BERKLEY W R CORP

Previous wording

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property and casualty business: Insurance and Reinsurance & Monoline Excess. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to better understand their individual needs and risk characteristics. While providing our operating units with certain operating autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment, reinsurance, enterprise risk management, and actuarial, financial and corporate legal staff support. The Company’s primary sources of revenues and earnings are its insurance operations and its investments.

Current wording

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property and casualty business: Insurance and Reinsurance & Monoline Excess. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to better understand their individual needs and risk characteristics. While providing our businesses with certain operating autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment, reinsurance, enterprise risk management, and actuarial, financial and corporate legal staff support. The Company’s primary sources of revenues and earnings are its insurance operations and its investments.

Previous wording

An important part of our strategy is to form new operating units to capitalize on various business opportunities. Over the years, the Company has formed numerous operating units that are focused on important parts of the economy in the U.S., including healthcare, cyber security, energy and agriculture, and on growing international markets, including the Asia-Pacific region, South America and Mexico.

Current wording

An important part of our strategy is to form new businesses to capitalize on various market opportunities. Over the years, the Company has formed numerous businesses that are focused on important parts of the economy in the U.S., including healthcare, cyber security, energy and agriculture, and on growing international markets, including the Asia-Pacific region, South America and Mexico.

Previous wording

Our net reserves for losses and loss expenses of approximately $18.2 billion as of June 30, 2025 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 $18.6 billion as of September 30, 2025 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 $3.4 billion, or 18.7%, of the Company’s net loss reserves as of June 30, 2025 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 $3.4 billion, or 18.4%, of the Company’s net loss reserves as of September 30, 2025 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 $415 million and $405 million as of June 30, 2025 and December 31, 2024, respectively.

Current wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $417 million and $405 million as of September 30, 2025 and December 31, 2024, 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, 2025 and 2024 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, 2025 and 2024 are as follows:

Previous wording

During the six months ended June 30, 2025, favorable prior year development (net of additional and return premiums) of $1 million included $20 million of favorable prior year development for the Reinsurance & Monoline Excess segment largely offset by $19 million of adverse prior year development for the Insurance segment.

Current wording

During the nine months ended September 30, 2025, favorable prior year development (net of additional and return premiums) of $2 million included $34 million of favorable prior year development for the Reinsurance & Monoline Excess segment largely offset by $32 million of adverse prior year development for the Insurance segment.

Previous wording

For the Insurance segment, the adverse development during the first half of 2025 was driven by other liability and commercial auto liability and was partially offset by favorable development for short tail lines of business, including commercial property and commercial auto physical damage. The adverse other liability development was driven primarily by umbrella and other claims attaching excess of primary policy limits and included a significant component stemming from underlying auto exposures. A secondary driver of the other liability development related to the Company’s excess and surplus lines casualty business. The other liability development was concentrated in accident years 2017 through 2022. The adverse commercial auto liability development was concentrated in accident years 2021 and 2022. The Company believes that 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 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, the adverse development during the first nine months of 2025 was driven by other liability and auto liability, and was partially offset by favorable development for short tail lines of business, including commercial property and commercial auto physical damage. The adverse other liability development was driven mainly by umbrella and excess liability claims, and to a lesser degree, adverse development from primary surplus lines casualty business. The umbrella and excess liability development included a significant component stemming from underlying auto exposures. The other liability development was concentrated in accident years 2017 through 2022. The adverse auto liability development was concentrated in accident years 2021 and 2022. The Company believes that 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 tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.

Previous wording

The favorable development for short tail property lines of business during the first half of 2025 related to the 2024 accident year, and resulted from favorable settlements of both catastrophe and non-catastrophe claims below our expectations.

Current wording

The favorable development for short tail property lines of business during the first nine months of 2025 related to the 2024 accident year, and resulted from favorable settlements of both catastrophe and non-catastrophe claims below our expectations.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first half of 2025 was driven mainly by favorable development in non-proportional reinsurance for assumed property. Similar to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related mainly to the 2024 accident year.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first nine months of 2025 was driven mainly by favorable development in property reinsurance. Similar to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related mainly to the 2024 accident year.

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 of favorable prior year development 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 were being particularly impacted by social inflation, which contributed 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 were particularly impacted by social inflation, which contributed 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 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 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 by 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

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,385 million and $1,358 million at June 30, 2025 and December 31, 2024, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $415 million and $405 million at June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.6%.

Current wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,394 million and $1,358 million at September 30, 2025 and December 31, 2024, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $417 million and $405 million at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.6%.

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 $0.4 million and $1 million as of June 30, 2025 and December 31, 2024, respectively.

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 $0.3 million and $1 million as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

Independent pricing services – Substantially all of the Company’s fixed maturity securities available for sale were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company). The prices provided by the independent pricing services are generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities). The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness based upon current trading levels for similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or revised. In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of June 30, 2025, the Company did not make any adjustments to the prices provided by the pricing services. Based upon the Company’s review of the methodologies used by the independent pricing services, these securities were classified as Level 2.

Current wording

Independent pricing services – Substantially all of the Company’s fixed maturity securities available for sale were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company). The prices provided by the independent pricing services are generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities). The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness based upon current trading levels for similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or revised. In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. Based upon the Company’s review of the methodologies used by the independent pricing services, these securities were classified as Level 2.

Previous wording

Results of Operations for the Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Nine Months Ended September 30, 2025 and 2024

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, 2025 and 2024. 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, 2025 and 2024. 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, 2025 and 2024:

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, 2025 and 2024:

Previous wording

The Company reported net income to common stockholders of $819 million in 2025 compared to $814 million in 2024. The $5 million increase of net income was primarily due to an after-tax increase in net investment gains of $62 million mainly due to change in unrealized gains on equity securities, an after-tax increase of $37 million in net investment income primarily due to income from transportation and financial services funds, a $5 million reduction in tax expense due to a change in the effective tax rate, an after-tax increase of $4 million in profit from insurance service businesses, and an after-tax increase in profits from non-insurance businesses of $2 million, largely offset by an after-tax increase in foreign currency losses of $76 million due to the weakening U.S. dollar against other major currencies in 2025, an after-tax decrease in underwriting income of $22 million mainly due to California wildfire and other catastrophe losses in 2025, and an after-tax increase in corporate expenses of $7 million. The number of weighted average diluted shares decreased 4.6 million for 2025 compared to 2024, mainly reflecting shares repurchased in 2025 and 2024.

Current wording

The Company reported net income to common stockholders of $1,330 million in 2025 compared to $1,180 million in 2024. The $150 million increase in net income was primarily due to an after-tax increase in net investment gains of $130 million mainly due to change in unrealized gains on equity securities, an after-tax increase of $59 million in net investment income primarily due to income from transportation and financial services funds, a $17 million reduction in tax expense due to a change in the effective tax rate, an after-tax increase of $6 million in profit from insurance service businesses and an after-tax increase in profits from non-insurance businesses of $3 million, partially offset by an after-tax increase in foreign currency losses of $48 million due to the weakening U.S. dollar against other major currencies in 2025, an after-tax increase in corporate expenses of $10 million, an after-tax decrease in underwriting income of $6 million and an after-tax decrease in income of $1 million related to minority interest. The number of weighted average diluted shares decreased 3.7 million for 2025 compared to 2024, mainly reflecting shares repurchased in 2025 and 2024.

Previous wording

Premiums. Gross premiums written were $7,662 million in 2025, an increase of 8% from $7,081 million in 2024. The increase was due to a $542 million increase in the Insurance segment and a $39 million increase in the Reinsurance & Monoline Excess segment. Approximately 80% of premiums expiring in 2025 were renewed, and 81% of premiums expiring in 2024 were renewed.

Current wording

Premiums. Gross premiums written were $11,498 million in 2025, an increase of 7% from $10,714 million in 2024. The increase was due to a $716 million increase in the Insurance segment and a $68 million increase in the Reinsurance & Monoline Excess segment. Approximately 80.3% of premiums expiring in 2025 were renewed, and 80.9% of premiums expiring in 2024 were renewed.

Previous wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 7.0% in 2025 and increased 7.9% excluding workers' compensation.

Current wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 6.8% in 2025 and increased 7.8% excluding workers' compensation.

Previous wording

•Reinsurance & Monoline Excess - gross premiums increased 5% to $838 million in 2025 from $799 million in 2024. Gross premiums increased $43 million (18%) for property and $7 million (5%) for monoline excess, partially offset by a decrease of $11 million (3%) for casualty.

Current wording

•Reinsurance & Monoline Excess - gross premiums increased 6% to $1,281 million in 2025 from $1,213 million in 2024. Gross premiums increased $53 million (15%) for property and $23 million (9%) for monoline excess, partially offset by a decrease of $8 million (1%) for casualty.

Previous wording

Net premiums written were $6,485 million in 2025, an increase of 8% from $5,978 million in 2024. Ceded reinsurance premiums as a percentage of gross written premiums was 15% and 16% in 2025 and 2024, respectively.

Current wording

Net premiums written were $9,712 million in 2025, an increase of 7% from $9,035 million in 2024. Ceded reinsurance premiums as a percentage of gross written premiums was 15.5% and 15.7% in 2025 and 2024, respectively.

Previous wording

Premiums earned increased 9% to $6,111 million in 2025 from $5,611 million in 2024. 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 2025 are related to business written during both 2025 and 2024. Audit premiums were $168 million in 2025 compared with $184 million in 2024.

Current wording

Premiums earned increased 9% to $9,267 million in 2025 from $8,538 million in 2024. 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 2025 are related to business written during both 2025 and 2024. Audit premiums were $248 million in 2025 compared with $270 million in 2024.

Previous wording

Net Investment Income. Following is a summary of net investment income for the six months ended June 30, 2025 and 2024:

Current wording

Net Investment Income. Following is a summary of net investment income for the nine months ended September 30, 2025 and 2024:

Previous wording

Net investment income increased 7% to $740 million in 2025 from $692 million in 2024 due primarily to a $58 million increase in income from investment funds primarily due to transportation funds and financial services funds, a $9 million improvement in real estate and a $5 million increase in arbitrage trading account, partially offset by a $23 million decrease in income from fixed maturity securities mainly due to higher income from the Argentine inflation-linked securities in 2024 and a $1 million increase in investment expenses. Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 4.9% in 2025 and 5.7% in 2024. The average annualized yield for fixed maturity securities excluding Argentine inflation-linked securities was 4.7% in 2025 and 4.4% in 2024. The effective duration of the fixed maturity portfolio was 2.8 years at June 30, 2025 and 2.6 years at December 31, 2024. Average invested assets, at cost (including cash and cash equivalents), were $30.9 billion in 2025 up 9% from $28.2 billion in 2024.

Current wording

Net investment income increased 7% to $1,091 million in 2025 from $1,016 million in 2024 due primarily to a $59 million increase in income from investment funds primarily due to transportation funds and financial services funds, a $9 million improvement in real estate, a $6 million increase in income from fixed maturity securities, and a $3 million increase in arbitrage trading account, partially offset by a $1 million decrease in equity securities and a $1 million increase in investment expenses. Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 4.8% in 2025 and 5.4% in 2024. The average annualized yield for fixed maturity securities excluding Argentine inflation-linked securities was 4.7% in 2025 and 4.4% in 2024. The effective duration of the fixed maturity portfolio was 2.9 years at September 30, 2025 up from 2.6 years at December 31, 2024. Average invested assets, at cost (including cash and cash equivalents), were $31.3 billion in 2025, up 9% from $28.6 billion in 2024.

Previous wording

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees increased to $62 million in 2025 from $53 million in 2024 mainly due to organic growth within the business.

Current wording

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees increased to $93 million in 2025 from $82 million in 2024, mainly due to organic growth within the business.

Previous wording

Net Realized and Unrealized Gains (Losses) 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 gains on investments were $46 million in 2025 compared with losses of $49 million in 2024. The gains of $46 million in 2025 reflected an increase in unrealized gains on equity securities of $83 million, partially offset by net realized losses on investments of $37 million. 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.

Current wording

Net Realized and Unrealized Gains (Losses) 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 gains on investments were $125 million in 2025 compared with losses of $72 million in 2024. The gains of $125 million in 2025 reflected an increase in unrealized gains on equity securities of $93 million and net realized gains on investments of $32 million. 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.

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, which are reflected in net investment gains (losses), decreased by $1 million ($0.8 million after-tax) in 2025 reflecting improved pricing related to fixed maturity securities and the redemption of one loan in the loan receivable portfolio, and $16 million ($13 million after-tax) in 2024 due to a change in estimate.

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, which are reflected in net investment gains (losses), decreased by $1 million ($1 million after-tax) in 2025 reflecting improved pricing related to fixed maturity securities and the redemption of one loan in the loan receivable portfolio, and $31 million ($24 million after-tax) in 2024 due to improved pricing associated with foreign government securities and corporate securities.

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 $258 million in 2025 and $247 million in 2024. The increase mainly relates to aviation-related business and commercial and residential textile business, partially offset by the reduction in 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 $408 million in 2025 and $375 million in 2024. The increase mainly relates to aviation-related business, partially offset by the reduction in promotional merchandise business.

Previous wording

Losses and Loss Expenses. Losses and loss expenses increased to $3,856 million in 2025 from $3,444 million in 2024. The consolidated loss ratio was 63.1% in 2025 and 61.4% in 2024. Catastrophe losses, net of reinsurance recoveries, were $210 million in 2025 with the largest contributors being California wildfire losses and frequency of severe storms, up from $120 million in 2024. Favorable prior year reserve development (net of premium offsets) was $1 million in 2025 and $2 million 2024. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.4 points to 59.7% in 2025 from 59.3% in 2024 largely due to a change in business mix.

Current wording

Losses and Loss Expenses. Losses and loss expenses increased to $5,825 million in 2025 from $5,270 million in 2024. The consolidated loss ratio was 62.9% in 2025 and 61.7% in 2024. Catastrophe losses, net of reinsurance recoveries, were $289 million in 2025 with the largest contributors being California wildfire losses and frequency of severe storms, up from $218 million in 2024. Favorable prior year reserve development (net of premium offsets) was $2 million in 2025 and $3 million 2024. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.6 points to 59.8% in 2025 from 59.2% in 2024, largely due to a change in business mix.

Previous wording

•Insurance - The loss ratio was 63.9% in 2025 and 62.9% in 2024. Catastrophe losses were $148 million in 2025 compared with $114 million in 2024. Adverse prior year reserve development was $19 million in 2025 and $5 million in 2024. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.3 points to 60.7% in 2025 from 60.4% in 2024.

Current wording

•Insurance - The loss ratio was 63.9% in 2025 and 63.0% in 2024. Catastrophe losses were $218 million in 2025 compared with $191 million in 2024. Adverse prior year reserve development was $32 million in 2025 and $2 million in 2024. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.4 points to 60.8% in 2025 from 60.4% in 2024.

Previous wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the six months ended June 30, 2025 and 2024:

Current wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the nine months ended September 30, 2025 and 2024:

Previous wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $48 million in 2025 and $45 million in 2024.

Current wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $70 million in 2025 and $66 million in 2024.

Previous wording

Net foreign currency losses (gains) result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $55 million in 2025 compared to gains of $10 million in 2024, primarily due to other major currencies strengthening against the U.S. dollar in 2025.

Current wording

Net foreign currency losses (gains) result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $63 million in 2025 compared to losses of $1 million in 2024, primarily due to other major currencies strengthening against the U.S. dollar in 2025.

Previous wording

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses increased to $147 million in 2025 from $137 million in 2024, primarily due to the increase in compensation-related costs and higher new start-up operating unit expenses in 2025.

Current wording

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses increased to $211 million in 2025 from $198 million in 2024, primarily due to the increase in compensation-related costs and higher new start-up operating unit expenses in 2025.

Previous wording

Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses were $122 million in 2025 and $121 million in 2024.

Current wording

Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses were $393 million in 2025 compared to $365 million in 2024. The increase mainly relates to aviation-related business, partially offset by the reduction in promotional merchandise.

Previous wording

Interest Expense. Interest expense was $64 million in 2025 and $63 million 2024.

Current wording

Interest Expense. Interest expense was $95 million in both 2025 and 2024.