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RESERVE FOR LOSSES AND LAE
 9 Months Ended
Sep. 30, 2025
Insurance [Abstract]  
RESERVE FOR LOSSES AND LAE RESERVE FOR LOSSES AND LAE
The following table provides a roll forward of the Company’s beginning and ending reserve for losses and LAE and is summarized for the periods indicated:
Nine Months Ended
September 30,
20252024
(Dollars in millions)
Gross reserves beginning of period$29,889 $24,604 
Less reinsurance recoverables on unpaid losses(2,915)(2,098)
Net reserves beginning of period26,975 22,506 
Incurred related to:
Current year7,665 7,132 
Prior years537 — 
Total incurred losses and LAE8,203 7,132 
Paid related to:
Current year885 1,711 
Prior years4,670 2,932 
Total paid losses and LAE5,554 4,643 
Foreign exchange/translation adjustment607 209 
Net reserves end of period30,231 25,204 
Plus reinsurance recoverables on unpaid losses3,511 2,276 
Gross reserves end of period$33,742 $27,480 
(Some amounts may not reconcile due to rounding.)
Current year incurred losses were $7.7 billion and $7.1 billion for the nine months ended September 30, 2025 and 2024, respectively. Gross and net reserves increased for the nine months ended September 30, 2025, reflecting an increase in underlying exposure due to strengthening of U.S. casualty reserves, year over year, amounting to approximately $476 million of current year attritional losses in 2025 compared to 2024, which includes $83 million of losses from the Washington D.C. aviation accident, as well as an increase of $58 million in 2025 current year catastrophe losses.
The net unfavorable development on prior year reserves of $537 million was primarily due to strengthening of U.S. casualty reserves and aviation losses associated with the Russia/Ukraine war of $98 million, partially offset by net favorable prior year development of $59 million, driven by the release of reserves from prior underwriting years for the property line of business. The reserve strengthening for prior year loss development was driven by elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024.
In the second quarter of 2025, the United Kingdom’s High Court concluded that the confiscation of certain aircraft was covered under the war provision within certain reinsurance contracts. As a result of the court’s decision, the Company increased its net ultimate loss reserve for contracts that were exposed to the war in the Ukraine by $98 million ($84 million net of reinstatement premiums).