
	Nine Months Ended September 30,
	2026		2025
(Dollars in millions)
Gross reserves beginning of period	$	34,312	$	29,889
Less reinsurance recoverables on unpaid losses	(3,715)		(2,915)
Net reserves beginning of period	30,597		26,975

Incurred related to:
Current year	6,585		7,665
Prior years	226		537
Prior years, reserves subject to the ADC	8		—

Total incurred losses and LAE	6,819		8,203



Paid related to:
Current year	770		885
Prior years	4,804		4,670
Total paid losses and LAE	5,574		5,554

Foreign exchange/translation adjustment	(170)		607


Net reserves end of period	31,672		30,231
Plus reinsurance recoverables on unpaid losses (1)	3,616		3,511
Gross reserves end of period	$	35,288	$	33,742

Current year incurred losses were $6.6 billion and $7.7 billion for the nine months ended September 30, 2026 and 2025, respectively. Current year incurred losses decreased overall due to a decrease of $1.0 billion of current year attritional losses in 2026 compared to 2025, as well as a decrease of $48 million in 2026 current year catastrophe losses. 2025 current year attritional losses for the nine months ended September 30, 2025 included approximately $83 million from the Washington D.C. aviation accident.

The decrease in current year attritional losses was primarily driven by a decline in premiums earned in our Reinsurance Treaty and Legacy segments. In addition, in 2025 we strengthened U.S. casualty reserves within the Legacy segment which was not a factor in 2026. The current year catastrophe losses of $556 million for the nine months ended September 30, 2026 primarily related to wildfires and other weather related events ($243 million), earthquakes ($157 million) and foreign conflict ($146 million).

The net prior year unfavorable development on reserves of $226 million was primarily due to net prior year unfavorable development on attritional losses of $366 million, partially offset by net prior year favorable development on catastrophe losses of $141 million. The net prior year unfavorable development of attritional losses is primarily driven by U.S. casualty reserve strengthening in the Reinsurance Treaty segment, offset by short-tail lines releases. The net prior year favorable development of catastrophe losses was driven by the release of $197 million of well-seasoned reserves primarily related to 2024 and 2025 events, offset by $57 million of unfavorable development primarily related to the 2024 Baltimore Bridge collapse.

We are exposed to losses arising from unpredictable catastrophic events, including, but not limited to, weather-related and other natural catastrophes, as well as acts of terrorism, wars, pandemics, political instability and significant cyber or operational incidents, for which liabilities cannot be estimated using traditional reserving techniques. For example, we have exposure to losses due to the uncertainty regarding the current conflict in the Middle East.

Effective October 1, 2025, the Company through its subsidiaries Everest Re and Bermuda Re (collectively, the “Ceding Companies”) (1) entered into an adverse development reinsurance agreement (the “State National Reinsurance Agreement”) with State National Reinsurer and (2) entered into an adverse development reinsurance agreement (the “MS Transverse Reinsurance Agreement”) with MS Transverse Reinsurer (collectively the “Reinsurers”). The Reinsurance Agreements are supported on a retrocessional basis by Longtail Re, an affiliate of Stone Ridge Capital.

The agreements reinsure potential adverse loss development for accident years 2024 and prior arising out of the Ceding Companies’ North American liabilities within the Global Wholesale & Specialty and Legacy segments (“Subject Business”), subject to exclusions for certain liabilities, including among others those related to the Asbestos and Environmental (“A&E”) reserves included in the Legacy segment. At the time the Company entered into the agreement, the carried reserves held for the Subject Business, pursuant to the Reinsurance Agreements, were $5.4 billion.

Under the State National Reinsurance Agreement, the Company provided in total consideration a reinsurance premium of $1.3 billion, including interest, to State National Reinsurer to assume $1.3 billion of carried reserves as of September 30, 2025, and potential subsequent adverse development for net paid losses on an approximately 85.7 percent coinsurance basis up to an aggregate limit of $600 million above the Company’s net carried reserves for the Subject Business.

Under the State National Reinsurance Agreement $250 million of the reinsurance premium was placed into a funds withheld collateral trust account as security for State National Reinsurer’s claim payment obligations to the Company.

Under the MS Transverse Reinsurance Agreement, the Company paid a reinsurance premium of $122 million to MS Transverse Reinsurer to assume potential subsequent adverse development for net paid losses on an 80 percent coinsurance basis up to an aggregate limit of $400 million. The $122 million payment to MS Transverse Reinsurer exceeds the retroactive reinsured liabilities and represents excess compensation for the uncertainty of future claims development; as a result, the Company recognized an immediate pre-tax loss of $122 million in Incurred losses and loss adjustment expenses in the Company’s 2025 consolidated statement of operations. Mitsui Sumitomo Insurance Company Limited, the parent of MS Transverse Reinsurer, has provided a parental guarantee to secure its obligations under the agreement.

The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions.

As of September 30, 2026 and December 31, 2025, the Company had a deferred gain of $9 million and $3 million, respectively. The deferred gain would be recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. The total covered losses ceded to State National Reinsurer as of September 30, 2026 and December 31, 2025 were $1.3 billion and $1.3 billion, respectively. The aggregated unexpired limit for State National Reinsurer as of September 30, 2026 and December 31, 2025 was $591 million and $597 million, respectively. The aggregated unexpired limit for MS Transverse Reinsurer as of September 30, 2026 and December 31, 2025 was $400 million.