The Company regularly updates its reserve estimates as new information becomes available and further events occur which may impact the resolution of unsettled claims. Reserve adjustments are reflected in results of operations as adjustments to losses and loss adjustment expenses (“LAE”). Often these adjustments are recognized in periods subsequent to the period in which the underlying policy was written and loss event occurred. These types of subsequent adjustments are described as loss and LAE “development.” Such development can be either favorable or unfavorable to the Company’s financial results and may vary by line of business. In this section, all amounts presented include catastrophe losses and LAE, unless otherwise indicated.

The table below provides a reconciliation of the gross beginning and ending reserve for unpaid losses and loss adjustment expenses.


	Nine Months Ended
	September 30,
(in millions)	2026			2025
Gross reserve for losses and LAE, beginning of period	$	7,755.2		$	7,461.2
Reinsurance recoverable on unpaid losses		1,850.3			1,829.8
Net reserve for losses and LAE, beginning of period		5,904.9			5,631.4
Net incurred losses and LAE in respect of losses occurring in:
Current year		3,048.3			2,907.9
Prior years		(138.5	)		(68.3	)
Total incurred losses and LAE		2,909.8			2,839.6
Net payments of losses and LAE in respect of losses occurring in:
Current year		1,191.6			1,124.3
Prior years		1,419.2			1,456.0
Total payments		2,610.8			2,580.3
Net reserve for losses and LAE, end of period		6,203.9			5,890.7
Reinsurance recoverable on unpaid losses		2,016.0			1,815.8
Gross reserve for losses and LAE, end of period	$	8,219.9		$	7,706.5

As a result of continuing trends in the Company’s business, reserves, including catastrophes, have been re-estimated for all prior accident years and were decreased by $138.5 million and $68.3 million in 2026 and 2025, respectively.

For the nine months ended September 30, 2026, net favorable loss and LAE development was $138.5 million. Specialty favorable loss and LAE development of $51.2 million was primarily due to lower than expected non-catastrophe and catastrophe losses in the Marine and Industrial Property division and the E&S and Alternative Markets division and, to a lesser extent, in the Surety and Other division. Personal Lines favorable loss and LAE development of $48.2 million was primarily due to lower than expected catastrophe and non-catastrophe losses in the homeowners line. Core Commercial favorable loss and LAE development of $39.3 million was primarily due to lower than expected catastrophe and non-catastrophe losses in the commercial multiple peril line. The lower catastrophe losses were primarily related to several convective storms across multiple states from accident year 2025, and to a lesser extent, accident year 2024.

For the nine months ended September 30, 2025, net favorable loss and LAE development was $68.3 million. Specialty favorable loss and LAE development of $42.4 million was primarily due to lower than expected non-catastrophe losses in the Professional and Executive Lines, Marine and Industrial Property, and E&S and Alternative Markets divisions. Core Commercial favorable loss and LAE development of $16.5 million was primarily due to lower than expected non-catastrophe losses in the workers’ compensation line and lower than expected catastrophe and non-catastrophe losses in the commercial multiple peril line, partially offset by higher than expected non-catastrophe losses in the commercial automobile line. The favorable catastrophe development in the commercial multiple peril line was due to lower than expected catastrophe losses related to events from accident years 2023 through 2024, including several convective storms across multiple states and Winter Storm Elliot. Personal Lines favorable loss and LAE development was primarily due to lower than expected catastrophe and non-catastrophe losses in the homeowners line.