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Unpaid Losses And Loss Adjustment Expenses
 12 Months Ended
Dec. 31, 2024
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract]  
Unpaid Losses And Loss Adjustment Expenses
11. Unpaid Losses and Loss Adjustment Expenses

a) The following table presents a reconciliation of consolidated beginning and ending reserves for losses and loss adjustment expenses.

Years Ended December 31,
(dollars in thousands)202420232022
Gross reserves for losses and loss adjustment expenses, beginning of year$23,483,321 $20,947,898 $18,178,894 
Reinsurance recoverables on unpaid losses, beginning of year8,820,567 7,994,884 6,876,317 
Net reserves for losses and loss adjustment expenses, beginning of year14,662,754 12,953,014 11,302,577 
Effect of foreign currency rate changes on beginning of year balance(78,702)70,344 (160,622)
Adjusted net reserves for losses and loss adjustment expenses, beginning of year14,584,052 13,023,358 11,141,955 
Incurred losses and loss adjustment expenses:
Current accident year5,508,059 5,360,559 4,613,035 
Prior accident years(455,310)(38,550)(167,446)
Total incurred losses and loss adjustment expenses5,052,749 5,322,009 4,445,589 
Payments:
Current accident year720,178 729,895 580,537 
Prior accident years3,239,999 2,663,165 2,396,446 
Total payments3,960,177 3,393,060 2,976,983 
Effect of foreign currency rate changes on current year activity(3,934)(1,532)(5,468)
Change in net reserves for losses and loss adjustment expenses of Markel CATCo Re (see note 17)
(159,963)(162,954)347,921 
Reinsurance recoverable on retroactive reinsurance transactions— (125,067)— 
Net reserves for losses and loss adjustment expenses, end of year15,512,727 14,662,754 12,953,014 
Reinsurance recoverables on unpaid losses, end of year11,120,367 8,820,567 7,994,884 
Gross reserves for losses and loss adjustment expenses, end of year$26,633,094 $23,483,321 $20,947,898 

In 2024, current accident year losses and loss adjustment expenses included $70.6 million of net losses and loss adjustment expenses attributed to Hurricane Helene and Hurricane Milton. These losses and loss adjustment expenses were net of ceded losses of $60.4 million.

In 2024, the Company, through its program services operations, entered into a retroactive reinsurance contract on behalf of a third-party capacity provider under which it assumed a layer of loss reserves for a portfolio of casualty policies that were concurrently ceded to the third-party capacity provider. As a result of these transactions, the Company recorded $302.6 million of gross losses and loss adjustment expenses and $302.6 million of corresponding reinsurance recoverables. The transactions had no impact on the Company's net reserves for losses and loss adjustment expenses.

In 2023, the Company completed a retroactive reinsurance transaction to cede its portfolio of policies comprised of liabilities for its run-off book of United Kingdom (U.K.) motor casualty business in exchange for payments totaling $125.1 million, which approximated the carrying value of the Company's reserves for losses and loss adjustment expenses on the ceded policies.

In 2023, current accident year losses and loss adjustment expenses included $40.1 million of net losses and loss adjustment expenses attributed to the Hawaiian wildfires and Hurricane Idalia. These losses and loss adjustment expenses were net of ceded losses of $9.3 million.

In 2022, current accident year losses and loss adjustment expenses included $46.2 million of net losses and loss adjustment expenses attributed to Hurricane Ian. These losses and loss adjustment expenses were net of ceded losses of $115.3 million.
In 2022, current accident year losses and loss adjustment expenses also included $35.7 million of net losses and loss adjustment expenses attributed to the Russia-Ukraine conflict. These losses and loss adjustment expenses were net of ceded losses of $44.3 million.

b) Reserving Methodology

The Company uses a variety of techniques to establish liabilities for unpaid losses and loss adjustment expenses based upon estimates of the ultimate amounts payable. The Company maintains reserves for specific claims incurred and reported (case reserves) and reserves for claims incurred but not reported (IBNR reserves), which include expected development on reported claims. The Company does not discount its reserves for losses and loss adjustment expenses to reflect estimated present value.

There is normally a time lag between when a loss event occurs and when it is reported to the Company, and some claims may not be reported for many years. As a result, the liability for unpaid losses and loss adjustment expenses includes significant estimates for IBNR claims.

The actuarial methods that the Company uses to estimate losses have been designed to address the lag in loss reporting as well as the delay in obtaining information that would allow the Company to more accurately estimate future payments. The reporting lag can be more pronounced in reinsurance contracts than in the insurance contracts due to a time lag between cedents establishing case reserves or re-estimating their reserves and notifying the Company of those new or revised case reserves. On reinsurance transactions, the reporting lag will generally be 60 to 90 days after the end of a reporting period, but can be longer in some cases. There may also be a more pronounced reporting lag on insurance contracts for which the Company is not the primary insurer and participates only in excess layers of loss. Based on the experience of the Company's actuaries and management, the Company selects loss development factors and trending techniques to mitigate the difficulties caused by reporting lags. At least annually, the Company evaluates its loss development factors and trending assumptions using its own loss data, as well as cedent-specific and industry data, and updates them as needed.

IBNR reserves are based on the estimated ultimate cost of settling claims using past experience adjusted for current trends and any other factors that would modify past experience. IBNR reserves are calculated by subtracting paid losses and loss adjustment expenses and case reserves from estimated ultimate losses and loss adjustment expenses. IBNR reserves were 71% of total unpaid losses and loss adjustment expenses at December 31, 2024 compared to 72% at December 31, 2023.

In establishing liabilities for unpaid losses and loss adjustment expenses, the Company's actuaries estimate an ultimate loss ratio, by accident year or underwriting year, for each product line with input from underwriting and claims personnel. For product lines in which loss reserves are established on an underwriting year basis, the Company has developed a methodology to convert from underwriting year to accident year for financial reporting purposes. In estimating an ultimate loss ratio for a particular line of business, the actuaries may use one or more actuarial reserving methods and select from these a single point estimate. To varying degrees, these methods include detailed statistical analysis of past claim reporting, settlement activity, claim frequency and severity, policyholder loss experience, industry loss experience and changes in market and economic conditions, policy forms and exposures. Greater judgment may be required when new product lines are introduced or when there have been changes in claims handling practices, as the statistical data available may be insufficient. Greater judgment also may be required for product lines that experience a low frequency of high severity claims, particularly when the Company is reliant on third party case reserve estimates and claims handling practices. These estimates also reflect implicit and explicit assumptions regarding the potential effects of external factors, including economic and social inflation, judicial decisions, changes in law, general economic conditions and recent trends in these factors. Management believes the process of evaluating past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events.

Estimates for losses from widespread catastrophic events, such as hurricanes and earthquakes, as well as pandemics and wars, are based on claims received to date, analysis of exposures in the impacted areas, industry loss estimates and output from both industry, broker and proprietary models, as well as analysis of the Company's ceded reinsurance contracts. The level of reliance on these procedures varies depending on the timing of the event relative to the point at which the Company develops its estimates. The Company also considers loss experience on historical events that may have similar characteristics to the underlying event and current market conditions. In the period shortly after an event occurs, more weight is put on modeling and industry estimates, whereas with the passage of time, greater reliance is placed on incurred claims data, individual contract exposures and historical claim patterns. Due to the inherent uncertainty in estimating such losses, these estimates are subject to variability, which increases with the severity and complexity of the underlying event. As additional claims are reported and paid, and industry loss estimates are revised, the Company incorporates this new information into its analysis and adjusts its estimate of ultimate losses and loss adjustment expenses as appropriate.
Loss reserves are established at management's best estimate, which is developed using the actuarially calculated point estimate as the starting point. The actuarial point estimate represents the actuaries' best estimate of the most likely amount that will ultimately be paid to settle the losses that have occurred at a particular point in time. Similarly, the point estimate for ceded losses is calculated based on the ultimate gross loss amount expected to be paid, as well as the frequency and severity of the underlying claims, which ultimately determines coverage under the applicable ceded reinsurance contracts. Therefore, ceded loss estimates are subject to many of the same judgments and assumptions as the gross loss estimates.

Inherent in the Company's reserving practices is the desire to establish loss reserves that are more likely redundant than deficient, and therefore, will ultimately prove to be adequate. This approach to establishing loss reserves results in loss reserves that exceed the calculated actuarial point estimate. Management continually attempts to improve its loss estimation process by refining its ability to analyze loss development patterns, claim payments and other information, but uncertainty remains regarding the potential for adverse development of estimated ultimate liabilities.

In some cases, actuarial analyses, which are generally based on statistical analysis, cannot fully incorporate all of the subjective factors that affect development of losses. In other cases, management's perspective of these more subjective factors may differ from the actuarial perspective. Subjective factors influencing the development of management's best estimate include: the credibility and timeliness of claims and loss information received from cedents and other third parties; and the impacts of economic and social inflation, judicial decisions, changes in law, changes in underwriting or claims handling practices, general economic conditions, the risk of moral hazard and other current and developing trends within the insurance and reinsurance markets, including the effects of competition.

The Company's ultimate liability may be greater or less than current reserves. Changes in the Company's estimated ultimate liability for loss reserves generally occur as a result of the emergence of unanticipated loss activity, the completion of specific actuarial or claims studies or changes in internal or external factors that impact the assumptions used to derive the Company's estimates. The Company closely monitors new information on reported claims and uses statistical analyses prepared by its actuaries to evaluate the adequacy of recorded reserves. Management exercises judgment when assessing the relative credibility of loss development trends.

Management currently believes the Company's gross and net reserves are adequate. However, there is no precise method for evaluating the impact of any significant factor on the adequacy of reserves, and actual results will differ from original estimates.

c) Prior Accident Year Loss Development

The following tables summarize, by segment, the product lines with the most significant changes in prior accident years loss reserves for the years ended December 31, 2024, 2023 and 2022, along with the corresponding accident years and the trends and factors that impacted management's best estimate of ultimate losses and loss adjustment expenses on underlying products in each of these product lines. The Company does not estimate losses at this level of aggregation as it offers a diverse portfolio of products and manages these products in more disaggregated groupings within each underwriting segment. As a result of the trends and factors described in the following tables, the Company's actuaries adjusted their estimates of the ultimate liability for unpaid losses and loss adjustment expenses. For those product lines with favorable development on prior accident years loss reserves, management has now given greater credibility to the favorable trends observed by the Company's actuaries and, upon incorporating these favorable trends into its best estimate, reduced prior years loss reserves accordingly.

In 2023 and 2022, the unfavorable claims and loss trends experienced on the Company's U.S. general liability and professional liability product lines disrupted the development of the claims trend observed prior to 2022, reflecting broader market conditions, including the effects of economic and social inflation. In 2024, the Company's U.S. professional liability product lines continued to experience many of these same trends, while the U.S. general liability product lines began to stabilize, resulting in modest favorable development as management gave more credibility to the favorable trends observed by the Company's actuaries.

Consistent with the Company's reserving philosophy, management is responding quickly to increase loss reserves following any indication of increased claims frequency or severity in excess of previous expectations, however in instances where trends have been more favorable than previously anticipated, management will wait to reduce loss reserves until those trends are observed over additional periods of time.
Year Ended December 31, 2024
(dollars in millions)Loss DevelopmentAccident Years with Most Significant DevelopmentTrends and Factors Impacting Loss Estimates
Insurance segment:
Professional liability
International$(152.6)
2021 to 2023
Lower loss frequency and severity than previously anticipated, including on the cyber portfolio and middle market accounts
U.S.
111.8 
2017 to 2023
Unfavorable claims settlements and increased claim severity, primarily on the risk-managed directors and officers product line
General liability
(81.6)
2022 and 2023
More favorable loss experience within the U.S. business, as well as lower loss frequency and severity than previously anticipated on the international excess and umbrella product line
Property
(75.0)
2020 and 2023
Lower loss frequency and severity than previously anticipated across a number of subclasses in the U.S. and international portfolios
Marine and energy
(58.3)
2021 to 2023
More favorable loss experience than previously anticipated
Programs
(53.9)
2022 and 2023
Lower loss frequency and severity than previously anticipated on certain programs
Credit and surety
(51.4)
2021 to 2023
Lower loss frequency and severity than previously anticipated driven by the international trade credit product line
Other products(90.0)
Total Insurance(451.0)
Reinsurance segment:
Property(23.0)
2017 to 2020
Lower loss severity than previously anticipated and net favorable development on catastrophe events
Workers' compensation
(20.3)
2019, 2020 and 2023
Lower loss severity than previously anticipated and net favorable development on losses related to the COVID-19 pandemic
Professional liability
(17.1)
2021 to 2023
More favorable loss experience than previously anticipated
Public entity
34.1 
2017 to 2023
Increased frequency of large claims across the product line, which was discontinued in late 2024
Other products18.0 
Premium adjustments
(4.0)
Total Reinsurance(12.3)
Other underwriting8.0 
Total decrease$(455.3)
Year Ended December 31, 2023
(dollars in millions)Loss DevelopmentAccident Years with Most Significant DevelopmentTrends and Factors Impacting Loss Estimates
Insurance segment:
General liability
U.S.
$274.0 2016 to 2021Increased frequency of large claims and unfavorable loss cost trends, primarily on primary casualty contractors' liability and excess and umbrella product lines
International(36.5)2020 to 2022
Lower loss frequency and severity than previously anticipated
Professional liability
U.S.
56.8 SeveralIncreased frequency of large claims and unfavorable loss cost trends, primarily on risk-managed errors and omissions product line
International(102.2)2020
Lower loss frequency and severity than previously anticipated
Property(95.1)2020 to 2022
Lower loss severity than previously anticipated and net favorable development on catastrophe events
Marine and energy(76.5)2021 and 2022
Lower loss severity than previously anticipated
Personal lines(42.8)2022
Lower loss frequency and severity than previously anticipated
Workers' compensation(36.5)2021 and 2022
Lower loss severity than previously anticipated
Other products(45.9)
Total Insurance(104.7)
Reinsurance segment:
General liability95.5 2015 to 2021
Large reported claims and adverse loss development trends
Public entity53.7 2014 to 2019
Increased frequency of large claims on a segment of business that was discontinued in 2020
Premium adjustments11.4 2021 and 2022
Recognition of additional exposures on prior accident years related to net favorable premium adjustments primarily on general liability, partially offset by reduced exposures recognized primarily on professional liability
Property(21.6)2017 to 2019More favorable loss experience and lower loss severity than previously anticipated
Workers' compensation(14.9)SeveralLower loss frequency and severity than previously anticipated
Other products(67.0)
Total Reinsurance57.1 
Other underwriting9.0 
Total decrease$(38.6)
Year Ended December 31, 2022
(dollars in millions)Loss DevelopmentAccident Years with Most Significant DevelopmentTrends and Factors Impacting Loss Estimates
Insurance segment:
Professional liability
2018 and 2019 accident years
$121.0 2018 and 2019Unfavorable claims settlements and increased claim frequency and severity, primarily on directors and officers, errors and omissions and employment practices liability lines
All other accident years
(91.1)SeveralMore favorable loss experience and lower loss severity than previously anticipated
General liability
2016 to 2019 accident years
61.6 2016 to 2019Unfavorable claims settlements and increased claim frequency and severity, primarily on contractors and excess and umbrella lines
All other accident years
(20.5)SeveralLower loss frequency and severity than previously anticipated
Workers' compensation
(62.1)2016 to 2021Lower loss severity than previously anticipated
Programs
(48.3)2020 and 2021Lower than expected frequency of claims
Property
(48.1)2020 and 2021
Lower loss severity than originally anticipated as well as favorable development on losses related to the COVID-19 pandemic
Credit and surety
(31.7)2019 to 2021Lower than expected frequency of claims
Other products(23.7)
Total Insurance(142.9)
Reinsurance segment:
Property(29.2)2017 to 2019Favorable development on catastrophe events
Credit and surety(22.9)SeveralFavorable commutations on mortgage insurance contracts
Premium adjustments53.1 2020 and 2021Recognition of additional exposures on prior accident years related to net favorable premium adjustments primarily on general liability, credit and surety and professional liability
Other products(27.1)
Total Reinsurance(26.1)
Other1.6 
Total decrease$(167.4)

d) Historic Loss Development

The following tables present undiscounted loss development information, by accident year, for the Company's Insurance and Reinsurance segments, including cumulative incurred and paid losses and allocated loss adjustment expenses, net of reinsurance, as well as the corresponding amount of IBNR reserves as of December 31, 2024. This level of disaggregation is consistent with how the Company analyzes loss reserves for both internal and external reporting purposes. The loss development information for the years ended December 31, 2015 through 2023 is presented as supplementary information. All amounts included in the following tables related to transactions denominated in a foreign currency have been translated into U.S. Dollars using the exchange rates in effect at December 31, 2024.

The difference between the segment loss development implied by the tables for the year ended December 31, 2024 and actual losses and loss adjustment expenses recognized on prior accident years for the Insurance and Reinsurance segments for the year ended December 31, 2024 is primarily attributed to the fact that amounts presented in these tables exclude amounts attributed to the 2014 and prior accident years. Adverse development on 2014 and prior accident years for the year ended December 31, 2024 totaled $50.1 million for the Insurance segment, which was driven by general liability and programs product lines.

The remaining difference between the segment loss development implied by the tables for the year ended December 31, 2024 and actual losses and loss adjustment expenses on prior accident years is attributed to the fact that amounts presented in these tables exclude unallocated loss adjustment expenses, as well as differences in the presentation of foreign currency movements, as previously described, none of which are material to the Insurance or Reinsurance segments.

The Insurance segment table that follows also includes claim count information, by accident year. The Company defines a claim as a single claim incident, per policy, which may include multiple claimants and multiple coverages on a single policy.
Claim counts include claims closed without a payment as well as claims where the Company is monitoring to determine if an exposure exists, even if a reserve has not been established.

All of the business contained within the Company's Reinsurance segment represents treaty business that is assumed from other insurance or reinsurance companies, for which the Company does not have access to the underlying claim counts. Further, this business includes both quota share and excess of loss treaty reinsurance, through which only a portion of each reported claim results in losses to the Company. As such, the Company has excluded claim count information from the Reinsurance segment disclosures.

Insurance Segment
(dollars in millions)Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of ReinsuranceTotal of Incurred-but-Not-Reported Liabilities, Net of ReinsuranceCumulative Number of Reported Claims
UnauditedAs of December 31,
As of December 31,
Accident Year2015201620172018201920202021202220232024December 31, 2024
2015$1,767.5 $1,693.8 $1,571.0 $1,517.0 $1,486.5 $1,454.7 $1,450.6 $1,440.9 $1,460.0 $1,457.1 $58.0 88,000 
20161,856.3 1,852.8 1,753.6 1,700.3 1,674.7 1,667.4 1,678.4 1,732.9 1,718.1 77.2 100,000 
20172,309.0 2,176.7 2,059.3 1,998.7 2,004.5 2,023.9 2,111.2 2,152.3 124.6 140,000 
20182,429.0 2,320.8 2,199.2 2,058.8 2,151.2 2,331.6 2,417.1 177.8 193,000 
20192,552.4 2,402.2 2,239.7 2,293.7 2,471.7 2,526.8 206.9 228,000 
20203,185.1 2,972.1 2,914.2 2,858.5 2,771.6 434.3 183,000 
20213,083.5 2,907.1 2,755.4 2,720.1 531.0 149,000 
20223,746.8 3,365.5 3,342.6 1,098.3 159,000 
20234,435.9 3,901.7 1,802.5 169,000 
20244,532.5 3,271.7 149,000 
Total$27,539.9 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
UnauditedAs of December 31,
As of December 31,
Accident Year2015201620172018201920202021202220232024
2015$320.7 $660.0 $870.2 $1,032.9 $1,141.3 $1,208.4 $1,259.2 $1,291.7 $1,327.3 $1,344.7 
2016369.8 746.2 973.7 1,158.2 1,262.8 1,350.3 1,425.5 1,479.6 1,529.8 
2017434.9 982.7 1,274.3 1,462.0 1,619.2 1,739.8 1,839.6 1,909.5 
2018490.7 1,017.4 1,281.9 1,494.9 1,671.6 1,856.5 2,017.4 
2019524.1 991.1 1,262.9 1,576.4 1,910.9 2,104.4 
2020568.1 1,148.5 1,515.7 1,772.5 2,033.8 
2021473.4 985.8 1,357.5 1,751.1 
2022484.5 1,059.9 1,564.1 
2023596.9 1,396.6 
2024651.3 
Total$16,302.7 
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2014, net of reinsurance
313.3 
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance$11,550.5 

Variability in claim counts is primarily attributable to claim counts on pet health liability, a product which has a high claim frequency and low claim severity. There was an elevated number of claims on this product line in 2018, 2019 and 2020. The related net incurred losses and allocated loss adjustment expenses are not material to the Insurance segment.
Reinsurance Segment
Ultimate Incurred Losses and Allocated Loss Adjustment Expenses, Net of ReinsuranceTotal of Incurred-but-Not-Reported Liabilities, Net of Reinsurance
UnauditedAs of December 31,
(dollars in millions)As of December 31,
Accident Year2015201620172018201920202021202220232024December 31, 2024
2015$523.0 $508.8 $524.6 $516.0 $504.8 $499.9 $487.8 $488.2 $500.0 $477.7 $56.6 
2016506.6 515.2 515.4 513.4 523.4 548.1 551.5 573.3 556.5 30.1 
2017894.4 927.6 933.2 934.9 907.3 919.7 931.0 931.3 44.2 
2018743.0 764.9 757.4 762.5 758.1 821.0 790.1 82.2 
2019654.4 668.4 683.1 691.0 719.0 730.4 129.1 
2020678.1 730.5 741.0 762.8 765.2 230.1 
2021731.9 733.6 754.7 753.9 303.8 
2022661.1 601.9 616.4 413.4 
2023658.3 665.3 506.7 
2024730.3 674.3 
Total$7,017.1 
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance
UnauditedAs of December 31,
As of December 31,
Accident Year2015201620172018201920202021202220232024
2015$63.3 $130.3 $201.0 $251.6 $298.6 $323.2 $342.8 $359.5 $375.6 $388.6 
201678.6 166.7 236.4 292.7 344.4 377.9 418.0 451.6 475.7 
2017157.1 357.5 478.6 560.4 623.8 692.8 747.6 796.0 
201886.9 235.1 334.9 404.4 474.4 543.6 613.9 
201953.2 169.1 261.3 351.8 435.6 507.7 
202093.2 202.9 308.7 381.8 463.0 
202179.2 187.1 281.6 361.0 
202224.1 66.6 138.4 
202327.1 79.5 
202423.9 
Total$3,847.7 
All outstanding liabilities for unpaid losses and loss adjustment expenses before 2014, net of reinsurance
273.3 
Total liabilities for unpaid losses and loss adjustment expenses, net of reinsurance$3,442.7 

The following table presents supplementary information about average historical claims duration as of December 31, 2024 based on the cumulative incurred and paid losses and allocated loss adjustment expenses presented above.

Average Annual Percentage Payout of Incurred Losses by Age (in Years), Net of Reinsurance
Unaudited12345678910
Insurance18.7 %20.9 %13.1 %10.8 %8.5 %6.1 %4.8 %2.9 %2.7 %1.2 %
Reinsurance9.6 %14.4 %12.9 %10.1 %9.5 %7.4 %6.5 %4.9 %3.8 %2.7 %
The following table reconciles the net incurred and paid loss development tables to the liability for losses and loss adjustment expenses on the consolidated balance sheet.

(dollars in thousands)December 31, 2024
Net outstanding liabilities
Insurance segment$11,550,516 
Reinsurance segment3,442,663 
Other underwriting62,903 
Program services and ILS fronting
6,615 
Markel CATCo Re (see note 17)
25,005 
Liabilities for unpaid losses and loss adjustment expenses, net of reinsurance15,087,702 
Reinsurance recoverable on unpaid losses
Insurance segment4,129,856 
Reinsurance segment397,810 
Other underwriting84,079 
Program services and ILS fronting
6,508,622 
Total reinsurance recoverable on unpaid losses11,120,367 
Unallocated loss adjustment expenses425,025 
Total gross liability for unpaid losses and loss adjustment expenses$26,633,094 

e) The Company has exposure to asbestos and environmental (A&E) claims primarily resulting from policies written by acquired insurance operations before their acquisition by the Company. The Company's exposure to A&E claims originated from umbrella, excess and commercial general liability insurance policies and assumed reinsurance contracts that were written on an occurrence basis from the 1970s to mid-1980s. Exposure also originated from claims-made policies that were designed to cover environmental risks provided that all other terms and conditions of the policy were met. A&E claims include property damage and clean-up costs related to pollution, as well as personal injury allegedly arising from exposure to hazardous materials. Development on A&E loss reserves is monitored separately from the Company's ongoing underwriting operations and is not included in a reportable segment.

At December 31, 2024, A&E reserves were $122.1 million and $32.5 million on a gross and net basis, respectively. At December 31, 2023, A&E reserves were $132.5 million and $39.6 million on a gross and net basis, respectively.

The Company's reserves for losses and loss adjustment expenses related to A&E exposures represent management's best estimate of ultimate settlement values based on statistical analysis of these reserves by the Company's actuaries. A&E exposures are subject to significant uncertainty due to potential loss severity and frequency resulting from the uncertain and unfavorable legal climate. A&E reserves could be subject to increases in the future, however, management believes the Company's gross and net A&E reserves at December 31, 2024 are adequate.