party liability, while short-tailed lines are those that settle more quickly, such as property. The table below summarizes (favorable) and adverse net PYD by segment and tail length:


	Three Months Ended						Six Months Ended
(Favorable) Adverse	June 30,						June 30,
2026	Short-tailed		Long-tailed		Total		Short-tailed		Long-tailed		Total
Insurance	$	(33)	$	6	$	(27)	$	(43)	$	2	$	(41)
Reinsurance	(123)		26		(97)		(295)		46		(249)
Mortgage	(45)		—		(45)		(99)		—		(99)
Total	$	(201)	$	32	$	(169)	$	(437)	$	48	$	(389)

2025
Insurance	$	(13)	$	5	$	(8)	$	(28)	$	3	$	(25)
Reinsurance	(75)		(6)		(81)		(202)		2		(200)
Mortgage	(64)		—		(64)		(125)		—		(125)
Total	$	(152)	$	(1)	$	(153)	$	(355)	$	5	$	(350)

2026 Second Quarter

The insurance segment’s short-tailed lines included $22 million of favorable development in property, energy, marine and aviation business, primarily from the 2023 and 2024 accident years (i.e., the year in which a loss occurred). Long-tailed lines primarily included adverse development in programs business, primarily from the 2021 to 2023 accident years.

The reinsurance segment’s short-tailed lines included $61 million of favorable development from property other than property catastrophe business, primarily from the 2024 and 2025 underwriting years (i.e., all premiums and losses attributable to contracts having an inception or renewal date within the given 12 month period), and $44 million of favorable development from property catastrophe business, primarily from the 2024 underwriting year. Long-tailed lines included $26 million of adverse development in casualty, primarily from the 2022 and 2023 underwriting years.

The mortgage segment’s favorable development was driven by reductions on reserves for delinquent loans associated with the U.S. first lien portfolio primarily from the 2025 accident year, with the credit risk transfer and international businesses also contributing.

2025 Second Quarter

The insurance segment’s short-tailed lines included $7 million of favorable development in travel and accident, primarily from the 2024 accident year. Long-tailed lines included $14 million of adverse development in programs business, primarily from the 2018 and 2023 accident years.

The reinsurance segment’s short-tailed lines included $60 million of favorable development from property other than property catastrophe business, primarily from the 2023 and 2024 underwriting years. Long-tailed lines included $6 million of favorable development, primarily from the 2022 to 2023 underwriting years.

The mortgage segment’s favorable development was driven by reductions on reserves for delinquent loans associated with the U.S. first lien portfolio from the 2024 accident year, with the credit risk transfer and international businesses also contributing.

Six Months Ended June 30, 2026

The insurance segment’s short-tailed lines included $29 million of favorable development in property, energy, marine and aviation business, primarily from the 2023 and 2024 accident years. Net adverse development in long-tailed lines primarily included adverse development in healthcare business, mainly from the 2018 and 2023 accident years.

The reinsurance segment’s short-tailed lines included $133 million of favorable development from property other than property catastrophe business, primarily from the 2023 to 2025 underwriting years, and $79 million of favorable development from property catastrophe, primarily from the 2023 to 2025 underwriting years. Long-tailed lines included $46 million of adverse development in casualty, primarily from the 2022 to 2024 underwriting years.

The mortgage segment’s favorable development was driven by reserve releases associated with the U.S. first lien portfolio from the 2024 and 2025 accident years, with the Company’s credit risk transfer and international businesses also contributing.

Six Months Ended June 30, 2025

The insurance segment’s short-tailed lines included $15 million of favorable development in travel and accident, primarily from the 2023 and 2024 accident years, and $11 million of favorable development in property, energy, marine and aviation, primarily from the 2024 accident year.

The reinsurance segment’s short-tailed lines included $89 million of favorable development from property other than property catastrophe business and $86 million of favorable development from property catastrophe, primarily from the 2023 and 2024 underwriting years for both lines.