LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

9 Months Ended

Sep. 30, 2025

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

The Company’s loss and loss adjustment expense (“LAE”) reserves were composed of the following:


	September 30, 2025		December 31, 2024
Case reserves	$	236,724	$	230,633
IBNR	701,584		630,336
Total	$	938,308	$	860,969

Reserve Roll-forward

The following provides a summary of changes in outstanding loss and LAE reserves for all lines of business:


Consolidated	Nine months ended September 30
	2025		2024
Gross balance at January 1	$	860,969	$	661,554
Less: Losses recoverable	(85,790)		(25,687)
Net balance at January 1	775,179		635,867
Incurred losses related to:
Current year	303,474		305,467
Prior years	8,082		(943)
Total incurred	311,556		304,524
Paid losses related to:
Current year	(35,136)		(27,382)
Prior years	(229,908)		(176,210)
Total paid	(265,043)		(203,592)
Foreign exchange and translation adjustment	33,833		8,405
Net balance at September 30	855,525		745,205
Add: Losses recoverable (see Note 8)	82,783		65,947
Gross balance at September 30	$	938,308	$	811,152

Estimates for Catastrophe Events

At September 30, 2025, the Company’s net reserves for losses and LAE include estimated amounts for catastrophe and weather-related events (the “CAT losses”). The magnitude and volume of losses arising from these events is inherently uncertain, and, consequently, actual losses for these events may ultimately differ, potentially materially, from current estimates.

CAT events in 2025

During the nine months ended September 30, 2025, the Company incurred CAT losses of $27.0 million relating to the California wildfires.

CAT events in 2024

During the nine months ended September 30, 2024, the Company incurred CAT losses of $29.9 million driven mainly by the Baltimore Bridge collapse, Hurricane Helene, and the U.S. tornadoes (including severe convective storms).

Prior Year Reserve Development

The Company’s net favorable (adverse) prior year development arises from changes to estimates for losses and LAE related to loss events that occurred in previous calendar years.

The following table presents net prior year reserve development by segment and consolidated for the respective periods.


	Favorable (Adverse)
	Open Market		Innovations		Total Segments		Corporate		Total Consolidated
Nine months ended September 30, 2025	$	(4,810)	$	(1,316)	$	(6,126)	$	(1,956)	$	(8,082)
Nine months ended September 30, 2024	$	3,782	$	1,548	$	5,330	$	(4,387)	$	943

Open Market Segment:

The net adverse reserve development for the nine months ended September 30, 2025 was composed of $46.4 million of reserve strengthening predominantly on the following lines of business:

•the casualty line (various underwriting years) due to current economic and social inflation trends;

•the financial line (2021, 2023 and 2024 underwriting years) due to worse than expected loss emergence for transactional liability business; and

•the multiline business (2023-2024 underwriting years) relating to commercial auto business.

This was partially offset by $41.6 million of favorable reserve development on property (mostly 2024 underwriting year) and specialty lines (mostly 2022-2024 underwriting years) due to better than expected loss emergence.

The net favorable reserve development for the nine months ended September 30, 2024 was composed of $8.3 million of favorable reserve development predominantly on financial line (various underwriting years), multiline business (mostly 2021-2022 underwriting years), and specialty line (mostly 2021-2022 underwriting years) due to better than expected loss emergence. This was partially offset by $4.5 million of reserve strengthening predominantly on the casualty line (various underwriting years) due to current economic and social inflation trends.

Innovations Segment:

The net adverse reserve development for the nine months ended September 30, 2025 was composed of $2.6 million of reserve strengthening predominantly on the financial line (2022-2023 underwriting years) due to a higher volume of claims than expected. This was partially offset by $1.3 million of favorable reserve development predominantly on the multiline business.

The net favorable reserve development for the nine months ended September 30, 2024 was composed of $2.2 million due to better than expected loss emergence on the health line (various underwriting years) and multiline business (predominantly 2023 underwriting years). This was partially offset by $0.6 million of reserve strengthening on the specialty business.

Corporate - Runoff Business:

Corporate represents the Innovations related property runoff business. The prior year adverse reserve development for the above periods relate predominantly to CAT losses driven by the U.S. tornados (2021-2023 underwriting years).