v3.26.1
Unpaid losses and loss adjustment expenses
 6 Months Ended
Jun. 30, 2026
Insurance [Abstract]  
Unpaid losses and loss adjustment expenses
6. Unpaid losses and loss adjustment expenses
Activity in unpaid losses and LAE reserve is summarized as follows:
Six Months Ended June 30,
(in millions)20262025
Gross reserve for unpaid losses and LAE, beginning of year$2,005.4 $1,294.4 
Less: Reinsurance recoverables, beginning of year1,682.3 1,069.5 
Net reserve for unpaid losses and LAE, beginning of year323.1 224.9 
Reserves reassumed under commutation agreement (1)
97.4 — 
Incurred losses and LAE related to:
    Current accident year157.5 96.5 
    Prior accident years(4.0)— 
Total incurred losses and LAE153.5 96.5 
Paid losses and LAE:
    Current accident year (3.9)(16.1)
    Prior accident years(40.7)(53.6)
Total paid losses and LAE(44.6)(69.7)
Foreign exchange adjustments(3.6)15.7 
Retroactive reinsurance (2)
(345.0)— 
Net reserve for unpaid losses and LAE, end of period180.8 267.4 
Reinsurance recoverables on unpaid losses and LAE, end of period2,092.9 1,424.6 
Gross reserve for unpaid losses and LAE, end of period$2,273.7 $1,692.0 
(1) During the six months ended June 30, 2026, we completed commutations that resulted in a gain of $7.3 million, representing the excess of the total consideration received of $104.7 million net of total liabilities reassumed of $97.4 million. The gain is included in Losses and loss adjustment expenses within our condensed consolidated statement of operations.
(2) During the six months ended June 30, 2026, we entered into loss portfolio transfer reinsurance contracts ("LPTs") under which our reinsurance counterparties will reinsure all of our retained loss reserves (subject to certain minor exclusions) on policies written between July 2022 to June 2025, subject to an aggregate limit of $502.0 million. The terms of the LPTs provide coverage on net loss reserves of $363.2 million as of the respective reference dates in consideration for a premium of the same amount. As of June 30, 2026, the total reinsurance recoverable and a corresponding funds held under reinsurance balance related to the LPTs were $345.0 million, reflecting paid losses and settlement activity during the six months ended June 30, 2026.
Reserves for losses and LAE represent our estimated indemnity cost and related adjustment expenses necessary to administer and settle claims. Our estimates are based upon individual case estimates for reported claims set by our claims specialists, adjusted with actuarial estimates for any further expected development on reported claims and for losses that have been incurred, but not yet reported.