BERKLEY W R CORP

Previous wording

Our net reserves for losses and loss expenses of approximately $19 billion as of March 31, 2026 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 $20 billion as of June 30, 2026 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 17.6%, of the Company’s net loss reserves as of March 31, 2026 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 17.3%, of the Company’s net loss reserves as of June 30, 2026 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 $425 million and $420 million as of March 31, 2026 and December 31, 2025, respectively.

Current wording

(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $434 million and $420 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the three months ended March 31, 2026 and 2025 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 six months ended June 30, 2026 and 2025 are as follows:

Previous wording

During the three months ended March 31, 2026, favorable prior year development (net of additional and return premiums) of $1 million included $9 million of favorable prior year development for the Reinsurance & Monoline Excess segment partially offset by $8 million of adverse prior year development for the Insurance segment.

Current wording

During the six months ended June 30, 2026, favorable prior year development (net of additional and return premiums) of $3 million included $10 million of favorable prior year development for the Reinsurance & Monoline Excess segment partially offset by $7 million of adverse prior year development for the Insurance segment.

Previous wording

For the Insurance segment, the development during the first quarter of 2026 resulted primarily from favorable development for short-tail lines of business which was offset by adverse development for other liability. The favorable development for short-tail lines of business related to the 2025 accident year and resulted from favorable settlements of both catastrophe and non-catastrophe property claims below our expectations. In addition, auto physical damage experienced favorable prior year development during the first quarter of 2026, also related to favorable claim settlements from the 2025 accident year below our expectations.

Current wording

For the Insurance segment, the development during the six months of 2026 resulted primarily from favorable development for short tail-lines of business which was offset by adverse development for other liability and auto liability. The favorable development for short-tail lines of business during the six months of 2026 related to the 2025 accident year, and resulted from favorable settlements of both catastrophe and non-catastrophe property claims below our expectations.

Previous wording

The adverse other liability development was driven mainly by umbrella and excess liability claims, and to a lesser extent from the Company’s primary surplus lines casualty business. The other liability development was concentrated in accident years 2019 through 2023. The umbrella and excess liability development included a significant component stemming from underlying auto exposures. The Company believes that auto related claims are being particularly impacted by social inflation. An increase in the frequency of litigated claims is also driving up both indemnity and loss adjustment expense costs in these lines of business beyond expectations.

Current wording

The adverse other liability development was driven mainly by umbrella and excess liability claims, and to a lesser extent from the Company’s primary surplus lines casualty business. The other liability development was concentrated in accident years 2019 through 2023. The umbrella and excess liability development included a significant component stemming from underlying auto exposures. 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. An increase in the frequency of litigated claims is also driving up both indemnity and loss adjustment expense costs in these lines of business beyond expectations.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first quarter of 2026 was driven mainly by favorable development in non-proportional reinsurance assumed property, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. Similarly to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related to the 2025 accident year. The unfavorable development for non-proportional reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance businesses, and was concentrated mainly in accident years 2019 through 2023.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the six months of 2026 was driven mainly by favorable development in non-proportional reinsurance assumed property, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. Similarly to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related to the 2025 accident year. The unfavorable development for non-proportional reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance businesses, and was concentrated mainly in accident years 2020 through 2023.

Previous wording

During the three months ended March 31, 2025, favorable prior year development (net of additional and return premiums) of $1 million included $12 million of for the Reinsurance & Monoline Excess segment largely offset by $11 million of adverse prior year development for the Insurance segment.

Current 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.

Previous wording

For the Insurance segment, the adverse development during the first quarter of 2025 was driven primarily by excess other liability, including umbrella, and was partially offset by favorable development for short-tail lines of business, including commercial property and commercial auto physical damage. The adverse excess other liability, including umbrella, development was concentrated in accident years 2018 through 2022, and included a significant component stemming from underlying auto exposures. 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. The favorable development for short-tail property lines of business during the first quarter 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

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.

Previous wording

For the Reinsurance & Monoline Excess segment, the favorable development during the first quarter of 2025 was driven mainly by favorable development in non-proportional reinsurance assumed property, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. Similar to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, related to the 2024 accident year. The unfavorable development for non-proportional reinsurance assumed liability was associated primarily with our U.S. assumed reinsurance businesses, and was concentrated mainly in accident years 2018 through 2021.

Current 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.

Previous wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,412 million and $1,400 million at March 31, 2026 and December 31, 2025, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $425 million and $420 million at March 31, 2026 and December 31, 2025, respectively. At March 31, 2026, 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 $1,436 million and $1,400 million at June 30, 2026 and December 31, 2025, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $434 million and $420 million at June 30, 2026 and December 31, 2025, respectively. At June 30, 2026, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.6%.

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 $55 million at March 31, 2026 and $54 million at December 31, 2025. 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 $48 million at June 30, 2026 and $54 million at December 31, 2025. 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 March 31, 2026, the Company recorded an allowance for expected credit losses on fixed maturity securities of $0.3 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 June 30, 2026, the Company recorded an allowance for expected credit losses on fixed maturity securities of $0.4 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 $0.1 million and $0.2 million as of March 31, 2026 and December 31, 2025, 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 none and $0.2 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

The Company reported net income to common stockholders of $515 million in 2026 compared to $418 million in 2025. The $97 million increase in net income was primarily due to an after-tax increase of $37 million in net investment income primarily due to a larger fixed maturity securities portfolio and increased investment income from investment funds, a $33 million decrease in tax expense due to the repeal of undiscounted property-casualty loss deductions and special estimated payments formerly available under Internal Revenue Code Section 847, partially offset by deferred charges in the United Kingdom during the quarter, an after-tax increase in foreign currency gains of $30 million due to the U.S. dollar strengthening against other major currencies in 2026, an after-tax increase in profits from non-insurance businesses of $15 million and an after-tax increase in underwriting income of $14 million, partially offset by an after-tax increase in net investment losses of $27 million mainly due to change in unrealized losses on equity securities, an after-tax increase in corporate expenses of $4 million and an after-tax decrease in income of $1 million related to minority interest. The number of weighted average diluted shares decreased 5.0 million for 2026 compared to 2025, mainly reflecting shares repurchased in 2026 and 2025.

Current wording

The Company reported net income to common stockholders of $967 million in 2026 compared to $819 million in 2025. The $148 million increase in net income was primarily due to an after-tax increase in foreign currency gains of $73 million due to the U.S. dollar strengthening against other major currencies in 2026, an after-tax increase of $68 million in net investment income primarily due to a larger fixed maturity securities portfolio and increased investment income from investment funds, an after-tax increase in underwriting income of $60 million mainly due to lower catastrophe losses in 2026, a $43 million decrease in tax expense due to the repeal of undiscounted property-casualty loss deductions and special estimated payments formerly available under Internal Revenue Code Section 847, partially offset by deferred tax charges in the United Kingdom and an after-tax increase in profits from non-insurance businesses of $19 million, partially offset by an after-tax increase in net investment losses of $96 million mainly due to a change in unrealized gains on equity securities, an after-tax increase in corporate expenses of $14 million, an after-tax decrease of $3 million in profit from insurance service businesses and an after-tax decrease in income of $2 million related to minority interest. The number of weighted average diluted shares decreased 6.8 million for 2026 compared to 2025, mainly reflecting shares repurchased in 2026 and 2025.

Previous wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 6.6% in 2026 and increased 7.2% excluding workers' compensation.

Current wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 5.1% in 2026 and increased 5.6% excluding workers' compensation.

Previous wording

•Insurance - gross premiums increased 5% to $3,362 million in 2026 from $3,217 million in 2025. Gross premiums increased $75 million (9%) for short-tail lines, $31 million (2%) for other liability, $25 million (6%) for auto, and $24 million (7%) for professional liability, partially offset by a reduction of $10 million (3%) for workers' compensation.

Current wording

•Insurance - gross premiums increased 5% to $7,165 million in 2026 from $6,824 million in 2025. Gross premiums increased $171 million (9%) for short-tail lines, $71 million (10%) for professional liability, $68 million (3%) for other liability and $34 million (4%) for auto, partially offset by a reduction of $3 million (1%) for workers' compensation.

Previous wording

•Reinsurance & Monoline Excess - gross premiums decreased by 9% to $424 million in 2026 from $467 million in 2025. Gross premiums decreased $24 million (13%) for casualty and $26 million (17%) for property, partially offset by an increase of $7 million (5%) for monoline excess.

Current wording

•Reinsurance & Monoline Excess - gross premiums decreased by 9% to $765 million in 2026 from $838 million in 2025. Gross premiums decreased $49 million (13%) for casualty and $32 million (11%) for property, partially offset by an increase of $8 million (5%) for monoline excess.

Previous wording

Premiums earned increased 3% to $3,115 million in 2026 from $3,012 million in 2025. 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 2026 are related to business written during both 2026 and 2025. Audit premiums were $74 million in 2026 compared with $83 million in 2025.

Current wording

Premiums earned increased 3% to $6,303 million in 2026 from $6,111 million in 2025. 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 2026 are related to business written during both 2026 and 2025. Audit premiums were $139 million in 2026 compared with $168 million in 2025.

Previous wording

Net investment income increased 12% to $404 million in 2026 from $360 million in 2025 due primarily to a $33 million increase in income from fixed maturity securities mainly driven by a larger fixed maturity securities portfolio, a $13 million increase in income from investment funds primarily due to energy funds and real estate funds and a $5 million increase in equity securities, partially offset by a $6 million decrease in arbitrage trading account and a $1 million decrease in real estate. Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 4.9% in both 2026 and 2025. The effective duration of the fixed maturity portfolio was 3.1 years at March 31, 2026 and 3.0 years at December 31, 2025. Average invested assets, at cost (including cash and cash equivalents), were $33.2 billion in 2026, up 9% from $30.5 billion in 2025.

Current wording

Net investment income increased 11% to $823 million in 2026 from $740 million in 2025 due primarily to a $71 million increase in income from fixed maturity securities mainly driven by a larger fixed maturity securities portfolio, a $14 million increase in income from investment funds primarily due to energy funds and real estate funds and an $11 million increase in equity securities, partially offset by an $11 million decrease in arbitrage trading account, a $1 million decrease in real estate 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 5.0% in 2026 and 4.9% in 2025. The effective duration of the fixed maturity portfolio was 3.2 years at June 30, 2026 and 3.0 years at December 31, 2025. Average invested assets, at cost (including cash and cash equivalents), were $33.5 billion in 2026, up 8% from $30.9 billion in 2025.

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 were $28 million in 2026 compared to $29 million in 2025.

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 were $59 million in 2026 compared to $62 million in 2025.

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 losses on investments were $16 million in 2026 compared with gains of $16 million in 2025. The losses of $16 million in 2026 reflected net realized losses on investments of $11 million and an increase in unrealized losses on equity securities of $5 million. The gains of $16 million in 2025 reflected an increase in unrealized gains on equity securities of $20 million, partially offset by net realized losses on investments of $4 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 losses on investments were $71 million in 2026 compared with gains of $46 million in 2025. The losses of $71 million in 2026 reflected net realized losses on investments of $48 million and a decrease in unrealized gains on equity securities of $23 million. 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.

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), increased by $0.1 million ($0.1 million after-tax) in 2026 due to a decrease in fair value of one investment in fixed maturity securities, and decreased by $0.6 million ($0.5 million after-tax) in 2025 due to improved pricing related to fixed maturity securities.

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), increased by $0.2 million ($0.2 million after-tax) in 2026 due to a decrease in fair value of one investment in fixed maturity securities, and 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.

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 $157 million in 2026 and $129 million in 2025. The increase mainly relates to aviation-related business due to plane sales, partially offset by the reduction in commercial and residential textile 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 $291 million in 2026 and $258 million in 2025. The increase mainly relates to aviation-related business due to plane sales, partially offset by the reduction in commercial and residential textile business and promotional merchandise business.

Previous wording

•Insurance - The loss ratio was 63.9% in 2026 and in 2025. Catastrophe losses were $75 million in 2026 compared with $71 million in 2025. Adverse prior year reserve development was $8 million in 2026 and $11 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.1 points to 60.9% in 2026 from 60.8% in 2025.

Current wording

•Insurance - The loss ratio was 63.5% in 2026 and 63.9% in 2025. Catastrophe losses were $135 million in 2026 compared with $148 million in 2025. Adverse prior year reserve development was $7 million in 2026 and $19 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.2 points to 60.9% in 2026 from 60.7% in 2025.

Previous wording

•Reinsurance & Monoline Excess - The loss ratio was 48.3% in 2026 and 57.7% in 2025. Catastrophe losses were $0.2 million in 2026 and $40 million in 2025. Favorable prior year reserve development was $9 million in 2026 and $12 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development increased 1.1 points to 51.1% in 2026 from 50.0% in 2025.

Current wording

•Reinsurance & Monoline Excess - The loss ratio was 48.8% in 2026 and 57.7% in 2025. Catastrophe losses were $3 million in 2026 and $62 million in 2025. Favorable prior year reserve development was $10 million in 2026 and $20 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development decreased 2.3 points to 49.8% in 2026 from 52.1% in 2025.

Previous wording

Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 6% and net premiums earned increased 3% from 2025. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased 0.8 points to 28.6% in 2026 from 27.8% in 2025, mainly due to investments in the business and from the decline in net earned premiums related to the Reinsurance & Monoline Excess segment.

Current wording

Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 5% and net premiums earned increased 3% from 2025. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased 0.4 points to 28.6% in 2026 from 28.2% in 2025, mainly due to investments in the business and from the decline in net earned premiums related to the Reinsurance & Monoline Excess segment.

Previous wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $23 million in both 2026 and in 2025.

Current wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $49 million in 2026 and $48 million in 2025.

Previous wording

Net foreign currency (gains) losses result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency gains were $17 million in 2026 compared to losses of $19 million in 2025, primarily due to the U.S. dollar strengthening against other major currencies in 2026.

Current wording

Net foreign currency (gains) losses result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency gains were $15 million in 2026 compared to losses of $75 million in 2025, primarily due to the U.S. dollar strengthening against other major currencies in 2026.

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 $75 million in 2026 from $69 million in 2025, primarily due to higher compensation-related costs and new start-up operating unit expenses in 2026.

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 $164 million in 2026 from $147 million in 2025, primarily due to higher compensation-related costs and new start-up operating unit expenses in 2026.

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 $136 million in 2026 compared to $126 million in 2025. The increase mainly relates to aviation-related business, partially offset by the reduction in commercial and residential textile business.

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 $259 million in 2026 compared to $249 million in 2025. The increase mainly relates to aviation-related business, partially offset by the reduction in commercial and residential textile business and promotional merchandise business.

Previous wording

Income Taxes. The effective income tax rate was 16.3% and 22.5% for the three months ended March 31, 2026 and 2025, respectively. The lower effective income tax rate for the three months ended March 31, 2026, as compared to the earlier period, was primarily due to the impact of the repeal of undiscounted property-casualty loss deductions and special estimated payments formerly available under Internal Revenue Code Section 847, partially offset by deferred tax charges in the United Kingdom.

Current wording

Income Taxes. The effective income tax rate was 18.8% and 22.9% for the six months ended June 30, 2026 and 2025, respectively. The lower effective income tax rate for the six months ended June 30, 2026, as compared to the earlier period, was primarily due to the impact of the repeal of undiscounted property-casualty loss deductions and special estimated payments formerly available under Internal Revenue Code Section 847, partially offset by deferred tax charges in the United Kingdom.

Previous wording

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $618 million of its non-U.S. subsidiaries, since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will not be material.

Current wording

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $652 million of its non-U.S. subsidiaries, since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will not be material.

Previous wording

Premiums. Gross premiums written were $3,786 million in 2026, an increase of 3% from $3,684 million in 2025. The increase was due to a $145 million increase in the Insurance segment, partially offset by a $43 million decrease in the Reinsurance & Monoline Excess segment. Approximately 81% of premiums expiring in 2026 and 2025 were renewed.

Current wording

Premiums. Gross premiums written were $4,144 million in 2026, an increase of 4% from $3,978 million in 2025. The increase was due to a $196 million increase in the Insurance segment, partially offset by a $30 million decrease in the Reinsurance & Monoline Excess segment. Approximately 81% of premiums expiring in 2026, and 80% of premiums expiring in 2025 were renewed.

Previous wording

Net premiums written were $3,174 million in 2026, an increase of 1% from $3,133 million in 2025. Ceded reinsurance premiums as a percentage of gross written premiums was 16% and 15% in 2026 and 2025, respectively.

Current wording

Net premiums written were $3,430 million in 2026, an increase of 2.4% from $3,351 million in 2025. Ceded reinsurance premiums as a percentage of gross written premiums was 17% and 16% in 2026 and 2025, respectively.

Previous wording

Losses and Loss Expenses. Losses and loss expenses increased to $1,936 million in 2026 from $1,901 million in 2025. The consolidated loss ratio was 62.1% in 2026 and 63.1% in 2025. Catastrophe losses, net of reinsurance recoveries, were $76 million in 2026 primarily related to winter storms, compared to $111 million in 2025 mainly due to California wildfire losses. Favorable prior year reserve development (net of premium offsets) was $1 million in both 2026 and 2025. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.3 points to 59.7% in 2026 from 59.4% in 2025.

Current wording

Losses and Loss Expenses. Losses and loss expenses increased to $1,961 million in 2026 from $1,955 million in 2025. The consolidated loss ratio was 61.5% in 2026 and 63.1% in 2025. Catastrophe losses, net of reinsurance recoveries, were $62 million in 2026, compared to $99 million in 2025 driven by frequency of severe storms. Favorable prior year reserve development (net of premium offsets) was $1 million in both 2026 and 2025. The loss ratio excluding catastrophe losses and prior year reserve development decreased 0.3 points to 59.6% in 2026 from 59.9% in 2025.

Previous wording

Interest Expense. Interest expense was $32 million in both 2026 and in 2025.

Current wording

Interest Expense. Interest expense was $32 million in both 2026 and 2025.

Previous wording

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was 3.1 years at March 31, 2026 and 3.0 years at December 31, 2025. The Company’s fixed maturity investment portfolio and investment-related assets as of March 31, 2026 were as follows:

Current wording

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was 3.2 years at June 30, 2026 and 3.0 years at December 31, 2025. The Company’s fixed maturity investment portfolio and investment-related assets as of June 30, 2026 were as follows:

Previous wording

Investment Funds. At March 31, 2026, the carrying value of investment funds was $1.4 billion, including investments in other funds of $380 million (which includes a deferred compensation trust asset of $47 million), financial services funds of $366 million, transportation funds of $276 million, infrastructure funds of $176 million, real estate funds of $157 million, and energy funds of $44 million. Investment funds are generally reported on a one-quarter lag.

Current wording

Investment Funds. At June 30, 2026, the carrying value of investment funds was $1.4 billion, including investments in other funds of $421 million (which includes a deferred compensation trust asset of $51 million), financial services funds of $357 million, transportation funds of $274 million, infrastructure funds of $179 million, real estate funds of $157 million, and energy funds of $43 million. Investment funds are generally reported on a one-quarter lag.