Short Duration Contracts

12 Months Ended

Dec. 31, 2025

Short Duration Contracts Disclosure [Abstract]

The Company’s reserves for losses and loss adjustment expenses primarily relate to short-duration contracts with various characteristics (e.g., type of coverage, geography, claims duration). The Company considered such information in determining the level of disaggregation for disclosures related to its short-duration contracts, as detailed in the table below:

Reportable segment

Level of disaggregation

Included lines of business

Insurance

Property energy, marine and aviation

Third party occurrence business

Excess and surplus casualty (excluding contract binding); construction and national accounts; and other (including alternative market risks, excess workers’ compensation and employer’s liability insurance coverages)

Third party claims-made business

Professional lines

Multi-line and other specialty

Programs; contract binding (part of excess and surplus casualty); travel, accident and health; warranty and lenders solutions; and other (contract and commercial surety coverages); MCE business1

Reinsurance

Casualty

Property catastrophe

Property excluding property catastrophe

Marine and aviation

Specialty

Mortgage

Direct mortgage insurance in the U.S.

Mortgage insurance on U.S. primary exposures

(1) Includes business underwritten under a new business reinsurance agreement related to the MCE Acquisition. See note 2.

The Company determined the following to be insignificant for disclosure purposes: (i) certain mortgage business, including non-U.S. primary business, second lien and student loan exposures, global mortgage reinsurance and participation in various GSE credit risk-sharing products and (ii) certain reinsurance business, including casualty clash and non-traditional lines. Such amounts are included as reconciling items.

The Company is required to establish reserves for losses and loss adjustment expenses (“Loss Reserves”) that arise from the business the Company underwrites. Loss Reserves for the insurance, reinsurance and mortgage segments represent estimates of future amounts required to pay losses and loss adjustment expenses for insured or reinsured events which have occurred at or before the balance sheet

date. Loss Reserves do not reflect contingency reserve allowances to account for future loss occurrences. Losses arising from future events will be estimated and recognized at the time the losses are incurred and could be substantial.

Insurance Segment

Loss Reserves for the insurance segment are comprised of estimated amounts for (1) reported losses (“case reserves”) and (2) incurred but not reported losses (“IBNR reserves”). Generally, claims personnel determine whether to establish a case reserve for the estimated amount of the ultimate settlement of individual claims. The estimate reflects the judgment of claims personnel based on general corporate reserving practices, the experience and knowledge of such personnel regarding the nature and value of the specific type of claim and, where appropriate, advice of counsel. The Company also contracts with a number of outside third party administrators in the claims process who, in certain cases, have limited authority to establish case reserves. The work of such administrators is reviewed and monitored by our claims personnel. Loss Reserves are also established to provide for loss adjustment expenses and represent the estimated expense of settling claims, including legal and other fees and the general expenses of administering the claims adjustment process. Periodically, adjustments to the case reserves may be made as additional information is reported or payments are made. IBNR reserves are established to provide for incurred claims which have not yet been reported at the balance sheet date as well as to adjust for any projected variance in case reserving. Actuaries estimate ultimate losses and loss adjustment expenses using various generally accepted actuarial methods applied to known losses and other relevant information. Like case reserves, IBNR reserves are adjusted as additional information becomes known or payments are made. The process of estimating reserves involves a considerable degree of judgment by management and, as of any given date, is inherently uncertain.

Ultimate losses and loss adjustment expenses are generally determined by projection of claim emergence and settlement patterns observed in the past that can reasonably be expected to persist into the future. In forecasting ultimate losses and loss adjustment expenses with respect to any line of business, past experience with respect to that line of business is the primary resource, developed through both industry and company experience, but cannot be relied upon in isolation. Uncertainties in estimating ultimate losses and loss adjustment expenses are magnified by the length of the time lag between when a claim actually occurs and when it is reported and settled. This time lag is sometimes referred to as the “claim-tail.” During this period additional facts regarding coverages written in prior accident years, as well as about actual claims and trends, may become known and, as a result, may lead to

adjustments of the related Loss Reserves. If the Company determines that an adjustment is appropriate, the adjustment is recorded in the accounting period in which such determination is made. Accordingly, should Loss Reserves need to be increased or decreased in the future from amounts currently established, future results of operations would be negatively or positively impacted respectively. The Company authorizes managing general agents, general agents and other producers to write program business on the Company’s behalf within prescribed underwriting authorities. This delegated authority process introduces additional complexity to the actuarial determination of unpaid future losses and loss adjustment expenses. In order to monitor adherence to the underwriting guidelines given to such parties, the Company periodically performs underwriting and claims due diligence reviews.

In determining ultimate losses and loss adjustment expenses, the cost to indemnify claimants, provide needed legal defense and other services for insureds and administer the investigation and adjustment of claims are considered. These claim costs are influenced by many factors that change over time, such as expanded coverage definitions as a result of new court decisions, inflation in costs to repair or replace damaged property, inflation in the cost of medical services and legislated changes in statutory benefits, as well as by the particular, unique facts that pertain to each claim. As a result, the rate at which claims arose in the past and the costs to settle them may not always be representative of what will occur in the future. The factors influencing changes in claim costs are often difficult to isolate or quantify and developments in paid and incurred losses from historical trends are frequently subject to multiple and conflicting interpretations. Changes in coverage terms or claims handling practices may also cause future experience and/or development patterns to vary from the past. A key objective of actuaries in developing estimates of ultimate losses and loss adjustment expenses, and resulting IBNR reserves, is to identify aberrations and systemic changes occurring within historical experience and adjust for them so that the future can be projected more reliably. Because of the factors previously discussed, this process requires the substantial use of informed judgment and is inherently uncertain.

Although Loss Reserves are initially determined based on underwriting and pricing analyses, the Company’s insurance segment applies several generally accepted actuarial methods, as discussed below, on a quarterly basis to evaluate the Loss Reserves, in addition to the expected loss method, in particular for Loss Reserves from more mature accident years (the year in which a loss occurred). Each quarter, as part of the reserving process, the segments’ actuaries reaffirm that the assumptions used in the reserving process continue to form a sound basis for the projection of liabilities. If actual loss activity differs

substantially from expectations based on historical information, an adjustment to Loss Reserves may be supported. The Company places more or less reliance on a particular actuarial method based on the facts and circumstances at the time the estimates of Loss Reserves are made.

These methods generally fall into one of the following categories or are hybrids of one or more of the following categories:

•Expected loss methods - these methods are based on the assumption that ultimate losses vary proportionately with premiums. Expected loss and loss adjustment expense ratios are typically developed based upon the information derived by underwriters and actuaries during the initial pricing of the business, supplemented by industry data available from organizations, such as statistical bureaus and consulting firms, where appropriate. These ratios consider, among other things, rate increases and changes in terms and conditions that have been observed in the market. Expected loss methods are useful for estimating ultimate losses and loss adjustment expenses in the early years of long-tailed lines of business, when little or no paid or incurred loss information is available, and is commonly applied when limited loss experience exists for a company.

•Historical incurred loss development methods - these methods assume that the ratio of losses in one period to losses in an earlier period will remain constant in the future. These methods use incurred losses (i.e., the sum of cumulative historical loss payments plus outstanding case reserves) over discrete periods of time to estimate future losses. Historical incurred loss development methods may be preferable to historical paid loss development methods because they explicitly take into account open cases and the claims adjusters’ evaluations of the cost to settle all known claims. However, historical incurred loss development methods necessarily assume that case reserving practices are consistently applied over time. Therefore, when there have been significant changes in how case reserves are established, using incurred loss data to project ultimate losses may be less reliable than other methods.

•Historical paid loss development methods - these methods, like historical incurred loss development methods, assume that the ratio of losses in one period to losses in an earlier period will remain constant. These methods use historical loss payments over discrete periods of time to estimate future losses and necessarily assume that factors that have affected paid losses in the past, such as inflation or the effects of litigation, will remain constant in the future. Because historical paid loss development methods do not use incurred losses to

estimate ultimate losses, they may be more reliable than the other methods that use incurred losses in situations where there are significant changes in how incurred losses are established by a company’s claims adjusters. However, historical paid loss development methods are more leveraged (meaning that small changes in payments have a larger impact on estimates of ultimate losses) than actuarial methods that use incurred losses because cumulative loss payments take much longer to equal the expected ultimate losses than cumulative incurred amounts. In addition, and for similar reasons, historical paid loss development methods are often slow to react to situations when new or different factors arise than those that have affected paid losses in the past.

•Adjusted historical paid and incurred loss development methods - these methods take traditional historical paid and incurred loss development methods and adjust them for the estimated impact of changes from the past in factors such as inflation, the speed of claim payments or the adequacy of case reserves. Adjusted historical paid and incurred loss development methods are often more reliable methods of predicting ultimate losses in periods of significant change, provided the actuaries can develop methods to reasonably quantify the impact of changes. As such, these methods utilize more judgment than historical paid and incurred loss development methods.

•Bornhuetter-Ferguson (“B-F”) paid and incurred loss methods - these methods utilize actual paid and incurred losses and expected patterns of paid and incurred losses, taking the initial expected ultimate losses into account to determine an estimate of expected ultimate losses. The B-F paid and incurred loss methods are useful when there are few reported claims and a relatively less stable pattern of reported losses.

•Frequency-Severity methods - These methods utilize actual paid and incurred claim experience, but break the data down into its component pieces: claim counts, often expressed as a ratio to exposure or premium (frequency), and average claim size (severity). The component pieces are projected to an ultimate level and multiplied together to result in an estimate of ultimate loss. These methods are especially useful when the severity of claims can be confined to a relatively stable range of estimated ultimate average claim value.

•Additional analyses - other methodologies are often used in the reserving process for specific types of claims or events, such as catastrophic or other specific major events. These include vendor catastrophe models, which are typically used in the estimation of Loss Reserves at the early stage of known catastrophic events before information has been reported to an insurer or reinsurer.

In the initial reserving process for short-tail insurance lines (consisting of property, energy, marine and aviation and other exposures including travel, accident and health, and warranty and lenders solutions), the Company relies on a combination of the reserving methods discussed above. For catastrophe-exposed business, the reserving process also includes the usage of catastrophe models for known events and a heavy reliance on analysis of individual catastrophic events and management judgment. The development of losses on short-tail business can be unstable, especially for policies characterized by high severity, low frequency losses. As time passes, for a given accident year, additional weight is given to the paid and incurred B-F loss development methods and eventually to the historical paid and incurred loss development methods in the reserving process. The Company makes a number of key assumptions in their reserving process, including that historical paid and reported development patterns are stable, catastrophe models provide useful information about our exposure to catastrophic events that have occurred and underwriters’ judgment as to potential loss exposures can be relied on. The expected loss ratios used in the initial reserving process for short-tail business have varied over time due to changes in pricing, reinsurance structure, estimates of catastrophe losses, policy changes (such as attachment points, class and limits) and geographical distribution. As losses in short-tail lines are reported relatively quickly, expected loss ratios are selected for the current accident year based upon actual attritional loss ratios for earlier accident years, adjusted for rate changes, inflation, changes in reinsurance programs and expected attritional losses based on modeling. Furthermore, ultimate losses for short-tail business are known in a reasonably short period of time.

In the initial reserving process for long-tail insurance lines (consisting of third party occurrence business, third party claims made business, and other exposures including surety, programs and contract binding exposures), the Company primarily relies on the expected loss method. The development of the Company’s long-tail business may be unstable, especially if there are high severity major events, as a portion of the Company’s casualty business is in high excess layers. As time passes, for a given accident year, additional weight is given to the paid and incurred B-F loss development methods and historical paid and incurred loss development methods in the reserving process. The Company makes a number of key assumptions in reserving for long-tail lines, including that the pricing loss ratio is the best estimate of the ultimate loss ratio at the time the policy is entered into, that the loss development patterns, which are based on a combination of company and industry loss development patterns and adjusted to reflect differences in the insurance segment’s mix of business, are reasonable and that claims personnel and underwriters analyses of our exposure to major events are assumed to be the best

estimate of exposure to the known claims on those events. The expected loss ratios used in the initial reserving process for long-tail business for recent accident years have varied over time, in some cases significantly, from earlier accident years. As the credibility of historical experience for earlier accident years increases, the experience from these accident years will be given a greater weighting in the actuarial analysis to determine future accident year expected loss ratios, adjusted for changes in pricing, loss trends, terms and conditions and reinsurance structure.

From time to time, the Company enters into loss portfolio transfer and adverse development cover reinsurance agreements accounted for as retroactive reinsurance. These agreements transfer Loss Reserves and future favorable or adverse development on certain runoff programs and

certain third party occurrence business, within multi-line and other specialty business (the “Covered Lines”). As incurred losses and allocated loss adjustment expenses for the Covered Lines are ceded to the reinsurer, the Company is not exposed to changes in the amount, timing and uncertainty of cash flows arising from the Covered Lines. To avoid distortion, the incurred losses and allocated loss adjustment expenses and cumulative paid losses and loss adjustment expenses for the Covered Lines are excluded entirely from the tables below. Unpaid loss and loss adjustment expenses recoverable at December 31, 2025 included $121 million related to such reinsurance agreements.

The following tables present information on the insurance segment’s short-duration insurance contracts:


Property, energy, marine and aviation (in millions except claim count)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	104	$	101	$	105	$	100	$	96	$	92	$	87	$	87	$	86	$	86	$	—	6,189
2017			281		246		236		230		231		225		225		224		225		—		6,512
2018					181		186		174		170		170		172		170		171		—		5,091
2019							179		179		165		161		159		156		156		(2)		7,518
2020									359		329		336		333		337		335		1		8,558
2021											427		429		423		421		420		12		10,380
2022													522		495		576		679		91		16,853
2023															571		510		483		48		22,016
2024																	703		607		142		25,054
2025																			693		327		21,693
																	Total		$	3,855

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	25	$	83	$	98	$	97	$	94	$	91	$	87	$	87	$	86	$	86
2017			30		140		195		212		216		218		220		221		223
2018					30		102		135		143		150		154		157		162
2019							26		105		134		139		148		153		155
2020									56		194		251		293		306		317
2021											90		268		343		365		396
2022													100		276		337		547
2023															146		271		378
2024																	195		363
2025																			267
									Total										2,894
									All outstanding liabilities before 2016, net of reinsurance										14
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	975


Third party occurrence business (in millions except claim count)
	Incurred losses and allocated loss adjustment expenses, net of reinsurance																				December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	389	$	394	$	406	$	399	$	375	$	367	$	363	$	352	$	345	$	331	$	49	78,399
2017			417		417		422		412		407		406		404		408		398		72		84,591
2018					430		453		450		451		459		461		448		435		84		79,101
2019							456		487		480		471		470		451		439		80		87,700
2020									606		616		640		632		606		594		91		92,035
2021											622		662		659		671		688		66		94,124
2022													687		726		735		737		300		95,570
2023															877		936		936		482		100,702
2024																	1,001		1,038		756		103,711
2025																			1,153		1,022		79,110
																	Total		$	6,749

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	12	$	42	$	87	$	137	$	164	$	195	$	215	$	230	$	246	$	252
2017			13		52		100		135		165		221		247		271		289
2018					17		64		115		154		200		247		271		289
2019							18		73		122		173		214		255		282
2020									24		76		155		235		318		374
2021											26		91		174		323		444
2022													24		85		186		294
2023															32		156		264
2024																	37		136
2025																			46
									Total										2,670
									All outstanding liabilities before 2016, net of reinsurance										375
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	4,454


Third party claims-made business (in millions except claim count)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	275	$	291	$	308	$	314	$	322	$	327	$	329	$	327	$	329	$	325	$	8	15,135
2017			270		285		311		308		323		316		337		339		326		23		15,712
2018					272		314		319		335		347		366		366		362		22		17,304
2019							288		317		317		321		329		329		326		34		17,428
2020									383		412		423		445		432		419		54		17,580
2021											514		517		498		461		446		119		19,120
2022													668		654		589		570		186		21,348
2023															809		895		901		375		26,037
2024																	736		777		432		29,857
2025																			882		736		29,188
																	Total		$	5,334

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	11	$	68	$	127	$	158	$	205	$	242	$	257	$	295	$	296	$	304
2017			9		67		113		143		196		232		257		276		284
2018					12		68		118		158		208		258		285		305
2019							12		65		122		154		196		235		254
2020									17		87		151		214		265		309
2021											23		90		162		223		269
2022													25		100		218		307
2023															64		200		332
2024																	56		196
2025																			49
									Total										2,609
									All outstanding liabilities before 2016, net of reinsurance										89
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	2,814


Multi-line and other specialty (in millions except claim count)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	408	$	430	$	427	$	416	$	410	$	408	$	408	$	406	$	404	$	403	$	3	196,531
2017			482		500		491		500		504		512		515		514		516		4		235,002
2018					512		564		562		564		564		564		564		566		6		265,421
2019							566		611		639		650		656		670		666		8		247,961
2020									616		567		513		515		519		519		22		170,515
2021											634		618		613		634		643		33		137,791
2022													677		640		639		624		64		156,572
2023															815		809		823		133		176,315
2024																	1,419		1,442		508		200,279
2025																			1,987		1,195		140,332
																	Total		$	8,189

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	176	$	304	$	341	$	362	$	379	$	385	$	390	$	391	$	396	$	397
2017			181		342		380		423		446		472		479		493		499
2018					211		388		442		479		508		526		543		550
2019							212		385		486		548		576		611		629
2020									171		308		358		405		450		469
2021											157		334		427		511		557
2022													177		370		439		491
2023															253		489		588
2024																	336		727
2025																			493
									Total										5,400
									All outstanding liabilities before 2016, net of reinsurance										38
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	2,827

The following table presents the average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance, as of December 31, 2025:


	Average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Property, energy, marine and aviation	23.0	%	41.4	%	18.2	%	8.9	%	3.3	%	1.0	%	—	%	1.1	%	(0.1)	%	0.1	%
Third party occurrence business	3.7	%	10.1	%	12.4	%	13.4	%	11.3	%	10.5	%	6.1	%	5.0	%	4.6	%	2.0	%
Third party claims-made business	4.7	%	16.1	%	16.3	%	12.0	%	13.3	%	11.8	%	6.4	%	7.7	%	1.3	%	2.4	%
Multi-line and other specialty	31.2	%	29.0	%	11.0	%	8.5	%	5.6	%	3.7	%	2.1	%	1.4	%	1.1	%	0.4	%

Reinsurance Segment

Loss Reserves for the Company’s reinsurance segment are comprised of (1) case reserves, (2) additional case reserves (“ACRs”) and (3) IBNR reserves. The Company receives reports of claims notices from ceding companies and records case reserves based upon the amount of reserves recommended by the ceding company. Case reserves may be supplemented by ACRs, which may be estimated by the Company’s claims personnel ahead of official notification from the ceding company, or when judgment regarding the size or severity of the known event differs from the ceding company. In certain instances, the Company establishes ACRs even when the ceding company does not report any liability on a known event. In addition, specific claim information reported by ceding companies or obtained through claim audits can alert the Company to emerging trends such as changing legal interpretations of coverage

and liability, claims from unexpected sources or classes of business, and significant changes in the frequency or severity of individual claims. Such information is often used in the process of estimating IBNR reserves. IBNR reserves are established to provide for incurred claims which have not yet been reported at the balance sheet date as well as to adjust for any projected variance in case reserving. Actuaries estimate ultimate losses and loss adjustment expenses using various generally accepted actuarial methods applied to known losses and other relevant information. Like case reserves, IBNR reserves are adjusted as additional information becomes known or payments are made. The process of estimating Loss Reserves involves a considerable degree of judgment by management and, as of any given date, is inherently uncertain.

The estimation of Loss Reserves for the reinsurance segment is subject to the same risk factors as the estimation of Loss Reserves for the insurance segment. In addition, the inherent uncertainties of estimating such reserves are even greater for reinsurers, due primarily to the following factors: (1) the claim-tail for reinsurers is generally longer because claims are first reported to the ceding company and then to the reinsurer through one or more intermediaries, (2) the reliance on premium estimates, where reports have not been received from the ceding company, in the reserving process, (3) the potential for writing a number of reinsurance contracts with different ceding companies with the same exposure to a single loss event, (4) the diversity of loss development patterns among different types of reinsurance contracts, (5) the necessary reliance on the ceding companies for information regarding reported claims and (6) the differing reserving practices among ceding companies.

Ultimate losses and loss adjustment expenses are generally determined by projection of claim emergence and settlement patterns observed in the past that can reasonably be expected to persist into the future. As with the insurance segment, the process of estimating Loss Reserves for the reinsurance segment involves a considerable degree of judgment by management and, as of any given date, is inherently uncertain. As discussed above, such uncertainty is greater for reinsurers compared to insurers. As a result, our reinsurance operations obtain information from numerous sources to assist in the process. Pricing actuaries from the reinsurance segment devote considerable effort to understanding and analyzing a ceding company’s operations and loss history during the underwriting of the business, using a combination of ceding company and industry statistics. Such statistics normally include historical premium and loss data by class of business, individual claim information for larger claims, distributions of insurance limits provided, loss reporting and payment patterns, and rate change history. This analysis is used to project expected loss ratios for each treaty during the upcoming contract period.

As mentioned above, there can be a considerable time lag from the time a claim is reported to a ceding company to the time it is reported to the reinsurer. The lag can be several years in some cases and may be attributed to a number of reasons, including the time it takes to investigate a claim, delays associated with the litigation process, the deterioration in a claimant’s physical condition many years after an accident occurs, the case reserving approach of the ceding company, etc. In the reserving process, the Company assumes that such lags are predictable, on average, over time and therefore the lags are contemplated in the loss reporting patterns used in their actuarial methods. This means that the reinsurance segment must rely on estimates for a longer period of time than does an insurance company.

Backlogs in the recording of assumed reinsurance can also complicate the accuracy of loss reserve estimation. As of December 31, 2025 there were no significant backlogs related to the processing of assumed reinsurance information at our reinsurance operations.

The reinsurance segment relies heavily on information reported by ceding companies, as discussed above. In order to determine the accuracy and completeness of such information, underwriters, actuaries, and claims personnel often perform audits of ceding companies and regularly review information received from ceding companies for unusual or unexpected results. Material findings are usually discussed with the ceding companies. The Company sometimes encounters situations where they determine that a claim presentation from a ceding company is not in accordance with contract terms. In these situations, the Company attempts to resolve the dispute with the ceding company. Most situations are resolved amicably and without the need for litigation or arbitration. However, in the infrequent situations where a resolution is not possible, the Company will vigorously defend its position in such disputes.

Although Loss Reserves are initially determined based on underwriting and pricing analysis, the Company applies several generally accepted actuarial methods, as discussed above, on a quarterly basis to evaluate its Loss Reserves in addition to the expected loss method, in particular for reserves from more mature underwriting years (the year in which business is underwritten). Each quarter, as part of the reserving process, the Company’s actuaries reaffirm that the assumptions used in the reserving process continue to form a sound basis for projection of liabilities. If actual loss activity differs substantially from expectations based on historical information, an adjustment to Loss Reserves may be supported. Estimated Loss Reserves for more mature underwriting years are now based more on actual loss activity and historical patterns than on the initial assumptions based on pricing indications. More recent underwriting years rely more heavily on internal pricing assumptions. The Company places more or less reliance on a particular actuarial method based on the facts and circumstances at the time the estimates of Loss Reserves are made.

In the initial reserving process for short-tail reinsurance lines (consisting of property excluding property catastrophe and property catastrophe exposures), the Company relies on a combination of the reserving methods discussed above. For known catastrophic events, the reserving process also includes the usage of catastrophe models and a heavy reliance on analysis which includes ceding company inquiries and management judgment. The development of property losses may be unstable, especially where there is high catastrophic exposure, may be characterized by high

severity, low frequency losses for excess and catastrophe-exposed business and may be highly correlated across contracts. As time passes, for a given underwriting year, additional weight is given to the paid and incurred B-F loss development methods and historical paid and incurred loss development methods in the reserving process. The Company makes a number of key assumptions in reserving for short-tail lines, including that historical paid and reported development patterns are stable, catastrophe models provide useful information about our exposure to catastrophic events that have occurred and our underwriters’ judgment and guidance received from ceding companies as to potential loss exposures may be relied on. The expected loss ratios used in the initial reserving process for property exposures have varied over time due to changes in pricing, reinsurance structure, estimates of catastrophe losses, terms and conditions and geographical distribution. As losses in property lines are reported relatively quickly, expected loss ratios are selected for the current underwriting year incorporating the experience for earlier underwriting years, adjusted for rate changes, inflation, changes in reinsurance programs, expectations about present and future market conditions and expected attritional losses based on modeling. Due to the short-tail nature of property business, reported loss experience emerges quickly and ultimate losses are known in a reasonably short period of time.

In the initial reserving process for long-tail reinsurance lines (consisting of casualty, specialty, marine and aviation and other exposures), the Company primarily relies on the expected loss method. The development of long-tail business may be unstable, especially if there are high severity major events, with business written on an excess of loss basis typically having a longer tail than business written on a pro rata basis. As time passes, for a given underwriting year, additional weight is given to the paid and incurred B-F loss development methods and eventually to the historical paid and incurred loss development methods in the reserving process. Our reinsurance operations make a number of key assumptions in reserving for long-tail lines, including that the pricing loss ratio is the best estimate of the ultimate loss ratio at the time the contract is entered into, historical paid and reported development patterns are stable and claims personnel and underwriters’ analyses of our exposure to major events are our best estimate of our exposure to the known claims on those events. The expected loss ratios used in our reinsurance operations’ initial reserving process for long-tail contracts have varied over time due to changes in pricing, terms and conditions and reinsurance structure. As the credibility of historical experience for earlier underwriting years increases, the experience from these underwriting years is used in the actuarial analysis to determine future underwriting year expected loss ratios, adjusted for changes in pricing, loss trends, terms and conditions and reinsurance structure.

The following tables present information on the reinsurance segment’s short-duration insurance contracts:


Casualty (in millions)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	216	$	228	$	252	$	267	$	274	$	273	$	277	$	285	$	287	$	289	$	45	N/A
2017			271		258		274		302		314		321		336		343		346		55		N/A
2018					281		295		286		291		304		314		328		332		53		N/A
2019							336		346		372		384		406		405		402		65		N/A
2020									389		377		360		379		399		365		108		N/A
2021											444		438		428		428		464		163		N/A
2022													552		533		546		539		241		N/A
2023															664		669		695		385		N/A
2024																	734		776		624		N/A
2025																			1,002		928		N/A
																	Total		$	5,210

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	6	$	26	$	52	$	87	$	114	$	133	$	158	$	174	$	188	$	197
2017			6		30		64		113		138		165		190		224		239
2018					8		31		107		129		155		183		207		224
2019							16		58		97		131		220		258		287
2020									18		51		90		132		178		202
2021											15		54		103		191		236
2022													18		62		114		182
2023															19		88		173
2024																	14		66
2025																			25
																	Total		1,831
									All outstanding liabilities before 2016, net of reinsurance										406
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	3,785


Property catastrophe (in millions)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	23	$	16	$	12	$	9	$	6	$	6	$	5	$	4	$	4	$	4	$	—	N/A
2017			86		54		50		36		24		21		21		21		20		—		N/A
2018					69		44		25		12		3		—		(2)		(4)		—		N/A
2019							12		4		4		(4)		(11)		(7)		(8)		1		N/A
2020									272		337		341		330		319		321		5		N/A
2021											323		318		305		307		302		11		N/A
2022													306		298		273		262		30		N/A
2023															272		272		227		18		N/A
2024																	512		441		67		N/A
2025																			415		84		N/A
																	Total		$	1,980

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	(7)	$	2	$	2	$	3	$	2	$	2	$	2	$	2	$	2	$	3
2017			31		32		37		27		14		16		17		17		17
2018					27		2		12		(17)		(14)		(13)		(11)		(12)
2019							4		4		8		(17)		(16)		(25)		(26)
2020									57		158		208		251		262		271
2021											66		177		230		239		243
2022													70		169		211		219
2023															8		84		120
2024																	60		145
2025																			82
																	Total		1,062
									All outstanding liabilities before 2016, net of reinsurance										2
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	920


Property excluding property catastrophe (in millions)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	174	$	144	$	136	$	135	$	138	$	135	$	129	$	130	$	127	$	124	$	3	N/A
2017			267		250		237		230		213		205		202		201		197		6		N/A
2018					223		239		235		212		202		203		203		197		3		N/A
2019							216		206		195		190		190		196		193		11		N/A
2020									368		339		319		320		322		313		(1)		N/A
2021											546		497		491		499		500		14		N/A
2022													745		670		660		656		70		N/A
2023															839		740		744		117		N/A
2024																	1,212		1,056		325		N/A
2025																			1,170		648		N/A
																	Total		$	5,150

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	33	$	94	$	98	$	103	$	111	$	113	$	114	$	114	$	117	$	116
2017			28		124		155		164		178		182		186		186		186
2018					30		107		151		167		175		177		177		181
2019							43		124		150		162		169		170		174
2020									101		207		243		266		280		291
2021											136		269		363		424		457
2022													142		360		468		526
2023															151		382		489
2024																	144		445
2025																			190
																	Total		3,055
									All outstanding liabilities before 2016, net of reinsurance										8
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	2,103


Marine and aviation (in millions)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	27	$	23	$	23	$	19	$	17	$	15	$	12	$	11	$	11	$	10	$	2	N/A
2017			29		26		24		21		20		17		15		15		15		2		N/A
2018					27		25		24		24		21		21		20		19		2		N/A
2019							48		55		60		61		62		63		60		6		N/A
2020									83		76		80		80		82		81		4		N/A
2021											110		96		82		79		86		8		N/A
2022													126		138		134		167		38		N/A
2023															161		170		156		44		N/A
2024																	233		220		100		N/A
2025																			227		172		N/A
																	Total		$	1,041

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	(7)	$	(2)	$	—	$	3	$	6	$	7	$	7	$	7	$	7	$	8
2017			2		7		9		11		12		12		12		12		12
2018					2		7		11		13		14		15		16		16
2019							11		22		29		35		43		49		49
2020									9		26		42		60		66		71
2021											8		24		45		53		68
2022													12		37		63		86
2023															13		43		77
2024																	18		44
2025																			16
																	Total		447
									All outstanding liabilities before 2016, net of reinsurance										18
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	612


Specialty (in millions)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																					December 31, 2025
																					Total of IBNR liabilities plus expected development on reported claims		Cumulative number of reported claims
	Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited		2025
2016	$	338	$	335	$	328	$	319	$	326	$	321	$	318	$	319	$	312	$	315	$	6	N/A
2017			412		405		385		386		384		379		376		372		378		11		N/A
2018					431		423		417		442		438		438		431		425		16		N/A
2019							441		418		412		408		418		413		398		25		N/A
2020									607		536		531		551		543		532		36		N/A
2021											628		629		630		637		638		33		N/A
2022													962		942		991		950		108		N/A
2023															1,303		1,230		1,321		330		N/A
2024																	1,696		1,647		623		N/A
2025																			1,960		1,275		N/A
																	Total		$	8,564

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	$	113	$	213	$	251	$	271	$	288	$	295	$	301	$	305	$	304	$	305
2017			141		266		309		325		339		350		360		361		362
2018					135		286		326		348		366		389		393		392
2019							126		217		286		313		335		355		354
2020									138		299		377		413		453		471
2021											156		319		443		508		546
2022													186		465		627		698
2023															207		502		714
2024																	331		705
2025																			383
																	Total		4,930
									All outstanding liabilities before 2016, net of reinsurance										35
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	3,669

The following table presents the average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance, as of December 31, 2025:


	Average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
Casualty	2.9	%	8.2	%	11.8	%	12.1	%	11.5	%	7.8	%	7.6	%	6.8	%	4.7	%	3.0	%
Property catastrophe	(62.4)	%	110.1	%	(23.8)	%	138.8	%	(24.8)	%	17.4	%	(4.8)	%	1.0	%	2.2	%	5.7	%
Property excluding property catastrophe	20.9	%	37.0	%	14.5	%	7.3	%	5.4	%	1.8	%	1.2	%	0.7	%	1.1	%	(0.7)	%
Marine and aviation	1.8	%	24.3	%	19.8	%	15.0	%	12.2	%	6.4	%	2.0	%	1.1	%	1.1	%	6.2	%
Specialty	26.2	%	28.2	%	14.6	%	6.7	%	5.4	%	3.8	%	1.2	%	0.5	%	—	%	0.1	%

Mortgage Segment

The Company’s mortgage segment includes (1) U.S. primary mortgage insurance (2) U.S. credit risk transfer and other, and (3) international mortgage insurance and reinsurance. The latter two categories along with second lien and student loan exposures are excluded on the basis of insignificance for the purposes of presenting disclosures related to short duration contracts.

For primary mortgage insurance business, the Company establishes case reserves for loans that have been reported as delinquent by loan servicers as well as those that are delinquent but not reported (IBNR reserves). The Company also reserves for the expenses of adjusting claims related to these delinquencies. The trigger that creates a case reserve estimate is that an insured loan is reported to us as being

two payments in arrears. The actuarial reviews and documentation created in the reserving process are completed in accordance with generally accepted actuarial standards. The selected assumptions reflect actuarial judgment based on the analysis of historical data and experience combined with information concerning current underwriting, economic, judicial, regulatory and other influences on ultimate claim settlements.

Because the reserving process requires the Company to forecast future conditions, it is inherently uncertain and requires significant judgment and estimation. The use of different estimates would result in the establishment of different reserve levels. Additionally, changes in estimates are likely to occur from period to period as economic conditions change, and the ultimate liability may vary significantly from the estimates used. Major risk factors

include (but are not limited to) changes in home prices and borrower equity, which can limit the borrower’s ability to sell the property and satisfy the outstanding loan balance, and changes in unemployment, which can affect the borrower’s income and ability to make mortgage payments.

The lead actuarial methodology used by the Company is a frequency-severity method based on the inventory of pending delinquencies. Each month the loan servicers report the delinquency status of each insured loan. Using the frequency-severity method allows the Company to take advantage of its knowledge of the number of delinquent loans and the coverage provided (“risk size”) on those loans by directly relating the reserves to these amounts. The delinquencies are grouped into homogeneous cohorts for analysis, reflecting the age of delinquency. A claim rate is then developed for each cohort which represents the frequency with which the delinquencies become claims. The claim frequency rates are based on an analysis of the patterns of emerging cure counts and claim counts, the foreclosure status of the pending delinquencies, the product and geographical mix of the delinquencies and our view of future economic and claim conditions, which include trends in home prices and unemployment. Claim rates can vary materially by age of delinquency, depending on the mix of delinquencies and economic conditions.

Claim size severity estimates are determined by examining the risk sizes on the delinquent loans and estimating the portion of risk that will be paid, as well as any expenses. This is done based on a review of historical development patterns, an assessment of economic conditions and the level of equity the borrowers may have in their homes, as well as considering economic conditions and loss mitigation opportunities. Mortgage insurance is generally not subject

to large claim sizes, as with some other lines of insurance. A claim size over $250,000 is rare, and this helps reduce the volatility of claim size estimates.

The claim rate and claim size assumptions generate case reserves for the population of reported delinquencies. The reserve for unreported delinquencies (included in IBNR reserves) is estimated by looking at historical patterns of reporting. Claim rates and claim sizes can then be assigned to estimated unreported delinquencies using assumptions made in the establishment of case reserves.

Mortgage insurance Loss Reserves are short-tail, in the sense that the vast majority of delinquencies are resolved within two years of being reported. While reserves are initially analyzed by reserve cohort, as described above, they are also rolled up by underwriting year to ensure that reserve assumptions are consistent with the performance of the underwriting year. The accuracy of prior reserve assumptions is also checked in hindsight to determine if adjustments to the assumptions are needed.

Loss Reserves for the Company’s mortgage reinsurance business and GSE credit risk sharing transactions are comprised of case reserves and IBNR reserves. The Company’s mortgage reinsurance operations receive reports of delinquent loans and claims notices from ceding companies and record case reserves based upon the amount of reserves recommended by the ceding company. In addition, specific claim and delinquency information reported by ceding companies is used in the process of estimating IBNR reserves.

The following table presents information on the mortgage segment’s short-duration insurance contracts:


U.S. primary mortgage insurance (in millions except claim count)
Incurred losses and allocated loss adjustment expenses, net of reinsurance																							December 31, 2025
																								Total of IBNR liabilities plus expected development on reported claims	Cumulative number of paid claims
Year ended December 31,
Accident year	2016 unaudited		2017 unaudited		2018 unaudited		2019 unaudited		2020 unaudited		2021 unaudited		2022 unaudited		2023 unaudited		2024 unaudited				2025
2016	$	184	$	171	$	149	$	141	$	142	$	142	$	137	$	136	$	136			$	136		—	3,564
2017			179		132		107		108		109		102		99		99				97			—	2,723
2018					132		96		89		88		72		69		69				66			—	1,990
2019							108		119		110		63		51		52				48			—	1,491
2020									420		374		78		33		31				26			—	904
2021											144		77		20		17				13			—	443
2022													173		55		30				22			—	604
2023															182		71				36			—	727
2024																	180				86			—	509
2025																					191			1	87
																	Total				$	721

Cumulative paid losses and allocated loss adjustment expenses, net of reinsurance
2016	11		72		113		127		131		132		132		133		134				135
2017			9		48		79		87		90		92		93		95				95
2018					4		31		50		56		59		60		63				64
2019							3		20		29		34		39		42				44
2020									1		4		8		13		19				21
2021											—		2		5		8				10
2022													—		3		10				14
2023															—		7				18
2024																	1				16
2025																					2
																	Total				419
									All outstanding liabilities before 2016, net of reinsurance										9
							Liabilities for losses and loss adjustment expenses, net of reinsurance												$	311

The following table presents the average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance, as of December 31, 2025:


Average annual percentage payout of incurred losses and allocated loss adjustment expenses by age, net of reinsurance
	Year 1		Year 2		Year 3		Year 4		Year 5		Year 6		Year 7		Year 8		Year 9		Year 10
U.S. Primary	4.1	%	26.0	%	26.0	%	14.3	%	9.6	%	4.2	%	2.6	%	1.3	%	0.7	%	0.5	%

The following table represents a reconciliation of the disclosures of net incurred and paid loss development tables to the reserve for losses and loss adjustment expenses at December 31, 2025:


	December 31, 2025
Net outstanding liabilities
Insurance
Property, energy, marine and aviation	$	975
Third party occurrence business	4,454
Third party claims-made business	2,814
Multi-line and other specialty	2,827
Reinsurance
Casualty	3,785
Property catastrophe	920
Property excluding property catastrophe	2,103
Marine and aviation	612
Specialty	3,669
Mortgage
U.S. primary	311
Other short duration lines not included in disclosures (1)	1,436
Total for short duration lines	23,906

Unpaid losses and loss adjustment expenses recoverable
Insurance
Property, energy, marine and aviation	456
Third party occurrence business	2,893
Third party claims-made business	907
Multi-line and other specialty	436
Reinsurance
Casualty	861
Property catastrophe	911
Property excluding property catastrophe	362
Marine and aviation	549
Specialty	1,386
Mortgage
U.S. primary	42
Other short duration lines not included in disclosures (2)	271
Intercompany eliminations	(20)
Total for short duration lines	9,054

Lines other than short duration	136
Discounting	(78)
Unallocated claims adjustment expenses	529
	587

Reserve for losses and loss adjustment expenses	$	33,547

(1) Includes amounts primarily associated with the loss portfolio reinsurance agreement related to the MCE Acquisition. See note 2.

(2) Includes unpaid loss and loss adjustment expenses recoverable of $121 million related to the loss portfolio transfer reinsurance agreements.