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Claim and Claim Adjustment Expense Reserves

12 Months Ended

Dec. 31, 2025

Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract]

Claim and Claim Adjustment Expense Reserves

Claim and claim adjustment expense reserves represent the estimated amounts necessary to resolve all outstanding claims, including incurred but not reported (IBNR) claims as of the reporting date. The Company's reserve projections are based primarily on detailed analysis of the facts in each case, the Company's experience with similar cases and various historical development patterns. Consideration is given to historical patterns such as claim reserving trends and settlement practices, loss payments, pending levels of unpaid claims and product mix, economic, medical and social inflation, and public attitudes. All of these factors can affect the estimation of claim and claim adjustment expense reserves.

Establishing claim and claim adjustment expense reserves, including claim and claim adjustment expense reserves for catastrophic events that have occurred, is an estimation process. Many factors can ultimately affect the final settlement of a claim and, therefore, the necessary reserve. Changes in the law, results of litigation, medical costs, the cost of repair materials and labor rates can affect ultimate claim costs. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of the claim, the more variable the ultimate settlement amount can be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably estimable than long-tail claims, such as workers' compensation, general liability and professional liability claims. Claim and claim adjustment expense reserves are also maintained for the Company's structured settlement obligations. In developing the claim and claim adjustment expense reserve estimates for structured settlement obligations, the Company's actuaries review mortality experience on an annual basis. Adjustments to prior year reserve estimates, if necessary, are reflected in the results of operations in the period that the need for such adjustments is determined. There can be no assurance that the Company's ultimate cost for insurance losses will not exceed current estimates.

Liability for Unpaid Claim and Claim Adjustment Expenses

The table below reconciles the net liability for unpaid claim and claim adjustment expenses to the amount presented on the Consolidated Balance Sheets.


As of December 31
(In millions)	2025
Net liability for unpaid claim and claim adjustment expenses:
Specialty	$	6,188
Commercial	10,696
International	2,841
Life & Group (1)	535
Corporate & Other	357
Total net claim and claim adjustment expenses	20,617
Reinsurance receivables: (2)
Specialty	1,596
Commercial	1,553
International	535
Life & Group	56
Corporate & Other (3)	2,242
Total reinsurance receivables	5,982
Total gross liability for unpaid claim and claim adjustment expenses	$	26,599

(1) The Life & Group segment amounts are related to unfunded structured settlements arising from short-duration contracts.

(2) Reinsurance receivables presented are gross of the allowance for uncollectible reinsurance and do not include reinsurance receivables related to paid losses.

(3) The Corporate & Other Reinsurance receivables are primarily related to A&EP claims covered under the A&EP Loss Portfolio Transfer (LPT).

The following table presents a reconciliation between beginning and ending claim and claim adjustment expense reserves.


As of or for the years ended December 31
(In millions)	2025		2024		2023
Reserves, beginning of year:
Gross	$	24,976	$	23,304	$	22,120
Ceded	5,713		5,141		5,191
Net reserves, beginning of year	19,263		18,163		16,929
Net incurred claim and claim adjustment expenses:
Provision for insured events of current year	6,724		6,330		5,667
Increase (decrease) in provision for insured events of prior years	189		42		48
Amortization of discount	39		39		44
Total net incurred (1)	6,952		6,411		5,759
Net payments attributable to:
Current year events	(1,089)		(1,093)		(922)
Prior year events	(4,685)		(4,096)		(3,679)
Total net payments	(5,774)		(5,189)		(4,601)
Foreign currency translation adjustment and other	176		(122)		76
Net reserves, end of year	20,617		19,263		18,163
Ceded reserves, end of year	5,982		5,713		5,141
Gross reserves, end of year	$	26,599	$	24,976	$	23,304

(1) Total net incurred does not agree to Insurance claims and policyholders' benefits as reflected on the Consolidated Statements of Operations due to amounts related to retroactive reinsurance deferred gain accounting, uncollectible reinsurance and benefit expenses related to future policy benefits and policyholders' dividends, which are not reflected in the table above.

Reserving Methodology

In developing claim and claim adjustment expense reserve estimates, the Company's actuaries perform detailed reserve analyses that are staggered throughout the year. The data is organized at a reserve group level. Every reserve group is reviewed at least once during the year, but most are reviewed more frequently. The analyses generally review losses gross of ceded reinsurance and apply the ceded reinsurance terms to the gross estimates to establish estimates net of reinsurance. Factors considered include, but are not limited to, the historical pattern and volatility of the actuarial indications, the sensitivity of the actuarial indications to changes in paid and incurred loss patterns, the consistency of claims handling processes, the consistency of case reserving practices, changes in the Company's pricing and underwriting, pricing and underwriting trends in the insurance market and legal, judicial, geopolitical, social and economic trends. In addition to the detailed analyses, the Company reviews actual loss emergence for all products each quarter.

In developing the loss reserve estimates for property and casualty contracts, the Company generally projects ultimate losses using several common actuarial methods as listed below. The Company reviews the indications from the various methods and applies judgment to select an actuarial point estimate. The carried reserve may differ from the actuarial point estimate as a result of the Company's consideration of the factors noted above as well as the potential volatility of the projections associated with the specific product being analyzed and other factors affecting claims costs that may not be quantifiable through traditional actuarial analysis. The indicated required reserve is the difference between the selected ultimate loss and the inception-to-date paid losses. The difference between the selected ultimate loss and the case incurred or reported loss is IBNR. IBNR includes a provision for development on known cases as well as a provision for late reported incurred claims.

The most frequently utilized methods to project ultimate losses include the following:

•Paid development: The paid development method estimates ultimate losses by reviewing paid loss patterns and applying them to accident years with further expected changes in paid loss.

•Incurred development: The incurred development method is similar to the paid development method, but it uses case incurred losses instead of paid losses.

•Loss ratio: The loss ratio method multiplies premiums by an expected loss ratio to produce ultimate loss estimates for each accident year.

•Bornhuetter-Ferguson paid loss: The Bornhuetter-Ferguson paid loss method is a combination of the paid development approach and the loss ratio approach. This method normally determines expected loss ratios similar to the approach used to estimate the expected loss ratio for the loss ratio method.

•Bornhuetter-Ferguson incurred loss: The Bornhuetter-Ferguson incurred loss method is similar to the Bornhuetter-Ferguson using premiums and paid loss method except that it uses case incurred losses.

•Frequency times severity: The frequency times severity method multiplies a projected number of ultimate claims by an estimated ultimate average loss for each accident year to produce ultimate loss estimates.

•Stochastic modeling: The stochastic modeling method produces a range of possible outcomes based on varying assumptions related to the particular product being modeled.

For many exposures, especially those that can be considered long-tail, a particular accident or policy year may not have a sufficient volume of paid losses to produce a statistically reliable estimate of ultimate losses. In such a case, the Company's actuaries typically assign more weight to the incurred development method than to the paid development method. As claims continue to settle and the volume of paid loss increases, the actuaries may assign additional weight to the paid development method. For most of the Company's products, even the incurred losses for accident or policy years that are early in the claim settlement process will not be of sufficient volume to produce a reliable estimate of ultimate losses. In these cases, the Company may not assign much, if any weight to the paid and incurred development methods. The Company may use the loss ratio, Bornhuetter-Ferguson and/or frequency times severity methods. For short-tail exposures, the paid and incurred development methods can often be relied on sooner, primarily because the Company's history includes a sufficient number of years to cover the entire period over which paid and incurred losses are expected to change. However, the Company may also use the loss ratio, Bornhuetter-Ferguson and/or frequency times severity methods for short-

tail exposures. For other more complex reserve groups where the above methods may not produce reliable indications, the Company uses additional methods tailored to the characteristics of the specific situation.

The Company's reserving methodologies for mass tort and A&EP are similar as both are based on detailed reviews of large accounts with estimates of ultimate payments based on the facts in each case and the Company's view of applicable law and coverage litigation.

Gross and Net Carried Reserves

The following tables present the gross and net carried reserves.


December 31, 2025	Specialty		Commercial		International		Life & Group		Corporate & Other		Total
(In millions)
Gross Case Reserves	$	2,166	$	4,093	$	1,052	$	556	$	1,196	$	9,063
Gross IBNR Reserves	5,618		8,156		2,324		35		1,403		17,536
Total Gross Carried Claim and Claim Adjustment Expense Reserves	$	7,784	$	12,249	$	3,376	$	591	$	2,599	$	26,599
Net Case Reserves	$	1,801	$	3,508	$	880	$	506	$	119	$	6,814
Net IBNR Reserves	4,387		7,188		1,961		29		238		13,803
Total Net Carried Claim and Claim Adjustment Expense Reserves	$	6,188	$	10,696	$	2,841	$	535	$	357	$	20,617


December 31, 2024	Specialty		Commercial		International		Life & Group		Corporate & Other		Total
(In millions)
Gross Case Reserves	$	2,023	$	3,690	$	876	$	572	$	1,241	$	8,402
Gross IBNR Reserves	5,403		7,646		2,044		50		1,431		16,574
Total Gross Carried Claim and Claim Adjustment Expense Reserves	$	7,426	$	11,336	$	2,920	$	622	$	2,672	$	24,976
Net Case Reserves	$	1,697	$	3,135	$	741	$	514	$	120	$	6,207
Net IBNR Reserves	4,282		6,804		1,675		27		268		13,056
Total Net Carried Claim and Claim Adjustment Expense Reserves	$	5,979	$	9,939	$	2,416	$	541	$	388	$	19,263

Net Prior Year Development

Changes in estimates of claim and claim adjustment expense reserves, net of reinsurance, for prior years are defined as net prior year loss reserve development (development). These changes can be favorable or unfavorable. The following table presents development recorded for the Specialty, Commercial, International and Corporate & Other segments.


Years ended December 31
(In millions)	2025		2024		2023
Pretax (favorable) unfavorable development:
Specialty	$	37	$	(9)	$	(14)
Commercial	39		(16)		(22)
International	(25)		(6)		13
Corporate & Other	134		79		71
Total pretax (favorable) unfavorable development	$	185	$	48	$	48

Unfavorable development of $134 million was recorded within the Corporate & Other segment for the year ended December 31, 2025, largely associated with legacy mass tort abuse claim activity, the on-going effects of social inflation and an agreement with the Diocese of Rochester. Unfavorable development of $79 million and $71 million was recorded within the Corporate & Other segment for the years ended December 31, 2024 and 2023 largely associated with legacy mass tort abuse reserves.

Segment Development Tables

For the Specialty, Commercial and International segments, the following tables present further detail and commentary on the development reflected in the financial statements for each of the periods presented. Also presented are loss reserve development tables that illustrate the change over time of reserves established for claim and allocated claim adjustment expenses arising from short-duration insurance contracts for certain lines of business within each of these segments. Not all lines of business or segments are presented based on their context to the Company's overall loss reserves, calendar year reserve development, or calendar year net earned premiums. Insurance contracts are considered to be short-duration contracts when the contracts are not expected to remain in force for an extended period of time.

The Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative net incurred claim and allocated claim adjustment expenses relating to each accident year at the end of the stated calendar year. Changes in the cumulative amount across time are the result of the Company's expanded awareness of additional facts and circumstances that pertain to the unsettled claims. The Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses tables, reading across, show the cumulative amount paid for claims for each accident year as of the end of the stated calendar year. The Net Strengthening or (Releases) of Prior Accident Year Reserves tables, reading across, show the net increase or decrease in the cumulative net incurred accident year claim and allocated claim adjustment expenses during each stated calendar year and indicates whether the reserves for that accident year were strengthened or released.

The information in the tables is reported on a net basis after reinsurance and does not include the effects of discounting. The information contained in calendar years 2024 and prior is unaudited. Information contained in the tables pertaining to the Company's International segment has been presented at the year-end 2025 foreign currency exchange rates for all periods presented to remove the effects of foreign currency exchange rate changes between calendar years. To the extent the Company enters into a commutation, the transaction is reported on a prospective basis. To the extent that the Company enters into a disposition, the effects of the disposition are reported on a retrospective basis by removing the balances associated with the disposed of business.

The amounts reported for the cumulative number of reported claims include direct and assumed open and closed claims by accident year at the claimant level. The number excludes claim counts for claims within a policy deductible where the insured is responsible for payment of losses in the deductible layer. Claim count data for certain assumed reinsurance contracts is unavailable.

IBNR includes reserves for incurred but not reported losses and expected development on case reserves. The Company does not establish case reserves for allocated loss adjusted expenses (ALAE), therefore ALAE reserves are also included in the estimate of IBNR.

Specialty

The following table presents further detail of the development recorded for the Specialty segment.


Years ended December 31
(In millions)	2025		2024		2023
Pretax (favorable) unfavorable development:
Medical Professional Liability	$	—	$	(8)	$	5
Other Professional Liability and Management Liability	69		49		37
Surety	(50)		(68)		(43)
Warranty	10		20		(11)
Other	8		(2)		(2)
Total pretax (favorable) unfavorable development	$	37	$	(9)	$	(14)

2025

Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in the Company's professional errors and omissions (E&O) business.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Unfavorable development in warranty was primarily due to higher than expected frequency and severity in the most recent accident year for auto warranty.

2024

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Unfavorable development in warranty was primarily due to higher than expected frequency and severity in a recent accident year.

2023

Unfavorable development in other professional liability and management liability was primarily due to higher than expected claim severity and frequency in the Company’s professional E&O businesses in multiple accident years.

Favorable development in surety was primarily due to lower than expected frequency and lack of systemic activity in multiple accident years.

Favorable development in warranty was due to lower than expected loss emergence in a recent accident year.

Specialty - Line of Business Composition

The table below provides the line of business composition of the net liability for unpaid claim and claim adjustment expenses for the Specialty segment.


As of December 31
(In millions)	2025
Net liability for unpaid claim and claim adjustment expenses:
Medical Professional Liability	$	1,468
Other Professional Liability and Management Liability	4,073
Surety	521
Warranty	58
Other	68
Total net liability for unpaid claim and claim adjustment expenses	$	6,188

Specialty - Medical Professional Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	427	$	487	$	485	$	499	$	508	$	510	$	508	$	514	$	513	$	509	$	12	16,205
2017			412		449		458		460		455		460		456		463		458		11		15,400
2018					404		429		431		448		470		495		499		507		34		15,358
2019							430		445		458		471		469		481		478		17		14,572
2020									477		476		455		447		419		400		57		11,381
2021											377		376		374		349		318		57		10,085
2022													329		329		333		323		87		10,353
2023															340		350		382		129		11,129
2024																	343		376		199		11,002
2025																			390		317		9,107
																	Total		$	4,141	$	920

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	18	$	121	$	246	$	339	$	401	$	436	$	460	$	483	$	489	$	491
2017			19		107		235		308		355		388		417		427		438
2018					21		115		211		290		349		418		453		463
2019							17		91		183		280		349		395		425
2020									11		61		139		201		258		303
2021											11		49		118		170		223
2022													10		57		122		171
2023															14		86		160
2024																	13		82
2025																			15
																	Total		$	2,771
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,370
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			47
Liability for unallocated claim adjustment expenses for accident years presented																			51
Total net liability for unpaid claim and claim adjustment expenses																			$	1,468

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	60	$	(2)	$	14	$	9	$	2	$	(2)	$	6	$	(1)	$	(4)	$	82
2017			37		9		2		(5)		5		(4)		7		(5)		46
2018					25		2		17		22		25		4		8		103
2019							15		13		13		(2)		12		(3)		48
2020									(1)		(21)		(8)		(28)		(19)		(77)
2021											(1)		(2)		(25)		(31)		(59)
2022													—		4		(10)		(6)
2023															10		32		42
2024																	33		33
Total net development for the accident years presented above													15		(17)		1
Total net development for accident years prior to 2016													(10)		9		1
Total unallocated claim adjustment expense development													—		—		(2)
Total													$	5	$	(8)	$	—

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

Specialty - Other Professional Liability and Management Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	901	$	900	$	900	$	904	$	907	$	891	$	888	$	906	$	912	$	910	$	28	17,993
2017			847		845		813		791		775		758		746		752		744		25		18,223
2018					850		864		869		906		923		941		987		1,003		44		20,083
2019							837		845		856		876		939		970		984		79		19,577
2020									930		944		951		945		945		936		106		19,558
2021											1,037		1,038		1,009		965		956		190		18,444
2022													1,120		1,112		1,084		1,049		265		18,534
2023															1,149		1,166		1,239		365		19,902
2024																	1,150		1,200		609		20,579
2025																			1,208		978		19,311
																	Total		$	10,229	$	2,689

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	64	$	248	$	466	$	625	$	701	$	736	$	784	$	826	$	856	$	862
2017			57		222		394		498		557		596		630		672		699
2018					54		282		473		599		706		779		847		886
2019							64		263		422		567		699		801		864
2020									67		248		400		523		660		751
2021											58		217		356		502		634
2022													64		225		453		638
2023															64		302		594
2024																	77		315
2025																			81
																	Total		$	6,324
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	3,905
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			101
Liability for unallocated claim adjustment expenses for accident years presented																			67
Total net liability for unpaid claim and claim adjustment expenses																			$	4,073

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	(1)	$	—	$	4	$	3	$	(16)	$	(3)	$	18	$	6	$	(2)	$	9
2017			(2)		(32)		(22)		(16)		(17)		(12)		6		(8)		(103)
2018					14		5		37		17		18		46		16		153
2019							8		11		20		63		31		14		147
2020									14		7		(6)		—		(9)		6
2021											1		(29)		(44)		(9)		(81)
2022													(8)		(28)		(35)		(71)
2023															17		73		90
2024																	50		50
Total net development for the accident years presented above													44		34		90
Total net development for accident years prior to 2016													(7)		10		(18)
Total unallocated claim adjustment expense development													—		5		(3)
Total													$	37	$	49	$	69

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

Specialty - Surety

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	124	$	124	$	109	$	84	$	67	$	64	$	58	$	43	$	43	$	43	$	3	5,590
2017			120		115		103		84		71		66		67		67		66		3		5,928
2018					114		108		91		62		56		51		49		58		2		6,322
2019							119		112		98		87		82		82		81		6		6,286
2020									128		119		81		67		57		67		6		4,918
2021											137		129		110		91		74		12		5,003
2022													155		158		132		118		53		5,131
2023															175		169		147		92		4,889
2024																	171		167		124		4,397
2025																			163		155		3,143
																	Total		$	984	$	456

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	5	$	37	$	45	$	45	$	43	$	43	$	41	$	40	$	40	$	40
2017			23		37		41		46		49		62		62		63		63
2018					5		25		34		39		40		41		41		46
2019							12		34		44		59		70		74		75
2020									4		20		28		33		44		57
2021											5		20		35		42		59
2022													12		35		52		59
2023															8		27		52
2024																	20		37
2025																			4
																	Total		$	492
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	492
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			13
Liability for unallocated claim adjustment expenses for accident years presented																			16
Total net liability for unpaid claim and claim adjustment expenses																			$	521

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	—	$	(15)	$	(25)	$	(17)	$	(3)	$	(6)	$	(15)	$	—	$	—	$	(81)
2017			(5)		(12)		(19)		(13)		(5)		1		—		(1)		(54)
2018					(6)		(17)		(29)		(6)		(5)		(2)		9		(56)
2019							(7)		(14)		(11)		(5)		—		(1)		(38)
2020									(9)		(38)		(14)		(10)		10		(61)
2021											(8)		(19)		(19)		(17)		(63)
2022													3		(26)		(14)		(37)
2023															(6)		(22)		(28)
2024																	(4)		(4)
Total net development for the accident years presented above													(54)		(63)		(40)
Total net development for accident years prior to 2016													11		(5)		(7)
Total unallocated claim adjustment expense development													—		—		(3)
Total													$	(43)	$	(68)	$	(50)

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

Commercial

The following table presents further detail of the development recorded for the Commercial segment.


Years ended December 31
(In millions)	2025		2024		2023
Pretax (favorable) unfavorable development:
Commercial Auto	$	74	$	107	$	33
General Liability	114		75		149
Workers' Compensation	(135)		(202)		(203)
Property and Other	(14)		4		(1)
Total pretax (favorable) unfavorable development	$	39	$	(16)	$	(22)

2025

Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years.

Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2016.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Favorable development in property and other was due to favorable emergence in multiple accident years.

2024

Unfavorable development in commercial auto was due to higher than expected claim severity in recent accident years.

Unfavorable development in general liability was due to higher than expected claim severity in multiple accident years going back to 2015.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

2023

Unfavorable development in commercial auto was due to higher than expected claim severity in the Company’s construction business in a recent accident year.

Unfavorable development in general liability was due to higher than expected claim severity in the Company’s construction and middle market businesses across multiple accident years.

Favorable development in workers’ compensation was due to favorable medical trends driving lower than expected severity in multiple accident years.

Commercial - Line of Business Composition

The table below provides the line of business composition of the net liability for unpaid claim and claim adjustment expenses for the Commercial segment.


As of December 31
(In millions)	2025
Net Claim and claim adjustment expenses:
Commercial Auto	$	1,573
General Liability	4,837
Workers' Compensation	3,482
Property and Other	804
Total net liability for claim and claim adjustment expenses	$	10,696

Commercial - Commercial Auto

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	198	$	186	$	186	$	186	$	190	$	195	$	200	$	197	$	195	$	194	$	—	30,459
2017			199		198		200		221		232		239		241		241		237		—		30,948
2018					229		227		227		245		254		255		260		259		1		34,333
2019							257		266		289		323		325		327		323		—		37,281
2020									310		303		304		298		303		299		7		29,192
2021											397		388		390		393		377		16		33,063
2022													437		465		496		506		55		37,327
2023															554		620		635		120		42,921
2024																	726		799		270		49,670
2025																			886		616		41,075
																	Total		$	4,515	$	1,085

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	52	$	93	$	126	$	154	$	175	$	185	$	190	$	192	$	193	$	193
2017			58		107		150		178		203		225		232		235		237
2018					66		128		175		212		238		249		256		257
2019							77		147		203		257		295		312		319
2020									71		134		197		246		276		287
2021											83		168		240		305		347
2022													112		236		334		411
2023															127		270		414
2024																	153		345
2025																			163
																	Total		$	2,973
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,542
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			5
Liability for unallocated claim adjustment expenses for accident years presented																			26
Total net liability for unpaid claim and claim adjustment expenses																			$	1,573

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	(12)	$	—	$	—	$	4	$	5	$	5	$	(3)	$	(2)	$	(1)	$	(4)
2017			(1)		2		21		11		7		2		—		(4)		38
2018					(2)		—		18		9		1		5		(1)		30
2019							9		23		34		2		2		(4)		66
2020									(7)		1		(6)		5		(4)		(11)
2021											(9)		2		3		(16)		(20)
2022													28		31		10		69
2023															66		15		81
2024																	73		73
Total net development for the accident years presented above													26		110		68
Total net development for accident years prior to 2016													4		(3)		3
Total unallocated claim adjustment expense development													3		—		3
Total													$	33	$	107	$	74

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

Commercial - General Liability

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	623	$	659	$	667	$	671	$	673	$	683	$	684	$	704	$	712	$	723	$	23	24,982
2017			632		632		632		634		630		652		690		713		749		15		22,611
2018					653		644		646		639		650		679		665		663		63		20,631
2019							680		682		682		691		720		727		747		98		20,091
2020									723		722		726		736		702		662		139		15,152
2021											782		784		793		814		833		189		16,349
2022													929		928		930		952		316		18,494
2023															1,071		1,106		1,146		516		18,905
2024																	1,271		1,295		833		20,250
2025																			1,381		1,218		15,771
																	Total		$	9,151	$	3,410

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	32	$	163	$	279	$	407	$	481	$	524	$	582	$	620	$	652	$	681
2017			23		118		250		399		471		553		606		657		705
2018					33		107		228		307		428		491		546		573
2019							25		98		181		322		455		532		607
2020									23		99		192		280		367		450
2021											26		140		262		391		542
2022													29		123		260		439
2023															33		153		356
2024																	34		180
2025																			43
																	Total		$	4,576
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	4,575
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			179
Liability for unallocated claim adjustment expenses for accident years presented																			83
Total net liability for unpaid claim and claim adjustment expenses																			$	4,837

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	36	$	8	$	4	$	2	$	10	$	1	$	20	$	8	$	11	$	100
2017			—		—		2		(4)		22		38		23		36		117
2018					(9)		2		(7)		11		29		(14)		(2)		10
2019							2		—		9		29		7		20		67
2020									(1)		4		10		(34)		(40)		(61)
2021											2		9		21		19		51
2022													(1)		2		22		23
2023															35		40		75
2024																	24		24
Total net development for the accident years presented above													134		48		130
Total net development for accident years prior to 2016													15		27		(30)
Total unallocated claim adjustment expense development													—		—		14
Total													$	149	$	75	$	114

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

Commercial - Workers' Compensation

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	426	$	405	$	396	$	382	$	366	$	355	$	331	$	308	$	293	$	287	$	40	32,007
2017			440		432		421		400		402		399		398		383		364		44		33,164
2018					450		440		428		415		415		404		399		393		57		34,930
2019							452		449		437		436		419		416		410		57		34,398
2020									477		466		446		414		393		363		74		29,506
2021											468		454		432		421		412		97		30,150
2022													497		489		478		467		108		33,488
2023															555		551		541		161		37,037
2024																	574		586		196		38,866
2025																			646		348		36,112
																	Total		$	4,469	$	1,182

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	53	$	129	$	169	$	198	$	219	$	227	$	234	$	235	$	238	$	238
2017			63		151		207		243		265		279		287		293		295
2018					68		163		229		259		280		298		307		313
2019							71		169		223		262		291		310		320
2020									65		147		200		228		246		257
2021											67		164		222		256		273
2022													79		192		258		299
2023															87		209		286
2024																	111		264
2025																			127
																	Total		$	2,672
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	1,797
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			1,648
Other (2)																			(23)
Liability for unallocated claim adjustment expenses for accident years presented																			60
Total net liability for unpaid claim and claim adjustment expenses																			$	3,482

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total
Accident Year
2016	$	(21)	$	(9)	$	(14)	$	(16)	$	(11)	$	(24)	$	(23)	$	(15)	$	(6)	$	(139)
2017			(8)		(11)		(21)		2		(3)		(1)		(15)		(19)		(76)
2018					(10)		(12)		(13)		—		(11)		(5)		(6)		(57)
2019							(3)		(12)		(1)		(17)		(3)		(6)		(42)
2020									(11)		(20)		(32)		(21)		(30)		(114)
2021											(14)		(22)		(11)		(9)		(56)
2022													(8)		(11)		(11)		(30)
2023															(4)		(10)		(14)
2024																	12		12
Total net development for the accident years presented above													(114)		(85)		(85)
Adjustment for development on a discounted basis													(2)		(2)		2
Total net development for accident years prior to 2016													(93)		(115)		(52)
Total unallocated claim adjustment expense development													6		—		—
Total													$	(203)	$	(202)	$	(135)

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

(2) Other includes the effect of discounting lifetime claim reserves.

International

The following table presents further detail of the development recorded for the International segment.


Years ended December 31
(In millions)	2025		2024		2023
Pretax (favorable) unfavorable development:
Commercial	$	(26)	$	(12)	$	(18)
Specialty	5		6		35
Other	(4)		—		(4)
Total pretax (favorable) unfavorable development	$	(25)	$	(6)	$	13

2025

Favorable development in commercial was due to lower than expected loss emergence across multiple accident years in the Company's marine and property businesses.

2024

Favorable development in commercial was due to lower than expected loss emergence across multiple accident years in the Company's marine and property businesses.

2023

Favorable development in commercial was due to lower than expected loss emergence across multiple accident years.

Unfavorable development in specialty was due to higher than expected large loss emergence in the Company’s medical treatment and professional liability businesses in multiple accident years.

International

Cumulative Net Incurred Claim and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year																				As of December 31, 2025
(In millions, except reported claims data)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		IBNR		Cumulative Number of Claims
Accident Year
2016	$	519	$	556	$	530	$	516	$	508	$	518	$	520	$	543	$	540	$	550	$	41	26,135
2017			551		626		636		630		632		620		644		665		668		29		27,478
2018					646		693		701		706		719		747		746		745		34		34,444
2019							572		588		580		595		594		600		605		59		31,242
2020									602		584		570		552		549		537		103		23,395
2021											595		574		538		520		516		139		20,159
2022													628		635		633		608		211		16,985
2023															691		679		658		318		15,977
2024																	743		780		436		14,380
2025																			759		544		9,708
																	Total		$	6,426	$	1,914

Cumulative Net Paid Claims and Allocated Claim Adjustment Expenses are presented in the following table.


As of December 31	Calendar Year
(In millions)	2016(1)		2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025
Accident Year
2016	$	129	$	278	$	332	$	365	$	390	$	424	$	437	$	452	$	468	$	475
2017			118		298		372		424		455		494		560		576		594
2018					144		337		415		477		520		585		634		655
2019							117		269		344		386		420		455		476
2020									87		208		269		301		339		372
2021											69		170		223		262		300
2022													69		197		279		308
2023															63		180		254
2024																	76		209
2025																			76
Total																			$	3,719
Net liability for unpaid claim and allocated claim adjustment expenses for the accident years presented																			$	2,707
Net liability for unpaid claim and claim adjustment expenses for accident years prior to 2016																			83
Liability for unallocated claim adjustment expenses for accident years presented																			51
Total net liability for unpaid claim and claim adjustment expenses																			$	2,841

Net strengthening (releases) of prior accident year reserves is presented in the following table.


For the years ended December 31	Calendar Year
(In millions)	2017(1)		2018(1)		2019(1)		2020(1)		2021(1)		2022(1)		2023(1)		2024(1)		2025		Total (2)
Accident Year
2016	$	37	$	(26)	$	(14)	$	(8)	$	10	$	2	$	23	$	(3)	$	10	$	31
2017			75		10		(6)		2		(12)		24		21		3		117
2018					47		8		5		13		28		(1)		(1)		99
2019							16		(8)		15		(1)		6		5		33
2020									(18)		(14)		(18)		(3)		(12)		(65)
2021											(21)		(36)		(18)		(4)		(79)
2022													7		(2)		(25)		(20)
2023															(12)		(21)		(33)
2024																	37		37

(1) Data presented for these calendar years is required supplemental information, which is unaudited.

(2) The amounts included in the loss reserve development tables above are presented at the year-end 2025 foreign currency exchange rates for all periods presented to remove the effects of foreign currency exchange rate fluctuations between calendar years.

The table below presents information about average historical claims duration as of December 31, 2025 and is presented as required supplementary information, which is unaudited.


Average Annual Percentage Payout of Ultimate Net Incurred Claim and Allocated Claim Adjustment Expenses in Year:
	1		2		3		4		5		6		7		8		9		10
Specialty
Medical Professional Liability	3.6	%	16.6	%	21.4	%	16.7	%	13.2	%	9.7	%	6.1	%	2.9	%	1.8	%	0.4	%
Other Professional Liability and Management Liability	6.4	%	19.5	%	19.8	%	15.0	%	11.5	%	7.3	%	5.8	%	4.7	%	3.5	%	0.7	%
Surety (1)	15.2	%	36.2	%	12.9	%	8.4	%	6.3	%	9.2	%	(0.9)	%	2.6	%	—	%	—	%

Commercial
Commercial Auto	22.6	%	22.5	%	19.1	%	15.2	%	10.7	%	5.5	%	2.6	%	0.9	%	0.7	%	—	%
General Liability	3.4	%	12.1	%	15.5	%	16.6	%	14.5	%	9.8	%	8.4	%	5.4	%	5.4	%	4.0	%
Workers' Compensation	17.6	%	24.2	%	14.5	%	8.8	%	5.8	%	3.8	%	2.3	%	1.2	%	0.8	%	—	%

International	15.0	%	22.6	%	11.3	%	6.8	%	5.8	%	6.5	%	5.6	%	2.6	%	2.8	%	1.3	%

(1) Due to the nature of the Surety business, average annual percentage payout of ultimate net incurred claim and allocated claim adjustment expenses has been calculated using only the payouts of mature accident years presented in the loss reserve development tables.

A&EP Reserves

In 2010, Continental Casualty Company (CCC) together with several of the Company’s insurance subsidiaries completed a transaction with National Indemnity Company (NICO), a subsidiary of Berkshire Hathaway Inc., under which substantially all of the Company’s legacy A&EP liabilities were ceded to NICO through a LPT. At the effective date of the transaction, the Company ceded approximately $1.6 billion of net A&EP claim and allocated claim adjustment expense reserves to NICO under a retroactive reinsurance agreement with an aggregate limit of $4 billion. The $1.6 billion of claim and allocated claim adjustment expense reserves ceded to NICO was net of $1.2 billion of ceded claim and allocated claim adjustment expense reserves under existing third-party reinsurance contracts. The NICO LPT aggregate reinsurance limit also covers credit risk on the existing third-party reinsurance related to these liabilities. The Company paid NICO a reinsurance premium of $2 billion and transferred to NICO billed third-party reinsurance receivables related to A&EP claims with a net book value of $215 million, resulting in total consideration of $2.2 billion.

In years subsequent to the effective date of the LPT, the Company recognized adverse prior year development on its A&EP reserves resulting in additional amounts ceded under the LPT. As a result, the cumulative amounts ceded under the LPT have exceeded the $2.2 billion consideration paid, resulting in the NICO LPT moving into a gain position, requiring retroactive reinsurance accounting. Under retroactive reinsurance accounting, this gain is deferred and only recognized in earnings in proportion to actual paid recoveries under the LPT. Over the life of the contract, there is no economic impact as long as any additional losses incurred are within the limit of the LPT. In a period in which the Company recognizes a change in the estimate of A&EP reserves that increases or decreases the amounts ceded under the LPT, the proportion of actual paid recoveries to total ceded losses is affected and the change in the deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the LPT. The effect of the deferred retroactive reinsurance benefit is recorded in Insurance claims and policyholders' benefits in the Consolidated Statements of Operations.

The following table presents the impact of the Loss Portfolio Transfer on the Consolidated Statements of Operations.


Years ended December 31
(In millions)	2025		2024		2023



Additional amounts ceded under LPT	$	185	$	103	$	86
Retroactive reinsurance benefit recognized	(140)		(95)		(94)
Pretax impact of deferred retroactive reinsurance	$	45	$	8	$	(8)

Additional amounts ceded under the LPT of $185 million, $103 million and $86 million for the years ended December 31, 2025, 2024 and 2023 were primarily driven by unfavorable development in each year as a result of higher than anticipated defense and indemnity costs on known direct asbestos and environmental accounts.

As of December 31, 2025 and 2024, the cumulative amounts ceded under the LPT were $3.9 billion and $3.7 billion. The unrecognized deferred retroactive reinsurance benefit was $470 million and $425 million as of December 31, 2025 and 2024 and is included within Other liabilities on the Consolidated Balance Sheets.

NICO established a collateral trust account as security for its obligations to the Company. The fair value of the collateral trust account was $2.4 billion as of December 31, 2025. In addition, Berkshire Hathaway Inc. guaranteed the payment obligations of NICO up to the aggregate reinsurance limit as well as certain of NICO’s performance obligations under the trust agreement. NICO is responsible for claims handling and billing and collection from third-party reinsurers related to the majority of the Company’s A&EP claims.

Excess Workers' Compensation LPT

On February 5, 2021, CCC completed a transaction with Cavello Bay Reinsurance Limited (Cavello), a subsidiary of Enstar Group Limited, under which certain legacy excess workers' compensation (EWC) liabilities were ceded to Cavello. Under the terms of the transaction, based on reserves in place as of January 1, 2020, the Company ceded approximately $690 million of net EWC claim and allocated claim adjustment expense reserves to Cavello under an LPT with an aggregate limit of $1 billion. The Company paid Cavello a reinsurance premium of $697 million.

Net favorable prior year development of $75 million was recognized before consideration of cessions to the EWC LPT for the year ended December 31, 2025 primarily driven by lower than expected severity in older accident years. This favorable development was entirely offset by ceded retroactive reserve development under the EWC LPT.

As of December 31, 2025, the cumulative amount ceded under the EWC LPT was $615 million.

Cavello established a collateral trust as security for its obligations to the Company. The fair value of the collateral trust was $247 million as of December 31, 2025.