filings.toolsItem 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EVEREST GROUP, LTD.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Schedules other than those listed above are omitted for the reason that they are not applicable or the information is otherwise contained in the Financial Statements.
INDEX TO EXHIBITS
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E-3
E-4
E-5
| 31.1 | Section 302 Certification of James Williamson, filed herewith | |||||||
| 31.2 | Section 302 Certification of Mark Kociancic, filed herewith | |||||||
| 32.1 | Section 906 Certification of James Williamson and Mark Kociancic, furnished herewith | |||||||
| 97.1 | Everest Group, Ltd. Clawback Policy, incorporated herein by reference to Exhibit 97.1 to Everest Group, Ltd. Form 10-K filed on February 28, 2024 | |||||||
| 101.INS | XBRL Instance Document | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
The exhibits listed on the index above are filed as part of this report except that the certifications in Exhibit 32 are being furnished to the SEC, rather than filed with the SEC, as permitted under applicable SEC rules.
*Management contract or compensatory plan or arrangement.
E-6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on February 26, 2026.
| EVEREST GROUP, LTD. | |||||||||||
| By: | /S/ JAMES WILLIAMSON | ||||||||||
| James Williamson (President and Chief Executive Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||||||||||||
| /S/ JAMES WILLIAMSON | President and Chief Executive Officer (Principal Executive Officer) | February 26, 2026 | ||||||||||||
| James Williamson | ||||||||||||||
| /S/ MARK KOCIANCIC | Executive Vice President and Chief Financial Officer | February 26, 2026 | ||||||||||||
| Mark Kociancic | ||||||||||||||
| /S/ ROBERT J. FREILING | Senior Vice President and Chief Accounting Officer | February 26, 2026 | ||||||||||||
| Robert J. Freiling | ||||||||||||||
| /S/ JOHN A. GRAF | Chairman | February 26, 2026 | ||||||||||||
| John A. Graf | ||||||||||||||
| /S/ JOHN J. AMORE | Director | February 26, 2026 | ||||||||||||
| John J. Amore | ||||||||||||||
| /S/ WILLIAM F. GALTNEY, JR. | Director | February 26, 2026 | ||||||||||||
| William F. Galtney, Jr. | ||||||||||||||
| /S/ MERYL HARTZBAND | Director | February 26, 2026 | ||||||||||||
| Meryl Hartzband | ||||||||||||||
| /S/ LAURA HAY | Director | February 26, 2026 | ||||||||||||
| Laura Hay | ||||||||||||||
| /S/ JOHN HOWARD | Director | February 26, 2026 | ||||||||||||
| John Howard | ||||||||||||||
| /S/ ALLAN LEVINE | Director | February 26, 2026 | ||||||||||||
| Allan Levine | ||||||||||||||
| /S/ GERALDINE LOSQUADRO | Director | February 26, 2026 | ||||||||||||
| Geraldine Losquadro | ||||||||||||||
| /S/ HAZEL McNEILAGE | Director | February 26, 2026 | ||||||||||||
| Hazel McNeilage | ||||||||||||||
| /S/ DARRYL PAGE | Director | February 26, 2026 | ||||||||||||
| Darryl Page | ||||||||||||||
| /S/ ROGER M. SINGER | Director | February 26, 2026 | ||||||||||||
| Roger M. Singer |
E-7
EVEREST GROUP, LTD.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS, NOTES AND SCHEDULES
Schedules other than those listed above are omitted for the reason that they are not applicable or the information is otherwise contained in the Financial Statements.
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
Everest Group, Ltd.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Everest Group, Ltd.: and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes and financial statement schedules listed in the index appearing on page F-1 (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
F-2
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Estimate of the reserve for losses and loss adjustment expenses
As discussed in Notes 1G and 4 to the consolidated financial statements, the reserve for losses and loss adjustment expenses represents the
Company’s best estimate of the ultimate liability for reported and unreported claims for both its insurance and reinsurance businesses. The Company uses a variety of statistical and actuarial techniques to develop estimates of ultimate losses and loss adjustment expenses by underwriting or accident year, sorted by exposure groupings. The Company considers many factors when setting reserves including: (1) exposure base and projected ultimate premium; (2) expected loss ratios; (3) actuarial methodologies and assumptions; (4) current legal interpretations of coverage and liability; and (5) economic conditions. The Company’s reserve for losses and loss adjustment expenses as of December 31, 2025 was $34,312 million.
We identified the evaluation of the estimate of the reserve for losses and loss adjustment expenses as a critical audit matter. Evaluation of the estimate required subjective auditor judgment and the involvement of actuarial professionals with specialized skills and knowledge to assess the methods and assumptions used to estimate the reserve for losses and loss adjustment expenses.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process for estimating the reserve for losses and loss adjustment expenses. This included controls related to the selection of methodologies and certain assumptions used to derive the Company’s estimate. We involved actuarial professionals with specialized skills and knowledge who assisted in:
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assessing the Company’s actuarial methodologies and assumptions used in estimating the reserve for losses and loss adjustment expenses by comparing the Company’s methodologies to generally accepted actuarial methods and evaluating the assumptions used based on actuarial judgment, company history, and industry practices
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evaluating the Company’s estimated reserve for losses and loss adjustment expenses for certain lines of business by comparing each one to an independently developed range of reasonable estimates
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evaluating the Company’s estimated reserve for losses and loss adjustment expenses for certain lines of business by assessing management’s methods and assumptions used to derive their loss estimates
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evaluating the Company’s process for estimating the reserve for losses and loss adjustment expenses for catastrophic events
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developing an overall range of reserve estimates to assess the position of the Company’s recorded reserve for losses and loss adjustment expenses relative to the range.
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/s/ KPMG LLP
We have served as the Company’s auditor since 2024.
New York, New York
February 26, 2026
F-4
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Everest Group, Ltd.
Opinion on the Financial Statements
We have audited the consolidated statements of operations and comprehensive income (loss), of changes in shareholders’ equity and of cash flows of Everest Group, Ltd. and its subsidiaries (the “Company”) for the year ended December 31, 2023, including the related notes and schedules of condensed financial information of the registrant, supplementary insurance information and reinsurance for the year ended December 31, 2023 listed in the index appearing on page F-1 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
February 28, 2024, except for the changes in segment presentation discussed in Note 7 to the consolidated financial statements, as to which the date is February 27, 2025
We served as the Company's auditor from 1996 to 2024.
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EVEREST GROUP, LTD.
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| (In millions of U.S. dollars, except par value per share) | 2025 | 2024 | |||||||||
| ASSETS: | |||||||||||
| Fixed maturities - available for sale, at fair value | $ | 34,573 | $ | 28,908 | |||||||
| (amortized cost: 2025, $34,620; 2024, $29,934, credit allowances: 2025, $(68); 2024, $(36)) | |||||||||||
| Fixed maturities - held to maturity, at amortized cost | |||||||||||
| (fair value: 2025, $576; 2024, $759, net of credit allowances: 2025, $(6); 2024, $(8)) | 567 | 757 | |||||||||
| Equity securities, at fair value | 180 | 217 | |||||||||
| Other invested assets | 5,796 | 5,392 | |||||||||
| Short-term investments | 2,994 | 4,707 | |||||||||
| Cash | 1,318 | 1,549 | |||||||||
| Total investments and cash | 45,429 | 41,531 | |||||||||
| Accrued investment income | 436 | 368 | |||||||||
| Premiums receivable (net of credit allowances: 2025, $(94); 2024, $(54)) | 5,727 | 5,378 | |||||||||
| Reinsurance paid loss recoverables (net of credit allowances: 2025, $(57); 2024, $(41)) | 142 | 207 | |||||||||
| Reinsurance unpaid loss recoverables | 4,968 | 2,915 | |||||||||
| Funds held by reinsureds | 1,326 | 1,218 | |||||||||
| Deferred acquisition costs | 1,546 | 1,461 | |||||||||
| Prepaid reinsurance premiums | 653 | 869 | |||||||||
| Income tax asset, net | 915 | 1,223 | |||||||||
| Other assets (net of credit allowances: 2025, $(17); 2024, $(9)) | 1,372 | 1,171 | |||||||||
| TOTAL ASSETS | $ | 62,514 | $ | 56,341 | |||||||
| LIABILITIES: | |||||||||||
| Reserve for losses and loss adjustment expenses | $ | 34,312 | $ | 29,889 | |||||||
| Unearned premium reserve | 7,275 | 7,324 | |||||||||
| Funds held under reinsurance treaties | 267 | 27 | |||||||||
| Amounts due to reinsurers | 642 | 701 | |||||||||
| Losses in course of payment | 151 | 241 | |||||||||
| Senior notes | 2,352 | 2,350 | |||||||||
| Long-term notes | 218 | 218 | |||||||||
| Borrowings from FHLB | 1,019 | 1,019 | |||||||||
| Accrued interest on debt and borrowings | 21 | 22 | |||||||||
| Unsettled securities payable | — | 84 | |||||||||
| Other liabilities | 797 | 590 | |||||||||
| TOTAL LIABILITIES | 47,054 | 42,466 | |||||||||
| Commitments and contingencies (Note 12) | |||||||||||
| SHAREHOLDERS' EQUITY: | |||||||||||
| Preferred shares, par value: $0.01; 50.0 shares authorized; no shares issued and outstanding | — | — | |||||||||
| Common shares, par value: $0.01; 200.0 shares authorized; 74.4 (2025) and 74.3 (2024) | |||||||||||
| outstanding before treasury shares | 1 | 1 | |||||||||
| Additional paid-in capital | 3,852 | 3,812 | |||||||||
| Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) | |||||||||||
| of $(23) at 2025 and $(177) at 2024 | (52) | (1,138) | |||||||||
| Treasury shares, at cost: 33.7 shares (2025) and 31.3 shares (2024) | (4,906) | (4,108) | |||||||||
| Retained earnings | 16,565 | 15,309 | |||||||||
| Total shareholders' equity | 15,461 | 13,875 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 62,514 | $ | 56,341 |
The accompanying notes are an integral part of the consolidated financial statements.
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EVEREST GROUP, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
| Years Ended December 31, | |||||||||||||||||
| (In millions of U.S. dollars, except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| REVENUES: | |||||||||||||||||
| Premiums earned | $ | 15,560 | $ | 15,187 | $ | 13,443 | |||||||||||
| Net investment income | 2,124 | 1,954 | 1,434 | ||||||||||||||
| Total net gains (losses) on investments | (143) | 19 | (276) | ||||||||||||||
| Other income (expense) | (45) | 121 | (14) | ||||||||||||||
| Total revenues | 17,496 | 17,281 | 14,587 | ||||||||||||||
| CLAIMS AND EXPENSES: | |||||||||||||||||
| Incurred losses and loss adjustment expenses | 10,859 | 11,305 | 8,427 | ||||||||||||||
| Commission, brokerage, taxes and fees | 3,461 | 3,300 | 2,952 | ||||||||||||||
| Other underwriting expenses | 1,029 | 938 | 846 | ||||||||||||||
| Corporate expenses | 109 | 95 | 73 | ||||||||||||||
| Interest, fees and bond issue cost amortization expense | 151 | 149 | 134 | ||||||||||||||
| Total claims and expenses | 15,609 | 15,787 | 12,432 | ||||||||||||||
| INCOME (LOSS) BEFORE TAXES | 1,887 | 1,493 | 2,154 | ||||||||||||||
| Income tax expense (benefit) | 296 | 120 | (363) | ||||||||||||||
| NET INCOME (LOSS) | $ | 1,591 | $ | 1,373 | $ | 2,517 | |||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||
| Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period | 740 | (97) | 743 | ||||||||||||||
| Reclassification adjustment for realized losses (gains) included in net income (loss) | 114 | (12) | 244 | ||||||||||||||
| Total URA(D) on securities arising during the period | 854 | (109) | 986 | ||||||||||||||
| Foreign currency translation and other adjustments | 242 | (128) | 59 | ||||||||||||||
| Benefit plan actuarial net gain (loss) for the period | (9) | 34 | 15 | ||||||||||||||
| Reclassification adjustment for amortization of net (gain) loss included in net income (loss) | (1) | (1) | 2 | ||||||||||||||
| Total benefit plan net gain (loss) for the period | (10) | 33 | 17 | ||||||||||||||
| Total other comprehensive income (loss), net of tax | 1,086 | (204) | 1,063 | ||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 2,678 | $ | 1,169 | $ | 3,580 | |||||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||
| Basic | $ | 37.80 | $ | 31.78 | $ | 60.19 | |||||||||||
| Diluted | 37.80 | 31.78 | 60.19 |
The accompanying notes are an integral part of the consolidated financial statements.
F-7
EVEREST GROUP, LTD.
CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY
| Years Ended December 31, | |||||||||||||||||
| (In millions of U.S. dollars, except dividends per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| COMMON SHARES (shares outstanding): | |||||||||||||||||
| Balance beginning of period | 43.0 | 43.4 | 39.2 | ||||||||||||||
| Issued (redeemed) during the period, net | 0.1 | 0.1 | 4.2 | ||||||||||||||
| Treasury shares acquired | (2.4) | (0.5) | — | ||||||||||||||
| Balance end of period | 40.7 | 43.0 | 43.4 | ||||||||||||||
| COMMON SHARES (par value): | |||||||||||||||||
| Balance beginning of period | $ | 1 | $ | 1 | $ | 1 | |||||||||||
| Issued during the period, net | — | — | — | ||||||||||||||
| Balance end of period | 1 | 1 | 1 | ||||||||||||||
| ADDITIONAL PAID-IN CAPITAL: | |||||||||||||||||
| Balance beginning of period | 3,812 | 3,773 | 2,302 | ||||||||||||||
| Public offering of shares | — | — | 1,445 | ||||||||||||||
| Share-based compensation plans | 40 | 39 | 26 | ||||||||||||||
| Balance end of period | 3,852 | 3,812 | 3,773 | ||||||||||||||
| ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF DEFERRED INCOME TAXES: | |||||||||||||||||
| Balance beginning of period | (1,138) | (934) | (1,996) | ||||||||||||||
| Net increase (decrease) during the period | 1,086 | (204) | 1,063 | ||||||||||||||
| Balance end of period | (52) | (1,138) | (934) | ||||||||||||||
| RETAINED EARNINGS: | |||||||||||||||||
| Balance beginning of period | 15,309 | 14,270 | 12,042 | ||||||||||||||
| Net income (loss) | 1,591 | 1,373 | 2,517 | ||||||||||||||
| Dividends declared ($8.00 per share 2025, $7.75 per share 2024 and $6.80 per share 2023) | (335) | (334) | (288) | ||||||||||||||
| Balance end of period | 16,565 | 15,309 | 14,270 | ||||||||||||||
| TREASURY SHARES AT COST: | |||||||||||||||||
| Balance beginning of period | (4,108) | (3,908) | (3,908) | ||||||||||||||
| Purchase of treasury shares | (797) | (200) | — | ||||||||||||||
| Balance end of period | (4,906) | (4,108) | (3,908) | ||||||||||||||
| TOTAL SHAREHOLDERS' EQUITY, END OF PERIOD | $ | 15,461 | $ | 13,875 | $ | 13,202 |
The accompanying notes are an integral part of the consolidated financial statements.
F-8
EVEREST GROUP, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years Ended December 31, | |||||||||||||||||
| (In millions of U.S. dollars) | 2025 | 2024 | 2023 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
| Net income (loss) | $ | 1,591 | $ | 1,373 | $ | 2,517 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Decrease (increase) in premiums receivable | (116) | (715) | (1,064) | ||||||||||||||
| Decrease (increase) in funds held by reinsureds, net | 138 | (81) | (66) | ||||||||||||||
| Decrease (increase) in reinsurance recoverables | (1,453) | (1,091) | 143 | ||||||||||||||
| Decrease (increase) in income taxes | 150 | (277) | (559) | ||||||||||||||
| Decrease (increase) in prepaid reinsurance premiums | 360 | (232) | (46) | ||||||||||||||
| Increase (decrease) in reserve for losses and loss adjustment expenses | 3,602 | 5,612 | 2,256 | ||||||||||||||
| Increase (decrease) in unearned premiums | (278) | 809 | 1,387 | ||||||||||||||
| Increase (decrease) in amounts due to reinsurers | (235) | 135 | 18 | ||||||||||||||
| Increase (decrease) in losses in course of payment | (98) | 75 | 93 | ||||||||||||||
| Change in equity adjustments in limited partnerships | (364) | (261) | (168) | ||||||||||||||
| Distribution of limited partnership income | 195 | 163 | 120 | ||||||||||||||
| Change in other assets and liabilities, net | (463) | (431) | (339) | ||||||||||||||
| Non-cash compensation expense | 61 | 63 | 49 | ||||||||||||||
| Amortization of bond premium (accrual of bond discount) | (166) | (167) | (64) | ||||||||||||||
| Net (gains) losses on investments | 143 | (19) | 276 | ||||||||||||||
| Net cash provided by (used in) operating activities | 3,068 | 4,957 | 4,553 | ||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Proceeds from fixed maturities matured/called/repaid - available for sale | 4,497 | 3,783 | 2,310 | ||||||||||||||
| Proceeds from fixed maturities sold - available for sale | 1,571 | 6,257 | 3,849 | ||||||||||||||
| Proceeds from fixed maturities matured/called/repaid - held to maturity | 199 | 157 | 105 | ||||||||||||||
| Proceeds from fixed maturities sold - held to maturity | 10 | — | — | ||||||||||||||
| Proceeds from equity securities sold | 56 | 37 | 126 | ||||||||||||||
| Distributions from other invested assets | 334 | 409 | 245 | ||||||||||||||
| Cost of fixed maturities acquired - available for sale | (10,364) | (11,563) | (10,653) | ||||||||||||||
| Cost of fixed maturities acquired - held to maturity | (7) | (49) | (112) | ||||||||||||||
| Cost of equity securities acquired | (9) | (50) | (17) | ||||||||||||||
| Cost of other invested assets acquired | (507) | (936) | (902) | ||||||||||||||
| Net change in short-term investments | 1,875 | (2,494) | (1,034) | ||||||||||||||
| Net change in unsettled securities transactions | (83) | (27) | 181 | ||||||||||||||
| Proceeds from sale of renewal rights | 331 | — | — | ||||||||||||||
| Net cash provided by (used in) investing activities | (2,096) | (4,478) | (5,902) | ||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
| Common shares issued (redeemed) during the period for share-based compensation, net of expense | (21) | (24) | (23) | ||||||||||||||
| Proceeds from public offering of common shares | — | — | 1,445 | ||||||||||||||
| Purchase of treasury shares | (797) | (200) | — | ||||||||||||||
| Dividends paid to shareholders | (335) | (334) | (288) | ||||||||||||||
| Net FHLB borrowings (repayments) | — | 200 | 300 | ||||||||||||||
| Cost of shares withheld on settlements of share-based compensation awards | (22) | (25) | (24) | ||||||||||||||
| Net cash provided by (used in) financing activities | (1,175) | (383) | 1,409 | ||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | (28) | 16 | (23) | ||||||||||||||
| Net increase (decrease) in cash | (231) | 112 | 38 | ||||||||||||||
| Cash, beginning of period | 1,549 | 1,437 | 1,398 | ||||||||||||||
| Cash, end of period | $ | 1,318 | $ | 1,549 | $ | 1,437 | |||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||||||||
| Income taxes paid (recovered) | $ | 150 | $ | 397 | $ | 196 | |||||||||||
| Interest paid | 150 | 147 | 130 | ||||||||||||||
| NON-CASH TRANSACTIONS: | |||||||||||||||||
| Non-cash limited partnership distribution | $ | 8 | $ | 23 | $ | — |
The accompanying notes are an integral part of the consolidated financial statements.
F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2025, 2024 and 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
**A.**Business and Basis of Presentation.
Everest Group, Ltd. (“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets. As used in this document, “Company” means Group and its subsidiaries.
In October 2025, the Company entered into definitive agreements to sell the renewal rights for certain lines of the commercial retail insurance business in the U.S., U.K., E.U. and Asia Pacific American International Group, Inc. See Note 6 of the Notes to these Consolidated Financial Statements for more information. Additionally, effective October 1, 2025, the Company entered into adverse development reinsurance agreements with State National Insurance Company, Inc. and MS Transverse Insurance Company. See Note 4 of the Notes to these Consolidated Financial Statements for more information.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The statements include all of the following domestic and foreign direct and indirect subsidiaries of Group: Everest International Reinsurance, Ltd. (“Everest International”), Everest Compañia de Seguros Generales Colombia S.A., Mt. Logan Re, Ltd. (“Mt. Logan Re”), Mt. Logan Insurance Managers, Ltd., Mt. Logan Management, Ltd., Everest International Holdings (Bermuda), Ltd. (“International Holdings”), Everest Corporate Member Limited, Everest Managing Agency Limited, Everest Service Company (U.K.), Ltd., Mt. Logan Capital Management, Ltd., Everest Preferred International Holdings, Ltd. (“Preferred International”), Everest Reinsurance (Bermuda), Ltd. (“Bermuda Re”), Everest Re Advisors, Ltd., Everest Advisors (U.K.), Ltd., Everest Compañia de Seguros Generales Chile S.A. (“Everest Chile”), Compañia de Seguros Generales Everest Mexico S.A. de C.V., Everest Underwriting Group (Ireland) Limited (“Holdings Ireland”), Everest Global Services, Inc. (“Global Services”), Everest Insurance Company of Canada (“Everest Canada”), Premiere Insurance Underwriting Services (“Premiere”), Everest Dublin Insurance Holdings Limited (“Everest Dublin Holdings”), Everest Insurance (Ireland), dac (“Ireland Insurance”), Everest Reinsurance Company (Ireland), dac (“Ireland Re”), Everest Reinsurance Holdings, Inc. (“Holdings”), Salus Systems, LLC (“Salus”), Everest International Assurance, Ltd. (“Everest Assurance”), EverSports & Entertainment Insurance, Inc. (“EverSports”), SIG Sports, Leisure and Entertainment Risk Purchasing Group LLC (“Specialty RPG”), Mt. McKinley Managers, L.L.C., Everest Specialty Underwriters Services, LLC, Everest Reinsurance Company (“Everest Re”), Everest National Insurance Company (“Everest National”), Everest Reinsurance Company - Escritório de Representa ção No Brasil Ltda., Mt. Whitney Securities, LLC, Everest Indemnity Insurance Company (“Everest Indemnity”), Everest Denali Insurance Company (“Everest Denali”), Everest Premier Insurance Company (“Everest Premier”), Everest Security Insurance Company (“Everest Security”), Everest, Consultoría, Administración y Back Office, Sociedad de Responsabilidad Limitada de Capital Variable and Everest Servicios Colombia S.A.S. All intercompany accounts and transactions have been eliminated. All amounts are reported in United States (“U.S.”) dollars.
The Company consolidates the results of operations and financial position of all voting interest entities ("VOE") in which the Company has a controlling financial interest and all variable interest entities ("VIE") in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.
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 disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates.
Certain reclassifications and format changes have been made to prior years’ amounts to conform to the 2025 presentation.
**B.**Investments and Cash.
Fixed maturity securities designated as available for sale reflect unrealized appreciation and depreciation, as a result of changes in fair value during the period, in shareholders’ equity, net of income taxes in “accumulated other comprehensive income (loss)” in the consolidated balance sheets. The Company reviews all of its fixed maturity, available
F-10
for sale securities whose fair value has fallen below their amortized cost at the time of review. The Company then assesses whether the decline in value is due to non-credit related or credit related factors. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. Generally, a change in a security’s value caused by a change in the market, interest rate or foreign exchange environment does not constitute a credit impairment, but rather a non-credit related decline in fair value. Non-credit related declines in fair value are recorded as unrealized losses in accumulated other comprehensive income (loss). If the Company intends to sell the impaired security or is more likely than not to be required to sell the security before an anticipated recovery in value, the Company records the entire impairment in net gains (losses) on investments in the Company’s consolidated statements of operations and comprehensive income (loss). If the Company determines that the decline is credit related and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the Company establishes a credit allowance equal to the estimated credit loss and is recorded in net gains (losses) on investments in the Company’s consolidated statements of operations and comprehensive income (loss). The determination of credit related or non-credit related impairment is first based on an assessment of qualitative factors, which may determine that a qualitative analysis is sufficient to support the conclusion that the present value of expected cash flows equals or exceeds the security’s amortized cost basis. However, if the qualitative assessment suggests a credit loss may exist, a quantitative assessment is performed, and the amount of the allowance for a given security will generally be the difference between a discounted cash flow model and the Company’s carrying value. The Company will adjust the credit allowance account for future changes in credit loss estimates for a security and record this adjustment through net gains (losses) on investments in the Company’s consolidated statements of operations and comprehensive income (loss).
Fixed maturity securities designated as held to maturity consist of debt securities for which the Company has both the positive intent and ability to hold to maturity or redemption and are reported at amortized cost, net of the current expected credit loss allowance. Interest income for fixed maturity securities held to maturity is determined in the same manner as interest income for fixed maturity securities available for sale. The Company evaluates fixed maturity securities classified as held to maturity for current expected credit losses utilizing risk characteristics of each security, including credit rating, remaining time to maturity, adjusted for prepayment considerations, and subordination level, and applying default and recovery rates, which include the incorporation of historical credit loss experience and macroeconomic forecasts, to develop an estimate of current expected credit losses. The majority of these fixed maturities classified as held to maturity are of a high credit quality and are rated investment grade as of December 31, 2025.
Interest, dividend income and amortization of fixed maturity market premium and discounts, related to securities are recorded in net investment income, net of investment management and custody fees in the Company’s consolidated statements of operations and comprehensive income (loss). The Company does not create an allowance for uncollectible interest. If interest is not received when due, the interest receivable is immediately reversed and no additional interest is accrued. If future interest is received that has not been accrued, it is recorded as income at that time. The Company’s assessments are based on the issuers’ current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.
Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the Company’s asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.
For equity securities, the Company reflects changes in fair value as net gains (losses) on investments. Interest income on all fixed maturities and dividend income on all equity securities are included as part of net investment income in the consolidated statements of operations and comprehensive income (loss).
Short-term investments comprise securities due to mature within one year from the date of purchase and are stated at cost, which approximates fair value.
Realized gains or losses on sales of investments are determined on the basis of identified cost.
F-11
For some non-publicly traded securities, market prices are determined through the use of pricing models that evaluate securities relative to the U.S. Treasury yield curve, taking into account the issue type, credit quality and cash flow characteristics of each security. For other non-publicly traded securities, investment managers’ valuation committees will estimate fair value, and in many instances, these fair values are supported with opinions from qualified independent third parties. All fair value estimates from investment managers are reviewed by the Company for reasonableness. For publicly traded securities, fair value is based on quoted market prices or valuation models that use observable market inputs. When a sector of the financial markets is inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.
Other invested assets include limited partnerships, corporate-owned life insurance (“COLI”), rabbi trusts and other investments. Limited partnerships are accounted for under the equity method of accounting, which can be recorded on a monthly or quarterly lag and are included within net investment income. COLI policies are carried at policy cash surrender value and changes in the policy cash surrender value are included within net investment income.
Cash includes cash on hand. Restricted cash is included within cash in the consolidated balance sheets and represents amounts held for the benefit of third parties that is legally or contractually restricted as to its withdrawal or usage. Amounts include cash in trust funds set up for the benefit of ceding companies.
**C.**Reinsurance
The Company assumes reinsurance from other insurers. Assumed reinsurance refers to the Company’s acceptance of certain insurance risks that other insurance companies or pools have underwritten. The Company also cedes insurance to affiliated and unaffiliated insurers in order to limit its maximum losses and to diversify its exposures and provide statutory surplus relief. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company.
Reinsurance accounting is followed for ceded and assumed transactions that provide indemnification against loss or liability relating to insurance risk (i.e., risk transfer). To meet risk transfer requirements, a reinsurance agreement must include insurance risk, consisting of underwriting and timing risk, and a reasonable possibility of a significant loss to the reinsurer. If the ceded and assumed transactions do not meet risk transfer requirements, the Company accounts for these transactions as deposit transactions. The Company did not hold any contracts that did not pass risk transfer as of December 31, 2025 or 2024.
Premiums, commissions, losses and loss adjustment expenses reflect the net effects of ceded and assumed prospective reinsurance transactions. Prepaid reinsurance premium represents the portion of premium ceded to reinsurers applicable to the unexpired terms of the reinsurance contract. The Company’s estimate of losses and LAE reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for amounts the Company owes to its claimants. Refer to Reserve for Losses and LAE accounting policy below.
Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Refer to Allowance for Premium Receivable and Reinsurance Recoverables accounting policy below. Reinsurance recoverables include an estimate of the amount of gross losses and LAE reserves that may be ceded under the terms of the reinsurance agreements, including IBNR unpaid losses. In the event that one or more of the reinsurers were unable to meet their obligations under these reinsurance agreements, the Company would not realize the full value of the reinsurance recoverable balances. The Company estimates its ceded reinsurance receivable based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how IBNR losses will ultimately be ceded under reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and LAE.
Retroactive reinsurance agreements are reinsurance agreements under which a reinsurer agrees to reimburse the Company as a result of loss development related to past insurable events. For these agreements, the excess of the amounts ultimately collectible under the agreement over the consideration paid is recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves. The amount of deferred gain liability is recalculated each period based on cumulative recoveries not yet collected relative to the latest estimate of ultimate losses to be recovered. If the consideration paid exceeds the ultimate losses collectible under the agreement, the net loss on the agreement is recognized in income immediately in incurred losses and loss adjustment expenses in the Company’s consolidated statement of operations. In any given period, the change in deferred gain included in net income includes amortization of the deferred gain based on the percentage of ultimate ceded losses collected plus any change in the deferred liability due to change in the estimated losses to be recovered. The amounts are recalculated each period based on loss payments and updated loss reserves estimates.
F-12
**D.**Premium Revenues.
Written premiums are earned ratably over the periods of the related insurance and reinsurance contracts. Unearned premium reserves are established relative to the unexpired contract period. For reinsurance contracts, such reserves are established based upon reports received from ceding companies or estimated using pro rata methods based on statistical data. Reinstatement premiums represent additional premium recognized and earned at the time a loss event occurs and losses are recorded, most prevalently catastrophe related, when limits have been depleted under the original reinsurance contract and additional coverage is granted. The recognition of reinstatement premiums is based on estimates of loss and LAE, which reflects management’s judgement. Written and earned premiums and the related costs, which have not yet been reported to the Company, are estimated and accrued. Premiums are net of ceded reinsurance.
**E.**Allowance for Premium Receivable and Reinsurance Recoverables.
The Company applies the Current Expected Credit Losses methodology for estimating allowances for credit losses. The Company evaluates the recoverability of its premiums and reinsurance recoverable balances and establishes an allowance for estimated uncollectible amounts.
Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums, are primarily comprised of premiums due from policyholders/cedents. Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods. For these balances, the allowance is estimated based on recent historical credit loss and collection experience, adjusted for current economic conditions and reasonable and supportable forecasts, when appropriate.
A portion of the Company's commercial lines business is written with large deductibles or under retrospectively-rated plans. Under some commercial insurance contracts with a large deductible, the Company is obligated to pay the claimant the full amount of the claim and the Company is subsequently reimbursed by the policyholder for the deductible amount. As such, the Company is subject to credit risk until reimbursement is made. Retrospectively-rated policies are policies whereby the ultimate premium is adjusted based on actual losses incurred. Although the premium adjustment feature of a retrospectively-rated policy substantially reduces insurance risk for the Company, it presents credit risk to the Company. The Company’s results of operations could be adversely affected if a significant portion of such policyholders failed to reimburse the Company for the deductible amount or the amount of additional premium owed under retrospectively-rated policies. The Company manages these credit risks through credit analysis, collateral requirements and oversight. The allowance for receivables for loss within a deductible and retrospectively-rated policy premiums is recorded within other assets in the consolidated balance sheets. The allowance is estimated as the amount of the receivable exposed to loss multiplied by estimated factors for probability of default. The probability of default is assigned based on each policyholder's credit rating, or a rating is estimated if no external rating is available. Credit ratings are reviewed and updated at least annually. The exposure amount is estimated net of collateral and other offsets, considering the nature of the collateral, potential future changes in collateral values and historical loss information for the type of collateral obtained. The probability of default factors are historical corporate defaults for receivables with similar durations estimated through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The Company's evaluation of the required allowance for receivables for loss within a deductible and retrospectively-rated policy premiums considers the current economic environment as well as the probability-weighted macroeconomic scenarios.
The Company records total credit loss expenses related to premiums receivable in other underwriting expenses and records credit loss expenses related to deductibles in incurred losses and loss adjustment expenses (“LAE”) in the Company’s consolidated statements of operations and comprehensive income (loss).
The allowance for uncollectible reinsurance recoverable reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The allowance for uncollectible reinsurance recoverable includes an allowance for disputed balances. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance recoverable or charge off reinsurer balances that are determined to be uncollectible. Reinsurance recoverable balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods.
Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverable become due, it is possible that future adjustments to the Company’s reinsurance recoverable, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.
F-13
The allowance is estimated as the amount of reinsurance recoverable exposed to loss multiplied by estimated factors for the probability of default. The reinsurance recoverable exposed is the amount of reinsurance recoverable net of collateral and other offsets, considering the nature of the collateral, potential future changes in collateral values and historical loss information for the type of collateral obtained. The probability of default factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The Company's evaluation of the required allowance for reinsurance recoverable considers the current economic environment as well as macroeconomic scenarios. To manage reinsurer credit risk, a reinsurance security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer.
The Company records credit loss expenses related to reinsurance recoverable in incurred losses and loss adjustment expenses in the Company’s consolidated statements of operations and comprehensive income (loss). Write-offs of reinsurance recoverable and any related allowance are recorded in the period in which the balance is deemed uncollectible.
**F.**Deferred Acquisition Costs.
Acquisition costs, consisting principally of commissions and brokerage expenses and certain premium taxes and fees incurred at the time a contract or policy is issued and that vary with and are directly related to the Company’s reinsurance and insurance business, are deferred and amortized over the period in which the related premiums are earned. Deferred acquisition costs are limited to their estimated realizable value by line of business based on the related unearned premiums, anticipated claims and claim expenses and anticipated investment income.
**G.**Reserve for Losses and LAE.
The reserve for losses and LAE is based on individual case estimates and reports received from ceding companies. A provision is included for losses and LAE incurred but not reported (“IBNR”) based on past experience. Provisions are also included for certain potential liabilities, including those relating to asbestos and environmental (“A&E”) exposures, catastrophe exposures and other exposures, for which liabilities cannot be estimated using traditional reserving techniques. See also Note 4 of the Notes to these Consolidated Financial Statements. The reserves are reviewed periodically and any changes in estimates are reflected in earnings in the period the adjustment is made. The Company’s loss and LAE reserves represent management’s best estimate of the ultimate liability. Loss and LAE reserves are presented gross of reinsurance recoverable and incurred losses and LAE are presented net of reinsurance.
Accruals for commissions are established for reinsurance contracts that provide for the stated commission percentage to increase or decrease based on the loss experience of the contract. Changes in estimates for such arrangements are recorded as commission expense. Commission accruals for contracts with adjustable features are estimated based on expected loss and LAE.
**H.**Prepaid Reinsurance Premiums.
Prepaid reinsurance premiums represent unearned premium reserves ceded to other reinsurers. Prepaid reinsurance premiums for any foreign reinsurers comprising more than 10% of the outstanding balance at December 31, 2025 were secured either through collateralized trust arrangements, rights of offset or letters of credit, thereby limiting the credit risk to the Company.
**I.**Income Taxes.
Holdings, the Company’s U.S. holding company, and its wholly owned subsidiaries file a consolidated U.S. federal income tax return. Foreign subsidiaries and branches of subsidiaries file local tax returns as required. Group and subsidiaries not included in Holdings’ consolidated tax return file separate company U.S. federal income tax returns as required. Deferred income taxes have been recorded to recognize the tax effect of temporary differences between the financial reporting and income tax bases of assets and liabilities, which arise because of differences between GAAP and income tax accounting rules.
As a result of Bermuda enacting a corporate income tax effective January 1, 2025, Group subsidiaries in Bermuda will file and pay income taxes subsequent to that date.
As an accounting policy, the Company has adopted the aggregate portfolio approach for releasing disproportionate income tax effects from Accumulated Other Comprehensive Income.
F-14
**J.**Foreign Currency.
The Company transacts business in numerous currencies through business units located around the world. The functional currency for each business unit is determined by the local currency used for most economic activity in that area. Movements in exchange rates related to transactions in currencies other than a business unit’s functional currency for monetary assets and liabilities are remeasured through the consolidated statements of operations and comprehensive income (loss) in other income (expense), except for currency movements related to available for sale fixed maturities securities, which are excluded from net income (loss) and accumulated in shareholders’ equity, net of deferred taxes.
The business units’ functional currency financial statements are translated to the Company’s reporting currency, U.S. dollars, using the exchange rates at the end of period for the balance sheets and the average exchange rates in effect for the reporting period for the statements of operations and comprehensive income (loss). Gains and losses resulting from translating the foreign currency financial statements, net of deferred income taxes, are excluded from net income (loss) and accumulated as a separate component of other comprehensive income (loss) in shareholders’ equity.
**K.**Treasury Shares.
Treasury shares are the Company’s common shares repurchased on the open market, by the Company. The cost of treasury shares includes the purchase price of shares acquired and direct costs to acquire shares, including commissions.
**L.**Earnings Per Common Share.
Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that would occur if options granted under various share-based compensation plans were exercised resulting in the issuance of common shares that would participate in the earnings of the entity.
Net income (loss) per common share has been computed as per below, based upon weighted average common basic and dilutive shares outstanding.
| Years Ended December 31, | |||||||||||||||||
| (Amounts in millions, except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Net income (loss) per share: | |||||||||||||||||
| Numerator | |||||||||||||||||
| Net income (loss) | $ | 1,591 | $ | 1,373 | $ | 2517 | |||||||||||
| Less: dividends declared-common shares and unvested common shares | (335) | (334) | (288) | ||||||||||||||
| Undistributed earnings | 1,256 | 1,039 | 2,229 | ||||||||||||||
| Percentage allocated to common shareholders (1) | 98.8 | % | 98.8 | % | 98.8 | % | |||||||||||
| 1,241 | 1,027 | 2,203 | |||||||||||||||
| Add: dividends declared-common shareholders | 331 | 331 | 285 | ||||||||||||||
| Numerator for basic and diluted earnings per common share | $ | 1,573 | $ | 1,358 | $ | 2,488 | |||||||||||
| Denominator | |||||||||||||||||
| Denominator for basic earnings per weighted-average common shares | 41.6 | 42.7 | 41.3 | ||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||
| Options | — | — | — | ||||||||||||||
| Denominator for diluted earnings per adjusted weighted-average common shares | 41.6 | 42.7 | 41.3 | ||||||||||||||
| Per common share net income (loss) | |||||||||||||||||
| Basic | $ | 37.80 | $ | 31.78 | $ | 60.19 | |||||||||||
| Diluted | $ | 37.80 | $ | 31.78 | $ | 60.19 | |||||||||||
| (1) Basic weighted-average common shares outstanding | 41.6 | 42.7 | 41.3 | ||||||||||||||
| Basic weighted-average common shares outstanding and unvested common shares expected to vest | 42.1 | 43.2 | 41.8 | ||||||||||||||
| Percentage allocated to common shareholders | 98.8 | % | 98.8 | % | 98.8 | % |
(Some amounts may not reconcile due to rounding.)
F-15
There were no options outstanding as of December 31, 2025 and 2024, respectively.
**M.**Segmentation.
The Company, through its subsidiaries, conducts business through two reportable segments: Reinsurance and Insurance. During the fourth quarter of 2024, the Company revised the classification and presentation of certain run-off business, previously included within the Reinsurance and Insurance reportable segments, as part of a new operating segment called "Other". The Other segment includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses. These segment presentation changes have been reflected retrospectively. See also Note 7 of the Notes to these Consolidated Financial Statements.
**N.**Share-Based Compensation.
Share-based compensation stock option, restricted share and performance share unit awards are fair valued at the grant date and expensed over the vesting period of the award. The tax benefit on the recorded expense is deferred until the time the award is exercised or vests (becomes unrestricted). See Note 15 of the Notes to these Consolidated Financial Statements.
**O.**Recent Accounting Pronouncements.
Adoption of New Accounting Standards
Improvements to Income Tax Disclosures. In December 2023, the FASB issued Accounting Standard Update No. 2023-09, which requires expanded income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. Prospective application is required, with retrospective application permitted. The Company adopted and prospectively applied the accounting standard effective year end 2025.
The Company did not adopt any other new accounting standards that had a material impact in 2025.
Future Adoption of Recently Issued Accounting Standards
The Company assessed the adoption impacts of recently issued accounting standards that are effective after 2025 by the FASB on the Company’s consolidated financial statements. Additionally, the Company assessed whether there have been material updates to previously issued accounting standards that are effective after 2025. There were no accounting standards identified, other than those directly referenced below, that are expected to have a material impact to Group.
Disaggregation of Income Statement Expenses. In November 2024, the FASB issued Accounting Standard Update No. 2024-03, which requires additional disclosure about specific expense categories included in the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Prospective application is required, with retrospective application permitted. The Company is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures.
F-16
2. INVESTMENTS
The tables below present the amortized cost, allowance for credit losses, gross unrealized appreciation/(depreciation) (“URA(D)”) and fair value of fixed maturity securities - available for sale for the periods indicated:
| At December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Allowance for Credit Losses | Unrealized Appreciation | Unrealized Depreciation | Fair Value | ||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 845 | $ | — | $ | 4 | $ | (19) | $ | 830 | |||||||||||||||||||
| Obligations of U.S. states and political subdivisions | 45 | — | — | (4) | 41 | ||||||||||||||||||||||||
| Corporate securities | 9,913 | (54) | 206 | (183) | 9,882 | ||||||||||||||||||||||||
| Asset-backed securities | 5,094 | (14) | 14 | (17) | 5,077 | ||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Agency commercial | 404 | — | 9 | (2) | 412 | ||||||||||||||||||||||||
| Non-agency commercial | 1,151 | — | 4 | (33) | 1,121 | ||||||||||||||||||||||||
| Agency residential | 5,544 | — | 82 | (161) | 5,465 | ||||||||||||||||||||||||
| Non-agency residential | 1,689 | — | 32 | (1) | 1,721 | ||||||||||||||||||||||||
| Foreign government securities | 2,400 | — | 36 | (64) | 2,371 | ||||||||||||||||||||||||
| Foreign corporate securities | 7,535 | — | 253 | (135) | 7,653 | ||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 34,620 | $ | (68) | $ | 640 | $ | (619) | $ | 34,573 |
(Some amounts may not reconcile due to rounding.)
| At December 31, 2024 | |||||||||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Allowance for Credit Losses | Unrealized Appreciation | Unrealized Depreciation | Fair Value | ||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 688 | $ | — | $ | 5 | $ | (24) | $ | 669 | |||||||||||||||||||
| Obligations of U.S. states and political subdivisions | 75 | — | — | (5) | 70 | ||||||||||||||||||||||||
| Corporate securities | 7,288 | (35) | 57 | (299) | 7,010 | ||||||||||||||||||||||||
| Asset-backed securities | 5,994 | — | 28 | (39) | 5,982 | ||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Agency commercial | — | — | — | — | — | ||||||||||||||||||||||||
| Non-agency commercial | 965 | — | 1 | (66) | 900 | ||||||||||||||||||||||||
| Agency residential | 5,205 | — | 13 | (287) | 4,931 | ||||||||||||||||||||||||
| Non-agency residential | 1,291 | — | 9 | (11) | 1,289 | ||||||||||||||||||||||||
| Foreign government securities | 2,330 | — | 13 | (147) | 2,196 | ||||||||||||||||||||||||
| Foreign corporate securities | 6,099 | — | 42 | (279) | 5,861 | ||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 29,934 | $ | (36) | $ | 167 | $ | (1,157) | $ | 28,908 |
(Some amounts may not reconcile due to rounding.)
F-17
The following tables show amortized cost, allowance for credit losses, gross URA(D) and fair value of fixed maturity securities - held to maturity for the periods indicated:
| At December 31, 2025 | |||||||||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Allowance for Credit Losses | Unrealized Appreciation | Unrealized Depreciation | Fair Value | ||||||||||||||||||||||||
| Fixed maturity securities - held to maturity | |||||||||||||||||||||||||||||
| Corporate securities | $ | 166 | $ | (2) | $ | 7 | $ | (1) | $ | 169 | |||||||||||||||||||
| Asset-backed securities | 328 | (3) | 5 | (8) | 322 | ||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Commercial | — | — | — | — | — | ||||||||||||||||||||||||
| Foreign corporate securities | 79 | (1) | 6 | — | 84 | ||||||||||||||||||||||||
| Total fixed maturity securities - held to maturity | $ | 573 | $ | (6) | $ | 18 | $ | (9) | $ | 576 |
(Some amounts may not reconcile due to rounding.)
| At December 31, 2024 | |||||||||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Allowance for Credit Losses | Unrealized Appreciation | Unrealized Depreciation | Fair Value | ||||||||||||||||||||||||
| Fixed maturity securities - held to maturity | |||||||||||||||||||||||||||||
| Corporate securities | $ | 177 | $ | (2) | $ | 5 | $ | (4) | $ | 175 | |||||||||||||||||||
| Asset-backed securities | 484 | (4) | 5 | (8) | 477 | ||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||
| Commercial | 21 | — | — | — | 21 | ||||||||||||||||||||||||
| Foreign corporate securities | 84 | (1) | 4 | — | 86 | ||||||||||||||||||||||||
| Total fixed maturity securities - held to maturity | $ | 765 | $ | (8) | $ | 14 | $ | (12) | $ | 759 |
(Some amounts may not reconcile due to rounding.)
The amortized cost and fair value of fixed maturity securities - available for sale are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.
| At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||
| Due in one year or less | $ | 1,440 | $ | 1,405 | $ | 1,116 | $ | 1,080 | |||||||||||||||
| Due after one year through five years | 10,746 | 10,819 | 8,774 | 8,480 | |||||||||||||||||||
| Due after five years through ten years | 6,722 | 6,781 | 4,764 | 4,523 | |||||||||||||||||||
| Due after ten years | 1,830 | 1,772 | 1,826 | 1,723 | |||||||||||||||||||
| Asset-backed securities | 5,094 | 5,077 | 5,994 | 5,982 | |||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||
| Agency commercial | 404 | 412 | — | — | |||||||||||||||||||
| Non-agency commercial | 1,151 | 1,121 | 965 | 900 | |||||||||||||||||||
| Agency residential | 5,544 | 5,465 | 5,205 | 4,931 | |||||||||||||||||||
| Non-agency residential | 1,689 | 1,721 | 1,291 | 1,289 | |||||||||||||||||||
| Total fixed maturity securities -available for sale | $ | 34,620 | $ | 34,573 | $ | 29,934 | $ | 28,908 |
(Some amounts may not reconcile due to rounding.)
F-18
The amortized cost and fair value of fixed maturity securities - held to maturity are shown in the following table by contractual maturity. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.
| At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||
| (Dollars in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
| Fixed maturity securities - held to maturity | |||||||||||||||||||||||
| Due in one year or less | $ | 25 | $ | 25 | $ | 7 | $ | 7 | |||||||||||||||
| Due after one year through five years | 68 | 69 | 67 | 67 | |||||||||||||||||||
| Due after five years through ten years | 4 | 4 | 37 | 35 | |||||||||||||||||||
| Due after ten years | 148 | 155 | 150 | 152 | |||||||||||||||||||
| Asset-backed securities | 328 | 322 | 484 | 477 | |||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||
| Commercial | — | — | 21 | 21 | |||||||||||||||||||
| Total fixed maturity securities - held to maturity | $ | 573 | $ | 576 | $ | 765 | $ | 759 |
(Some amounts may not reconcile due to rounding.)
During 2022, the Company re-designated a portion of its fixed maturity securities from its fixed maturity - available for sale portfolio to its fixed maturity - held to maturity portfolio. The fair value of the securities reclassified at the date of transfer was $722 million, net of allowance for current expected credit losses, which was subsequently recognized as the new amortized cost basis. As of December 31, 2025, $27 million of unrealized loss from the date of the re-designation remained in accumulated other comprehensive income on the balance sheet and will be amortized into income through an adjustment to the yields of the underlying securities over the remaining life of the securities. The fair values of these securities incorporate the use of significant unobservable inputs and therefore are classified as Level 3 within the fair value hierarchy.
The changes in net URA(D) for the Company’s investments are as follows:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Increase (decrease) during the period between the fair value and cost | |||||||||||
| of investments carried at fair value, and deferred taxes thereon: | |||||||||||
| Fixed maturity securities - available for sale, held to maturity and short-term investments | $ | 1,018 | $ | (203) | |||||||
| Equity method investments | — | 18 | |||||||||
| Change in URA(D), pre-tax | 1,018 | (185) | |||||||||
| Deferred tax benefit (expense) | (164) | 76 | |||||||||
| Change in URA(D), net of deferred taxes, included in shareholders’ equity | $ | 854 | $ | (109) |
(Some amounts may not reconcile due to rounding.)
F-19
The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale by security type and contractual maturity, in each case subdivided according to length of time that the individual securities had been in a continuous unrealized loss position for the periods indicated:
| Duration of Unrealized Loss at December 31, 2025 by Security Type | |||||||||||||||||||||||||||||||||||
| Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | |||||||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 244 | $ | (5) | $ | 333 | $ | (14) | $ | 577 | $ | (19) | |||||||||||||||||||||||
| Obligations of U.S. states and political subdivisions | 2 | — | 33 | (4) | 35 | (4) | |||||||||||||||||||||||||||||
| Corporate securities | 1,370 | (31) | 1,990 | (147) | 3,360 | (179) | |||||||||||||||||||||||||||||
| Asset-backed securities | 802 | (5) | 429 | (12) | 1,231 | (17) | |||||||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
| Agency commercial | 43 | (1) | 17 | (1) | 60 | (2) | |||||||||||||||||||||||||||||
| Non-agency commercial | 288 | (5) | 631 | (29) | 919 | (33) | |||||||||||||||||||||||||||||
| Agency residential | 234 | (3) | 1,755 | (158) | 1,990 | (161) | |||||||||||||||||||||||||||||
| Non-agency residential | 81 | — | 87 | — | 168 | (1) | |||||||||||||||||||||||||||||
| Foreign government securities | 260 | (4) | 854 | (61) | 1,114 | (64) | |||||||||||||||||||||||||||||
| Foreign corporate securities | 847 | (15) | 1,615 | (120) | 2,463 | (135) | |||||||||||||||||||||||||||||
| Total | $ | 4,171 | $ | (68) | $ | 7,745 | $ | (547) | $ | 11,916 | $ | (615) | |||||||||||||||||||||||
| Securities where an allowance for credit loss was recorded | 24 | (2) | 14 | (2) | 37 | (4) | |||||||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 4,194 | $ | (70) | $ | 7,759 | $ | (549) | $ | 11,953 | $ | (619) |
(Some amounts may not reconcile due to rounding.)
| Duration of Unrealized Loss at December 31, 2025 by Maturity | |||||||||||||||||||||||||||||||||||
| Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | |||||||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||||||||
| Due in one year or less | $ | 165 | $ | (5) | $ | 675 | $ | (18) | $ | 840 | $ | (23) | |||||||||||||||||||||||
| Due in one year through five years | 1,475 | (33) | 2,411 | (156) | 3,887 | (189) | |||||||||||||||||||||||||||||
| Due in five years through ten years | 859 | (14) | 987 | (99) | 1,846 | (112) | |||||||||||||||||||||||||||||
| Due after ten years | 223 | (3) | 752 | (74) | 975 | (77) | |||||||||||||||||||||||||||||
| Asset-backed securities | 802 | (5) | 429 | (12) | 1,231 | (17) | |||||||||||||||||||||||||||||
| Mortgage-backed securities | 646 | (8) | 2,490 | (188) | 3,137 | (196) | |||||||||||||||||||||||||||||
| Total | $ | 4,171 | $ | (68) | $ | 7,745 | $ | (547) | $ | 11,916 | $ | (615) | |||||||||||||||||||||||
| Securities where an allowance for credit loss was recorded | 24 | (2) | 14 | (2) | 37 | (4) | |||||||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 4,194 | $ | (70) | $ | 7,759 | $ | (549) | $ | 11,953 | $ | (619) |
(Some amounts may not reconcile due to rounding.)
The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at December 31, 2025 were $12.0 billion and $619 million, respectively. The fair value of securities for the single issuer (the U.S. government) whose securities comprised the largest unrealized loss position at December 31, 2025, amounted to less than 1.7% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss position at December 31, 2025 comprised less than 0.2% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $70 million of unrealized losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, asset-backed securities, non-agency commercial mortgage-backed securities and foreign government securities. Of these unrealized losses, $66 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $549 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, agency residential and non-agency commercial mortgage-backed securities and foreign government securities. Of these
F-20
unrealized losses, $540 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments. Based upon the Company’s current evaluation of securities in an unrealized loss position as of December 31, 2025, the unrealized losses are due to changes in interest rates and non-issuer-specific credit spreads and are not credit-related. In addition, the contractual terms of these securities do not permit these securities to be settled at a price less than their amortized cost.
The tables below display the aggregate fair value and gross unrealized depreciation of fixed maturity securities - available for sale by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:
| Duration of Unrealized Loss at December 31, 2024 by Security Type | |||||||||||||||||||||||||||||||||||
| Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | |||||||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 80 | $ | (1) | $ | 398 | $ | (23) | $ | 478 | $ | (24) | |||||||||||||||||||||||
| Obligations of U.S. states and political subdivisions | 9 | — | 40 | (5) | 48 | (5) | |||||||||||||||||||||||||||||
| Corporate securities | 2,744 | (76) | 2,132 | (221) | 4,876 | (297) | |||||||||||||||||||||||||||||
| Asset-backed securities | 958 | (20) | 537 | (19) | 1,495 | (39) | |||||||||||||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
| Agency commercial | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Non-agency commercial | 53 | (3) | 757 | (63) | 810 | (66) | |||||||||||||||||||||||||||||
| Agency residential | 2,754 | (115) | 1,226 | (172) | 3,980 | (287) | |||||||||||||||||||||||||||||
| Non-agency residential | 654 | (11) | 25 | — | 678 | (11) | |||||||||||||||||||||||||||||
| Foreign government securities | 851 | (35) | 828 | (112) | 1,679 | (147) | |||||||||||||||||||||||||||||
| Foreign corporate securities | 2,484 | (61) | 1,785 | (218) | 4,269 | (279) | |||||||||||||||||||||||||||||
| Total | $ | 10,587 | $ | (323) | $ | 7,728 | $ | (833) | $ | 18,315 | $ | (1,156) | |||||||||||||||||||||||
| Securities where an allowance for credit loss was recorded | 17 | (1) | — | — | 17 | (1) | |||||||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 10,604 | $ | (324) | $ | 7,728 | $ | (833) | $ | 18,332 | $ | (1,157) |
(Some amounts may not reconcile due to rounding.)
| Duration of Unrealized Loss at December 31, 2024 by Maturity | |||||||||||||||||||||||||||||||||||
| Less than 12 months | Greater than 12 months | Total | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | Fair Value | Gross Unrealized Depreciation | |||||||||||||||||||||||||||||
| Fixed maturity securities - available for sale | |||||||||||||||||||||||||||||||||||
| Due in one year or less | $ | 138 | $ | (5) | $ | 544 | $ | (34) | $ | 682 | $ | (39) | |||||||||||||||||||||||
| Due in one year through five years | 3,503 | (87) | 2,770 | (249) | 6,273 | (335) | |||||||||||||||||||||||||||||
| Due in five years through ten years | 1,850 | (50) | 1,382 | (220) | 3,232 | (271) | |||||||||||||||||||||||||||||
| Due after ten years | 677 | (32) | 487 | (76) | 1,164 | (107) | |||||||||||||||||||||||||||||
| Asset-backed securities | 958 | (20) | 537 | (19) | 1,495 | (39) | |||||||||||||||||||||||||||||
| Mortgage-backed securities | 3,461 | (129) | 2,008 | (235) | 5,469 | (364) | |||||||||||||||||||||||||||||
| Total | $ | 10,587 | $ | (323) | $ | 7,728 | $ | (833) | $ | 18,315 | $ | (1,156) | |||||||||||||||||||||||
| Securities where an allowance for credit loss was recorded | 17 | (1) | — | — | 17 | (1) | |||||||||||||||||||||||||||||
| Total fixed maturity securities - available for sale | $ | 10,604 | $ | (324) | $ | 7,728 | $ | (833) | $ | 18,332 | $ | (1,157) |
(Some amounts may not reconcile due to rounding.)
The aggregate fair value and gross unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position at December 31, 2024 were $18.3 billion and $1.2 billion, respectively. The fair value of securities for the single issuer (the U.S. government), whose securities comprised the largest unrealized loss position at December 31, 2024, amounted to less than 1.6% of the overall fair value of the Company’s fixed maturity securities - available for sale. The fair value of the securities for the issuer with the second largest unrealized loss comprised less than 0.9% of the Company’s fixed maturity securities - available for sale. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $324 million of unrealized
F-21
losses related to fixed maturity securities - available for sale that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, asset-backed securities, agency residential mortgage-backed securities and foreign government securities. Of these unrealized losses, $319 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $833 million of unrealized losses related to fixed maturity securities - available for sale in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, agency residential mortgage-backed securities and foreign government securities. Of these unrealized losses, $810 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.
The components of net investment income are presented in the table below for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Fixed maturities | $ | 1,572 | $ | 1,481 | $ | 1,153 | |||||||||||
| Equity securities | 4 | 3 | 3 | ||||||||||||||
| Short-term investments and cash | 169 | 195 | 140 | ||||||||||||||
| Other invested assets | |||||||||||||||||
| Limited partnerships | 277 | 206 | 122 | ||||||||||||||
| Other | 124 | 104 | 59 | ||||||||||||||
| Gross investment income before adjustments | 2,146 | 1,989 | 1,477 | ||||||||||||||
| Funds held interest income (expense) | 26 | 26 | 10 | ||||||||||||||
| Future policy benefit reserve income (expense) | (1) | (1) | (1) | ||||||||||||||
| Gross investment income | 2,172 | 2,013 | 1,486 | ||||||||||||||
| Investment expenses | 48 | 59 | 53 | ||||||||||||||
| Net investment income | $ | 2,124 | $ | 1,954 | $ | 1,434 |
(Some amounts may not reconcile due to rounding.)
The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. The net investment income from limited partnerships is dependent upon the Company’s share of the net asset values (“NAVs”) of interests underlying each limited partnership. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.
The Company had contractual commitments to invest up to an additional $2.5 billion in limited partnerships and private placement loan securities at December 31, 2025, which includes $1.4 billion specific to limited partnerships as noted below. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2035.
The Company is the beneficiary of COLI policies, which are invested in debt and equity securities. The COLI policies are carried within other invested assets at the policy cash surrender value of $1.9 billion and $1.7 billion as of December 31, 2025 and December 31, 2024, respectively.
Variable Interest Entities
The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs primarily as an investor through normal investment activities but also as an investment manager. A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s consolidated financial statements. As of December 31, 2025 and 2024, the Company did not hold any investments for which it is the primary beneficiary.
F-22
The Company, through normal investment activities, makes passive investments in general and limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of December 31, 2025 and 2024 is limited to the total carrying value of $3.9 billion and $3.6 billion, respectively, which are included in general and limited partnerships.
As of December 31, 2025, the Company has outstanding commitments totaling $1.4 billion whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management.
In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in asset-backed securities, which includes collateralized loan obligations and are classified as fixed maturities - available for sale. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, credit subordination that reduces the Company’s obligation to absorb losses or right to receive benefits or the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.
The components of net gains (losses) on investments are presented in the table below for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Credit allowance on fixed maturity securities | $ | (30) | $ | 13 | $ | 7 | |||||||||||
| Gains (losses) from fair value adjustment on public equities | (1) | (1) | — | ||||||||||||||
| Net realized gains (losses) from dispositions: | |||||||||||||||||
| Fixed maturities | (112) | 6 | (292) | ||||||||||||||
| Equity securities | (1) | 1 | 8 | ||||||||||||||
| Other invested assets | — | (1) | — | ||||||||||||||
| Short-term investments | — | 1 | — | ||||||||||||||
| Total net gains (losses) from dispositions | (112) | 7 | (283) | ||||||||||||||
| Total net gains (losses) on investments | $ | (143) | $ | 19 | $ | (276) |
(Some amounts may not reconcile due to rounding.)
The following tables provide a roll forward of the Company’s beginning and ending balance of allowance for credit losses for the periods indicated:
| Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale | |||||||||||||||||||||||||||||
| Twelve Months Ended December 31, 2025 | |||||||||||||||||||||||||||||
| Corporate Securities | Asset-Backed Securities | Foreign Corporate Securities | Total | ||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Beginning balance | $ | (35) | $ | — | $ | — | $ | (36) | |||||||||||||||||||||
| Credit losses on securities where credit losses were not previously recorded | (28) | (14) | — | (42) | |||||||||||||||||||||||||
| Increases in allowance on previously impaired securities | (16) | — | — | (16) | |||||||||||||||||||||||||
| Decreases in allowance on previously impaired securities | — | — | — | — | |||||||||||||||||||||||||
| Reduction in allowance due to disposals | 25 | — | — | 26 | |||||||||||||||||||||||||
| Balance, end of period | $ | (54) | $ | (14) | $ | — | $ | (68) |
(Some amounts may not reconcile due to rounding.)
F-23
| Roll Forward of Allowance for Credit Losses - Fixed Maturities - Available for Sale | |||||||||||||||||||||||||||||
| Twelve Months Ended December 31, 2024 | |||||||||||||||||||||||||||||
| Corporate Securities | Asset-Backed Securities | Foreign Corporate Securities | Total | ||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||
| Beginning balance | $ | (47) | $ | — | $ | (1) | $ | (48) | |||||||||||||||||||||
| Credit losses on securities where credit losses were not previously recorded | (9) | — | — | (9) | |||||||||||||||||||||||||
| Increases in allowance on previously impaired securities | — | — | — | — | |||||||||||||||||||||||||
| Decreases in allowance on previously impaired securities | — | — | — | — | |||||||||||||||||||||||||
| Reduction in allowance due to disposals | 20 | — | 1 | 21 | |||||||||||||||||||||||||
| Balance, end of period | $ | (35) | $ | — | $ | — | $ | (36) |
(Some amounts may not reconcile due to rounding.)
The allowance for credit losses for fixed maturities - held to maturity was not significant as of December 31, 2025 and December 31, 2024.
The proceeds and split between gross gains and losses from sales of fixed maturity securities - available for sale, fixed maturities - held to maturity and equity securities are presented in the table below for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Proceeds from sales of fixed maturity securities - available for sale | $ | 1,571 | $ | 6,257 | $ | 3,849 | |||||||||||
| Gross gains from sales | 48 | 166 | 35 | ||||||||||||||
| Gross losses from sales | (159) | (160) | (327) | ||||||||||||||
| Proceeds from sales of fixed maturity securities - held to maturity | $ | 10 | $ | — | $ | — | |||||||||||
| Gross gains from sales | — | — | — | ||||||||||||||
| Gross losses from sales | (1) | — | — | ||||||||||||||
| Proceeds from sales of equity securities | $ | 56 | $ | 37 | $ | 126 | |||||||||||
| Gross gains from sales | — | 2 | 8 | ||||||||||||||
| Gross losses from sales | (1) | (1) | — |
(Some amounts may not reconcile due to rounding.)
During the year ended December 31, 2025, the Company sold fixed maturity securities - held to maturity with a net carrying amount of $11 million, which had realized losses of $1 million as part of the sale. The Company's decision to sell was due to significant credit deterioration of the issuer of the securities.
Securities with a carrying value amount of $1.4 billion at December 31, 2025 were on deposit with or regulated by various state or governmental insurance departments in compliance with insurance laws. See Note 11 of the Notes to these Consolidated Financial Statements.
3. FAIR VALUE
GAAP guidance regarding fair value measurements addresses how companies should measure fair value when they are required to use fair value measures for recognition or disclosure purposes under GAAP and provides a common definition of fair value to be used throughout GAAP. It defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. In addition, it establishes a three-level valuation hierarchy for the disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement, with Level 1 being the highest priority and Level 3 being the lowest priority.
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The levels in the hierarchy are defined as follows:
| Level 1: | Inputs to the valuation methodology are observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in an active market; | ||||
| Level 2: | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; | ||||
| Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The Company’s fixed maturity and equity securities are managed both internally and on an external basis by independent, professional investment managers using portfolio guidelines approved by the Company. The Company obtains prices from nationally recognized pricing services. These services seek to utilize market data and observations in their evaluation process. These services use pricing applications that vary by asset class and incorporate available market information. When fixed maturity securities do not trade on a daily basis, the services will apply available information through processes such as benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. In addition, they use model processes, such as the Option Adjusted Spread model to develop prepayment and interest rate scenarios for securities that have prepayment features.
The Company does not make any changes to prices received from the pricing services. In addition, the Company has procedures in place to review the reasonableness of the prices from the service providers and may request verification of the prices. The Company also continually performs quantitative and qualitative analysis of prices, including but not limited to initial and ongoing review of pricing methodologies, review of prices obtained from pricing services and third-party investment asset managers, review of pricing statistics and trends and comparison of prices for certain securities with a secondary price source for reasonableness. No material variances were noted during these price validation procedures. In limited situations, where financial markets are inactive or illiquid, the Company may use its own assumptions about future cash flows and risk-adjusted discount rates to determine fair value.
At December 31, 2025 and 2024, $2.5 billion and $2.2 billion, respectively, of fixed maturities were fair valued using unobservable inputs. The majority of these fixed maturities were valued by investment managers’ valuation committees and many of these fair values were substantiated by valuations from independent third parties. The Company has procedures in place to evaluate these independent third-party valuations.
Equity securities denominated in U.S. currency with quoted prices in active markets for identical assets are categorized as Level 1 since the quoted prices are directly observable. Equity securities traded on foreign exchanges are categorized as Level 2 due to the added input of a foreign exchange conversion rate to determine fair value. The Company uses foreign currency exchange rates published by nationally recognized sources.
Fixed maturity securities listed in the tables have been categorized as Level 2, since a particular security may not have traded but the pricing services are able to use valuation models with observable market inputs such as interest rate yield curves and prices for similar fixed maturity securities in terms of issuer, maturity and seniority. For foreign government securities and foreign corporate securities, the fair values are provided by the third-party pricing services in local currencies, and where applicable, are converted to U.S. dollars using currency exchange rates from nationally recognized sources.
In addition, some of the fixed maturities with fair values categorized as Level 3 result when prices are not available from the nationally recognized pricing services, are obtained from investment managers and are derived using unobservable inputs. The Company will value the securities with unobservable inputs using comparable market information or receive fair values from investment managers. The investment managers may obtain non-binding price quotes for the securities from brokers. The single broker quotes are provided by market makers or broker-dealers who are recognized as market participants in the markets in which they are providing the quotes. The prices received from brokers are reviewed for reasonableness by the third-party asset managers and the Company. If the broker quotes are for foreign denominated securities, the quotes are converted to U.S. dollars using currency exchange rates from nationally recognized sources.
F-25
The composition and valuation inputs for the presented fixed maturities categories Level 1 and Level 2 are as follows:
-
U.S. Treasury securities and obligations of U.S. government agencies and corporations are primarily comprised of U.S. Treasury bonds, and the fair value is based on observable market inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields;
-
Obligations of U.S. states and political subdivisions are comprised of state and municipal bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
-
Corporate securities are primarily comprised of U.S. corporate and public utility bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities, benchmark yields and credit spreads;
-
Asset-backed and mortgage-backed securities fair values are based on observable inputs such as quoted prices, reported trades, quoted prices for similar issuances or benchmark yields and cash flow models using observable inputs such as prepayment speeds, collateral performance and default spreads;
-
Foreign government securities are comprised of global non-U.S. sovereign bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, are converted to U.S. dollars using an exchange rate from a nationally recognized source; and
-
Foreign corporate securities are comprised of global non-U.S. corporate bond issuances and the fair values are based on observable market inputs such as quoted market prices, quoted prices for similar securities and models with observable inputs such as benchmark yields and credit spreads and then, where applicable, are converted to U.S. dollars using an exchange rate from a nationally recognized source.
The following tables present the fair value measurement levels for all assets which the Company has recorded at fair value as of the periods indicated:
| Fair Value Measurement Using: | |||||||||||||||||||||||
| (Dollars in millions) | December 31, 2025 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Fixed maturities - available for sale | |||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 830 | $ | — | $ | 830 | $ | — | |||||||||||||||
| Obligations of U.S. States and political subdivisions | 41 | — | 41 | — | |||||||||||||||||||
| Corporate securities | 9,882 | — | 9,512 | 370 | |||||||||||||||||||
| Asset-backed securities | 5,077 | — | 2,987 | 2,091 | |||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||
| Agency commercial | 412 | — | 412 | — | |||||||||||||||||||
| Non-agency commercial | 1,121 | — | 1,121 | — | |||||||||||||||||||
| Agency residential | 5,465 | — | 5,465 | — | |||||||||||||||||||
| Non-agency residential | 1,721 | — | 1,721 | — | |||||||||||||||||||
| Foreign government securities | 2,371 | — | 2,371 | — | |||||||||||||||||||
| Foreign corporate securities | 7,653 | — | 7,639 | 14 | |||||||||||||||||||
| Total fixed maturities - available for sale | 34,573 | — | 32,099 | 2,474 | |||||||||||||||||||
| Equity securities, fair value | 180 | 88 | 92 | — |
(Some amounts may not reconcile due to rounding.)
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| Fair Value Measurement Using: | |||||||||||||||||||||||
| (Dollars in millions) | December 31, 2024 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Fixed maturities - available for sale | |||||||||||||||||||||||
| U.S. Treasury securities and obligations of | |||||||||||||||||||||||
| U.S. government agencies and corporations | $ | 669 | $ | — | $ | 669 | $ | — | |||||||||||||||
| Obligations of U.S. States and political subdivisions | 70 | — | 70 | — | |||||||||||||||||||
| Corporate securities | 7,010 | — | 6,492 | 518 | |||||||||||||||||||
| Asset-backed securities | 5,982 | — | 4,325 | 1,657 | |||||||||||||||||||
| Mortgage-backed securities | |||||||||||||||||||||||
| Commercial | 900 | — | 900 | — | |||||||||||||||||||
| Agency residential | 4,931 | — | 4,931 | — | |||||||||||||||||||
| Non-agency residential | 1,289 | — | 1,289 | — | |||||||||||||||||||
| Foreign government securities | 2,196 | — | 2,196 | — | |||||||||||||||||||
| Foreign corporate securities | 5,861 | — | 5,847 | 14 | |||||||||||||||||||
| Total fixed maturities - available for sale | 28,908 | — | 26,719 | 2,189 | |||||||||||||||||||
| Equity securities, fair value | 217 | 79 | 133 | 5 |
(Some amounts may not reconcile due to rounding.)
The following table presents the activity under Level 3, fair value measurements using significant unobservable inputs for fixed maturities - available for sale, for the periods indicated:
| Total Fixed Maturities - Available for Sale | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Corporate Securities | Asset-Backed Securities | Foreign Corporate | Total | Corporate Securities | Asset-Backed Securities | Foreign Corporate | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance fixed maturities | $ | 518 | $ | 1,657 | $ | 14 | $ | 2,189 | $ | 672 | $ | 1,305 | $ | 16 | $ | 1,993 | |||||||||||||||||||||||||||||||||||||||||||
| Total gains or (losses) (realized/unrealized) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Included in earnings (or changes in net assets) | (38) | (13) | — | (52) | (1) | — | 1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Included in other comprehensive income (loss) | (7) | 8 | — | 1 | 1 | 12 | — | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases, issuances and settlements | (103) | 440 | — | 336 | (154) | 339 | (2) | 183 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Transfers in and/or (out) of Level 3 and reclassification | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| of securities in/(out) of investment categories | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 370 | $ | 2,091 | $ | 14 | $ | 2,474 | $ | 518 | $ | 1,657 | $ | 14 | $ | 2,189 | |||||||||||||||||||||||||||||||||||||||||||
| The amount of total gains or losses for the period | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| included in earnings (or changes in net assets) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| attributable to the change in unrealized gains | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| or losses relating to assets still held | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| at the reporting date | $ | (16) | $ | (14) | $ | — | $ | (29) | $ | (3) | $ | — | $ | — | $ | (3) |
(Some amounts may not reconcile due to rounding.)
There were no transfers of assets in/(out) of Level 3 during 2025 or 2024.
Financial Instruments Disclosed, But Not Reported, at Fair Value
Certain financial instruments disclosed, but not reported, at fair value are excluded from the fair value hierarchy tables above. Fair values and valuation hierarchy of fixed maturity securities - held to maturity, senior notes and long-term subordinated notes can be found within Notes 2, 9 and 10 of the Notes to these Consolidated Financial Statements, respectively. Short-term investments are stated at cost, which approximates fair value. See Note 1 of the Notes to these Consolidated Financial Statements.
F-27
Exempt from Fair Value Disclosure Requirements
Certain financial instruments are exempt from the requirements for fair value disclosure, such as limited/general partnerships accounted for under the equity method and pension and other postretirement obligations. The Company’s investments in COLI policies are recorded at their cash surrender value and are therefore not required to be included in the tables above. See Note 1 of the Notes to these Consolidated Financial Statements for details of investments in COLI policies.
In addition, $233 million and $239 million of investments within other invested assets on the consolidated balance sheets as of December 31, 2025 and 2024, respectively, are not included within the fair value hierarchy tables, as the assets are measured at NAV as a practical expedient to determine fair value.
4. RESERVE FOR LOSSES AND LAE
Reserve for losses and LAE.
The following table provides a roll forward of the Company’s beginning and ending reserve for losses and LAE and is summarized for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Gross reserves beginning of period | $ | 29,889 | $ | 24,604 | $ | 22,065 | |||||||||||
| Less reinsurance recoverables on unpaid losses | (2,915) | (2,098) | (2,105) | ||||||||||||||
| Net reserves beginning of period | 26,975 | 22,506 | 19,960 | ||||||||||||||
| Incurred related to: | |||||||||||||||||
| Current year | 10,202 | 9,967 | 8,432 | ||||||||||||||
| Prior years, excluding impact from retroactive reinsurance | 535 | 1,337 | (5) | ||||||||||||||
| Prior years, impact from retroactive reinsurance (1) | 122 | — | — | ||||||||||||||
| Total incurred losses and LAE | 10,859 | 11,305 | 8,427 | ||||||||||||||
| Paid related to: | |||||||||||||||||
| Current year | 1,253 | 1,258 | 1,379 | ||||||||||||||
| Prior years | 6,525 | 5,279 | 4,731 | ||||||||||||||
| Total paid losses and LAE | 7,778 | 6,537 | 6,110 | ||||||||||||||
| Foreign exchange/translation adjustment | 663 | (298) | 229 | ||||||||||||||
| Retroactive reinsurance adjustment (1) | (122) | — | — | ||||||||||||||
| Net reserves end of period | 30,597 | 26,975 | 22,506 | ||||||||||||||
| Plus reinsurance recoverables on unpaid losses (2) | 3,715 | 2,915 | 2,098 | ||||||||||||||
| Gross reserves end of period | $ | 34,312 | $ | 29,889 | $ | 24,604 |
(Some amounts may not reconcile due to rounding.)
(1) The consideration paid ($1,372 million) exceeds the ceded loss reserves at the inception of the Agreement ($1,250 million), as a result the Company recognized an immediate pre-tax loss of $122 million in earnings, in accordance with retroactive reinsurance accounting guidance. The Company recognized the loss by writing off the reinsurance recoverable of $122 million, which represents excess compensation for the uncertainty of future claims development, and is not a component of our best estimate of loss reserves.
(2) This amount excludes the unpaid recoverable of the adverse development reinsurance agreements of $1,253 million as of December 31, 2025.
Current year incurred losses were $10.2 billion, $10.0 billion and $8.4 billion in 2025, 2024 and 2023, respectively. The increase in current year incurred losses from 2024 to 2025 was primarily related to an increase of $308 million in current year attritional losses, resulting from the impact of the increase in premiums earned, strengthening of U.S. casualty reserves and changes in the mix of business, partially offset by a decrease of $73 million in current year catastrophe losses.
The increase in current year incurred losses from 2023 to 2024, was primarily related to an increase in underlying exposure due to premium growth, year over year and changes in the mix of business as well an increase of $423 million in 2024 current year catastrophe losses.
Incurred prior years unfavorable development in losses was $657 million and $1.3 billion in 2025 and 2024, respectively, and incurred prior years favorable development in losses of $5 million in 2023. The unfavorable development on prior year reserves of $657 million in 2025 was primarily due to strengthening of U.S. casualty reserves, as well as aviation
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losses associated with the Russia/Ukraine war within the Reinsurance segment, partially offset by the release of well-seasoned reserves in the property and mortgage lines within the Reinsurance segment. The reserve strengthening for prior year loss development was driven by elevated loss experience in excess casualty and U.S. liability lines primarily on accident years 2022-2024.
In 2025, the United Kingdom’s High Court concluded that the confiscation of certain aircraft was covered under the war provision within certain reinsurance contracts. As a result of the court’s decision, the Company increased its net ultimate loss reserve for contracts that were exposed to the war in Russia/Ukraine. This increase in ultimate loss is reflected in the prior year incurred loss line in the table above.
The net unfavorable development on prior year reserves of $1.3 billion in 2024 is primarily comprised of $1.1 billion of unfavorable development on prior years attritional losses for the Insurance segment, mainly driven by a combination of social inflation and portfolio concentrations in certain U.S. casualty lines and $403 million of unfavorable development on prior years attritional losses for the Other segment, mainly related to certain sports and leisure lines for accident years 2019 through 2023, including A&E reserve strengthening of $54 million. In addition, the Reinsurance segment recorded $684 million of unfavorable development on prior year casualty reserves. This unfavorable development in the Reinsurance segment was largely offset by favorable development booked on property and mortgage lines.
The net favorable development on prior year reserves of $5 million in 2023 is comprised of $401 million of favorable development on prior years attritional losses for reinsurance lines, mainly related to mortgage and short-tail lines of business, mostly offset by $285 million of unfavorable development on prior years attritional losses for insurance lines, mainly related to casualty lines for accident years from 2016 through 2019 as well as $110 million of unfavorable development on prior years attritional losses for other lines.
The following is information about incurred and paid claims development as of December 31, 2025, net of reinsurance, as well as cumulative claim frequency and the total of IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. Each of the Company’s financial reporting segments has been disaggregated into casualty and property business. The casualty and property segregation results in groups that have homogeneous loss development characteristics and are large enough to represent credible trends. Generally, casualty claims take longer to be reported and settled, resulting in longer payout patterns and increased volatility. Property claims on the other hand, tend to be reported and settled quicker and therefore tend to exhibit less volatility. The property business is more exposed to catastrophe losses, which can result in year over year fluctuations in incurred claims depending on the frequency and severity of catastrophes claims in any one accident year.
The information about incurred and paid claims development for the years ended December 31, 2016 to December 31, 2024 is presented as supplementary information.
The Cumulative Number of Reported Claims is shown only for Insurance Casualty as it is impractical to provide the information for the remaining groups. The reinsurance groups each include pro rata contracts for which ceding companies provide only summary information via a bordereau. This summary information does not include the number of reported claims underlying the paid and reported losses. Therefore, it is not possible to provide this information. The Insurance Property group includes Accident and Health insurance business. This business is written via a master contract and individual claim counts are not provided. This business represents a significant enough portion of the business in the Insurance Property group so that including the number of reported claims for the remaining business would distort any analytics performed on the group.
The Cumulative Number of Reported Claims shown for the Insurance Casualty is determined by claim and line of business. For example, a claim event with three claimants in the same line of business is a single claim. However, a claim event with a single claimant that spans two lines of business contributes two claims.
F-29
Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated statement of financial position is as follows:
| December 31, 2025 | |||||
| (Dollars in millions) | |||||
| Net outstanding liabilities | |||||
| Reinsurance Casualty | $ | 14,048 | |||
| Reinsurance Property | 7,423 | ||||
| Insurance Casualty | 6,597 | ||||
| Insurance Property | 983 | ||||
| Liabilities for unpaid claims and claim adjustment expenses, net of reinsurance (1) | 29,052 | ||||
| Reinsurance recoverable on unpaid claims | |||||
| Reinsurance Casualty | 152 | ||||
| Reinsurance Property | 901 | ||||
| Insurance Casualty | 2,094 | ||||
| Insurance Property | 314 | ||||
| Total reinsurance recoverable on unpaid claims (1), (3) | 3,461 | ||||
| Unallocated claims adjustment expenses | 360 | ||||
| Other (2) | 1,439 | ||||
| 1,799 | |||||
| Total gross liability for unpaid claims and claim adjustment expense | $ | 34,312 |
(Some amounts may not reconcile due to rounding.)
(1) Amounts disclosed are for reinsurance and insurance reportable segments.
(2) The other amount is primarily comprised of the Other segment, which includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses.
(3) This amount excludes the unpaid recoverable of the adverse development reinsurance agreements of $1,253 million as of December 31, 2025.
Adverse Development Reinsurance Agreements
Effective October 1, 2025, the Company through its subsidiaries Everest Re and Bermuda Re (collectively, the “Ceding Companies”) (1) entered into an adverse development reinsurance agreement (the “State National Reinsurance Agreement”) with State National Insurance Company, Inc. (“State National Reinsurer”) and (2) entered into an adverse development reinsurance agreement (the “MS Transverse Reinsurance Agreement”) with MS Transverse Insurance Company (“MS Transverse Reinsurer”) (collectively the “Reinsurers”). The Reinsurance Agreements are supported on a retrocessional basis by Longtail Re, an affiliate of Stone Ridge Capital.
The agreements reinsure potential adverse loss development for accident years 2024 and prior arising out of the Ceding Companies’ North American liabilities within the Insurance and Other segments (“Subject Business”), subject to exclusions for certain liabilities, including among others those related to the Asbestos and Environmental reserves included in the Other segment. The carried reserves held for the Subject Business, pursuant to the Reinsurance Agreements, were $5.4 billion as of September 30, 2025 and $5.0 billion as of December 31, 2025, respectively.
Under the State National Reinsurance Agreement, the Company paid a reinsurance premium of $1.3 billion, including interest, to State National Reinsurer to assume $1.3 billion of carried reserves as of September 30, 2025, and potential subsequent adverse development for net paid losses on an approximately 85.7 percent coinsurance basis up to an aggregate limit of $600 million above the Company’s net carried reserves for the Subject Business.
Under the State National Reinsurance Agreement $250 million of the reinsurance premium was placed into a funds withheld collateral trust account as security for State National Reinsurer’s claim payment obligations to the Company.
Under the MS Transverse Reinsurance Agreement, the Company paid a reinsurance premium of $122 million to MS Transverse Reinsurer to assume potential subsequent adverse development for net paid losses on an 80 percent
F-30
coinsurance basis up to an aggregate limit of $400 million. The $122 million payment to MS Transverse Reinsurer exceeds the retroactive reinsured liabilities and represents excess compensation for the uncertainty of future claims development, as a result the Company recognized an immediate pre-tax loss of $122 million in Incurred losses and loss adjustment expenses in the Company’s consolidated statement of operations. Mitsui Sumitomo Insurance Company Limited, the parent of MS Transverse Reinsurer, has provided a parental guarantee to secure its obligations under the agreement.
The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions.
As of December 31, 2025, the Company had a deferred gain of $3 million. The deferred gain would be recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. The total covered losses ceded to State National Reinsurer were $1,253 million and the aggregated unexpired limit was $597 million and $400 million for State National Reinsurer and MS Transverse Reinsurer, respectively.
Prior Year Development
The following table presents net prior year development before the adverse development cover reinsurance agreements (“ADC”) cessions for the year ended December 31, 2025:
| (Dollars in millions) | Prior Year Development Net of External Reinsurance Before ADC Cessions (1) | |||||||||||||||||||
| Reinsurance - Casualty Business | $ | 456 | ||||||||||||||||||
| Reinsurance - Property Business | (428) | |||||||||||||||||||
| Insurance - Casualty Business | 474 | |||||||||||||||||||
| Insurance - Property Business | (113) | |||||||||||||||||||
| Subtotal, adjusted pre-tax basis | $ | 389 | ||||||||||||||||||
(1) Excluding the impact of:
- Our Other segment which has $146 million of prior year development.
- $122 million of excess compensation for the uncertainty of future claims development of which $105 million is from our Insurance segment and $17 million from our Other segment.
F-31
The following tables present the ultimate loss and allocated LAE and the paid loss and allocated LAE, net of reinsurance for casualty and property, as well as the average annual percentage payout of incurred claims by age, net of reinsurance for each of our disclosed lines of business.
Reinsurance - Casualty Business
| At December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, | Total of IBNR Liabilities Plus Expected Development on Reported Claims | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 798 | $ | 880 | $ | 877 | $ | 872 | $ | 947 | $ | 949 | $ | 980 | $ | 1,009 | $ | 1,032 | $ | 1,055 | $ | 37 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 880 | 840 | 847 | 928 | 936 | 992 | 1,056 | 1,084 | 1,156 | 50 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 1,464 | 1,462 | 1,539 | 1,569 | 1,638 | 1,734 | 1,791 | 1,686 | 93 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 1,785 | 1,850 | 1,853 | 1,877 | 1,918 | 1,978 | 1,980 | 255 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 1,977 | 1,949 | 1,928 | 1,889 | 1,932 | 1,899 | 349 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2,505 | 2,501 | 2,441 | 2,532 | 2,370 | 748 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2,959 | 2,917 | 2,968 | 3,098 | 1,439 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2,993 | 3,158 | 3,276 | 1,927 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 3,143 | 3,237 | 2,434 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 3,228 | 2,760 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 22,986 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
| Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 93 | $ | 195 | $ | 330 | $ | 437 | $ | 552 | $ | 627 | $ | 706 | $ | 775 | $ | 840 | $ | 903 | ||||||||||||||||||||||||||||||||||||||||||
| 2017 | 83 | 192 | 325 | 466 | 582 | 692 | 802 | 931 | 1,020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 200 | 304 | 507 | 665 | 837 | 1,017 | 1,224 | 1,347 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 251 | 375 | 548 | 740 | 969 | 1,240 | 1,424 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 210 | 323 | 505 | 740 | 1,009 | 1,246 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 229 | 327 | 552 | 858 | 1,194 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 220 | 388 | 693 | 1,104 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 211 | 433 | 832 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 236 | 485 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 268 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 9,824 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All outstanding liabilities prior to 2016, net of reinsurance | 886 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for claims and claim adjustment expenses, net of reinsurance | $ | 14,048 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Casualty | 8.7 | % | 6.5 | % | 10.6 | % | 11.7 | % | 12.2 | % | 11.2 | % | 9.9 | % | 8.2 | % | 6.9 | % | 6.0 | % |
F-32
Reinsurance - Property Business
| At December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, | Total of IBNR Liabilities Plus Expected Development on Reported Claims | Cumulative Number of Reported Claims | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 1,711 | $ | 1,539 | $ | 1,574 | $ | 1,568 | $ | 1,546 | $ | 1,547 | $ | 1,543 | $ | 1,545 | $ | 1,539 | $ | 1,542 | $ | 3 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 2,802 | 3,425 | 3,536 | 3,664 | 3,710 | 3,720 | 3,734 | 3,753 | 3,817 | 5 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 2,641 | 2,516 | 2,518 | 2,456 | 2,409 | 2,394 | 2,429 | 2,532 | 60 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2,111 | 2,142 | 2,087 | 1,972 | 1,975 | 2,026 | 2,107 | 62 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2,448 | 2,521 | 2,465 | 2,437 | 2,439 | 2,582 | 65 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2,802 | 2,828 | 2,750 | 2,639 | 2,749 | 83 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 3,313 | 2,991 | 2,697 | 2,601 | 97 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2,870 | 2,493 | 2,217 | 256 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 4,056 | 3,763 | 1,254 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 4,505 | 2,354 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 28,415 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
| Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 445 | $ | 855 | $ | 1,130 | $ | 1,239 | $ | 1,289 | $ | 1,312 | $ | 1,320 | $ | 1,332 | $ | 1,345 | $ | 1,346 | ||||||||||||||||||||||||||||||||||||||||||
| 2017 | 905 | 1,581 | 1,843 | 2,064 | 2,171 | 2,203 | 2,248 | 2,377 | 2,384 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 1,254 | 2,847 | 3,566 | 3,969 | 4,179 | 4,324 | 4,511 | 4,511 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 465 | 1,077 | 1,374 | 1,501 | 1,601 | 1,733 | 1,748 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 272 | 992 | 1,409 | 1,676 | 1,967 | 2,059 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 630 | 1,362 | 1,825 | 2,153 | 2,360 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 769 | 1,613 | 2,177 | 2,419 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 609 | 1,297 | 1,721 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 761 | 1,443 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 1,020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 21,011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All outstanding liabilities prior to 2016, net of reinsurance | 20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for claims and claim adjustment expenses, net of reinsurance | $ | 7,423 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Property | 25.1 | % | 29.1 | % | 17.0 | % | 9.5 | % | 6.3 | % | 3.4 | % | 2.6 | % | 1.8 | % | 0.4 | % | — | % |
F-33
Insurance - Casualty Business
| At December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, | 2025 Prior Year Development Excluding the Impact of ADC | Total of IBNR Liabilities Plus Expected Development on Reported Claims | Cumulative Number of Reported Claims | Incurred Impact of ADC | IBNR Impact of ADC | 2025 (Net of Impact of ADC) | Total of IBNR Liabilities Net of Impact of ADC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 509 | $ | 495 | $ | 539 | $ | 558 | $ | 489 | $ | 474 | $ | 478 | $ | 488 | $ | 493 | $ | 507 | $ | 13 | $ | 17 | 31,277 | $ | 9 | $ | 3 | $ | 498 | $ | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 551 | 558 | 568 | 585 | 559 | 559 | 584 | 580 | 596 | 15 | 31 | 34,849 | 11 | 5 | 584 | 26 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 644 | 649 | 679 | 685 | 697 | 772 | 810 | 832 | 21 | 43 | 34,920 | 16 | 6 | 816 | 37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 776 | 778 | 798 | 804 | 954 | 1,089 | 1,080 | (9) | 98 | 37,936 | 37 | 19 | 1,044 | 79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 913 | 990 | 978 | 975 | 1,095 | 1,080 | (15) | 163 | 39,683 | 53 | 32 | 1,027 | 131 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 1,119 | 1,161 | 1,154 | 1,353 | 1,343 | (10) | 310 | 44,838 | 102 | 63 | 1,241 | 246 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 1,243 | 1,241 | 1,597 | 1,720 | 124 | 591 | 48,143 | 191 | 130 | 1,530 | 460 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 1,425 | 1,739 | 1,931 | 191 | 891 | 47,258 | 274 | 191 | 1,657 | 701 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 1,792 | 1,935 | 143 | 1,251 | 43,636 | 322 | 257 | 1,612 | 994 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 1,698 | — | 1,458 | 30,732 | — | — | 1,698 | 1,458 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 12,721 | $ | 474 | $ | 4,853 | $ | 1,015 | $ | 706 | $ | 11,706 | $ | 4,148 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below | (6,227) | — | (6,227) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for losses and loss adjustment expenses and prior year development before accident year 2016, net of reinsurance | 104 | — | 27 | 32 | 7 | 72 | 20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance | $ | 6,597 | $ | 474 | $ | 4,880 | $ | 1,046 | $ | 713 | $ | 5,551 | $ | 4,167 |
(Some amounts may not reconcile due to rounding.)
| Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 53 | $ | 149 | $ | 253 | $ | 314 | $ | 362 | $ | 398 | $ | 430 | $ | 448 | $ | 460 | $ | 471 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 49 | 165 | 263 | 343 | 404 | 467 | 493 | 526 | 537 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 61 | 196 | 296 | 407 | 539 | 623 | 678 | 722 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 69 | 218 | 364 | 498 | 646 | 828 | 901 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 63 | 229 | 372 | 531 | 659 | 808 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 105 | 246 | 428 | 654 | 855 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 79 | 282 | 577 | 859 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 93 | 308 | 642 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 85 | 347 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 86 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 6,227 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All outstanding liabilities prior to 2016, net of reinsurance | 104 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for claims and claim adjustment expenses, net of reinsurance | $ | 6,597 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Casualty | 6.4 | % | 14.3 | % | 15.3 | % | 14.2 | % | 12.7 | % | 11.5 | % | 6.1 | % | 4.6 | % | 2.6 | % | 1.9 | % |
F-34
Insurance - Property Business
| At December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ultimate Incurred Loss and Allocated Loss Adjustment Expenses, Net of reinsurance Years Ended December 31, | 2025 Prior Year Development Excluding the Impact of ADC | Total of IBNR Liabilities Plus Expected Development on Reported Claims | Cumulative Number of Reported Claims | Incurred Impact of ADC | IBNR Impact of ADC | 2025 (Net of Impact of ADC) | Total of IBNR Liabilities Net of Impact of ADC | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 289 | $ | 280 | $ | 284 | $ | 292 | $ | 297 | $ | 299 | $ | 300 | $ | 302 | $ | 302 | $ | 300 | $ | (2) | $ | — | N/A | $ | — | $ | — | $ | 300 | $ | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 486 | 494 | 486 | 494 | 496 | 508 | 509 | 506 | 505 | (1) | — | N/A | — | — | 505 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 403 | 399 | 401 | 410 | 428 | 436 | 435 | 432 | (3) | 1 | N/A | — | — | 432 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 348 | 352 | 350 | 365 | 380 | 375 | 372 | (3) | 2 | N/A | — | — | 372 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 602 | 508 | 498 | 503 | 492 | 490 | (2) | 6 | N/A | 1 | — | 489 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 647 | 586 | 602 | 628 | 603 | (25) | 13 | N/A | 2 | 1 | 601 | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 771 | 797 | 698 | 661 | (37) | 19 | N/A | 4 | 2 | 656 | 16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 717 | 669 | 635 | (35) | 33 | N/A | 7 | 4 | 628 | 29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 598 | 592 | (6) | 53 | N/A | 14 | 6 | 578 | 46 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 900 | — | 410 | N/A | — | — | 900 | 410 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 5,490 | $ | (113) | $ | 536 | $ | 29 | $ | 14 | $ | 5,461 | $ | 522 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance from the table below | (4,507) | — | (4,507) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for losses and loss adjustment expenses and prior year development before accident year 2016, net of reinsurance | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for losses and loss adjustment expenses and prior year loss development, net of reinsurance | $ | 983 | $ | (113) | $ | 537 | $ | 29 | $ | 14 | $ | 954 | $ | 522 |
(Some amounts may not reconcile due to rounding.)
| Cumulative Paid Loss and Allocated Loss Adjustment Expenses, Net of Reinsurance Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accident Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 167 | $ | 248 | $ | 272 | $ | 290 | $ | 296 | $ | 297 | $ | 299 | $ | 300 | $ | 300 | $ | 300 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 176 | 416 | 452 | 477 | 493 | 505 | 504 | 505 | 505 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | 240 | 356 | 376 | 407 | 424 | 429 | 431 | 431 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 226 | 313 | 335 | 355 | 363 | 368 | 370 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 292 | 413 | 450 | 465 | 473 | 478 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 325 | 482 | 544 | 565 | 576 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 377 | 567 | 594 | 615 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 400 | 503 | 565 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2024 | 200 | 379 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 289 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| $ | 4,507 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All outstanding liabilities prior to 2016, net of reinsurance | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities for claims and claim adjustment expenses, net of reinsurance | 983 |
(Some amounts may not reconcile due to rounding.)
| Average Annual Percentage Payout of Incurred Loss by Age, Net of Reinsurance (unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Property | 54.0 | % | 30.1 | % | 7.2 | % | 4.5 | % | 2.5 | % | 1.4 | % | 0.3 | % | — | % | — | % | — | % |
Reserving Methodology
The Company maintains reserves equal to management’s estimated ultimate liability for losses and LAE for reported and unreported claims for our insurance and reinsurance businesses. Because reserves are based on estimates of ultimate losses and LAE by underwriting or accident year, the Company uses a variety of statistical and actuarial techniques to monitor reserve adequacy over time, evaluate new information as it becomes known and adjust reserves whenever an adjustment appears warranted. The Company considers many factors when setting reserves including: (1) exposure base and projected ultimate premium; (2) expected loss ratios by product and class of business, which are developed collaboratively by underwriters and actuaries; (3) actuarial methodologies and assumptions which analyze loss reporting and payment experience, size of loss distributions, reports from ceding companies and historical trends, such as reserving
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patterns, loss payments and product mix; (4) current legal interpretations of coverage and liability; and (5) economic conditions including but not limited to social inflation. Management’s best estimate is developed through collaboration with actuarial, underwriting, claims, legal and finance departments and culminates with the input of reserve committees. Each segment reserve committee includes the participation of the relevant parties from actuarial, finance, claims and segment senior management. Reserves are further reviewed by Everest’s Chief Reserving Actuary and senior management. The objective of such process is to determine a single best estimate viewed by management to be the best estimate of its ultimate loss liability. Our insurance and reinsurance loss and LAE reserves represent management’s best estimate of our ultimate liability. Actual loss and LAE ultimately paid may deviate, perhaps substantially, from such reserves. Net income will be impacted in a period in which the change in estimated ultimate loss and LAE is recorded.
The detailed data required to evaluate ultimate losses for the Company’s insurance business is accumulated from its underwriting and claim systems. Reserving for reinsurance requires evaluation of loss information received from ceding companies. Ceding companies report losses in many forms depending on the type of contract and the agreed or contractual reporting requirements. Generally, pro rata contracts require the submission of a monthly/quarterly account, which includes premium and loss activity for the period with corresponding reserves as established by the ceding company. This information is recorded in the Company’s records. For certain pro rata contracts, the Company may require a detailed loss report for claims that exceed a certain dollar threshold or relate to a particular type of loss. Excess of loss and facultative contracts generally require individual loss reporting with precautionary notices provided when a loss reaches a significant percentage of the attachment point of the contract or when certain causes of loss or types of injury occur. Experienced Claims staff handle individual loss reports and supporting claim information. Based on evaluation of a claim, the Company may establish additional case reserves in addition to the case reserves reported by the ceding company. To ensure ceding companies are submitting required and accurate data, Everest’s Underwriting, Claim, Reinsurance Accounting and Internal Audit departments perform various reviews of ceding companies, particularly larger ceding companies, including on-site audits.
The Company segments both reinsurance and insurance reserves into exposure groupings for actuarial analysis. The Company assigns business to exposure groupings so that the underlying exposures have reasonably homogeneous loss development characteristics and are large enough to facilitate credible estimation of ultimate losses. The Company periodically reviews its exposure groupings and may change groupings over time as business changes. The Company currently uses approximately 250 exposure groupings to develop reserve estimates. One of the key selection characteristics for the exposure groupings is the historical duration of the claims settlement process. Business in which claims are reported and settled relatively quickly are commonly referred to as short tail lines, principally property lines. Casualty claims tend to take longer to be reported and settled and casualty lines are generally referred to as long tail lines. Estimates of ultimate losses for shorter tail lines, with the exception of loss estimates for large catastrophic events, generally exhibit less uncertainty than those for the longer tail lines.
The Company uses a variety of actuarial methodologies, such as the expected loss ratio method, chain ladder methods and Bornhuetter-Ferguson methods, supplemented by judgment where appropriate, to estimate ultimate loss and LAE for each exposure group.
Expected Loss Ratio Method: The expected loss ratio method uses earned premium times an expected loss ratio to calculate ultimate losses for a given underwriting or accident year. This method relies entirely on expectation to project ultimate losses with no consideration given to actual losses. As such, it may be appropriate for an immature underwriting or accident year where few, if any, losses have been reported or paid, but less appropriate for a more mature year.
Chain Ladder Method: Chain ladder methods use a standard loss development triangle to project ultimate losses. Age-to-age development factors are selected for each development period and combined to calculate age-to-ultimate development factors which are then applied to paid or reported losses to project ultimate losses. This method relies entirely on actual paid or reported losses to project ultimate losses. No other factors such as changes in pricing or other expectations are taken into account. It is most appropriate for groups with homogeneous, stable experience where past development patterns are expected to continue in the future. It is least appropriate for groups which have changed significantly over time, or which are more volatile.
Bornhuetter-Ferguson Method: The Bornhuetter-Ferguson method is a combination of the expected loss ratio method and the chain ladder method. Ultimate losses are projected based partly on actual paid or reported losses and partly on expectation. IBNR reserves are calculated using earned premium, an a priori loss ratio and selected age-to-age development factors and added to actual reported (paid) losses to determine ultimate losses. It is more responsive to actual reported or paid development than the expected loss ratio method but less responsive than the chain ladder method.
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For both short and long tail lines, the Company supplements these general approaches with analytically based judgments. Although the Company uses similar actuarial methods for both short tail and long tail lines, the faster reporting of experience for the short tail lines allows the Company to have greater confidence in its estimates of ultimate losses at an earlier stage than for long tail lines. For immature underwriting or accident years, the initial expected loss ratios are key inputs that involve management’s judgment and are based on a variety of factors, including: (1) expected loss ratios developed during the Company’s pricing process; (2) historical loss ratios adjusted for rate change and trend; and (3) industry benchmarks for similar business. These judgments take into account management’s view of past, current and future factors that may influence ultimate losses, including: (1) market conditions; (2) changes in the business underwritten; (3) changes in timing of the emergence of claims; and (4) other factors. The determination of when reported losses are sufficient and credible to warrant selection of an ultimate loss ratio different from the initial expected loss ratio also requires judgment.
Carried reserves at each reporting date are the management’s best estimate of ultimate unpaid losses and LAE at that date. The Company completes detailed reserve studies for each exposure group annually for both reinsurance and insurance operations. The completed annual reserve studies are “rolled-forward” for each accounting period until the subsequent reserve study is completed. Analyzing the roll-forward process involves comparing actual reported losses to expected losses based on the most recent reserve study. The Company analyzes significant variances between actual and expected losses and also considers recent market, underwriting and management criteria to determine management’s best estimate of ultimate unpaid losses and LAE.
Certain reserves, including losses from widespread catastrophic events, cannot be estimated using traditional actuarial methods. Rather, loss and LAE reserves are estimated by management by completing an in-depth analysis of the individual contracts which may potentially be impacted by the loss. The analysis uses inputs from various sources and methodology, to build up a comprehensive perspective. Such analysis generally involves: (1) estimating the size of insured industry losses; (2) reviewing portfolios to identify contracts which are exposed; (3) reviewing information reported or otherwise provided by customers and brokers; (4) discussing the loss with customers and brokers; and (5) estimating the ultimate expected cost to settle all claims and administrative costs arising from the loss on a contract-by-contract basis and in aggregate for the event. Due to the inherent uniqueness or specific nature of a catastrophic event, each event has its own unique assessment, and different weights may be applied to various inputs based on management’s judgment. Once a loss has occurred, during the then current reporting period, the Company records its best estimate of the ultimate expected cost to settle all claims arising from the loss. The Company’s estimate of loss and LAE reserves is then determined by deducting cumulative paid losses from its estimate of the ultimate expected loss. The Company’s estimate of IBNR is determined by deducting cumulative paid losses, case reserves and additional case reserves from its estimate of the ultimate expected loss.
Because catastrophe losses are typically due to prominent, public events such as hurricanes and earthquakes, the Company is often able to use independent reports as part of its loss reserve estimation process. The Company also reviews catastrophe bulletins published by various statistical modeling agencies to assist in determining the size of the industry loss, although these reports may not be available for some time after an event. For smaller events including localized severe weather events such as windstorms, hail, ice, snow, flooding, freezing and tornadoes, which are not necessarily prominent, public occurrences, the Company initially places greater reliance on catastrophe bulletins published by statistical modeling agencies to assist in determining what events occurred during the reporting period than the Company does for large events. This includes reviewing catastrophe bulletins published by Property Claim Services for U.S. catastrophes. The Company sets its initial estimates of reserves for loss and LAE for these smaller events based on a combination of its historical market share for these types of losses and the estimate of the total insured industry property losses as reported by statistical modeling agencies, although management may make significant adjustments based on the Company’s current exposure to the geographic region involved as well as the size of the loss and the peril involved.
In general, reserves for the Company’s more recent large losses are subject to greater uncertainty and, therefore, greater potential variability, and are likely to experience material changes from one period to the next. This is due to the uncertainty as to the size of the industry losses, uncertainty as to which contracts have been exposed, uncertainty due to complex legal and coverage issues that can arise out of large or complex losses and uncertainty as to the magnitude of losses and LAE incurred by the Company’s customers. As the Company’s losses age, more information becomes available, and the Company believes its estimates become more certain.
The Company continues to receive claims under expired insurance and reinsurance contracts asserting injuries and/or damages relating to or resulting from environmental pollution and hazardous substances, including asbestos. Environmental claims typically assert liability for (a) the mitigation or remediation of environmental contamination or (b) bodily injury or property damage caused by the release of hazardous substances into the land, air or water. Asbestos
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claims typically assert liability for bodily injury from exposure to asbestos or for property damage resulting from asbestos or products containing asbestos. The results of run-off A&E exposures are included within the Company’s Other Segment.
Our reserves include an estimate of our ultimate liability for A&E claims. There are significant uncertainties surrounding our estimates of our potential losses from A&E claims. Among the uncertainties are: (a) potentially long waiting periods between exposure and manifestation of any bodily injury or property damage; (b) difficulty in identifying sources of asbestos or environmental contamination; (c) difficulty in properly allocating responsibility and/or liability for asbestos or environmental damage; (d) changes in underlying laws and judicial interpretation of those laws; (e) the potential for an asbestos or environmental claim to involve many insurance providers over many policy periods; (f) questions concerning interpretation and application of insurance and reinsurance coverage; and (g) uncertainty regarding the number and identity of insureds with potential asbestos or environmental exposure. Due to the uncertainties discussed above, the ultimate losses attributable to A&E, and particularly asbestos, may be subject to more variability than are non-A&E reserves.
The Company’s reserves include an estimate of the Company’s ultimate liability for A&E claims. The Company’s A&E liabilities emanate from Mt. McKinley Insurance Company’s (“Mt. McKinley”), a former wholly owned subsidiary that was sold in 2015, direct insurance business and Everest Re’s assumed reinsurance business. All of the contracts of insurance and reinsurance, under which the Company has received claims during the past three years, expired more than 20 years ago. There are significant uncertainties surrounding the Company’s reserves for its A&E losses.
A&E exposures represent a separate exposure group for monitoring and evaluating reserve adequacy. The following table summarizes incurred losses with respect to A&E reserves on both a gross and net of reinsurance basis for the periods indicated:
| At December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Gross basis: | |||||||||||||||||
| Beginning of period reserves | $ | 260 | $ | 247 | $ | 278 | |||||||||||
| Incurred losses | 2 | 62 | — | ||||||||||||||
| Paid losses | (52) | (49) | (31) | ||||||||||||||
| End of period reserves | $ | 209 | $ | 260 | $ | 247 | |||||||||||
| Net basis: | |||||||||||||||||
| Beginning of period reserves | $ | 242 | $ | 232 | $ | 257 | |||||||||||
| Incurred losses | — | 54 | — | ||||||||||||||
| Paid losses | (49) | (43) | (25) | ||||||||||||||
| End of period reserves | $ | 193 | $ | 242 | $ | 232 |
(Some amounts may not reconcile due to rounding.)
In 2015, the Company sold Mt. McKinley to Clearwater Insurance Company (“Clearwater”), a subsidiary of Fairfax Financial. Concurrently with the closing, the Company entered into a retrocession treaty with an affiliate of Clearwater. Per the retrocession treaty, the Company retroceded 100% of the liabilities associated with certain Mt. McKinley policies, which related entirely to A&E business and had been reinsured by Bermuda Re. As consideration for entering into the retrocession treaty, Everest Re Bermuda transferred cash of $140 million, an amount equal to the net loss reserves as of the closing date. The maximum liability retroceded under the retrocession treaty will be $440 million, equal to the retrocession payment plus $300 million. The Company will retain liability for any amounts exceeding the maximum liability retroceded under the retrocession treaty.
On December 20, 2019, the retrocession treaty was amended and included a partial commutation. As a result of this amendment and partial commutation, gross A&E reserves and correspondingly reinsurance receivable were reduced by $43 million. In addition, the maximum liability permitted to be retroceded increased to $450 million.
Reinsurance Recoverables.
Reinsurance recoverables for both paid and unpaid losses totaled $5.1 billion and $3.1 billion at December 31, 2025 and December 31, 2024, respectively. At December 31, 2025, in connection with the ADC reinsurance agreements, $1,253 million was unpaid recoverable from State National Insurance Company, Inc. Additionally at December 31, 2025, $411 million, or 8.1%, was recoverable from Mt. Logan Re collateralized segregated accounts and $289 million, or 5.7%, was recoverable from Munich Reinsurance America, Inc. No other retrocessionaire accounted for more than 5% of our recoverables.
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5. REINSURANCE
The Company utilizes reinsurance agreements to reduce its exposure to large claims and catastrophic loss occurrences. These agreements provide for recovery from reinsurers of a portion of losses and LAE under certain circumstances without relieving the Company of its underlying obligations to the policyholders. The Company's procedures include carefully selecting its reinsurers, structuring agreements to provide collateral funds where necessary and regularly monitoring the financial condition and ratings of its reinsurers. The Company may hold partial collateral, including letters of credit and funds held, under these agreements. See also Note 1E, Note 4 and Note 11 of the Notes to these Consolidated Financial Statements.
In placing reinsurance, the Company considers the nature of the risk reinsured, including the expected liability payout duration and establishes limits tiered by reinsurer credit rating. Failure of reinsurers to honor their obligations could result in losses to the Company. See Note 1E of the Notes to these Consolidated Financial Statements for discussion of allowance on reinsurance recoverables.
Effective October 1, 2025, the Company’s subsidiaries entered into two adverse development reinsurance agreements, both of which are accounted for as retroactive reinsurance. The agreements reinsure potential adverse loss development for accident years 2024 and prior arising out of the ceding companies’ North American liabilities in the Insurance and Other segment, subject to exclusions for certain liabilities, including among others those related to the A&E reserves included in the Other segment. For additional details on the ADC agreements, refer to Note 4 - Reserve for Losses and Loss Adjustment Expenses.
Insurance companies, including reinsurers, are regulated and hold risk-based capital to mitigate the risk of loss due to economic factors and other risks. Non-U.S. reinsurers are either subject to a capital regime substantively equivalent to domestic insurers or we hold collateral to support collection of reinsurance receivable. As a result, there is limited history of losses from insurer defaults.
Premiums written and earned and incurred losses and LAE are comprised of the following for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Written premiums: | |||||||||||||||||
| Direct | $ | 4,641 | $ | 5,115 | $ | 5,031 | |||||||||||
| Assumed | 13,065 | 13,117 | 11,606 | ||||||||||||||
| Ceded | (2,193) | (2,418) | (1,907) | ||||||||||||||
| Net written premiums | $ | 15,513 | $ | 15,814 | $ | 14,730 | |||||||||||
| Premiums earned: | |||||||||||||||||
| Direct | $ | 4,921 | $ | 4,977 | $ | 4,733 | |||||||||||
| Assumed | 13,067 | 12,458 | 10,518 | ||||||||||||||
| Ceded | (2,429) | (2,248) | (1,807) | ||||||||||||||
| Net premiums earned | $ | 15,560 | $ | 15,187 | $ | 13,443 | |||||||||||
| Incurred losses and LAE: | |||||||||||||||||
| Direct | $ | 4,352 | $ | 5,465 | $ | 3,209 | |||||||||||
| Assumed | 8,083 | 7,464 | 5,870 | ||||||||||||||
| Ceded | (1,698) | (1,624) | (651) | ||||||||||||||
| Retroactive reinsurance adjustment (1) | 122 | — | — | ||||||||||||||
| Net incurred losses and LAE | $ | 10,859 | $ | 11,305 | $ | 8,427 |
(Some amounts may not reconcile due to rounding.)
(1) The consideration paid ($1.4 billion) exceeds the ceded loss reserves at the inception of the Agreement ($1.3 billion), as a result the Company recognized an immediate pre-tax loss of $122 million in earnings, in accordance with retroactive reinsurance accounting guidance. The Company recognized the loss by writing off the reinsurance recoverable of $122 million, which represents excess compensation for the uncertainty of future claims development, and is not a component of our best estimate of loss reserves.
6. SALE OF RENEWAL RIGHTS
On October 26, 2025, the Company entered into a Master Transaction Agreement (the “ROW Master Transaction Agreement”) with American International Group, Inc. (the “Buyer”), pursuant to which the Company agreed to cause (i) Everest International Australia and Singapore branches, (ii) Ireland Insurance UK branch and (iii) Everest National, Everest Indemnity, Everest Security, Everest Premier and Everest Denali, Everest Assurance and Everest Reinsurance Company to
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sell to Buyer the renewal rights in respect of certain lines of commercial retail insurance business, subject to certain exclusions as set forth in the ROW Master Transaction Agreement, for an aggregate purchase price of $252 million.
Pursuant to the ROW Master Transaction Agreement, if the gross written premium paid and payable to the Buyer in respect to the Aggregate Renewed Premiums (as defined in the ROW Master Transaction Agreement) from the closing date of the transaction to December 31, 2027 are less than 80% of the aggregate premiums for the year ended December 31, 2025, the Company will reimburse a portion of the aggregate purchase price under the ROW Master Transaction Agreement to the Buyer based on the relative percentage of such 2025 premiums renewed, which amount shall not exceed $70 million.
The closing of the transaction pursuant to the ROW Master Transaction Agreement occurred on October 26, 2025. Upon closing of the transaction, the Company recognized a $204 million gain on sale included in other income (expense) in its consolidated statements of operations for the year ended December 31, 2025. The remaining $47 million was recorded as a liability within Other liabilities on the Company’s consolidated balance sheet as of December 31, 2025 due to significant uncertainty related to factors outside the Company's influence, including the Buyer's underwriting decisions and the period until resolution. The Company also received and recognized $30 million for originating and structuring the transaction in other income (expense) in its consolidated statements of operations for the year ended December 31, 2025.
In addition, on October 26, 2025, the Company entered into a Master Transaction Agreement (the “EU Master Transaction Agreement,” and together with the ROW Master Transaction Agreement, the “Master Transaction Agreements”), between the Company and the Buyer, pursuant to which the Company agreed to cause Ireland Insurance to sell to the Buyer, the renewal rights in respect of certain lines of commercial retail insurance business written by Ireland Insurance in certain countries in the European Union, for an aggregate purchase price of $49 million.
The closing of the transaction pursuant to the EU Master Transaction Agreement is subject to the receipt of antitrust approvals from the European Commission and other customary closing conditions, which occurred on December 10, 2025. Upon closing of the transaction, the Company recognized a $55 million gain on sale included in other income (expense) in its consolidated statements of operations for the year ended December 31, 2025.
Under the Master Transaction Agreements, the Buyer has also agreed to pay the Company a total of $10 million per month for nine months for specified transition services starting January 1, 2026.
In addition, as a result of the Master Transaction Agreements, the Company also recorded severance and impairments of capitalized software in the amount of $28 million and $83 million, respectively, for the year ended December 31, 2025. Legal expenses and merger and acquisition fees related to the sale were $21 million for the year ended December 31, 2025. These expenses were recorded in other income (expense) in its consolidated statements of operations for the year ended December 31, 2025.
7. SEGMENT REPORTING
The Company conducts business through two reportable segments: Reinsurance and Insurance. The Reinsurance operation writes worldwide property and casualty reinsurance and specialty lines of business, on both a treaty and facultative basis, through reinsurance brokers, as well as directly with ceding companies. Business is written in the U.S., Bermuda, and Ireland offices, as well as, through branches in Canada, India, Singapore, the United Kingdom (“U.K.”) and Switzerland. The Insurance operation writes property and casualty insurance directly and through brokers, including for surplus lines, and general agents within the U.S., Bermuda, Canada, Europe, Singapore and South America through its offices in the U.S., Bermuda, Canada, Chile, Colombia, Mexico, Singapore, the U.K., Ireland, and branches located in Australia, the U.K., the Netherlands, France, Germany, Italy and Spain. The two segments are managed independently, but conform with corporate guidelines with respect to pricing, risk management, control of aggregate catastrophe exposures, capital, investments and support operations.
Our two reportable segments each have executive leadership who are responsible for the overall performance of their respective segments and who are directly accountable to our chief operating decision maker (“CODM”), the Chief Executive Officer of Everest Group, Ltd., who is ultimately responsible for reviewing the business to assess performance, make operating decisions and allocate resources. We report the results of our operations consistent with the manner in which our CODM reviews the business.
During the fourth quarter of 2024, the Company revised its classification and presentation of certain run-off business, previously included within the Reinsurance and Insurance reportable segments, as part of a new segment called "Other".
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The Other segment includes the results of our sports and leisure business sold in October 2024, consisting of policies written prior to the sale and polices renewed and certain new business written on the Company’s paper post-sale. It also includes run-off A&E exposures, certain discontinued insurance programs primarily written prior to 2012 and certain discontinued insurance and reinsurance coverage classes. The Other segment does not generally sell insurance or reinsurance products but is responsible for the management of existing policies and settlement of related losses. These segment presentation changes have been reflected retrospectively within this Form 10-K, including Schedule III - Supplementary Insurance Information.
The Company does not review and evaluate the financial results of its segments based upon balance sheet data. Management generally monitors and evaluates the financial performance of these segments based upon their underwriting results. Underwriting results include earned premium less losses and LAE incurred, commission and brokerage expenses and other underwriting expenses. The Company measures its underwriting results using ratios, in particular, loss, commission and brokerage and other underwriting expense ratios, which, respectively, divide incurred losses, commissions and brokerage and other underwriting expenses by premiums earned. Management has determined that these measures are appropriate and align with how the business is managed. We continue to evaluate our segments as our business evolves and may further refine our segments and financial performance measures.
The following tables present segment underwriting results for the periods indicated:
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in millions) | Reinsurance | Insurance | Other | Total | |||||||||||||||||||
| Gross written premiums | $ | 12,825 | $ | 4,790 | $ | 91 | $ | 17,706 | |||||||||||||||
| Net written premiums | 11,791 | 3,638 | 84 | 15,513 | |||||||||||||||||||
| Premiums earned | $ | 11,732 | $ | 3,718 | $ | 111 | $ | 15,560 | |||||||||||||||
| Incurred losses and LAE | 7,517 | 3,050 | 292 | 10,859 | |||||||||||||||||||
| Commission and brokerage | 2,952 | 488 | 21 | 3,461 | |||||||||||||||||||
| Other underwriting expenses | 291 | 721 | 17 | 1,029 | |||||||||||||||||||
| Underwriting gain (loss) | $ | 972 | $ | (541) | $ | (220) | $ | 211 | |||||||||||||||
| Net investment income | 2,124 | ||||||||||||||||||||||
| Net gains (losses) on investments | (143) | ||||||||||||||||||||||
| Corporate expenses | (109) | ||||||||||||||||||||||
| Interest, fee and bond issue cost amortization expense | (151) | ||||||||||||||||||||||
| Other income (expense) | (45) | ||||||||||||||||||||||
| Income (loss) before taxes | $ | 1,887 |
| Year Ended December 31, 2024 | |||||||||||||||||||||||
| (Dollars in millions) | Reinsurance | Insurance | Other | Total | |||||||||||||||||||
| Gross written premiums | $ | 12,941 | $ | 5,078 | $ | 212 | $ | 18,232 | |||||||||||||||
| Net written premiums | 11,969 | 3,678 | 167 | 15,814 | |||||||||||||||||||
| Premiums earned | $ | 11,412 | $ | 3,579 | $ | 197 | $ | 15,187 | |||||||||||||||
| Incurred losses and LAE | 7,103 | 3,622 | 580 | 11,305 | |||||||||||||||||||
| Commission and brokerage | 2,837 | 439 | 24 | 3,300 | |||||||||||||||||||
| Other underwriting expenses | 290 | 615 | 33 | 938 | |||||||||||||||||||
| Underwriting gain (loss) | $ | 1,181 | $ | (1,097) | $ | (440) | $ | (356) | |||||||||||||||
| Net investment income | 1,954 | ||||||||||||||||||||||
| Net gains (losses) on investments | 19 | ||||||||||||||||||||||
| Corporate expenses | (95) | ||||||||||||||||||||||
| Interest, fee and bond issue cost amortization expense | (149) | ||||||||||||||||||||||
| Other income (expense) | 121 | ||||||||||||||||||||||
| Income (loss) before taxes | $ | 1,493 |
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| Year Ended December 31, 2023 | |||||||||||||||||||||||
| (Dollars in millions) | Reinsurance | Insurance | Other | Total | |||||||||||||||||||
| Gross written premiums | $ | 11,460 | $ | 4,888 | $ | 289 | $ | 16,637 | |||||||||||||||
| Net written premiums | 10,802 | 3,704 | 225 | 14,730 | |||||||||||||||||||
| Premiums earned | $ | 9,799 | $ | 3,420 | $ | 225 | $ | 13,443 | |||||||||||||||
| Incurred losses and LAE | 5,690 | 2,471 | 266 | 8,427 | |||||||||||||||||||
| Commission and brokerage | 2,520 | 410 | 22 | 2,952 | |||||||||||||||||||
| Other underwriting expenses | 254 | 556 | 35 | 846 | |||||||||||||||||||
| Underwriting gain (loss) | $ | 1,334 | $ | (18) | $ | (98) | $ | 1,219 | |||||||||||||||
| Net investment income | 1,434 | ||||||||||||||||||||||
| Net gains (losses) on investments | (276) | ||||||||||||||||||||||
| Corporate expenses | (73) | ||||||||||||||||||||||
| Interest, fee and bond issue cost amortization expense | (134) | ||||||||||||||||||||||
| Other income (expense) | (14) | ||||||||||||||||||||||
| Income (loss) before taxes | $ | 2,154 |
The following table below presents gross written premiums by geographic region. Allocations have been made on the basis of location of risk.
| United States | Europe | All other | |||||||||||||||
| 2025 | 56 | % | 27 | % | 17 | % | |||||||||||
| 2024 | 57 | % | 25 | % | 18 | % | |||||||||||
| 2023 | 58 | % | 24 | % | 18 | % |
Approximately 22.4%, 21.9% and 20.4% of the Company’s gross written premiums in 2025, 2024 and 2023, respectively, were sourced through the Company’s largest intermediary.
8. CREDIT FACILITIES
As of December 31, 2025, the Company has multiple active committed letter of credit facilities with a total commitment of up to $1.6 billion, as well as two additional credit facilities denominated in British Pound Sterling and Euros, with total commitments of up to £150 million and €75 million, respectively. The Company also has additional uncommitted letter of credit facilities of up to $240 million which may be accessible via written request and corresponding authorization from the applicable lender. There is no guarantee that the uncommitted capacity will be available to us on a future date.
The terms and outstanding amounts for each facility are discussed below. See Note 11 of the Notes to these Consolidated Financial Statements for collateral posted related to secured letters of credit.
Bermuda Re Wells Fargo Bilateral Letter of Credit Facility
Effective June 10, 2024, Everest Reinsurance (Bermuda) Ltd. (“Bermuda Re”) entered into a Second Amended and Restated Letter of Credit Facility agreement with Wells Fargo (the “Bermuda Re Wells Fargo Bilateral Letter of Credit Facility”). The agreement provides a commitment for the issuance of up to $500 million of secured letters of credit. Effective June 9, 2025, the Bermuda Re Wells Fargo Bilateral Letter of Credit Facility was amended to tranche the facility, extend the availability of committed issuance for two years, and to reduce the overall size of the facility. As of December 31, 2025, the amended Bermuda Re Wells Fargo Bilateral Letter of Credit Facility provides for the committed issuance of up to $175 million of unsecured letters of credit and $175 million of secured letters of credit.
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The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Wells Fargo Bank Bilateral LOC Facility - Secured Tranche | $ | 175 | $ | 141 | 12/31/2026 | $ | 500 | $ | 455 | 12/31/2025 | ||||||||||||||||||||||||||||
| Bermuda Re Wells Fargo Bank Bilateral LOC Facility - Unsecured Tranche | 175 | 140 | 12/31/2026 | |||||||||||||||||||||||||||||||||||
| Total Bermuda Re Wells Fargo Bank Bilateral LOC Facility | $ | 350 | $ | 280 | $ | 500 | $ | 455 |
(Some amounts may not reconcile due to rounding.)
Bermuda Re Citibank Letter of Credit Facility
Effective August 9, 2021, Bermuda Re entered into a letter of credit issuance facility with Citibank N.A. (the “Bermuda Re Citibank Letter of Credit Facility”). The Bermuda Re Citibank Letter of Credit Facility provides for the committed issuance of up to $230 million of secured letters of credit. In addition, the facility provided for the uncommitted issuance of up to $140 million, which may be accessible via written request by the Company and corresponding authorization from Citibank N.A. Effective December 23, 2025, the agreement was amended to extend the availability of committed issuance for an additional two years.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Citibank LOC Facility - Committed | $ | 230 | $ | — | 1/21/2026 | $ | 230 | $ | — | 01/21/2025 | ||||||||||||||||||||||||||||
| 4 | 2/28/2026 | 4 | 02/28/2025 | |||||||||||||||||||||||||||||||||||
| 2 | 3/1/2026 | 2 | 3/1/2025 | |||||||||||||||||||||||||||||||||||
| 1 | 3/15/2026 | 1 | 3/15/2025 | |||||||||||||||||||||||||||||||||||
| — | 12/16/2026 | 3 | 9/23/2025 | |||||||||||||||||||||||||||||||||||
| 191 | 12/31/2026 | 1 | 12/1/2025 | |||||||||||||||||||||||||||||||||||
| 1 | 8/15/2027 | — | 12/16/2025 | |||||||||||||||||||||||||||||||||||
| 3 | 9/23/2027 | — | 12/20/2025 | |||||||||||||||||||||||||||||||||||
| 197 | 12/31/2025 | |||||||||||||||||||||||||||||||||||||
| 1 | 8/15/2026 | |||||||||||||||||||||||||||||||||||||
| Bermuda Re Citibank LOC Facility - Uncommitted | 140 | 1 | 12/1/2026 | 140 | 75 | 12/31/2025 | ||||||||||||||||||||||||||||||||
| — | 12/20/2026 | 7 | 12/30/2028 | |||||||||||||||||||||||||||||||||||
| 42 | 12/31/2026 | |||||||||||||||||||||||||||||||||||||
| 7 | 12/30/2029 | |||||||||||||||||||||||||||||||||||||
| Total Bermuda Re Citibank LOC Facility | $ | 370 | $ | 253 | $ | 370 | $ | 293 |
(Some amounts may not reconcile due to rounding.)
Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility
Effective August 27, 2021, Bermuda Re entered into a letter of credit issuance facility with Bayerische Landesbank (the “Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility”). The Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility provides for the committed issuance of up to $200 million of secured letters of credit. Effective August 16, 2024, the Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility was amended to extend the availability of committed issuance for three years.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Bayerische Landesbank Bilateral Secured Credit Facility - Committed | $ | 200 | $ | 123 | 12/31/2026 | $ | 200 | $ | 193 | 12/31/2025 |
(Some amounts may not reconcile due to rounding.)
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Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility
Effective December 30, 2022, Bermuda Re entered into an additional letter of credit issuance facility with Bayerische Landesbank, New York Branch (the “Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility”). The Bermuda Re Bayerische Landesbank Bilateral Unsecured Letter of Credit Facility provides for the committed issuance of up to $150 million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor. Effective December 30, 2024, the Bermuda Re Bayerische Landesbank Bilateral Unsecured Credit Facility was amended to extend the availability of committed issuance for two years.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Bayerische Landesbank Bilateral Unsecured Credit Facility - Committed | $ | 150 | $ | 150 | 12/31/2026 | $ | 150 | $ | 150 | 12/31/2025 |
(Some amounts may not reconcile due to rounding.)
Bermuda Re Lloyd’s Bank Letter of Credit Facility.
Effective December 27, 2023, Bermuda Re entered into an amended and restated letter of credit issuance facility with Lloyd’s Bank Corporate Markets PLC, to add Ireland Insurance as an account party with access to a $15 million sub-limit for the issuance of letters of credit (the “Bermuda Re Lloyd’s Bank Letter of Credit Facility”). Effective August 18, 2025, the Bermuda Re Lloyds Bank Letter of Credit Facility was amended to add Everest Re as an account party and to extend the availability of committed issuance for an additional two years. The Bermuda Re Lloyd’s Bank Letter of Credit Facility provides for the committed issuance of up to $250 million of unsecured letters of credit and is fully and unconditionally guaranteed by Group, as Parent Guarantor. Letters of credit under the Bermuda Re Lloyd’s Bank Letter of Credit Facility may be issued in U.S. dollars, Canadian dollars, Euros or Sterling.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Lloyd's Bank Credit Facility - Committed | $ | 250 | $ | 67 | 10/22/2026 | $ | 250 | $ | 244 | 12/31/2025 | ||||||||||||||||||||||||||||
| 61 | 12/18/2026 | |||||||||||||||||||||||||||||||||||||
| 107 | 12/31/2026 | |||||||||||||||||||||||||||||||||||||
| Total Bermuda Re Lloyd's Bank Credit Facility | $ | 250 | $ | 235 | $ | 250 | $ | 244 |
(Some amounts may not reconcile due to rounding.)
Bermuda Re Barclays Bank Letter of Credit Facility
Effective November 3, 2021, Bermuda Re entered into a letter of credit issuance facility with Barclays Bank PLC (the “Bermuda Re Barclays Letter of Credit Facility”). The Bermuda Re Barclays Letter of Credit Facility provides for the committed issuance of up to $200 million of secured letters of credit. Effective October 30, 2024, the agreement was amended to extend the availability of the committed issuance for an additional three years.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Bermuda Re Barclays Bilateral Letter of Credit Facility | $ | 200 | $ | 13 | 11/14/2026 | $ | 200 | $ | 150 | 12/30/2025 | ||||||||||||||||||||||||||||
| — | 5 | 12/31/2026 | — | 14 | 12/31/2025 | |||||||||||||||||||||||||||||||||
| Total Bermuda Re Barclays Bilateral Letter of Credit Facility | $ | 200 | $ | 17 | $ | 200 | $ | 164 |
(Some amounts may not reconcile due to rounding.)
Bermuda Re Nordea Bank Letter of Credit Facility
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Effective November 21, 2022, Bermuda Re entered into a letter of credit issuance facility with Nordea Bank ABP, New York Branch (the “Nordea Bank Letter of Credit Facility”). The Bermuda Re Nordea Bank Letter of Credit Facility provides for the committed issuance of up to $200 million of unsecured letters of credit, and subject to credit approval, uncommitted issuance of $100 million for a maximum total facility amount of $300 million.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Nordea Bank Letter of Credit Facility - Committed | $ | 200 | $ | 200 | 12/31/2026 | $ | 200 | $ | 200 | 12/31/2025 | ||||||||||||||||||||||||||||
| Nordea Bank Letter of Credit Facility - Uncommitted | 100 | 100 | 12/31/2026 | 100 | 100 | 12/31/2025 | ||||||||||||||||||||||||||||||||
| Total Nordea Bank ABP, NY LOC Facility | $ | 300 | $ | 300 | $ | 300 | $ | 300 |
(Some amounts may not reconcile due to rounding.)
Everest International Reinsurance, Ltd. Funds at Lloyds Syndicated Letter of Credit Facility
Effective October 30, 2024, Everest International entered into a letter of credit issuance facility with a syndicate of banks including Lloyds Bank plc, Commerzbank AG, London Branch and ING Bank N.V., London Branch (the “Funds at Lloyds Syndicated Letter of Credit Facility”). Effective October 26, 2025, the agreement was extended for an additional one year and amended to £150 million of unsecured letters of credit to support Everest Corporate Member Limited’s Funds at Lloyds requirements.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Pounds in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Funds at Lloyds Syndicated Letter of Credit Facility | £ | 150 | £ | 143 | 11/1/2029 | £ | 113 | £ | 107 | 11/1/2028 | ||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
Everest Reinsurance Company (Ireland), dac Commerzbank Letter of Credit Facility
Effective December 30, 2024, Ireland Re entered into a letter of credit issuance facility with Commerzbank AG, New York Branch (the “Commerzbank Letter of Credit Facility”). The Commerzbank Letter of Credit Facility provides for the committed issuance of up to €75 million of unsecured letters of credit. Letters of credit under the Commerzbank Letter of Credit Facility may be issued in U.S. dollars or Euros.
The following table summarizes the outstanding letters of credit for the periods indicated:
| (Dollars and Euros in millions) | At December 31, 2025 | At December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Letter of Credit Facility | Commitment | In Use | Date of Expiry | Commitment | In Use | Date of Expiry | ||||||||||||||||||||||||||||||||
| Commerzbank Letter of Credit Facility | € | 75 | € | 51 | 1/30/2027 | € | 75 | € | 20 | 12/31/2025 | ||||||||||||||||||||||||||||
| $ | 25 | 12/31/2026 | ||||||||||||||||||||||||||||||||||||
| $ | — | 12/26/2026 | ||||||||||||||||||||||||||||||||||||
(Some amounts may not reconcile due to rounding.)
Federal Home Loan Bank Membership
Everest Re is a member of the Federal Home Loan Bank of New York (“FHLBNY”), which allows Everest Re to borrow up to 10% of its statutory admitted assets. As of December 31, 2025, Everest Re had statutory admitted assets of approximately $32.6 billion which provides borrowing capacity in excess of approximately $3.3 billion. As of December 31, 2025, Everest Re had $1.0 billion of borrowings outstanding, which begin to expire in 2026. Everest Re incurred interest expense of $48 million and $45 million for the years ended December 31, 2025 and 2024, respectively. The FHLBNY membership agreement requires that 4.5% of borrowed funds be used to acquire additional membership stock. Additionally, the FHLBNY membership agreement requires that members must have sufficient qualifying collateral pledged. As of December 31, 2025, Everest Re had $1.4 billion of collateral pledged. See Note 11 of the Notes to these Consolidated Financial Statements.
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9. SENIOR NOTES
The table below displays Holdings’ outstanding senior notes (the “Senior Notes”). Fair value is based on quoted market prices, but due to limited trading activity, the Senior Notes are considered Level 2 in the fair value hierarchy.
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Date Issued | Date Due | Principal Amounts | Consolidated Balance Sheet Amount | Fair Value | Consolidated Balance Sheet Amount | Fair Value | ||||||||||||||||||||||||||||||||||
| 4.868% Senior notes | 6/5/2014 | 6/1/2044 | $ | 400 | $ | 398 | $ | 355 | $ | 398 | $ | 347 | |||||||||||||||||||||||||||||
| 3.5% Senior notes | 10/7/2020 | 10/15/2050 | 1,000 | 982 | 698 | 982 | 681 | ||||||||||||||||||||||||||||||||||
| 3.125% Senior notes | 10/4/2021 | 10/15/2052 | 1,000 | 972 | 636 | 971 | 620 | ||||||||||||||||||||||||||||||||||
| $ | 2,400 | $ | 2,352 | $ | 1,689 | $ | 2,350 | $ | 1,648 |
(Some amounts may not reconcile due to rounding.)
Interest expense incurred in connection with the Senior Notes is as follows for the periods indicated:
| Years Ended December 31, | ||||||||||||||||||||||||||||||||
| (Dollars in millions) | Interest Paid | Payable Dates | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| 4.868% Senior Notes | semi-annually | June 1/December 1 | $ | 19 | $ | 19 | $ | 19 | ||||||||||||||||||||||||
| 3.5% Senior Notes | semi-annually | April 15/October 15 | 35 | 35 | 35 | |||||||||||||||||||||||||||
| 3.125% Senior Notes | semi-annually | April 15/October 15 | 32 | 32 | 32 | |||||||||||||||||||||||||||
| $ | 86 | $ | 86 | $ | 86 |
(Some amounts may not reconcile due to rounding.)
10. LONG-TERM SUBORDINATED NOTES
The table below displays Holdings’ outstanding fixed to floating rate long-term subordinated notes (“Subordinated Notes Issued 2007”). Fair value is based on quoted market prices, but due to limited trading activity, the Subordinated Notes Issued 2007 are considered Level 2 in the fair value hierarchy.
| Maturity Date | December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Date Issued | Original Principal Amount | Scheduled | Final | Consolidated Balance Sheet Amount | Fair Value | Consolidated Balance Sheet Amount | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
| Subordinated Notes Issued 2007 | 4/26/2007 | $ | 400 | 5/15/2037 | 5/1/2067 | $ | 218 | $ | 208 | $ | 218 | $ | 215 |
During the fixed rate interest period from May 3, 2007 through May 14, 2017, interest was at the annual rate of 6.6%, payable semi-annually in arrears on November 15 and May 15 of each year, commencing on November 15, 2007. During the floating rate interest period from May 15, 2017 through maturity, interest was initially based on the 3-month London Interbank Offered Rate (“LIBOR”) plus 238.5 basis points, reset quarterly, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, subject to Holdings’ right to defer interest on one or more occasions for up to ten consecutive years. Deferred interest will accumulate interest at the applicable rate compounded quarterly for periods from and including May 15, 2017. The reset quarterly interest rate for November 17, 2025 to February 16, 2026 is 6.50%. Following the cessation of LIBOR, for periods from and including August 15, 2023, interest is based on the 3-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate plus a spread.
Holdings may redeem the Subordinated Notes Issued 2007 on or after May 15, 2017, in whole or in part at 100% of the principal amount plus accrued and unpaid interest; however, redemption on or after the scheduled maturity date and prior to May 1, 2047 is subject to a replacement capital covenant. This covenant is for the benefit of the Senior Note holders and it mandates that Holdings receive proceeds from the sale of another subordinated debt issue, of at least similar size, before it may redeem the Subordinated Notes Issued 2007. The Company’s Senior Notes are the Company’s long-term indebtedness that rank senior to the Subordinated Notes Issued 2007.
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Interest expense incurred in connection with the long-term Subordinated Notes Issued 2007 is as follows for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Interest expense incurred | $ | 15 | $ | 17 | $ | 17 |
11. COLLATERALIZED REINSURANCE, TRUST AGREEMENTS AND OTHER RESTRICTED ASSETS
The Company maintains certain restricted assets as security for potential future obligations, primarily to support its underwriting operations. The following table summarizes the Company’s restricted assets:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Collateral in trust for non-affiliated agreements | $ | 3,363 | $ | 3,241 | |||||||
| Collateral for secured letter of credit facilities | 739 | 1,386 | |||||||||
| Collateral for FHLB borrowings | 1,418 | 1,294 | |||||||||
| Securities on deposit with or regulated by government authorities | 1,417 | 1,406 | |||||||||
| Funds at Lloyd's | 260 | 341 | |||||||||
| Funds held by reinsureds | 1,326 | 1,218 | |||||||||
| Total restricted assets | $ | 8,522 | $ | 8,885 |
Restricted cash is included in cash on the consolidated balance sheets. At December 31, 2025 and December 31, 2024, the Company had restricted cash of $122 million and $397 million, respectively. Total restricted cash includes amounts on deposit in trust accounts for non-affiliated agreements and secured letter of credit facilities.
The Company reinsures some of its catastrophe exposures with the segregated accounts of a subsidiary, Mt. Logan Re. Mt. Logan Re is a collateralized insurer registered in Bermuda and 100% of the voting common shares are owned by Group. Each segregated account invests predominantly in a diversified set of catastrophe exposures, diversified by risk/peril and across different geographic regions globally.
The following table summarizes the premiums and losses that are ceded by the Company to Mt. Logan Re segregated accounts and assumed by the Company from Mt. Logan Re segregated accounts.
| Years Ended December 31, | ||||||||||||||||||||
| Mt. Logan Re Segregated Accounts | 2025 | 2024 | 2023 | |||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Ceded written premiums | 357 | 433 | 246 | |||||||||||||||||
| Ceded earned premiums | 425 | 376 | 242 | |||||||||||||||||
| Ceded losses and LAE | 168 | 188 | 64 | |||||||||||||||||
| Assumed written premiums | 14 | 10 | 6 | |||||||||||||||||
| Assumed earned premiums | 14 | 10 | 6 | |||||||||||||||||
| Assumed losses and LAE | — | — | — |
The Company entered into various collateralized reinsurance agreements with Kilimanjaro Re Limited (“Kilimanjaro”), a Bermuda-based special purpose reinsurer, to provide the Company with catastrophe reinsurance coverage. These
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agreements are multi-year reinsurance contracts which cover named storm and earthquake events. The table below summarizes the various agreements.
| (Dollars in millions) | ||||||||||||||||||||||||||||||||
| Class | Description | Effective Date | Expiration Date | Limit | Coverage Basis | |||||||||||||||||||||||||||
| Series 2021-1 Class A-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 4/8/2021 | 4/20/2026 | 150 | Occurrence | |||||||||||||||||||||||||||
| Series 2021-1 Class B-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 4/8/2021 | 4/20/2026 | 90 | Aggregate | |||||||||||||||||||||||||||
| Series 2021-1 Class C-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 4/8/2021 | 4/20/2026 | 90 | Aggregate | |||||||||||||||||||||||||||
| Series 2024-1 Class A | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/27/2024 | 6/30/2028 | 75 | Occurrence | |||||||||||||||||||||||||||
| Series 2024-1 Class B | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/27/2024 | 6/30/2028 | 125 | Occurrence | |||||||||||||||||||||||||||
| Series 2025-1 Class A-1 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/9/2029 | 105 | Aggregate | |||||||||||||||||||||||||||
| Series 2025-2 Class A-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/8/2030 | 105 | Aggregate | |||||||||||||||||||||||||||
| Series 2025-1 Class B-1 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/9/2029 | 120 | Aggregate | |||||||||||||||||||||||||||
| Series 2025-2 Class B-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/8/2030 | 120 | Aggregate | |||||||||||||||||||||||||||
| Series 2025-1 Class C-1 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/9/2029 | 170 | Occurrence | |||||||||||||||||||||||||||
| Series 2025-2 Class C-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/8/2030 | 170 | Occurrence | |||||||||||||||||||||||||||
| Series 2025-1 Class D-1 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/9/2029 | 105 | Occurrence | |||||||||||||||||||||||||||
| Series 2025-2 Class D-2 | US, Canada, Puerto Rico – Named Storm and Earthquake Events | 6/26/2025 | 7/8/2030 | 105 | Occurrence | |||||||||||||||||||||||||||
| Total available limit as of December 31, 2025 | $ | 1,530 |
Recoveries under these collateralized reinsurance agreements with Kilimanjaro are primarily dependent on estimated industry level insured losses from covered events, as well as the geographic location of the events. The estimated industry level of insured losses is obtained from published estimates by an independent recognized authority on insured property losses.
Kilimanjaro has financed the various property catastrophe reinsurance coverages by issuing catastrophe bonds to unrelated, external investors. The proceeds from the issuance of the catastrophe bonds are held in reinsurance trusts throughout the duration of the applicable reinsurance agreements and invested solely in U.S. government money market funds with a rating of at least “AAAm” by Standard & Poor’s. The catastrophe bonds’ issue dates, maturity dates and amounts correspond to the reinsurance agreements listed above.
12. COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Company is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures, the outcomes of which will determine the Company’s rights and obligations under insurance and reinsurance agreements. In some disputes, the Company seeks to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company is resisting attempts by others to collect funds or enforce alleged rights. These disputes arise from time to time and are ultimately resolved through both informal and formal means, including negotiated resolution, arbitration and litigation. In all such matters, the Company believes that its positions are legally and commercially reasonable. The Company considers the statuses of these proceedings when determining its reserves for unpaid loss and LAE.
Aside from litigation and arbitrations related to these insurance and reinsurance agreements, the Company is not a party to any other material litigation or arbitration.
The Company has entered into separate annuity agreements with Prudential Insurance Company (“Prudential”), an unaffiliated life insurance company, as well as an additional unaffiliated life insurance company in which the Company has either purchased annuity contracts or become the assignee of annuity proceeds that are meant to settle claim payment obligations in the future. In both instances, the Company would become contingently liable if either Prudential or the unaffiliated life insurance company was unable to make payments related to the respective annuity contract.
The table below presents the estimated cost to replace all such annuities for which the Company was contingently liable for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Prudential | $ | 134 | $ | 136 | |||||||
| Other unaffiliated life insurance company | $ | 31 | $ | 32 |
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13. LEASES
The Company enters into lease agreements for real estate that is primarily used for office space in the ordinary course of business. These leases are accounted for as operating leases, whereby lease expense is recognized on a straight-line basis over the term of the lease. Most leases include an option to extend or renew the lease term. The exercise of the renewal is at the Company’s discretion. The operating lease liability includes lease payments related to options to extend or renew the lease term if the Company is reasonably certain of exercising those options. The Company, in determining the present value of lease payments utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with terms of the underlying lease.
Supplemental information related to operating leases is as follows for the periods indicated:
| Year Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Lease expense incurred: | |||||||||||
| Operating lease cost | $ | 36 | $ | 32 |
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Operating lease right of use assets (1) | $ | 176 | $ | 108 | |||||||
| Operating lease liabilities (1) | 196 | 126 |
(1) Operating lease right of use assets and operating lease liabilities are included within other assets and other liabilities on the Company’s consolidated balance sheets, respectively.
| Year Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Operating cash flows from operating leases | $ | (24) | $ | (24) |
| At December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted average remaining operating lease term | 10.7 years | 9.2 years | |||||||||
| Weighted average discount rate on operating leases | 4.62 | % | 4.14 | % |
Maturities of the existing lease liabilities are expected to occur as follows:
| (Dollars in millions) | As of December 31, | ||||
| 2026 | $ | 28 | |||
| 2027 | 27 | ||||
| 2028 | 24 | ||||
| 2029 | 23 | ||||
| 2030 | 21 | ||||
| Thereafter | 125 | ||||
| Undiscounted lease payments | 247 | ||||
| Less: present value adjustment | 51 | ||||
| Total operating lease liability | $ | 196 |
(Some amounts may not reconcile due to rounding.)
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14. OTHER COMPREHENSIVE INCOME (LOSS)
The following table presents the components of other comprehensive income (loss) in the consolidated statements of operations for the periods indicated:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | Before Tax | Tax Effect | Net of Tax | Before Tax | Tax Effect | Net of Tax | Before Tax | Tax Effect | Net of Tax | ||||||||||||||||||||||||||||||||||||||||||||
| URA(D) of securities (1) | $ | 876 | $ | (136) | $ | 740 | $ | (167) | $ | 70 | $ | (97) | $ | 843 | $ | (101) | $ | 743 | |||||||||||||||||||||||||||||||||||
| Reclassification of net realized losses (gains) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| included in net income (loss) (1) | 142 | (28) | 114 | (18) | 6 | (12) | 285 | (41) | 244 | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation and other adjustments | 236 | 6 | 242 | (139) | 11 | (128) | 64 | (5) | 59 | ||||||||||||||||||||||||||||||||||||||||||||
| Benefit plan actuarial net gain (loss) | (12) | 2 | (9) | 43 | (9) | 34 | 19 | (4) | 15 | ||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of benefit plan liability amortization | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| included in net income (loss) | (2) | — | (1) | (2) | — | (1) | 2 | — | 2 | ||||||||||||||||||||||||||||||||||||||||||||
| Total other comprehensive income (loss) | $ | 1,241 | $ | (155) | $ | 1,086 | $ | (283) | $ | 79 | $ | (204) | $ | 1,214 | $ | (151) | $ | 1,063 |
(Some amounts may not reconcile due to rounding.)
(1) URA(D) of securities and Reclassification of net realized losses (gains) included in net income (loss) include URA(D) of fixed maturity, available for sale securities and equity method investments.
The following table presents details of the amounts reclassified from accumulated other comprehensive income (loss) (“AOCI”) for the periods indicated:
| Years Ended December 31, | Affected line item within the statements of operations and comprehensive income (loss) | |||||||||||||||||||
| AOCI component | 2025 | 2024 | ||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| URA(D) of securities (1) | $ | 142 | $ | (18) | Net gains (losses) on investments | |||||||||||||||
| (28) | 6 | Income tax expense (benefit) | ||||||||||||||||||
| $ | 114 | $ | (12) | Net income (loss) | ||||||||||||||||
| Benefit plan net gain (loss) | $ | (2) | $ | (2) | Other underwriting expenses | |||||||||||||||
| — | — | Income tax expense (benefit) | ||||||||||||||||||
| $ | (1) | $ | (1) | Net income (loss) |
(Some amounts may not reconcile due to rounding.)
(1) URA(D) of securities includes URA(D) of fixed maturity, available for sale securities and equity method investments.
The following table presents the components of AOCI, net of tax, in the consolidated balance sheets for the periods indicated:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Beginning balance of URA(D) of securities (1) | $ | (831) | $ | (723) | |||||||
| Current period change in URA(D) of securities | 854 | (109) | |||||||||
| Ending balance of URA(D) of securities | 23 | (831) | |||||||||
| Beginning balance of foreign currency translation and other adjustments | (323) | (195) | |||||||||
| Current period change in foreign currency translation and other adjustments | 242 | (128) | |||||||||
| Ending balance of foreign currency translation and other adjustments | (81) | (323) | |||||||||
| Beginning balance of benefit plan net gain (loss) | 16 | (16) | |||||||||
| Current period change in benefit plan net gain (loss) | (10) | 33 | |||||||||
| Ending balance of benefit plan net gain (loss) | 6 | 16 | |||||||||
| Ending balance of accumulated other comprehensive income (loss) | $ | (52) | $ | (1,138) |
(Some amounts may not reconcile due to rounding.)
(1) URA(D) of securities includes URA(D) of fixed maturity, available for sale securities and equity method investments.
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15. SHARE-BASED COMPENSATION PLANS
The Company has a 2020 Stock Incentive Plan (“2020 Employee Plan”), a 2009 Non-Employee Director Stock Option and Restricted Stock Plan (“2009 Director Plan”), a 2003 Non-Employee Director Equity Compensation Plan (“2003 Director Plan”) and a 2025 Employee Stock Purchase Plan (“2025 ESPP”).
The 2020 Employee Plan was established in June 2020. Under the 2020 Employee Plan, 1,400,000 common shares have been authorized to be granted as non-qualified share options, share appreciation rights, restricted share awards or performance share unit (“PSU”) awards to officers and key employees of the Company. At December 31, 2025, there were 517,298 remaining shares available to be granted under the 2020 Employee Plan, which includes 257,408 shares related to previous grants from the 2020 Employee Plan that have been forfeited by participants and are now eligible to be re-issued. Through December 31, 2025, only non-qualified share options, restricted share awards and PSU awards had been granted under the employee plans. Under the 2009 Director Plan, 37,439 common shares have been authorized to be granted as share options or restricted share awards to non-employee directors of the Company. At December 31, 2025, there were 34,617 remaining shares available to be granted under the 2009 Director Plan. Under the 2003 Director Plan, 500,000 common shares have been authorized to be granted as share options or share awards to non-employee directors of the Company. At December 31, 2025, there were 252,793 remaining shares available to be granted under the 2003 Director Plan. In May 2025, shareholders approved the ESPP which allows for 500,000 common shares to be issued. No common shares have yet been issued under the ESPP, so all 500,000 are available for issuance as of December 31, 2025.
Options and restricted share awards granted under the 2020 Employee Plan prior to January 1, 2024 vest at the earliest of 20% per year over five years or in accordance with any applicable employment agreement. Restricted share awards granted under the 2020 Employee Plan after January 1, 2024 vest at the earliest of 33.30% per year over three years or in accordance with any applicable employment agreement. Restricted share awards granted under the 2003 Director Plan and 2009 Director Plan generally vest at 33% per year over three years, unless an alternate vesting period is authorized by the Board. Options granted under the 2020 Employee Plan have all expired as of September 19, 2022. There are no options outstanding as of December 31, 2025 and 2024, respectively.
PSU awards granted under the 2020 Employee Plan will vest 100% after three years. For PSU awards granted prior to January 1, 2025, the PSU awards represent the right to receive between 0 and 1.75 shares of stock for each unit depending upon performance in relation to certain metrics. For PSU awards granted after January 1, 2025, the PSU awards represent the right to receive between 0 and 2.00 shares of stock for each unit awarded depending upon performance in relation to certain metrics. The PSU metrics generally include operating return on equity for each of the individual years within the performance period, total shareholder return (“TSR”) for each of the individual years within the performance period and growth in book value per share over the three year performance period, compared to designated peer companies.
For restricted share awards and PSU awards granted under the 2020 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, share-based compensation expense recognized in the consolidated statements of operations and comprehensive income (loss) was $61 million, $63 million and $49 million for the years ended December 31, 2025, 2024 and 2023, respectively. The corresponding income tax benefit recorded in the consolidated statements of operations and comprehensive income (loss) for share-based compensation was $6 million, $8 million and $7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
For the year ended December 31, 2025, a total of 300,709 shares of restricted stock were granted on February 26, 2025, February 27, 2025, March 6, 2025, May 13, 2025, June 23, 2025, August 20, 2025, September 11, 2025 and November 4, 2025 with a fair value of $344.48, $347.23, $359.28, $348.41, $339.93, $341.44, $343.83 and $315.22 per share, respectively. Additionally, 27,204 PSU awards were granted on February 26, 2025, with a fair value of $344.48 per unit. No share options were granted during the year ended December 31, 2025.
The Company recognizes, as an increase to additional paid-in capital, a realized income tax benefit from dividends, charged to retained earnings and paid to employees on equity classified non-vested equity shares. In addition, the amount recognized in additional paid-in capital for the realized income tax benefit from dividends on those awards is included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards. For the years ended December 31, 2025, 2024 and 2023, the Company recognized $0.6 million, $0.6 million and $0.5 million, respectively, of additional paid-in capital due to tax benefits from dividends on restricted shares.
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The following table summarizes the status of the Company’s restricted non-vested shares and changes for the periods indicated:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Restricted (non-vested) Shares | Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||||||||||||||||
| Outstanding at January 1, | 467,185 | $ | 343.53 | 461,537 | $ | 313.05 | 479,630 | $ | 268.82 | ||||||||||||||||||||||||||
| Granted | 300,709 | 344.38 | 222,196 | 369.62 | 181,646 | 382.01 | |||||||||||||||||||||||||||||
| Vested | 163,616 | 331.37 | 147,655 | 292.15 | 155,110 | 261.60 | |||||||||||||||||||||||||||||
| Forfeited | 111,529 | 345.22 | 68,893 | 333.54 | 44,629 | 297.23 | |||||||||||||||||||||||||||||
| Outstanding at December 31, | 492,749 | 347.71 | 467,185 | 343.53 | 461,537 | 313.05 |
As of December 31, 2025, there was $122 million of total unrecognized compensation cost related to non-vested restricted stock award compensation expense. That cost is expected to be recognized over a weighted-average period of 2 years. The total grant-date fair value of shares vested during the years ended December 31, 2025, 2024 and 2023, was $54 million, $43 million and $41 million, respectively. The tax benefit realized from the shares vested for the years ended December 31, 2025, 2024 and 2023 were $9 million, $9 million and $11 million, respectively.
In addition to the 2020 Employee Plan, the 2009 Director Plan and the 2003 Director Plan, Group issued 839 common shares in 2025, 324 common shares in 2024 and 447 common shares in 2023 to the Company’s non-employee directors as compensation for their service as directors. These issuances had aggregate values of $0.3 million, $0.1 million and $0.2 million in 2025, 2024 and 2023.
The Company acquired 57,715, 54,537 and 56,832 common shares at a cost of $20 million, $20 million and $22 million in 2025, 2024 and 2023, respectively, from employees who chose to pay required withholding taxes on restricted share vestings by withholding shares.
The following table summarizes the status of the Company’s non-vested PSU awards and changes for the period indicated:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Performance Share Unit Awards | Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||||||||||||||||
| Outstanding at January 1, | 52,682 | $ | — | 51,000 | $ | — | 54,861 | $ | — | ||||||||||||||||||||||||||
| Granted | 27,204 | 344.48 | 18,713 | 369.52 | 14,975 | 382.39 | |||||||||||||||||||||||||||||
| Increase/(Decrease) on vesting units due to performance | (4,967) | — | 8,354 | — | (4,063) | — | |||||||||||||||||||||||||||||
| Vested | 10,446 | 362.70 | 24,053 | 386.81 | 14,023 | 340.44 | |||||||||||||||||||||||||||||
| Forfeited | 29,491 | — | 1,332 | — | 750 | — | |||||||||||||||||||||||||||||
| Outstanding at December 31, | 34,982 | — | 52,682 | — | 51,000 | — |
The Company acquired 4,981, 11,336 and 6,117 common shares at a cost of $2 million, $4 million and $2 million in 2025, 2024 and 2023, respectively, from employees who chose to pay required withholding taxes on PSU settlements by withholding shares.
Employee Stock Purchase Plan.
In August 2025, following shareholder approval, the Company implemented an Employee Stock Purchase Plan (“2025 ESPP”), authorizing the issuance of 500,000 shares under such plan. The ESPP provides employees of the Company and its participating subsidiaries with the opportunity to purchase Group common shares at a discount through accumulated payroll deductions during established offering periods. Under this plan, eligible employees of the Company purchase common shares at a discount rate of 15% from the market price per share on the last trading day of the offering period. The ESPP is a compensatory plan, based on the discount rate of 15%. Therefore, consistent with other forms of share-
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based payments, compensation cost for equity awarded through the ESPP is measured as the fair value of the award at grant date.
16. EMPLOYEE BENEFIT PLANS
Defined Benefit Pension Plans.
The Company maintains both qualified and non-qualified defined benefit pension plans for its U.S. employees employed prior to April 1, 2010. Generally, the Company computes the benefits based on average earnings over a period prescribed by the plans and credited length of service. The Company’s non-qualified defined benefit pension plan provided compensating pension benefits for participants whose benefits have been curtailed under the qualified plan due to the U.S. Internal Revenue Code (the “IRC”) limitations.
Effective January 1, 2018, participants of the Company’s non-qualified defined benefit pension plan no longer accrue additional service benefits. Additionally, on November 15, 2023, the Company's Board approved the termination of the qualified defined benefit pension plan. In June 2024, the Company amended the qualified defined benefit pension plan to freeze all benefits accruals and terminate the plan effective June 30, 2024. Plan participants no longer accrue future plan benefits after June 30, 2024. In the second quarter of 2025, the Company entered into an annuity purchase contract to liquidate the plan and settled substantially all of the pension benefit obligation. Upon termination of the qualified defined benefit pension plan, participants were given the option to receive a lump sum payout or receive payments from the annuity purchaser. In June 2025, the Company executed a lump sum payout of $49 million for a specified group of elected participants and completed the transfer of the agreed-upon annuity contract purchase consideration of $186 million for a total payout of $235 million. Final settlement of the annuity contract purchase occurred in November 2025 at which time the Company was relieved of all remaining plan benefit obligation.
Plan assets consist primarily of shares in investment trusts with 100% of the underlying assets consisting of short-term investments. The Company manages the qualified plan investments for U.S. employees.
The Company’s contributions to the defined benefit pension plans were not significant for the years ended December 31, 2025, 2024 and 2023, although such contributions are not required under U.S. Internal Revenue Service (the “IRS”) regulations.
The following table summarizes the Company’s pension expense for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Pension expense (income) | $ | (30) | $ | (15) | $ | 5 |
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The following table summarizes the status of these defined benefit plans for U.S. employees for the periods indicated:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Change in projected benefit obligation: | |||||||||||
| Benefit obligation at beginning of year | $ | 259 | $ | 295 | |||||||
| Service cost | — | 3 | |||||||||
| Interest cost | 7 | 14 | |||||||||
| Actuarial (gain)/loss | (19) | (17) | |||||||||
| Curtailment | (235) | (21) | |||||||||
| Benefits paid | (8) | (15) | |||||||||
| Projected benefit obligation at end of year | 3 | 259 | |||||||||
| Change in plan assets: | |||||||||||
| Fair value of plan assets at beginning of year | 331 | 308 | |||||||||
| Actual return on plan assets | 7 | 35 | |||||||||
| Actual contributions during the year | 1 | 3 | |||||||||
| Curtailment | (235) | — | |||||||||
| Benefits paid | (8) | (15) | |||||||||
| Fair value of plan assets at end of year | 96 | 331 | |||||||||
| Funded status at end of year | $ | 93 | $ | 73 |
(Some amounts may not reconcile due to rounding.)
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Other assets (due beyond one year) | $ | 96 | $ | 76 | |||||||
| Other liabilities (due within one year) | (1) | (1) | |||||||||
| Other liabilities (due beyond one year) | (2) | (3) | |||||||||
| Net amount recognized in the consolidated balance sheets | $ | 93 | $ | 73 |
(Some amounts may not reconcile due to rounding.)
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Accumulated income (loss) | $ | (1) | $ | 9 | |||||||
| Accumulated other comprehensive income (loss) | $ | (1) | $ | 9 |
(Some amounts may not reconcile due to rounding.)
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Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Other comprehensive income (loss) at December 31, prior year | $ | 9 | $ | (33) | |||||||
| Net gain (loss) arising during period | 17 | 51 | |||||||||
| Recognition of amortizations in net periodic benefit cost: | |||||||||||
| Actuarial loss | (27) | (9) | |||||||||
| Curtailment loss recognized | — | — | |||||||||
| Other comprehensive income (loss) at December 31, current year | $ | (1) | $ | 9 |
(Some amounts may not reconcile due to rounding.)
Net periodic benefit cost for U.S. employees included the following components for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Service cost | $ | — | $ | 3 | $ | 5 | |||||||||||
| Interest cost | 7 | 14 | 14 | ||||||||||||||
| Expected return on assets | (9) | (22) | (19) | ||||||||||||||
| Amortization of actuarial loss from earlier periods | — | — | 4 | ||||||||||||||
| Settlement | (27) | (9) | — | ||||||||||||||
| Net periodic benefit cost | $ | (30) | $ | (15) | $ | 5 | |||||||||||
| Other changes recognized in other comprehensive income (loss): | |||||||||||||||||
| Other comprehensive income (loss) attributable to change from prior year | 10 | (42) | |||||||||||||||
| Total recognized in net periodic benefit cost and other | |||||||||||||||||
| comprehensive income (loss) | $ | (20) | $ | (57) |
(Some amounts may not reconcile due to rounding.)
In 2025, the weighted average discount rate used to determine net periodic benefit cost was 4.75% for annuities and ranged from 4.66% to 5.57% for lump sums. The weighted average discount rates used to determine net periodic benefit cost for 2024 and 2023 were 5.00% and 5.25%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for January 2024 through April 2024 was 4.00%. The net periodic benefit cost was remeasured at May 1, 2024 due to plan curtailment. Rate of compensation increase is not applicable to calculate the net periodic benefit cost for May 2024 through December 2024. The rate of compensation increase used to determine the net periodic benefit cost for 2023 was 4.00%. The expected long-term rate of return on plan assets for 2025, 2024 and 2023 was 4.25%, 7.25% and 7.00% respectively.
The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation for 2023 was 5.00%. In 2024, the weighted average discount rate used to determine the actuarial present value of the projected benefit obligation, based on plan termination rates, was 4.75% for annuities and ranged from 4.66% to 5.57% for lump sums.
The following table summarizes the accumulated benefit obligation for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Qualified Plan | $ | — | $ | 255 | |||||||
| Non-qualified Plan | 3 | 3 | |||||||||
| Total | $ | 3 | $ | 259 |
(Some amounts may not reconcile due to rounding.)
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The following table displays the plans with projected benefit obligations in excess of plan assets for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Non-qualified Plan | |||||||||||
| Projected benefit obligation | $ | 3 | $ | 3 | |||||||
| Fair value of plan assets | — | — |
The following table displays the plans with accumulated benefit obligations in excess of plan assets for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Non-qualified Plan | |||||||||||
| Accumulated benefit obligation | $ | 3 | $ | 3 | |||||||
| Fair value of plan assets | — | — |
The following table displays the expected benefit payments for the non-qualified defined benefit pension plan in the periods indicated:
| (Dollars in millions) | |||||
| 2026 | $ | 1 | |||
| 2027 | 1 | ||||
| 2028 | — | ||||
| 2029 | — | ||||
| 2030 | — | ||||
| Next 5 years | 1 |
The fair value measurement levels for the qualified plan assets were all categorized as Level 1 short-term investments with a fair value of $96 million and $331 million for the years ended December 31, 2025 and 2024, respectively.
No contributions were made to the qualified pension benefit plan for the years ended December 31, 2025 and 2024.
Defined Contribution Plans.
The Company also maintains both qualified and non-qualified defined contribution plans (“Savings Plan” and “Non-Qualified Savings Plan”, respectively) covering U.S. employees. Under the plans, the Company contributes up to a maximum 3% of the participants’ compensation based on the contribution percentage of the employee. The Non-Qualified Savings Plan provides compensating savings plan benefits for participants whose benefits have been curtailed under the Savings Plan due to IRC limitations. In addition, effective for new hires (and rehires) on or after April 1, 2010, the Company will contribute between 3% and 8% of an employee’s earnings for each payroll period based on the employee’s age. These contributions will be 100% vested after three years. The Company incurred expenses related to these plans of $27 million, $26 million and $22 million for the years ended December 31, 2025, 2024 and 2023, respectively.
In addition, the Company maintains several defined contribution pension plans covering non-U.S. employees. Each international office maintains a separate plan for the non-U.S. employees working in that location. The Company contributes various amounts based on salary, age and/or years of service. In the current year, the contributions as a percentage of salary for the international offices ranged from 4.3% to 21.1%. The contributions are generally used to purchase pension benefits from local insurance providers. The Company incurred expenses related to these plans of $14 million, $9 million and $6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Post-Retirement Plan.
The Company sponsors a Retiree Health Plan for employees employed prior to April 1, 2010. This plan provides healthcare benefits for eligible retired employees (and their eligible dependents), who have elected coverage. The Company anticipates that most covered employees will become eligible for these benefits if they retire while working for
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the Company. The cost of these benefits is shared with the retiree. The Company accrues the post-retirement benefit expense during the period of the employee’s service. A medical cost trend rate of 7.50% in 2025 was assumed to decrease gradually to 4.75% in 2033 and then remain at that level. The post-retirement benefit expenses incurred by the Company were not significant for the years ended December 31, 2025, 2024 and 2023.
The following table summarizes the status of this plan for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Change in projected benefit obligation: | |||||||||||
| Benefit obligation at beginning of year | $ | 21 | $ | 22 | |||||||
| Service cost | — | — | |||||||||
| Interest cost | 1 | 1 | |||||||||
| Amendments | — | — | |||||||||
| Actuarial (gain)/loss | 2 | (1) | |||||||||
| Benefits paid | (1) | (1) | |||||||||
| Benefit obligation at end of year | 24 | 21 | |||||||||
| Change in plan assets: | |||||||||||
| Fair value of plan assets at beginning of year | — | — | |||||||||
| Employer contributions | 1 | 1 | |||||||||
| Benefits paid | (1) | (1) | |||||||||
| Fair value of plan assets at end of year | — | — | |||||||||
| Funded status at end of year | $ | (24) | $ | (21) |
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Other liabilities (due within one year) | $ | (1) | $ | (1) | |||||||
| Other liabilities (due beyond one year) | (23) | (21) | |||||||||
| Net amount recognized in the consolidated balance sheets | $ | (24) | $ | (21) |
(Some amounts may not reconcile due to rounding.)
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated:
| At December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Accumulated income (loss) | $ | 8 | $ | 11 | |||||||
| Accumulated prior service credit (cost) | — | — | |||||||||
| Accumulated other comprehensive income (loss) | $ | 8 | $ | 12 |
Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Other comprehensive income (loss) at December 31, prior year | $ | 12 | $ | 12 | |||||||
| Net gain (loss) arising during period | (2) | 1 | |||||||||
| Prior Service credit (cost) arising during period | — | — | |||||||||
| Recognition of amortizations in net periodic benefit cost: | |||||||||||
| Actuarial loss (gain) | (1) | (1) | |||||||||
| Prior service cost | — | — | |||||||||
| Other comprehensive income (loss) at December 31, current year | $ | 8 | $ | 12 |
F-57
Net periodic benefit cost included the following components for the periods indicated:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Service cost | $ | — | $ | — | $ | 1 | |||||||||||
| Interest cost | 1 | 1 | 1 | ||||||||||||||
| Prior service credit recognition | — | — | — | ||||||||||||||
| Net gain recognition | (1) | (1) | (2) | ||||||||||||||
| Net periodic cost | $ | — | $ | — | $ | (1) | |||||||||||
| Other changes recognized in other comprehensive income (loss): | |||||||||||||||||
| Other comprehensive gain (loss) attributable to change from prior year | 3 | 1 | |||||||||||||||
| Total recognized in net periodic benefit cost and | |||||||||||||||||
| other comprehensive income (loss) | $ | 3 | $ | — |
(Some amounts may not reconcile due to rounding.)
The weighted average discount rates used to determine net periodic benefit cost for 2025, 2024 and 2023 were 5.64%, 5.00% and 5.25%, respectively.
The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year-end 2025, 2024 and 2023 were 5.53%, 5.64% and 5.00%, respectively.
The following table displays the expected benefit payments in the years indicated:
| (Dollars in millions) | |||||
| 2026 | $ | 1 | |||
| 2027 | 1 | ||||
| 2028 | 1 | ||||
| 2029 | 1 | ||||
| 2030 | 2 | ||||
| Next 5 years | 8 |
17. INCOME TAXES
On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act 2023 (the “2023 Act”), which will apply a 15% corporate income tax to certain Bermuda businesses in fiscal years beginning on or after January 1, 2025. The 2023 Act includes a provision referred to as “The Economic Transition Adjustment” (the “ETA”), which is intended to provide a fair and equitable transition into the new tax regime, and results in a deferred tax benefit for the Company. However, on January 15, 2025, the OECD issued guidance related to “deferred tax assets arising from tax benefits provided by General Government” restricting the utilization of those deferred tax benefits against the computation of its Pillar Two Global Minimum Taxes to approximately 20% of the originally calculated amounts and only for a grace period of two years through 2026. If the Bermuda Ministry of Finance amends the 2023 Act in response to this guidance, the exact impact of any such amendments is uncertain but there is a risk that it results in a reduction in the Company's deferred tax assets.
All of the income of Group's non-Bermuda subsidiaries is subject to the applicable federal, foreign, state and local taxes on corporations. Additionally, the income of the foreign branches of the Company's insurance operating companies is subject to various rates of income tax. Group's U.S. subsidiaries conduct business in and are subject to taxation in the U.S. Should the U.S. subsidiaries distribute current or accumulated earnings and profits in the form of dividends or otherwise, the Company would be subject to an accrual of 5% U.S. withholding tax. There has been no withholding tax accrued with respect to such unremitted earnings as management has no intention of remitting them as of December 31, 2025. The cumulative amount that would be subject to withholding tax, if distributed, is not practicable to compute. The provision for income taxes in the consolidated statement of operations and comprehensive income (loss) has been determined in accordance with the individual income of each entity and the respective applicable tax laws. The provision reflects the permanent differences between financial and taxable income relevant to each entity.
F-58
In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”, which the Company has adopted effective January 1, 2025, on a prospective basis. ASU 2023-09 enhances the transparency of income tax reporting by requiring, among other items, further disaggregation of the rate reconciliation and additional information on income taxes paid by jurisdiction as shown in the tables below. The adoption did not have an impact on our results of operations, financial condition, or cash flows.
The significant components of the provision are as follows for the periods indicated:
| Year Ended December 31, | |||||
| (Dollars in millions) | 2025 | ||||
| Current tax expense (benefit): | |||||
| Bermuda | $ | 74 | |||
| Non-Bermuda | 265 | ||||
| Total current tax expense (benefit) | 339 | ||||
| Deferred tax expense (benefit): | |||||
| Bermuda | (9) | ||||
| Non-Bermuda | (34) | ||||
| Total deferred tax expense (benefit) | (42) | ||||
| Total income tax expense (benefit) | $ | 296 |
(Some amounts may not reconcile due to rounding.)
The significant components of the provision for the years ended 2024 and 2023 remain on the originally as-filed basis prior to the adoption of the Improvements to Income Tax Disclosures standard:
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions) | 2024 | 2023 | |||||||||||||||
| Current tax expense (benefit): | |||||||||||||||||
| U.S. | $ | 152 | $ | 284 | |||||||||||||
| Non-U.S. | 19 | 7 | |||||||||||||||
| Total current tax expense (benefit) | 171 | 291 | |||||||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||
| U.S. | (52) | (76) | |||||||||||||||
| Non-U.S. | 1 | (578) | |||||||||||||||
| Total deferred tax expense (benefit) | (51) | (654) | |||||||||||||||
| Total income tax expense (benefit) | $ | 120 | $ | (363) |
(Some amounts may not reconcile due to rounding.)
F-59
The rate reconciliation for income taxes is disclosed under ASU 2023-09 for the period indicated:
| Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| (Dollars in millions) | Bermuda | Non-Bermuda | |||||||||
| Underwriting gain (loss) | $ | 452 | $ | (241) | |||||||
| Net investment income | 628 | 1,497 | |||||||||
| Net realized gain (loss) | (54) | (89) | |||||||||
| Realized loss derivative event | — | — | |||||||||
| Corporate expense | (73) | (36) | |||||||||
| Interest, fees and bond issue cost amortization expense | — | (151) | |||||||||
| Other income (expense) | (40) | (6) | |||||||||
| Pre-tax income (loss) | $ | 913 | $ | 974 |
(Some amounts may not reconcile due to rounding.)
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| (Dollars in millions) | Amount | Percent | |||||||||||||||||||||
| Expected tax provision at Bermuda statutory tax rate | $ | 283 | 15.00 | % | |||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||
| Statutory tax rate difference between United Kingdom and Bermuda | 10 | 0.51 | % | ||||||||||||||||||||
| Effect of cross-border tax laws | 41 | 2.20 | % | ||||||||||||||||||||
| Other | 34 | 1.78 | % | ||||||||||||||||||||
| United States | |||||||||||||||||||||||
| Statutory tax rate difference between United States and Bermuda | 64 | 3.39 | % | ||||||||||||||||||||
| Return to provision adjustment | (30) | (1.57) | % | ||||||||||||||||||||
| Tax credits | (44) | (2.33) | % | ||||||||||||||||||||
| Insurance corporate-owned life insurance | (27) | (1.42) | % | ||||||||||||||||||||
| Other | 4 | 0.22 | % | ||||||||||||||||||||
| Spain | |||||||||||||||||||||||
| Statutory tax rate difference between Spain and Bermuda | — | (0.03) | % | ||||||||||||||||||||
| Effect of cross-border tax laws | 16 | 0.82 | % | ||||||||||||||||||||
| Other | 4 | 0.23 | % | ||||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Statutory tax rate difference between Canada and Bermuda | 8 | 0.45 | % | ||||||||||||||||||||
| Other | 7 | 0.36 | % | ||||||||||||||||||||
| Other Foreign Jurisdictions | 1 | 0.07 | % | ||||||||||||||||||||
| Effect of cross-border tax laws | — | ||||||||||||||||||||||
| State and local income taxes, net of federal | — | ||||||||||||||||||||||
| Tax credits | (17) | (0.90) | % | ||||||||||||||||||||
| Changes in valuation allowances | — | ||||||||||||||||||||||
| Nontaxable or nondeductible items | 4 | 0.21 | % | ||||||||||||||||||||
| Changes in unrecognized tax benefits | — | ||||||||||||||||||||||
| Other adjustments | 12 | 0.64 | % | ||||||||||||||||||||
| Effective Tax Rate, subtotal | $ | 370 | 19.62 | % | |||||||||||||||||||
| Effect of changes in tax laws or rates enacted in the current period | |||||||||||||||||||||||
| Bermuda Corporate Income Tax Act - Amendment 2025 | (74) | (3.92) | % | ||||||||||||||||||||
| Effective Tax Rate, total | $ | 296 | 15.70 | % |
(Some amounts may not reconcile due to rounding.)
F-60
The Company made the following net tax payments after the adoption of ASU 2023-09 for the period indicated:
| Year Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | ||||||||||
| Corporate income tax | $ | 76 | |||||||||
| Foreign | |||||||||||
| United Kingdom | 35 | ||||||||||
| Canada | 20 | ||||||||||
| Other | 18 | ||||||||||
| Total taxes paid | $ | 150 | |||||||||
(Some amounts may not reconcile due to rounding.)
The weighted average expected tax provision has been calculated using the pre-tax income (loss) in each jurisdiction multiplied by that jurisdiction's applicable statutory tax rate. Reconciliation of the difference between the provision for income taxes and the expected tax provision at the weighted average tax rate for the years ended 2024 and 2023 remain on the originally as-filed basis prior to the adoption of the improvements to income tax disclosures standard and are provided below:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| (Dollars in millions) | U.S. | Non-U.S. | U.S. | Non-U.S. | |||||||||||||||||||||||||||||||
| Underwriting gain (loss) | $ | (891) | $ | 536 | $ | 533 | $ | 686 | |||||||||||||||||||||||||||
| Net investment income | 1,219 | 734 | 954 | 479 | |||||||||||||||||||||||||||||||
| Net realized capital gains (losses) | 34 | (15) | (190) | (86) | |||||||||||||||||||||||||||||||
| Net derivative gain (loss) | — | — | — | 1 | |||||||||||||||||||||||||||||||
| Corporate expenses | (19) | (76) | (18) | (55) | |||||||||||||||||||||||||||||||
| Interest, fee and bond issue cost amortization expense | (150) | 1 | (134) | — | |||||||||||||||||||||||||||||||
| Other income (expense) | 64 | 57 | (13) | (3) | |||||||||||||||||||||||||||||||
| Pre-tax income (loss) | $ | 257 | $ | 1,237 | $ | 1,132 | $ | 1,022 | |||||||||||||||||||||||||||
| Expected tax provision at the applicable statutory rate(s) | 54 | 19 | 238 | 26 | |||||||||||||||||||||||||||||||
| Increase (decrease) in taxes resulting from: | |||||||||||||||||||||||||||||||||||
| Tax exempt income | (1) | — | (3) | — | |||||||||||||||||||||||||||||||
| Dividend received deduction | (3) | — | (2) | — | |||||||||||||||||||||||||||||||
| Proration | 1 | — | 1 | — | |||||||||||||||||||||||||||||||
| Affiliated preferred stock dividends | 7 | — | 7 | — | |||||||||||||||||||||||||||||||
| Creditable foreign premium tax | (14) | — | (14) | — | |||||||||||||||||||||||||||||||
| Share-based compensation tax benefits formerly in APIC | (1) | — | (3) | — | |||||||||||||||||||||||||||||||
| BEAT Tax | 66 | — | — | — | |||||||||||||||||||||||||||||||
| Valuation allowance | — | — | — | (13) | |||||||||||||||||||||||||||||||
| Bermuda corporate income tax | — | — | — | (578) | |||||||||||||||||||||||||||||||
| Insurance corporate-owned life insurance | (18) | — | (13) | — | |||||||||||||||||||||||||||||||
| Other | 9 | 1 | (3) | (6) | |||||||||||||||||||||||||||||||
| Total income tax provision | $ | 100 | $ | 20 | $ | 208 | $ | (571) |
(Some amounts may not reconcile due to rounding.)
At December 31, 2025, 2024 and 2023, the Company had no uncertain tax positions.
The Company’s 2014 through 2018 U.S. Federal tax returns are under audit by the IRS. Over several years, the Company received and responded to a number of Information Document Requests. In 2023, the IRS issued several Notice(s) of Proposed Adjustment and then a draft Revenue Agent Report (“RAR”). In 2024, the Company responded to the RAR with additional information which the IRS has been processing. The IRS requested, and we have signed, an extension of the audit to September 30, 2026.
F-61
For tax years 2019, 2020, and 2021, the Statute of Limitations has expired and, thus, the Federal income tax return for those years is no longer subject to IRS examination except to the extent the Company files an amended return.
Tax years 2022, 2023, and 2024 are open for examination by the U.S. Federal income tax jurisdiction.
Deferred income taxes reflect the tax effect of the temporary differences between the value of assets and liabilities for financial statement purposes, and such values are measured by the U.S. tax laws and regulations. The principal items making up the net deferred income tax assets/(liabilities) are as follows for the periods indicated:
| Years Ended December 31, | |||||||||||
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Bermuda economic transition adjustment | $ | 483 | $ | 536 | |||||||
| Loss reserves | 342 | 313 | |||||||||
| Unearned premium reserves | 152 | 152 | |||||||||
| Depreciation | 64 | 55 | |||||||||
| Amortization | 41 | — | |||||||||
| Lease liability | 36 | 23 | |||||||||
| Net operating loss carryforward | 24 | 24 | |||||||||
| Investment impairments | 16 | 10 | |||||||||
| Equity compensation | 10 | 10 | |||||||||
| Foreign tax credits | 7 | 16 | |||||||||
| Net unrealized investment losses | 6 | 138 | |||||||||
| Unrealized foreign currency losses | — | 35 | |||||||||
| Capital loss carryforward | — | 14 | |||||||||
| Other assets | 25 | 21 | |||||||||
| Total deferred tax assets | 1,206 | 1,347 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Deferred acquisition costs | 176 | 171 | |||||||||
| Partnership investments | 40 | 43 | |||||||||
| Right of use asset | 32 | 19 | |||||||||
| Deferred investment income | 20 | 12 | |||||||||
| Benefit plan asset | 13 | — | |||||||||
| Net fair value income | — | 74 | |||||||||
| Other liabilities | 25 | 13 | |||||||||
| Total deferred tax liabilities | 306 | 332 | |||||||||
| Net deferred tax assets | 900 | 1,015 | |||||||||
| Less: Valuation allowance | (28) | (25) | |||||||||
| Total net deferred tax assets/(liabilities) (1) | $ | 872 | $ | 990 |
(Some amounts may not reconcile due to rounding.)
(1) The Company has net current tax receivable and net deferred tax asset of $43 million and $872 million, respectively, as of December 31, 2025, totaling to an income tax asset, net of $915 million as presented in consolidated balance sheets. The net current tax receivable of $43 million represents a gross federal and state tax receivable of $118 million offset by foreign tax payable of $75 million.
At December 31, 2025 and 2024, the Company had $28 million and $25 million of Valuation Allowances (“VA”), respectively. The VA is a result of our conclusion under U.S. GAAP accounting principles that the Australia, Colombia, Italy, France, Mexico, Singapore, Spain, and U.K. jurisdictions could not demonstrate that it was more likely than not that the related deferred tax assets will be realized. This was primarily due to factors such as cumulative operating losses in recent years, cumulative capital losses and, therefore, an inability to demonstrate overall profitability within the specific jurisdiction. During the year ended December 31, 2025, the Company recorded an overall increase in its VA of $3 million. Tax effected U.K. Net Operating Losses (“NOLs”) of $12 million do not expire. Tax effected Spanish NOLs of $3 million do not expire. The remaining tax effected NOLs of $9 million arose in various jurisdictions and do not expire. Note that not all NOLs had a VA up against them.
F-62
At December 31, 2025 and 2024, the Company had $7 million and $16 million respectively of foreign tax credit (“FTC”) carryforwards. In 2025, there were approximately no U.S. FTCs and $7 million of non-US FTCs. The U.S. FTCs expire in 2034. The non-U.S. FTCs do not expire.
The Company follows ASU 2016-09 regarding the treatment of the tax effects of share-based compensation transactions. ASU 2016-09 required that the income tax effects of restricted stock vestings and stock option exercises resulting from the change in value of share-based compensation awards between the grant date and settlement (vesting/exercise) date be recorded as part of income tax expense (benefit) within the consolidated statements of operations and comprehensive income (loss). Per ASU 2016-09, the Company recorded excess tax benefits related to restricted stock vestings and stock option exercises that were not significant as part of income tax expense (benefit) within the consolidated statements of operations and comprehensive income (loss) in 2025, 2024 and, 2023, respectively.
ASU 2016-09 does not impact the accounting treatment of tax benefits related to dividends on restricted stock. The tax benefits related to the payment of dividends on restricted stock have been recorded as part of additional paid-in capital in the shareholders' equity section of the consolidated balance sheets in all years. The tax benefits related to the payment of dividends on restricted stock were $0.7 million, $0.7 million and $0.6 million in 2025, 2024 and 2023, respectively.
18. DIVIDEND RESTRICTIONS AND STATUTORY FINANCIAL INFORMATION
Group and its operating subsidiaries are subject to various regulatory restrictions, including the amount of dividends that may be paid and the level of capital that the operating entities must maintain. These regulatory restrictions are based upon statutory capital as opposed to GAAP basis equity or net assets. Group and one of its primary operating subsidiaries, Bermuda Re, are regulated by Bermuda law and its other primary operating subsidiary, Everest Re, is regulated by Delaware law. Bermuda Re is subject to the Bermuda Solvency Capital Requirement (“BSCR”) administered by the Bermuda Monetary Authority (the “BMA”) and Everest Re is subject to the Risk-Based Capital Model (“RBC”) developed by the U.S. National Association of Insurance Commissioners (“NAIC”). These models represent the aggregate regulatory restrictions on net assets and statutory capital and surplus.
Dividend Restrictions.
Under Bermuda law, Group is prohibited from declaring or paying a dividend if such payment would reduce the realizable value of its assets to an amount less than the aggregate value of its liabilities and its issued share capital and share premium (additional paid-in capital) accounts. Group’s ability to pay dividends and its operating expenses is dependent upon dividends from its subsidiaries.
Under Bermuda law, Bermuda Re is prohibited from declaring or making payment of a dividend if it fails to meet its minimum solvency margin or minimum liquidity ratio. As a long-term insurer, Bermuda Re is also unable to declare or pay a dividend to anyone who is not a policyholder unless, after payment of the dividend, the value of the assets in their long-term business fund, as certified by their approved actuary, exceeds their liabilities for long term business by at least the $500,000 minimum solvency margin.
Prior approval of the BMA is required if Bermuda Re’s dividend payments would exceed 25% of their prior year-end total statutory capital and surplus.
Bermuda Re prepares its statutory financial statements in conformity with the accounting principles set forth in Bermuda in The Insurance Act 1978, amendments thereto and related regulations. The statutory capital and surplus of Bermuda Re was $4.2 billion and $4.3 billion at December 31, 2025 and 2024, respectively. The statutory net income of Bermuda Re was $0.6 billion, $1.4 billion and $1.5 billion for the years ended December 31, 2025, 2024 and 2023, respectively.
Delaware law provides that an insurance company which is a member of an insurance holding company system and is domiciled in the state shall not pay dividends without giving prior notice to the Insurance Commissioner of Delaware and may not pay dividends without the approval of the Insurance Commissioner if the value of the proposed dividend, together with all other dividends and distributions made in the preceding twelve months, exceeds the greater of (1) 10% of statutory surplus or (2) net income, not including realized capital gains, each as reported in the prior year’s statutory annual statement. In addition, no dividend may be paid in excess of unassigned earned surplus. Accordingly, as of December 31, 2025, the maximum amount that will be available for the payment of dividends by Everest Re without triggering the requirement for prior approval of regulatory authorities in connection with a dividend is $886 million.
F-63
Statutory Financial Information.
Everest Re prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the NAIC and the Delaware Insurance Department. Prescribed statutory accounting practices are set forth in the NAIC Accounting Practices and Procedures Manual. The capital and statutory surplus of Everest Re was $8.9 billion and $8.1 billion at December 31, 2025 and 2024, respectively. The statutory net income of Everest Re was $837 million, $74 million and $877 million for the years ended December 31, 2025, 2024 and 2023.
There are certain regulatory and contractual restrictions on the ability of Holdings’ operating subsidiaries to transfer funds to Holdings in the form of cash dividends, loans or advances. The insurance laws of the State of Delaware, where Holdings’ direct insurance subsidiaries are domiciled, require regulatory approval before those subsidiaries can pay dividends or make loans or advances to Holdings that exceed certain statutory thresholds.
Capital Restrictions.
In Bermuda, Bermuda Re is subject to the BSCR administered by the BMA. No regulatory action is taken if an insurer’s capital and surplus is equal to or in excess of their enhanced capital requirement determined by the BSCR model. In addition, the BMA has established a target capital level for each insurer, which is 120% of the enhanced capital requirement.
In the United States, Everest Re is subject to the RBC developed by the NAIC which determines an authorized control level risk-based capital. As long as the total adjusted capital is 200% or more of the authorized control level capital, no action is required by the Company.
The regulatory targeted capital and the actual statutory capital for Bermuda Re and Everest Re were as follows:
| Bermuda Re (1) | Everest Re (2) | ||||||||||||||||||||||
| At December 31, | At December 31, | ||||||||||||||||||||||
| (Dollars in millions) | 2025 ⁽³⁾ | 2024 | 2025 | 2024 | |||||||||||||||||||
| Regulatory targeted capital | $ | — | $ | 3,151 | $ | 5,119 | $ | 4,799 | |||||||||||||||
| Actual capital | $ | 4,209 | $ | 4,323 | $ | 8,856 | $ | 8,126 |
(1) Regulatory targeted capital represents the target capital level from the applicable year's BSCR calculation.
(2) Regulatory targeted capital represents 200% of the RBC authorized control level calculation for the applicable year.
(3) The 2025 BSCR calculation is not yet due to be completed; however, the Company anticipates that Bermuda Re's December 31, 2025 actual capital will exceed the targeted capital level.
19. SUBSEQUENT EVENTS
The Company has evaluated known recognized and non-recognized subsequent events. The Company does not have any subsequent events to report.
F-64
SCHEDULE I — SUMMARY OF INVESTMENTS —
OTHER THAN INVESTMENTS IN RELATED PARTIES
December 31, 2025
| Column A | Column B | Column C | Column D | ||||||||||||||
| (Dollars in millions) | Cost | Fair Value | Amount Shown in Balance Sheet | ||||||||||||||
| Fixed maturities - available for sale | |||||||||||||||||
| U.S. Treasury securities and obligations of U.S. government agencies and corporations | $ | 845 | $ | 830 | $ | 830 | |||||||||||
| Obligations of U.S. states and political subdivisions | 45 | 41 | 41 | ||||||||||||||
| Corporate securities | 9,913 | 9,882 | 9,882 | ||||||||||||||
| Asset-backed securities | 5,094 | 5,077 | 5,077 | ||||||||||||||
| Mortgage-backed securities: | |||||||||||||||||
| Agency commercial | 404 | 412 | 412 | ||||||||||||||
| Non-agency commercial | 1,151 | 1,121 | 1,121 | ||||||||||||||
| Agency residential | 5,544 | 5,465 | 5,465 | ||||||||||||||
| Non-agency residential | 1,689 | 1,721 | 1,721 | ||||||||||||||
| Foreign government securities | 2,400 | 2,371 | 2,371 | ||||||||||||||
| Foreign corporate securities | 7,535 | 7,653 | 7,653 | ||||||||||||||
| Total fixed maturities-available for sale | 34,620 | 34,573 | 34,573 | ||||||||||||||
| Fixed maturities - held to maturity | |||||||||||||||||
| Foreign corporate securities | 79 | 84 | 78 | ||||||||||||||
| Corporate securities | 166 | 169 | 164 | ||||||||||||||
| Asset-backed securities | 328 | 322 | 325 | ||||||||||||||
| Mortgage-backed securities: | |||||||||||||||||
| Commercial | — | — | — | ||||||||||||||
| Total fixed maturities-held to maturity | 573 | 576 | 567 | ||||||||||||||
| Equity securities - at fair value (1) | 179 | 180 | 180 | ||||||||||||||
| Short-term investments | 2,994 | 2,994 | 2,994 | ||||||||||||||
| Other invested assets | 5,796 | 5,796 | 5,796 | ||||||||||||||
| Cash | 1,318 | 1,318 | 1,318 | ||||||||||||||
| Total investments and cash | $ | 45,481 | $ | 45,437 | $ | 45,429 |
(Some amounts may not reconcile due to rounding.)
(1) Original cost does not reflect fair value adjustments, which have been realized through the statements of operations and comprehensive income (loss).
S-1
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED BALANCE SHEETS
| December 31, | |||||||||||
| (In millions of U.S. dollars, except par value per share) | 2025 | 2024 | |||||||||
| ASSETS: | |||||||||||
| Other invested assets (cost: 2025, $207; 2024, $63) | $ | 207 | $ | 63 | |||||||
| Short-term investments | — | 8 | |||||||||
| Cash | 6 | 5 | |||||||||
| Investment in subsidiaries, at equity in the underlying net assets | 16,648 | 15,329 | |||||||||
| Long-term notes receivable, affiliated | 600 | 600 | |||||||||
| Receivable from subsidiaries | 65 | 17 | |||||||||
| Income tax asset, net | 2 | — | |||||||||
| Other assets | 40 | 37 | |||||||||
| TOTAL ASSETS | $ | 17,569 | $ | 16,059 | |||||||
| LIABILITIES: | |||||||||||
| Long-term notes payable, affiliated | $ | 2,073 | $ | 2,173 | |||||||
| Due to subsidiaries | 29 | 9 | |||||||||
| Other liabilities | 6 | 2 | |||||||||
| Total liabilities | 2,108 | 2,184 | |||||||||
| SHAREHOLDERS' EQUITY: | |||||||||||
| Preferred shares, par value: $0.01; 50.0 shares authorized; no shares issued and outstanding | — | — | |||||||||
| Common shares, par value: $0.01; 200.0 shares authorized; (2025) 74.4 and (2024) 74.3 outstanding before treasury shares | 1 | 1 | |||||||||
| Additional paid-in capital | 3,852 | 3,812 | |||||||||
| Accumulated other comprehensive income (loss), net of deferred income tax expense (benefit) of ($23) at 2025 and $(177) at 2024 | (52) | (1,138) | |||||||||
| Treasury shares, at cost; 33.7 shares (2025) and 31.3 shares (2024) | (4,906) | (4,108) | |||||||||
| Retained earnings | 16,565 | 15,309 | |||||||||
| Total shareholders' equity | 15,461 | 13,875 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 17,569 | $ | 16,059 |
(Some amounts may not reconcile due to rounding.)
See notes to consolidated financial statements.
S-2
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF OPERATIONS
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (Dollars in millions) | |||||||||||||||||
| REVENUES: | |||||||||||||||||
| Net investment income | $ | 31 | $ | 5 | $ | 4 | |||||||||||
| Other income (expense) | 74 | 7 | 8 | ||||||||||||||
| Net income (loss) of subsidiaries | 1,658 | 1,510 | 2,641 | ||||||||||||||
| Total revenues | 1,762 | 1,522 | 2,653 | ||||||||||||||
| EXPENSES: | |||||||||||||||||
| Interest expense - affiliated | 100 | 77 | 87 | ||||||||||||||
| Other expenses | 73 | 71 | 49 | ||||||||||||||
| Total expenses | 174 | 148 | 136 | ||||||||||||||
| INCOME (LOSS) BEFORE TAXES | 1,589 | 1,373 | 2,517 | ||||||||||||||
| Income tax expense (benefit) | (3) | — | — | ||||||||||||||
| NET INCOME (LOSS) | $ | 1,591 | $ | 1,373 | $ | 2,517 | |||||||||||
| Other comprehensive income (loss) of subsidiaries, net of tax | 1,086 | (204) | 1,063 | ||||||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 2,678 | $ | 1,169 | $ | 3,580 |
(Some amounts may not reconcile due to rounding.)
See notes to consolidated financial statements.
S-3
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
CONDENSED STATEMENTS OF CASH FLOWS
| Years Ended December 31, | |||||||||||||||||
| (Dollars in millions, except share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
| Net income (loss) | $ | 1,591 | $ | 1,373 | $ | 2,517 | |||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Decrease (increase) in income taxes | (2) | — | — | ||||||||||||||
| Equity in retained (earnings) deficit of subsidiaries | (1,658) | (1,510) | (2,641) | ||||||||||||||
| Cash dividends received from subsidiaries | 1,547 | 969 | 365 | ||||||||||||||
| Change in other assets and liabilities, net | (29) | 7 | (8) | ||||||||||||||
| Increase (decrease) in due to/from affiliates | (29) | (3) | 2 | ||||||||||||||
| Non-cash compensation expense | 3 | 2 | 3 | ||||||||||||||
| Net cash provided by (used in) operating activities | 1,424 | 839 | 238 | ||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Additional investment in subsidiaries | (121) | (161) | (377) | ||||||||||||||
| Proceeds from fixed maturities sold - available for sale | — | — | 23 | ||||||||||||||
| Distribution from other invested assets | 1,243 | 826 | 441 | ||||||||||||||
| Cost of fixed maturities acquired - available for sale | — | — | (23) | ||||||||||||||
| Cost of other invested assets acquired | (1,387) | (852) | (479) | ||||||||||||||
| Net change in short-term investments | 8 | (8) | — | ||||||||||||||
| Proceeds from repayment of long term notes receivable - affiliated | — | 50 | 50 | ||||||||||||||
| (Issuance) of long term notes receivable - affiliated | — | (600) | (100) | ||||||||||||||
| Proceeds from sale of renewal rights | 30 | — | — | ||||||||||||||
| Net cash provided by (used in) investing activities | (228) | (745) | (465) | ||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
| Common shares issued during the period, net | 38 | 36 | 23 | ||||||||||||||
| Proceeds from public offering of common shares | — | — | 1,445 | ||||||||||||||
| Purchase of treasury shares | (797) | (200) | — | ||||||||||||||
| Dividends paid to shareholders | (335) | (334) | (288) | ||||||||||||||
| Proceeds from issuance (cost of repayment) of long term notes payable - affiliated | (100) | 400 | (965) | ||||||||||||||
| Net cash provided by (used in) financing activities | (1,195) | (98) | 215 | ||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | — | — | — | ||||||||||||||
| Net increase (decrease) in cash | 1 | (4) | (13) | ||||||||||||||
| Cash, beginning of period | 5 | 9 | 22 | ||||||||||||||
| Cash, end of period | $ | 6 | $ | 5 | $ | 9 | |||||||||||
(Some amounts may not reconcile due to rounding.)
See notes to consolidated financial statements.
S-4
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
NOTES TO CONDENSED FINANCIAL INFORMATION
i.)The accompanying condensed financial information should be read in conjunction with the consolidated financial statements and related notes of Everest Group, Ltd. and its subsidiaries.
ii.)Everest Group, Ltd. entered into a $300 million long-term note agreement with Everest Reinsurance Company, an affiliated company, as of December, 2019. The note was scheduled to pay interest annually at a rate of 1.69% and was scheduled to mature in December 2028. However, the note was paid off in full in May 2023 and is no longer outstanding as of December 31, 2023.
iii.)Everest Group, Ltd. entered into a $200 million long-term note agreement with Everest Reinsurance Company, an affiliated company, as of August 2021. The note was scheduled to pay interest annually at a rate of 1.00% and was scheduled to mature in August 2030. However, the note was paid off in full in May 2023 and is no longer outstanding as of December 31, 2023.
iv.)Everest Group, Ltd. entered into a $215 million long-term note agreement with Everest Reinsurance Holdings, Inc., an affiliated company, as of June 2022. The note was scheduled to pay interest annually at a rate of 3.11% and was scheduled to mature in June 2052. However, the note was paid off in full in May 2023 and is no longer outstanding as of December 31, 2023.
v.)Everest Group, Ltd. entered into a $125 million long-term note agreement with Everest Reinsurance Holdings, Inc., an affiliated company, as of December 2022. The note was scheduled to pay interest annually at a rate of 4.34% and was scheduled to mature in June 2052. However, the note was paid off in full in May 2023 and is no longer outstanding as of December 31, 2023.
vi.)Everest Group, Ltd. entered into a $125 million long-term note agreement with Everest International Reinsurance, an affiliated company, as of December 2022. The note was scheduled to pay interest annually at a rate of 4.34% and was scheduled to mature in December 2052. However, the note was paid off in full in May 2023 and is no longer outstanding as of December 31, 2023.
vii.)Everest Group, Ltd. entered into a $1.8 billion long-term note agreement with Everest Preferred International Holdings, an affiliated company, as of December 2022. The note will pay interest quarterly at a rate of 4.34% and is scheduled to mature in December 2052. At December 31, 2025, this transaction was included within long-term notes payable, affiliated in the condensed balance sheets of Everest Group, Ltd.
viii.)Everest Group, Ltd. issued a $100 million long-term note agreement to Everest Reinsurance Bermuda, an affiliated company, as of May 2023. The note will pay interest annually at a rate of 3.72% and is scheduled to mature in May 2053. Everest Reinsurance Bermuda repaid $50 million to Everest Group, Ltd. in September 2023 and $50 million in May 2024 and the note is no longer outstanding as of December 31, 2024.
ix.)In December 2024, Everest Group, Ltd. entered into a $1.5 billion revolving loan facility with Everest Reinsurance Holdings, Inc., an affiliated company, and funded a $600 million long-term note. The note will pay interest semi-annually at a rate of 4.30% and is scheduled to mature in December 2027. At December 31, 2025, this transaction was included within long-term notes receivable, affiliated in the condensed balance sheets of Everest Group, Ltd.
x.)In December 2024, Everest Group, Ltd. entered into a $500 million revolving loan facility with Everest International Reinsurance, an affiliated company, and drew down $100 million under a long-term note. The note will pay interest semi-annually at a rate of 4.30% and is scheduled to mature in December 2027. At December 31, 2025, this transaction was included within long-term notes payable, affiliated in the condensed balance sheets of Everest Group, Ltd.
xi.)In December 2024, Everest Group, Ltd. entered into a $1.0 billion revolving loan facility with Everest Reinsurance Bermuda, an affiliated company and drew down $300 million under a long-term note. The note will pay interest semi-annually at a rate of 4.30% and is scheduled to mature in December 2027. During 2025, Everest Group, Ltd. drew down an additional $175 million in the first quarter and repaid $275 million in December, leaving $200 million outstanding as of December 31, 2025. At December 31, 2025, this transaction was included within long-term notes payable, affiliated in the condensed balance sheets of Everest Group, Ltd.
S-5
xii.)Everest Group, Ltd. has invested funds in the segregated accounts of Mt. Logan Re, an affiliated entity. On the condensed balance sheets, investments in Mt. Logan Re valued at $35 million and $39 million as of December 31, 2025 and 2024, respectively, have been recorded within other assets. On the condensed statements of operations, income (expense) of $7 million, $8 million and $8 million for the years ended December 31, 2025, 2024 and 2023, respectively, have been recorded in other income (expense).
xiii.)On October 26, 2025, Everest Group, Ltd. entered into definitive agreements to sell the renewal rights for certain lines of the commercial retail insurance business in the U.S., U.K., E.U. and Asia Pacific to American International Group, Inc. On the condensed statements of operations, income from the sale of renewal rights of $68 million for the year ended December 31, 2025 has been recorded in other income (expense).
S-6
SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION
| Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | Column I | Column J | |||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Acquisition Costs | Reserve for Losses and Loss Adjustment Expenses | Unearned Premium Reserves | Premiums Earned | Net Investment Income | Incurred Loss and Loss Adjustment Expenses | Amortization of Deferred Acquisition Costs | Other Operating Expenses | Net Written Premium | ||||||||||||||||||||||||||||||||||||||||||||||||
| Segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As of and Year Ended December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reinsurance | $ | 1,258 | $ | 22,730 | $ | 4,747 | $ | 11,732 | $ | 1,376 | $ | 7,517 | $ | 2,952 | $ | 291 | $ | 11,791 | ||||||||||||||||||||||||||||||||||||||
| Insurance | 280 | 10,203 | 2,495 | 3,718 | 658 | 3,050 | 488 | 721 | 3,638 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 8 | 1,379 | 32 | 111 | 90 | 292 | 21 | 17 | 84 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,546 | $ | 34,312 | $ | 7,275 | $ | 15,560 | $ | 2,124 | $ | 10,859 | $ | 3,461 | $ | 1,029 | $ | 15,513 | ||||||||||||||||||||||||||||||||||||||
| As of and Year Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reinsurance | $ | 1,185 | $ | 19,708 | $ | 4,621 | $ | 11,412 | $ | 1,255 | $ | 7,103 | $ | 2,837 | $ | 290 | $ | 11,969 | ||||||||||||||||||||||||||||||||||||||
| Insurance | 270 | 8,841 | 2,635 | 3,579 | 605 | 3,622 | 439 | 615 | 3,678 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 6 | 1,340 | 68 | 197 | 94 | 580 | 24 | 33 | 167 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,461 | $ | 29,889 | $ | 7,324 | $ | 15,187 | $ | 1,954 | $ | 11,305 | $ | 3,300 | $ | 938 | $ | 15,814 | ||||||||||||||||||||||||||||||||||||||
| As of and Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reinsurance | $ | 967 | $ | 17,327 | $ | 4,009 | $ | 9,799 | $ | 984 | $ | 5,690 | $ | 2,520 | $ | 254 | $ | 10,802 | ||||||||||||||||||||||||||||||||||||||
| Insurance | 271 | 6,338 | 2,504 | 3,420 | 391 | 2,471 | 410 | 556 | 3,704 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 9 | 939 | 109 | 225 | 59 | 266 | 22 | 35 | 225 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,247 | $ | 24,604 | $ | 6,622 | $ | 13,443 | $ | 1,434 | $ | 8,427 | $ | 2,952 | $ | 846 | $ | 14,730 |
(Some amounts may not reconcile due to rounding.)
S-7
SCHEDULE IV — REINSURANCE
| Column A | Column B | Column C | Column D | Column E | Column F | |||||||||||||||||||||||||||
| (Dollars in millions) | Gross Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Assumed to Net | |||||||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||||||||
| Total property and liability insurance premiums earned | $ | 4,921 | $ | 2,429 | $ | 13,067 | $ | 15,560 | 84.0 | % | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||||||||
| Total property and liability insurance premiums earned | $ | 4,977 | $ | 2,248 | $ | 12,458 | $ | 15,187 | 82.0 | % | ||||||||||||||||||||||
| December 31, 2023 | ||||||||||||||||||||||||||||||||
| Total property and liability insurance premiums earned | $ | 4,733 | $ | 1,807 | $ | 10,518 | $ | 13,443 | 78.2 | % |
S-8
Previous: Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES