BERKLEY W R CORP

Previous wording

The Company’s profitability is also affected by its investment income and investment gains. The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities.

Current wording

The Company’s profitability is also affected by its investment income and investment gains (losses). The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities.

Previous wording

Our net reserves for losses and loss expenses of approximately $16.5 billion as of June 30, 2024 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Current wording

Our net reserves for losses and loss expenses of approximately $17.0 billion as of September 30, 2024 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Previous wording

Approximately $3.3 billion, or 20%, of the Company’s net loss reserves as of June 30, 2024 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves, which predominantly comprise these reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.

Current wording

Approximately $3.3 billion, or 19.7%, of the Company’s net loss reserves as of September 30, 2024 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves, which predominantly comprise these reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.

Previous wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $390 million as of both June 30, 2024 and December 31, 2023.

Current wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $399 million and $390 million as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the six months ended June 30, 2024 and 2023 are as follows:

Current wording

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the nine months ended September 30, 2024 and 2023 are as follows:

Previous wording

The ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of June 30, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $388 million, of which $329 million relates to the Insurance segment and $59 million relates to the Reinsurance & Monoline Excess segment. Such $388 million of COVID-19-related losses included $385 million of reported losses and $3 million of IBNR.

Current wording

The ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of September 30, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $382 million, of which $325 million relates to the Insurance segment and $57 million relates to the Reinsurance & Monoline Excess segment. Such $382 million of COVID-19-related losses included $379 million of reported losses and $3 million of IBNR.

Previous wording

During the six months ended June 30, 2024, favorable prior year development (net of additional and return premiums) of $2 million included $7 million for the Reinsurance & Monoline Excess segment partially offset by $5 million of adverse prior year development for the Insurance segment.

Current wording

During the nine months ended September 30, 2024, favorable prior year development (net of additional and return premiums) of $3 million included $5 million for the Reinsurance & Monoline Excess segment partially offset by $2 million of adverse prior year development for the Insurance segment.

Previous wording

For the Insurance segment, the adverse development during the first half of 2024 was driven by commercial auto liability and other liability (mainly umbrella and excess liability), and was partially offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2020 through 2023. The other liability development was mainly driven by umbrella and excess liability claims, and was focused in accident years 2017 through 2021. A significant portion of the umbrella and excess liability development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.

Current wording

For the Insurance segment, the adverse development during the first nine months of 2024 was driven by commercial auto liability and other liability (mainly umbrella and excess liability), which was largely offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2020 through 2023. The other liability development was mainly driven by umbrella and excess liability claims, and was focused in accident years 2017 through 2021. A significant portion of the umbrella and excess liability development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.

Previous wording

The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2016 through 2023, while the favorable professional liability development was mainly in accident years 2018 through 2022. For workers’ compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. For professional liability, reported loss experience for accident years 2018 through 2022 was better than expected, which drove the favorable reserve development. Accident years 2020 through 2022 also feature business written at peak pricing levels, which the Company now believes will result in higher profitability than initially anticipated.

Current wording

The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2017 through 2023, while the favorable professional liability development was mainly in accident years 2020 through 2022. For workers' compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. For professional liability, reported loss experience for accident years 2020 through 2022 was better than expected, which drove the favorable reserve development. These accident years also feature business written at peak pricing levels, which the Company now believes will result in higher profitability than initially anticipated.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first half of 2024 was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2017 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first nine months of 2024 was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2015 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects.

Previous wording

During the six months ended June 30, 2023, adverse prior year development (net of additional and return premiums) of $21 million included $19 million for the Insurance segment and $2 million for the Reinsurance & Monoline Excess segment.

Current wording

During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of $20 million included $21 million of adverse development for the Insurance segment, partially offset by $1 million of favorable development for the Reinsurance & Monoline Excess segment.

Previous wording

Overall adverse development was recognized during the first quarter of 2023 in both business segments due to property catastrophe losses related to 2022 events that were still being adjusted and settled. In particular, losses related to U.S. winter storms that occurred in December were a significant driver of the development, as information gathering and evaluation of these losses were still ongoing into the first quarter. As a result, prior year reserve development (net of additional and return premiums) overall was adverse by $24 million in the first quarter, but was favorable by $3 million during the second quarter of 2023.

Current wording

Such adverse development during the nine months ended September 30, 2023 was concentrated in the first quarter, with $24 million of adverse development (net of additional and return premiums) recorded in the first quarter, partially offset by favorable development totaling $4 million recorded during the second and third quarters. The recorded adverse development during the first quarter in both business segments was due to property catastrophe losses related to 2022 events which were still being adjusted and settled. In particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant driver of the development, as information gathering and evaluation of many of these losses were still ongoing into the new year.

Previous wording

For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the six months ended June 30, 2023 included adverse prior year development on casualty lines for the 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2021 and 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the other liability line of business, and to a lesser degree, professional liability, including medical professional. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

Current wording

For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the nine months ended September 30, 2023 included adverse prior year development on casualty lines for the 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2020 through 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the general liability line of business, and to a lesser degree professional liability, including medical professional, and commercial auto liability. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

Previous wording

The favorable prior year development on casualty lines for the 2021 and 2022 accident years in the Insurance segment was concentrated in the professional liability, workers’ compensation, and other liability lines of business, partially offset by adverse development in commercial auto liability. Due to uncertainty regarding incurred loss frequency and severity in light of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2021 and 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience for these lines of business for the 2021 and 2022 accident years has been better than was expected, and the Company has begun to react to this favorable emergence as the accident years mature beyond 12 months. Commercial auto liability experienced adverse prior year development during the six months ended June 30, 2023 for the 2021 accident year, which was driven by a larger than expected number of large losses reported.

Current wording

The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to uncertainty regarding incurred loss frequency and severity in light of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company began to react to this favorable emergence as the accident years matured beyond the age of 12 months. However, commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years, partially offsetting the favorable development discussed above, which was driven by a larger than expected number of large losses reported.

Previous wording

For the Reinsurance & Monoline Excess segment, the adverse development during the six months ended June 30, 2023 was driven mainly by adverse development in property (discussed above) and non-proportional reinsurance assumed liability lines of business, largely offset by favorable development in excess workers' compensation. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The adverse development on reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the nine months ended September 30, 2023 was driven mainly by favorable development in excess workers’ compensation, largely offset by adverse development in property (discussed above), non-proportional reinsurance assumed liability, and commercial auto liability lines of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The adverse development on reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020. The adverse development on commercial auto liability was concentrated in the 2022 accident year and related to commercial auto program business.

Previous wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,324 million and $1,352 million at June 30, 2024 and December 31, 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $390 million at both June 30, 2024 and December 31, 2023. At June 30, 2024, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.5%.

Current wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,346 million and $1,352 million at September 30, 2024 and December 31, 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $399 million and $390 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.5%.

Previous wording

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $66 million at June 30, 2024 and $65 million at December 31, 2023. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Current wording

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $55 million at September 30, 2024 and $65 million at December 31, 2023. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

Previous wording

As of June 30, 2024, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $22 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

Current wording

As of September 30, 2024, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $7 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

Previous wording

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $3 million as of both June 30, 2024 and December 31, 2023.

Current wording

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $1 million and $3 million as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

Results of Operations for the Six Months Ended June 30, 2024 and 2023

Current wording

Results of Operations for the Nine Months Ended September 30, 2024 and 2023

Previous wording

Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the six months ended June 30, 2024 and 2023. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.

Current wording

Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the nine months ended September 30, 2024 and 2023. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.

Previous wording

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the six months ended June 30, 2024 and 2023:

Current wording

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the nine months ended September 30, 2024 and 2023:

Previous wording

The Company reported net income to common stockholders of $814 million in 2024 compared to $650 million in 2023. The $164 million increase in net income was primarily due to an after-tax increase in net investment income of $171 million mainly due to higher interest rates, a larger fixed maturity securities portfolio and investment income associated with our Argentine inflation-linked securities, an after-tax increase in underwriting income of $49 million due to growth in premium rates, an after-tax increase in foreign currency gains of $34 million mainly due to the strengthening of the U.S. dollar against other currencies in 2024, an after-tax reduction in corporate expenses of $6 million, an after-tax increase in profits from non-insurance businesses of $4 million and an after-tax increase in minority interest of $2 million, partially offset by an after-tax reduction in net investment gains of $88 million mainly due to the foreign currency losses from Argentine peso-denominated investments and reversal of prior unrealized gains on equity securities, an increase of $13 million in tax expense due to a change in the effective tax rate and an after-tax reduction in profit from insurance service businesses of $1 million. The number of weighted average diluted shares decreased 8.1 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024 and 2023.

Current wording

The Company reported net income to common stockholders of $1,180 million in 2024 compared to $984 million in 2023. The $196 million increase in net income was primarily due to an after-tax increase in net investment income of $212 million mainly due to higher interest rates, a larger fixed maturity securities portfolio and investment income associated with our Argentine inflation-linked securities, an after-tax increase in underwriting income of $54 million due to growth in premium rates, an after-tax reduction in corporate expenses of $7 million, an after-tax increase in profits from non-insurance businesses of $4 million, an after-tax increase in profit from insurance service businesses of $3 million and an after-tax increase in minority interest of $2 million, partially offset by an after-tax reduction in net investment gains of $61 million mainly due to the foreign currency losses from Argentine peso-denominated investments and reversal of prior unrealized gains on equity securities, an increase of $23 million in tax expense due to a change in the effective tax rate and an after-tax reduction in foreign currency gains of $2 million. The number of weighted average diluted shares decreased 7.2 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024 and 2023.

Previous wording

Premiums. Gross premiums written were $7,081 million in 2024, an increase of 11% from $6,386 million in 2023. The increase was due to a $662 million increase in the Insurance segment and a $33 million increase in the Reinsurance & Monoline

Current wording

Premiums. Gross premiums written were $10,714 million in 2024, an increase of 10% from $9,739 million in 2023. The increase was due to a $915 million increase in the Insurance segment and a $60 million increase in the Reinsurance &

Previous wording

Excess segment. Approximately 81% of premiums expiring in 2024 were renewed, and 80% of premiums expiring in 2023 were renewed.

Current wording

Monoline Excess segment. Approximately 80.9% of premiums expiring in 2024 were renewed, and 80.0% of premiums expiring in 2023 were renewed.

Previous wording

Average renewal rates (per unit of exposure) for insurance and facultative reinsurance increased 6.9% in 2024, and increased 7.9% excluding workers' compensation.

Current wording

Average renewal rates (per unit of exposure) for insurance and facultative reinsurance increased 7.0% in 2024, and increased 8.0% excluding workers' compensation.

Previous wording

•Insurance - gross premiums increased 12% to $3,361 million in 2024 from $2,994 million in 2023. Gross premiums increased $166 million (15%) for other liability, $128 million (17%) for short-tail lines, $58 million (16%) for auto, $9 million (2%) for professional liability and $6 million (2%) for workers' compensation.

Current wording

•Insurance - gross premiums increased 11% to $9,501 million in 2024 from $8,586 million in 2023. Gross premiums increased $399 million (12%) for other liability, $370 million (17%) for short-tail lines, $139 million (13%) for auto, $6 million (1%) for professional liability and $1 million (less than 1%) for workers' compensation.

Previous wording

•Reinsurance & Monoline Excess - gross premiums increased 4% to $799 million in 2024 from $766 million in 2023. Gross premiums increased $44 million (22%) for property and $15 million (10%) for monoline excess, partially offset by a reduction of $26 million (6%) for casualty.

Current wording

•Reinsurance & Monoline Excess - gross premiums increased 5% to $1,213 million in 2024 from $1,153 million in 2023. Gross premiums increased $61 million (20%) for property and $23 million (10%) for monoline excess, partially offset by a reduction of $24 million (4%) for casualty.

Previous wording

Net premiums written were $5,978 million in 2024, an increase of 11% from $5,386 million in 2023. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in both 2024 and 2023.

Current wording

Net premiums written were $9,035 million in 2024, an increase of 10% from $8,235 million in 2023. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in 2024 and 15% in 2023.

Previous wording

Premiums earned increased 11% to $5,611 million in 2024 from $5,044 million in 2023. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $184 million in 2024 compared with $183 million in 2023.

Current wording

Premiums earned increased 11% to $8,538 million in 2024 from $7,686 million in 2023. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $270 million in 2024 compared with $271 million in 2023.

Previous wording

Net Investment Income. Following is a summary of net investment income for the six months ended June 30, 2024 and 2023:

Current wording

Net Investment Income. Following is a summary of net investment income for the nine months ended September 30, 2024 and 2023:

Previous wording

Net investment income increased 48% to $692 million in 2024 from $469 million in 2023 due primarily to a $246 million increase in income from fixed maturity securities mainly driven by higher interest rates, a larger fixed maturity securities portfolio and our Argentine inflation-linked securities which is not expected to continue at this level (see below for further discussion), partially offset by an $11 million decrease in real estate, a $5 million decrease in income from investment funds, a $5 million decrease in equity securities, a $1 million decrease from arbitrage trading account and a $1 million increase in investment expenses. The Company expects investment income to benefit as it continues to invest maturing securities at the current higher rates. The Company maintained the shortened duration of its fixed maturity security portfolio, with a small increase in average duration from 2.4 to 2.5 years, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including cash and cash equivalents), were $28.2 billion in 2024 up 9.2% from $25.8 billion in 2023.

Current wording

Net investment income increased 37% to $1,016 million in 2024 from $739 million in 2023 due primarily to a $302 million increase in income from fixed maturity securities mainly driven by higher interest rates, a larger fixed maturity securities portfolio and our Argentine inflation-linked securities which is not expected to continue at this level (see below for further discussion), partially offset by a $13 million decrease in real estate, a $6 million decrease in equity securities, a $5 million decrease in income from investment funds and a $1 million increase in investment expenses. The Company expects investment income to benefit as it continues to invest maturing securities at the current higher rates. The Company maintained the shortened duration of 2.4 years for its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including cash and cash equivalents), were $28.6 billion in 2024, up 9% from $26.1 billion in 2023.

Previous wording

Pre-tax net investment income associated with the Argentine inflation-linked securities for the six months ended June 30, 2024 was $159 million. Such investment income increased as a result of an adjustment to the inflation rate that was made by the Argentine government in late 2023. As certain of our Argentine bonds matured and were sold in the first six months of 2024 and the inflation rate has continued to decline, we do not expect investment income relating to these securities to continue at this level. The proceeds from the Argentine inflation-linked securities that matured and were sold in the first six months of 2024 have been reinvested.

Current wording

Pre-tax net investment income associated with the Argentine inflation-linked securities for the nine months ended September 30, 2024 was $183 million. Such investment income increased as a result of an adjustment to the inflation rate that was made by the Argentine government in late 2023. As certain of our Argentine bonds matured and were sold in the first nine months of 2024 and the inflation rate has continued to decline, we do not expect investment income relating to these securities to continue at this level. The proceeds from the Argentine inflation-linked securities that matured and were sold in the first nine months of 2024 have been reinvested.

Previous wording

Insurance Service Fees. The Company earns fees from an insurance distribution business (part of which was sold in June 2023), a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees were $53 million in 2024 and $58 million in 2023. The decrease in service fees resulted from the sale of the property and casualty insurance services division of Breckenridge IS, Inc.

Current wording

Insurance Service Fees. The Company earns fees from an insurance distribution business (part of which was sold in June 2023), a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees were $82 million in 2024 and $81 million in 2023.

Previous wording

Net Realized and Unrealized (Losses) Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized losses on investments were $49 million in 2024 compared with net gains of $91 million in 2023. The losses of $49 million in 2024 reflected an increase in unrealized losses on equity securities of $41 million and net realized losses on investments of $8 million. The gains of $91 million in 2023 reflected net realized gains on investments of $26 million (primarily a pre-tax net realized gain of $88 million on the sale of the property and casualty insurance services division of Breckenridge IS, Inc., partially offset by an impairment of $51 million recognized on a real estate investment) and an increase in unrealized gains on equity securities of $65 million.

Current wording

Net Realized and Unrealized (Losses) Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized losses on investments were $72 million in 2024 compared with net gains of $50 million in 2023. The losses of $72 million in 2024 reflected an increase in unrealized losses on equity securities of $42 million and net realized losses on investments of $30 million. The gains of $50 million in 2023 reflected net realized gains on investments of $5 million (primarily a pre-tax net realized gain of $88 million on the sale of the property and casualty insurance services division of Breckenridge IS, Inc., partially offset by an impairment of $72 million recognized on a real estate investment) and an increase in unrealized gains on equity securities of $45 million.

Previous wording

Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments decreased by $2 million ($1.6 million after-tax) and increased by $10 million ($8 million after-tax) in 2024 and 2023, respectively, which are both reflected in net

Current wording

Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments reflected in net investment (losses) gains, decreased by $31 million ($24 million after-tax) in 2024 due to improved pricing associated with foreign government securities and corporate securities, and increased by $11 million ($9 million after-tax) in 2023 due to a change in estimate.

Previous wording

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were $126 million in 2024 and $114 million in 2023. The increase mainly relates to aviation-related business and commercial and residential textile business, partially offset by the decrease from promotional merchandise business.

Current wording

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were $375 million in both 2024 and 2023.

Previous wording

Losses and Loss Expenses. Losses and loss expenses increased to $3,444 million in 2024 from $3,108 million in 2023. The consolidated loss ratio was 61.4% in 2024 and 61.6% in 2023. Catastrophe losses, net of reinsurance recoveries, were $120 million in 2024 and $101 million in 2023. Favorable prior year reserve development (net of premium offsets) was $2 million in 2024 and adverse prior year reserve development was $21 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.1 points to 59.3% in 2024 from 59.2% in 2023.

Current wording

Losses and Loss Expenses. Losses and loss expenses increased to $5,270 million in 2024 from $4,745 million in 2023. The consolidated loss ratio was 61.7% in both 2024 and 2023. Catastrophe losses, net of reinsurance recoveries, were $218 million in 2024 driven by heightened frequency of severe catastrophe events with Hurricane Helene having the largest impact, along with an above-average number of severe storms, and $163 million in 2023. Favorable prior year reserve development (net of premium offsets) was $3 million in 2024 and adverse prior year reserve development was $20 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 0.2 points to 59.2% in 2024 from 59.4% in 2023.

Previous wording

•Insurance - The loss ratio was 62.9% in 2024 and 62.8% in 2023. Catastrophe losses were $114 million in 2024 compared with $93 million in 2023. Adverse prior year reserve development was $6 million in 2024 and $19 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.1 points to 60.4% in 2024 from 60.3% in 2023.

Current wording

•Insurance - The loss ratio was 63.0% in 2024 and 62.8% in 2023. Catastrophe losses were $191 million in 2024 compared with $139 million in 2023. Adverse prior year reserve development was $2 million in 2024 and $21 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development was 60.4% in both 2024 and 2023.

Previous wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the six months ended June 30, 2024 and 2023:

Current wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the nine months ended September 30, 2024 and 2023: