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What changed in W. R. Berkley Corporation's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of W. R. Berkley Corporation's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+365 added−384 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-23)

Top changes in W. R. Berkley Corporation's 2024 10-K

365 paragraphs added · 384 removed · 305 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

106 edited+24 added−25 removed141 unchanged
Biggest changeW / R / B Underwriting provides a broad range of insurance products to the Lloyd's marketplace, with a concentration in specialist classes of business including property, professional indemnity and financial lines. 12 The following table sets forth the percentage of gross premiums written by each Insurance business: Year Ended December 31, 2023 2022 2021 Acadia Insurance 5.3% 5.2% 5.5% Admiral Insurance 7.0 6.2 5.9 Berkley Accident and Health 5.3 5.1 5.0 Berkley Agribusiness 0.8 0.8 0.8 Berkley Alliance Managers 2.3 2.7 2.8 Berkley Aspire 1.2 0.9 0.7 Berkley Asset Protection 0.9 1.0 0.8 Berkley Canada 1.0 1.2 1.2 Berkley Construction Solutions 0.6 0.4 — Berkley Custom Insurance 2.9 3.1 3.2 Berkley Cyber Risk Solutions 0.8 0.9 0.8 Berkley E&S Solutions 0.1 — — Berkley Enterprise Risk Solutions 0.1 — — Berkley Entertainment 1.7 1.8 1.8 Berkley Environmental 6.6 5.6 5.2 Berkley Financial Specialists 0.6 0.6 0.6 Berkley Fire & Marine 0.9 0.7 0.8 Berkley Healthcare 1.5 1.8 1.8 Berkley Human Services 1.3 1.1 1.0 Berkley Industrial Comp 0.7 0.7 0.8 Berkley Insurance Asia 0.8 0.8 0.8 Berkley Insurance Australia 1.6 1.7 1.7 Berkley Latinoamérica 3.2 2.9 2.7 Berkley Life Sciences 0.5 0.5 0.5 Berkley Luxury Group 0.7 0.8 0.9 Berkley Management Protection 0.2 0.1 — Berkley Mid-Atlantic Group 0.9 1.0 1.3 Berkley Net Underwriters 1.9 2.2 2.1 Berkley North Pacific 0.7 0.7 0.7 Berkley Offshore Underwriting Managers 1.5 1.4 1.5 Berkley Oil & Gas 3.0 3.5 3.0 Berkley One 2.6 1.8 1.2 Berkley Product Protection 0.3 0.3 0.4 Berkley Professional Liability 3.8 5.8 7.5 Berkley Program Specialists 0.9 1.7 2.0 Berkley Public Entity 0.7 0.6 0.6 Berkley Risk 0.3 0.3 0.2 Berkley Select 1.8 1.8 2.0 Berkley Small Business Solutions 0.2 — — Berkley Southeast 2.3 2.2 2.3 Berkley Specialty Excess 0.2 — — Berkley Surety 1.1 1.1 1.1 Berkley Technology Underwriters 0.6 0.6 0.6 Carolina Casualty 2.1 2.1 1.7 Continental Western Group 2.6 2.4 2.5 Gemini Transportation 3.0 3.1 3.0 Intrepid Direct 1.5 1.2 1.1 Key Risk 2.1 2.2 2.5 Nautilus Insurance Group 4.7 4.7 4.5 Preferred Employers Insurance 1.0 1.2 1.5 Union Standard 1.3 1.5 1.7 Vela Insurance Services 2.6 2.5 2.6 Verus Specialty Insurance 1.0 0.8 0.8 W R B Europe 1.1 1.0 1.1 W/R/B Underwriting 3.9 3.6 4.0 Other 1.7 2.1 2.1 1.2 Total 100.0% 100.0% 100.0% 13 The following table sets forth percentages of gross premiums written, by line, by our Insurance operations: Year Ended December 31, 2023 2022 2021 Other liability 38.4% 37.0% 35.6% Short-tail lines (1) 25.1 23.2 22.2 Professional liability 13.0 15.5 17.3 Auto 12.7 12.6 12.5 Workers' compensation 10.8 11.7 12.4 Total 100.0% 100.0% 100.0% ___________________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
Biggest changeW / R / B Underwriting provides a broad range of insurance products to the Lloyd's marketplace, with a concentration in specialist classes of business including property, professional indemnity and financial lines. 10 The following table sets forth the percentage of gross premiums written by each Insurance business: Year Ended December 31, 2024 2023 2022 Acadia Insurance 5.4% 5.4% 5.3% Admiral Insurance 7.3 7.0 6.3 Berkley Accident and Health 5.9 5.4 5.2 Berkley Agribusiness 0.6 0.8 0.8 Berkley Alliance Managers 2.3 2.4 2.8 Berkley Aspire 1.3 1.2 1.0 Berkley Asset Protection 0.9 0.9 1.0 Berkley Canada 1.0 1.0 1.2 Berkley Construction Solutions 0.7 0.6 0.4 Berkley Custom Insurance 2.9 2.9 3.2 Berkley Cyber Risk Solutions 0.7 0.8 0.9 Berkley Enterprise Risk Solutions 0.2 0.1 — Berkley Entertainment 1.6 1.7 1.9 Berkley Environmental 7.3 6.7 5.7 Berkley Financial Specialists 0.6 0.6 0.6 Berkley Fire & Marine 0.8 0.9 0.8 Berkley Healthcare 1.2 1.5 1.8 Berkley Human Services 1.4 1.3 1.1 Berkley Industrial Comp 0.8 0.7 0.7 Berkley Insurance Asia 0.7 0.8 0.8 Berkley Insurance Australia 1.4 1.6 1.7 Berkley Latinoamérica 3.3 3.2 3.0 Berkley Life Sciences 0.5 0.5 0.5 Berkley Luxury Group 0.7 0.7 0.8 Berkley Management Protection 0.3 0.2 0.1 Berkley Mid-Atlantic Group 0.7 0.9 1.0 Berkley Net Underwriters 1.9 2.0 2.3 Berkley North Pacific 0.8 0.7 0.7 Berkley Offshore Underwriting Managers 1.4 1.5 1.5 Berkley Oil & Gas 1.8 3.0 3.5 Berkley One 3.7 2.6 1.8 Berkley Product Protection 0.4 0.3 0.3 Berkley Professional Liability 2.7 3.8 5.9 Berkley Public Entity 0.6 0.7 0.7 Berkley Risk 0.3 0.3 0.3 Berkley Select 1.8 1.9 1.8 Berkley Small Business Solutions 0.3 0.2 — Berkley Southeast 2.2 2.3 2.2 Berkley Southwest 1.1 1.3 1.5 Berkley Specialty Excess 0.6 0.2 — Berkley Surety 1.1 1.1 1.1 Berkley Technology Underwriters 0.6 0.6 0.6 Carolina Casualty 2.0 2.2 2.1 Continental Western Group 2.8 2.6 2.4 Gemini Transportation 2.8 3.0 3.1 Intrepid Direct 1.4 1.5 1.2 Key Risk 1.9 2.1 2.2 Nautilus Insurance Group 5.2 4.8 4.8 Preferred Employers Insurance 0.9 1.0 1.3 Vela Insurance Services 2.5 2.7 2.6 Verus Specialty Insurance 1.1 1.0 0.8 W R B Europe 1.2 1.1 1.1 W/R/B Underwriting 4.1 3.9 3.7 Other 2.3 1.8 1.9 Total 100.0% 100.0% 100.0% 11 The following table sets forth percentages of gross premiums written, by line, by our Insurance operations: Year Ended December 31, 2024 2023 2022 Other liability 39.0% 38.7% 37.5% Short-tail lines (1) 26.1 24.7 22.8 Auto 12.9 12.7 12.0 Professional liability 12.0 13.1 15.8 Workers' compensation 10.0 10.8 11.9 Total 100.0% 100.0% 100.0% ___________________ (1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
The NYDFS’s 2020 circular letter, which applies to our insurance subsidiaries licensed in New York, states that regulated insurers are expected to integrate 22 financial risks related to climate change into their governance frameworks, risk management processes, business strategies and scenario analysis, and develop their approach to climate-related financial disclosure.
The NYDFS’s 2020 circular letter, which applies to our insurance subsidiaries licensed in New York, states that regulated insurers are expected to integrate financial risks related to climate change into their governance frameworks, risk management processes, business strategies and scenario analysis, and develop their approach to climate-related financial disclosure.
Its product lines include general liability, excess liability and some property and inland marine coverage. It serves a limited distribution channel, including select Berkley business agents. Berkley Asset Protection provides specialized insurance coverages for fine arts and jewelry exposures to commercial and individual clients.
Its product lines include general liability, excess liability and some property and inland marine coverage. It serves a limited distribution channel, including select agents. Berkley Asset Protection provides specialized insurance coverages for fine arts and jewelry exposures to commercial and individual clients.
Our leadership programs cultivate the talent of our high-potential, strong-performing employees as we strive to deepen, enhance and diversify the Company’s leadership team. We strive to align employee incentives with the risk and performance frameworks of the Company.
Our leadership programs cultivate the talent of our high-potential, strong-performing employees as we strive to deepen, enhance and diversify the Company’s leadership team. 24 We strive to align employee incentives with the risk and performance frameworks of the Company.
As a third party administrator, it manages workers’ compensation, liability and property claims nationwide. 10 Berkley Select specializes in underwriting professional liability insurance for law firms and accounting firms, as well as other professional firms and their practices.
As a third party administrator, it manages workers’ compensation, liability and property claims nationwide. Berkley Select specializes in underwriting professional liability insurance for law firms and accounting firms, as well as other professional firms and their practices.
For example, an insurer should designate a board member or board committee, as well as a senior management function, to oversee the management of financial risks associated with climate change.
For example, an insurer should designate a board member or board committee, as well as a senior management function, to oversee the management of financial risks 20 associated with climate change.
It has a diversified product and service portfolio serving a range of clients from small employers, health care organizations, and membership groups to Fortune 500 companies. 8 Berkley Agribusiness offers insurance for larger commercial risks across the United States involved in the supply, storage, handling, processing and distribution of commodities related to the agriculture and food industries.
It has a diversified product and service portfolio serving a range of clients from small employers, health care organizations, and membership groups to Fortune 500 companies. 7 Berkley Agribusiness offers insurance for larger commercial risks across the United States involved in the supply, storage, handling, processing and distribution of commodities related to the agriculture and food industries.
Berkley Surety provides a full spectrum of surety bonds for construction, environmental and commercial surety accounts in the U.S. and Canada, through an independent agency and broker platform across 19 field locations. Berkley Technology Underwriters provides technology error & omission (TE&O) and first party cyber coverage along with traditional package, umbrella and worker's compensation products.
Berkley Surety provides a full spectrum of surety bonds for construction, environmental and commercial surety accounts in the U.S. and Canada, through an independent agency and broker platform across seven field locations. Berkley Technology Underwriters provides technology error & omission (TE&O) and first party cyber coverage along with traditional package, umbrella and worker's compensation products.
Cybersecurity Regulations. New York’s cybersecurity regulation applies to financial services institutions authorized by the New York State Department of Financial Services (the “NYDFS”), including our insurance subsidiaries licensed in New York.
New York’s cybersecurity regulation applies to financial services institutions authorized by the New York State Department of Financial Services (the “NYDFS”), including our insurance subsidiaries licensed in New York.
While there is no one “Berkley” way, each of our businesses has its own culture that embodies a shared set of values that define our enterprise. Our structure, with 60 distinct businesses, facilitates the prompt identification of and appropriate action with respect to addressing individual business or cultural issues arising within a business, without affecting the larger enterprise.
While there is no one “Berkley” way, each of our businesses has its own culture that embodies a shared set of values that define our enterprise. Our structure, with 58 distinct businesses, facilitates the prompt identification of and appropriate action with respect to addressing individual business or cultural issues arising within a business, without affecting the larger enterprise.
Our twenty-five insurance company subsidiaries rated by Fitch Ratings ("Fitch") have insurer financial strength ratings of AA- (the fourth highest rating out of twenty-seven possible ratings). 7 The following sections describe our reporting segments and their businesses in greater detail. These businesses underwrite on behalf of one or more affiliated insurance companies within the group.
Our twenty-five insurance company subsidiaries rated by Fitch Ratings ("Fitch") have insurer financial strength ratings of AA- (the fourth highest rating out of twenty-seven possible ratings). 6 The following sections describe our reporting segments and their businesses in greater detail. These businesses underwrite on behalf of one or more affiliated insurance companies within the group.
For example, in 2021 Colorado enacted a law that prohibits insurers from using external consumer data and information sources (“ECDIS”), as well as algorithms or predictive models that use ECDIS, in a way that unfairly discriminates based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity or gender expression.
For example, Colorado has enacted a law that prohibits insurers from using external consumer data and information sources (“ECDIS”), as well as algorithms or predictive models that use ECDIS, in a way that unfairly discriminates based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity or gender expression.
TRIPRA is applicable to almost all commercial lines of property and casualty insurance but excludes auto, burglary and theft, surety, professional liability and farm owners' multi-peril insurance. Insurers with direct commercial property and casualty insurance exposure in the United States are required to participate in the program and make available coverage for certified acts of terrorism.
TRIPRA is applicable to almost all commercial lines of property and casualty insurance but excludes auto, burglary and theft, surety, workers' compensation, professional liability and farm owners' multi-peril insurance. Insurers with direct commercial property and casualty insurance exposure in the United States are required to participate in the program and make available coverage for certified acts of terrorism.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing approximately 3% of total discounted reserves at December 31, 2023), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates permitted by the Department of Insurance of the State of Delaware.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing approximately 3% of total discounted reserves at December 31, 2024), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates permitted by the Department of Insurance of the State of Delaware.
Of this number, our subsidiaries employed 8,194 individuals and the remaining individuals were employed at the parent company. We believe that our people are our greatest asset and that our corporate culture is the most important intangible driver of long-term value creation for our Company and the highest priority for pursuing long-term risk-adjusted returns and growth in stockholder value.
Of this number, our subsidiaries employed 8,474 individuals and the remaining individuals were employed at the parent company. We believe that our people are our greatest asset and that our corporate culture is the most important intangible driver of long-term value creation for our Company and the highest priority for pursuing long-term risk-adjusted returns and growth in stockholder value.
As a result of increased innovation and use of technology in the insurance sector, the NAIC and insurance regulators have been focusing on the use of “big data” techniques, such as artificial intelligence, machine learning and automated decision-making. In December 2023, the NAIC adopted the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (the “AI Bulletin”).
As a result of increased innovation and use of technology in the insurance sector, the NAIC and insurance regulators have been focusing on the use of “big data” technologies, such as artificial intelligence, machine learning and automated decision-making. In December 2023, the NAIC adopted the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers (the “AI Bulletin”).
Although the loss reserves included in the Company’s financial statements represent management’s best estimates, setting reserves is inherently uncertain and the Company cannot provide assurance that its current reserves will prove adequate in light of subsequent events. 17 The Company discounts its liabilities for certain workers’ compensation reserves.
Although the loss reserves included in the Company’s financial statements represent management’s best estimates, setting reserves is inherently uncertain and the Company cannot provide assurance that its current reserves will prove adequate in light of subsequent events. 15 The Company discounts its liabilities for certain workers’ compensation reserves.
Regulation Our U.S. insurance subsidiaries are principally regulated by their domiciliary state insurance departments and are subject to varying degrees of regulation and supervision in the other U.S. jurisdictions in which they do business. As of January 1, 2024, there are six domiciliary states related to our U.S. insurance subsidiaries. Overview .
Regulation Our U.S. insurance subsidiaries are principally regulated by their domiciliary state insurance departments and are subject to varying degrees of regulation and supervision in the other U.S. jurisdictions in which they do business. As of January 1, 2025, there are six domiciliary states related to our U.S. insurance subsidiaries. Overview .
The RBC of each of our domestic insurance subsidiaries was above the calculated RBC target level as of December 31, 2023. Insurance Regulatory Information System. The NAIC also has developed a set of 13 financial ratios for property and casualty insurers referred to as the Insurance Regulatory Information System (“IRIS”).
The RBC of each of our domestic insurance subsidiaries was above the calculated RBC target level as of December 31, 2024. Insurance Regulatory Information System. The NAIC also has developed a set of 13 financial ratios for property and casualty insurers referred to as the Insurance Regulatory Information System (“IRIS”).
Our property casualty subsidiaries, other than our excess and surplus lines and reinsurance subsidiaries, must generally file all rates with the insurance department of each state in which they operate. Our excess and surplus lines and reinsurance subsidiaries generally operate free of rate and form regulation. 19 Holding Company Statutes .
Our property casualty subsidiaries, other than our excess and surplus lines and reinsurance subsidiaries, must generally file all rates with the insurance department of each state in which they operate. Our excess and surplus lines and reinsurance subsidiaries generally operate free of rate and form regulation. 17 Holding Company Statutes .
At December 31, 2023, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.5%. Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2023) are excess workers’ compensation reserves.
At December 31, 2024, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.6%. Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2024) are excess workers’ compensation reserves.
A substantial portion of Nautilus' business is written through its close, long-standing network of general agents, who are chosen on a highly selective basis. Preferred Employers Insurance focuses exclusively on workers' compensation products and services for businesses based in California. It serves thousands of customers covering a broad spectrum of industries throughout the state.
A substantial portion of Nautilus' business is written through its close, long-standing network of general agents, who are chosen on a highly selective basis. Preferred Employers Insurance focuses exclusively on workers' compensation products and services for businesses based in California. It serves a broad spectrum of industries throughout the state.
Aggregate Bond Index 3.3 % 2.7 % 2.3 % S&P 500 ® Index 2.0 1.3 1.8 The percentages of the fixed maturity portfolio categorized by contractual maturity, based on fair value, on the dates indicated, are set forth below.
Aggregate Bond Index 3.4 % 3.3 % 2.7 % S&P 500 ® Index 1.7 2.0 1.3 The percentages of the fixed maturity portfolio categorized by contractual maturity, based on fair value, on the dates indicated, are set forth below.
This strategy of decentralized operations allows each of our businesses to identify and respond quickly and effectively to changing market conditions and specific customer needs, while capitalizing on the benefits of centralized capital, investment and reinsurance management, and corporate actuarial, financial, enterprise risk management and legal staff support.
This strategy of decentralized operations allows each of our businesses to identify and respond quickly and effectively to changing market conditions and specific customer needs, while capitalizing on the benefits of centralized capital, investment and reinsurance management, and corporate actuarial, financial, enterprise risk management and compliance support.
Intrepid Direct provides business insurance coverages through a direct distribution model focused on the franchise market, with specialties including the restaurant, garage and fitness industries.
Intrepid Direct provides commercial insurance coverages through a direct distribution model focused on the franchise market, with specialties including the restaurant, garage and fitness industries.
We cannot predict whether states will adopt the AI Bulletin, or what, if any, changes to laws or regulations may be enacted with regard to “big data” or artificial intelligence technologies. Risk-Based Capital Requirements .
We cannot predict whether states will adopt the AI Bulletin or a similar regulation, or what, if any, changes to laws or regulations may be enacted with regard to “big data” or artificial intelligence technologies. Risk-Based Capital Requirements .
Berkley Latinoamérica provides property, casualty, auto, surety, group life and workers' compensation products and services in its operating territories of Argentina, Brazil, the Caribbean, Colombia, Mexico and Uruguay. Berkley Life Sciences offers a comprehensive spectrum of property casualty products to the life sciences industry on a global basis, including both primary and excess product liability coverages.
Berkley Latinoamérica provides property, casualty, auto, surety, group life and workers' compensation products and services in Argentina, Brazil, the Caribbean, Colombia, Mexico and Uruguay. 8 Berkley Life Sciences offers a comprehensive spectrum of property casualty products to the life sciences industry on a global basis, including both primary and excess product liability coverages.
(2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $13 million in 2023, increased by $16 million in 2022, and decreased by $19 million in 2021.
(2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years increased by $13 million in 2024, decreased by $13 million in 2023, and increased by $16 million in 2022.
(2) Represents the change in unrealized investment gains (losses) for available for sale securities recognized in stockholders' equity. For comparison, the following are the coupon returns for the Barclays U.S. Aggregate Bond Index and the dividend returns for the S&P 500 ® Index: Year Ended December 31, 2023 2022 2021 Barclays U.S.
(2) Represents the pre-tax change in unrealized investment gains (losses) for available for sale securities recognized in stockholders' equity. For comparison, the following are the coupon returns for the Barclays U.S. Aggregate Bond Index and the dividend returns for the S&P 500 ® Index: Year Ended December 31, 2024 2023 2022 Barclays U.S.
However, the Covered Agreements prohibit any EU supervisor or the PRA (as applicable) from exercising group-wide supervision at any level above the highest company organized in the country of that supervisor. We must also comply with the EU General Data Protection Regulation (EU) 2016/879) (“GDPR”), which took effect in May 2018, including EEA member state legislation implementing the GDPR.
However, the Covered Agreements prohibit any EU supervisor or the PRA (as applicable) from exercising group- wide supervision at any level above the highest company organized in the country of that supervisor. We must also comply with the EU General Data Protection Regulation (EU) 2016/879) (“GDPR”), including EEA member state legislation implementing the GDPR.
Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay certain obligations. 16 Year Ended December 31, 2023 2022 2021 1 year or less 9.2% 8.7% 9.5% Over 1 year through 5 years 46.2 47.2 46.1 Over 5 years through 10 years 21.2 23.4 25.2 Over 10 years 12.2 11.2 12.7 Mortgage-backed securities 11.2 9.5 6.5 Total 100.0% 100.0% 100.0% At each of December 31, 2023 and 2022, the fixed maturity portfolio, including cash and cash equivalents, had an effective duration of 2.4 years.
Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay certain obligations. 14 Year Ended December 31, 2024 2023 2022 1 year or less 7.7% 9.2% 8.7% Over 1 year through 5 years 40.5 46.2 47.2 Over 5 years through 10 years 17.4 21.2 23.4 Over 10 years 17.6 12.2 11.2 Mortgage-backed securities 16.8 11.2 9.5 Total 100.0% 100.0% 100.0% At each of December 31, 2024, 2023 and 2022, the fixed maturity portfolio, including cash and cash equivalents, had an effective duration of 2.6 years, 2.4 years and 2.4 years, respectively.
Further, an expanded supply of reinsurance capital may lower costs for insurers that rely on reinsurance and, as a consequence, those insurers may be able to price their products more competitively. Human Capital Resources As of January 15, 2024, we employed 8,329 individuals.
Further, an expanded supply of reinsurance capital may lower costs for insurers that rely on reinsurance and, as a consequence, those insurers may be able to price their products more competitively. Human Capital Resources As of January 15, 2025, we employed 8,606 individuals.
The insurer's deductible is calculated as 20% of earned premium for the prior year for covered lines of commercial property and casualty insurance. Based on our 2023 earned premiums, our aggregate deductible under TRIPRA during 2024 will be approximately $1,464 million.
The insurer's deductible is calculated as 20% of earned premium for the prior year for covered lines of commercial property and casualty insurance. Based on our 2024 earned premiums, our aggregate deductible under TRIPRA during 2025 will be approximately $1,663 million.
On November 1, 2023, the NYDFS adopted amendments to New York’s cybersecurity regulation, which require additional reporting, governance and oversight measures, and enhanced cybersecurity safeguards to be implemented. The amendments take effect in phases that began in 2023 and continue through 2025.
The NYDFS has adopted amendments to New York’s cybersecurity regulation, which require additional reporting, governance and oversight measures, and enhanced cybersecurity safeguards to be implemented. The amendments take effect in phases that began in 2023 and continue through 2025.
The Company’s net reserves for losses and loss expenses relating to environmental and asbestos claims on policies written before adoption of the absolute exclusion was $17 million and $20 million at December 31, 2023 and 2022, respectively.
The Company’s net reserves for losses and loss expenses relating to environmental and asbestos claims on policies written before adoption of the absolute exclusion was $16 million and $17 million at December 31, 2024 and 2023, respectively.
Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty insurance business: • Insurance - Our Insurance businesses underwrite predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom. • Reinsurance & Monoline Excess - Our Reinsurance businesses provide facultative and treaty reinsurance in the United States, as well as in the Asia Pacific region, Australia, Continental Europe, South Africa and the United Kingdom.
Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two segments of the property casualty insurance business: • Insurance - Our Insurance businesses underwrite predominantly commercial insurance business, including excess and surplus lines, admitted lines and specialty personal lines throughout the United States, as well as insurance business in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom. • Reinsurance & Monoline Excess - Our Reinsurance businesses provide facultative and treaty reinsurance in the United States, the Asia Pacific region, Australia, Continental Europe, South Africa and the United Kingdom, as well as operations that solely retain risk on an excess basis and certain program management business.
The AI Bulletin may be adopted and issued by state regulators to licensed insurers. In addition to affirming that the use of artificial intelligence must comply with existing state law, the AI Bulletin sets forth regulators’ expectations on how insurers will develop, acquire and use artificial intelligence technologies.
The AI Bulletin may be adopted and issued by state regulators to licensed insurers. In addition to affirming that the use of artificial intelligence must comply with existing state law, the AI Bulletin sets forth regulators’ expectations on how insurers will develop, acquire and use artificial intelligence technologies including around the use of third-party data and models.
Furthermore, our businesses are overseen by senior corporate business managers and senior corporate functional managers, including actuarial, underwriting, compliance and finance, providing a governance oversight structure that makes it easier to identify such issues.
Furthermore, our businesses are overseen by senior corporate business managers and senior corporate functional managers, including actuarial, claims, compliance, enterprise risk management, finance, insurance risk management and underwriting, providing a governance oversight structure that makes it easier to identify such issues.
The Cybersecurity Model Law imposes significant regulatory burdens intended to protect the confidentiality, integrity and availability of information systems. As of December 31, 2023, the Cybersecurity Model Law, or a form thereof, had been adopted by several states, including three of our U.S. insurance subsidiaries’ domiciliary states.
The Cybersecurity Model Law imposes significant regulatory burdens intended to protect the confidentiality, integrity and availability of information systems. The Cybersecurity Model Law, or a form thereof, has been adopted by several states, including three of our U.S. insurance subsidiaries’ domiciliary states.
Reinsurance & Monoline Excess We provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance. Our monoline excess operations solely retain risk on an excess basis.
Reinsurance & Monoline Excess We provide other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on either a portfolio basis, through treaty reinsurance, or on an individual basis, through facultative reinsurance as well as certain program management businesses. Our monoline excess operations solely retain risk on an excess basis.
In 2022, Delaware, our lead state regulator, adopted the NAIC amendments to the model holding company act and regulation that require the ultimate controlling person of an insurer subject to holding company registration to submit the group capital calculation filing annually with its lead state regulator.
Delaware has adopted the NAIC amendments to the model holding company act and regulation that require the ultimate controlling person of an insurer subject to holding company registration to submit the group capital calculation filing annually with its lead state regulator. Cybersecurity Regulations.
We have received notice from Delaware, our lead state insurance regulator, that we may be considered an IAIG. In the event that we are deemed to be an IAIG, we would be subject to international oversight coordinated by the Delaware Department of Insurance.
We have received notice from Delaware, our lead state insurance regulator, that we are considered an IAIG. As an IAIG, we may be subject to international oversight coordinated by the Delaware Department of Insurance .
In each of our operating territories, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our businesses are managed by teams of professionals with expertise in local markets and knowledge of regional environments.
In each geographic region in which we operate, we have built decentralized structures that allow products and services to be tailored to each regional customer base. Our businesses are managed by teams of professionals with expertise in local markets and knowledge of regional environments.
The amount of workers’ compensation reserves that were discounted was $1,352 million and $1,464 million at December 31, 2023 and 2022, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $390 million and $416 million at December 31, 2023 and 2022, respectively.
The amount of workers’ compensation reserves that were discounted was $1,358 million and $1,352 million at December 31, 2024 and 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $405 million and $390 million at December 31, 2024 and 2023, respectively.
It focuses on highly specialized risk exposures within specific industry verticals such as the environmental and energy industries. Its predominate focus is on providing excess insurance; however, in some cases it provides highly specialized environmental primary products tailored to the individual risk. Products are distributed through a minimal number of insurance brokers and agents that specialize in these industry verticals.
Its predominate focus is on providing excess insurance; however, in some cases it provides highly specialized environmental primary products tailored to the individual risk. Products are distributed through a minimal number of insurance brokers and agents that specialize in these industry verticals.
Monoline Excess businesses retain risk solely on an excess basis. Our two reporting segments are each composed of individual businesses that serve a market defined by geography, products, services or industry served. Each of our businesses is positioned close to its customer base and participates in a niche market requiring specialized knowledge.
Our two reporting segments are each composed of individual businesses that serve a market defined by geography, products, services or industry served. Each of our businesses is positioned close to its customer base and participates in a niche market requiring specialized knowledge.
A number in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit: Year Ended December 31, 2023 2022 2021 Insurance Loss ratio 62.3 % 61.3 % 61.1 % Expense ratio 28.4 27.9 28.3 Combined ratio 90.7 % 89.2 % 89.4 % Reinsurance & Monoline Excess Loss ratio 53.8 % 61.3 % 61.0 % Expense ratio 28.3 28.4 29.7 Combined ratio 82.1 % 89.7 % 90.7 % Total Loss ratio 61.3 % 61.3 % 61.1 % Expense ratio 28.4 28.0 28.5 Combined ratio 89.7 % 89.3 % 89.6 % Investments Investment results, before income taxes, were as follows: Year Ended December 31, (In thousands) 2023 2022 2021 Average investments, at cost (1) $ 26,444,111 $ 24,438,112 $ 22,234,975 Net investment income (1) $ 1,052,835 $ 779,185 $ 671,618 Percent earned on average investments (1) 3.9 % 3.2 % 3.0 % Net investment gains $ 47,042 $ 202,397 $ 90,632 Change in unrealized investment gains (losses) (2) $ 392,903 $ (1,248,128) $ (254,939) _______________________________________ (1) Includes investments, cash and cash equivalents, trading accounts receivable (payable) from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
A number in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit: Year Ended December 31, 2024 2023 2022 Insurance Loss ratio 62.8 % 62.3 % 61.4 % Expense ratio 28.4 28.3 27.7 Combined ratio 91.2 % 90.6 % 89.1 % Reinsurance & Monoline Excess Loss ratio 54.7 % 54.3 % 61.0 % Expense ratio 29.4 29.4 29.2 Combined ratio 84.1 % 83.7 % 90.2 % Total Loss ratio 61.8 % 61.3 % 61.3 % Expense ratio 28.5 28.4 28.0 Combined ratio 90.3 % 89.7 % 89.3 % Investments Investment results, before income taxes, were as follows: Year Ended December 31, (In thousands) 2024 2023 2022 Average investments, at cost (1) $ 28,942,819 $ 26,444,111 $ 24,438,112 Net investment income (1) $ 1,333,161 $ 1,052,835 $ 779,185 Percent earned on average investments (1) 4.6 % 3.9 % 3.2 % Net investment gains $ 117,708 $ 47,042 $ 202,397 Change in unrealized investment gains (losses) (2) $ 84,474 $ 392,903 $ (1,248,128) _______________________________________ (1) Includes investments, cash and cash equivalents, trading accounts receivable (payable) from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
The FIO also has authority to represent the United States in international insurance matters and is authorized to monitor the U.S. insurance industry and identify potential regulatory gaps that could contribute to systemic risk.
The FIO also has authority to represent the United States in international insurance matters and is authorized to monitor the U.S. insurance industry and identify potential regulatory gaps that could contribute to systemic risk. The Dodd-Frank Act authorizes the Secretary of the Treasury and U.S.
The PRA/FCA’s Senior Managers and Certification Regime and analogous regulation in Liechtenstein further provide regulatory frameworks for standards of fitness and propriety, conduct and accountability for individuals in positions of responsibility at insurers.
The PRA/FCA’s Senior Managers and Certification Regime and analogous regulation in Liechtenstein further provide regulatory frameworks for standards of fitness and propriety, conduct and accountability for individuals in positions of responsibility at insurers. In addition, certain employees are individually registered at Lloyd’s.
Berkley Re UK writes international property casualty treaty and property facultative accounts. Its territorial scope includes reinsured clients domiciled in the United Kingdom, Europe, Africa, the Middle East and the Caribbean. Lloyd's Syndicate 2791 Participation represents the Company's minority participation in a Lloyd's syndicate that writes a broad range of mainly short-tail classes of business.
Its territorial scope includes reinsured clients domiciled in the United Kingdom, Europe, Africa, the Middle East and the Caribbean. Lloyd's Syndicate 2791 Participation represents the Company's minority participation in a Lloyd's syndicate that writes a broad range of mainly short-tail classes of business.
In addition, through our non-U.S. insurance businesses, we write business in more than 60 countries worldwide, with branches or offices in 43 cities outside the United States, in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom.
In addition, through our non-U.S. insurance businesses, we have the capability to write business in 87 countries worldwide, with branches or offices in 40 cities outside the United States, in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America and the United Kingdom.
Loss ratio is losses and loss expenses incurred expressed as a percentage of net premiums earned. Expense ratio is underwriting expenses expressed as a percentage of net premiums earned. Underwriting expenses do not include expenses related to insurance services or unallocated corporate expenses. Combined ratio is the sum of the loss ratio and the expense ratio.
Loss ratio is losses and loss expenses incurred expressed as a percentage of net premiums earned. Expense ratio is policy acquisition and insurance operating expenses expressed as a percentage of net premiums earned. Policy acquisition and insurance operating expenses do not include expenses related to insurance services or unallocated corporate expenses.
Of our 60 businesses, 53 have been organized and developed internally and seven have been added through acquisition.
Of our 58 businesses, 51 have been organized and developed internally and seven have been added through acquisition.
We must also annually submit to the lead state regulator for our group an “enterprise risk management report” which identifies the activities and circumstances of any affiliated company that might have a material adverse effect on the financial condition of our group or our U.S. licensed insurers.
We are required to submit to the Delaware Department of Insurance, the lead state regulator for our group, an annual “enterprise risk management report,” which identifies the activities and circumstances of any affiliated company that might have a material adverse effect on the financial condition of our group or our U.S. licensed insurers.
It primarily serves the construction, manufacturing, garage service and professional sectors through a selective wholesale broker network. W R B Europe is comprised of specialist businesses offering a focused range of insurance products to markets in Continental Europe.
Verus Specialty Insurance offers tailored casualty, professional liability, and garage coverages, specializing in the excess and surplus lines market. It primarily serves the construction, manufacturing, garage service and professional sectors through a selective wholesale broker network. W R B Europe is comprised of specialist businesses offering a focused range of insurance products to markets in Continental Europe.
Following the U.K.’s withdrawal from the EU, or Brexit, our Lloyd’s managing agency (and the U.K. branch of our Liechtenstein subsidiary) are now subject to a separate U.K. prudential regime, which is broadly identical to Solvency II but will diverge from Solvency II in the future.
Following the U.K.’s withdrawal from the EU, or Brexit, our Lloyd’s managing agency (and the U.K. branch of our Liechtenstein subsidiary) are now subject to a separate U.K. prudential regime, which derives from Solvency II but has recently begun to diverge from it.
Its facultative reinsurance products include automatic, semi-automatic and individual risk assumed reinsurance. It also provides its customers with turnkey products such as cyber, employment practices liability insurance ("EPLI"), liquor liability insurance and violent events coverage to help enhance their clients' product offerings, along with underwriting, claims, and actuarial consultation.
It also provides its customers with turnkey products such as cyber, employment practices liability insurance, liquor liability insurance and violent events coverage to help enhance its clients' product offerings, along with underwriting, claims, and actuarial consultation services.
TRIPRA provides a federal backstop to all U.S. based property and casualty insurers for insurance related losses resulting from any act of terrorism on U.S. soil or against certain U.S. air carriers, vessels or foreign missions.
Pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2019 (“TRIPRA”), the program was extended until December 31, 2027. TRIPRA provides a federal backstop to all U.S. based property and casualty insurers for insurance related losses resulting from any act of terrorism on U.S. soil or against certain U.S. air carriers, vessels or foreign missions.
A reconciliation between the reserves as of December 31, 2023 as reported in the accompanying consolidated GAAP financial statements and those reported on the basis of statutory accounting principles (“SAP”) in the Company’s U.S. regulatory filings is as follows: (In thousands) Net reserves reported in U.S. regulatory filings on a SAP basis $ 14,954,598 Reserves for non-U.S. companies 780,762 Loss reserve discounting (1) (80,832) Ceded reserves 3,077,832 Allowance for expected credit losses on due from reinsurers 7,292 Gross reserves reported in the consolidated GAAP financial statements $ 18,739,652 _________________________ (1) For statutory purposes, the Company discounts its workers’ compensation reinsurance reserves at 2.5% as prescribed or permitted by the Department of Insurance of the State of Delaware.
A reconciliation between the reserves as of December 31, 2024 as reported in the accompanying consolidated GAAP financial statements and those reported on the basis of statutory accounting principles (“SAP”) in the Company’s U.S. regulatory filings is as follows: (In thousands) Net reserves reported in U.S. regulatory filings on a SAP basis $ 16,328,835 Reserves for non-U.S. companies 922,868 Loss reserve discounting (1) (92,921) Ceded reserves 3,201,389 Allowance for expected credit losses on due from reinsurers 7,859 Gross reserves reported in the consolidated GAAP financial statements $ 20,368,030 _________________________ (1) For statutory purposes, the Company discounts its workers’ compensation reinsurance reserves at 2.5% as prescribed or permitted by the Department of Insurance of the State of Delaware.
In addition, certain employees are individually registered at Lloyd’s. 24 Our insurance business throughout the EU and EEA is subject to “Solvency II,” an insurance regulatory regime governing, among other things, capital adequacy and risk management.
Our insurance business throughout the EU and EEA is subject to “Solvency II,” an insurance regulatory regime governing, among other things, capital adequacy and risk management.
Berkley Cyber Risk Solutions focuses on insurance and risk management products that respond to the changing cyber security vulnerabilities of organizations around the world. It offers specialty commercial cyber insurance coverages on a worldwide basis to clients of all sizes.
Berkley Cyber Risk Solutions focuses on insurance and risk management products that respond to the changing cyber security vulnerabilities of organizations around the world. It offers specialty commercial cyber insurance coverages on a worldwide basis to clients of all sizes. Berkley Enterprise Risk Solutions provides custom workers' compensation programs to large employers operating in a broad range of industries.
The combined ratio represents a measure of underwriting profitability, excluding investment income.
Combined ratio is the sum of the loss ratio and the expense ratio. The combined ratio represents a measure of underwriting profitability, excluding investment income.
A drafting note in the Cybersecurity Model Law states that a licensee’s compliance with New York's cybersecurity regulation is intended to constitute compliance with the Cybersecurity Model Law, but compliance remains a state-by-state issue requiring consideration of any State differences in implementation and enforcement of the Cybersecurity Model Law. 20 Certain other states have enacted or are considering laws and regulations related to privacy and data security.
A drafting note in the Cybersecurity Model Law states that a licensee’s compliance with New York's cybersecurity regulation is intended to constitute compliance with the Cybersecurity Model Law, but compliance remains a state-by-state issue requiring consideration of any state differences in implementation and enforcement of the Cybersecurity Model Law.
The table below provides a reconciliation of the beginning of year and end of year property casualty reserves for the indicated years: (In thousands) 2023 2022 2021 Net reserves at beginning of year $ 14,248,879 $ 12,848,362 $ 11,620,393 Net provision for losses and loss expenses: Claims occurring during the current year (1) 6,311,780 5,774,713 4,921,191 Increase in estimates for claims occurring in prior years (2) 29,681 54,511 863 Loss reserve discount amortization 30,681 32,526 31,906 Total 6,372,142 5,861,750 4,953,960 Net payments for claims: Current year 1,217,078 1,068,577 887,896 Prior years 3,764,532 3,279,333 2,777,798 Total 4,981,610 4,347,910 3,665,694 Foreign currency translation 22,409 (113,323) (60,297) Net reserves at end of year 15,661,820 14,248,879 12,848,362 Ceded reserves at end of year 3,077,832 2,762,344 2,542,526 Gross reserves at end of year $ 18,739,652 $ 17,011,223 $ 15,390,888 Net change in premiums and losses occurring in prior years: Increase in estimates for claims occurring in prior years (2) $ (29,681) $ (54,511) $ (863) Retrospective premium adjustments for claims occurring in prior years (3) 10,782 18,106 7,510 Net premium and reserve development on prior years $ (18,899) $ (36,405) $ 6,647 ____________________________________ 18 (1) Claims occurring during the current year are net of loss reserve discounts of $47 million, $35 million and $21 million in 2023, 2022 and 2021, respectively.
The table below provides a reconciliation of the beginning of year and end of year property casualty reserves for the indicated years: (In thousands) 2024 2023 2022 Net reserves at beginning of year $ 15,661,820 $ 14,248,879 $ 12,848,362 Net provision for losses and loss expenses: Claims occurring during the current year (1) 7,083,999 6,311,780 5,774,713 Increase in estimates for claims occurring in prior years (2) 14,350 29,681 54,511 Loss reserve discount accretion 33,246 30,681 32,526 Total 7,131,595 6,372,142 5,861,750 Net payments for claims: Current year 1,278,585 1,217,078 1,068,577 Prior years 4,205,845 3,764,532 3,279,333 Total 5,484,430 4,981,610 4,347,910 Foreign currency translation (142,344) 22,409 (113,323) Net reserves at end of year 17,166,641 15,661,820 14,248,879 Ceded reserves at end of year 3,201,389 3,077,832 2,762,344 Gross reserves at end of year $ 20,368,030 $ 18,739,652 $ 17,011,223 Net change in premiums and losses occurring in prior years: Increase in estimates for claims occurring in prior years (2) $ (14,350) $ (29,681) $ (54,511) Retrospective premium adjustments for claims occurring in prior years (3) 18,782 10,782 18,106 Net premium and reserve development on prior years $ 4,432 $ (18,899) $ (36,405) ____________________________________ 16 (1) Claims occurring during the current year are net of loss reserve discounts of $49 million, $47 million and $35 million in 2024, 2023 and 2022, respectively.
Berkley Insurance Asia underwrites specialty commercial insurance coverages to clients in North Asia and Southeast Asia through offices in Hong Kong, Singapore, Labuan and Shanghai. 9 Berkley Insurance Australia underwrites general insurance business in Australia, including professional indemnity insurance for companies of all sizes.
Its products are distributed by a select group of independent retail agents and wholesale brokers. Berkley Insurance Asia underwrites specialty commercial insurance coverages to clients in North Asia and Southeast Asia through offices in Hong Kong, India, Shanghai and Singapore. Berkley Insurance Australia underwrites general insurance business in Australia, including professional indemnity insurance for companies of all sizes.
Its primary focus is on general liability insurance for construction, manufacturing and general casualty clients as well as products liability and miscellaneous professional liability coverages distributed through wholesale insurance brokers. 11 Verus Specialty Insurance offers tailored casualty, professional liability, and garage coverages, specializing in the excess and surplus lines market.
Vela Insurance Services specializes in commercial casualty insurance on an excess and surplus lines basis. Its primary focus is on general liability insurance for construction, manufacturing and general casualty clients as well as products liability and miscellaneous professional liability coverages distributed through wholesale insurance brokers.
The amended Credit for Reinsurance Model Law also extends the zero reinsurance collateral provisions in the Covered Agreements to qualified reinsurers domiciled in U.S. jurisdictions that are accredited by the NAIC and to non-U.S. jurisdictions that have not entered into a covered agreement with the U.S. but which the NAIC has identified as “reciprocal jurisdictions” pursuant to the NAIC Qualified Jurisdiction Process. 23 We cannot currently predict the impact of these changes to the law or whether any other covered agreements will be successfully adopted, and cannot currently estimate the impact of these changes to the law and any such adopted covered agreements on our business, financial condition or operating results.
The amended Credit for Reinsurance Model Law also extends the zero reinsurance collateral provisions in the Covered Agreements to qualified reinsurers domiciled in U.S. jurisdictions that are accredited by the NAIC and to non-U.S. jurisdictions that have not entered into a covered agreement with the U.S. but which the NAIC has identified as “reciprocal jurisdictions” pursuant to the NAIC Qualified Jurisdiction Process.
Net premiums written, as reported based on United States generally accepted accounting principles (“GAAP”), for each of our reporting segments for each of the past three years were as follows: Year Ended December 31, (In thousands) 2023 2022 2021 Net premiums written: Insurance $ 9,657,121 $ 8,784,146 $ 7,743,814 Reinsurance & Monoline Excess 1,297,346 1,219,924 1,119,053 Total $ 10,954,467 $ 10,004,070 $ 8,862,867 Percentage of net premiums written: Insurance 88.2 % 87.8 % 87.4 % Reinsurance & Monoline Excess 11.8 12.2 12.6 Total 100.0 % 100.0 % 100.0 % Thirty-two of our insurance company subsidiaries are rated by A.M.
Net premiums written, as reported based on United States generally accepted accounting principles (“GAAP”), for each of our reporting segments for each of the past three years were as follows: Year Ended December 31, (In thousands) 2024 2023 2022 Net premiums written: Insurance $ 10,549,550 $ 9,560,533 $ 8,609,028 Reinsurance & Monoline Excess 1,422,546 1,393,934 1,395,042 Total $ 11,972,096 $ 10,954,467 $ 10,004,070 Percentage of net premiums written: Insurance 88.1 % 87.3 % 86.1 % Reinsurance & Monoline Excess 11.9 12.7 13.9 Total 100.0 % 100.0 % 100.0 % Thirty-three of our insurance company subsidiaries are rated by A.M.
Also in November 2019, the IAIS adopted a risk-based group-wide global insurance capital standard (“ICS”) that will apply to IAIGs and ultimately form a part of ComFrame.
Also in November 2019, the IAIS agreed to a version of a risk-based group-wide global insurance capital standard (“ICS”) that was intended to apply to IAIGs and ultimately form a part of ComFrame. The ICS was adopted by the IAIS in December 2024 as a group-wide prescribed capital requirement for IAIGs and integrated into the rest of ComFrame.
Berkley Environmental underwrites casualty and specialty environmental products for environmental customers including contractors, consultants, property owners and facilities operators. Berkley Financial Specialists serves the insurance needs of companies predominantly in the financial services sector. Its Berkley Crime division provides crime and fidelity related insurance products for commercial organizations, financial sector businesses and governmental entities on a primary and excess basis.
Berkley Financial Specialists serves the insurance needs of companies predominantly in the financial services sector. Its Berkley Crime division provides crime and fidelity related insurance products for commercial organizations, financial sector businesses and governmental entities on a primary and excess basis. Its Financial Services segment provides management liability and fidelity products to financial institutions, insurance companies and asset management firms.
In addition, we support employees in making an impact in their local communities and globally through environmental and social efforts that are meaningful to them. 26 Our Board of Directors engages with our senior leadership team, including our senior vice president - human resources, on a periodic basis across a range of human capital management issues, including succession planning and development, compensation, benefits, talent recruiting and retention, engagement, diversity and inclusion, and employee feedback.
Our Board of Directors engages with our senior leadership team, including our senior vice president - human resources, on a periodic basis across a range of human capital management issues, including succession planning and development, compensation, benefits, talent recruiting and retention, engagement, diversity and inclusion, and employee feedback.
In 2024, the NAIC plans to form a new task force to create a regulatory framework for the oversight of insurers’ use of third-party data and models.
In 2024, the NAIC formed a new task force to develop and propose a regulatory framework for the oversight of insurers’ use of third-party data and predictive models, the drafting of which is expected to begin in 2025.
Berkley Enterprise Risk Solutions provides custom workers' compensation programs to large employers operating in a broad range of industries. Loss sensitive and/or guaranteed cost programs are offered to employers with exposure predominately in California. Berkley Entertainment underwrites property casualty insurance products, both on an admitted and non-admitted basis, for clients in the entertainment industry and sports-related organizations.
Loss sensitive and/or guaranteed cost programs are offered to employers with exposure predominately in California. Berkley Entertainment underwrites property casualty insurance products, both on an admitted and non-admitted basis, for clients in the entertainment industry and sports-related organizations. Berkley Environmental underwrites casualty and specialty environmental products for environmental customers including contractors, consultants, property owners and facilities operators.
The ORSA Report is a confidential internal assessment of the material and relevant risks associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks.
We must also annually submit to the Delaware Department of Insurance an Own Risk and Solvency Assessment Summary Report (“ORSA Report”), which is a confidential internal assessment of the material and relevant risks associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks.
In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications. Investments that do not comply with these limits and qualifications are deducted in our insurance subsidiaries' calculation of their statutory capital and surplus.
Investments by our domestic insurance companies must comply with applicable laws and regulations which prescribe the kind, quality and concentration of investments. In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and certain other investments, subject to specified limits and certain other qualifications.
Berkley Risk provides at-risk and alternative risk insurance program management services for a broad range of groups and individuals including public entity pools, professional associations, captives and self-insured clients.
Products include general liability, auto liability, law enforcement liability, public officials and educator's legal liability, employment practices liability, incidental medical, property and crime. Berkley Risk provides at-risk and alternative risk insurance program management services for a broad range of groups and individuals including public entity pools, professional associations, and self-insured clients.
Berkley Product Protection offers a broad product suite, including product liability and product recall and Contamination, to assist clients in the manufacturing, wholesale and import space with their risk management and insurance needs. Berkley Professional Liability specializes in professional liability insurance for publicly-traded and private entities on a worldwide basis.
Berkley One targets high net worth individuals and families with sophisticated risk management needs. Berkley Product Protection offers a broad product suite, including product liability and product recall and contamination, to assist clients in the manufacturing, wholesale and import space with their risk management and insurance needs.
California subsequently enacted the California Privacy Rights Act (“CPRA”), which came into full effect in January 2023 and amended the CCPA by imposing additional limitations and obligations with respect to covered businesses’ use and sharing of certain personal data. Compliance with the CCPA/CPRA may increase the cost of providing our products and services in California.
California subsequently enacted the California Privacy Rights Act (“CPRA”), which imposed additional limitations and obligations with respect to covered businesses’ use and sharing of certain personal data. Compliance with the CCPA/CPRA may increase the cost of providing our products and services in California. An increasing number of U.S. states have adopted, 18 or are considering legislation similar to the CCPA.
On September 30, 2023, the FIO reported that it did not recommend taking any preemption action as a result of inconsistency between the Covered Agreements and state credit for reinsurance laws, although it is still monitoring state measures implementing the NAIC’s revisions to the Credit for Reinsurance Model Law.
The NAIC amended its Credit for Reinsurance Model Law to satisfy the substantive and timing requirements of the Covered Agreements, which amendments have been enacted by all states. On September 30, 2023, the FIO reported that it did not recommend taking any preemption action as a result of inconsistency between the Covered Agreements and state credit for reinsurance laws.
It has developed sophisticated, proprietary analytical tools and risk management services designed to help its insureds lower their total cost of risk. 14 The following table sets forth the percentages of gross premiums written by each Reinsurance & Monoline Excess business: Year Ended December 31, 2023 2022 2021 Berkley Re America 33.7% 34.6% 31.2% Berkley Re Asia Pacific 16.0 15.6 15.4 Berkley Re Solutions 10.2 12.5 13.8 Berkley Re UK 11.4 12.8 13.8 Lloyd's Syndicate 2791 Participation 9.4 6.1 6.8 Midwest Employers Casualty 19.3 18.4 19.0 Total 100.0% 100.0% 100.0% The following table sets forth the percentages of gross premiums written, by line, by our Reinsurance & Monoline Excess operations: Year Ended December 31, 2023 2022 2021 Casualty 56.4% 61.7% 61.8% Property 24.4 19.9 19.2 Monoline Excess 19.2 18.4 19.0 Total 100.0% 100.0% 100.0% Results by Segment Summary financial information about our segments is presented on a GAAP basis in the following table: Year Ended December 31, (In thousands) 2023 2022 2021 Insurance Revenue $ 9,961,152 $ 8,952,493 $ 7,578,592 Income before income taxes 1,640,438 1,455,658 1,219,798 Reinsurance & Monoline Excess Revenue 1,481,991 1,386,639 1,203,647 Income before income taxes 438,765 316,527 270,563 Other (1) Revenue 699,795 827,367 673,227 Loss before income taxes (324,800) (52,504) (207,456) Total Revenue $ 12,142,938 $ 11,166,499 $ 9,455,466 Income before income taxes $ 1,754,403 $ 1,719,681 $ 1,282,905 _______________________________________ (1) Represents corporate revenues and expenses, net investment gains and losses, and revenues and expenses from non-insurance businesses that are consolidated for financial reporting purposes. 15 The table below represents summary underwriting ratios on a GAAP basis for our segments.
It distributes its products through retail and wholesale agencies. 12 The following table sets forth the percentages of gross premiums written by each Reinsurance & Monoline Excess business: Year Ended December 31, 2024 2023 2022 Berkley Integrated Solutions 14.1% 16.2% 22.5% Berkley Re America 34.4 31.5 30.9 Berkley Re Asia Pacific 13.8 14.9 13.7 Berkley Re UK 9.9 10.6 11.3 Lloyd's Syndicate 2791 Participation 8.6 8.8 5.4 Midwest Employers Casualty 19.2 18.0 16.2 Total 100.0% 100.0% 100.0% The following table sets forth the percentages of gross premiums written, by line, by our Reinsurance & Monoline Excess operations: Year Ended December 31, 2024 2023 2022 Casualty 49.1% 54.1% 61.1% Property 31.6 27.9 22.7 Monoline Excess 19.3 18.0 16.2 Total 100.0% 100.0% 100.0% Results by Segment Summary financial information about our segments is presented on a GAAP basis in the following table: Year Ended December 31, (In thousands) 2024 2023 2022 Insurance Revenue $ 11,181,501 $ 9,827,866 $ 8,749,019 Income before income taxes 1,942,083 1,629,918 1,445,745 Reinsurance & Monoline Excess Revenue 1,696,905 1,615,277 1,590,113 Income before income taxes 466,595 449,285 326,440 Other (1) Revenue 760,346 699,795 827,367 Loss before income taxes (144,185) (324,800) (52,504) Total Revenue $ 13,638,752 $ 12,142,938 $ 11,166,499 Income before income taxes $ 2,264,493 $ 1,754,403 $ 1,719,681 _______________________________________ (1) Represents corporate revenues and expenses, net investment gains and losses, and revenues and expenses from non-insurance businesses that are consolidated for financial reporting purposes. 13 The table below represents summary underwriting ratios on a GAAP basis for our segments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOperational Disruptions and Costs . Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our agents, brokers, suppliers or other third party service providers are unable to continue to work because of illness, government directives or otherwise.
Biggest changeIn addition, we may be unable to renew our reinsurance coverages or obtain other appropriate reinsurance covers with respect to pandemic-related exposures. • Reduced economic activity relating to potential pandemics is likely to decrease demand for our insurance products. • Disruptions in global financial markets due to future pandemics could cause us to incur investment losses. • Our operations could be disrupted if our senior management or a significant percentage of our workforce or of our agents, brokers, suppliers or other service providers are unable to continue to work because of illness, government directives or otherwise. 28 Changing climate conditions may alter the frequency and increase the severity of catastrophic events and thereby adversely affect our financial condition and results.
Our financial results could be adversely affected by acquired businesses not performing as projected, unforeseen liabilities, routine and unanticipated transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges for impairment of long-term assets or goodwill and indemnification.
Our financial results could be adversely affected by acquired businesses not performing as projected, unforeseen liabilities, routine and unanticipated transaction-related charges, diversion of management time and resources to acquisition integration challenges or growth strategies, loss of key employees, challenges in integrating information technology systems of acquired companies with our own, amortization of expenses related to intangibles, charges 32 for impairment of long-term assets or goodwill and indemnification.
Cybersecurity breaches, including physical or electronic break-ins, computer viruses, malware, attacks by hackers, ransomware attacks, phishing attacks, supply chain attacks, breaches due to employee error or misconduct and other similar breaches can create system disruptions, shutdowns or unauthorized access to, or disclosure of, information maintained in our information technology systems and in the information technology systems of our 35 vendors and other third parties.
Cybersecurity breaches, including physical or electronic break-ins, computer viruses, malware, attacks by hackers, ransomware attacks, phishing attacks, supply chain attacks, breaches due to employee error or misconduct and other similar breaches can create system disruptions, shutdowns or unauthorized access to, or disclosure of, information maintained in our information technology systems and in the information technology systems of our vendors and other third parties.
These estimates, which generally involve actuarial projections, are based on management's assessment of facts and circumstances then known, as 28 well as estimates of future trends in claims severity and frequency, inflation, judicial theories of liability, reinsurance coverage, legislative changes and other factors, including the actions of third parties, which are beyond our control.
These estimates, which generally involve actuarial projections, are based on management's assessment of facts and circumstances then known, as well as estimates of future trends in claims severity and frequency, inflation, judicial theories of liability, reinsurance coverage, legislative changes and other factors, including the actions of third parties, which are beyond our control.
As industry practices and economic, legal, judicial, social, technological and other environmental conditions change, unexpected and unintended issues related to claim and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims.
As industry practices and economic, legal, judicial, social, technological and other environmental conditions change, unexpected and unintended issues related to claim and coverage frequently emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims.
We may be unable to maintain all required licenses and approvals and our business may not fully comply with the wide variety of applicable laws and regulations or the relevant authority's interpretation of the laws and regulations. Also, some regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals.
We may be unable to maintain all required licenses and approvals and our business may not fully comply with the 30 wide variety of applicable laws and regulations or the relevant authority's interpretation of the laws and regulations. Also, some regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals.
State regulation is the primary form of regulation of insurance and reinsurance in the United States, although Congress has considered various proposals regarding federal regulation of insurance, in addition to the changes brought about by the 32 Dodd-Frank Act, such as proposals for the creation of an optional federal charter for insurance companies.
State regulation is the primary form of regulation of insurance and reinsurance in the United States, although Congress has considered various proposals regarding federal regulation of insurance, in addition to the changes brought about by the Dodd-Frank Act, such as proposals for the creation of an optional federal charter for insurance companies.
These provisions may discourage potential acquisition proposals and may delay, deter or prevent a change in control of us through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be desirable. 38
These provisions may discourage potential acquisition proposals and may delay, deter or prevent a change in control of us through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be desirable.
This system of regulation, generally administered in the United States by a department of insurance in each state in which we do business, relates to, among other things: • standards of solvency, including risk-based capital measurements; • restrictions on the nature, quality and concentration of investments; • limitations on the amount of dividends, tax distributions, intercompany loans and other payments that can be made without prior regulatory approval; • requirements pertaining to certain methods of accounting; • evaluating enterprise risk to an insurer; • privacy, data protection, and cybersecurity; • rate and form regulation pertaining to certain of our insurance businesses; • potential assessments for the provision of funds necessary for the settlement of covered claims under certain policies provided by impaired, insolvent or failed insurance companies; and • involvement in the payment or adjudication of catastrophe or other claims beyond the terms of the policies.
This system of regulation, generally administered in the United States by a department of insurance in each state in which we do business, relates to, among other things: • standards of solvency, including risk-based capital measurements; • restrictions on the nature, quality and concentration of investments; • limitations on the amount of dividends, tax distributions, intercompany loans and other payments that can be made without prior regulatory approval; • requirements pertaining to certain methods of accounting; • evaluating enterprise risk to an insurer; • privacy, data protection, cybersecurity and artificial intelligence; • rate and form regulation pertaining to certain of our insurance businesses; • potential assessments for the provision of funds necessary for the settlement of covered claims under certain policies provided by impaired, insolvent or failed insurance companies; and 29 • involvement in the payment or adjudication of catastrophe or other claims beyond the terms of the policies.
There is a scientific consensus that global warming and other climate change are altering the frequency, severity and peril characteristics of catastrophic weather events, such as hurricanes, windstorms, floods and other natural disasters.
There is a scientific consensus that global warming and other climate change are altering the frequency, severity and peril characteristics of catastrophic weather events, such as hurricanes, windstorms, floods, wildfires and other natural disasters.
We are subject to credit risk relating to our policyholders, independent agents and brokers. In addition to exposure to credit risk related to our reinsurance recoverables and investment portfolio, we are exposed to credit risk in several other areas of our business, including credit risk relating to policyholders, independent agents and brokers.
We are subject to credit risk relating to our policyholders, independent agents and brokers. 31 In addition to exposure to credit risk related to our reinsurance recoverables and investment portfolio, we are exposed to credit risk in several other areas of our business, including credit risk relating to policyholders, independent agents and brokers.
However, there are certain limitations in these and similar tactics and as a result, loss levels may be higher than modeled or otherwise expected, which could have a material adverse effect on our business. Increased scrutiny on social responsibility and the efforts we take to implement related measures, or the failure to take such measures, may adversely impact our business.
However, there are certain limitations in these and similar tactics and as a result, loss levels may be higher than modeled or otherwise expected, which could have a material adverse effect on our business. Scrutiny of our social responsibility and the efforts we take to implement related measures, or the failure to take such measures, may adversely impact our business.
Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current loss 31 reserves. In addition, our estimate of loss reserves may change.
Because of the uncertainties set forth above, additional liabilities may arise for amounts in excess of the current loss reserves. In addition, our estimate of loss reserves may change.
Catastrophes can be caused by various events, including hurricanes, windstorms, earthquakes, tsunamis, hailstorms, explosions, severe winter weather and fires, pandemics, as well as terrorist and other man-made activities, including drilling, mining and other industrial accidents, the bankruptcy of a major company, war or other military actions, social unrest, cyber events or terrorist activities.
Catastrophes can be caused by various events, including hurricanes, windstorms, earthquakes, tsunamis, hailstorms, explosions, severe winter weather and wildfires, pandemics, as well as terrorist and other man-made activities, including drilling, mining and other industrial accidents, the bankruptcy of a major company, war or other military actions, social unrest, cyber events or terrorist activities.
However, loss costs have also increased and the duration and magnitude of the improving pricing environment remains uncertain. Despite higher interest rates, current price levels for certain lines of business may remain below the prices required for us to achieve our long-term return objectives. We expect to continue to face strong competition in our business.
However, loss costs have also increased and the duration and magnitude of the improved pricing environment remains uncertain. Despite higher interest rates, current price levels for certain lines of business 26 may remain below the prices required for us to achieve our long-term return objectives. We expect to continue to face strong competition in our business.
The adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural disasters, regulatory measures and court decisions that define and expand the extent of coverage, and the effects of economic and social inflation on the amount of claims payments due for injuries or losses.
The adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural disasters and other catastrophic events, regulatory measures and court decisions that define and expand the extent of coverage, and the effects of economic and social inflation on the amount of claims payments due for injuries or losses.
We have in the past experienced cybersecurity breaches of our information technology systems as well as the information technology systems of our vendors and other third parties, but, to our knowledge, we have not experienced any material cybersecurity breaches.
We have in the past experienced cybersecurity incidents affecting our information technology systems as well as the information technology systems of our vendors and other third parties, but, to our knowledge, we have not experienced any material cybersecurity breaches.
In addition, because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials or failures of controls if demand for our service exceeds capacity or a third-party system fails or experiences an interruption.
In addition, because our information technology and telecommunications systems interface with and depend on third-party systems and infrastructure beyond our control, we could experience service denials or failures of controls if demand for our service exceeds capacity or a third-party system or infrastructure fails or experiences an interruption.
As of December 31, 2023, the amount due from our reinsurers was approximately $3,535 million, including amounts due from state funds and industry pools where it was intended that we would bear no risk. Certain of these amounts are secured by letters of credit or by funds held in trust on our behalf.
As of December 31, 2024, the amount due from our reinsurers was approximately $3,558 million, including amounts due from state funds and industry pools where it was intended that we would bear no risk. Certain of these amounts are secured by letters of credit or by funds held in trust on our behalf.
A shut-down of, or inability to access, one or more of our facilities, a power outage or a failure of one or more of our information technology, telecommunications or other computer systems could significantly impair our employees' ability to perform such functions on a timely basis.
A shutdown of, or inability to access, one or more of our facilities, a power outage or a failure of one or more of our information technology, telecommunications or other computer systems could significantly impair our employees' ability to perform such functions on a timely basis.
The payment of dividends by our insurance company subsidiaries is subject to regulatory restrictions and competitive pressures on maintaining financial strength ratings and will depend on the surplus and future earnings of these subsidiaries. During 2024, the maximum amount of dividends that can be paid without regulatory approval is approximately $1.2 billion.
The payment of dividends by our insurance company subsidiaries is subject to regulatory restrictions and competitive pressures on maintaining financial strength ratings and will depend on the surplus and future earnings of these subsidiaries. During 2025, the maximum amount of dividends that can be paid without regulatory approval is approximately $1.6 billion.
However, any such coverage would be subject to a mandatory deductible based on 20% of earned premium for the prior year for the covered lines of commercial property and casualty insurance. Based on our 2023 earned premiums, our aggregate deductible under TRIPRA during 2024 is approximately $1,464 million.
However, any such coverage would be subject to a mandatory deductible based on 20% of earned premium for the prior year for the covered lines of commercial property and casualty insurance. Based on our 2024 earned premiums, our aggregate deductible under TRIPRA during 2025 is approximately $1,663 million.
We expect cybersecurity breaches to continue to occur in the future and we are constantly managing efforts to infiltrate and compromise our systems and data.
We expect cybersecurity threats to continue to occur in the future and we are constantly managing efforts to infiltrate and compromise our systems and data.
We may be unable to attract and retain key personnel and qualified employees. We depend on our ability to attract and retain key personnel, including our President and CEO, Executive Chairman, senior executive officers, presidents of our businesses, experienced underwriters and other skilled employees who are knowledgeable about our business.
We depend on our ability to attract and retain key personnel, including our President and CEO, Executive Chairman, senior executive officers, presidents of our businesses, experienced underwriters and other skilled employees who are knowledgeable about our business.
The demand for insurance is influenced primarily by general economic conditions, while the supply of insurance is often directly related to available capacity or the perceived profitability of the business.
The demand for insurance is influenced primarily by general economic conditions, while the supply of insurance is often directly related to available capacity based on the perceived profitability of the business.
Our merger arbitrage positions are exposed to the risk associated with the completion of announced deals, which are subject to regulatory as well as political and other risks. Real estate related investments, including directly owned, investment funds and loans receivable, were $1.7 billion, or 6.2% of our investment portfolio, including cash and cash equivalents, at December 31, 2023.
Our merger arbitrage positions are exposed to the risk associated with the completion of announced deals, which are subject to regulatory as well as political and other risks. Real estate related investments, including directly owned, investment funds and loans receivable, were $1.9 billion, or 6.3% of our investment portfolio, including cash and cash equivalents, at December 31, 2024.
Rather, reserves represent an estimate of what management expects the ultimate settlement and claims administration will cost for claims that have occurred, whether known or unknown. The major assumptions about anticipated loss emergence patterns are subject to unanticipated fluctuation.
Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management expects the ultimate settlement and claims administration will cost for claims that have occurred, whether known or unknown. The major assumptions about anticipated loss emergence patterns are subject to unanticipated fluctuation.
Best, Standard & Poor's, Moody's and Fitch. Our ratings are subject to periodic review, and we cannot assure you that we will be able to retain our current or any future ratings, especially given that rating agencies may change their criteria or increase capital requirements for various rating levels.
Best, Standard & Poor's, Moody's and Fitch. Our ratings are subject to periodic review, and we cannot assure you that we will be able to retain our current or any future ratings, especially given that rating agencies may change their criteria or increase capital requirements for various rating levels. If our ratings are reduced from their current levels by A.M.
Thus, the insurance regulatory authorities of the states in which our insurance subsidiaries are domiciled are likely to apply these restrictions on acquisition of control to any proposed acquisition of our common stock.
Indirect ownership includes ownership of the shares of our common stock. Thus, the insurance regulatory authorities of the states in which our insurance subsidiaries are domiciled are likely to apply these restrictions on acquisition of control to any proposed acquisition of our common stock.
A control system, no matter how well designed and operated, can provide only reasonable assurance that the control system's objectives will be met. If our controls are not effective, it could lead to financial loss, unanticipated risk exposure (including underwriting, credit and investment risk), regulatory scrutiny, and/or damage to our reputation. We could be adversely affected by changes in U.S.
A control system, no matter how well designed and operated, can provide only reasonable assurance that the control system's objectives will be met. If our controls are not effective, it could lead to financial loss, unanticipated risk exposure (including underwriting, credit and investment risk), regulatory scrutiny, and/or damage to our reputation.
Pursuant to applicable laws and regulations, “control” over an insurer is generally presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote, or holds proxies representing 10% or more of the voting securities of that insurer or any parent company of such insurer. Indirect ownership includes ownership of the shares of our common stock.
Pursuant to applicable laws and regulations, “control” over an insurer is generally presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote, or holds proxies representing 10% or more of 35 the voting securities of that insurer or any parent company of such insurer.
We face additional risks as a result of our international operations which could have an adverse effect on our results of operations and financial condition including: burdens and costs of compliance with a variety of foreign laws and regulations and the associated risk and costs of non-compliance; exposure to undeveloped or evolving legal systems, which may result in unpredictable or inconsistent application of laws and regulations; exposure to commercial, political, legal or regulatory corruption; political, economic or other instability in countries in which we conduct business, including possible terrorist acts; the imposition of tariffs, trade barriers or other protectionist laws or business practices that favor local competition, increased costs and adverse effects on our business; changes to visa or immigration policies; diminished ability to enforce our contractual rights; potential increased risk of data breaches; differences in cultural environments; sociopolitical instability; social, political or economic instability resulting from climate change; changes in regulatory requirements, including changes in regulatory treatment of certain products or services; exposure to local economic conditions and its impact on our clients’ performance and creditworthiness; and restrictions on the repatriation of non-U.S. investments and earnings. 33 Our U.K. business could be specifically adversely impacted by the imposition of trade barriers between the EU and the U.K. following Brexit, which has already reduced the level of trade between the two markets and the U.K.’s overall trade exports, thereby negatively affecting the attractiveness of the U.K. market.
We face additional risks as a result of our international operations which could have an adverse effect on our results of operations and financial condition including: burdens and costs of compliance with a variety of foreign laws and regulations and the associated risk and costs of non-compliance; exposure to undeveloped or evolving legal systems, which may result in unpredictable or inconsistent application of laws and regulations; exposure to commercial, political, legal or regulatory corruption; political, economic or other instability in countries in which we conduct business, including possible terrorist acts; the imposition of tariffs, trade barriers or other protectionist laws or business practices that favor local competition, increased costs and adverse effects on our business; changes to visa or immigration policies; diminished ability to enforce our contractual rights; potential increased risk of data breaches; differences in cultural environments; sociopolitical instability; social, political or economic instability resulting from climate change; changes in regulatory requirements, including changes in regulatory treatment of certain products or services; exposure to local economic conditions and its impact on our clients’ performance and creditworthiness; and restrictions on the repatriation of non-U.S. investments and earnings.
There may be certain asset classes that were in active markets with significant observable data that become illiquid due to the then current financial environment. In such cases, more securities may require additional subjectivity and management judgment.
There may be certain asset classes that were in active markets with significant observable data that become illiquid 34 due to the then current financial environment. In such cases, the valuation of a greater number of our securities may require additional subjectivity and management judgment.
We may be subject to potentially increased federal oversight as a financial institution. In addition, the current U.S. administration and the volatile political environment (including, in particular, the upcoming U.S. presidential election in November 2024) increases the chance of other federal legislative and regulatory changes that could affect us in ways we cannot predict.
We may be subject to potentially increased federal oversight as a financial institution. In addition, the new U.S. administration and the volatile political environment increases the chance of other federal legislative and regulatory changes that could affect us in ways we cannot predict.
However, the two regimes, and their respective requirements, are diverging due to both the EU’s review of Solvency II described above and the recently adopted reforms to the U.K.’s domestic prudential regime (please see “International Regulation” above for more information). We therefore may be required to utilize additional resources to ensure compliance with the different rules in each regime.
However, the two regimes, and their respective requirements, have begun to diverge due to both the EU’s recent amendments to Solvency II described above and the reforms to the U.K.’s domestic prudential regime (please see “International Regulation” above for more information). We therefore may be required to utilize additional resources to ensure compliance with the different rules in each regime.
Risks Relating to Our Investments A significant amount of our assets is invested in fixed maturity securities and is subject to market fluctuations. 36 Our investment portfolio consists substantially of fixed maturity securities. As of December 31, 2023, our investment in fixed maturity securities was approximately $20.2 billion, or 75.8% of our total investment portfolio including cash and cash equivalents.
Risks Relating to Our Investments A significant amount of our assets is invested in fixed maturity securities and is subject to market fluctuations. Our investment portfolio consists substantially of fixed maturity securities. As of December 31, 2024, our investment in fixed maturity securities was approximately $22.4 billion, or 75.0% of our total investment portfolio including cash and cash equivalents.
As of that date, our portfolio of fixed maturity securities consisted of the following types of securities: U.S. Government securities (8.4%); state and municipal securities (13.3%); corporate securities (37.9%); asset-backed securities (20.8%); mortgage-backed securities (11.3%) and foreign government (8.3%). The fair value of these assets and the investment income from these assets fluctuate depending on general economic and market conditions.
As of that date, our portfolio of fixed maturity securities consisted of the following types of securities: U.S. Government securities (10.0%); state and municipal securities (10.5%); corporate securities (37.6%); asset-backed securities (17.3%); mortgage-backed securities (16.8%) and foreign government (7.8%). The fair value of these assets and the investment income from these assets fluctuate depending on general economic and market conditions.
In recent years, various types of investors have increasingly sought to participate in the property and casualty insurance and reinsurance industries. Well-capitalized new entrants to the property and casualty insurance and reinsurance industries, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition, which may adversely impact our business and profitability.
Well-capitalized new entrants to the property and casualty insurance and reinsurance industries, or existing competitors that receive substantial infusions of capital or access to third-party capital, provide increasing competition, which may adversely impact our business and profitability.
We also purchase reinsurance on risks underwritten by others which we reinsure. Market conditions beyond our control determine the availability and cost of the reinsurance protection we seek to purchase, which may affect the level of our business and profitability.
Market conditions beyond our control determine the availability and cost of the reinsurance protection we seek to purchase, which may affect the level of our business and profitability.
At December 31, 2023, our investment in these assets was approximately $5.1 billion, or 19.1%, of our investment portfolio, including cash and cash equivalents. Merger and arbitrage trading securities were $0.9 billion, or 3.5% of our investment portfolio, including cash and cash equivalents at December 31, 2023.
At December 31, 2024, our investment in these assets was approximately $5.5 billion, or 18.4%, of our investment portfolio, including cash and cash equivalents. Merger and arbitrage trading securities were $1.1 billion, or 3.8% of our investment portfolio, including cash and cash equivalents at December 31, 2024.
In addition, technology companies or other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact our competitive position in some parts of our business.
In addition, technology companies or other third parties have created, and may in the future create technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact our competitive position in some parts of our business. Some of our competitors, particularly in the reinsurance business, have greater financial and/or marketing resources than we do.
We compete with a large number of other companies in our selected lines of business. We compete, and will continue to compete, with major U.S. and non-U.S. insurers and reinsurers, other regional companies, as well as mutual companies, specialty insurance companies, underwriting agencies, diversified financial services companies and insurtech companies.
We compete, and will continue to compete, with major U.S. and non-U.S. insurers and reinsurers, other regional companies, as well as mutual companies, specialty insurance companies, underwriting agencies, diversified financial services companies and insurtech companies.
Similar considerations apply to our U.K. subsidiaries, which are now subject to a separate U.K. prudential regime, which is broadly identical to Solvency II.
Similar considerations apply to our U.K. subsidiaries, which are now subject to a separate U.K. prudential regime that derives from Solvency II.
There is increased scrutiny from regulators and investors on the measures companies take to be socially responsible.
There continues to be scrutiny from regulators and investors of the measures companies take to be socially responsible.
We seek to effectively manage risk and limit our losses in a variety of ways including through effective underwriting, tailoring policy terms, and the use of reinsurance.
Limitations in risk management and loss limitation methods may adversely impact our business. We seek to effectively manage risk and limit our losses in a variety of ways including through effective underwriting, tailoring policy terms, and the use of reinsurance.
As an insurance holding company, our principal assets are the shares of capital stock of our insurance company subsidiaries. We have to rely on dividends from our insurance company subsidiaries to meet our obligations for paying principal and interest on outstanding debt obligations, paying dividends to stockholders and repurchasing our shares and paying corporate expenses.
We have to rely on dividends from our insurance company subsidiaries to meet our obligations for paying principal and interest on outstanding debt obligations, paying dividends to stockholders and repurchasing our shares and paying corporate expenses.
Periods of insurance industry consolidation may further increase competition in some parts of our business and may cause our insurance subsidiaries to incur greater customer retention and acquisition expenses, affecting the profitability of existing and new business. Some of our competitors, particularly in the reinsurance business, have greater financial and/or marketing resources than we do.
Periods of insurance industry consolidation may further increase competition in some parts of our business and may cause our insurance subsidiaries to incur greater customer retention and acquisition expenses, affecting the profitability of existing and new business.
In addition, despite the waiver of the Solvency II group capital requirements we received, Solvency II may have the effect of increasing the capital requirements of our EU domiciled insurers.
In addition, despite the waiver of the Solvency II group capital requirements we received, any changes in the application of Solvency II (or any further amendments to Solvency II itself) may have the effect of increasing the capital requirements of our EU domiciled insurers.
For example, catastrophe losses net of reinsurance recoveries, including COVID-19 related losses, were $195 million in 2023, $212 29 million in 2022, and $202 million in 2021. Similarly, man-made catastrophes can also have a material impact on our financial results.
For example, current accident year catastrophe losses net of reinsurance recoveries were $298 million in 2024, $195 million in 2023, and $212 million in 2022. Similarly, man-made catastrophes can also have a material impact on our financial results.
These competitors within the reinsurance market include Swiss Re, Munich Re, Berkshire Hathaway and Partner Re. We expect that perceived financial strength, in particular, will become more important as customers seek high quality reinsurers. Recently, insurance prices have generally increased for most lines of business, excluding workers' compensation and certain professional liability lines of business.
These competitors within the reinsurance market include Swiss Re, Munich Re, Berkshire Hathaway and Partner Re. We expect that perceived financial strength, in particular, will become more important as customers seek high quality reinsurers.
Risks Relating to Our Industry Our results may fluctuate as a result of many factors, including cyclical changes in the insurance and reinsurance industry. 27 The results of companies in the property casualty insurance industry historically have been subject to significant fluctuations and uncertainties in demand and pricing, causing cyclical changes in the insurance and reinsurance industry.
The results of companies in the property casualty insurance industry historically have been subject to significant fluctuations and uncertainties in supply and demand and pricing, causing cyclical changes in the insurance and reinsurance industry.
In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to extend the statutes of limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on our business.
As a result, the full extent of liability under our insurance policies may not be known until many years after the policies are issued. 27 In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to extend the statutes of limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on our business.
In addition to those described below, our businesses may also be adversely affected by risks and uncertainties not currently known to us or that we currently consider immaterial.
In addition to those 25 described below, our businesses may also be adversely affected by risks and uncertainties not currently known to us or that we currently consider immaterial. Risks Relating to Our Industry Our results may fluctuate as a result of many factors, including cyclical changes in the insurance and reinsurance industry.
It is therefore possible that a catastrophic event or multiple catastrophic events could produce significant losses and have a material adverse effect on our results of operations and financial condition.
It is therefore possible that a catastrophic event or multiple catastrophic events could produce significant losses and have a material adverse effect on our results of operations and financial condition. New or emerging pandemics, whether related to COVID-19 or otherwise, may materially and adversely affect our results of operations, financial position and liquidity in the future.
These investments are subject to significant volatility as a result of the conditions in the financial and commodity markets and the global economy. 37 Risks Relating to Limitations on Dividends from Subsidiaries and Anti-Takeover Provisions We are an insurance holding company and, therefore, may not be able to receive dividends in needed amounts.
Risks Relating to Limitations on Dividends from Subsidiaries and Anti-Takeover Provisions We are an insurance holding company and, therefore, may not be able to receive dividends in needed amounts. As an insurance holding company, our principal assets are the shares of capital stock of our insurance company subsidiaries.
Our gross reserves for losses and loss expenses were approximately $18.7 billion as of December 31, 2023. Our loss reserves reflect our best estimates of the cost of settling claims and related expenses with respect to insured events that have occurred. Reserves do not represent an exact calculation of liability.
Our actual claims losses may exceed our reserves for claims, which may require us to establish additional reserves. Our gross reserves for losses and loss expenses were approximately $20.4 billion as of December 31, 2024. Our loss reserves reflect our best estimates of the cost of settling claims and related expenses with respect to insured events that have occurred.
On December 22, 2023, one of the 30 Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess of $90 million in respect of certain losses paid to its policyholders under certain event cancellation and related insurance policies. See, "Item 3.
For example, as described in "Item 3. Legal Proceedings," in December 2023, one of our subsidiaries filed a lawsuit against certain reinsurers to recover in excess of $90 million in respect of certain losses under certain event cancellation insurance policies.
These factors could produce results that would have a negative impact on our results of operations and financial condition. We face significant competitive pressures in our businesses, which can pressure premium rates in certain areas and could harm our ability to maintain or increase our profitability and premium volume in some parts of our business.
We face significant competitive pressures in our businesses, which can pressure premium rates in certain areas and could harm our ability to maintain or increase our profitability and premium volume in some parts of our business. We compete with a large number of other companies in our selected lines of business.
In some instances, these emerging issues may not become apparent for some time after we have issued the affected insurance policies. As a result, the full extent of liability under our insurance policies may not be known until many years after the policies are issued.
In some instances, these emerging issues may not become apparent for some time after we have issued the affected insurance policies.
If we are unable to retain existing business or write new business at adequate rates or on terms and conditions acceptable to us, our results of operations could be materially and adversely affected. Our actual claims losses may exceed our reserves for claims, which may require us to establish additional reserves.
If we are unable to retain existing business or write new business at adequate rates or on terms and conditions acceptable to us, our results of operations could be materially and adversely affected. Recently, insurance prices have generally increased for most lines of business, excluding workers' compensation and certain professional liability lines of business.
If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our underwriting commitments. 34 As part of our overall risk and capacity management strategy, we purchase reinsurance for certain amounts of risk underwritten by our insurance company subsidiaries, especially catastrophe risks and those risks with relatively high policy limits.
As part of our overall risk and capacity management strategy, we purchase reinsurance for certain amounts of risk underwritten by our insurance company subsidiaries, especially catastrophe risks and those risks with relatively high policy limits. We also purchase reinsurance on risks underwritten by others which we reinsure.
With respect to international measures, Solvency II, the EU regime concerning the capital adequacy, risk management and regulatory reporting for insurers and reinsurers may affect our insurance businesses.
With respect to international measures, Solvency II, the EU regime concerning the capital adequacy, risk management and regulatory reporting for insurers and reinsurers may affect our insurance businesses. As described in “International Regulation” above, the EU has recently amended certain provisions in Solvency II, which EU member states will implement in their domestic regulation over the next two years.
At times, we have faced significant competition in our business as a result of existing insurers seeking to gain or maintain market share as well as new entrants and capital providers. Recently, premium rates have increased for most lines of business, while they have decreased in others, most notably workers' compensation and certain professional liability lines of business.
At times, we have faced significant competition in our business as a result of existing insurers seeking to gain or maintain market share as well as new entrants and capital providers. Various types of investors seek to participate in the property and casualty insurance and reinsurance industries.
A significant downgrade could result in a substantial loss of business as policyholders move to other companies with higher financial strength ratings.
A significant downgrade could result in a substantial loss of business as policyholders move to other companies with higher financial strength ratings. If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our underwriting commitments.
In addition, our investments in real estate related assets and other alternative investments are less liquid than our other investments.
In addition, our investments in real estate related assets and other alternative investments are less liquid than our other investments. These investments are subject to significant volatility as a result of the conditions in the financial and commodity markets and the global economy.
The COVID-19 pandemic, including the related impact on the U.S. and global economies, materially and adversely affected our results of operations. The pandemic's impact on our business may continue, and potentially even worsen, whether as a result of COVID-19's long-term effects, or new or emerging variants, or even other potential pandemics.
The COVID-19 pandemic, including the related impact on the U.S. and global economies, materially and adversely affected our results of operations.
As a result, our ability to conduct our business could be materially and adversely affected. We could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.
Moreover, because some AI technologies are relatively new, such as generative AI, many of the potential risks regarding their use are currently unknown. We could be adversely affected if our controls to ensure compliance with guidelines, policies and legal and regulatory standards are not effective.
Removed
The COVID-19 pandemic materially and adversely affected our results of operations, and, whether as a result of COVID-19's long-term effects, or new or emerging variants, or other potential pandemics, may further materially and adversely affect our results of operations, financial position and liquidity in the future.
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These factors could produce results that would have a negative impact on our results of operations and financial condition. The uncertainty of an insurer’s ultimate loss costs, and fluctuating competitive conditions, result in alternating periods of “hard” markets (more profitable for insurers) and “soft” markets (less profitable for insurers).
Removed
We cannot predict the magnitude or duration of such impact, particularly given the uncertainties associated with COVID-19 or other potential pandemics. The ultimate impact of COVID-19 or other potential pandemics on our results of operations, financial position and liquidity is not yet known, but includes the following: Adverse Legislative and Regulatory Action.
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In recent years, improvement (or deterioration) in various lines of property casualty insurance has become less uniform in its cyclicality, with changes frequently happening at different rates, and even at times in different directions.
Removed
Legislative and regulatory initiatives in response to COVID-19 or other similar future pandemics may adversely affect us, particularly in our workers’ compensation and property coverages businesses.
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Over the past several years, premium rates have increased for most lines of business, while they have decreased in others, most notably workers' compensation and certain professional liability lines of business.
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For example, our business may be subject to, certain initiatives, including, but not limited to: legislative and regulatory action that seeks to retroactively mandate coverage for losses that our insurance policies would not otherwise cover and which were not priced to cover; legislative and regulatory action providing for shifting presumptions with respect to the burdens of proof for “essential” workers on workers’ compensation coverages and varying definitions of “essential” workers; actions prohibiting us from cancelling insurance policies in accordance with our policy terms or non-renewing policies at their natural expiration; and/or orders to provide premium refunds, grant extended grace periods for premium payments, and provide extended time to pay past due premiums.
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New or emerging pandemics, whether related to COVID-19 or otherwise, may materially and adversely affect our results of operations, financial position and liquidity, including the following: • Legislative and regulatory initiatives in response to pandemics may adversely affect us by, for example, retroactively mandating coverage for losses that our policies were not intended to cover. • A lthough the Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’ compensation, and other lines of business under a number of possible scenarios, there remains uncertainty around COVID-19's ultimate impact on the Company and its related reserves . • Claims and coverage issues may emerge that extend coverage beyond our underwriting intent or increase the number and/or size of claims. • Our reinsurers may refuse to pay reinsurance recoverables due to uncertainty regarding reinsurance coverage for losses related to COVID-19 or any future pandemics.
Removed
Any such action would likely increase both our underwriting losses and our expenses and any legal challenges to any such action could take years to resolve. Claim Losses Related to COVID-19 May Exceed Reserves . As of December 31, 2023, we recorded approximately $384 million for COVID-19-related losses.
Added
Our U.K. business could be specifically adversely impacted by trade barriers between the EU and the U.K. following Brexit, which has reduced the level of trade between the two markets and the U.K.’s overall trade exports, thereby negatively affecting the attractiveness of the U.K. market. We may be unable to attract and retain key personnel and qualified employees.
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Our reserves do not represent an exact calculation of liability, but represent an estimate of what management expects the ultimate settlement and claims administration will cost for claims that have occurred, whether known or unknown.
Added
As a result, our ability to conduct our business could be materially and adversely affected. Use of artificial intelligence technologies by us or third-parties on which we rely could expose us to technological, security, legal, and other risks.
Removed
Accordingly, given the uncertainties still associated with COVID-19 and its impact, our reserves and the underlying estimated level of claim losses and costs arising from COVID-19 may materially change. Claim Losses and Adjustment Expenses May Increase .

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY Cybersecurity Strategy and Risk Management Program The Company has a documented information security program (the Program) to identify, assess, monitor and manage potential cybersecurity threats and incidents. The Program is designed to protect the confidentiality, integrity and availability of our information systems and assets that store, process, or transmit information.
Biggest changeITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy The Company has a documented information security program (the "Program"), which is integrated into its overall risk management processes, to identify, assess, monitor and manage potential cybersecurity threats and incidents.
The Program’s security and risk policies and standards, implemented by either the Company or third party assessors or consultants, include: – information security management tools, such as firewalls, intrusion prevention and detection systems, anti-malware functionality, and access privilege controls; – vulnerability management, including penetration and control testing and vulnerability scans of information systems; – incident monitoring, breach notification and escalation, including disaster recovery and incident response plans and resources; – risk based assessment of third party service providers; and – annual cybersecurity awareness training for employees and contractors.
The Program’s security and risk policies and standards, implemented by either the Company or third party assessors or consultants, include: – information security management tools, such as firewalls, intrusion prevention and detection systems, anti-malware functionality, and access privilege controls; – vulnerability management, including penetration and control testing and vulnerability scans of information systems; 36 – incident monitoring, breach notification and escalation, including disaster recovery and incident response plans and resources; – risk based assessment of third party service providers; and – annual cybersecurity awareness training for employees and contractors.
Regular reporting on the Program is also provided to the Company’s Enterprise Risk Management Committee, which is comprised of the President and CEO, Senior Vice President – Enterprise Risk Management, Executive Vice President – Investments, Executive Vice President – Chief Financial Officer, Executive Vice President – Secretary, and the Of Counsel and Assistant Secretary.
Regular reporting on the Program is also provided to the Company’s Enterprise Risk Management Committee, which is comprised of the President and CEO, Senior Vice President – Enterprise Risk Management, Executive Vice President – Investments, Executive Vice President – Chief Financial Officer, and Executive Vice President – Secretary.
Our CISO meets periodically with senior executives, including the Company’s President and Chief Executive Officer, to discuss the Company’s cybersecurity strategy, and its monitoring, prevention, detection, mitigation, and remediation of cybersecurity risks.
Our CISO meets periodically with senior executives, including the Company’s President and CEO, to discuss the Company’s cybersecurity strategy, and its monitoring, prevention, detection, mitigation, and remediation of cybersecurity risks.
For a discussion regarding risks associated with cybersecurity threats, see Risk Factors – Risks Relating to Our Business – “If our information technology, telecommunications or other computer systems become unavailable or unreliable, our ability to conduct our business could be negatively or severely impacted” and “Failure to maintain the security of information technology systems and confidential data may expose us to liability.” Board Oversight, Governance and Risk Management The entire Board of Directors has oversight of risks from cybersecurity threats and receives periodic updates on such risks from the Company’s management, including from the Company’s President and CEO and its Vice President, Chief Information Security Officer (CISO).
For a discussion regarding risks associated with cybersecurity threats, see “Risk Factors – Risks Relating to Our Business – If our information technology, telecommunications or other computer systems become unavailable or unreliable, our ability to conduct our business could be negatively or severely impacted” and “Failure to maintain the security of information technology systems and confidential data may expose us to liability”; and “Use of artificial intelligence technologies, by us or third-parties on whom we rely, could expose us to technological, security, legal, and other risks.” Board Oversight, Governance and Risk Management The entire Board of Directors has oversight of risks from cybersecurity threats and receives periodic updates on such risks from the Company’s management, including from the Company’s President and CEO and its Senior Vice President - Chief Information Security Officer (CISO).
Our CISO is principally responsible for assessing and managing all aspects of the Program, including the Company’s Regional Information Security Officers (RISOs), third-party consultants, development of industry trends and control testing and tracking by risk level.
Our CISO, who has over 25 years of information security experience and is licensed as a Certified Information Systems Security Professional, is principally responsible for assessing and managing all aspects of the Program, including the Company’s Regional Information Security Officers (RISOs), third-party consultants, development of industry trends and control testing and tracking by risk level.
In the event of a potentially material cybersecurity incident, the Company’s incident response plans establish escalation protocols for relevant IT leaders and functional leaders within Enterprise Risk Management, Legal, Compliance and Internal Audit to engage management as appropriate. Our CISO has over 25 years of information security experience and is licensed as a Certified Information Systems Security Professional. 39
In the event of a potentially material cybersecurity incident, the Company’s incident response plans establish escalation protocols for relevant IT leaders and functional leaders within Legal, Compliance and Internal Audit to engage management as appropriate.
Added
The Program is designed to protect the confidentiality, integrity and availability of our information systems and assets that store, process, or transmit information.
Added
The Company engages third party consultants with respect to cybersecurity, including to conduct vulnerability assessments and penetration testing of its information technology systems. The Company has established a regular vendor risk management process to evaluate and address potential risks associated with the use of such third parties.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeRental expense for the Company's operations was approximately $44,256,000, $43,383,000 and $44,051,000 for 2023, 2022 and 2021, respectively. Future minimum lease payments, without provision for sublease income, are $50,222,000 in 2024, $41,249,000 in 2025 and $166,192,000 thereafter.
Biggest changeRental expense for the Company's operations was approximately $45,718,000, $44,256,000 and $43,383,000 for 2024, 2023 and 2022, respectively. Future minimum lease payments, without provision for sublease income, are $48,822,000 in 2025, $41,861,000 in 2026 and $172,679,000 thereafter.
ITEM 2. PROPERTIES W. R. Berkley and its subsidiaries own or lease office buildings or office space suitable to conduct their operations. At December 31, 2023, the Company had aggregate office space of 4,333,225 square feet, of which 1,042,156 were owned and 3,291,069 were leased.
ITEM 2. PROPERTIES W. R. Berkley Corporation and its subsidiaries own or lease office buildings or office space suitable to conduct their operations. At December 31, 2024, the Company had aggregate office space of 4,177,891 square feet, of which 1,051,681 were owned and 3,126,210 were leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company's estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations.
Biggest changeThe Company's estimates of the costs of settling such matters are reflected in its aggregate reserves for losses and loss expenses, and the Company does not believe that the ultimate outcome of such matters will have a material adverse effect on its financial condition or results of operations. 37 On December 22, 2023, one of the Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess of $90 million in respect of certain losses paid to its policyholders under certain event cancellation and related insurance policies.
While an adverse outcome is possible, the Company believes that the outcome, in any case, will not be material to the Company’s financial condition.
The Company believes its claims against the reinsurers are meritorious and expects a positive resolution to its lawsuit. While an adverse outcome is possible, the Company believes that the outcome, in any case, will not be material to the Company’s financial condition.
Removed
On December 22, 2023, one of the Company’s subsidiaries filed a lawsuit against certain reinsurers to recover in excess of $90 million in respect of certain losses paid to its policyholders under certain event cancellation and related insurance policies. The Company believes its claims against the reinsurers are meritorious and expects a positive resolution to its lawsuit.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that may yet be Purchased Under the Plans or Programs October 2023 371,497 $ 63.75 371,497 14,430,487 November 2023 — — — 14,430,487 December 2023 1,189,204 69.75 1,189,204 13,241,283 42
Biggest changeTotal Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that may yet be Purchased Under the Plans or Programs October 2024 715,920 $ 57.91 715,920 14,608,875 November 2024 449,947 57.69 449,947 14,158,928 December 2024 — — — 14,158,928 40
As of December 31, 2023 , the S&P 500® Property and Casualty Insurance Index consists of The Allstate Corporation, Arch Capital Group Ltd. (added Nov. 2022), Chubb Limited, Cincinnati Financial Corporation, The Hartford Financial Services Group, Inc., Loews Corporation (CNA), The Progressive Corporation, The Travelers Companies, Inc., and W. R.
As of December 31, 2024 , the S&P 500® Property and Casualty Insurance Index consisted of The Allstate Corporation, Arch Capital Group Ltd. (added Nov. 2022), Chubb Limited, Cincinnati Financial Corporation, The Hartford Financial Services Group, Inc., Loews Corporation (CNA), The Progressive Corporation, The Travelers Companies, Inc., and W. R. Berkley Corporation. 2019 2020 2021 2022 2023 2024 W. R.
The approximate number of record holders of the common stock on February 15, 2024 was 327. 41 The chart below shows a comparison of 5 year cumulative total return. Comparison of 5 Year Cumulative Total Return Assumes initial investment of $100 on January 1, 2018, with dividends reinvested.
The approximate number of record holders of the common stock on February 13, 2025 was 327. 39 The chart below shows a comparison of 5 year cumulative total return. Comparison of 5 Year Cumulative Total Return Assumes initial investment of $100 on January 1, 2019, with dividends reinvested.
In 2023, the Board declared regular quarterly cash dividends of $0.10 per share in the first quarter and $0.11 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share in the first, third, and fourth quarters, for a total of $501 million in aggregate dividends in 2023.
In 2024, the Board declared regular quarterly cash dividends of $0.07 per share in the first quarter and $0.08 per share in each of the remaining three quarters, as well as special dividends of $0.33 per share, $0.25 per share and $0.50 per share in the second, third, and fourth quarters, for a total of $532 million in aggregate dividends in 2024.
Berkley Corporation Cum $ 100.00 143.83 139.30 177.37 237.46 238.04 S&P 500 Index - Total Returns Cum $ 100.00 131.48 155.64 200.28 163.89 207.05 S&P 500 Property and Casualty Insurance Index Cum $ 100.00 125.87 133.84 157.28 187.04 207.20 Set forth below is a summary of the shares repurchased by the Company during the fourth quarter of 2023 and the remaining number of shares authorized for purchase by the Company during such period.
Berkley Corporation Cum $ 100.00 96.85 123.32 165.10 165.50 210.49 S&P 500 Index - Total Returns Cum $ 100.00 118.38 152.33 124.65 157.48 196.49 S&P 500 Property and Casualty Insurance Index Cum $ 100.00 106.33 124.95 148.60 164.61 222.06 Set forth below is a summary of the shares repurchased by the Company during the fourth quarter of 2024 and the remaining number of shares authorized for purchase by the Company during such period.
Removed
Berkley Corporation (added Dec. 2019). 2018 2019 2020 2021 2022 2023 W. R.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe 2023 net income reflected an after-tax increase in net investment income of $216 million primarily due to rising interest rates and a larger investment portfolio related to fixed maturity securities, an after-tax increase in underwriting income of $38 million mainly due to the growth in premium rates, an after-tax reduction in interest expenses of $2 million due to debt repayment in 2022, an after-tax increase in profit from insurance service businesses of $1 million and an after-tax increase of $1 million in minority interest, offset by an after-tax reduction in net investment gains of $123 million mainly due to the gain on sale of a real estate investment in 2022, an after-tax increase in foreign currency losses of $65 million mainly due to weakening of the U.S. dollar against other currencies in 2023, an after-tax increase in corporate expenses of $37 million due to increased compensation-related costs, an increase of $28 million in tax expense due to a change in the effective tax rate and an after-tax decrease in profits from non-insurance businesses of $5 million.
Biggest changeThe $375 million increase in net income reflected an after-tax increase in net investment income of $217 million primarily due to higher interest rates, a larger fixed maturity securities portfolio and investment income associated with our Argentine inflation-linked securities, an after-tax increase in foreign currency gains of $65 million mainly due to strengthening of the U.S. dollar against other currencies in 2024, an after-tax increase in net investment gains of $55 million due to change in market value of equity securities and impairment loss recognized on a real estate investment in 2023, an after-tax increase in underwriting income of $37 million mainly due to growth in premium rates, an after-tax reduction in corporate expenses of $15 million, an after-tax increase of $4 million in noncontrolling interests, an after-tax increase in profits from non-insurance businesses of $3 million and an after-tax increase in profit from insurance service businesses of $3 million, partially offset by an increase of $24 million in tax expense due to a change in the effective tax rate.
The Company monitors the financial condition of its reinsurers and attempts to place its coverages only with financially sound carriers. Reinsurance coverage and retentions vary depending on the line of business, location of the risk and nature of loss.
The Company monitors the financial condition of its reinsurers and attempts to place its coverages with only financially sound carriers. Reinsurance coverage and retentions vary depending on the line of business, location of the risk and nature of loss.
Since these securities were priced based on observable data, they were classified as Level 2. Cash flow model – If the above methodologies are not available, the Company prices securities using a discounted cash flow model based upon assumptions as to prevailing credit spreads, interest rates and interest rate volatility, time to maturity and subordination levels.
Since these securities were priced based on observable data, they were classified as Level 2. 49 Cash flow model – If the above methodologies are not available, the Company prices securities using a discounted cash flow model based upon assumptions as to prevailing credit spreads, interest rates and interest rate volatility, time to maturity and subordination levels.
Due to the uncertainty regarding the ultimate impacts of the pandemic on accident years 2020 and 2021 incurred losses, the Company was cautious in reacting to these lower trends in setting and updating its loss ratio estimates for these years.
Due to the uncertainty regarding the ultimate impacts of the pandemic on accident years 2020 and 2021 incurred losses, the Company was cautious in reacting to these lower trends in 46 setting and updating its loss ratio estimates for these years.
In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.
In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among 47 other factors.
The Company determines whether inputs are observable based on the use of such information by pricing services and external investment managers, the uninterrupted availability of such inputs, the need to make significant 50 adjustments to such inputs and the volatility of such inputs over time.
The Company determines whether inputs are observable based on the use of such information by pricing services and external investment managers, the uninterrupted availability of such inputs, the need to make significant adjustments to such inputs and the volatility of such inputs over time.
The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result in realized gains; however, there is no reason to expect these gains to continue in future periods. Equity Securities .
The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result in realized gains (losses); however, there is no reason to expect these gains (losses) to continue in future periods. Equity Securities .
The allowance is adjusted for any change in expected credit losses and subsequent recoveries through net investment gains (losses). The 49 impairment related to non-credit factors is recognized in other comprehensive income (loss).
The allowance is adjusted for any change in expected credit losses and subsequent recoveries through net investment gains (losses). The impairment related to non-credit factors is recognized in other comprehensive income (loss).
The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses 47 relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years.
The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and favorable claim settlements. The favorable development was spread across many prior accident years.
Examples of changes in terms and conditions that can have a significant impact on reserve levels are the use of aggregate policy limits, the expansion of coverage exclusions, whether or not defense costs are within policy limits, and changes in deductibles and attachment points. 44 The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns.
Examples of changes in terms and conditions that can have a significant impact on reserve levels are the use of aggregate policy limits, the expansion of coverage exclusions, whether or not defense costs are within policy limits, and changes in deductibles and attachment points. 42 The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns.
Based on historical results and the prospects for future operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of this asset. 58 Reinsurance The Company follows customary industry practice of reinsuring a portion of its exposures in exchange for paying reinsurers a part of the premiums received on the policies it writes.
Based on historical results and the prospects for future operations, management anticipates that it is more likely than not that future taxable income will be sufficient for the realization of this asset. 57 Reinsurance The Company follows customary industry practice of reinsuring a portion of its exposures in exchange for paying reinsurers a part of the premiums received on the policies it writes.
However, management of the available for sale 56 portfolio is considered necessary to maintain an approximate matching of assets and liabilities as well as to adjust the portfolio as a result of changes in financial market conditions and tax considerations. The Company’s philosophy related to holding or selling fixed maturity securities is based on its objective of maximizing total return.
However, management of the available for sale 55 portfolio is considered necessary to maintain an approximate matching of assets and liabilities as well as to adjust the portfolio as a result of changes in financial market conditions and tax considerations. The Company’s philosophy related to holding or selling fixed maturity securities is based on its objective of maximizing total return.
Investment funds are primarily reported on a one-quarter lag. Real Estate . Real estate is directly owned property held for investment. At December 31, 2023, real estate properties in operation included a long-term ground lease in Washington D.C., an office complex in New York City and the completed portion of a mixed-use project in Washington D.C.
Investment funds are primarily reported on a one-quarter lag. Real Estate . Real estate is directly owned property held for investment. At December 31, 2024, real estate properties in operation included a long-term ground lease in Washington D.C., an office complex in New York City and the completed portion of a mixed-use project in Washington D.C.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $261 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed the Company projects that the incremental tax, if any, will be immaterial.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $481 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will be immaterial.
Securities that are not rated by a rating agency are evaluated and classified by the Company on a case-by-case basis. A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at December 31, 2023 is presented in the table below.
Securities that are not rated by a rating agency are evaluated and classified by the Company on a case-by-case basis. A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at December 31, 2024 is presented in the table below.
In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of December 31, 2023, the Company did not make any adjustments to the prices provided by the pricing services.
In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of December 31, 2024, the Company did not make any adjustments to the prices provided by the pricing services.
Furthermore, due to 45 delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.
Furthermore, due to 43 delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of loss development factors for these lines of business.
The overall favorable prior year development for the segment was driven mainly by favorable development in excess workers’ compensation, substantially offset by unfavorable development in the non-proportional reinsurance assumed liability and excess general liability (including umbrella) lines of business.
The overall favorable prior year development for the segment was driven mainly by favorable development in excess workers’ compensation, substantially offset by unfavorable development in the non-proportional reinsurance assumed liability, excess general liability (including umbrella), and commercial auto liability lines of business.
The Company has no arrangements of these types that management believes may have a material current or future effect on our financial condition, liquidity or results of operations. 61
The Company has no arrangements of these types that management believes may have a material current or future effect on our financial condition, liquidity or results of operations. 60
Results of Operations for the Years Ended December 31, 2022 and 2021 For a comparison of the Company’s results of operations for the year ended December 31, 2022 to the year ended December 31, 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 24, 2023. 55 Investments As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-term securities that, combined with expected cash flow, it believes is adequate to meet its payment obligations.
Results of Operations for the Years Ended December 31, 2023 and 2022 For a comparison of the Company’s results of operations for the year ended December 31, 2023 to the year ended December 31, 2022, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on February 23, 2024. 54 Investments As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-term securities that, combined with expected cash flow, it believes is adequate to meet its payment obligations.
The Company's investment portfolio is highly liquid, with approximately 81% invested in cash, cash equivalents and marketable fixed maturity securities as of December 31, 2023. If the sale of fixed maturity securities were to become necessary, a realized gain or loss equal to the difference between the cost and sales price of securities sold would be recognized. Debt .
The Company's investment portfolio is highly liquid, with approximately 82% invested in cash, cash equivalents and marketable fixed maturity securities as of December 31, 2024. If the sale of fixed maturity securities were to become necessary, a realized gain or loss equal to the difference between the cost and sales price of securities sold would be recognized. Debt .
The following table presents the Company’s net income to common stockholders and net income per diluted share for the years ended December 31, 2023 and 2022.
The following table presents the Company’s net income to common stockholders and net income per diluted share for the years ended December 31, 2024 and 2023.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $5 million in 2023 (net of additional and return premiums).
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $2 million in 2023 (net of additional and return premiums).
Following is a summary of significant property reinsurance treaties in effect as of January 1, 2024: ◦ The Company’s property per risk reinsurance generally covers losses between $2.5 million and $85 million. ◦ The Company’s catastrophe excess of loss reinsurance program provides protection for business written by its Insurance segment businesses and U.S. and non-U.S. business written by Lloyd's Syndicate, excluding offshore energy.
Following is a summary of significant property reinsurance treaties in effect as of January 1, 2025: ◦ The Company’s property per risk reinsurance generally covers losses between $2.5 million and $85 million. ◦ The Company’s property catastrophe excess of loss reinsurance program provides protection for business written by its Insurance segments and U.S. and non-U.S. business written by Lloyd's Syndicate, excluding offshore energy.
Loans receivable are reported net of an allowance for expected credit losses of $3 million and $2 million as of December 31, 2023 and 2022, respectively. Fair Value Measurements . The Company’s fixed maturity available for sale securities, equity securities, and its trading account securities are carried at fair value.
Loans receivable are reported net of an allowance for expected credit losses of $1 million and $3 million as of December 31, 2024 and 2023, respectively. Fair Value Measurements . The Company’s fixed maturity available for sale securities, equity securities, and its trading account securities are carried at fair value.
Cash flow provided from operating activities increased to $2,929 million in 2023 from $2,569 million in 2022, primarily due to an increase in premium receipts partially offset by increased loss and loss expense payments. The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and proceeds from sales and maturities of portfolio investments.
Cash flow provided from operating activities increased to $3,678 million in 2024 from $2,929 million in 2023, primarily due to an increase in premium receipts partially offset by increased loss and loss expense payments. The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and proceeds from sales and maturities of portfolio investments.
Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized gains on investments were $48 million in 2023 compared with $217 million in 2022.
Decisions to sell securities and other 52 investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized gains on investments were $80 million in 2024 compared with $48 million in 2023.
Approximately $3.1 billion, or 20%, of the Company’s net loss reserves as of December 31, 2023 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves.
Approximately $3.3 billion, or 19.1%, of the Company’s net loss reserves as of December 31, 2024 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss reserves.
The Company also has a $36 million valuation allowance against the gross deferred tax asset and a gross deferred tax liability of $473 million (which primarily relates to deferred policy acquisition costs, and various investment funds) resulting in a net deferred tax asset of $267 million.
The Company also has a $36 million valuation allowance against the gross deferred tax asset and a gross deferred tax liability of $524 million (which primarily relates to deferred policy acquisition costs, and various investment funds) resulting in a net deferred tax asset of $155 million.
Our workers’ compensation catastrophe reinsurance program is a shared cover for both excess and primary workers’ compensation business. • Facultative reinsurance - The Company also purchases facultative reinsurance on certain individual policies or risks that are in excess of treaty reinsurance capacity. • Other reinsurance - Depending on the business, the Company purchases specific additional reinsurance to supplement the above programs. • Lifson Re will continue to be a participant on the majority of the Company’s reinsurance placements for a 30.0% share of the placed amounts.
Our workers’ compensation catastrophe reinsurance program is a shared cover for both excess and primary workers’ compensation business. • Facultative reinsurance - The Company also purchases facultative reinsurance on certain individual policies or risks that are in excess of treaty reinsurance capacity. • Other reinsurance - Depending on the business, the Company purchases specific additional reinsurance to supplement the above programs. • Lifson Re is expected to continue to be a participant on the majority of the Company’s reinsurance placements.
Ceded reinsurance premiums as a percentage of gross written premiums were 16% in both 2023 and 2022. Premiums earned increased 9% to $10,401 million in 2023 from $9,561 million in 2022. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly recent rate increases will be earned over the upcoming quarters.
Ceded reinsurance premiums as a percentage of gross written premiums were 16% in both 2024 and 2023. Premiums earned increased 11% to $11,548 million in 2024 from $10,401 million in 2023. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly recent rate increases will be earned over the upcoming quarters.
The Company also attempts to maintain an appropriate relationship between the effective duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The effective duration of the investment portfolio was 2.4 years at both December 31, 2023 and 2022.
The Company also attempts to maintain an appropriate relationship between the effective duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The effective duration of the investment portfolio was 2.6 years and 2.4 years at December 31, 2024 and 2023, respectively.
(3) Reinsurance & Monoline Excess includes property and casualty reinsurance as well as operations that solely retain risk on an excess basis. 46 The Company evaluates reserves for losses and loss expenses on a quarterly basis. Changes in estimates of prior year losses are reported when such changes are made.
(3) Reinsurance & Monoline Excess includes property and casualty reinsurance as well as certain program management business and operations that solely retain risk on an excess basis. 44 The Company evaluates reserves for losses and loss expenses on a quarterly basis. Changes in estimates of prior year losses are reported when such changes are made.
The maturities of the outstanding debt are $7 million in 2024, $3 million in 2025, $250 million in 2037, $350 million in 2044, $470 million in 2050, $400 million in 2052, $185 million in 2058, $300 million in 2059, $250 million in 2060, and $650 million in 2061.
The maturities of the outstanding debt are $9 million in 2025, $250 million in 2037, $350 million in 2044, $470 million in 2050, $400 million in 2052, $185 million in 2058, $300 million in 2059, $250 million in 2060, and $650 million in 2061.
Premiums earned in 2023 are related to business written during both 2023 and 2022. Audit premiums were $363 million in 2023 compared with $312 million in 2022. Net Investment Income .
Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $350 million in 2024 compared with $363 million in 2023. Net Investment Income .
These securities were classified as Level 3. 51 Results of Operations for the Years Ended December 31, 2023 and 2022 Business Segment Results Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the years ended December 31, 2023 and 2022.
These securities were classified as Level 3. 50 Results of Operations for the Years Ended December 31, 2024 and 2023 Business Segment Results Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (policy acquisition and insurance operating expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the years ended December 31, 2024 and 2023.
Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 4.4% in 2023 and 2.9% in 2022. The effective duration of the fixed maturity portfolio was 2.4 years at both December 31, 2023 and 2022.
Investment funds are reported on a one quarter lag. The average annualized yield for fixed maturity securities was 5.3% in 2024 and 4.4% in 2023. The effective duration of the fixed maturity portfolio was 2.6 years at December 31, 2024 and 2.4 years at December 31, 2023.
For 2024, some of our property catastrophe reinsurance is placed via industry loss warranty (ILW) covers and the equivalent W. R. Berkley limit and retention (and resulting net position) are estimated based on our market share and modeled outcome when applying the ILW layering. Retentions by territory and peril range between $62.1 million and $83.6 million.
For 2025, some of our property catastrophe reinsurance is placed via industry loss warranty (ILW) covers and the equivalent W. R. Berkley limit and retention (and resulting net position) are estimated based on our market share and modeled outcome when applying the ILW layering. Retentions by territory and peril range between $46.3 million and $74.0 million.
A summary of loss ratios in 2023 compared with 2022 by business segment follows: • Insurance - The loss ratio was 62.3% in 2023 and 61.3% in 2022. Catastrophe losses were $160 million in 2023 compared with $127 million in 2022.
A summary of loss ratios in 2024 compared with 2023 by business segment follows: • Insurance - The loss ratio was 62.8% in 2024 and 62.3% in 2023. Catastrophe losses were $227 million in 2024 compared with $160 million in 2023.
Off-Balance Sheet Arrangements An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that engages in leasing, hedging or research and development arrangements with the Company.
The Company does not retain underwriting risk, and credit risk is limited as ceded balances are jointly shared by all the pool members. 59 Off-Balance Sheet Arrangements An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or contingent interest in transferred assets, (3) an obligation under derivative instruments classified as equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company, or that engages in leasing, hedging or research and development arrangements with the Company.
At December 31, 2023, the Company had a gross deferred tax asset of $777 million (which primarily relates to, loss and loss expense reserves, unearned premium reserves and unrealized losses on investments).
At December 31, 2024, the Company had a gross deferred tax asset of $715 million (which primarily relates to, loss and loss expense reserves, unearned premium reserves, employee compensation plans and unrealized losses on investments).
At December 31, 2023, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of $2,837 million and a face amount of $2,865 million.
At December 31, 2024, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of $2,841 million and a face amount of $2,864 million.
The unfavorable development for non-proportional reinsurance assumed liability and excess general liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020. Unfavorable prior year development (net of additional and return premiums) was $36 million in 2022.
The unfavorable development for non-proportional reinsurance assumed liability and excess general liability was associated primarily with our U.S. assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years 2017 through 2020.
In 2023, the gains reflected a change in unrealized 53 gains on equity securities of $70 million, partially offset by net realized losses on investments of $23 million.
In 2024, the gains reflected a change in unrealized gains on equity securities of $121 million, partially offset by net realized losses on investments of $41 million. In 2023, the gains reflected a change in unrealized gains on equity securities of $71 million, partially offset by net realized losses on investments of $23 million.
Adverse prior year reserve development (net of premium offsets) was $19 million in 2023 and $36 million in 2022 (refer to Note 13 of our consolidated financial statements for more detail). The loss ratio excluding catastrophe losses and prior year reserve development was 59.2% and 58.7% in 2023 and 2022, respectively.
Favorable prior year reserve development (net of premium offsets) was $4 million in 2024 and adverse prior year reserve development was $19 million in 2023 (refer to Note 13 of our consolidated financial statements for more detail). The loss ratio excluding catastrophe losses and prior year reserve development were 59.2% in both 2024 and 2023.
Total capitalization (equity, debt and subordinated debentures) was $10.3 billion at December 31, 2023. The percentage of the Company’s capital attributable to senior notes, subordinated debentures and other debt was 28% and 30% at December 31, 2023 and 2022, respectively.
Total Capital . Total capitalization (equity, debt and subordinated debentures) was $11.2 billion at December 31, 2024. The percentage of the Company’s capital attributable to senior notes, subordinated debentures and other debt was 25% and 28% at December 31, 2024 and 2023, respectively.
Unfavorable prior year development (net of additional and return premiums) was $19 million in 2023. Insurance – Reserves for the Insurance segment developed unfavorably by $24 million in 2023 (net of additional and return premiums).
Insurance – Reserves for the Insurance segment developed unfavorably by $21 million in 2023 (net of additional and return premiums). The unfavorable development for the segment was concentrated in the early part of the year.
The unfavorable professional liability and non-proportional reinsurance assumed liability development was concentrated mainly in accident years 2016 through 2018 and was associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional liability exposures. Favorable prior year development (net of additional and return premiums) was $7 million in 2021.
The unfavorable professional liability and non-proportional reinsurance assumed liability development was concentrated mainly in accident years 2016 through 2018 and was associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional liability exposures.
Insurance – Reserves for the Insurance segment developed unfavorably by $40 million in 2022 (net of additional and return premiums). The unfavorable development in the segment primarily related to COVID-19 losses at two businesses. These businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by losses directly caused by the COVID-19 pandemic.
The unfavorable development in the segment primarily related to COVID-19 losses at two businesses. These businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by losses directly caused by the COVID-19 pandemic.
The number of weighted average diluted shares decreased by 6.2 million for 2023 compared to 2022, mainly reflecting shares repurchased in 2023. Premiums . Gross premiums written were $12,972 million in 2023, an increase of 9% from $11,909 million in 2022.
The number of weighted average diluted shares decreased by 6.7 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024. Premiums . Gross premiums written were $14,211 million in 2024, an increase of 10% from $12,972 million in 2023.
The ceded losses and loss expenses ratio increased 3 points to 70% in 2023 from 67% in 2022. The following table presents the credit quality of amounts due from reinsurers as of December 31, 2023.
The ceded losses and loss expenses ratio decreased 7.0 points to 63% in 2024 from 70% in 2023. The following table presents the credit quality of amounts due from reinsurers as of December 31, 2024.
The aggregate cost of the repurchases was $537 million in 2023 and $94 million in 2022.
The aggregate cost of the repurchases was $304 million in 2024 and $537 million in 2023.
The unfavorable development for the segment was concentrated in the early part of the year, with reserve development being flat overall during the second half of 2023. A key driver of the unfavorable development early in 2023 was property catastrophe losses related to 2022 events which were still being adjusted and settled during the early part of 2023.
A key driver of the unfavorable development early in 2023 was property catastrophe losses related to 2022 events which were still being adjusted and settled during the early part of 2023.
Insurance Service Fees . The Company earns fees from an insurance distribution business (part of which was sold in June 2023), a third-party administrator, and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees were $106 million in 2023 and $111 million in 2022.
The proceeds from the Argentine inflation-linked securities that matured and were sold in 2024 have been reinvested. Insurance Service Fees . The Company earns fees from an insurance distribution business (part of which was sold in June 2023), a third-party administrator, and as a servicing carrier of workers' compensation assigned risk plans for certain states.
In order to properly match loss expenses with income earned on investment securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount rates determined by reference to the U.S. Treasury yield curve. These rates are determined annually based on the weighted average rate for the period.
Substantially all discounted workers’ compensation reserves (97% of total discounted reserves at December 31, 2024) are excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount rates determined by reference to the U.S. Treasury yield curve.
The income tax will be based on a statutory tax rate of 15% on Bermuda businesses, subject to reductions for foreign tax credits, and will be effective for fiscal years beginning on or after January 1, 2025.
The income tax will be based on a statutory tax rate of 15% on Bermuda businesses, subject to reductions for foreign tax credits, and will be effective for fiscal years beginning on or after January 1, 2025. The legislation does not have a material impact on our income tax position. We will continue to evaluate tax legislation developments during 2025.
In 2023, the Board declared regular quarterly cash dividends of $0.10 per share in the first quarter and $0.11 per share in each of the remaining three quarters, as well as special dividends of $0.50 per share in the first, third, and fourth quarters, for a total of $501 million in aggregate dividends in 2023. Total Capital .
In 2024, the Board declared regular quarterly cash dividends of $0.07 per share in the first quarter and $0.08 per share in each of the remaining three quarters, as well as special dividends of $0.33 per share, $0.25 per share and $0.50 per share in the second, third, and fourth quarters, respectively, for a total of $532 million in aggregate dividends in 2024.
Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses increased to $286 million in 2023 from $242 million in 2022, primarily due to the increase in compensation-related costs in 2023.
Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses decreased to $269 million in 2024 from $286 million in 2023, primarily due to lower new start-up operating unit expenses in 2024.
Net prior year development (i.e, the sum of prior year reserve changes and prior year earned premiums changes) for each of the last three years ended December 31, are as follows: (In thousands) 2023 2022 2021 Increase in prior year loss reserves $ (29,681) $ (54,511) $ (863) Increase in prior year earned premiums 10,782 18,106 7,510 Net (unfavorable) favorable prior year development $ (18,899) $ (36,405) $ 6,647 The COVID-19 global pandemic has impacted, and may further impact, the Company’s loss costs.
Net prior year development (i.e, the sum of prior year reserve changes and prior year earned premiums changes) for each of the last three years ended December 31, are as follows: (In thousands) 2024 2023 2022 Increase in prior year loss reserves $ (14,350) $ (29,681) $ (54,511) Increase in prior year earned premiums 18,782 10,782 18,106 Net favorable (unfavorable) prior year development $ 4,432 $ (18,899) $ (36,405) The ultimate net impact of COVID-19 on the Company's reserves remains uncertain.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $4 million in 2022 (net of additional and return premiums). The overall favorable development for the segment was driven mainly by favorable development in excess workers compensation, substantially offset by unfavorable development in the professional liability and non-proportional reinsurance assumed liability lines of business.
Reinsurance & Monoline Excess – Reserves for the Reinsurance & Monoline Excess segment developed favorably by $12 million in 2024 (net of additional and return premiums). The favorable development was driven mainly by excess workers’ compensation business, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business.
Following is a summary of other operating costs and expenses: (In thousands) 2023 2022 Policy acquisition and insurance operating expenses $ 2,954,686 $ 2,673,903 Insurance service expenses 91,714 96,419 Net foreign currency losses (gains) 31,799 (50,930) Other costs and expenses 285,737 242,113 Total $ 3,363,936 $ 2,961,505 Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs.
Following is a summary of other operating costs and expenses: (In thousands) 2024 2023 Policy acquisition and insurance operating expenses $ 3,294,902 $ 2,954,686 Insurance service expenses 90,640 91,714 Net foreign currency (gains) losses (52,376) 31,799 Other costs and expenses 269,140 285,737 Total $ 3,602,306 $ 3,363,936 Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs.
In addition, part of the previously mentioned mixed-use project in Washington D.C. is under development. The Company expects to fund further development costs for the project with a combination of its own funds and external financing. The Company recognized impairments on real estate of $72 million in 2023.
In addition, part of the previously mentioned mixed-use project in Washington D.C. is under development. The Company expects to fund further development costs for the project with a combination of its own funds and external financing. Arbitrage Trading Account . The arbitrage trading account is comprised of direct investments in arbitrage securities.
The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of December 31, 2023: (In thousands) Carrying Value Percent of Total Pricing source: Independent pricing services $ 19,589,441 97.3 % Syndicate manager 85,139 0.4 Directly by the Company based on: Observable data 450,356 2.3 Total $ 20,124,936 100.0 % Independent pricing services - Substantially all of the Company’s fixed maturity securities available for sale were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company).
The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of December 31, 2024: (In thousands) Carrying Value Percent of Total Pricing source: Independent pricing services $ 21,919,679 98.1 % Syndicate manager 135,129 0.6 Directly by the Company based on: Observable data 278,978 1.3 Cash flow model 19,667 — Total $ 22,353,453 100.0 % Independent pricing services - Substantially all of the Company’s fixed maturity securities available for sale were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company).
Gross premiums written increased $79 million (30%) for property lines and $28 million (12%) for monoline excess, partially offset by a reduction of $22 million (3%) for casualty lines. Net premiums written were $10,954 million in 2023, an increase of 10% from $10,004 million in 2022.
Gross premiums written increased $68 million (16%) for property lines and $28 million (10%) for monoline excess, partially offset by a reduction of $58 million (7%) for casualty lines. Net premiums written were $11,972 million in 2024, an increase of 9% from $10,954 million in 2023.
Loans receivable include commercial loans of $1 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 10 years. 57 Liquidity and Capital Resources Cash Flow .
Real estate loans generally earn interest at fixed or stepped interest rates and have maturities through 2028. Loans receivable include commercial loans of $3 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 5 years. 56 Liquidity and Capital Resources Cash Flow .
These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements. Allowance for Expected Credit Losses on Investments .
The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements. Allowance for Expected Credit Losses on Investments .
Catastrophe losses were $35 million in 2023 compared with $85 million in 2022. Favorable prior year reserve development was $5 million in 2023 and $4 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development decreased 3.1 points to 51.4% in 2023 from 54.5% in 2022. Other Operating Costs and Expenses .
Favorable prior year reserve development was $12 million in 2024 and $2 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 1.3 points to 50.6% in 2024 from 51.9% in 2023. Other Operating Costs and Expenses .
Limits purchased are the difference between the corresponding retention and the following amounts: ▪ For terrorism: $700 million. ▪ For Northeast wind exposures: $600 million. ▪ For all other perils and/or territories: $500 million. • Casualty reinsurance treaties - The Company purchases casualty reinsurance to reduce its exposure to large individual casualty losses, workers’ compensation catastrophe losses and casualty losses involving multiple claimants or insureds for the majority of business written by its U.S. companies.
Limits purchased are the difference between the corresponding retentions and $700 million. • Casualty reinsurance treaties - The Company purchases casualty reinsurance to reduce its exposure to large individual casualty losses and workers’ compensation catastrophe losses for the majority of business written by its U.S. companies.
Once established, no adjustments are made to the discount rate for that period, and any increases or decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are recognized. The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss payout experience.
These rates are determined annually based on the weighted average rate for the period. Once established, no adjustments are made to the discount rate for that period, and any increases or decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are recognized.
At December 31, 2023, the carrying value of investment funds was $1,622 million, including investments in financial services funds of $433 million, other funds of $397 million (which includes a deferred compensation trust asset of $36 million), transportation funds of $344 million, real estate funds of $202 million, infrastructure funds of $131 million and energy funds of $115 million.
At December 31, 2024, the carrying value of investment funds was $1,468 million, including investments in financial services funds of $430 million, other funds of $379 million (which includes a deferred compensation trust asset of $38 million), transportation funds of $286 million, real estate funds of $179 million, infrastructure funds of $151 million and energy funds of $43 million.
Our initial assessment is that the impact will not be significant, as the Company mainly operates in jurisdictions with a statutory tax rate above 15%. The “Bermuda Corporate Income Tax Act 2023” was passed into law December 27, 2023 in Bermuda.
Our initial assessment is that the 2025 impact will not be significant. The “Bermuda Corporate Income Tax Act 2023” was passed into law December 27, 2023.
Following is a summary of net investment income (loss) for the years ended December 31, 2023 and 2022: Amount Average Annualized Yield (In thousands) 2023 2022 2023 2022 Fixed maturity securities, including cash and cash equivalents and loans receivable $ 929,098 $ 549,281 4.4 % 2.9 % Arbitrage trading account 69,369 45,213 5.7 3.9 Equity securities 55,726 52,600 5.1 4.9 Investment funds 16,743 145,099 1.0 8.9 Real estate (11,185) (3,087) (0.9) (0.2) Gross investment income 1,059,751 789,106 4.0 3.2 Investment expenses (6,916) (9,921) — — Total $ 1,052,835 $ 779,185 4.0 % 3.2 % Net investment income increased 35% to $1,053 million in 2023 from $779 million in 2022 due primarily to a $380 million increase in income from fixed maturity securities mainly driven by higher interest rates and a larger investment portfolio, a $24 million increase from the arbitrage trading account (including investment income from trading account receivables from brokers and clearing organizations), a $3 million increase from equity securities and a $3 million reduction in investment expenses, partially offset by a $128 million decrease in income from investment funds primarily due to financial service funds and real estate funds and an $8 million decrease in real estate.
Following is a summary of net investment income (loss) for the years ended December 31, 2024 and 2023: Amount Average Annualized Yield (In thousands) 2024 2023 2024 2023 Fixed maturity securities, including cash and cash equivalents and loans receivable $ 1,260,429 $ 929,098 5.3 % 4.4 % Arbitrage trading account 69,573 69,369 5.8 5.7 Equity securities 48,920 55,726 5.0 5.1 Investment funds (11,491) 16,743 (0.7) 1.0 Real estate (23,616) (11,185) (1.8) (0.9) Gross investment income 1,343,815 1,059,751 4.6 4.0 Investment expenses (10,654) (6,916) — — Total $ 1,333,161 $ 1,052,835 4.6 % 4.0 % Net investment income increased 27% to $1,333 million in 2024 from $1,053 million in 2023 due primarily to a $331 million increase in income from fixed maturity securities mainly driven by higher interest rates, a larger fixed maturity securities portfolio and investment income associated with our Argentine inflation-linked securities (see below for further discussion), partially offset by a $28 million decrease in income from investment funds primarily due to financial service funds, a $12 million decrease in real estate, a $7 million decrease from equity securities and a $4 million increase in investment expenses.
Such $384 million of COVID-19-related losses included $381 million of reported losses and $3 million of IBNR. For the year ended December 31, 2023, the Company recognized current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $1 million, all of which relates to the Insurance segment.
As of December 31, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $381 million, of which $326 million relates to the Insurance segment and $55 million relates to the Reinsurance & Monoline Excess segment. Such $381 million of COVID-19-related losses included $379 million of reported losses and $2 million of IBNR.
Policy acquisition and insurance operating expenses increased 11% and net premiums earned increased 9% from 2022. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased by 0.4 points to 28.4% in 2023 from 28.0% in 2022 mainly due to lower ceding commissions, increased compensation costs and new start-up operating unit expenses.
Policy acquisition and insurance operating expenses increased 12% and net premiums earned increased 11% from 2023. The expense ratio (policy acquisition and insurance operating expenses expressed as a percentage of net premiums earned) increased by 0.1 points to 28.5% in 2024 from 28.4% in 2023.
Net foreign currency losses were $32 million in 2023 compared to gains of $51 million in 2022, primarily related to the strengthening of the U.K. sterling and Euro against the U.S. dollar in 2023.
Net foreign currency gains were $52 million in 2024 compared to losses of $32 million in 2023, primarily due to the U.S. dollar strengthening against other major currencies in 2024.
The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity, relative to our assumptions, on our loss estimate for claims occurring in 2023: (In thousands) Frequency (+/-) Severity (+/-) 1% 5% 10% 1% $ 126,867 $ 381,863 $ 700,608 5% 381,863 646,957 978,326 10% 700,608 978,326 1,325,474 Our net reserves for losses and loss expenses of approximately $15.7 billion as of December 31, 2023 relate to multiple accident years.
The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity, relative to our assumptions, on our loss estimate for claims occurring in 2024: (In thousands) Frequency (+/-) Severity (+/-) 1% 5% 10% 1% $ 142,388 $ 428,582 $ 786,324 5% 428,582 726,110 1,098,020 10% 786,324 1,098,020 1,487,640 Our net reserves for losses and loss expenses of approximately $17.2 billion as of December 31, 2024 relate to multiple accident years.
Service expenses, which represent the costs associated with the fee-based businesses, was $92 million in 2023, down from $96 million in 2022, as a result of the sale of the property and casualty insurance services division of Breckenridge IS, Inc. 54 Net foreign currency losses (gains) result from transactions denominated in a currency other than a businesses’ functional currency.
Service expenses, which represent the costs associated with the fee-based businesses, was $91 million in 2024 compared to $92 million in 2023. 53 Net foreign currency (gains) losses result from transactions denominated in a currency other than a businesses’ functional currency.
The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing approximately 3% of total discounted reserves at December 31, 2023), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates prescribed or permitted by the Department of Insurance of the State of Delaware.
The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss payout experience. The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing approximately 3% of total discounted reserves at December 31, 2024), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease.
As of December 31, 2023, there were no borrowings outstanding under the facility. Equity . At December 31, 2023, total common stockholders’ equity was $7.5 billion, common shares outstanding were 256,544,757 and stockholders’ equity per outstanding share was $29.06. The Company repurchased 8,707,676 and 1,370,394 shares of its common stock in 2023 and 2022, respectively.
As of December 31, 2024, there were no borrowings outstanding under the facility. Equity . At December 31, 2024, total common stockholders’ equity was $8.4 billion, common shares outstanding were 380,066,070 and stockholders’ equity per outstanding share was $22.09. The Company repurchased 5,702,996 and 13,061,514 shares of its common stock in 2024 and 2023, respectively.
(In thousands, except per share data) 2023 2022 Net income to common stockholders $ 1,381,359 $ 1,381,062 Weighted average diluted shares 273,298 279,461 Net income per diluted share $ 5.05 $ 4.94 The Company reported net income of $1,381 million in both 2023 and 2022.
(In thousands, except per share data) 2024 2023 Net income to common stockholders $ 1,756,115 $ 1,381,359 Weighted average diluted shares 403,224 409,948 Net income per diluted share $ 4.36 $ 3.37 The Company reported net income of $1,756 million in 2024 and $1,381 million in 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table outlines the groups of fixed maturity securities and their effective duration at December 31, 2023: Effective Duration ($ in thousands) (Years) Fair Value Mortgage-backed securities 3.9 $ 2,269,430 State and municipal 3.2 2,688,058 U.S. government and government agencies 3.1 1,716,731 Foreign government 2.7 1,666,229 Corporate 2.5 7,654,059 Loans receivable 1.4 198,244 Asset-backed securities 1.1 4,187,040 Cash and cash equivalents 0.0 1,363,195 Total 2.4 $ 21,742,986 Duration is a common measure of the price sensitivity of fixed maturity securities to changes in interest rates.
Biggest changeThe following table outlines the groups of fixed maturity securities and their effective duration at December 31, 2024: Effective Duration ($ in thousands) (Years) Fair Value Mortgage-backed securities 4.3 $ 3,767,851 U.S. government and government agencies 3.7 2,235,341 State and municipal 2.7 2,338,256 Foreign government 2.7 1,755,325 Corporate 2.6 8,417,641 Loans receivable 2.4 405,248 Asset-backed securities 1.4 3,885,012 Cash and cash equivalents 0.0 1,404,931 Total 2.6 $ 24,209,605 Duration is a common measure of the price sensitivity of fixed maturity securities to changes in interest rates.
The Company's merger arbitrage securities are primarily exposed to the risk of completion of announced deals, which are subject to regulatory as well as transactional and other risks. 62
The Company's merger arbitrage securities are primarily exposed to the risk of completion of announced deals, which are subject to regulatory as well as transactional and other risks. 61
The effective duration for the fixed maturity portfolio (including cash and cash equivalents) was 2.4 years at both December 31, 2023 and 2022. In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.
The effective duration for the fixed maturity portfolio (including cash and cash equivalents) was 2.6 years and 2.4 years at December 31, 2024 and 2023, respectively. In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.
The estimated fair value at specified levels at December 31, 2023 would be as follows: (In thousands) Estimated Fair Value Change in Fair Value Change in interest rates: 300 basis point rise $ 20,180,450 $ (1,562,536) 200 basis point rise 20,691,790 (1,051,196) 100 basis point rise 21,215,431 (527,555) Base scenario 21,742,986 — 100 basis point decline 22,265,903 522,917 200 basis point decline 22,780,386 1,037,400 300 basis point decline 23,286,292 1,543,306 Arbitrage investing differs from other types of investments in that its focus is on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less).
The estimated fair value at specified levels at December 31, 2024 would be as follows: (In thousands) Estimated Fair Value Change in Fair Value Change in interest rates: 300 basis point rise $ 22,258,604 $ (1,951,001) 200 basis point rise 22,898,254 (1,311,351) 100 basis point rise 23,555,609 (653,996) Base scenario 24,209,605 — 100 basis point decline 24,827,143 617,538 200 basis point decline 25,393,892 1,184,287 300 basis point decline 25,928,699 1,719,094 Arbitrage investing differs from other types of investments in that its focus is on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less).

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