
Consolidated	Nine months ended September 30
	2026		2025
Gross balance at January 1	$	967,960	$	860,969
Less: Losses recoverable	(81,392)		(85,790)
Net balance at January 1	886,568		775,179
Incurred losses related to:
Current year	286,886		303,474
Prior years	717		8,082
Total incurred	287,603		311,556
Paid losses related to:
Current year	(17,287)		(35,136)
Prior years	(245,953)		(229,908)
Total paid	(263,241)		(265,043)
Foreign exchange and translation adjustment	(4,400)		33,833
Net balance at September 30	906,530		855,525
Add: Losses recoverable (see Note 9)	118,361		82,783
Gross balance at September 30	$	1,024,891	$	938,308

At September 30, 2026, the Company’s net reserves for losses and LAE include estimated amounts for several catastrophe and weather-related events (the “CAT losses”). The magnitude and volume of losses arising from CAT events is inherently uncertain. Adjustments are recorded in the period in which they are identified. Accordingly, actual losses for CAT events may ultimately differ materially from the Company’s current estimates.

During the nine months ended September 30, 2026, the Company incurred CAT losses of $29.0 million relating to the Middle East conflict and a QatarEnergy gas facility explosion, net of $3.8 million loss recoveries.

During the nine months ended September 30, 2025, the Company incurred CAT losses of $27.0 million relating to the California wildfires. There were no loss recoveries associated with this event.

The Company’s net favorable (adverse) prior year reserve development arises from changes to estimates for losses and LAE related to loss events that occurred in previous calendar years. The following table presents net prior year reserve development by segment and consolidated:


	Favorable (Adverse)
	Open Market		Innovations		Total Segments		Corporate		Total Consolidated
Nine months ended September 30, 2026	$	6,417	$	(4,286)	$	2,131	$	(2,848)	$	(717)
Nine months ended September 30, 2025	$	(4,810)	$	(1,316)	$	(6,126)	$	(1,956)	$	(8,082)

•The net favorable reserve development for the nine months ended September 30, 2026 was composed of $13.0 million predominantly on the property business due to lower California wildfire losses than previously anticipated based on latest clients’ estimates (accident year 2025). Additionally, we had better than expected loss emergence on our FAL business (accident years 2024 and 2025) within our multiline business. This was partially offset by $6.6 million of reserve strengthening predominantly on the casualty business (various accident years) due to current economic and social inflation trends.

•The net adverse reserve development for the nine months ended September 30, 2025 was composed of $46.4 million of reserve strengthening predominantly on the casualty line (various accident years) due to current economic and social inflation trends, in addition to worse than expected loss emergence for the financial line (accident years 2021, 2022, and 2024) relating to the transactional liability business, and for the multiline business (accident years 2023-2024) relating to the commercial auto business. This was partially offset by $41.6 million of favorable reserve development on property (mostly 2024 underwriting year) and specialty lines (mostly accident years 2022-2024) due to better than expected loss emergence.

•The net adverse reserve development for the nine months ended September 30, 2026 was composed of $5.8 million of reserve strengthening predominantly on the casualty business due to worse than expected loss emergence on the general liability line (accident year 2022). This was partially offset by $1.6 million of favorable reserve development predominantly on the multiline business (Syndicate 3456 for accident year 2024).

•The net adverse reserve development for the nine months ended September 30, 2025 was composed of $2.6 million of reserve strengthening predominantly on the financial line (accident years 2022-2023) due to higher volume of claims than expected. This was partially offset by $1.3 million of favorable reserve development predominantly on the multiline business.

Corporate represents the Innovations related property runoff business. The prior year adverse reserve development for the above periods relate to continued worse than expected loss emergence on U.S. homeowners property claims (accident years 2021-2023).