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美國證券交易所(SEC)
華盛頓特區 20549

表格 10-Q
（在以下選項中加上一個）
☒根據1934年證券交易法第13或15(d)條規定的季報
截至季度末2024年9月30日
or
☐
根據1934年證券交易法第13或15(d)條的過渡報告。
過渡期從                      to                     .
委員會文件號碼
1-15202

W. R. BERKLEY公司CORATION
(根據其章程規定的註冊人準確名稱)
特拉華州22-1867895
（國家或其他管轄區的
公司成立或組織）		（納稅人識別號碼）
  
Steamboat Road 475號Greenwich康涅狄格州06830
(主要行政辦公室地址)(郵政編碼)
(203)629-3000
(註冊人電話號碼，包括區號)
無
如果自上次報告以來公司更改了名稱、地址或財政年度，請註明舊名稱、舊地址和舊財政年度。.
每個交易所的名稱
標題 交易標的名稱
 
普通股，每股面值爲$0.20WRB紐約證券交易所
5.700%下級債券，期限至2058年WRb-市盈率紐約證券交易所
5.100%下級債券，期限至2059年WRb-市盈率紐約證券交易所
4.250%下級債券，期限至2060年WRb-市盈率紐約證券交易所
4.125%下級債券，期限至2061年WRb-PH紐約證券交易所
請在以下空格內打勾，以表示註冊人：(1)在過去12個月(或註冊人所要求提交此類報告的更短期間內)已提交了根據1934年證券交易法第13或15(d)條規定需要提交的所有報告；並且(2)在過去90個天內一直遵守此類提交要求。是 ☒ 沒有 ☐
請打勾，表明申報人在過去12個月內（或申報人需要提交此類文件的更短期間內）已按規則405或本章節232.405條的規定遞交了每份互動數據文件。是 ☒無 ☐

請在交易所法規則120.2規定的「大型加速申報人」、「加速申報人」、「小型報告公司」和「新興成長公司」的定義中選中相應選項。
大型加速報告人
 ☒
加速文件提交人☐
非加速文件提交人☐較小的報告公司☐
新興成長公司☐
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 ☐
請在以下方框內打勾：公司是否是空殼公司(根據證券交易法第12b-2條規定定義）。是☐沒有 ☒
截至2024年10月28日，流通的面值爲0.20美元的普通股股份數量： 381,069,120
2
目錄
EX-101 實例文檔
EX-101 模式文檔
EX-101 計算鏈接基地文檔
EX-101 標籤鏈接基地文檔
EX-101 展示鏈接基地文檔
EX-101 定義鏈接基地文檔
3
第一部分——財務信息
項目 1.     基本報表
W. R.伯克利公司及其子公司合併資產負債表
（單位：千美元，以股份數據爲單位）
9月30日,
2024		2023年12月31日,
2023
(未經審計)(已經審計)
資產  
投資:  
固定到期證券（攤餘成本爲$23,003,148 and $20,915,245; 預計信貸損失準備金爲$6,983 and $36,751 分別爲2024年9月30日和2023年12月31日）
$22,663,878 $20,178,308 
投資基金1,607,381 1,621,655 
房地產1,297,314 1,249,874 
股權證券1,048,126 1,090,347 
套戥交易帳戶820,928 938,049 
應收貸款（扣除預計信貸損失準備金$後的淨額）1,425 and $3,004 分別爲2024年9月30日和2023年12月31日）
389,869 201,271 
總投資27,827,496 25,279,504 
現金及現金等價物1,573,238 1,363,195 
應收保費和費用（扣除預期信用損失準備金後的金額$38,071 and $35,110 分別爲2024年9月30日和2023年12月31日）
3,414,385 3,109,334 
應收再保險金（扣除預期信用損失準備金後的金額$8,332 and $8,404 分別爲2024年9月30日和2023年12月31日）
3,478,354 3,534,527 
遞延保單獲取成本957,997 861,609 
預付再保險保費830,797 758,927 
來自經紀商和結算組織的交易帳戶應收款項410,756 303,614 
房地產、傢俱和設備478,361 426,803 
商譽184,089 174,597 
應計的投資收益234,084 213,408 
當前和遞延的聯邦及外國所得稅131,209 220,756 
其他資產838,532 865,556 
總資產$40,359,298 $37,111,830 
負債和股東權益  
負債：  
損失及損失費用準備$20,155,310 $18,739,652 
未賺保費6,489,597 5,922,326 
應付再保險人727,074 631,164 
已出售但尚未購買的交易帳戶證券36,093 9,357 
其他負債1,674,405 1,503,053 
高級票據和其他債務1,827,788 1,827,951 
次級債券1,009,629 1,009,090 
總負債31,919,896 29,642,593 
股東權益：  
優先股，面值$.10：
  
已授權 5,000,000   已發行和流通 - 無
— — 
普通股，每股面值 $，授權股數：百萬股；發行股數：分別爲2024年6月30日和2023年12月31日：百萬股；流通股數：分別爲2024年6月30日和2023年12月31日：百萬股.20：
  
已授權 1,250,000,000 股份；已發行並在外流通的，扣除庫藏股， 381,189,906 和 384,817,136 股份分別爲
158,705 158,705 
追加實收資本973,032 964,789 
留存收益11,909,408 11,040,908 
累計其他綜合損失(603,144)(925,838)
截至2024年3月31日和2023年12月31日，公司的庫藏股票分別有2,279,784股和2,693,653股。412,331,903 和 408,704,807 股份分別爲
(4,011,737)(3,783,133)
股東權益總額8,426,264 7,455,431 
非控制權益13,138 13,806 
總股本8,439,402 7,469,237 
總負債和權益$40,359,298 $37,111,830 
請參見附註以了解中期合併基本報表。
1
W. R.伯克利公司及其子公司
綜合損益表（未經審計）
(以千爲單位，除每股數據外)
爲了三個月
截至9月30日，		九個月內
截至9月30日，
2024202320242023
收入:  
淨已承保保費$3,057,276 $2,848,459 $9,035,346 $8,234,799 
未賺保費淨變動 (130,453)(206,545)(497,761)(548,726)
已賺保費收入2,926,823 2,641,914 8,537,585 7,686,073 
淨投資收益323,756 270,944 1,015,723 739,494 
淨投資（損失）收益：
投資的淨實現和未實現（損失）收益(23,362)(40,855)(72,165)50,403 
投資上預期信用損失的準備金變動15,276 (1,571)31,347 (11,164)
淨投資（損失）收益(8,086)(42,426)(40,818)39,239 
非保險業務的收入128,610 137,116 375,307 375,225 
保險服務費28,666 22,962 81,583 81,290 
其他收入610 128 1,804 235 
總收入3,400,379 3,030,638 9,971,184 8,921,556 
營運成本和費用：  
損失和賠償支出1,825,960 1,636,193 5,270,334 4,744,602 
其他經營成本和費用943,365 808,669 2,704,890 2,457,925 
非保險業務的費用124,885 133,939 364,612 370,244 
利息支出31,720 31,888 95,156 95,580 
總營業成本和費用2,925,930 2,610,689 8,434,992 7,668,351 
稅前收入474,449 419,949 1,536,192 1,253,205 
所得稅費用(109,135)(86,519)(356,958)(268,322)
非控制權益前淨利潤365,314 333,430 1,179,234 984,883 
非控制權益320 156 780 (863)
普通股股東淨利潤$365,634 $333,586 $1,180,014 $984,020 
每股淨利潤:  
基本$0.92 $0.83 $2.95 $2.41 
攤薄$0.91 $0.82 $2.92 $2.39 

See accompanying notes to interim consolidated financial statements.






2
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(In thousands)
For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
2024202320242023
Net income before noncontrolling interests$365,314 $333,430 $1,179,234 $984,883 
Other comprehensive income (loss):  
Change in unrealized currency translation adjustments49,503 (22,781)25,160 (7,387)
Change in unrealized investment gains (losses), net of taxes380,993 (118,365)297,533 (50,850)
Other comprehensive income (loss)430,496 (141,146)322,693 (58,237)
Comprehensive income795,810 192,284 1,501,927 926,646 
Noncontrolling interests320 156 779 (862)
Comprehensive income to common stockholders$796,130 $192,440 $1,502,706 $925,784 

See accompanying notes to interim consolidated financial statements.
3
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(In thousands, except per share data)
For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
2024202320242023
COMMON STOCK:  
Beginning and end of period$158,705 $158,705 $158,705 $158,705 
ADDITIONAL PAID-IN CAPITAL:  
Beginning of period$986,892 $967,916 $964,789 $944,632 
Restricted stock units issued(26,930)(25,226)(30,075)(25,228)
Restricted stock units expensed13,070 12,709 38,318 35,995 
End of period$973,032 $955,399 $973,032 $955,399 
RETAINED EARNINGS:  
Beginning of period$11,669,567 $10,624,518 $11,040,908 $10,161,005 
Net income to common stockholders365,634 333,586 1,180,014 984,020 
Dividends ($0.33, $0.41, $0.81 and $0.88 per share, respectively)
(125,793)(157,407)(311,514)(344,328)
End of period$11,909,408 $10,800,697 $11,909,408 $10,800,697 
ACCUMULATED OTHER COMPREHENSIVE LOSS:  
Unrealized investment losses:  
Beginning of period$(669,813)$(825,391)$(586,354)$(892,905)
Change in unrealized gains (losses) on securities without an allowance for expected credit losses369,827 (108,121)293,064 (47,757)
Change in unrealized gains (losses) on securities with an allowance for expected credit losses11,166 (10,244)4,470 (3,094)
End of period(288,820)(943,756)(288,820)(943,756)
Currency translation adjustments:  
Beginning of period(363,827)(356,282)(339,484)(371,676)
Net change in period49,503 (22,781)25,160 (7,387)
End of period(314,324)(379,063)(314,324)(379,063)
Total accumulated other comprehensive loss$(603,144)$(1,322,819)$(603,144)$(1,322,819)
TREASURY STOCK:  
Beginning of period$(4,007,742)$(3,682,281)$(3,783,133)$(3,251,429)
Stock exercised/vested8,164 8,469 9,488 9,461 
Stock repurchased(12,480)(2,917)(236,243)(430,536)
Other321 326 (1,849)(3,899)
End of period$(4,011,737)$(3,676,403)$(4,011,737)$(3,676,403)
NONCONTROLLING INTERESTS:  
Beginning of period$13,269 $21,167 $13,806 $19,829 
Contributions (distribution) 189 (6,681)111 (6,361)
Net (loss) income(320)(156)(780)863 
Other comprehensive income (loss), net of tax— — 1 (1)
End of period$13,138 $14,330 $13,138 $14,330 
See accompanying notes to interim consolidated financial statements.
4
W. R. BERKLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
For the Nine Months
Ended September 30,
 20242023
CASH FROM OPERATING ACTIVITIES:  
Net income to common stockholders$1,180,014 $984,020 
Adjustments to reconcile net income to net cash from operating activities:  
Net investment losses (gains)40,818 (39,239)
Depreciation and (accretion) amortization (156,993)3,294 
Noncontrolling interests(780)863 
Investment funds(868)(5,444)
Stock incentive plans40,319 37,796 
Change in:
Arbitrage trading account36,714 (41,399)
Premiums and fees receivable(311,827)(340,056)
Reinsurance accounts85,226 (194,610)
Deferred policy acquisition costs(94,393)(93,270)
Income taxes16,825 49,722 
Reserves for losses and loss expenses1,402,623 1,288,975 
Unearned premiums569,416 608,300 
Other61,241 (27,790)
Net cash from operating activities2,868,335 2,231,162 
CASH USED IN INVESTING ACTIVITIES:  
Proceeds from sale of fixed maturity securities1,688,623 877,019 
Proceeds from sale of equity securities288,366 161,470 
Distributions from investment funds15,533 8,385 
Proceeds from maturities and prepayments of fixed maturity securities3,483,326 2,654,140 
Purchase of fixed maturity securities(7,177,379)(5,091,866)
Purchase of equity securities(186,382)(63,815)
Real estate purchased(66,813)(15,158)
Change in loans receivable(173,548)12,796 
Net purchases of property, furniture and equipment(91,670)(42,127)
Change in balances due to security brokers122,519 8,224 
Cash received in connection with business disposition— 94,076 
Other— 320 
Net cash used in investing activities(2,097,425)(1,396,536)
CASH USED IN FINANCING ACTIVITIES:  
Repayment of senior notes and other debt(240)(1,954)
Net proceeds from issuance of debt— 1,100 
Cash dividends to common stockholders(311,514)(186,921)
Purchase of common treasury shares(236,243)(430,536)
Other, net(13,944)(20,545)
Net cash used in financing activities(561,941)(638,856)
Net impact on cash due to change in foreign exchange rates1,074 959 
Net change in cash and cash equivalents210,043 196,728 
Cash and cash equivalents at beginning of period1,363,195 1,449,346 
Cash and cash equivalents at end of period$1,573,238 $1,646,074 
See accompanying notes to interim consolidated financial statements.
5

W. R. Berkley Corporation and Subsidiaries

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) General
    The unaudited consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries (the “Company”), have been prepared on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the revenues and expenses reflected during the reporting period. For further information related to areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Reclassifications have been made in the 2023 financial statements as originally reported to conform to the presentation of the 2024 financial statements. The Company reclassified a program management business from the Insurance segment to the Reinsurance & Monoline Excess segment. The reclassified business is a program management business offering support on a nationwide basis for commercial casualty and property program administrators. In addition, share and per share amounts have been adjusted to reflect the 3-for-2 common stock split effected on July 10, 2024.
The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective income tax rate differs from the federal income tax rate of 21% primarily due to the geographical mix of earnings and larger amounts being subject to tax at a rate greater than the U.S. statutory rate, which was partially offset by tax benefits related to equity-based compensation and tax-exempt investment income.

(2) Per Share Data
    The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including 17,495,175 and 17,125,284 common shares held in a grantor trust as of September 30, 2024 and 2023, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect.
    The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:
For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Basic398,338 403,787 400,302 407,484 
Diluted401,817 407,158 404,053 411,219 


(3) Recent Accounting Pronouncements and Accounting Policies
Recently adopted accounting pronouncements:
    All accounting and reporting standards that became effective in 2024 were either not applicable to the Company or their adoption did not have a material impact on the Company.
6

Accounting and reporting standards that are not yet effective:
    All recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company.
7
(4) Consolidated Statements of Comprehensive Income (Loss)

    The following table presents the components of the changes in accumulated other comprehensive income (loss) ("AOCI"):

(In thousands)Unrealized Investment (Losses) GainsCurrency Translation AdjustmentsAccumulated Other Comprehensive
 Income (Loss)
As of and for the nine months ended September 30, 2024
Changes in AOCI
Beginning of period$(586,354)$(339,484)$(925,838)
Other comprehensive income before reclassifications218,087 25,160 243,247 
Amounts reclassified from AOCI79,446 — 79,446 
Other comprehensive income297,533 25,160 322,693 
Unrealized investment gain related to noncontrolling interest1 — 1 
End of period$(288,820)$(314,324)$(603,144)
Amounts reclassified from AOCI
Pre-tax$100,565 (1)$— $100,565 
Tax effect (21,119)(2)— (21,119)
After-tax amounts reclassified$79,446 $— $79,446 
Other comprehensive income
Pre-tax$370,831 $25,160 $395,991 
Tax effect(73,298)— (73,298)
Other comprehensive income$297,533 $25,160 $322,693 
As of and for the three months ended September 30, 2024
Changes in AOCI
Beginning of period$(669,813)$(363,827)$(1,033,640)
Other comprehensive income before reclassifications374,110 49,503 423,613 
Amounts reclassified from AOCI6,883 — 6,883 
Other comprehensive income380,993 49,503 430,496 
Unrealized investment gain to noncontrolling interest— — — 
Ending balance$(288,820)$(314,324)$(603,144)
Amounts reclassified from AOCI
Pre-tax$8,713 (1)$— $8,713 
Tax effect (1,830)(2)— (1,830)
After-tax amounts reclassified$6,883 $— $6,883 
Other comprehensive income
Pre-tax$480,768 $49,503 $530,271 
Tax effect(99,775)— (99,775)
Other comprehensive income$380,993 $49,503 $430,496 


8
(In thousands)Unrealized Investment (Losses) GainsCurrency Translation AdjustmentsAccumulated Other Comprehensive
(Loss) Income
As of and for the nine months ended September 30, 2023
Changes in AOCI
Beginning of period$(892,905)$(371,676)$(1,264,581)
Other comprehensive loss before reclassifications(103,087)(7,387)(110,474)
Amounts reclassified from AOCI52,237 — 52,237 
Other comprehensive loss(50,850)(7,387)(58,237)
Unrealized investment loss related to noncontrolling interest(1)— (1)
End of period$(943,756)$(379,063)$(1,322,819)
Amounts reclassified from AOCI
Pre-tax$66,123 (1)$— $66,123 
Tax effect (13,886)(2)— (13,886)
After-tax amounts reclassified$52,237 $— $52,237 
Other comprehensive loss
Pre-tax$(62,476)$(7,387)$(69,863)
Tax effect11,626 — 11,626 
Other comprehensive income$(50,850)$(7,387)$(58,237)
As of and for the three months ended September 30, 2023
Changes in AOCI
Beginning of period$(825,391)$(356,282)$(1,181,673)
Other comprehensive loss before reclassifications(133,018)(22,781)(155,799)
Amounts reclassified from AOCI14,653 — 14,653 
Other comprehensive loss(118,365)(22,781)(141,146)
Unrealized investment loss related to noncontrolling interest— — — 
Ending balance$(943,756)$(379,063)$(1,322,819)
Amounts reclassified from AOCI
Pre-tax$18,548 (1)$— $18,548 
Tax effect (3,895)(2)— (3,895)
After-tax amounts reclassified$14,653 $— $14,653 
Other comprehensive loss
Pre-tax$(150,455)$(22,781)$(173,236)
Tax effect32,090 — 32,090 
Other comprehensive loss$(118,365)$(22,781)$(141,146)
____________
(1) Net investment (losses) gains in the consolidated statements of income.
(2) Income tax expense in the consolidated statements of income.



(5) Statements of Cash Flows
    Interest payments were $116,462,000 and $79,336,000 for the nine months ended September 30, 2024 and 2023, respectively. Income taxes paid were $271,739,000 and $180,000,000 for the nine months ended September 30, 2024 and 2023, respectively.
9
(6) Investments in Fixed Maturity Securities
    At September 30, 2024 and December 31, 2023, investments in fixed maturity securities were as follows:
 
(In thousands)Amortized
Cost		Allowance for Expected Credit Losses (1)Gross UnrealizedFair
Value		Carrying
Value
GainsLosses
September 30, 2024
Held to maturity:
State and municipal$41,561 $(30)$1,944 $— $43,475 $41,531 
Residential mortgage-backed2,398 — 109 — 2,507 2,398 
Total held to maturity43,959 (30)2,053 — 45,982 43,929 
Available for sale:
U.S. government and government agency2,083,085 — 23,974 (36,074)2,070,985 2,070,985 
State and municipal:
Special revenue1,732,996 — 8,414 (51,652)1,689,758 1,689,758 
State general obligation273,232 — 4,565 (7,375)270,422 270,422 
Pre-refunded85,683 — 1,260 (90)86,853 86,853 
Corporate backed168,276 — 1,847 (4,968)165,155 165,155 
Local general obligation307,754 — 2,483 (6,123)304,114 304,114 
Total state and municipal2,567,941 — 18,569 (70,208)2,516,302 2,516,302 
Mortgage-backed:
Residential2,736,493 — 31,527 (130,929)2,637,091 2,637,091 
Commercial600,597 (52)3,254 (2,918)600,881 600,881 
Total mortgage-backed3,337,090 (52)34,781 (133,847)3,237,972 3,237,972 
Asset-backed4,118,052 (546)26,592 (36,777)4,107,321 4,107,321 
Corporate:
Industrial3,980,058 — 55,042 (80,692)3,954,408 3,954,408 
Financial3,326,838 — 54,929 (33,205)3,348,562 3,348,562 
Utilities774,956 — 13,319 (13,877)774,398 774,398 
Other774,274 — 4,715 (3,593)775,396 775,396 
Total corporate8,856,126 — 128,005 (131,367)8,852,764 8,852,764 
Foreign government1,996,895 (6,355)23,701 (179,636)1,834,605 1,834,605 
Total available for sale22,959,189 (6,953)255,622 (587,909)22,619,949 22,619,949 
Total investments in fixed maturity securities$23,003,148 $(6,983)$257,675 $(587,909)$22,665,931 $22,663,878 
____________
(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.
















10
(In thousands)Amortized
Cost		Allowance for Expected Credit Losses (1)Gross UnrealizedFair
Value		Carrying
Value
GainsLosses
December 31, 2023
Held to maturity:
State and municipal$50,547 $(43)$3,132 $— $53,636 $50,504 
Residential mortgage-backed2,868 — 107 — 2,975 2,868 
Total held to maturity53,415 (43)3,239 — 56,611 53,372 
Available for sale:
U.S. government and government agency1,762,997 — 11,403 (57,669)1,716,731 1,716,731 
State and municipal:
Special revenue1,682,550 — 5,651 (82,006)1,606,195 1,606,195 
State general obligation394,429 — 3,550 (16,405)381,574 381,574 
Pre-refunded103,029 — 1,634 (185)104,478 104,478 
Corporate backed166,873 (757)696 (11,973)154,839 154,839 
Local general obligation396,041 — 3,188 (11,893)387,336 387,336 
Total state and municipal2,742,922 (757)14,719 (122,462)2,634,422 2,634,422 
Mortgage-backed:
Residential1,773,206 — 12,780 (163,844)1,622,142 1,622,142 
Commercial657,157 (158)626 (13,312)644,313 644,313 
Total mortgage-backed2,430,363 (158)13,406 (177,156)2,266,455 2,266,455 
Asset-backed4,252,883 (1,164)8,527 (73,206)4,187,040 4,187,040 
Corporate:
Industrial3,679,219 (40)24,312 (143,936)3,559,555 3,559,555 
Financial2,838,220 (4,986)14,681 (68,681)2,779,234 2,779,234 
Utilities701,865 — 6,471 (23,412)684,924 684,924 
Other635,975 — 1,605 (7,234)630,346 630,346 
Total corporate7,855,279 (5,026)47,069 (243,263)7,654,059 7,654,059 
Foreign government1,817,386 (29,603)15,865 (137,419)1,666,229 1,666,229 
Total available for sale20,861,830 (36,708)110,989 (811,175)20,124,936 20,124,936 
Total investments in fixed maturity securities$20,915,245 $(36,751)$114,228 $(811,175)$20,181,547 $20,178,308 
____________
(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses is recognized in the consolidated statements of income. Amount excludes unrealized losses relating to non-credit factors.

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the nine months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$43 $114 
Change in expected credit losses(13)(66)
Allowance for expected credit losses, end of period$30 $48 

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$34 $53 
Change in expected credit losses(4)(5)
Allowance for expected credit losses, end of period$30 $48 

11
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the nine months ended September 30, 2024 and 2023:
20242023
(In thousands)Foreign GovernmentCorporateMortgage-backedAsset-backedState and MunicipalTotalForeign GovernmentCorporateMortgage-backedAsset-backedState and MunicipalTotal
Balance, beginning of period$29,603 $5,026 $158 $1,164 $757 $36,708 $32,633 $4,701 $18 $— $— $37,352 
Change on securities for which credit losses were not previously recorded347 — 1,701 — — 2,048 — 942 1,766 1,444 821 4,973 
Change on securities for which credit losses were previously recorded(23,216)(5,026)(1,246)(618)(757)(30,863)3,538 134 316 58 — 4,046 
Reduction due to disposals(379)— (561)— — (940)— (7)— — — (7)
Balance, end of period$6,355 $— $52 $546 $— $6,953 $36,171 $5,770 $2,100 $1,502 $821 $46,364 
During the nine months ended September 30, 2024, the Company decreased the allowance for expected credit losses for available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to improved pricing associated with foreign government securities and corporate securities. During the nine months ended September 30, 2023, the Company increased the allowance for expected credit losses for available for sale securities in part due to changes in economic assumptions utilized in its credit loss model, primarily affecting the financial services and real estate sectors, and an increase in unrealized loss related to the foreign government portfolio.
The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended September 30, 2024 and 2023:
20242023
(In thousands)Foreign GovernmentCorporateMortgage-backedAsset-backedState and MunicipalTotalForeign GovernmentCorporateMortgage-backedAsset-backedState and MunicipalTotal
Balance, beginning of period$19,469 $— $1,140 $889 $339 $21,837 $33,052 $8,867 $885 $1,444 $— $44,248 
Change on securities for which credit losses were not previously recorded47 — — — — 47 — 756 905 — 821 2,482 
Change on securities for which credit losses were previously recorded(12,782)— (1,088)(343)(339)(14,552)3,119 (3,853)310 58 — (366)
Reduction due to disposals(379)— — — — (379)— — — — — — 
Balance, end of period$6,355 $— $52 $546 $— $6,953 $36,171 $5,770 $2,100 $1,502 $821 $46,364 
During the three months ended September 30, 2024, the Company decreased the allowance for expected credit losses for available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to improved pricing associated with foreign government securities.
The amortized cost and fair value of fixed maturity securities at September 30, 2024, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.
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(In thousands)Amortized
Cost (1)		Fair
Value
Due in one year or less$1,910,941 $1,886,626 
Due after one year through five years9,907,127 9,724,883 
Due after five years through ten years4,282,838 4,283,690 
Due after ten years3,562,724 3,530,253 
Mortgage-backed securities3,339,488 3,240,479 
Total$23,003,118 $22,665,931 
_______________
(1) Amortized cost is reduced by the allowance for expected credit losses of $30 thousand related to held to maturity securities.    
At September 30, 2024 and December 31, 2023, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities.


(7) Investments in Equity Securities
    At September 30, 2024 and December 31, 2023, investments in equity securities were as follows:
 
(In thousands)CostGross UnrealizedFair
Value		Carrying
Value
GainsLosses
September 30, 2024
Common stocks$604,288 $157,761 $(60,382)$701,667 $701,667 
Preferred stocks345,265 10,921 (9,727)346,459 346,459 
Total$949,553 $168,682 $(70,109)$1,048,126 $1,048,126 
December 31, 2023
Common stocks$664,997 $191,806 $(18,749)$838,054 $838,054 
Preferred stocks284,335 3,075 (35,117)252,293 252,293 
Total$949,332 $194,881 $(53,866)$1,090,347 $1,090,347 




(8) Arbitrage Trading Account
    At September 30, 2024 and December 31, 2023, the fair and carrying values of the arbitrage trading account were $821 million and $938 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus 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 Company uses put options and call options in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options are reported at fair value. As of September 30, 2024, the fair value of long option contracts outstanding was $6 million (notional amount of $340 million) and the fair value of short option contracts was $36 million (notional amount of $340 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.


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(9) Net Investment Income
    Net investment income consisted of the following: 
 For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Investment income (loss) earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable$295,272 $239,727 $954,655 $653,200 
Arbitrage trading account (1)17,869 17,876 52,562 53,168 
Equity securities12,203 12,714 35,924 41,714 
Investment funds4,741 4,450 868 5,444 
Real estate(3,711)(1,986)(20,579)(7,821)
Gross investment income326,374 272,781 1,023,430 745,705 
Investment expense(2,618)(1,837)(7,707)(6,211)
Net investment income$323,756 $270,944 $1,015,723 $739,494 
(1) Net investment income includes earnings from trading account receivables from brokers and clearing organizations.


(10) Investment Funds
    The Company evaluates whether it is an investor in a variable interest entity ("VIE"). Such entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment funds, and accordingly, carries its interests in investment funds under the equity method of accounting.    
    The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount reported on the Company’s consolidated balance sheet and its unfunded commitments, which were $248 million as of September 30, 2024.
    Investment funds consisted of the following:
Carrying Value as of Income (Loss) from
Investment Funds
September 30,December 31,For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Financial services$460,264 $433,407 $(16,908)$(15,606)
Transportation300,937 344,278 962 37,894 
Real Estate190,318 201,625 11,471 (5,062)
Infrastructure146,936 130,589 12,730 7,813 
Energy131,113 114,794 9,473 3,921 
Other funds377,813 396,962 (16,860)(23,516)
Total$1,607,381 $1,621,655 $868 $5,444 
    The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.
Financial services investment funds include the minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1, 2021, Lifson Re participated on a fully collateralized basis in a majority of the Company’s reinsurance placements for a 22.5% share of placed amounts. The percentage increased from 22.5% to 30.0% effective July 1, 2022. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there is more than
14
one open market reinsurer participating. For the nine months ended September 30, 2024 and 2023, the Company ceded approximately $315 million and $348 million, respectively, of written premiums to Lifson Re.
Other funds include deferred compensation trust assets of $38 million and $36 million as of September 30, 2024 and December 31, 2023, respectively. These assets support other liabilities reflected in the balance sheet of an equal amount for employees who have elected to defer a portion of their compensation. The change in the net asset value of the trust is recorded in other funds within net investment income with an offsetting equal amount within corporate expenses.


(11) Real Estate
    Investment in real estate represents directly owned property held for investment, as follows:
Carrying Value
September 30,December 31,
(In thousands)20242023
Properties in operation$1,069,589 $1,022,654 
Properties under development227,725 227,220 
Total$1,297,314 $1,249,874 

    As of September 30, 2024, 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. Properties in operation are net of accumulated depreciation and amortization of $36,999,000 and $32,745,000 as of September 30, 2024 and December 31, 2023, respectively. Related depreciation expense was $6,401,000 and $6,667,000 for the nine months ended September 30, 2024 and 2023, respectively. Future minimum rental income expected on operating leases relating to properties in operation is $8,884,653 in 2024, $34,771,667 in 2025, $33,308,460 in 2026, $32,567,952 in 2027, $33,133,057 in 2028, $28,606,364 in 2029 and $415,176,586 thereafter.
    A mixed-use project in Washington, D.C. had been under development in 2024 and 2023, with the completed portion reported in properties in operation as of September 30, 2024.



(12) Loans Receivable

At September 30, 2024 and December 31, 2023, loans receivable were as follows:
(In thousands)September 30,
2024		December 31,
2023
Amortized cost (net of allowance for expected credit losses):
Real estate loans$387,642 $200,381 
Commercial loans2,227 890 
Total$389,869 $201,271 
Fair value:
Real estate loans$387,634 $197,354 
Commercial loans2,227 890 
Total$389,861 $198,244 
The real estate loans are secured by commercial and residential real estate primarily located in the UK and New York. These loans generally earn interest at fixed or stepped interest rates and have maturities through 2028. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans primarily earn interest on a fixed basis and have varying maturities generally not exceeding 5 years.

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The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the nine months ended September 30, 2024 and 2023:
20242023
(In thousands)Real Estate LoansCommercial LoansTotalReal Estate LoansCommercial LoansTotal
Allowance for expected credit losses, beginning of period$2,983 $21 $3,004 $1,100 $691 $1,791 
Change in expected credit losses(1,581)2 (1,579)2,302 (84)2,218 
Allowance for expected credit losses, end of period$1,402 $23 $1,425 $3,402 $607 $4,009 
During the nine months ended September 30, 2024, the Company decreased the allowance for expected credit losses due to a decrease in the weighted average life of the loan portfolio. During the nine months ended September 30, 2023, the Company increased the allowance for expected credit losses due to changes in economic assumptions utilized in its credit loss model.
The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended September 30, 2024 and 2023:
20242023
(In thousands)Real Estate LoansCommercial LoansTotalReal Estate LoansCommercial LoansTotal
Allowance for expected credit losses, beginning of period$1,793 $20 $1,813 $3,658 $892 $4,550 
Change in expected credit losses(391)3 (388)(256)(285)(541)
Allowance for expected credit losses, end of period$1,402 $23 $1,425 $3,402 $607 $4,009 
The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions.
    In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the position in the capital structure, the overall leverage in the capital structure and other market conditions.

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(13) Net Investment (Losses) Gains
     Net investment (losses) gains were as follows:
For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Net investment (losses) gains:  
Fixed maturity securities:  
Gains$4,799 $299 $11,448 $1,357 
Losses(3,884)(2,700)(11,569)(24,470)
Equity securities (1):
Net realized gains on investment sales (2)407 23,631 102,205 135,763 
Change in unrealized (losses) gains(1,537)(19,059)(42,442)45,605 
Investment funds(101)(3,329)1,109 (3,417)
Real estate (3)1,470 (24,234)(2,704)(68,944)
Loans receivable— (1,428)— (1,428)
Other (4)(24,516)(14,035)(130,212)(34,063)
Net realized and unrealized (losses) gains on investments in earnings before allowance for expected credit losses(23,362)(40,855)(72,165)50,403 
Change in allowance for expected credit losses on investments:
Fixed maturity securities14,888 (2,112)29,768 (8,946)
Loans receivable388 541 1,579 (2,218)
Change in allowance for expected credit losses on investments15,276 (1,571)31,347 (11,164)
Net investment (losses) gains(8,086)(42,426)(40,818)39,239 
Income tax benefit (expense)43 9,405 5,810 (8,033)
After-tax net investment (losses) gains$(8,043)$(33,021)$(35,008)$31,206 
Change in unrealized investment gains (losses) on available for sale securities:  
Fixed maturity securities without allowance for expected credit losses$463,418 $(136,388)$363,430 $(57,293)
Fixed maturity securities with allowance for expected credit losses11,166 (10,244)4,470 (3,094)
Investment funds6,152 (3,217)3,112 (818)
Other32 (606)(181)(1,271)
Total change in unrealized investment gains (losses)480,768 (150,455)370,831 (62,476)
Income tax (expense) benefit (99,775)32,090 (73,298)11,626 
Noncontrolling interests— — 1 (1)
After-tax change in unrealized investment gains (losses) of available for sale securities$380,993 $(118,365)$297,534 $(50,851)
______________________
(1) The net realized gains or losses on investment sales represent the total gains or losses from the purchase dates of the equity securities. The change in unrealized gains (losses) consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and (ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.
(2) In June 2023, the Company completed a sale of the property and casualty insurance services division of Breckenridge IS, Inc. and recognized a pre-tax net realized gain on investment of $88 million on the sale (proceeds from the sale is presented on the business disposition line within the Consolidated Statements of Cash Flows).
(3) The Company recognized impairments on real estate of $21 million and $72 million in the three months and nine months ended September 30, 2023, respectively.
(4) Primarily relates to realized foreign currency losses upon the disposition of fixed maturity securities.


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(14) Fixed Maturity Securities in an Unrealized Loss Position
    The following tables summarize all fixed maturity securities in an unrealized loss position at September 30, 2024 and December 31, 2023 by the length of time those securities have been continuously in an unrealized loss position:
  Less Than 12 Months12 Months or GreaterTotal
(In thousands)Fair
Value		Gross
Unrealized Losses		Fair
Value		Gross
Unrealized Losses		Fair
Value		Gross
Unrealized Losses
September 30, 2024
U.S. government and government agency$142,850 $3,128 $586,823 $32,946 $729,673 $36,074 
State and municipal119,658 2,875 1,636,735 67,333 1,756,393 70,208 
Mortgage-backed237,206 925 1,162,601 132,922 1,399,807 133,847 
Asset-backed471,907 1,236 787,420 35,541 1,259,327 36,777 
Corporate308,606 4,573 3,325,568 126,794 3,634,174 131,367 
Foreign government141,247 17,405 617,409 162,231 758,656 179,636 
Fixed maturity securities$1,421,474 $30,142 $8,116,556 $557,767 $9,538,030 $587,909 
December 31, 2023
U.S. government and government agency$384,392 $6,655 $614,623 $51,014 $999,015 $57,669 
State and municipal264,273 3,013 1,680,034 119,449 1,944,307 122,462 
Mortgage-backed278,819 2,025 1,360,748 175,131 1,639,567 177,156 
Asset-backed413,511 2,070 2,176,035 71,136 2,589,546 73,206 
Corporate874,754 11,975 4,418,309 231,288 5,293,063 243,263 
Foreign government204,908 1,758 794,174 135,661 999,082 137,419 
Fixed maturity securities$2,420,657 $27,496 $11,043,923 $783,679 $13,464,580 $811,175 
    Substantially all of the securities in an unrealized loss position are rated investment grade, except for the securities in the foreign government classification. A significant amount of the unrealized loss on foreign government securities is the result of changes in currency exchange rates. 
    A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at September 30, 2024 is presented in the table below:
($ in thousands)Number of
Securities		Aggregate
Fair Value		Gross
Unrealized Loss
Foreign government62 $146,049 $163,081 
State and municipal5 28,143 1,894 
Corporate9 20,185 568 
Mortgage-backed15 2,930 143 
Total91 $197,307 $165,686 
    For fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other comprehensive income (loss).
     The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.

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(15) Fair Value Measurements
    The Company’s fixed maturity available for sale securities, equity securities and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable.
Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available.
    Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation.
    If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information.
    For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate.
    
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    The following tables present the assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by level:
(In thousands)TotalLevel 1Level 2Level 3
September 30, 2024
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency$2,070,985 $— $2,070,985 $— 
State and municipal2,516,302 — 2,516,302 — 
Mortgage-backed3,237,972 — 3,237,972 — 
Asset-backed4,107,321 — 4,107,321 — 
Corporate8,852,764 — 8,852,764 — 
Foreign government1,834,605 — 1,834,605 — 
Total fixed maturity securities available for sale22,619,949 — 22,619,949 — 
Equity securities:
Common stocks701,667 698,364 1,130 2,173 
Preferred stocks346,459 — 342,823 3,636 
Total equity securities1,048,126 698,364 343,953 5,809 
Arbitrage trading account820,928 728,783 88,397 3,748 
Total$24,489,003 $1,427,147 $23,052,299 $9,557 
Liabilities:
Trading account securities sold but not yet purchased$36,093 $36,093 $— $— 
December 31, 2023
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency$1,716,731 $— $1,716,731 $— 
State and municipal2,634,422 — 2,634,422 — 
Mortgage-backed2,266,455 — 2,266,455 — 
Asset-backed4,187,040 — 4,187,040 — 
Corporate7,654,059 — 7,654,059 — 
Foreign government1,666,229 — 1,666,229 — 
Total fixed maturity securities available for sale20,124,936 — 20,124,936 — 
Equity securities:
Common stocks838,054 835,338 1,158 1,558 
Preferred stocks252,293 — 248,598 3,695 
Total equity securities1,090,347 835,338 249,756 5,253 
Arbitrage trading account938,049 546,110 388,167 3,772 
Total$22,153,332 $1,381,448 $20,762,859 $9,025 
Liabilities:
Trading account securities sold but not yet purchased$9,357 $9,357 $— $— 

20
    The following tables summarize changes in Level 3 assets and liabilities for the nine months ended September 30, 2024 and for the year ended December 31, 2023:
Gains (Losses) Included In:
(In thousands)Beginning
Balance		Earnings (Losses)Other
Comprehensive
Income (Losses)		ImpairmentsPurchasesSalesPaydowns / MaturitiesTransfers In / (Out)Ending
Balance
Nine Months Ended September 30, 2024
Assets:
Equity securities:
Common stocks$1,558 $743 $— $— $— $(128)$— $— $2,173 
Preferred stocks3,695 (2)— — — (57)— — 3,636 
Total5,253 741 — — — (185)— — 5,809 
Arbitrage trading account3,772 (23)— — — (38)— 37 3,748 
Total$9,025 $718 $— $— $— $(223)$— $37 $9,557 
Year Ended
December 31, 2023
Assets:
Equity securities:
Common stocks$2,599 $(1,041)$— $— $— $— $— $— $1,558 
Preferred stocks11,299 (3)— (7,601)— — — — 3,695 
Total13,898 (1,044)— (7,601)— — — — 5,253 
Arbitrage trading account3,590 117 — — — — — 65 3,772 
Total$17,488 $(927)$— $(7,601)$— $— $— $65 $9,025 
    For both the nine months ended September 30, 2024 and the year ended December 31, 2023, one security within the arbitrage trading account portfolio that no longer had a publicly traded price was transferred into Level 3.

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(16) Reserves for Loss and Loss Expenses
    The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported liabilities ("IBNR"). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss reserve development on reported claims.
    Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit.
    The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions.
    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. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns.
    Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations.
    Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include auto, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of business with short reporting lags than for lines of business with long reporting lags.
    The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed.
22
    The table below provides a reconciliation of the beginning and ending reserve balances:
September 30,
(In thousands)20242023
Net reserves at beginning of period$15,661,820 $14,248,879 
Net provision for losses and loss expenses:
Claims occurring during the current year (1)5,229,468 4,694,554 
Increase in estimates for claims occurring in prior years (2) (3)15,279 27,186 
Loss reserve discount accretion 25,587 22,862 
Total5,270,334 4,744,602 
Net payments for claims:  
Current year795,792 743,416 
Prior years3,164,720 2,915,979 
Total3,960,512 3,659,395 
Foreign currency translation19,659 (48,162)
Net reserves at end of period16,991,301 15,285,924 
Ceded reserves at end of period3,164,009 2,987,386 
Gross reserves at end of period$20,155,310 $18,273,310 
_______________________________________
(1) Claims occurring during the current year are net of loss reserve discounts of $37 million and $35 million for the nine months ended September 30, 2024 and 2023, respectively.
(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 $12 million and decreased by $12 million for the nine months ended September 30, 2024 and 2023, respectively.
(3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $3 million and adverse development was $20 million for the nine months ended September 30, 2024 and 2023, respectively.
The ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of September 30, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $382 million, of which $325 million relates to the Insurance segment and $57 million relates to the Reinsurance & Monoline Excess segment. Such $382 million of COVID-19-related losses included $379 million of reported losses and $3 million of IBNR.
During the nine months ended September 30, 2024, favorable prior year development (net of additional and return premiums) of $3 million included $5 million for the Reinsurance & Monoline Excess segment partially offset by $2 million of adverse development for the Insurance segment.
For the Insurance segment, the adverse development during the first nine months of 2024 was driven by commercial auto liability and other liability (mainly umbrella and excess liability), which was largely offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2020 through 2023. The other liability development was mainly driven by umbrella and excess liability claims, and was focused in accident years 2017 through 2021. A significant portion of the umbrella and excess liability development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.
The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2017 through 2023, while the favorable professional liability development was mainly in accident years 2020 through 2022. For workers' compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. For professional liability, reported loss experience for accident years 2020 through 2022 was better than expected, which drove the favorable reserve development. These accident years also feature business written at peak pricing levels, which the Company now believes will result in higher profitability than initially anticipated.
For the Reinsurance & Monoline Excess segment, the favorable development during the first nine months of 2024 was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was
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driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2015 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects.
During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of $20 million included $21 million of adverse development for the Insurance segment, partially offset by $1 million of favorable development for the Reinsurance & Monoline Excess segment.
Such adverse development during the nine months ended September 30, 2023 was concentrated in the first quarter, with $24 million of adverse development (net of additional and return premiums) recorded in the first quarter, partially offset by favorable development totaling $4 million recorded during the second and third quarters. The recorded adverse development during the first quarter in both business segments was due to property catastrophe losses related to 2022 events which were still being adjusted and settled. In particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant driver of the development, as information gathering and evaluation of many of these losses were still ongoing into the new year.
For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the nine months ended September 30, 2023 included adverse prior year development on casualty lines for the 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2020 through 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the general liability line of business, and to a lesser degree professional liability, including medical professional, and commercial auto liability. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.
The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to uncertainty regarding incurred loss frequency and severity in light of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company began to react to this favorable emergence as the accident years matured beyond the age of 12 months. However, commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years, partially offsetting the favorable development discussed above, which was driven by a larger than expected number of large losses reported.
For the Reinsurance & Monoline Excess segment, the favorable development during the nine months ended September 30, 2023 was driven mainly by favorable development in excess workers’ compensation, largely offset by adverse development in property (discussed above), non-proportional reinsurance assumed liability, and commercial auto liability lines of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The adverse development on reinsurance assumed 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. The adverse development on commercial auto liability was concentrated in the 2022 accident year and related to commercial auto program business.

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(17) Fair Value of Financial Instruments
    The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:
  September 30, 2024December 31, 2023
(In thousands)Carrying ValueFair ValueCarrying ValueFair Value
Assets:
Fixed maturity securities$22,663,878 $22,665,931 $20,178,308 $20,181,547 
Equity securities1,048,126 1,048,126 1,090,347 1,090,347 
Arbitrage trading account820,928 820,928 938,049 938,049 
Loans receivable389,869 389,861 201,271 198,244 
Cash and cash equivalents1,573,238 1,573,238 1,363,195 1,363,195 
Trading account receivables from brokers and clearing organizations410,756 410,756 303,614 303,614 
     Due from broker— — 36,747 36,747 
Liabilities:
Due to broker85,920 85,920 — — 
Trading account securities sold but not yet purchased36,093 36,093 9,357 9,357 
Senior notes and other debt1,827,788 1,522,430 1,827,951 1,480,076 
Subordinated debentures1,009,629 922,564 1,009,090 929,598 
    The estimated fair values of the Company’s fixed maturity securities, equity securities and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note 15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.

(18) Premiums and Reinsurance Related Information
The following is a summary of insurance and reinsurance financial information:
For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Written premiums:
Direct$3,303,682 $3,037,932 $9,723,219 $8,762,249 
Assumed329,596 315,273 990,587 977,047 
Ceded(576,002)(504,746)(1,678,460)(1,504,497)
Total net premiums written$3,057,276 $2,848,459 $9,035,346 $8,234,799 
Earned premiums:
Direct$3,141,883 $2,825,176 $9,127,399 $8,217,888 
Assumed346,780 316,134 1,012,804 913,795 
Ceded(561,840)(499,396)(1,602,618)(1,445,610)
Total net premiums earned$2,926,823 $2,641,914 $8,537,585 $7,686,073 
Ceded losses and loss expenses incurred$319,472 $320,995 $952,666 $970,267 
Ceded commissions earned$129,916 $118,207 $374,618 $354,148 
    The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the nine months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$35,110 $30,660 
Change in expected credit losses2,961 2,942 
Allowance for expected credit losses, end of period$38,071 $33,602 
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The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the three months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$37,279 $32,770 
Change in expected credit losses792 832 
Allowance for expected credit losses, end of period$38,071 $33,602 
The Company reinsures a portion of its insurance exposures in order to reduce its net liability on individual risks and catastrophe losses. The Company also cedes premiums to state assigned risk plans and captive insurance companies. Estimated amounts due from reinsurers are reported net of an allowance for expected credit losses.
The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the nine months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$8,404 $8,064 
Change in expected credit losses(72)1,379 
Allowance for expected credit losses, end of period$8,332 $9,443 
The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the three months ended September 30, 2024 and 2023:
(In thousands)20242023
Allowance for expected credit losses, beginning of period$10,255 $9,365 
Change in expected credit losses(1,923)78 
Allowance for expected credit losses, end of period$8,332 $9,443 

(19) Restricted Stock Units
    Pursuant to its stock incentive plan, the Company may issue restricted stock units ("RSUs") to employees of the Company and its subsidiaries. The RSUs generally vest three to five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were $38 million and $36 million for the nine months ended September 30, 2024 and 2023, respectively. A summary of RSUs issued in the nine months ended September 30, 2024 and 2023 follows:
($ in thousands)
UnitsFair Value
20241,215,623 $70,195 
20231,638,195 $68,936 


(20) Litigation and Contingent Liabilities
    In the ordinary course of business, the Company is subject to disputes, litigation and arbitration arising from its insurance and reinsurance businesses. These matters are generally related to insurance and reinsurance claims and are considered in the establishment of loss and loss expense reserves. In addition, the Company may also become involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims. The Company expects its ultimate liability with respect to such matters will not be material to its financial condition. However, adverse outcomes on such matters are possible, from time to time, and could be material to the Company’s results of operations in any particular financial reporting period.
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. 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.
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(21) Leases
    Lessees are required to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months on the balance sheet. All leases disclosed within this footnote are classified as operating leases. Recognized right-of-use asset and lease liability are reported within other assets and other liabilities, respectively, in the consolidated balance sheet. Lease expense is reported in other operating costs and expenses in the consolidated statement of income and accounted for on a straight-line basis over the lease term.
    To determine the discount rate used to calculate present value of future minimum lease payments, the Company uses its incremental borrowing rate during the lease commencement period in line with the respective lease duration. In certain cases, the Company has the option to renew the lease. Lease renewal future payments are included in the present value of the future minimum lease payments when the Company determines it is reasonably certain to renew.
The main leases entered into by the Company are for office space used by the Company’s operating units across the world. Additionally, the Company, to a lesser extent, has equipment leases mainly for office equipment. Further information relating to operating lease expense and other operating lease information are as follows:
 For the Three Months Ended
September 30,		For the Nine Months Ended September 30,
(In thousands)2024202320242023
Leases:
Lease cost$11,230 $10,122 $33,633 $30,448 
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows$12,222 $11,403 $36,818 $33,247 
Right-of-use assets obtained in exchange for new lease liabilities$3,458 $6,543 $37,007 $14,489 

As of September 30,
($ in thousands)20242023
Right-of-use assets$184,166$155,662
Lease liabilities$224,776$188,141
Weighted-average remaining lease term7.4 years6.9 years
Weighted-average discount rate5.53 %4.55 %
Contractual maturities of the Company’s future minimum lease payments are as follows:
(In thousands)September 30, 2024
Contractual Maturities:
2024$13,277 
202546,867 
202640,116 
202731,122 
202829,436 
Thereafter109,555 
Total undiscounted future minimum lease payments270,373 
Less: Discount impact45,597 
Total lease liability$224,776 
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(22) Business Segments
    The Company’s reportable segments include the following two business segments, plus a corporate segment:
•Insurance - 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 - reinsurance business on a facultative and treaty basis, primarily in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific Region and South Africa, as well as operations that solely retain risk on an excess basis and certain program management business.
    The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company's overall effective tax rate.
    Summary financial information about the Company's reporting segments is presented in the following tables. Income (loss) before income taxes by segment includes allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.
  Revenues  
(In thousands)Earned
Premiums (1)		Investment
Income 		OtherTotal (2)Pre-Tax Income (Loss)Net Income (Loss) to Common Stockholders
Three months ended September 30, 2024
Insurance$2,564,490 $253,234 $9,189 $2,826,913 $469,421 $363,026 
Reinsurance & Monoline Excess362,333 57,037 — 419,370 105,225 82,659 
Corporate, other and eliminations (3)— 13,485 148,697 162,182 (92,111)(72,008)
Net investment losses— — (8,086)(8,086)(8,086)(8,043)
Total$2,926,823 $323,756 $149,800 $3,400,379 $474,449 $365,634 
Three months ended September 30, 2023
Insurance$2,291,917 $204,030 $9,143 $2,505,090 $410,909 $326,086 
Reinsurance & Monoline Excess349,997 59,021 — 409,018 110,442 86,747 
Corporate, other and eliminations (3)— 7,893 151,063 158,956 (58,976)(46,226)
Net investment losses— — (42,426)(42,426)(42,426)(33,021)
Total$2,641,914 $270,944 $117,780 $3,030,638 $419,949 $333,586 
Nine months ended September 30, 2024
Insurance$7,447,828 $801,573 $28,202 $8,277,603 $1,437,623 $1,102,363 
Reinsurance & Monoline Excess1,089,757 168,721 — 1,258,478 357,299 282,423 
Corporate, other and eliminations (3)— 45,429 430,492 475,921 (217,912)(169,764)
Net investment losses— — (40,818)(40,818)(40,818)(35,008)
Total$8,537,585 $1,015,723 $417,876 $9,971,184 $1,536,192 $1,180,014 
Nine months ended September 30, 2023
Insurance$6,650,027 $552,917 $27,570 $7,230,514 $1,149,886 $900,434 
Reinsurance & Monoline Excess1,036,046 155,790 — 1,191,836 317,146 251,420 
Corporate, other and eliminations (3)— 30,787 429,180 459,967 (253,066)(199,040)
Net investment gains— — 39,239 39,239 39,239 31,206 
Total$7,686,073 $739,494 $495,989 $8,921,556 $1,253,205 $984,020 
_________________
(1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions.
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(2) Revenues for Insurance from foreign operations for the three months ended September 30, 2024 and 2023 were $350 million and $298 million, respectively, and for the nine months ended September 30, 2024 and 2023 were $1,112 million and $852 million, respectively. Revenues for Reinsurance & Monoline Excess from foreign operations for the three months ended September 30, 2024 and 2023 were $125 million and $124 million, respectively, and for the nine months ended September 30, 2024 and 2023 were $353 million and $333 million, respectively.
(3) Corporate, other and eliminations represent corporate revenues and expenses that are not allocated to business segments.

Identifiable Assets
(In thousands)September 30,
2024		December 31,
2023
Insurance$32,687,852 $29,923,282 
Reinsurance & Monoline Excess5,842,643 5,545,249 
Corporate, other and eliminations1,828,803 1,643,299 
Consolidated$40,359,298 $37,111,830 


    Net premiums earned by major line of business are as follows:
 For the Three Months
Ended September 30,		For the Nine Months
Ended September 30,
(In thousands)2024202320242023
Insurance:
Other liability$1,031,087 $916,394 $3,000,335 $2,660,850 
Short-tail lines (1)563,736 472,805 1,613,342 1,330,173 
Auto376,762 327,507 1,092,354 929,201 
Workers' compensation313,154 300,694 925,214 905,405 
Professional liability279,751 274,517 816,583 824,398 
Total Insurance2,564,490 2,291,917 7,447,828 6,650,027 
Reinsurance & Monoline Excess:
Casualty (2)188,284 201,795 585,208 618,855 
Property (2)108,386 87,838 308,024 239,338 
Monoline excess (3)65,663 60,364 196,525 177,853 
Total Reinsurance & Monoline Excess362,333 349,997 1,089,757 1,036,046 
Total$2,926,823 $2,641,914 $8,537,585 $7,686,073 
______________
(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.
(2) Includes reinsurance casualty and property and certain program management business.
(3) Monoline excess includes operations that solely retain risk on an excess basis.



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SAFE HARBOR STATEMENT
    
    This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year 2024 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition, including new entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, foreign governmental bonds, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss amounts, including claims for cybersecurity-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities; the ongoing effects of the COVID-19 pandemic, or other epidemics and pandemics; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, changing interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of 2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; cyber security breaches of our information technology systems and the information technology systems of our vendors and other third parties, or related processes and systems; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
    These risks and uncertainties could cause our actual results for the year 2024 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Our future financial performance is dependent upon factors discussed in our Annual Report on Form 10-K, elsewhere in this Form 10-Q and our other SEC filings. Forward-looking statements speak only as of the date on which they are made. Except to the extent required by applicable laws, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview
    W. R. 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 and casualty business: Insurance and Reinsurance & Monoline Excess. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to better understand their individual needs and risk characteristics. While providing our business units with certain operating autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment, reinsurance, enterprise risk management, and actuarial, financial and corporate legal staff support. The Company’s primary sources of revenues and earnings are its insurance operations and its investments.
    An important part of our strategy is to form new operating units to capitalize on various business opportunities. Over the years, the Company has formed numerous operating units that are focused on important parts of the economy in the U.S., including healthcare, cyber security, energy and agriculture, and on growing international markets, including the Asia-Pacific region, South America and Mexico.
    The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The ultimate adequacy of premium rates is not known with certainty at the time an insurance policy is issued because premiums are determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court decisions that define and change the extent of coverage and the effects of economic and social inflation on the amount of compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of capital employed in the industry, and the industry’s willingness to deploy that capital.
    The Company’s profitability is also affected by its investment income and investment gains (losses). The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities.
    The Company also invests in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate-related assets. The Company's investments in investment funds and its other alternative investments have experienced, and the Company expects to continue to experience, greater fluctuations in investment income. The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.
Commencing with the first quarter of 2024, the Company reclassified a program management business from the Insurance segment to the Reinsurance & Monoline Excess segment. The reclassified business is a program management business offering support on a nationwide basis for commercial casualty and property program administrators. Reclassifications have been made to the Company's 2023 financial information to conform with this presentation.
On June 12, 2024, the Company announced that its Board of Directors approved a 3-for-2 common stock split which was paid in the form of a stock dividend to holders of record as of June 24, 2024. The additional shares were issued on July 10, 2024. Share and per share amounts in this Form 10-Q reflect such 3-for-2 common stock split.
In June 2023, the Company completed a sale of the property and casualty insurance services division of Breckenridge IS, Inc. and recognized a pre-tax net realized gain on investment of $88 million.


Critical Accounting Estimates
    The following presents a discussion of accounting policies and estimates relating to reserves for losses and loss expenses, assumed premiums and allowance for expected credit losses on investments. Management believes these policies and estimates are the most critical to its operations and require the most difficult, subjective and complex judgments.
    Reserves for Losses and Loss Expenses. To recognize liabilities for unpaid losses, either known or unknown, insurers establish reserves, which is a balance sheet account representing estimates of future amounts needed to pay claims and related expenses with respect to insured events which have occurred. Estimates and assumptions relating to reserves for losses and loss expenses are based on complex and subjective judgments, often including the interplay of specific uncertainties with related accounting and actuarial measurements. Such estimates are also susceptible to change as significant periods of time may
31
elapse between the occurrence of an insured loss, the report of the loss to the insurer, the ultimate determination of the cost of the loss and the insurer’s payment of that loss.
    In general, when a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the ultimate payment based upon known information about the claim at that time. The estimate represents an informed judgment based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature and value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon the then current legal interpretation of coverage provided.
    In examining reserve adequacy, several factors are considered in estimating the ultimate economic value of losses. These factors include, among other things, historical data, legal developments, changes in social attitudes and economic conditions, including the effects of inflation. The actuarial process relies on the basic assumption that past experience, adjusted judgmentally for the effects of current developments and anticipated trends, is an appropriate basis for predicting future outcomes. Reserve amounts are based on management’s informed estimates and judgments using currently available data. As additional experience and other data become available and are reviewed, these estimates and judgments may be revised. This may result in reserve increases or decreases that would be reflected in our results in periods in which such estimates and assumptions are changed.
    Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management expects the ultimate settlement and claim administration will cost. While the methods for establishing reserves are well tested over time, some of the major assumptions about anticipated loss emergence patterns are subject to uncertainty. These estimates, which generally involve actuarial projections, are based on management’s assessment of facts and circumstances then known, as well as estimates of trends in claims severity and frequency, judicial theories of liability and other factors, including the actions of third parties which are beyond the Company’s control. These variables are affected by external and internal events, such as inflation and economic volatility, judicial and litigation trends, reinsurance coverage, legislative changes and claim handling and reserving practices, which make it more difficult to accurately predict claim costs. The inherent uncertainties of estimating reserves are greater for certain types of liabilities where long periods of time elapse before a definitive determination of liability is made. Because setting reserves is inherently uncertain, the Company cannot provide assurance that its current reserves will prove adequate in light of subsequent events.
    Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. For example, the paid loss and incurred loss development methods rely on historical paid and incurred loss data. For new lines of business, where there is insufficient history of paid and incurred claims data, or in circumstances where there have been significant changes in claim practices, the paid and incurred loss development methods would be less credible than other actuarial methods. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” and in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit.
    The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. 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.
    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. Expected loss ratios represent management’s expectation of losses at the time the business is written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current
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reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Management believes the estimates and assumptions it makes in the reserving process provide the best estimate of the ultimate cost of settling claims and related expenses with respect to insured events which have occurred; however, different assumptions and variables could lead to significantly different reserve estimates.
    Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations.
    Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include auto, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of business with short reporting lags than for lines of business with long reporting lags.
    The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. If the actual level of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s estimate. 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%$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 $17.0 billion as of September 30, 2024 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.
    Approximately $3.3 billion, or 19.7%, of the Company’s net loss reserves as of September 30, 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, which predominantly comprise these reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to 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.
    Information received from ceding companies is used to set initial expected loss ratios, to establish case reserves and to estimate reserves for incurred but not reported losses on assumed reinsurance business. This information, which is generally provided through reinsurance intermediaries, is gathered through the underwriting process and from periodic claim reports and other correspondence with ceding companies. The Company performs underwriting and claim audits of selected ceding
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companies to determine the accuracy and completeness of information provided to the Company. The information received from the ceding companies is supplemented by the Company’s own loss development experience with similar lines of business as well as industry loss trends and loss development benchmarks.
    Following is a summary of the Company’s reserves for losses and loss expenses by business segment:
(In thousands)September 30,
2024		December 31,
2023
Insurance$13,644,469 $12,430,202 
Reinsurance & Monoline Excess3,346,832 3,231,618 
Net reserves for losses and loss expenses16,991,301 15,661,820 
Ceded reserves for losses and loss expenses3,164,009 3,077,832 
Gross reserves for losses and loss expenses$20,155,310 $18,739,652 

    Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business:
(In thousands)Reported Case
Reserves		Incurred But
Not Reported		Total
September 30, 2024
Other liability$2,140,577 $5,029,680 $7,170,257 
Professional liability612,421 1,499,487 2,111,908 
Workers’ compensation (1)1,047,541 782,736 1,830,277 
Auto701,657 885,357 1,587,014 
Short-tail lines (2)394,123 550,890 945,013 
Total Insurance4,896,319 8,748,150 13,644,469 
Reinsurance & Monoline Excess (1) (3)1,670,673 1,676,159 3,346,832 
Total$6,566,992 $10,424,309 $16,991,301 
December 31, 2023
Other liability$1,912,594 $4,607,507 $6,520,101 
Professional liability527,555 1,438,102 1,965,657 
Workers’ compensation (1)1,019,445 790,944 1,810,389 
Auto645,707 700,850 1,346,557 
Short-tail lines (2)375,129 412,369 787,498 
Total Insurance4,480,430 7,949,772 12,430,202 
Reinsurance & Monoline Excess (1) (3)1,673,581 1,558,037 3,231,618 
Total$6,154,011 $9,507,809 $15,661,820 
___________
(1) Reserves for workers’ compensation and Reinsurance & Monoline Excess are net of an aggregate net discount of $399 million and $390 million as of September 30, 2024 and December 31, 2023, respectively.
(2) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery, high net worth homeowners and other lines.
(3) Reinsurance & Monoline Excess includes property and casualty reinsurance, as well as operations that solely retain risk on an excess basis and certain program management business.
    The Company evaluates reserves for losses and loss adjustment expenses on a quarterly basis. Changes in estimates of prior year losses are reported when such changes are made. The changes in prior year loss reserve estimates are generally the result of ongoing analysis of recent loss development trends. Original estimates are increased or decreased as additional information becomes known regarding individual claims and aggregate claim trends.
    Certain of the Company's insurance and reinsurance contracts are retrospectively rated, whereby the Company collects more or less premiums based on the level of loss activity. For those contracts, changes in loss and loss adjustment expenses for prior years may be fully or partially offset by additional or return premiums.
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    Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the nine months ended September 30, 2024 and 2023 are as follows:
(In thousands)20242023
Increase in prior year loss reserves$(15,279)$(27,186)
Increase in prior year earned premiums18,126 7,291 
Net favorable (unfavorable) prior year development$2,847 $(19,895)
The ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of September 30, 2024, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $382 million, of which $325 million relates to the Insurance segment and $57 million relates to the Reinsurance & Monoline Excess segment. Such $382 million of COVID-19-related losses included $379 million of reported losses and $3 million of IBNR.
During the nine months ended September 30, 2024, favorable prior year development (net of additional and return premiums) of $3 million included $5 million for the Reinsurance & Monoline Excess segment partially offset by $2 million of adverse prior year development for the Insurance segment.
For the Insurance segment, the adverse development during the first nine months of 2024 was driven by commercial auto liability and other liability (mainly umbrella and excess liability), which was largely offset by favorable development for workers’ compensation and professional liability. The adverse commercial auto liability development was concentrated in accident years 2020 through 2023. The other liability development was mainly driven by umbrella and excess liability claims, and was focused in accident years 2017 through 2021. A significant portion of the umbrella and excess liability development related to underlying commercial auto exposures. The Company believes that commercial auto-related claims are being particularly impacted by social inflation, which is contributing to an increase in the frequency of large losses beyond expectations. Social inflation can include higher settlement demands from plaintiffs, use of aggressive actions by the plaintiffs’ bar such as litigation funding, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among other factors.
The favorable workers’ compensation development for the Insurance segment was mainly related to accident years 2017 through 2023, while the favorable professional liability development was mainly in accident years 2020 through 2022. For workers' compensation, favorable reported claim frequency, below expectations, continued to be the main driver of the favorable reserve development. For professional liability, reported loss experience for accident years 2020 through 2022 was better than expected, which drove the favorable reserve development. These accident years also feature business written at peak pricing levels, which the Company now believes will result in higher profitability than initially anticipated.
For the Reinsurance & Monoline Excess segment, the favorable development during the first nine months of 2024 was driven mainly by favorable development in excess workers’ compensation, partially offset by adverse development in the non-proportional reinsurance assumed liability line of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to expectations, and to favorable claim settlements spread across many prior accident years. The unfavorable development for non-proportional reinsurance was concentrated mainly in accident years 2015 through 2019 and was associated primarily with our U.S. and U.K. excess general liability reinsurance businesses, including coverage for cedants insuring construction projects.
During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of $20 million included $21 million of adverse development for the Insurance segment, partially offset by $1 million of favorable development for the Reinsurance & Monoline Excess segment.
Such adverse development during the nine months ended September 30, 2023 was concentrated in the first quarter, with $24 million of adverse development (net of additional and return premiums) recorded in the first quarter, partially offset by favorable development totaling $4 million recorded during the second and third quarters. The recorded adverse development during the first quarter in both business segments was due to property catastrophe losses related to 2022 events which were still being adjusted and settled. In particular, losses related to U.S. winter storms which occurred during the month of December 2022 were a significant driver of the development, as information gathering and evaluation of many of these losses were still ongoing into the new year.
For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the nine months ended September 30, 2023 included adverse prior year development on casualty lines for the 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2020 through 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the general liability line of business, and to a lesser degree professional liability, including medical professional, and commercial auto liability. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a
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larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.
The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance segment was concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to uncertainty regarding incurred loss frequency and severity in light of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company began to react to this favorable emergence as the accident years matured beyond the age of 12 months. However, commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years, partially offsetting the favorable development discussed above, which was driven by a larger than expected number of large losses reported.
For the Reinsurance & Monoline Excess segment, the favorable development during the nine months ended September 30, 2023 was driven mainly by favorable development in excess workers’ compensation, largely offset by adverse development in property (discussed above), non-proportional reinsurance assumed liability, and commercial auto liability lines of business. The favorable excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years. The adverse development on reinsurance assumed 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. The adverse development on commercial auto liability was concentrated in the 2022 accident year and related to commercial auto program business.
Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was $1,346 million and $1,352 million at September 30, 2024 and December 31, 2023, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was $399 million and $390 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024, discount rates by year ranged from 0.7% to 6.5%, with a weighted average discount rate of 3.5%.
    Substantially all of the workers’ compensation discount (97% of total discounted reserves at September 30, 2024) relates to 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. 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. 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 September 30, 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.
    Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately $55 million at September 30, 2024 and $65 million at December 31, 2023. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. 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.
    Fixed Maturity Securities – For fixed maturity securities in an unrealized loss position where the Company intends to sell, or it is more likely than not that it will be required to sell the security before recovery in value, the amortized cost basis is written down to fair value through net investment gains (losses). For fixed maturity securities in an unrealized loss position
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where the Company does not intend to sell, or it is more likely than not that it will not be required to sell the security before recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or all other factors (non-credit 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 other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for expected credit losses is recorded for the credit loss through net investment gains (losses), limited by the amount that the fair value is less than the amortized cost basis. 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 Company’s credit assessment of allowance for expected credit losses uses a third party model for available for sale and held to maturity securities, as well as loans receivable. The allowance for expected credit losses is generally based on the performance of the underlying collateral under various economic and default scenarios that involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance for expected credit losses, if any. In general, the model reverts to the rating-level long-term average marginal default rates based on 10 years of historical data, beyond the forecast period. For other inputs, the model in most cases reverts to the baseline long-term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical averages.
    The Company classifies its fixed maturity securities by credit rating, primarily based on ratings assigned by credit rating agencies. For purposes of classifying securities with different ratings, the Company uses the average of the credit ratings assigned, unless in limited situations the Company’s own analysis indicates an internal rating is more appropriate. 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 September 30, 2024 is presented in the table below:
($ in thousands)Number of
Securities		Aggregate
Fair Value		 Gross Unrealized Loss
Foreign government62 $146,049 $163,081 
State and municipal5 28,143 1,894 
Corporate9 20,185 568 
Mortgage-backed15 2,930 143 
Total91 $197,307 $165,686 
    As of September 30, 2024, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $7 million. The Company has evaluated the remaining fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become due.
Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and forecasts that affect the expected collectability of the amortized cost of the financial asset. The allowance for expected credit losses is presented as a reduction to amortized cost of the financial asset in the consolidated balance sheet and changes to the estimate for expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of an allowance for expected credit losses of $1 million and $3 million as of September 30, 2024 and December 31, 2023, respectively.
    Fair Value Measurements. The Company’s fixed maturity available for sale securities, equity securities, and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair
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value of the vast majority of the Company’s portfolio is based on observable data (other than quoted prices) and, accordingly, is classified as Level 2.
    In classifying particular financial securities in the fair value hierarchy, the Company uses its judgment to determine whether the market for a security is active and whether significant pricing inputs are observable. The Company determines the existence of an active market by assessing whether transactions occur with sufficient frequency and volume to provide reliable pricing information. 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. If the market for a security is determined to be inactive or if significant inputs used to price a security are determined to be unobservable, the security is categorized in Level 3 of the fair value hierarchy.
    Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable market data. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial data, projections and business developments of the issuer and other relevant information.
    The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of September 30, 2024:
($ in thousands)Carrying
Value		Percent
of Total
Pricing source:
Independent pricing services$22,087,241 97.6 %
Syndicate manager107,310 0.5 
Directly by the Company based on:
Observable data425,398 1.9 
Total$22,619,949 100.0 %
    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 prices provided by the independent pricing services are generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities). The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness based upon current trading levels for similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or revised. 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 September 30, 2024, the Company did not make any adjustments to the prices provided by the pricing services. Based upon the Company’s review of the methodologies used by the independent pricing services, these securities were classified as Level 2.
    Syndicate manager – The Company has a 15% participation in a Lloyd’s syndicate, and the Company’s share of the securities owned by the syndicate is priced by the syndicate’s manager. The majority of the securities are liquid, short duration fixed maturity securities. The Company reviews the syndicate manager’s pricing methodology and audited financial statements and holds discussions with the syndicate manager as necessary to confirm its understanding and agreement with security prices. Based upon the Company’s review of the methodologies used by the syndicate manager, these securities were classified as Level 2.
    Observable data – If independent pricing is not available, the Company prices the securities directly. Prices are based on observable market data where available, including current trading levels for similar securities and non-binding quotations from brokers. The Company generally requests two or more quotes. If more than one quote is received, the Company sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes obtained from brokers. Since these securities were priced based on observable data, they were classified as Level 2.
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    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. Discount rates are adjusted to reflect illiquidity where appropriate. These securities were classified as Level 3.


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Results of Operations for the Nine Months Ended September 30, 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 (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 nine months ended September 30, 2024 and 2023. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.
($ in thousands)20242023
Insurance:
Gross premiums written$9,501,027 $8,586,193 
Net premiums written7,929,439 7,175,904 
Net premiums earned7,447,828 6,650,027 
Loss ratio63.0 %62.8 %
Expense ratio28.4 %28.2 %
GAAP combined ratio91.4 %91.0 %
Reinsurance & Monoline Excess:
Gross premiums written$1,212,779 $1,153,103 
Net premiums written1,105,907 1,058,895 
Net premiums earned1,089,757 1,036,046 
Loss ratio53.2 %54.8 %
Expense ratio29.5 %29.6 %
GAAP combined ratio82.7 %84.4 %
Consolidated:
Gross premiums written$10,713,806 $9,739,296 
Net premiums written9,035,346 8,234,799 
Net premiums earned8,537,585 7,686,073 
Loss ratio61.7 %61.7 %
Expense ratio28.6 %28.4 %
GAAP combined ratio90.3 %90.1 %
    Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the nine months ended September 30, 2024 and 2023:
(In thousands, except per share data)20242023
Net income to common stockholders$1,180,014 $984,020 
Weighted average diluted shares404,053 411,219 
Net income per diluted share$2.92 $2.39 
    The Company reported net income to common stockholders of $1,180 million in 2024 compared to $984 million in 2023. The $196 million increase in net income was primarily due to an after-tax increase in net investment income of $212 million mainly 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 underwriting income of $54 million due to growth in premium rates, an after-tax reduction in corporate expenses of $7 million, an after-tax increase in profits from non-insurance businesses of $4 million, an after-tax increase in profit from insurance service businesses of $3 million and an after-tax increase in minority interest of $2 million, partially offset by an after-tax reduction in net investment gains of $61 million mainly due to the foreign currency losses from Argentine peso-denominated investments and reversal of prior unrealized gains on equity securities, an increase of $23 million in tax expense due to a change in the effective tax rate and an after-tax reduction in foreign currency gains of $2 million. The number of weighted average diluted shares decreased 7.2 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024 and 2023.
    Premiums. Gross premiums written were $10,714 million in 2024, an increase of 10% from $9,739 million in 2023. The increase was due to a $915 million increase in the Insurance segment and a $60 million increase in the Reinsurance &
40
Monoline Excess segment. Approximately 80.9% of premiums expiring in 2024 were renewed, and 80.0% of premiums expiring in 2023 were renewed.
    Average renewal rates (per unit of exposure) for insurance and facultative reinsurance increased 7.0% in 2024, and increased 8.0% excluding workers' compensation.
    A summary of gross premiums written in 2024 compared with 2023 by line of business within each business segment follows:
•Insurance - gross premiums increased 11% to $9,501 million in 2024 from $8,586 million in 2023. Gross premiums increased $399 million (12%) for other liability, $370 million (17%) for short-tail lines, $139 million (13%) for auto, $6 million (1%) for professional liability and $1 million (less than 1%) for workers' compensation.
•Reinsurance & Monoline Excess - gross premiums increased 5% to $1,213 million in 2024 from $1,153 million in 2023. Gross premiums increased $61 million (20%) for property and $23 million (10%) for monoline excess, partially offset by a reduction of $24 million (4%) for casualty.
    Net premiums written were $9,035 million in 2024, an increase of 10% from $8,235 million in 2023. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in 2024 and 15% in 2023.
    Premiums earned increased 11% to $8,538 million in 2024 from $7,686 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. Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $270 million in 2024 compared with $271 million in 2023.
    Net Investment Income. Following is a summary of net investment income for the nine months ended September 30, 2024 and 2023:
AmountAverage Annualized
Yield
($ in thousands)2024202320242023
Fixed maturity securities, including cash and cash equivalents and loans receivable$954,655 $653,200 5.4 %4.2 %
Arbitrage trading account52,562 53,168 5.8 5.9 
Equity securities35,924 41,714 4.9 5.0 
Investment funds868 5,444 0.1 0.5 
Real estate(20,579)(7,821)(2.2)(0.8)
Gross investment income1,023,430 745,705 4.8 3.8 
Investment expenses(7,707)(6,211)— — 
Total$1,015,723 $739,494 4.7 %3.8 %
    Net investment income increased 37% to $1,016 million in 2024 from $739 million in 2023 due primarily to a $302 million increase in income from fixed maturity securities mainly driven by higher interest rates, a larger fixed maturity securities portfolio and our Argentine inflation-linked securities which is not expected to continue at this level (see below for further discussion), partially offset by a $13 million decrease in real estate, a $6 million decrease in equity securities, a $5 million decrease in income from investment funds and a $1 million increase in investment expenses. The Company expects investment income to benefit as it continues to invest maturing securities at the current higher rates. The Company maintained the shortened duration of 2.4 years for its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including cash and cash equivalents), were $28.6 billion in 2024, up 9% from $26.1 billion in 2023.
Pre-tax net investment income associated with the Argentine inflation-linked securities for the nine months ended September 30, 2024 was $183 million. Such investment income increased as a result of an adjustment to the inflation rate that was made by the Argentine government in late 2023. As certain of our Argentine bonds matured and were sold in the first nine months of 2024 and the inflation rate has continued to decline, we do not expect investment income relating to these securities to continue at this level. The proceeds from the Argentine inflation-linked securities that matured and were sold in the first nine months of 2024 have been reinvested.
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    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 $82 million in 2024 and $81 million in 2023.
    Net Realized and Unrealized (Losses) Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on 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 losses on investments were $72 million in 2024 compared with net gains of $50 million in 2023. The losses of $72 million in 2024 reflected an increase in unrealized losses on equity securities of $42 million and net realized losses on investments of $30 million. The gains of $50 million in 2023 reflected net realized gains on investments of $5 million (primarily a pre-tax net realized gain of $88 million on the sale of the property and casualty insurance services division of Breckenridge IS, Inc., partially offset by an impairment of $72 million recognized on a real estate investment) and an increase in unrealized gains on equity securities of $45 million.
Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments reflected in net investment (losses) gains, decreased by $31 million ($24 million after-tax) in 2024 due to improved pricing associated with foreign government securities and corporate securities, and increased by $11 million ($9 million after-tax) in 2023 due to a change in estimate.
Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were $375 million in both 2024 and 2023.
    Losses and Loss Expenses. Losses and loss expenses increased to $5,270 million in 2024 from $4,745 million in 2023. The consolidated loss ratio was 61.7% in both 2024 and 2023. Catastrophe losses, net of reinsurance recoveries, were $218 million in 2024 driven by heightened frequency of severe catastrophe events with Hurricane Helene having the largest impact, along with an above-average number of severe storms, and $163 million in 2023. Favorable prior year reserve development (net of premium offsets) was $3 million in 2024 and adverse prior year reserve development was $20 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 0.2 points to 59.2% in 2024 from 59.4% in 2023.
    A summary of loss ratios in 2024 compared with 2023 by business segment follows:
•Insurance - The loss ratio was 63.0% in 2024 and 62.8% in 2023. Catastrophe losses were $191 million in 2024 compared with $139 million in 2023. Adverse prior year reserve development was $2 million in 2024 and $21 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development was 60.4% in both 2024 and 2023.
•Reinsurance & Monoline Excess - The loss ratio was 53.2% in 2024 and 54.8% in 2023. Catastrophe losses were $27 million in 2024 compared with $24 million in 2023. Favorable prior year reserve development was $5 million in 2024 and $1 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 1.4 points to 51.2% in 2024 from 52.6% in 2023.
Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the nine months ended September 30, 2024 and 2023:
($ in thousands)20242023
Policy acquisition and insurance operating expenses$2,438,905 $2,183,517 
Insurance service expenses66,309 70,336 
Net foreign currency losses (gains)1,324 (1,777)
Other costs and expenses198,352 205,849 
Total$2,704,890 $2,457,925 
    Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 12% and net premiums earned increased 11% from 2023. The expense ratio (underwriting expenses expressed as a
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percentage of net premiums earned) increased 0.2 points to 28.6% in 2024 from 28.4% in 2023 mainly due to investments in the business, new start-up operating units, change in business mix and reinsurance structures.
    Service expenses, which represent the costs associated with the fee-based businesses, was $66 million in 2024, down from $70 million in 2023, as a result of the sale of the property and casualty insurance services division of Breckenridge IS, Inc.
    Net foreign currency losses (gains) result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $1 million in 2024 compared with the gains of $2 million 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 $198 million in 2024 from $206 million in 2023, primarily due to lower new start-up operating unit expenses.
    Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses were $365 million in 2024 compared to $370 million in 2023. The decrease
mainly relates to the aviation-related business and promotional merchandise business, partially offset by the increase in the textile business.
Interest Expense. Interest expense was $95 million in 2024 and $96 million in 2023.
Income Taxes. The effective income tax rate was 23.2% and 21.4% for the nine months ended September 30, 2024 and 2023, respectively. The higher effective income tax rate for the nine months ended September 30, 2024, as compared to the earlier period, was primarily due to the geographical mix of earnings and larger amounts being subject to tax at a rate greater than the U.S. statutory rate.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $445 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.
Starting in 2023, as part of the Inflation Reduction Act of 2022, a 1% excise tax is imposed on common share repurchase activity, net of common share issuances, and is included in the cost of treasury stock acquired.


















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Results of Operations for the Three Months Ended September 30, 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 (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 three months ended September 30, 2024 and 2023. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.
($ in thousands)20242023
Insurance:
Gross premiums written$3,219,128 $2,965,787 
Net premiums written2,673,275 2,484,626 
Net premiums earned2,564,490 2,291,917 
Loss ratio63.1 %62.8 %
Expense ratio28.4 %28.2 %
GAAP combined ratio91.5 %91.0 %
Reinsurance & Monoline Excess:
Gross premiums written$414,150 $387,418 
Net premiums written384,001 363,833 
Net premiums earned362,333 349,997 
Loss ratio57.0 %56.5 %
Expense ratio29.7 %28.8 %
GAAP combined ratio86.7 %85.3 %
Consolidated:
Gross premiums written$3,633,278 $3,353,205 
Net premiums written3,057,276 $2,848,459 
Net premiums earned2,926,823 $2,641,914 
Loss ratio62.4 %61.9 %
Expense ratio28.5 %28.3 %
GAAP combined ratio90.9 %90.2 %
    Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the three months ended September 30, 2024 and 2023:
(In thousands, except per share data)20242023
Net income to common stockholders$365,634 $333,586 
Weighted average diluted shares401,817 407,158 
Net income per diluted share$0.91 $0.82 
    The Company reported net income to common stockholders of $366 million in 2024 compared to $334 million in 2023. The $32 million increase in net income was primarily due to an after-tax increase in net investment income of $41 million mainly due to higher interest rates and a larger fixed maturity securities portfolio, an after-tax reduction in net investment losses of $26 million mainly due to an impairment recognized on a real estate investment and reversal of prior unrealized gains on equity securities in 2023, an after-tax increase in underwriting income of $5 million, an after-tax increase in profit from insurance service businesses of $4 million, an after-tax reduction in corporate expenses of $1 million and an after-tax increase in profits from non-insurance businesses of $1 million, partially offset by an after-tax increase in foreign currency losses of $36 million mainly due to the U.S. dollar weakening against other major currencies in 2024 and an increase of $10 million in tax expense due to a change in the effective tax rate. The number of weighted average diluted shares decreased 5.4 million for 2024 compared to 2023, mainly reflecting shares repurchased in 2024 and 2023.
    Premiums. Gross premiums written were $3,633 million in 2024, an increase of 8% from $3,353 million in 2023. The increase was due to a $253 million increase in the Insurance segment and a $27 million increase in the Reinsurance & Monoline Excess segment. Approximately 81.1% of premiums expiring in 2024 and 80.5% of premiums expiring in 2023 were renewed.
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    Average renewal rates (per unit of exposure) for insurance and facultative reinsurance increased 7.2% in 2024, and increased 8.4% excluding workers' compensation.
    A summary of gross premiums written in 2024 compared with 2023 by line of business within each business segment follows:
•Insurance - gross premiums increased 9% to $3,219 million in 2024 from $2,966 million in 2023. Gross premiums increased $108 million (15%) for short-tail lines, $100 million (9%) for other liability, $27 million (7%) for auto and $18 million (5%) for professional liability.
•Reinsurance & Monoline Excess - gross premiums increased 7% to $414 million in 2024 from $387 million in 2023. Gross premiums increased $16 million (15%) for property and $8 million (9%) for monoline excess and $3 million (1%) for casualty.
    Net premiums written were $3,057 million in 2024, an increase of 7% from $2,848 million in 2023. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in 2024 and 15% in 2023.
    Premiums earned increased 11% to $2,927 million in 2024 from $2,642 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. Premiums earned in 2024 are related to business written during both 2024 and 2023. Audit premiums were $86 million in 2024 compared with $88 million in 2023 due to an increase in exposures.
    Net Investment Income. Following is a summary of net investment income for the three months ended September 30, 2024 and 2023:
AmountAverage Annualized
Yield
($ in thousands)2024202320242023
Fixed maturity securities, including cash and cash equivalents and loans receivable$295,272 $239,727 4.9 %4.5 %
Arbitrage trading account17,869 17,876 6.0 5.9 
Equity securities12,203 12,714 5.1 4.7 
Investment funds4,741 4,450 1.2 1.1 
Real estate(3,711)(1,986)(1.2)(0.6)
Gross investment income326,374 272,781 4.4 4.1 
Investment expenses(2,618)(1,837)— — 
Total$323,756 $270,944 4.4 %4.1 %
    Net investment income increased 20% to $324 million in 2024 from $271 million in 2023 due primarily to a $56 million increase in income from fixed maturity securities mainly driven by higher interest rates and a larger fixed maturity securities portfolio (but with no material impact from our Argentine inflation-linked securities compared to the prior year quarter, unlike the first two quarters of 2024), partially offset by a $2 million decrease in real estate and a $1 million increase in investment expenses. The Company expects investment income to benefit as it continues to invest maturing securities at the current higher rates. The Company maintained the shortened duration of 2.4 years for its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. Average invested assets, at cost (including cash and cash equivalents), were $29.3 billion in 2024 and $26.7 billion in 2023.
    Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees increased to $29 million in 2024 from $23 million in 2023 due to an acquisition in the insurance distribution business in late 2023.
    Net Realized and Unrealized (Losses) Gains on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on 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 losses on investments were $23 million in 2024 compared with $41 million in 2023. The losses of $23 million in 2024 reflected net realized losses on investments of $22 million and an increase in unrealized losses on equity securities of $1 million. The losses of $41 million in 2023 reflected net realized losses on investments of $22 million (primarily
45
due to an impairment of $21 million recognized on a real estate investment) and an increase in unrealized losses on equity securities of $19 million.
Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments reflected in net investment (losses) gains, decreased by $15 million ($12 million after-tax) in 2024 due to improved pricing associated with foreign government securities, and increased by $2 million ($1 million after-tax) in 2023 due to a change in estimate.
Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses decreased to $129 million in 2024 from $137 million in 2023 mainly due to the aviation-related business.
    Losses and Loss Expenses. Losses and loss expenses increased to $1,826 million in 2024 from $1,636 million in 2023. The consolidated loss ratio was 62.4% in 2024 and 61.9% in 2023. Catastrophe losses, net of reinsurance recoveries were $98 million in 2024, primarily due to four hurricanes during the quarter with Helene having the largest impact, and $62 million in 2023. Favorable prior year reserve development (net of premium offsets) was $1 million in both 2024 and 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased by 0.5 points to 59.1% in 2024 from 59.6% in 2023, due to lower attritional property losses and change in business mix.
    A summary of loss ratios in 2024 compared with 2023 by business segment follows:
•Insurance - The loss ratio was 63.1% in 2024 and 62.8% in 2023. Catastrophe losses were $77 million in 2024 compared with $46 million in 2023. Favorable prior year reserve development was $3 million in 2024 and adverse prior year development was $2 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 0.5 points to 60.2% in 2024 from 60.7% in 2023.
•Reinsurance & Monoline Excess - The loss ratio was 57.0% in 2024 and 56.5% in 2023. Catastrophe losses were $21 million in 2024 compared with $16 million in 2023. Adverse prior year reserve development was $2 million in 2024 and favorable prior year reserve development was $3 million in 2023. The loss ratio excluding catastrophe losses and prior year reserve development decreased 2.2 points to 50.7% in 2024 from 52.9% in 2023.
Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the three months ended September 30, 2024 and 2023:
($ in thousands)20242023
Policy acquisition and insurance operating expenses$835,376 $747,007 
Insurance service expenses21,786 21,225 
Net foreign currency losses (gains)24,619 (22,498)
Other costs and expenses61,584 62,935 
Total$943,365 $808,669 
    Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 12% and net premiums earned increased 11% from 2023. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased 0.2 points to 28.5% in 2024 from 28.3% in 2023 mainly due to investments in the business, new start-up operating units, change in business mix and reinsurance structures.
    Service expenses, which represent the costs associated with the fee-based businesses, were $22 million in 2024 and $21 million in 2023.
    Net foreign currency (losses) gains result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $25 million in 2024 compared with the gains of $22 million in 2023, primarily due to the U.S. dollar weakening against other major currencies in 2024.
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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 $62 million in 2024 from $63 million in 2023.
    Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses decreased to $125 million in 2024 from $134 million in 2023 mainly due to aviation-related business.
Interest Expense. Interest expense was $32 million in both 2024 and 2023.
Income Taxes. The effective income tax rate was 23.0% and 20.6% for the three months ended September 30, 2024 and 2023, respectively. The effective income tax rate increased for the three months ended September 30, 2024, primarily due to the geographical mix of earnings and larger amounts being subject to tax at a rate greater than the U.S. statutory rate.
The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $445 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.
Starting in 2023, as part of the Inflation Reduction Act of 2022, a 1% excise tax is imposed on common share repurchase activity, net of common share issuances, and is included in the cost of treasury stock acquired.

















47
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. In addition to fixed maturity securities, the Company invests in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets. The Company's investments in investment funds and its other alternative investments have experienced, and the Company expects to continue to experience, greater fluctuations in investment income.
    The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was 2.4 years at both September 30, 2024 and December 31, 2023. The Company’s fixed maturity investment portfolio and investment-related assets as of September 30, 2024 were as follows:
($ in thousands)Carrying
Value		Percent
of Total
Fixed maturity securities:
U.S. government and government agencies$2,070,985 7.0 %
State and municipal:
Special revenue1,689,758 5.7 
State general obligation311,953 1.0 
Local general obligation304,114 1.0 
Corporate backed165,155 0.6 
Pre-refunded (1)86,853 0.3 
Total state and municipal2,557,833 8.6 
Mortgage-backed:
Agency2,424,228 8.2 
Commercial600,881 2.0 
Residential-Prime212,909 0.7 
Residential-Alt A2,352 — 
Total mortgage-backed3,240,370 10.9 
Asset-backed4,107,321 13.8 
Corporate:
Industrial3,954,408 13.3 
Financial3,348,562 11.3 
Utilities774,398 2.6 
Other775,396 2.6 
Total corporate8,852,764 29.8 
Foreign government and foreign government agencies1,834,605 6.2 
Total fixed maturity securities22,663,878 76.3 
Equity securities:
Common stocks701,667 2.3 
Preferred stocks346,459 1.2 
Total equity securities1,048,126 3.5 
Cash and cash equivalents (2)1,861,981 6.3 
Investment funds1,607,381 5.4 
Real estate1,297,314 4.4 
Arbitrage trading account820,928 2.8 
Loans receivable389,869 1.3 
Total investments$29,689,477 100.0 %
____________________
(1) Pre-refunded securities are securities for which an escrow account has been established to fund the remaining payments of principal and interest through maturity. Such escrow accounts are funded almost exclusively with U.S. Treasury and U.S. government agency securities.
(2) Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.
48
Fixed Maturity Securities. The Company’s investment policy with respect to fixed maturity securities is generally to purchase instruments with the expectation of holding them to their maturity. However, management of the available for sale 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. The key factors that management considers in its investment decisions as to whether to hold or sell fixed maturity securities are its view of the underlying fundamentals of specific securities as well as its expectations regarding interest rates, credit spreads and currency values. In a period in which management expects interest rates to rise, the Company may sell longer duration securities in order to mitigate the impact of an interest rate rise on the fair value of the portfolio. Similarly, in a period in which management expects credit spreads to widen, the Company may sell lower quality securities, and in a period in which management expects certain foreign currencies to decline in value, the Company may sell securities denominated in those foreign currencies. The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result in realized gains or losses; however, there is no reason to expect these gains or losses to continue in future periods.
Equity Securities. Equity securities primarily represent investments in common and preferred stocks in companies with potential growth opportunities in different sectors, mainly in the financial institutions, energy and technology sectors.
Investment Funds. At September 30, 2024, the carrying value of investment funds was $1.6 billion, including investments in financial services funds of $460 million, other funds of $378 million (which includes a deferred compensation trust asset of $38 million), transportation funds of $301 million, real estate funds of $190 million, infrastructure funds of $147 million and energy funds of $131 million. Investment funds are generally reported on a one-quarter lag.
Real Estate. Real estate is directly owned property held for investment. At September 30, 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. 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. Merger arbitrage is the business of investing in the securities of publicly held companies that are the targets in announced tender offers and mergers.
Loans Receivable. Loans receivable, which are carried at amortized cost (net of allowance for expected credit losses), had an amortized cost of $390 million and an aggregate fair value of $390 million at September 30, 2024. The amortized cost of loans receivable is net of an allowance for expected credit losses of $1 million as of September 30, 2024. Loans receivable include real estate loans of $388 million that are secured by commercial and residential real estate located primarily in the UK and New York. Real estate loans generally earn interest at fixed or stepped interest rates and have maturities through 2028. Loans receivable include commercial loans of $2 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 5 years.
Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest rates. The Company uses various models and stress test scenarios to monitor and manage interest rate risk. The Company attempts to manage its interest rate risk by maintaining 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 for the fixed maturity portfolio (including cash and cash equivalents) was 2.4 years at both September 30, 2024 and December 31, 2023.
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.

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Liquidity and Capital Resources
    Cash Flow. Cash flow provided from operating activities increased to $2,868 million in the nine months ended September 30, 2024 from $2,231 million in the nine months ended September 30, 2023, primarily due to increased premium receipts.
    The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and proceeds from sales and maturities of portfolio investments. The principal uses of cash are payments for claims, taxes, operating expenses and dividends. The Company expects its insurance subsidiaries to fund the payment of losses with cash received from premiums, investment income and fees. The Company generally targets an average duration for its investment portfolio that is within 1.5 years of the average duration of its liabilities so that portions of its investment portfolio mature throughout the claim cycle and are available for the payment of claims if necessary. In the event operating cash flow and proceeds from maturities and prepayments of fixed income securities are not sufficient to fund claim payments and other cash requirements, the remainder of the Company's cash and investments is available to pay claims and other obligations as they become due. The Company's investment portfolio is highly liquid, with approximately 82% invested in cash, cash equivalents and marketable fixed maturity securities as of September 30, 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. At September 30, 2024, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of $2,837 million and a face amount of $2,861 million. The maturities of the outstanding debt are $6 million in 2024, $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.
On April 1, 2022, the Company entered into a senior unsecured revolving credit facility that provides for revolving, unsecured borrowings up to an aggregate of $300 million with a $50 million sublimit for letters of credit. The Company may increase the amount available under the facility to a maximum of $500 million subject to obtaining lender commitments for the increase and other customary conditions. Borrowings under the facility may be used for working capital and other general corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of credit outstanding on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the facility is conditioned on the satisfaction of representations, warranties and covenants that are customary for facilities of this type. As of September 30, 2024, there were no borrowings outstanding under the facility.
    Equity. At September 30, 2024, total common stockholders’ equity was $8.4 billion, common shares outstanding were 381,189,906 and stockholders’ equity per outstanding share was $22.11. During the nine months ended September 30, 2024, the Company repurchased 4,537,130 shares of its common stock for $236 million. In the third quarter of 2024, the board of directors of the Company declared a regular quarterly cash dividend of $0.08 per share and a special quarterly cash dividend of $0.25 per share. In the second quarter of 2024, the board of directors of the Company declared a regular quarterly cash dividend of $0.08 per share and a special quarterly cash dividend of $0.33 per share. In the first quarter of 2024, the board of directors of the Company declared a regular quarterly cash dividend of $0.07 per share.The number of common shares outstanding excludes shares held in a grantor trust established by the Company for delivery upon settlement of vested but mandatorily deferred RSUs.
    Total Capital. Total capitalization (equity, debt and subordinated debentures) was $11.3 billion at September 30, 2024. The percentage of the Company’s capital attributable to senior notes, subordinated debentures and other debt was 25% at September 30, 2024 and 28% at December 31, 2023.

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Item 3.     Quantitative and Qualitative Disclosure About Market Risk
    Reference is made to the information under “Investments - Market Risk” under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.

Item 4.     Controls and Procedures
    Disclosure Controls and Procedures. The Company’s management, including its Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-14 as of the end of the period covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company has in place effective controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended, and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
    Changes in Internal Control over Financial Reporting. During the quarter ended September 30, 2024, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION
Item 1. Legal Proceedings
    Please see Note 20 to the notes to the interim consolidated financial statements.

Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds    
    Set forth below is a summary of the shares repurchased by the Company during the three months ended September 30, 2024, and the number of shares remaining authorized for purchase by the Company:

Total 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
July 2024238,620 $52.30 238,620 15,324,795 
August 2024— $— — 15,324,795 
September 2024— $— — 15,324,795 


Item 5. Other Information

None of the Company's directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2024, as such terms are defined under Item 408(a) of Regulation S-K.
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Item 6. Exhibits
Number 
Form of 2024 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2018 Stock Incentive Plan.
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
  
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).
  
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


 
W. R. BERKLEY CORPORATION



Date:November 4, 2024/s/ W. Robert Berkley, Jr.
 W. Robert Berkley, Jr.
 President and Chief Executive Officer 
  
Date:November 4, 2024/s/ Richard M. Baio
 Richard M. Baio
 Executive Vice President -
Chief Financial Officer
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