BERKLEY W R CORP

Previous 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.

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, cybersecurity, 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 $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.

Current wording

Our net reserves for losses and loss expenses of approximately $20.1 billion as of September 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 17.3%, 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.

Current wording

Approximately $3.4 billion, or 17.1%, of the Company’s net loss reserves as of September 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 $434 million and $420 million as of June 30, 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 $442 million and $420 million as of September 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 six months ended June 30, 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 nine months ended September 30, 2026 and 2025 are as follows:

Previous 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.

Current wording

During the nine months ended September 30, 2026, favorable prior year development (net of additional and return premiums) of $4 million included $26 million of favorable prior year development for the Reinsurance & Monoline Excess segment, partially offset by $22 million of adverse prior year development for the Insurance segment.

Previous 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.

Current wording

For the Insurance segment, the development during the nine 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 nine months of 2026 was concentrated in the 2025 accident year, and primarily 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, 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.

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 adverse auto liability development was concentrated in accident years 2022 through 2024. 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 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.

Current wording

For the Reinsurance & Monoline Excess segment, the favorable development during the nine months of 2026 was driven mainly by favorable development in assumed property reinsurance (both non-proportional and proportional), partially offset by adverse development in assumed liability reinsurance lines of business. Similarly to the Insurance segment, the favorable property reinsurance development was driven by favorable claim settlements, below our expectations, concentrated in the 2025 accident year. The unfavorable development for assumed liability reinsurance was associated primarily with our U.S. assumed reinsurance businesses, and was focused mainly in the 2022 and 2023 accident years.

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

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%.

Current wording

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,456 million and $1,400 million at September 30, 2026 and December 31, 2025, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $442 million and $420 million at September 30, 2026 and December 31, 2025, respectively. At September 30, 2026, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.7%.

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 $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.

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 $47 million at September 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 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.

Current wording

As of September 30, 2026, the Company recorded an allowance for expected credit losses on fixed maturity securities of $1.2 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 none and $0.2 million as of June 30, 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 $9 thousand and $0.2 million as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

Results of Operations for the Six Months Ended June 30, 2026 and 2025

Current wording

Results of Operations for the Nine Months Ended September 30, 2026 and 2025

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, 2026 and 2025. 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, 2026 and 2025. 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, 2026 and 2025:

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, 2026 and 2025:

Previous 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.

Current wording

The Company reported net income to common stockholders of $1,413 million in 2026 compared to $1,330 million in 2025. The $83 million increase in net income was primarily due to an after-tax increase of $93 million in net investment income, primarily due to a larger fixed maturity securities portfolio, an after-tax increase in foreign currency gains of $67 million due to the U.S. dollar strengthening against most other major currencies in 2026, an after-tax increase in underwriting income of $66 million mainly due to lower catastrophe losses in 2026, a $40 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. Increases in net income were partially offset by an after-tax increase in net investment losses of $173 million, mainly due to a change in unrealized gains on equity securities, an after-tax increase in corporate expenses of $19 million, an after-tax decrease of $7 million in profit from insurance service businesses and an after-tax decrease in income of $3 million related to minority interest. The number of weighted average diluted shares decreased 7.3 million for 2026 compared to 2025, mainly reflecting shares repurchased in 2026 and 2025.

Previous wording

Premiums. Gross premiums written were $7,930 million in 2026, an increase of 3.5% from $7,662 million in 2025. The increase was due to a $341 million increase in the Insurance segment, partially offset by a $73 million decrease in the

Current wording

Premiums. Gross premiums written were $11,882 million in 2026, an increase of 3% from $11,498 million in 2025. The increase was due to a $508 million increase in the Insurance segment, partially offset by a $124 million decrease in the

Previous wording

Reinsurance & Monoline Excess segment. Approximately 81% of premiums expiring in 2026, and 80% of premiums expiring in 2025 were renewed.

Current wording

Reinsurance & Monoline Excess segment. Approximately 81.3% of premiums expiring in 2026, and 80.3% of premiums expiring in 2025 were renewed.

Previous 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.

Current wording

Average renewal premium rates (per unit of exposure) for insurance and facultative reinsurance increased 4.5% in 2026 and increased 5.0% excluding workers' compensation.

Previous wording

•Insurance - gross premiums increased 5% to $3,803 million in 2026 from $3,607 million in 2025. Gross premiums increased $96 million (10%) for short-tail lines, $47 million (12%) for professional liability, $37 million (3%) for other liability, $10 million (2%) for auto and $6 million (2%) for workers' compensation.

Current wording

•Insurance - gross premiums increased 5% to $10,725 million in 2026 from $10,217 million in 2025. Gross premiums increased $232 million (8%) for short-tail lines, $131 million (3%) for other liability, $85 million (7%) for professional liability, $54 million (4%) for auto and $6 million (1%) for workers' compensation.

Previous wording

•Reinsurance & Monoline Excess - gross premiums decreased by 8% to $341 million in 2026 from $371 million in 2025. Gross premiums decreased $25 million (13%) for casualty and $6 million (4%) for property, partially offset by an increase of $1 million (3%) for monoline excess.

Current wording

•Reinsurance & Monoline Excess - gross premiums decreased by 10% to $1,157 million in 2026 from $1,281 million in 2025. Gross premiums decreased $99 million (17%) for casualty and $35 million (8%) for property, partially offset by an increase of $10 million (4%) for monoline excess.

Previous wording

Net premiums written were $6,605 million in 2026, an increase of 2% from $6,485 million in 2025. Ceded reinsurance premiums as a percentage of gross written premiums were 17% and 15% in 2026 and 2025, respectively.

Current wording

Net premiums written were $9,872 million in 2026, an increase of 2% from $9,712 million in 2025. Ceded reinsurance premiums as a percentage of gross written premiums were 16.9% and 15.5% in 2026 and 2025, respectively.

Previous 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.

Current wording

Premiums earned increased 3% to $9,516 million in 2026 from $9,267 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 $211 million in 2026 compared with $248 million in 2025.

Previous wording

Net Investment Income. Following is a summary of net investment income for the six months ended June 30, 2026 and 2025:

Current wording

Net Investment Income. Following is a summary of net investment income for the nine months ended September 30, 2026 and 2025:

Previous wording

Net investment income increased 10% to $419 million in 2026 from $379 million in 2025 due primarily to a $38 million increase in income from fixed maturity securities mainly driven by a larger fixed maturity securities portfolio, a $6 million increase in equity securities, a $2 million increase in income from investment funds and a $1 million decrease in loss from real estate, partially offset by a $5 million decrease in arbitrage trading account and a $2 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 $33.8 billion in 2026, up 8% from $31.2 billion in 2025.

Current wording

Net investment income increased 11% to $1,207 million in 2026 from $1,091 million in 2025 due primarily to a $104 million increase in income from fixed maturity securities, mainly driven by a larger fixed maturity securities portfolio, a $16 million increase in equity securities, an $11 million increase in income from investment funds and a $1 million decrease in loss from real estate, partially offset by a $15 million decrease in arbitrage trading account 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 2026 and 4.8% in 2025. The effective duration of the fixed maturity portfolio was 3.3 years at September 30, 2026 and 3.0 years at December 31, 2025. Average invested assets, at cost (including cash and cash equivalents), were $33.8 billion in 2026, up 8% from $31.3 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 $59 million in 2026 compared to $62 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 $87 million in 2026 compared to $93 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 $55 million in 2026 compared with gains of $31 million in 2025. The losses of $55 million in 2026 reflected net realized losses on investments of $37 million and a decrease in unrealized gains on equity securities of $18 million. The gains of $31 million in 2025 reflected an increase in unrealized gains on equity securities of $64 million, partially offset by net realized losses on investments of $33 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 $88 million in 2026 compared with gains of $125 million in 2025. The losses of $88 million in 2026 reflected a decrease in unrealized gains on equity securities of $68 million and net realized losses on investments of $20 million. 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.

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 $0.2 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.

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 $1 million ($0.8 million after-tax) in 2026 due to a decrease in fair value of one investment in fixed maturity securities, and 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.

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 $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.

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 $422 million in 2026 and $408 million in 2025. The increase mainly relates to aviation-related business due to plane sales, partially offset by the reduction in residential and commercial textile business and promotional merchandise business.

Previous wording

Losses and Loss Expenses. Losses and loss expenses increased to $3,897 million in 2026 from $3,856 million in 2025. The consolidated loss ratio was 61.8% in 2026 and 63.1% in 2025. Catastrophe losses, net of reinsurance recoveries, were $138 million in 2026 primarily related to winter storms, compared to $210 million in 2025 with the largest contributors being California wildfire losses and frequency of severe storms. Favorable prior year reserve development (net of premium offsets) was $3 million in 2026 and $1 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development was 59.7% in both 2026 and 2025.

Current wording

Losses and Loss Expenses. Losses and loss expenses increased to $5,895 million in 2026 from $5,825 million in 2025. The consolidated loss ratio was 61.9% in 2026 and 62.9% in 2025. Catastrophe losses, net of reinsurance recoveries, were $224 million in 2026 compared to $289 million in 2025 with the largest contributors being California wildfire losses and frequency of severe storms. Favorable prior year reserve development (net of premium offsets) was $4 million in 2026 and $2 million in 2025. The loss ratio excluding catastrophe losses and prior year reserve development was 59.6% in 2026 and 59.8% in 2025.

Previous wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the six months ended June 30, 2026 and 2025:

Current wording

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the nine months ended September 30, 2026 and 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 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.

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 4% 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 $49 million in 2026 and $48 million in 2025.

Current wording

Insurance service expenses, which represent the costs associated with the fee-based businesses, were $73 million in 2026 and $70 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 $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.

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 $20 million in 2026 compared to losses of $63 million in 2025, primarily due to the U.S. dollar strengthening against most 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 $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.

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 $235 million in 2026 from $211 million in 2025, primarily due to higher compensation-related costs and new start-up operating unit expenses in 2026.