

þ☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the Transition Period from to .

Delaware

22-1867895

(State or other jurisdiction of

~~(I.R.S. Employer~~

incorporation or organization)

(I.R.S. Employer Identification No.)

475 Steamboat Road ~~Greenwich, Connecticut~~

Greenwich

Connecticut

06830

(Address of principal executive offices)

(Zip Code)

(Registrant’s telephone number, including area code)

Former name, former address and former fiscal year, if changed since last report.

Securities registered pursuant to Section 12(b) of the Act:


Title	Trading Symbol	Name

Common Stock, par value $.20 per share	WRB	New York Stock Exchange

5.75% Subordinated Debentures due 2056	WRB-PD	New York Stock Exchange
5.70% Subordinated Debentures due 2058	WRB-PE	New York Stock Exchange
5.10% Subordinated Debentures due 2059	WRB-PF	New York Stock Exchange
4.25% Subordinated Debentures due 2060	WRB-PG	New York Stock Exchange
4.125% Subordinated Debentures due 2061	WRB-PH	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ☒ No o☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes þ☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerþ

☒

Accelerated filero

☐

Non-accelerated filero

☐

Smaller reporting companyo

☐

~~(Do not check if a smaller reporting company)~~

Emerging growth companyo

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No þ☒

Number of shares of common stock, $.20 par value, outstanding as of ~~November 6, 2017: 121,794,758~~

April 29, 2021: 177,380,548

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

Equity securities available for sale

See accompanying notes to interim consolidated financial statements.

(In thousands, except per share data)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
REVENUES:
Net premiums written $ 1,571,183
$ 1,607,365
$ 4,782,272
$ 4,913,656
Change in net unearned premiums 10,317
(21,421 ) (62,028 ) (240,584 )
Net premiums earned 1,581,500
1,585,944
4,720,244
4,673,072
Net investment income 142,479
145,668
426,601
404,850
Net realized investment gains 183,959
175,738
276,760
207,508
Other-than-temporary impairments —
—
—
(18,114 )
Revenues from non-insurance businesses 89,786
80,242
225,033
305,787
Insurance service fees 33,612
32,135
100,475
109,437
Other income 6
—
695
—
Total revenues 2,031,342
2,019,727
5,749,808
5,682,540
OPERATING COSTS AND EXPENSES:
Losses and loss expenses 1,081,174
965,856
3,025,475
2,852,339
Other operating costs and expenses 600,822
606,348
1,821,155
1,770,450
Expenses from non-insurance businesses 86,412
78,865
221,389
291,127
Interest expense 36,821
37,043
110,419
104,019
Total operating costs and expenses 1,805,229
1,688,112
5,178,438
5,017,935
Income before income taxes 226,113
331,615
571,370
664,605
Income tax expense (63,295 ) (110,952 ) (174,305 ) (214,789 )
Net income before noncontrolling interests 162,818
220,663
397,065
449,816
Noncontrolling interests (764 ) (13 ) (2,560 ) (689 )
Net income to common stockholders $ 162,054
$ 220,650
$ 394,505
$ 449,127

NET INCOME PER SHARE:
Basic $ 1.29
$ 1.80
$ 3.17
$ 3.66
Diluted $ 1.26
$ 1.72
$ 3.05
$ 3.50

See accompanying notes to interim consolidated financial statements.

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2017 2016 2017 2016
Net income before noncontrolling interests $ 162,818
$ 220,663
$ 397,065
$ 449,816
Other comprehensive income (loss):
Change in unrealized currency translation adjustments 28,592
(19,470 ) 71,574
(77,389 )
Change in unrealized investment gains (losses), net of taxes (8,168 ) (47,676 ) 26,598
134,213
Other comprehensive income (loss): 20,424
(67,146 ) 98,172
56,824
Comprehensive income 183,242
153,517
495,237
506,640
Noncontrolling interests (731 ) 44
(2,541 ) (623 )
Comprehensive income to common stockholders $ 182,511
$ 153,561
$ 492,696
$ 506,017

See accompanying notes to interim consolidated financial statements.

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

(In ~~thousands)~~thousands, except per share data)

Dividends ($0.12 and $0.11 per share, respectively)

See accompanying notes to interim consolidated financial statements.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The unaudited consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries (the “Company”), have been prepared on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. Reclassifications have been made in the 2020 financial statements as originally reported to conform to the presentation of the 2021 financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the revenues and expenses reflected during the reporting period. For further information related to ~~a description of~~ areas of judgment and estimates and other information necessary to understand the Company’s financial position and results of operations, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016. Reclassifications have been made in the 2016 financial statements as originally reported to conform to the presentation of the 2017 financial statements.~~2020.

The income tax provision has been computed based on the Company’s estimated annual effective tax rate. The effective income tax rate ~~for the quarter~~ differs from the federal income tax rate of ~~35%~~21% principally because of state and foreign income taxes, which was partially offset by tax-exempt investment income ~~as well as the new requirement in 2017 to recognize~~and tax benefits ~~for stock compensation in income tax expense.~~related to equity-based compensation.

The Company presents both basic and diluted net income (loss) per share (“EPS”) amounts. Basic EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period (including ~~4,087,731~~7,767,874 and 7,575,168 common shares held in a grantor trust ~~established in~~as of March ~~2017)~~31, 2021 and 2020, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect. For the period ended March 31, 2020, diluted shares have been reduced by 2.0 million to reflect the anti-dilutive effect of common equivalent shares.

The weighted average number of common shares used in the computation of basic and diluted earnings per share was as follows:


	For the Three Months Ended March 31,

(In thousands)	2021	2020
Basic	185,195	190,287
Diluted	186,830	190,287

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(In thousands) 2017 2016 2017 2016
Basic 125,818
122,562
124,363
122,652
Diluted 128,944
128,556
129,289
128,501

and Accounting Policies

Recently adopted accounting pronouncements:

In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-09, Disclosures about Short-Duration Contracts. ASU 2015-09 requires companies that issue short duration insurance contracts to disclose additional information, including: (i) incurred and paid claims development tables; (ii) frequency and severity of claims; and (iii) information about material changes in judgments made in calculating the liability for unpaid claim adjustment expenses, including reasons for the change and the effects on the financial statements. The Company adopted this updated guidance on January 1, 2016 with regard to the annual requirements and on January 1, 2017 with regard to the interim requirements. The amendments in ASU 2015-09 are applied retrospectively by providing comparative disclosures for each period presented, except for those requirements that apply only to the current period. As the requirements are disclosure only, the adoption of this guidance did not impact our financial condition or results of operations, but did result in additional disclosures.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 includes provisions intended to simplify various previous provisions related to how share-based payments are accounted for and presented in the financial statements. Under the new guidance, excess tax benefits (deductions for share based payment awards for tax purposes that exceed the compensation cost recognized for financial reporting purposes) are reported within the income tax expense financial statement line item. Previously, excess tax benefits were reported within additional paid in capital. The Company adopted this updated guidance on January 1, 2017 prospectively. The adoption of this guidance did not have a material impact on the Company's financial condition or results of operations.

All ~~other~~ accounting and reporting standards that ~~became~~have become effective in ~~2017~~2021 were either not applicable to the Company or their adoption did not have a material impact on the Company.

Accounting and reporting standards that are not yet effective:

In May 2014, the FASB issued ASU 2014-09, Revenue from Customers. ASU 2014-09 clarifies the principles for recognizing revenue. While insurance contracts are not within the scope of this updated guidance, the Company’s insurance service fee revenue and non-insurance business revenue will be subject to this updated guidance. The updated guidance requires an entity to recognize revenue as performance obligations are met, in order to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration the entity is entitled to receive for those goods or services. The updated guidance, as amended by ASU 2015-14, is effective for public business entities for annual and interim reporting periods beginning after December 15, 2017. The adoption of this guidance is not expected to have a material effect on the Company’s financial condition or results of operations.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments. ASU 2016-01 amends the accounting guidance for financial instruments to require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The updated guidance is effective for public business entities for annual reporting periods beginning after December 15, 2017 and interim periods within those years. The adoption of this guidance is not expected to have a material effect on the Company’s financial condition upon adoption, but will impact results of operations after adoption of this guidance as unrealized gains and losses on equity securities will no longer be reported directly in accumulated other comprehensive income (AOCI), but will instead be reported in net income.

In February 2016, the FASB issued ASU 2016-02, Leases, which amends the accounting and disclosure guidance for leases. This guidance retains the two classifications of a lease, as either an operating or finance lease, both of which will require lessees to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months. The right-of-use asset and the lease liability will be determined based upon the present value of cash flows. Finance leases will reflect the financial arrangement by recognizing interest expense on the lease liability separately from the amortization expense of the right-of-use asset. Operating leases will recognize lease expense (with no separate recognition of interest expense) on a straight-line basis over the term of the lease. The accounting by lessors is not significantly changed by the updated guidance. The updated guidance is effective for reporting periods beginning after December 15, 2018, and will require that the earliest comparative period presented include the measurement and recognition of existing leases with an adjustment to equity as if the updated guidance had always been applied. The Company is currently evaluating the impact that the adoption of this guidance will have on its results of operations, financial position and liquidity.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which amends the accounting guidance for credit losses on financial instruments. The updated guidance amends the current other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. This guidance also applies a new current expected credit loss model for determining credit-related impairments for financial instruments measured at amortized cost. The updated guidance is effective for reporting periods beginning after December 15, 2019. The Company will not be able to determine the impact the adoption of this guidance will have on its results of operations, financial position or liquidity until the year the guidance becomes effective.

All ~~other~~ recently issued but not yet effective accounting and reporting standards are either not applicable to the Company or are not expected to have a material impact on the Company.

(4) ~~Acquisitions/Disposition~~

In March 2017, the Company acquired an 89.5% ownership interest for $73.3 million in a company engaged in providing textile solutions world-wide. The fair value of the assets acquired and liabilities assumed have been estimated based on a third party valuation.

~~The following table summarizes the estimated fair value of net assets acquired and liabilities assumed for the business combination completed in 2017:~~

(In thousands) 2017

Cash and cash equivalents $ 2,721
Real estate, furniture and equipment 7,042
Goodwill 28,522
Intangible assets 32,395
Other assets 9,862
Total assets acquired 80,542

Other liabilities assumed (2,251 )
Noncontrolling interest (5,000 )
Net assets acquired $ 73,291

~~In February 2016, the Company acquired an 85% ownership interest for $42.3 million in a company engaged in the distribution of promotional merchandise.~~

~~(5)~~ Consolidated ~~Statement~~Statements of Comprehensive Income (Loss)

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


(In thousands)											(In thousands)	Unrealized Investment Gains (Losses)			Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income
As of and for the three months ended March 31, 2021											As of and for the three months ended March 31, 2021
Changes in AOCI											Changes in AOCI
Beginning of period											Beginning of period	$	289,714		$	(351,886)	$	(62,172)

(In thousands)	Unrealized Investment Gains (Losses)				Currency Translation Adjustments			Accumulated Other Comprehensive Income
As of and for the nine months ended September 30, 2017:
Changes in AOCI
Beginning of period	$	427,154			$	(371,586	)	$	55,568
Other comprehensive income before reclassifications	109,277				71,574			180,851
Amounts reclassified from AOCI	(82,679		)		—			(82,679		)
Other comprehensive income	26,598				71,574			98,172
Unrealized investment loss related to non-controlling interest	19				—			19
End of period	$	453,771			$	(300,012	)	$	153,759
Amounts reclassified from AOCI
Pre-tax	$	(127,198	)	(1)	$	—		$	(127,198	)
Tax effect	44,519			(2)	—			44,519
After-tax amounts reclassified	$	(82,679	)		$	—		$	(82,679	)
Other comprehensive income
Pre-tax	$	50,148			$	71,574		$	121,722
Tax effect	(23,550		)		—			(23,550		)
Other comprehensive income	$	26,598			$	71,574		$	98,172

As of and for the three months ended September 30, 2017:
Changes in AOCI
Beginning of period	$	461,906			$	(328,604	)	$	133,302
Other comprehensive income before reclassifications	19,968				28,592			48,560
Other comprehensive (loss) income before reclassifications											Other comprehensive (loss) income before reclassifications	(98,991)			4,050		(94,941)
Amounts reclassified from AOCI	(28,136		)		—			(28,136		)	Amounts reclassified from AOCI	8,861			0		8,861
Other comprehensive (loss) income	(8,168		)		28,592			20,424			Other comprehensive (loss) income	(90,130)			4,050		(86,080)
Unrealized investment loss related to non-controlling interest	33				—			33
Unrealized investment gain related to noncontrolling interest											Unrealized investment gain related to noncontrolling interest	0			0		0
End of period	$	453,771			$	(300,012	)	$	153,759		End of period	$	199,584		$	(347,836)	$	(148,252)
Amounts reclassified from AOCI											Amounts reclassified from AOCI
Pre-tax	$	(43,286	)	(1)	$	—		$	(43,286	)	Pre-tax	$	11,216	(1)	$	0	$	11,216
Tax effect	15,150			(2)	—			15,150			Tax effect	(2,355)		(2)	0		(2,355)
After-tax amounts reclassified	$	(28,136	)		$	—		$	(28,136	)	After-tax amounts reclassified	$	8,861		$	0	$	8,861
Other comprehensive (loss) income											Other comprehensive (loss) income
Pre-tax	$	(8,563	)		$	28,592		$	20,029		Pre-tax	$	(113,735)		$	4,050	$	(109,685)
Tax effect	395				—			395			Tax effect	23,605			0		23,605
Other comprehensive (loss) income	$	(8,168	)		$	28,592		$	20,424		Other comprehensive (loss) income	$	(90,130)		$	4,050	$	(86,080)

(1) Net investment gains (losses) in the consolidated statements of ~~income.~~income (loss).

⁽²⁾Income tax ~~expense~~(expense) benefit in the consolidated statements of ~~income.~~income (loss).

(In thousands) Unrealized Investment Gains (Losses) Currency Translation Adjustments Accumulated Other Comprehensive Income (Loss)
As of and for the nine months ended September 30, 2016:
Changes in AOCI
Beginning of period $ 180,695
$ (247,393 ) $ (66,698 )
Other comprehensive income (loss) before reclassifications 170,824
(77,389 ) 93,435
Amounts reclassified from AOCI (36,611 ) —
(36,611 )
Other comprehensive income (loss) 134,213
(77,389 ) 56,824
Unrealized investment loss related to non-controlling interest 66
—
66
End of period $ 314,974
$ (324,782 ) $ (9,808 )
Amounts reclassified from AOCI
Pre-tax $ (56,325 ) (1) $ —
$ (56,325 )
Tax effect 19,714
(2) —
19,714
After-tax amounts reclassified $ (36,611 ) $ —
$ (36,611 )
Other comprehensive income (loss)
Pre-tax $ 198,808
$ (77,389 ) $ 121,419
Tax effect (64,595 ) —
(64,595 )
Other comprehensive income (loss) $ 134,213
$ (77,389 ) $ 56,824

As of and for the three months ended September 30, 2016:
Changes in AOCI
Beginning of period $ 362,593
$ (305,312 ) $ 57,281
Other comprehensive loss before reclassifications (20,968 ) (19,470 ) (40,438 )
Amounts reclassified from AOCI (26,708 ) —
(26,708 )
Other comprehensive loss (47,676 ) (19,470 ) (67,146 )
Unrealized investment loss related to non-controlling interest 57
—
57
End of period $ 314,974
$ (324,782 ) $ (9,808 )
Amounts reclassified from AOCI
Pre-tax $ (41,090 ) (1) $ —
$ (41,090 )
Tax effect 14,382
(2) —
14,382
After-tax amounts reclassified $ (26,708 ) $ —
$ (26,708 )
Other comprehensive loss
Pre-tax $ (72,188 ) $ (19,470 ) $ (91,658 )
Tax effect 24,512
—
24,512
Other comprehensive loss $ (47,676 ) $ (19,470 ) $ (67,146 )

~~(1) Net investment gains in the consolidated statements of income.~~

~~(2) Income tax expense in the consolidated statements of income.~~

Interest payments were ~~$134,291,000~~$45,393,000 and ~~$124,791,000~~$54,582,000 for the three months ended March 31, 2021 and 2020, respectively. No income taxes were paid ~~were $182,487,000 and $99,161,000 in the nine months ended September 30, 2017 and~~ ~~2016, respectively.~~during such periods.

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, investments in fixed maturity securities were as follows:

(In thousands)
Amortized
Cost
Gross Unrealized
Fair
Value

Carrying
Value
Gains Losses
September 30, 2017
Held to maturity:
State and municipal $ 65,372
$ 15,212
$ —
$ 80,584
$ 65,372
Residential mortgage-backed 14,024
1,452
—
15,476
14,024
Total held to maturity 79,396
16,664
—
96,060
79,396
Available for sale:
U.S. government and government agency 402,901
10,828
(2,124 ) 411,605
411,605
State and municipal:
Special revenue 2,730,653
80,144
(5,469 ) 2,805,328
2,805,328
State general obligation 481,070
21,377
(565 ) 501,882
501,882
Pre-refunded 282,488
21,052
(173 ) 303,367
303,367
Corporate backed 380,351
11,775
(499 ) 391,627
391,627
Local general obligation 384,930
26,566
(531 ) 410,965
410,965
Total state and municipal 4,259,492
160,914
(7,237 ) 4,413,169
4,413,169
Mortgage-backed securities:
Residential (1) 1,064,705
12,696
(8,860 ) 1,068,541
1,068,541
Commercial 251,387
1,641
(1,450 ) 251,578
251,578
Total mortgage-backed securities 1,316,092
14,337
(10,310 ) 1,320,119
1,320,119
Asset-backed 2,389,187
9,836
(10,405 ) 2,388,618
2,388,618
Corporate:
Industrial 2,569,673
70,054
(2,842 ) 2,636,885
2,636,885
Financial 1,335,101
43,636
(4,716 ) 1,374,021
1,374,021
Utilities 255,478
12,760
(907 ) 267,331
267,331
Other 42,183
2
(48 ) 42,137
42,137
Total corporate 4,202,435
126,452
(8,513 ) 4,320,374
4,320,374
Foreign 909,608
32,889
(2,088 ) 940,409
940,409
Total available for sale 13,479,715
355,256
(40,677 ) 13,794,294
13,794,294
Total investments in fixed maturity securities $ 13,559,111
$ 371,920
$ (40,677 ) $ 13,890,354
$ 13,873,690

(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses is recognized in the consolidated statements of income (loss). Amount excludes unrealized losses relating to non-credit factors.

(1) Represents the amount of impairment that has resulted from credit-related factors. The change in the allowance for expected credit losses, excluding the cumulative effect adjustment resulting from changes in accounting principles, is recognized in the consolidated statements of income (loss). Amount excludes unrealized losses relating to non-credit factors.

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended March 31, 2021:

~~Gross unrealized gains and (losses)~~(68)

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended March 31, 2020:


	State and Municipal
(In thousands)
Allowance for expected credit losses at January 1, 2020	$	0
Cumulative effect adjustment resulting from changes in accounting principles	69
Provision for expected credit losses	38
Allowance for expected credit losses at March 31, 2020	$	107

The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended March 31, 2021:


	Foreign Government		Corporate		Total
(In thousands)
Allowance for expected credit losses at December 31, 2020	$	1,264	$	518	$	1,782
Expected credit losses on securities for which credit losses were not previously recorded	18,990		16		19,006
Expected credit losses on securities for which credit losses were previously recorded	(261)		(513)		(774)
Reduction due to disposals	0		(5)		(5)
Allowance for expected credit losses at March 31, 2021	$	19,993	$	16	$	20,009

The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended March 31, 2020:


	Foreign Government		Corporate		Total
(In thousands)
Allowance for expected credit losses at January 1, 2020	$	0	$	0	$	0
Cumulative effect adjustment resulting from changes in accounting principles	35,645		0		35,645
Expected credit losses on securities for which credit losses were not previously recorded	12,494		6,436		18,930
Expected credit losses on securities for which credit losses were previously recorded	16,369		0		16,369
Reduction due to disposals	(3,588)		0		(3,588)
Allowance for expected credit losses at March 31, 2020	$	60,920	$	6,436	$	67,356

During the three months ended March 31, 2021, the Company increased the allowance for expected credit losses for available for sale securities utilizing its credit loss assessment process and inputs used in its credit loss model, primarily due to foreign government securities that had no reserve in prior periods. During the three months ended March 31, 2020, the Company increased the allowance for expected credit losses for available for sale securities primarily due to the negative impact to the financial markets caused by COVID-19.

The amortized cost and fair value of fixed maturity securities at ~~September 30, 2017~~,March 31, 2021, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because certain issuers may have the right to call or prepay obligations.



(In thousands)	Amortized Cost (1)		Fair Value
Due in one year or less	$	1,778,569	$	1,765,769
Due after one year through five years	6,419,223		6,576,943
Due after five years through ten years	3,500,751		3,592,140
Due after ten years	2,359,151		2,394,291
Mortgage-backed securities	1,068,556		1,083,049
Total	$	15,126,250	$	15,412,192

(In thousands)
Amortized
Cost
Fair Value
Due in one year or less $ 745,010
$ 750,479
Due after one year through five years 5,089,768
5,210,268
Due after five years through ten years 3,248,254
3,396,461
Due after ten years 3,145,963
3,197,551
Mortgage-backed securities 1,330,116
1,335,595
Total $ 13,559,111
$ 13,890,354
________________

(1) Amortized cost is reduced by the allowance for expected credit losses of $730 thousand related to held to maturity securities.

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities.

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, investments in equity securities were as follows:

At ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~,2020, the fair and carrying values of the arbitrage trading account were ~~$488~~$615 million and ~~$300~~$341 million, respectively. The primary focus of the trading account is merger arbitrage. Merger arbitrage is the business of investing in the securities of publicly held companies which are the targets in announced tender offers and mergers. Arbitrage investing differs from other types of investing in its focus on transactions and events believed likely to bring about a change in value over a relatively short time period (usually four months or less).

The Company uses put options and call options ~~and swap contracts~~ in order to mitigate the impact of potential changes in market conditions on the merger arbitrage trading account. These options ~~and contracts~~ are reported at fair value. As of ~~September 30, 2017, the fair value of long option contracts outstanding was $1 million (notional amount of $33 million) and~~March 31, 2021, the fair value of short option contracts outstanding was ~~$1 million~~$161 thousand (notional amount of ~~$54~~$18.5 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.

Net investment income ~~consists~~consisted of the following:

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(In thousands) 2017 2016 2017 2016
Investment income earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable $ 118,834
$ 114,271
$ 347,976
$ 331,448
Investment funds 15,200
25,293
50,744
60,385
Arbitrage trading account 4,418
6,441
16,235
12,883
Real estate 5,042
585
14,894
4,552
Equity securities available for sale 604
1,069
1,845
3,217
Gross investment income 144,098
147,659
431,694
412,485
Investment expense (1,619 ) (1,991 ) (5,093 ) (7,635 )
Net investment income $ 142,479
$ 145,668
$ 426,601
$ 404,850

~~(11)~~(10) Investment Funds

The Company evaluates whether it is an investor in a variable interest entity ~~(VIE)~~("VIE"). Such entities do not have sufficient equity at risk to finance their activities without additional subordinated financial support, or the equity investors, as a group, do not have the characteristics of a controlling financial interest (primary beneficiary). The Company determines whether it is the

primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE's capital structure, contractual terms, nature of the VIE's operations and purpose, and the Company's relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE and on an ongoing basis. The Company is not the primary beneficiary in any of its investment funds, and accordingly, carries its interests in investment funds under the equity method of accounting.

The Company’s maximum exposure to loss with respect to these investments is limited to the carrying amount reported on the Company’s consolidated balance sheet and its unfunded commitments, which were ~~$442~~$129 million as of ~~September 30, 2017.~~March 31, 2021.

Investment funds consisted of the following:


	Carrying Value as of				Income from Investment Funds
	March 31,		December 31,		For the Three Months Ended March 31,
(In thousands)	2021		2020		2021		2020
Financial services	$	477,927	$	434,437	$	17,142	$	15,209
Real Estate	304,461		310,783		4,434		6,790
Energy	143,852		140,935		3,320		4,413
Transportation	193,401		190,125		6,228		2,646
Other funds	239,356		233,150		7,811		11,519
Total	$	1,358,997	$	1,309,430	$	38,935	$	40,577

Carrying Value as of Income (Loss) from Investment Funds
September 30, December 31, For the Nine Months Ended September 30,
(In thousands) 2017 2016 2017 2016
Real estate $ 614,508
$ 641,783
$ 30,661
$ 33,028
Energy 85,817
91,448
(12,763 ) 7,174
Hedge equity —
73,913
(1,164 ) 791
Other funds 419,582
391,002
34,010
19,392
Total $ 1,119,907
$ 1,198,146
$ 50,744

$ 60,385

The Company's share of the earnings or losses offrom investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.

Financial services investment funds include the Company’s minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1, 2021, Lifson Re participates on a fully collateralized basis in a majority of the Company’s reinsurance placements for a 22.5% share of placed amounts. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there is more than one open market reinsurer participating. As of March 31, 2021, the Company has ceded approximately $53 million of written premiums to Lifson Re.

Investment in real estate represents directly owned property held for investment, as follows:

Carrying Value
September 30, December 31,
(In thousands) 2017 2016
Properties in operation $ 451,669
$ 457,237
Properties under development 939,605
727,744
Total $ 1,391,274
$ 1,184,981

~~In 2017,~~ As of March 31, 2021, properties in operation included a long-term ground lease in Washington, D.C., ~~a hotel in Memphis, Tennessee,~~ an office complex in New York City, ~~and~~ office buildings in West Palm Beach and Palm Beach, ~~Florida.~~Florida, an office building in London, U.K., and the completed portion of a mixed-use project in Washington D.C. Properties in operation are net of accumulated depreciation and amortization of ~~$20,378,000~~$90,424,000 and ~~$14,996,000~~$86,970,000 as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. Related depreciation expense was ~~$5,382,000~~$4,890,000 and ~~$4,117,000~~$6,620,000 for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively. Future minimum rental income expected on operating leases relating to properties in operation is ~~$4,966,133 in 2017, $28,251,980 in 2018, $30,174,146 in 2019, $29,415,103 in 2020, $30,054,813~~$51,375,848 in 2021, ~~$29,966,679~~$69,979,774 in 2022, $62,948,942 in 2023, $59,715,831 in 2024, $55,715,947 in 2025, $51,654,944 in 2026 and ~~$467,192,215~~$594,894,205 thereafter.

~~Properties under development include an~~The Company borrowed $101,750,000 through a non-recourse loan secured by the West Palm Beach office building in ~~London~~2018. The loan matures in November 2028 and carries a fixed interest rate of 4.21%. The carrying value does not reflect the outstanding financing, which is reflected within senior notes and other debt on the Company's consolidated balance sheets.

A mixed-use project in Washington, D.C. has been under development in 2021 and 2020, with the completed portion reported in properties in operation as of March 31, 2021.

~~Loans receivable are as follows:~~

(In thousands) September 30, 2017 December 31, 2016
Amortized cost (net of valuation allowance):
  Real estate loans $ 59,487
$ 92,415
  Commercial loans 14,742
14,383
  Total $ 74,229
$ 106,798

Fair value:
  Real estate loans $ 60,372
$ 92,415
  Commercial loans 16,243
15,884
  Total $ 76,615
$ 108,299

Valuation allowance:
  Specific $ 1,200
$ 1,200
  General 2,183
2,197
  Total $ 3,383
$ 3,397

For the Three Months Ended September 30,

2017 2016
  Increase in valuation allowance $ —
$ 467

For the Nine Months Ended September 30,

2017 2016
(Decrease) increase in valuation allowance $ (14 ) $ 1,128

~~Loans receivable in non-accrual status were $4.5 million and $5.4 million as of September 30, 2017~~At March 31, 2021 and December 31, ~~2016, respectively.~~

~~The Company monitors the performance of its~~2020, loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.were as follows:


(In thousands)	March 31, 2021		December 31, 2020
Amortized cost (net of allowance for expected credit losses):
Real estate loans	$	51,717	$	51,910
Commercial loans	25,179		33,003
Total	$	76,896	$	84,913

Fair value:
Real estate loans	$	53,325	$	53,593
Commercial loans	25,179		33,003
Total	$	78,504	$	86,596

The real estate loans are secured by commercial real estate primarily located in New York. These loans generally earn interest at floating LIBOR-based interest rates and have maturities (inclusive of extension options) through August 2025. The commercial loans are with small business owners who have secured the related financing with the assets of the business. Commercial loans primarily earn interest on a fixed basis and have varying maturities generally not exceeding 10 years.

Loans receivable in non-accrual status were both $0.2 million as of March 31, 2021 and December 31, 2020.

The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended March 31, 2021:

The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended March 31, 2020:


	Real Estate Loans		Commercial Loans		Total
(In thousands)
Allowance for expected credit losses at January 1, 2020	$	1,502	$	644	$	2,146
Cumulative effect adjustment resulting from changes in accounting principles	(905)		548		(357)
Provision for expected credit losses	838		1,301		2,139
Allowance for expected credit losses at March 31, 2020	$	1,435	$	2,493	$	3,928

The Company monitors the performance of its loans receivable and assesses the ability of the borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions.

In evaluating the real estate loans, the Company considers their credit quality indicators, including loan to value ratios, which compare the outstanding loan amount to the estimated value of the property, the borrower’s financial condition and performance with respect to loan terms, the position in the capital structure, the overall leverage in the capital structure and other market conditions. Based on these considerations, none of the real estate loans were considered to be impaired at September 30, 2017, and accordingly, the Company determined that a specific valuation allowance was not required.

~~(14) Realized and Unrealized~~

~~Realized and unrealized~~ Net investment gains (losses) ~~are~~were as follows:

Change in unrealized investment gains of available for sale securities:

Fixed maturity securities $ (10,627 ) $ (45,388 ) $ 84,214
$ 169,933
Previously impaired fixed maturity securities 61
(1,406 ) 905
413
Equity securities available for sale (2,126 ) (28,517 ) (44,812 ) 12,433
Investment funds 4,129
3,143
9,841
16,028
Total change in unrealized investment gains (8,563 ) (72,168 ) 50,148
198,807
Income tax benefit (expense) 423
24,493
(23,550 ) (64,594 )
Noncontrolling interests 5
57
19
66
After-tax change in unrealized investment gains of available for sale securities $ (8,135 ) $ (47,618 ) $ 26,617
$ 134,279

______________________

(1) ~~Investment funds includes a gain of $124.3 million~~The net realized gains or losses on investment sales represent the total gains or losses from the ~~sale~~purchase dates of ~~an investment~~the equity securities. The change in ~~an office building located~~unrealized losses consists of two components: (i) the reversal of the gain or loss recognized in ~~Washington, D.C. for~~previous periods on equity securities sold and (ii) the ~~three and nine months ended September 30, 2017.~~change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.

~~(2) Other includes a gain of $134.9 million from the sale of Aero Precision Industries and certain related aviation services business for the three and nine months ended September 30, 2016.~~

(3) There were no other than temporary impairments (OTTI) for the three and nine months ended September 30, 2017, or for the three months ended September 30, 2016. OTTI for the nine months ended September 30, 2016 of $18.1 million were related to common stock.

The following tables summarize all fixed maturity securities in an unrealized loss position at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 by the length of time those securities have been continuously in an unrealized loss position:

Substantially all of the securities in an unrealized loss position are rated investment grade, except for the securities in the foreign government classification. A significant amount of the unrealized loss on foreign government securities is the result of changes in currency exchange rates.

~~Fixed Maturity Securities~~ – A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at ~~September 30, 2017~~March 31, 2021 is presented in the table below:

($ in thousands)
Number of
Securities

Aggregate
Fair Value

Gross Unrealized
Loss
Foreign government 9
$ 55,292
$ 462
Mortgage-backed securities 6
5,975
150
Corporate 3
2,852
211
Asset-backed securities 3
1,331
115
Total 21
$ 65,450
$ 938

For ~~OTTI of~~ fixed maturity securities that management does not intend to sell or to be required to sell, the portion of the decline in value that is considered to be due to credit factors is recognized in earnings, and the portion of the decline in value that is considered to be due to non-credit factors is recognized in other comprehensive income.

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become ~~due and does not consider any of these securities to be OTTI.~~due.

~~Preferred Stocks~~ – At September 30, 2017, there was one preferred stock in an unrealized loss position, with a fair value of $24.0 million and a gross unrealized loss of $1.7 million. Based upon management’s view of the underlying value of the security, the Company does not consider the equity security to be OTTI. For the nine months ended September 30, 2017 and 2016, there was no OTTI for preferred stocks.

~~Common Stocks~~ ~~– At September 30, 2017, there were three~~common stocks in an unrealized loss position, with an aggregate fair value of $14.1 million and a gross unrealized loss of $3.5 million. Based upon management's view of the underlying value of these securities, the Company does not consider these equity securities to be OTTI. There was no OTTI of common stocks for the nine months ended September 30, 2017. For the nine months ended September 30, 2016, OTTI for common stocks was $18.1 million.

~~(16)~~(15)Fair Value Measurements

The Company’s fixed maturity ~~and equity securities classified as~~ available for sale securities, equity securities and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Quoted prices for similar assets or valuations based on inputs that are observable.

Level 3 - Estimates of fair value based on internal pricing methodologies using unobservable inputs. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available.

Substantially all of the Company’s fixed maturity securities were priced by independent pricing services. The prices provided by the independent pricing services are estimated based on observable market data in active markets utilizing pricing models and processes, which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, sector groupings, matrix pricing and reference data. The pricing services may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs are available for each security evaluation on any given day. The pricing services used by the Company have indicated that they will only produce an estimate of fair value if objectively verifiable information is available. The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness and periodically performs independent price tests of a sample of securities to ensure proper valuation.

If prices from independent pricing services are not available for fixed maturity securities, the Company estimates the fair value. For Level 2 securities, the Company utilizes pricing models and processes which may include benchmark yields, sector groupings, matrix pricing, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, bids, offers and reference data. Where broker quotes are used, the Company generally requests two or more quotes and sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes received from brokers. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial projections, credit quality and business developments of the issuer and other relevant information.

For Level 3 securities, the Company generally uses a discounted cash flow model to estimate the fair value of fixed maturity securities. The cash flow models are based upon assumptions as to prevailing credit spreads, interest rate and interest rate volatility, time to maturity and subordination levels. Projected cash flows are discounted at rates that are adjusted to reflect illiquidity, where appropriate.

The following tables present the assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016~~2020 by level:

(In thousands) Total Level 1 Level 2 Level 3
September 30, 2017
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency $ 411,605
$ —
$ 411,605
$ —
State and municipal 4,413,169
—
4,413,169
—
Mortgage-backed securities 1,320,119
—
1,320,119
—
Asset-backed securities 2,388,618
—
2,388,444
174
Corporate 4,320,374
—
4,320,374
—
Foreign government 940,409
—
940,409
—
Total fixed maturity securities available for sale 13,794,294
—
13,794,120
174
Equity securities available for sale:
Common stocks 419,520
410,133
—
9,387
Preferred stocks 194,505
—
190,649
3,856
Total equity securities available for sale 614,025
410,133
190,649
13,243
Arbitrage trading account 488,238
275,818
212,420
—
Total $ 14,896,557
$ 685,951
$ 14,197,189
$ 13,417
Liabilities:
Trading account securities sold but not yet purchased $ 44,937
$ 44,851
$ 86
$ —

December 31, 2016
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency $ 513,802
$ —
$ 513,802
$ —
State and municipal 4,519,503
—
4,519,503
—
Mortgage-backed securities 1,189,645
—
1,189,645
—
Asset-backed securities 1,907,860
—
1,907,677
183
Corporate 4,068,527
—
4,068,527
—
Foreign government 902,805
—
902,805
—
Total fixed maturity securities available for sale 13,102,142
—
13,101,959
183
Equity securities available for sale:
Common stocks 445,858
429,647
7,457
8,754
Preferred stocks 223,342
—
219,680
3,662
Total equity securities available for sale 669,200
429,647
227,137
12,416
Arbitrage trading account 299,999
224,623
75,376
—
Total $ 14,071,341
$ 654,270
$ 13,404,472
$ 12,599
Liabilities:
Trading account securities sold but not yet purchased $ 51,179
$ 51,089
$ 90
$ —

~~There were no significant transfers between Levels 1 and 2 during the nine months ended~~ ~~September 30, 2017~~ ~~or during the year ended~~ ~~December 31, 2016~~.

The following tables summarize changes in Level 3 assets and liabilities for the ~~nine~~three months ended ~~September 30, 2017~~ ~~and for the year ended~~ ~~December~~March 31, ~~2016~~:

Gains (Losses) Included in:
(In thousands)
Beginning
Balance
Earnings (Losses)
Other
Comprehensive
Income (Loss)
Impairments Purchases (Sales) Paydowns / Maturities Transfers
Ending
Balance
In / (Out)
Nine months ended September 30, 2017:
Assets:
Fixed maturities securities available for sale:
Asset-backed securities $ 183
$ 2
$ 32
$ —
$ —
$ (43 ) $ —
$ —
$ 174
Corporate —
—
—
—
—
—
—
—
—
Total 183
2
32
—
—
(43 ) —
—
174
Equity securities available for sale:
Common stocks 8,754
—
633
—
—
—
—
—
9,387
Preferred stocks 3,662
19
—
—
175
—
—
—
3,856
Total 12,416
19
633
—
175
—
—
—
13,243
Arbitrage trading account —
8
—
—
—
(8 ) —
—
—
Total $ 12,599
$ 29
$ 665
$ —
$ 175
$ (51 ) $ —
$ —
$ 13,417

Year ended December 31, 2016:
Assets:
Fixed maturities securities available for sale:
Asset-backed securities $ 199
$ 3
$ 16
$ —
$ —
$ —
$ (35 ) $ —
$ 183
Corporate 154
177
—
—
��
(331 ) —
—
—
Total 353
180
16
—
—
(331 ) (35 ) —
183
Equity securities available for sale:
Common stocks 7,829
—
160
—
765
—
—
—
8,754
Preferred stocks 3,624
38
—
—
—
—
—
—
3,662
Total 11,453
38
160
—
765
—
—
—
12,416
Arbitrage trading account 176
(176 ) —
—
—
—
—
—
—
Total $ 11,982
$ 42
$ 176
$ —
$ 765
$ (331 ) $ (35 ) $ —
$ 12,599

~~During the nine months ended September 30, 2017~~2021 and for the year ended December 31, ~~2016,~~2020:

Gains (Losses) Included in:

For the three months ended March 31, 2021, there were no t~~ransfers~~0 securities transferred into or out of Level 3. For the year ended December 31, 2020, a fixed maturity security was transferred from Level 2 into Level 3 as a result of observable valuation inputs no longer being available.

~~(17)~~(16) Reserves for Loss and Loss Expenses

The Company's reserves for losses and loss expenses are comprised of case reserves and incurred but not reported liabilities ~~(IBNR)~~("IBNR"). When a claim is reported, a case reserve is established for the estimated ultimate payment based upon known information about the claim. As more information about the claim becomes available over time, case reserves are adjusted up or down as appropriate. Reserves are also established on an aggregate basis to provide for IBNR liabilities and expected loss reserve development on reported claims.

Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit.

The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is priced and written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns.

Loss frequency and severity are measures of loss activity that are considered in determining the key assumptions described in our discussion of loss and loss expense reserves, including expected loss ratios, rate of loss cost inflation and reported and paid loss emergence patterns. Loss frequency is a measure of the number of claims per unit of insured exposure, and loss severity is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations.

Another factor affecting estimates of loss frequency and severity is the loss reporting lag, which is the period of time between the occurrence of a loss and the date the loss is reported to the Company. The length of the loss reporting lag affects our ability to accurately predict loss frequency (loss frequencies are more predictable for lines with short reporting lags) as well as the amount of reserves needed for incurred but not reported losses (less IBNR is required for lines with short reporting lags). As a result, loss reserves for lines with short reporting lags are likely to have less variation from initial loss estimates. For lines with short reporting lags, which include commercial automobile, primary workers’ compensation, other liability (claims-made) and property business, the key assumption is the loss emergence pattern used to project ultimate loss estimates from known losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags.

The table below provides a reconciliation of the beginning and ending reserve balances:

(1) Claims occurring during the current year are net of loss reserve discounts of $5 million and $3 million for the three months ended March 31, 2021 and 2020, respectively.

(2) The change in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $5 million and $4 million for the three months ended March 31, 2021 and 2020, respectively.

(3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $3 million and $4 million for the three months ended March 31, 2021 and 2020, respectively.

The ongoing COVID-19 global pandemic has impacted, and will likely continue to impact, the Company’s results through its effect on claim frequency and severity. Loss cost trends have been impacted and will likely be further impacted by COVID-19-related claims in certain lines of business, as well as by other effects of COVID-19 associated with economic conditions, inflation, and social distancing and work from home rules, for example. It remains too early to determine the ultimate net impact of COVID-19. Losses incurred from COVID-19-related claims as well as increased severity are being offset, to a certain extent, by lower claim frequency in certain lines of our businesses, including commercial auto, workers’ compensation, and other liability. However, as the economy and legal systems continue to reopen, we expect the benefit of lower claim frequency in certain lines of business will abate. Given the continuing nature of the pandemic, the direct and indirect impacts of COVID-19 remain uncertain and ultimately could increase or decrease overall loss cost trends and will likely continue to have differing impacts on the Company's different lines of business.

Most of the COVID-19-related claims reported to the Company to date involve certain short-tailed lines of business, including contingency and event cancellation, business interruption, and film production delay. Until the economy fully reopens, the Company expects additional claims to be reported for these lines of business. The Company has also received COVID-19-related claims for longer-tailed casualty lines of business such as workers’ compensation and other liability; however, the estimated incurred loss impact for these reported claims appears to be modest at this time. Given the continuing uncertainty regarding the pandemic's pervasiveness, the future impact that the pandemic may have on claim frequency and severity remains uncertain at this time. In ~~2017,~~workers’ compensation, for example, currently nearly one-half of the states still have rules, legislation or administrative orders creating a presumption that certain “essential” workers who contract COVID-19 did so through the course of their employment. Several other states are considering similar actions, including varying the definition of “essential” workers. While the ultimate impact of these presumptions remains unknown at this time, the Company believes that such state actions will likely increase workers’ compensation claims with respect to workers deemed “essential,” although this impact may be partially offset by lower workers’ compensation claim frequency with respect to non-essential workers.

action, continue to seek to expand policy coverage terms beyond the policy’s intended coverage, including, for example, but not limited to, property coverages, where there are attempts to extend business interruption coverage where there is no physical damage or loss to property, and attempts to disregard policy exclusions for communicable disease. Accordingly, losses arising from these actions, and the other factors described above, could exceed the Company’s reserves established for those related policies.

As of March 31, 2021, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $204 million, of which $183 million relates to the Insurance segment and $21 million relates to the Reinsurance & Monoline Excess segment. Such $204 million of COVID-19-related losses included $120 million of reported losses and $84 million of IBNR. For the three months ended March 31, 2021, the Company recognized current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $15 million, all of which relates to the Insurance segment.

During the three months ended March 31, 2021, favorable prior year development (net of additional and return premiums) of ~~$31~~$3 million included ~~$62~~$6 million of favorable development for the Insurance segment, partially offset by ~~$31~~$3 million of adverse development for the Reinsurance & Monoline Excess segment.

The overall favorable development for the Insurance segment was primarily attributable to ~~workers'~~favorable development on the 2020 accident year, partially offset by adverse development on the 2016 through 2018 accident years. The favorable development on the 2020 accident year was largely concentrated in the commercial auto liability and other liability lines of business. During 2020, the Company achieved larger rate increases in these lines of business than were contemplated in its budget and initial loss ratio selections. The Company also experienced significantly lower reported claim frequency in these lines in 2020 relative to historical averages, and lower reported incurred losses relative to our expectations. We believe that the lower claim frequency and lower reported incurred losses were caused by the impacts of the COVID-19 pandemic, including for example, lockdowns, reduced driving and traffic, work from home, court closures, etc.; however, due to the ongoing uncertainty regarding the ultimate impacts of the pandemic on accident year 2020 incurred losses, the Company did not adjust its reserves based on these lower trends during 2020. As of March 31, 2021 we began to recognize some of the favorable accident year 2020 experience in certain lines in our ultimate loss picks. The adverse development on the 2016 through 2018 accident years is concentrated in the other liability line of business, and is driven by a higher than expected number of large losses reported. The large losses particularly impacted directors and officers liability and excess and surplus lines casualty classes of business.

Prior year reserve development for the Reinsurance & Monoline Excess segment was less significant during the first quarter of 2021, and consisted of small adverse or favorable movements across many lines of business, which largely offset each other. The largest contributor to the slight overall adverse development for the segment was non-proportional reinsurance assumed property business, which was impacted by higher than expected reported losses on property per risk treaties written in the U.S. and U.K. related to accident year 2020.

During the three months ended March 31, 2020, favorable prior year development (net of additional and return premiums) of $4 million included $7 million of favorable development for the Insurance segment, partially offset by $3 million of adverse development for the Reinsurance & Monoline Excess segment.

The overall favorable development for the Insurance segment was primarily attributable to favorable development on workers’ compensation business, ~~(including excess workers' compensation).~~partially offset by adverse development on professional liability business. The favorable ~~workers'~~workers’ compensation development was spread across many accident years, including prior to ~~2008, but~~2010, and was ~~most~~especially significant in accident years ~~2014~~2018 and ~~2015.~~2019. The favorable ~~workers'~~workers’ compensation development reflects a continuation of the benign loss cost trends experienced during ~~2016,~~recent years, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). In addition, ongoing workers’ compensation claims management efforts, including active medical case management and use of networks and specialty vendors to control medical and pharmaceutical benefit costs, have added to the Company’s favorable workers’ compensation prior year development. The adverse professional liability development was mainly concentrated in accident years 2016 and 2017, but was also spread to a lesser degree across other accident years. The development mainly relates to directors and officers and lawyers professional liability lines of business, and was driven by a higher than expected number of large losses being reported in the period. The Company also experienced a small amount of adverse prior year development during the first quarter 2020 on general liability business stemming from large losses in its excess and surplus lines book of business, mainly in accident years 2016 and 2017.

The adverse development for the Reinsurance & Monoline Excess segment was ~~due to reserve strengthening associated with claims impacted~~mainly driven by ~~the change in the Ogden discount rate~~non-proportional reinsurance assumed liability business written in the U.K., as well as adverse development in the U.S. facultative casualty excess of loss business. The Ogden rate is the discount rate used to calculate lump-sum bodily injury payouts in the U.K., and was reduced by the U.K. Ministry of Justice from +2.5% to -0.75%; the adverse development mostly related to U.K. motor bodily injury claims which we reinsured on an excess of loss basis in accident years 2012 through 2016. The adverse development on U.S. facultative casualty business related to construction-related risks in accident years 2008 and prior.

In 2016, favorable prior year development (net of additional and return premiums) of $42 million included $38 million for the Insurance segment and $4 million for the Reinsurance segment. The favorable development for the Insurance segment was primarily attributable to workers' compensation business, partially offset by adverse development for commercial auto liability and medical and other professional liability. The favorable development for workers' compensation stems from accident years ~~2003~~2015 through ~~2015, but is concentrated in accident years 2014 and 2015; it reflects claims frequency trends (i.e.,~~2019. The development was driven by a higher than expected number of reported ~~claims per unit of exposure) that continue to be better than we expected. The unfavorable development for commercial auto liability was driven by higher~~ large ~~loss activity than expected in accident years 2014 and 2015, and the~~losses.

unfavorable development for medical professional liability was primarily in accident years prior to 2013 and stemmed from a class of medical professional liability business that we discontinued writing in 2013.

~~(18)~~(17) Fair Value of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments:

September 30, 2017 December 31, 2016
(In thousands) Carrying Value Fair Value Carrying Value Fair Value
Assets:
Fixed maturity securities $ 13,873,690
$ 13,890,354
$ 13,190,668
$ 13,204,814
Equity securities available for sale 614,025
614,025
669,200
669,200
Arbitrage trading account 488,238
488,238
299,999
299,999
Loans receivable 74,229
76,615
106,798
108,299
Cash and cash equivalents 773,997
773,997
795,285
795,285
Trading account receivables from brokers and clearing organizations 297,208
297,208
484,593
484,593
Liabilities:
Due to broker 58,973
58,973
19,416
19,416
Trading account securities sold but not yet purchased 44,937
44,937
51,179
51,179
Subordinated debentures 728,071
728,291
727,630
687,504
Senior notes and other debt 1,759,929
1,946,700
1,760,595
1,914,727

The estimated fair values of the Company’s fixed maturity securities, equity securities ~~available for sale~~ and arbitrage trading account securities are based on various valuation techniques that rely on fair value measurements as described in Note ~~16 above.~~15. The fair value of loans receivable are estimated by using current institutional purchaser yield requirements for loans with similar credit characteristics, which is considered a Level 2 input. The fair value of the senior notes and other debt and the subordinated debentures is based on spreads for similar securities, which is considered a Level 2 input.

In April 2021, the Company announced it will redeem the $290 million aggregate principal amount of its 5.75% subordinated debentures due 2056 on June 1, 2021.

The following is a summary of insurance and reinsurance financial information:


	For the Three Months Ended March 31,

(In thousands)	2021		2020
Written premiums:
Direct	$	2,177,162	$	1,964,490
Assumed	307,550		266,882
Ceded	(434,674)		(385,526)
Total net premiums written	$	2,050,038	$	1,845,846

Earned premiums:
Direct	$	2,003,045	$	1,829,713
Assumed	259,541		228,214
Ceded	(412,630)		(366,509)
Total net premiums earned	$	1,849,956	$	1,691,418

Ceded losses and loss expenses incurred	$	298,740	$	235,183
Ceded commissions earned	$	101,680	$	81,045

The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the three months ended March 31, 2021:


(In thousands)
Allowance for expected credit losses at January 1, 2020	$	19,823
Cumulative effect adjustment resulting from changes in accounting principles	1,270
Provision for expected credit losses	431
Allowance for expected credit losses at March 31, 2020	$	21,524

amounts due from reinsurers are reported net of ~~reserves~~an allowance for ~~uncollectible reinsurance~~expected credit losses.

The following table presents the rollforward of ~~$1 million as~~the allowance for expected credit losses associated with due from reinsurers for the three months ended March 31, 2021:

The following table presents the rollforward of ~~September 30, 2017~~ ~~and~~ ~~December~~the allowance for expected credit losses associated with due from reinsurers for the three months ended March 31, ~~2016~~.2020:


(In thousands)
Allowance for expected credit losses at January 1, 2020	$	690
Cumulative effect adjustment resulting from changes in accounting principles	5,927
Provision for expected credit losses	183
Allowance for expected credit losses at March 31, 2020	$	6,800

Pursuant to its stock incentive plan, the Company may issue restricted stock units ~~(RSUs)~~("RSUs") to employees of the Company and its subsidiaries. The RSUs generally vest three to five years from the award date and are subject to other vesting and forfeiture provisions contained in the award agreement. RSUs are expensed pro-ratably over the vesting period. RSU expenses were ~~$30~~$12 million ~~and~~ ~~$25 million~~for both the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~,2020, respectively. A summary of RSUs issued in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 follows:

Lessees are required to recognize a right-of-use asset and a lease liability for leases with terms of more than 12 months on the balance sheet. All leases disclosed within this footnote are classified as operating leases. Recognized right-of-use asset and lease liability are reported within other assets and other liabilities, respectively, in the consolidated balance sheet. Lease expense is reported in other operating costs and expenses in the consolidated statement of income and accounted for on a straight-line basis over the lease term.

To determine the discount rate used to calculate present value of future minimum lease payments, the Company uses its incremental borrowing rate during the lease commencement period in line with the respective lease duration. In certain cases, the Company has the option to renew the lease. Lease renewal future payments are included in the present value of the future minimum lease payments when the Company determines it is reasonably certain to renew.

The main leases entered into by the Company are for office space used by the Company’s operating units across the world. Additionally, the Company, to a lesser extent, has equipment leases mainly for office equipment. Further information relating to operating lease expense and other operating lease information are as follows:


	For the Three Months Ended March 31,

(In thousands)	2021		2020
Leases:
Lease cost	$	11,264	$	11,236
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows	$	11,377	$	10,830
Right-of-use assets obtained in exchange for new lease liabilities	$	30	$	1,612


	As of March 31
($ in thousands)	2021			2020
Right-of-use assets	$	156,942		$	184,544
Lease liabilities	$	195,590		$	224,189
Weighted-average remaining lease term	6.73 years			6.95 years
Weighted-average discount rate	5.94		%	5.95		%

Contractual maturities of the Company’s future minimum lease payments are as follows:


(In thousands)	March 31, 2021
Contractual Maturities:
2021	$	35,596
2022	41,887
2023	38,218
2024	31,694
2025	22,881
Thereafter	56,217
Total undiscounted future minimum lease payments	226,493
Less: Discount impact	(30,903)
Total lease liability	$	195,590

The Company’s reportable segments include the following ~~two~~2 business segments, plus a corporate segment:

•Insurance - ~~primarily~~predominantly commercial insurance business, including excess and surplus lines, ~~and~~ admitted lines inand specialty personal lines throughout the United States, as well as insurance business in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and ~~Australia; and~~

Australia.

•Reinsurance & Monoline Excess - reinsurance business on a facultative and treaty basis, primarily in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific Region and South ~~Africa.~~

Africa, as well as operations that solely retain risk on an excess basis.

Commencing with the first quarter of 2017, the Company reclassified two businesses from the Insurance Segment to the Reinsurance segment. Reclassifications have been made to the Company's 2016 financial information to conform with this presentation.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Income tax expense and benefits are calculated based upon the Company's overall effective tax rate.

Summary financial information about the Company's reporting segments is presented in the following tables. Income (loss) before income taxes by segment includes allocated investment income. Identifiable assets by segment are those assets used in or allocated to the operation of each segment.

(Loss) to Common Stockholders

(1) Certain amounts included in earned premiums of each segment are related to inter-segment transactions.

(2) Revenues for Insurance from foreign countries for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 were ~~$166~~$196 million and ~~$187 million, respectively, and for the nine months ended September 30, 2017 and 2016 were $513 million and $546~~$168 million, respectively. Revenues for Reinsurance & Monoline Excess from foreign countries for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 were ~~$49~~$88 million and ~~$48 million, respectively, and for the nine months ended September 30, 2017 and 2016 were $150 million and $153~~$69 million, respectively.

~~(2)~~(3) Corporate, other and eliminations represent corporate revenues and expenses that are not allocated to business segments.

(In thousands) September 30, 2017 December 31, 2016
Insurance $ 19,136,776
$ 19,137,758
Reinsurance 3,243,610
2,524,338
Corporate, other and eliminations 1,955,690
1,687,980
Consolidated $ 24,336,076
$ 23,350,076

Net premiums earned by major line of business are as follows:

(1) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines.

(2) Monoline excess includes operations that solely retain risk on an excess basis.

SAFE HARBOR STATEMENT

This is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including statements related to our outlook for the industry and for our performance for the year ~~2017~~2021 and beyond, are based upon the Company’s historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. They are subject to various risks and uncertainties, including but not limited to: the cyclical nature of the property casualty industry; the impact of significant competition, including new alternative entrants to the industry; the long-tail and potentially volatile nature of the insurance and reinsurance business; product demand and pricing; claims development and the process of estimating reserves; investment risks, including those of our portfolio of fixed maturity securities and investments in equity securities, including investments in financial institutions, municipal bonds, mortgage-backed securities, loans receivable, investment funds, including real estate, merger arbitrage, energy related and private equity investments; the effects of emerging claim and coverage issues; the uncertain nature of damage theories and loss ~~amounts;~~amounts, including claims for cybersecurity-related risks; natural and man-made catastrophic losses, including as a result of terrorist activities; the ongoing COVID-19 pandemic; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks (including those associated with the United Kingdom's ~~expected~~ withdrawal from the European Union, or "Brexit") relating to our international operations; our ability to attract and retain key personnel and qualified employees; continued availability of capital and financing; the success of our new ventures or acquisitions and the availability of other opportunities; the availability of reinsurance; our retention under the Terrorism Risk Insurance Program Reauthorization Act of ~~2015;~~2019; the ability or willingness of our reinsurers to pay reinsurance recoverables owed to us; other legislative and regulatory developments, including those related to business practices in the insurance industry; credit risk related to our policyholders, independent agents and brokers; changes in the ratings assigned to us or our insurance company subsidiaries by rating agencies; the availability of dividends from our insurance company subsidiaries; potential difficulties with technology and/or ~~data security;~~cyber security issues; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

These risks and uncertainties could cause our actual results for the year ~~2017~~2021 and beyond to differ materially from those expressed in any forward-looking statement we make. Any projections of growth in our revenues would not necessarily result in commensurate levels of earnings. Our future financial performance is dependent upon factors discussed in our Annual Report on Form 10-K, elsewhere in this Form 10-Q and our other SEC filings. Forward-looking statements speak only as of the date on which they are made. Except to the extent required by applicable laws, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.


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

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

Overview

W. R. Berkley Corporation is an insurance holding company that is among the largest commercial lines writers in the United States and operates worldwide in two ~~business segments:~~segments of the property and casualty business: Insurance and ~~Reinsurance.~~Reinsurance & Monoline Excess. Our decentralized structure provides us with the flexibility to respond quickly and efficiently to local or specific market conditions and to pursue specialty business niches. It also allows us to be closer to our customers in order to better understand their individual needs and risk characteristics. While providing our business units with certain operating autonomy, our structure allows us to capitalize on the benefits of economies of scale through centralized capital, investment, reinsurance, enterprise risk management, and actuarial, financial and corporate legal staff support. The Company’s primary sources of revenues and earnings are its insurance operations and its investments.

An important part of our strategy is to form new operating units to capitalize on various business opportunities. Over the years, the Company has formed numerous operating units that are focused on important parts of the economy in the U.S., including healthcare, cyber security, energy and agriculture, and on growing international markets, including the Asia-Pacific region, South America and Mexico.

The profitability of the Company’s insurance business is affected primarily by the adequacy of premium rates. The ultimate adequacy of premium rates is not known with certainty at the time an insurance policy is issued because premiums are determined before claims are reported. The ultimate adequacy of premium rates is affected mainly by the severity and frequency of claims, which are influenced by many factors, including natural and other disasters, regulatory measures and court decisions that define and change the extent of coverage and the effects of economic inflation on the amount of compensation for injuries or losses. General insurance prices are also influenced by available insurance capacity, i.e., the level of ~~statutory~~ capital ~~and surplus~~ employed in the industry, and the industry’s willingness to deploy that capital.

The Company’s profitability is also affected by its investment income and investment gains. The Company’s invested assets are invested principally in fixed maturity securities. The return on fixed maturity securities is affected primarily by general interest rates, as well as the credit quality and duration of the securities. Returns available on fixed maturity investments ~~are~~have been at ~~historically~~ low ~~levels.~~levels for an extended period.

The Company also invests in equity securities, merger arbitrage securities, investment funds, ~~(including energy related funds),~~ private equity, loans and real estate related assets. The Company's investments in investment funds and its other alternative investments have experienced, and the Company expects to continue to experience, greater fluctuations in investment income. The Company's share of the earnings or losses from investment funds is generally reported on a one-quarter lag in order to facilitate the timely completion of the Company's consolidated financial statements.

~~During~~The ongoing COVID-19 pandemic, including the ~~third quarter~~related impact on the U.S. and global economies, has materially and adversely affected our results of ~~2017, catastrophe losses were $119 million, including $107 million related to Hurricanes Harvey, Irma, and Maria and two earthquakes in Mexico.~~

~~Commencing with~~operations. For the ~~first quarter of 2017,~~three months ended March 31, 2021, the Company ~~reclassified two businesses from~~recorded approximately $15 million for current accident year COVID-19-related losses, net of reinsurance. At the ~~Insurance segment~~same time, COVID-19 has led to reduced loss frequency in certain lines of business (which may increase as the ~~Reinsurance segment. Reclassifications~~economy returns to normal). The ultimate impact of COVID-19 on the economy and on the Company’s results of operations, financial position and liquidity is uncertain and not within the Company’s control. The scope, duration and magnitude of the direct and indirect effects of COVID-19 continue to evolve in ways that are difficult or impossible to anticipate. Its impact on the Company’s first three months of 2021 is not necessarily indicative of its impact for the remainder of 2021 or beyond. Despite the effects of COVID-19 to date, the Company’s financial position and liquidity continued to improve.

The ultimate impact of the COVID-19 pandemic on our results of operations, financial position and liquidity remains uncertain due to, among other factors, the following:

Adverse Legislative and Regulatory Action. Legislative and regulatory initiatives taken or that may be taken in response to COVID-19, such as those that seek to retroactively mandate or provide a presumption of coverage for losses which our insurance policies would not otherwise cover and were not priced to cover, may adversely affect us, particularly in our workers’ compensation and property coverages businesses.

Claim Losses Related to COVID-19 May Exceed Reserves. Given the great uncertainty associated with COVID-19 and its continuing impact and the limited information upon which our current assumptions and assessments have been made, our reserves and underlying estimated level of claim losses and costs arising from COVID-19 may materially change.

Claim Losses and Adjustment Expenses May Increase. As the effects of COVID-19 on industry practices and economic, legal, judicial, social and other environmental conditions continue to evolve, unexpected and unintended issues

related to claims and coverages may emerge (including in the area of property coverages where physical damage requirements and communicable disease exclusions are currently being challenged).

Reinsurance. Reinsurers may dispute the applicability of reinsurance to COVID-19 related losses (including the application of reinsurance reinstatements) and, as a result, our reinsurers may refuse to pay reinsurance recoverables related thereto or they may not pay them on a timely basis. In addition, we may be unable to renew our current reinsurance coverages or purchase new coverages with respect to certain exposures under our policies, including COVID-19-related exposures.

Premium Volumes May Be Negatively Impacted. Continued reduced economic activity relating to the ~~Company's 2016~~COVID-19 pandemic will likely decrease demand for our insurance products and services. In addition, we may alter our view on the insurance coverages that are appropriate to offer in various jurisdictions, which could further negatively impact our premium volumes.

Investments. Further disruptions in global financial ~~information~~markets due to ~~conform~~the continuing impact of COVID-19 could cause us to incur additional unrealized and/or realized investment losses, including impairments in our fixed income portfolio and other investments.

Credit Risk. As credit risk is generally a function of the economy, we face greater credit risk from our policyholders, independent agents and brokers in connection with ~~this presentation.~~the payment and remittance of premiums as a result of the economic impact caused by COVID-19. Similarly, our credit risk related to the reimbursement of deductibles from policyholders and in connection with reinsurance recoverables has increased.

Operational Disruptions and Costs. Our operations could be disrupted if key members of our senior management or a significant percentage of our workforce or the workforce of our agents, brokers, suppliers or other third party service providers are unable to continue to work because of illness, government directives or otherwise. In response to the COVID-19 pandemic, we have implemented remote working policies which have resulted in disruptions to our business routines, heightened risk to cybersecurity attacks and data security incidents and a greater dependency on internet and telecommunication access and capabilities.

Critical Accounting Estimates

The following presents a discussion of accounting policies and estimates relating to reserves for losses and loss expenses, assumed premiums and ~~other-than-temporary impairments of~~allowance for expected credit losses on investments. Management believes these policies and estimates are the most critical to its operations and require the most difficult, subjective and complex judgments.

Reserves for Losses and Loss Expenses.To recognize liabilities for unpaid losses, either known or unknown, insurers establish reserves, which is a balance sheet account representing estimates of future amounts needed to pay claims and related expenses with respect to insured events which have occurred. Estimates and assumptions relating to reserves for losses and loss expenses are based on complex and subjective judgments, often including the interplay of specific uncertainties with related accounting and actuarial measurements. Such estimates are also susceptible to change as significant periods of time may elapse between the occurrence of an insured loss, the report of the loss to the insurer, the ultimate determination of the cost of the loss and the insurer’s payment of that loss.

In general, when a claim is reported, claims personnel establish a “case reserve” for the estimated amount of the ultimate payment based upon known information about the claim at that time. The estimate represents an informed judgment based on general reserving practices and reflects the experience and knowledge of the claims personnel regarding the nature and value of the specific type of claim. Reserves are also established on an aggregate basis to provide for losses incurred but not reported (“IBNR”) to the insurer, potential inadequacy of case reserves and the estimated expenses of settling claims, including legal and other fees and general expenses of administrating the claims adjustment process. Reserves are established based upon the then current legal interpretation of coverage provided.

In examining reserve adequacy, several factors are considered in estimating the ultimate economic value of losses. These factors include, among other things, historical data, legal developments, changes in social attitudes and economic conditions, including the effects of inflation. The actuarial process relies on the basic assumption that past experience, adjusted judgmentally for the effects of current developments and anticipated trends, is an appropriate basis for predicting future outcomes. Reserve amounts are based on management’s informed estimates and judgments using currently available data. As additional experience and other data become available and are reviewed, these estimates and judgments may be revised. This may result in reserve increases or decreases that would be reflected in our results in periods in which such estimates and assumptions are changed.

Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what management expects the ultimate settlement and claim administration will cost. While the methods for establishing reserves are well tested

over time, some of the major assumptions about anticipated loss emergence patterns are subject to uncertainty. These estimates, which generally involve actuarial projections, are based on management’s assessment of facts and circumstances then known, as well as estimates of trends in claims severity and frequency, judicial theories of liability and other factors, including the actions of third parties which are beyond the Company’s control. These variables are affected by external and internal events, such as inflation and economic volatility, judicial and litigation trends, reinsurance coverage, legislative changes and claim handling and reserving practices, which make it more difficult to accurately predict claim costs. The inherent uncertainties of estimating reserves are greater for certain types of liabilities where long periods of time elapse before a definitive determination of liability is made. Because setting reserves is inherently uncertain, the Company cannot provide assurance that its current reserves will prove adequate in light of subsequent events.

Loss reserves included in the Company’s financial statements represent management’s best estimates based upon an actuarially derived point estimate and other considerations. The Company uses a variety of actuarial techniques and methods to derive an actuarial point estimate for each operating unit. These methods include paid loss development, incurred loss development, paid and incurred Bornhuetter-Ferguson methods and frequency and severity methods. In circumstances where one actuarial method is considered more credible than the others, that method is used to set the point estimate. For example, the paid loss and incurred loss development methods rely on historical paid and incurred loss data. For new lines of business, where there is insufficient history of paid and incurred claims data, or in circumstances where there have been significant changes in claim practices, the paid and incurred loss development methods would be less credible than other actuarial methods. The actuarial point estimate may also be based on a judgmental weighting of estimates produced from each of the methods considered. Industry loss experience is used to supplement the Company’s own data in selecting “tail factors” and in areas where the Company’s own data is limited. The actuarial data is analyzed by line of business, coverage and accident or policy year, as appropriate, for each operating unit.

The establishment of the actuarially derived loss reserve point estimate also includes consideration of qualitative factors that may affect the ultimate losses. These qualitative considerations include, among others, the impact of re-underwriting initiatives, changes in the mix of business, changes in distribution sources and changes in policy terms and conditions. Examples of changes in terms and conditions that can have a significant impact on reserve levels are the use of aggregate policy limits, the expansion of coverage exclusions, whether or not defense costs are within policy limits, and changes in deductibles and attachment points.

The key assumptions used to arrive at the best estimate of loss reserves are the expected loss ratios, rate of loss cost inflation, and reported and paid loss emergence patterns. Expected loss ratios represent management’s expectation of losses at the time the business is written, before any actual claims experience has emerged. This expectation is a significant determinant of the estimate of loss reserves for recently written business where there is little paid or incurred loss data to consider. Expected loss ratios are generally derived from historical loss ratios adjusted for the impact of rate changes, loss cost trends and known changes in the type of risks underwritten. Expected loss ratios are estimated for each key line of business within each operating unit. Expected loss cost inflation is particularly important for the long-tail lines, such as excess casualty, and claims with a high medical component, such as workers’ compensation. Reported and paid loss emergence patterns are used to project current reported or paid loss amounts to their ultimate settlement value. Loss development factors are based on the historical emergence patterns of paid and incurred losses, and are derived from the Company’s own experience and industry data. The paid loss emergence pattern is also significant to excess and assumed workers’ compensation reserves because those reserves are discounted to their estimated present value based upon such estimated payout patterns. Management believes the estimates and assumptions it makes in the reserving process provide the best estimate of the ultimate cost of settling claims and related expenses with respect to insured events which have occurred; however, different assumptions and variables could lead to significantly different reserve estimates.

controls and safety programs and changes in economic activity or weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations.

losses paid or reported to date. For lines of business with long reporting lags, which include other liability (occurrence), products liability, excess workers’ compensation and liability reinsurance, the key assumption is the expected loss ratio since there is often little paid or incurred loss data to consider. Historically, the Company has experienced less variation from its initial loss estimates for lines of businesses with short reporting lags than for lines of business with long reporting lags.

The key assumptions used in calculating the most recent estimate of the loss reserves are reviewed each quarter and adjusted, to the extent necessary, to reflect the latest reported loss data, current trends and other factors observed. If the actual level of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s estimate. The following table reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity, relative to our assumptions, on our loss estimate for claims occurring in ~~2016:~~2020:


(In thousands)	Frequency (+/-)
Severity (+/-)	1%		5%		10%
1%	$	89,102	$	268,193	$	492,056
5%	268,193		454,376		687,105
10%	492,056		687,105		930,917

(In thousands) Frequency (+/-)
Severity (+/-) 1% 5% 10%
1% $ 76,915
$ 231,511
$ 424,755
5% 231,511
392,229
593,126
10% 424,755
593,126
803,590

Our net reserves for losses and loss expenses of approximately ~~$10.0~~$11.8 billion as of ~~September 30, 2017~~March 31, 2021 relate to multiple accident years. Therefore, the impact of changes in frequency or severity for more than one accident year could be higher or lower than the amounts reflected above. The impact of such changes would likely be manifested gradually over the course of many years, as the magnitude of the changes became evident.

Approximately ~~$1.8~~$2.6 billion, or ~~17%~~22%, of the Company’s net loss reserves as of ~~September 30, 2017~~March 31, 2021 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss ~~reserves because those~~reserves. In the case of excess workers’ compensation, our policies generally attach at $1 million or higher. The claims which reach our layer therefore tend to involve the most serious injuries and many remain open for the lifetime of the claimant, which extends the claim settlement tail. These claims also occur less frequently but tend to be larger than primary claims, which increases claim variability. In the case of assumed reinsurance our loss reserve estimates are based, in part, upon information received from ceding companies. If information received from ceding companies is not timely or correct, the Company’s estimate of ultimate losses may not be accurate. Furthermore, due to delayed reporting of claim information by ceding companies, the claim settlement tail for assumed reinsurance is also extended. Management considers the impact of delayed reporting and the extended tail in its selection of ~~assumed~~ loss development ~~factors.~~factors for these lines of business.

Information received from ceding companies is used to set initial expected loss ratios, to establish case reserves and to estimate reserves for incurred but not reported losses on assumed reinsurance business. This information, which is generally provided through reinsurance intermediaries, is gathered through the underwriting process and from periodic claim reports and other correspondence with ceding companies. The Company performs underwriting and claim audits of selected ceding companies to determine the accuracy and completeness of information provided to the Company. The information received from the ceding companies is supplemented by the Company’s own loss development experience with similar lines of business as well as industry loss trends and loss development benchmarks.

Following is a summary of the Company’s reserves for losses and loss expenses by business segment:


(In thousands)	March 31, 2021		December 31, 2020
Insurance	$	9,220,681	$	9,034,969
Reinsurance & Monoline Excess	2,614,467		2,585,424
Net reserves for losses and loss expenses	11,835,148		11,620,393
Ceded reserves for losses and loss expenses	2,245,380		2,164,037
Gross reserves for losses and loss expenses	$	14,080,528	$	13,784,430

(In thousands) September 30, 2017 December 31, 2016
Insurance $ 8,291,708
$ 7,913,074
Reinsurance 1,756,766
1,677,191
Net reserves for losses and loss expenses 10,048,474
9,590,265
Ceded reserves for losses and loss expenses 1,605,872
1,606,930
Gross reserves for losses and loss expenses $ 11,654,346
$ 11,197,195

Following is a summary of the Company’s net reserves for losses and loss expenses by major line of business:


(In thousands)	Reported Case Reserves		Incurred But Not Reported		Total		(In thousands)	Reported Case Reserves		Incurred But Not Reported		Total
September 30, 2017
March 31, 2021							March 31, 2021
Other liability	$	1,243,208	$	2,162,031	$	3,405,239	Other liability	$	1,608,645	$	2,920,315	$	4,528,960
Workers’ compensation (1)	1,530,194		1,246,084		2,776,278		Workers’ compensation (1)	984,401		883,669		1,868,070
Professional liability	299,418		584,606		884,024		Professional liability	412,037		927,549		1,339,586
Commercial automobile	341,998		267,136		609,134		Commercial automobile	449,342		392,003		841,345
Short-tail lines (2)	309,692		307,341		617,033		Short-tail lines (2)	263,958		378,762		642,720
Total Insurance	3,724,510		4,567,198		8,291,708		Total Insurance	3,718,383		5,502,298		9,220,681
Reinsurance (1)	909,690		847,076		1,756,766
Reinsurance & Monoline Excess (1) (3)							Reinsurance & Monoline Excess (1) (3)	1,451,441		1,163,026		2,614,467
Total	$	4,634,200	$	5,414,274	$	10,048,474	Total	$	5,169,824	$	6,665,324	$	11,835,148

December 31, 2016
December 31, 2020							December 31, 2020
Other liability	$	1,159,082	$	2,061,966	$	3,221,048	Other liability	$	1,534,514	$	2,864,760	$	4,399,274
Workers’ compensation (1)	1,453,318		1,228,774		2,682,092		Workers’ compensation (1)	977,035		873,072		1,850,107
Professional liability	264,188		542,539		806,727		Professional liability	414,104		875,163		1,289,267
Commercial automobile	344,143		252,978		597,121		Commercial automobile	442,975		398,688		841,663
Short-tail lines (2)	322,872		283,214		606,086		Short-tail lines (2)	295,313		359,345		654,658
Total Insurance	3,543,603		4,369,471		7,913,074		Total Insurance	3,663,941		5,371,028		9,034,969
Reinsurance (1)	823,516		853,675		1,677,191
Reinsurance & Monoline Excess (1) (3)							Reinsurance & Monoline Excess (1) (3)	1,442,099		1,143,325		2,585,424
Total	$	4,367,119	$	5,223,146	$	9,590,265	Total	$	5,106,040	$	6,514,353	$	11,620,393

___________

(1) Reserves for workers’ compensation and ~~reinsurance~~Reinsurance & Monoline Excess are net of an aggregate net discount of ~~$599~~$478 million and ~~$640~~

$483 million as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively.

(2) Short-tail lines include commercial multi-peril (non-liability), inland marine, accident and health, fidelity and surety, boiler and machinery and other lines.

(3) Reinsurance & Monoline Excess includes property and casualty reinsurance, as well as operations that solely retain risk on an excess basis.

The Company evaluates reserves for losses and loss adjustment expenses on a quarterly basis. Changes in estimates of prior year losses are reported when such changes are made. The changes in prior year loss reserve estimates are generally the result of ongoing analysis of recent loss development trends. Original estimates are increased or decreased as additional information becomes known regarding individual claims and aggregate claim trends.

Certain of the Company's insurance and reinsurance contracts are retrospectively rated, whereby the Company collects more or less premiums based on the level of loss activity. For those contracts, changes in loss and loss adjustment expenses for prior years may be fully or partially offset by additional or return premiums.

Net prior year development (i.e., the sum of prior year reserve changes and prior year earned premiums changes) for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 are as follows:


(In thousands)	2021		2020
Net decrease (increase) in prior year loss reserves	$	859	$	(433)
Increase in prior year earned premiums	2,595		4,448
Net favorable prior year development	$	3,454	$	4,015

(In thousands) 2017 2016
Net decrease in prior year loss reserves $ 7,648
$ 23,518
Increase in prior year earned premiums 22,940
18,039
Net favorable prior year development $ 30,588
$ 41,557
The ongoing COVID-19 global pandemic has impacted, and will likely continue to impact, the Company’s results through its effect on claim frequency and severity. Loss cost trends have been impacted and will likely be further impacted by COVID-19-related claims in certain lines of business, as well as by other effects of COVID-19 associated with economic conditions, inflation, and social distancing and work from home rules, for example. It remains too early to determine the ultimate net impact of COVID-19. Losses incurred from COVID-19-related claims as well as increased severity are being offset, to a certain extent, by lower claim frequency in certain lines of our businesses, including commercial auto, workers’ compensation, and other liability. However, as the economy and legal systems continue to reopen, we expect the benefit of lower claim frequency in certain lines of business will abate. Given the continuing nature of the pandemic, the direct and indirect impacts of COVID-19 remain uncertain and ultimately could increase or decrease overall loss cost trends and will likely continue to have differing impacts on the Company's different lines of business.

Most of the COVID-19-related claims reported to the Company to date involve certain short-tailed lines of business, including contingency and event cancellation, business interruption, and film production delay. Until the economy fully reopens, the Company expects additional claims to be reported for these lines of business. The Company has also received COVID-19-related claims for longer-tailed casualty lines of business such as workers’ compensation and other liability; however, the estimated incurred loss impact for these reported claims appears to be modest at this time. Given the continuing uncertainty regarding the pandemic's pervasiveness, the future impact that the pandemic may have on claim frequency and severity remains uncertain at this time. In workers’ compensation, for example, currently nearly one-half of the states still have rules, legislation or administrative orders creating a presumption that certain “essential” workers who contract COVID-19 did so through the course of their employment. Several other states are considering similar actions, including varying the definition of “essential” workers. While the ultimate impact of these presumptions remains unknown at this time, the Company believes that such state actions will likely increase workers’ compensation claims with respect to workers deemed “essential,” although this impact may be partially offset by lower workers’ compensation claim frequency with respect to non-essential workers.

The Company has estimated the potential COVID-19 impact to its contingency and event cancellation, workers’ compensation, and other lines of business under a number of possible scenarios; however, due to COVID-19’s evolving impact and the still limited amount of available data, there remains a high degree of uncertainty around the Company’s COVID-19 reserves. In ~~2017,~~addition, several states (and international jurisdictions), through regulation, legislation and/or judicial action, continue to seek to expand policy coverage terms beyond the policy’s intended coverage, including, for example, but not limited to, property coverages, where there are attempts to extend business interruption coverage where there is no physical damage or loss to property, and attempts to disregard policy exclusions for communicable disease. Accordingly, losses arising from these actions, and the other factors described above, could exceed the Company’s reserves established for those related policies.

The overall favorable development for the Insurance segment was primarily attributable to ~~workers'~~favorable development on the 2020 accident year, partially offset by adverse development on the 2016 through 2018 accident years. The favorable development on the 2020 accident year was largely concentrated in the commercial auto liability and other liability lines of business. During 2020, the Company achieved larger rate increases in these lines of business than were contemplated in its budget and initial loss ratio selections. The Company also experienced significantly lower reported claim frequency in these lines in 2020 relative to historical averages, and lower reported incurred losses relative to our expectations. We believe that the lower claim frequency and lower reported incurred losses were caused by the impacts of the COVID-19 pandemic, including for example, lockdowns, reduced driving and traffic, work from home, court closures, etc.; however, due to the ongoing uncertainty regarding the ultimate impacts of the pandemic on accident year 2020 incurred losses, the Company did not adjust its reserves based on these lower trends during 2020. As the accident year starts to mature, we began to recognize some of the favorable accident year 2020 experience in certain lines in our ultimate loss picks made as of March 31, 2021. The adverse development on the 2016 through 2018 accident years is concentrated in the other liability line of business, and is driven by a higher than expected number of large losses reported. The large losses particularly impacted directors and officers liability and excess and surplus lines casualty classes of business.

each other. The largest contributor to the slight overall adverse development for the segment was non-proportional reinsurance assumed property business, which was impacted by higher than expected reported losses on property per risk treaties written in the U.S. and U.K. related to accident year 2020.

The adverse development for the Reinsurance & Monoline Excess segment was ~~due to reserve strengthening associated with claims impacted~~mainly driven by ~~the change in~~

~~the Ogden discount rate~~non-proportional reinsurance assumed liability business written in the U.K., as well as adverse development on the U.S. facultative casualty excess of loss business. The Ogden rate is the discount rate used to calculate lump-sum bodily injury payouts in the U.K., and was reduced by the U.K. Ministry of Justice from +2.5% to -0.75%; the adverse development mostly related to U.K. motor bodily injury claims which we reinsured on an excess of loss basis in accident years 2012 through 2016. The adverse development on U.S. facultative casualty business was due to construction-related risks in accident years 2008 and prior.

In 2016, favorable prior year development (net of additional and return premiums) of $42 million included $38 million for the Insurance segment and $4 million for the Reinsurance segment. The favorable development for the Insurance segment was primarily attributable to workers' compensation business, partially offset by adverse development for commercial auto liability and medical and other professional liability. The favorable development for workers' compensation stems from accident years ~~2003~~2015 through ~~2015, but is concentrated in accident years 2014 and 2015; it reflects claims frequency trends (i.e.,~~2019. The development was driven by a higher than expected number of reported ~~claims per unit of exposure) that continue to be better than we expected. The unfavorable development for commercial auto liability was driven by higher~~ large loss activity than expected in accident years 2014 and 2015, and the unfavorable development for medical professional liability was primarily in accident years prior to 2013 and stemmed from a class of medical professional liability business that we discontinued writing in 2013.losses.

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was ~~$1,849~~$1,651 million and ~~$1,907~~$1,655 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was ~~$599~~$478 million and ~~$640~~$483 million at ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively. At ~~September 30, 2017,~~March 31, 2021, discount rates by year ranged from ~~2.0%~~0.7% to 6.5%, with a weighted average discount rate of ~~3.8%~~3.5%.

Substantially all of the workers’ compensation discount (97% of total discounted reserves at ~~September 30, 2017)~~March 31, 2021) relates to excess workers’ compensation reserves. In order to properly match loss expenses with income earned on investment securities supporting the liabilities, reserves for excess workers’ compensation business are discounted using risk-free discount rates determined by reference to the U.S. Treasury yield curve. These rates are determined annually based on the weighted average rate for the period. Once established, no adjustments are made to the discount rate for that period, and any increases or decreases in loss reserves in subsequent years are discounted at the same rate, without regard to when any such adjustments are recognized. The expected loss and loss expense payout patterns subject to discounting are derived from the Company’s loss payout experience.

The Company also discounts reserves for certain other long-duration workers’ compensation reserves (representing approximately 3% of total discounted reserves at ~~September 30, 2017)~~March 31, 2021), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates permitted by the Department of Insurance of the State of Delaware.

Assumed Reinsurance Premiums. The Company estimates the amount of assumed reinsurance premiums that it will receive under treaty reinsurance agreements at the inception of the contracts. These premium estimates are revised as the actual amount of assumed premiums is reported to the Company by the ceding companies. As estimates of assumed premiums are made or revised, the related amount of earned premiums, commissions and incurred losses associated with those premiums are recorded. Estimated assumed premiums receivable were approximately ~~$56~~$47 million at ~~September 30, 2017~~March 31, 2021 and ~~$68~~$44 million at December 31, ~~2016.~~2020. The assumed premium estimates are based upon terms set forth in reinsurance agreements, information received from ceding companies during the underwriting and negotiation of agreements, reports received from ceding companies and discussions and correspondence with reinsurance intermediaries. The Company also considers its own view of market conditions, economic trends and experience with similar lines of business. These premium estimates represent management’s best estimate of the ultimate amount of premiums to be received under its assumed reinsurance agreements.

~~Other-Than-Temporary Impairments (OTTI) of~~Allowance for Expected Credit Losses on Investments. ~~The cost of~~

Fixed Maturity Securities – For fixed maturity securities in an unrealized loss position where the Company intends to sell, or it is ~~adjusted where appropriate~~more likely than not that it will be required to ~~include a provision for decline~~sell the security before recovery in value, ~~which~~the amortized cost basis is ~~considered~~written down to ~~be other-than-temporary. An other-than-temporary decline is considered to occur in investments where there has been a sustained reduction in~~ fair value ~~and~~ through net investment gains (losses). For fixed maturity securities in an unrealized loss position

where the Company does not ~~expect~~intend to sell, or it is more likely than not that it will not be required to sell the security before recovery in value, the Company evaluates whether the decline in fair value has resulted from credit losses or all other factors (non-credit factors). In making this assessment, the Company considers the extent to which fair value is less than amortized cost, changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for expected credit losses is recorded for the credit loss through net investment gains (losses), limited by the amount that the fair value is less than the amortized cost basis. Effective January 1, 2020, the allowance is adjusted for any change in expected credit losses and subsequent recoveries through net investment gains (losses). The impairment related to ~~recover prior~~non-credit factors is recognized in other comprehensive income (loss) .

The Company’s credit assessment of allowance for expected credit losses uses a third party model for available for sale and held to maturity securities, as well as loans receivable. The allowance for expected credit losses is generally based on the performance of the underlying collateral under various economic and default scenarios that involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other relevant economic and performance factors. A discounted cash flow analysis is used to ascertain the amount of the allowance for expected credit losses, if any. In general, the model reverts to the ~~time~~rating-level long-term average marginal default rates based on 10 years of ~~sale or maturity. Since equity securities do not have a contractual cash flow or maturity,~~historical data, beyond the ~~Company considers whether~~forecast period. For other inputs, the ~~price of an equity security is expected~~model in most cases reverts to ~~recover within a reasonable period of time.~~the baseline long-term assumptions linearly over 5 years beyond the forecast period. The long-term assumptions are based on the historical averages.

The Company classifies its fixed maturity securities ~~and preferred stocks~~ by credit rating, primarily based on ratings assigned by credit rating agencies. For purposes of classifying securities with different ratings, the Company uses the average of the credit ratings assigned, unless in limited situations the Company’s own analysis indicates an internal rating is more appropriate. Securities that are not rated by a rating agency are evaluated and classified by the Company on a case-by-case basis.

~~Fixed Maturity Securities~~ – For securities that we intend to sell or, more likely than not, would be required to sell, a decline in value below amortized cost is considered to be OTTI. The amount of OTTI is equal to the difference between amortized cost and fair value at the balance sheet date. For securities that we do not intend to sell or expect to be required to sell, a decline in value below amortized cost is considered to be an OTTI if we do not expect to recover the entire amortized cost basis of a security (i.e., the present value of cash flows expected to be collected is less than the amortized cost basis of the security).

The portion of the decline in value considered to be a credit loss (i.e., the difference between the present value of cash flows expected to be collected and the amortized cost basis of the security) is recognized in earnings. The portion of the decline in value not considered to be a credit loss (i.e., the difference in the present value of cash flows expected to be collected and the fair value of the security) is recognized in other comprehensive income.

Impairment assessments for structured securities, including mortgage-backed securities and asset-backed securities, collateralized debt obligations and corporate debt, are generally evaluated based on the performance of the underlying collateral under various economic and default scenarios that may involve subjective judgments and estimates by management. Modeling these securities involves various factors, such as projected default rates, the nature and realizable value of the collateral, if any, the ability of the issuer to make scheduled payments, historical performance and other relevant economic and performance factors. If an OTTI determination is made, a discounted cash flow analysis is used to ascertain the amount of the credit impairment.

~~The following table provides a summary of fixed maturity securities in an unrealized loss position as of September 30, 2017:~~

($ in thousands)
Number of
Securities

Aggregate
Fair Value

Gross Unrealized
Loss
Unrealized loss less than 20% of amortized cost 592
$ 3,864,164
$ 40,565
Unrealized loss of 20% or greater of amortized cost:
Twelve months and longer 3
180
112
Total 595
$ 3,864,344
$ 40,677

A summary of the Company’s non-investment grade fixed maturity securities that were in an unrealized loss position at ~~September 30, 2017~~March 31, 2021 is presented in the table below:


($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss		($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Foreign government	9	$	55,292	$	462	Foreign government	19	$	79,761	$	39,694
Corporate						Corporate	8	25,066		2,071
Mortgage-backed securities	6	5,975		150		Mortgage-backed securities	5	540		24
Corporate	3	2,852		211
Asset-backed securities	3	1,331		115

Total	21	$	65,450	$	938	Total	32	$	105,367	$	41,789

As of March 31, 2021, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $21 million. The Company has evaluated ~~its~~the remaining fixed maturity securities in an unrealized loss position and believes the unrealized ~~loss is~~losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become ~~due~~due.

Loans Receivable – For loans receivable, the Company estimates an allowance for expected credit losses based on relevant information about past events, including historical loss experience, current conditions and ~~does not consider any of these securities to be OTTI.~~

~~Preferred Stocks~~ ~~– At September 30, 2017, there was one preferred stock in an unrealized loss position, with a fair value of $24.0 million and a gross unrealized loss of $1.7 million. Based upon management's view~~forecasts that affect the expected collectability of the ~~underlying value~~amortized cost of the ~~security, the Company does not consider the equity security~~financial asset. The allowance for expected credit losses is presented as a reduction to ~~be OTTI. For the nine months ended September 30, 2017 and 2016, there was no OTTI for preferred stocks.~~

~~Common Stocks~~ – At September 30, 2017, there were three common stocks in an unrealized loss position, with an aggregate fair value of $14.1 million and a gross unrealized loss of $3.5 million. Based upon management’s viewamortized cost of the ~~underlying value of these securities,~~financial asset in the ~~Company does not consider these equity securities~~consolidated balance sheet and changes to ~~be OTTI. There was no OTTI of common stocks~~the estimate for ~~the nine months ended September 30, 2017. For the nine months ended September 30, 2016, OTTI for common stocks was $18.1 million.~~

~~Loans Receivable~~ – The Company monitors the performance of its loans receivable, including current market conditions for each loan and the ability to collect principal and interest. For loans where the Company determines it is probable that the contractual terms will not be met, an analysis is performed and a valuation reserve is established, if necessary, with a charge to earnings.expected credit losses are recognized through net investment gains (losses). Loans receivable are reported net of ~~a valuation reserve~~an allowance for expected credit losses of $3$4 million ~~at both September 30, 2017~~and $5 million as of March 31, 2021 and December 31, ~~2016.~~2020, respectively.

The Company monitors the performance of its loans receivable and assesses the ability of each borrower to pay principal and interest based upon loan structure, underlying property values, cash flow and related financial and operating performance of the property and market conditions. Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.

Fair Value Measurements.The Company’s fixed maturity ~~and equity securities~~ available for sale securities, equity securities, and its arbitrage trading account securities are carried at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The Company utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for similar assets in active markets. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs may only be used to measure fair value to the extent that observable inputs are not available. The fair

value of the vast majority of the Company’s portfolio is based on observable data (other than quoted prices) and, accordingly, is classified as Level 2.

In classifying particular financial securities in the fair value hierarchy, the Company uses its judgment to determine whether the market for a security is active and whether significant pricing inputs are observable. The Company determines the existence of an active market by assessing whether transactions occur with sufficient frequency and volume to provide reliable pricing information. The Company determines whether inputs are observable based on the use of such information by pricing services and external investment managers, the uninterrupted availability of such inputs, the need to make significant adjustments to such inputs and the volatility of such inputs over time. If the market for a security is determined to be inactive or if significant inputs used to price a security are determined to be unobservable, the security is categorized in Level 3 of the fair value hierarchy.

Because many fixed maturity securities do not trade on a daily basis, the Company utilizes pricing models and processes which may include benchmark curves, benchmarking of like securities, sector groupings and matrix pricing. Market inputs used to evaluate securities include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Quoted prices are often unavailable for recently issued securities that are infrequently traded or securities that are only traded in private transactions. For publicly traded securities for which quoted prices are unavailable, the Company determines fair value based on independent broker quotations and other observable market data. For securities traded only in private negotiations, the Company determines fair value based primarily on the cost of such securities, which is adjusted to reflect prices of recent placements of securities of the same issuer, financial data, projections and business developments of the issuer and other relevant information.

The following is a summary of pricing sources for the Company's fixed maturity securities available for sale as of ~~September 30, 2017:~~

March 31, 2021:


($ in thousands)	Carrying Value		Percent of Total		($ in thousands)	Carrying Value		Percent of Total
Pricing source:					Pricing source:
Independent pricing services	$	13,570,457	98.4	%	Independent pricing services	$	14,967,529	97.7	%
Syndicate manager	43,196		0.3		Syndicate manager	46,393		0.3
Directly by the Company based on:					Directly by the Company based on:
Observable data	180,467		1.3		Observable data	313,115		2.0
Cash flow model	174		—

Total	$	13,794,294	100.0	%	Total	$	15,327,037	100.0	%

Independent pricing services – Substantially all of the Company’s fixed maturity securities available for sale were priced by independent pricing services (generally one U.S. pricing service plus additional pricing services with respect to a limited number of foreign securities held by the Company). The prices provided by the independent pricing services are generally based on observable market data in active markets (e.g., broker quotes and prices observed for comparable securities). The determination of whether markets are active or inactive is based upon the volume and level of activity for a particular asset class. The Company reviews the prices provided by pricing services for reasonableness based upon current trading levels for

similar securities. If the prices appear unusual to the Company, they are re-examined and the value is either confirmed or revised. In addition, the Company periodically performs independent price tests of a sample of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of ~~September 30, 2017,~~March 31, 2021, the Company did not make any adjustments to the prices provided by the pricing services. Based upon the Company’s review of the methodologies used by the independent pricing services, these securities were classified as Level 2.

Syndicate manager – The Company has a 15% participation in a Lloyd’s syndicate, and the Company’s share of the securities owned by the syndicate is priced by the syndicate’s manager. The majority of the securities are liquid, short duration fixed maturity securities. The Company reviews the syndicate manager’s pricing methodology and audited financial statements and holds discussions with the syndicate manager as necessary to confirm its understanding and agreement with security prices. Based upon the Company’s review of the methodologies used by the syndicate manager, these securities were classified as Level 2.

Observable data – If independent pricing is not available, the Company prices the securities directly. Prices are based on observable market data where available, including current trading levels for similar securities and non-binding quotations from brokers. The Company generally requests two or more quotes. If more than one quote is received, the Company sets a price within the range of quotes received based on its assessment of the credibility of the quote and its own evaluation of the security. The Company generally does not adjust quotes obtained from brokers. Since these securities were priced based on observable data, they were classified as Level 2.



Part I — FINANCIAL INFORMATION
			Item 1. Financial Statements
			Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
			Item 3. Quantitative and Qualitative Disclosure About Market Risk
			Item 4. Controls and Procedures
PART II — OTHER INFORMATION
			Item 1. Legal Proceedings
			Item 1A. Risk Factors
			Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
			Item 6. Exhibits
SIGNATURES
~~EX-10.1~~
~~EX-31.1~~
~~EX-31.2~~ EX-31.1
~~EX-32.1~~ EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT


	September 30, 2017			December 31, 2016				March 31, 2021		December 31, 2020
	(Unaudited)			(Audited)				(Unaudited)		(Audited)
Assets							Assets
Investments:							Investments:
Fixed maturity securities	$	13,873,690		$	13,190,668
Fixed maturity securities (amortized cost of $15,126,980 and $13,755,858; allowance for expected credit losses of $20,739 and $2,580 at March 31, 2021 and December 31, 2020, respectively)							Fixed maturity securities (amortized cost of $15,126,980 and $13,755,858; allowance for expected credit losses of $20,739 and $2,580 at March 31, 2021 and December 31, 2020, respectively)	$	15,400,118	$	14,159,369
Real estate							Real estate	1,961,212		1,960,914
Investment funds	1,119,907			1,198,146			Investment funds	1,358,997		1,309,430
Real estate	1,391,274			1,184,981
Arbitrage trading account	488,238			299,999			Arbitrage trading account	614,721		341,473
Equity securities available for sale	614,025			669,200
Loans receivable	74,229			106,798
Equity securities							Equity securities	621,629		625,667
Loans receivable (net of allowance for expected credit losses of $4,198 and $5,437 at March 31, 2021 and December 31, 2020, respectively)							Loans receivable (net of allowance for expected credit losses of $4,198 and $5,437 at March 31, 2021 and December 31, 2020, respectively)	76,896		84,913

Total investments	17,561,363			16,649,792			Total investments	20,033,573		18,481,766
Cash and cash equivalents	773,997			795,285			Cash and cash equivalents	2,014,911		2,372,366
Premiums and fees receivable	1,818,836			1,701,854
Due from reinsurers	1,739,835			1,743,980
Premiums and fees receivable (net of allowance for expected credit losses of $24,264 and $22,883 at March 31, 2021 and December 31, 2020, respectively)							Premiums and fees receivable (net of allowance for expected credit losses of $24,264 and $22,883 at March 31, 2021 and December 31, 2020, respectively)	2,260,026		2,167,799
Due from reinsurers (net of allowance for expected credit losses of $7,373 and $7,801 at March 31, 2021 and December 31, 2020, respectively)							Due from reinsurers (net of allowance for expected credit losses of $7,373 and $7,801 at March 31, 2021 and December 31, 2020, respectively)	2,549,739		2,424,502
Deferred policy acquisition costs	534,091			537,890			Deferred policy acquisition costs	594,309		556,168
Prepaid reinsurance premiums	473,766			413,140			Prepaid reinsurance premiums	668,111		648,376
Trading account receivables from brokers and clearing organizations	297,208			484,593			Trading account receivables from brokers and clearing organizations	257,756		524,727
Property, furniture and equipment	399,924			349,432			Property, furniture and equipment	404,281		405,930
Goodwill	173,422			144,513			Goodwill	169,652		169,652
Accrued investment income	139,864			127,047			Accrued investment income	123,755		120,464

Other assets	423,770			402,550			Other assets	715,161		700,215
Total assets	$	24,336,076		$	23,350,076		Total assets	$	29,791,274	$	28,571,965

Liabilities and Equity							Liabilities and Equity
Liabilities:							Liabilities:
Reserves for losses and loss expenses	$	11,654,346		$	11,197,195		Reserves for losses and loss expenses	$	14,080,528	$	13,784,430
Unearned premiums	3,409,628			3,283,300			Unearned premiums	4,288,252		4,073,191
Due to reinsurers	228,539			213,128			Due to reinsurers	463,467		426,124
Trading account securities sold but not yet purchased	44,937			51,179			Trading account securities sold but not yet purchased	218		10,048
Federal and foreign income taxes	116,608			119,597

Current and deferred federal and foreign income taxes							Current and deferred federal and foreign income taxes	76,667		48,495
Other liabilities	923,369			916,318			Other liabilities	1,141,444		1,178,546
Senior notes and other debt	1,759,929			1,760,595			Senior notes and other debt	2,021,142		1,623,025
Subordinated debentures	728,071			727,630			Subordinated debentures	1,289,272		1,102,309
Total liabilities	18,865,427			18,268,942			Total liabilities	23,360,990		22,246,168
Equity:							Equity:
Preferred stock, par value $.10 per share:
Authorized 5,000,000 shares; issued and outstanding - none	—			—
Common stock, par value $.20 per share:
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 121,769,109 and 121,193,599 shares, respectively	47,024			47,024
Preferred stock, par value $0.10 per share:							Preferred stock, par value $0.10 per share:
Authorized 5,000,000 shares; issued and outstanding - NaN							Authorized 5,000,000 shares; issued and outstanding - NaN	0		0
Common stock, par value $0.20 per share:							Common stock, par value $0.20 per share:
Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 177,372,943 and 177,825,150 shares, respectively							Authorized 500,000,000 shares, issued and outstanding, net of treasury shares, 177,372,943 and 177,825,150 shares, respectively	70,535		70,535
Additional paid-in capital	1,040,575			1,037,446			Additional paid-in capital	1,023,556		1,012,483
Retained earnings	6,880,062			6,595,987			Retained earnings	8,556,621		8,348,381
Accumulated other comprehensive income	153,759			55,568
Treasury stock, at cost, 113,348,809 and 113,924,319 shares, respectively	(2,690,884		)	(2,688,817		)
Accumulated other comprehensive loss							Accumulated other comprehensive loss	(148,252)		(62,172)
Treasury stock, at cost, 175,303,557 and 174,851,350 shares, respectively							Treasury stock, at cost, 175,303,557 and 174,851,350 shares, respectively	(3,087,860)		(3,058,425)
Total stockholders’ equity	5,430,536			5,047,208			Total stockholders’ equity	6,414,600		6,310,802
Noncontrolling interests	40,113			33,926			Noncontrolling interests	15,684		14,995
Total equity	5,470,649			5,081,134			Total equity	6,430,284		6,325,797
Total liabilities and equity	$	24,336,076		$	23,350,076		Total liabilities and equity	$	29,791,274	$	28,571,965


	For the Three Months Ended March 31,

	2021		2020
REVENUES:
Net premiums written	$	2,050,038	$	1,845,846
Change in net unearned premiums	(200,082)		(154,428)
Net premiums earned	1,849,956		1,691,418
Net investment income	158,577		174,763
Net investment gains (losses):
Net realized and unrealized gains (losses) on investments	51,759		(143,285)

Change in allowance for expected credit losses on investments	(16,920)		(33,889)
Net investment gains (losses)	34,839		(177,174)
Revenues from non-insurance businesses	87,430		93,729
Insurance service fees	25,808		25,751
Other income	259		2,123
Total revenues	2,156,869		1,810,610


OPERATING COSTS AND EXPENSES:
Losses and loss expenses	1,121,592		1,107,253
Other operating costs and expenses	616,268		578,334
Expenses from non-insurance businesses	86,290		94,757
Interest expense	36,651		36,734
Total operating costs and expenses	1,860,801		1,817,078
Income (loss) before income taxes	296,068		(6,468)
Income tax (expense) benefit	(64,352)		2,942
Net income (loss) before noncontrolling interests	231,716		(3,526)
Noncontrolling interests	(2,191)		(892)
Net income (loss) to common stockholders	$	229,525	$	(4,418)

NET INCOME (LOSS) PER SHARE:
Basic	$	1.24	$	(0.02)
Diluted	$	1.23	$	(0.02)


	For the Three Months Ended March 31,

	2021		2020
Net income (loss) before noncontrolling interests	$	231,716	$	(3,526)
Other comprehensive loss:
Change in unrealized currency translation adjustments	4,050		(98,194)
Change in unrealized investment gains, net of taxes	(90,130)		(258,981)

Other comprehensive loss	(86,080)		(357,175)
Comprehensive income (loss)	145,636		(360,701)
Noncontrolling interests	(2,191)		(893)
Comprehensive income (loss) to common stockholders	$	143,445	$	(361,594)


	For the Nine Months							For the Three Months Ended March 31,
	Ended September 30,
	2017			2016				2021		2020
COMMON STOCK:							COMMON STOCK:
Beginning and end of period	$	47,024		$	47,024		Beginning and end of period	$	70,535	$	70,535
ADDITIONAL PAID-IN CAPITAL:							ADDITIONAL PAID-IN CAPITAL:
Beginning of period	$	1,037,446		$	1,005,455		Beginning of period	$	1,012,483	$	1,056,042
Restricted stock units issued	(27,047		)	(3,421		)	Restricted stock units issued	(525)		(4,590)
Restricted stock units expensed	30,176			25,431			Restricted stock units expensed	11,598		11,632

End of period	$	1,040,575		$	1,027,465		End of period	$	1,023,556	$	1,063,084
RETAINED EARNINGS:							RETAINED EARNINGS:
Beginning of period	$	6,595,987		$	6,178,070		Beginning of period	$	8,348,381	$	7,932,372
Net income to common stockholders	394,505			449,127
Dividends	(110,430		)	(107,661		)
Cumulative effect adjustment resulting from changes in accounting principles							Cumulative effect adjustment resulting from changes in accounting principles	0		(30,514)
Net income (loss) to common stockholders							Net income (loss) to common stockholders	229,525		(4,418)
Dividends ($0.12 and $0.11 per share, respectively)							Dividends ($0.12 and $0.11 per share, respectively)	(21,285)		(20,069)
End of period	$	6,880,062		$	6,519,536		End of period	$	8,556,621	$	7,877,371
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized investment gains:
ACCUMULATED OTHER COMPREHENSIVE LOSS:							ACCUMULATED OTHER COMPREHENSIVE LOSS:
Unrealized investment gains (losses):							Unrealized investment gains (losses):
Beginning of period	$	427,154		$	180,695		Beginning of period	$	289,714	$	124,514
Unrealized gains on securities not other-than-temporarily impaired	25,712			133,866
Unrealized gains on other-than-temporarily impaired securities	905			413
Cumulative effect adjustment resulting from changes in accounting principles							Cumulative effect adjustment resulting from changes in accounting principles	0		24,952
Change in unrealized gains on securities without an allowance for expected credit losses							Change in unrealized gains on securities without an allowance for expected credit losses	(100,485)		(260,521)
Change in unrealized gains on securities with an allowance for expected credit losses							Change in unrealized gains on securities with an allowance for expected credit losses	10,355		1,541
End of period	453,771			314,974			End of period	199,584		(109,514)
Currency translation adjustments:							Currency translation adjustments:
Beginning of period	(371,586		)	(247,393		)	Beginning of period	(351,886)		(381,813)
Net change in period	71,574			(77,389		)	Net change in period	4,050		(98,194)
End of period	(300,012		)	(324,782		)	End of period	(347,836)		(480,007)
Total accumulated other comprehensive income (loss)	$	153,759		$	(9,808	)

Total accumulated other comprehensive loss							Total accumulated other comprehensive loss	$	(148,252)	$	(589,521)
TREASURY STOCK:							TREASURY STOCK:
Beginning of period	$	(2,688,817	)	$	(2,563,605	)	Beginning of period	$	(3,058,425)	$	(2,726,711)
Stock exercised/vested	25,584			5,023			Stock exercised/vested	248		1,338
Stock repurchased	(28,378		)	(99,870		)	Stock repurchased	(29,683)		(202,621)
Stock incentive plans expensed	727			—

End of period	$	(2,690,884	)	$	(2,658,452	)	End of period	$	(3,087,860)	$	(2,927,994)
NONCONTROLLING INTERESTS:							NONCONTROLLING INTERESTS:
Beginning of period	$	33,926		$	32,962		Beginning of period	$	14,995	$	43,403
Contributions	3,646			2,474
Distributions							Distributions	(1,502)		(227)
Net income	2,560			689			Net income	2,191		892
Other comprehensive loss, net of tax	(19		)	(66		)
Other comprehensive income, net of tax							Other comprehensive income, net of tax	0		1
End of period	$	40,113		$	36,059		End of period	$	15,684	$	44,069


		~~(Registrant’s telephone number, including area code)~~None

	~~None~~
Former name, former address and former fiscal year, if changed since last report.


Item 1. Financial Statements ~~Item 1.~~	~~Financial Statements~~



	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2017			2016			2017			2016
REVENUES:
Net premiums written	$	1,571,183		$	1,607,365		$	4,782,272		$	4,913,656
Change in net unearned premiums	10,317			(21,421		)	(62,028		)	(240,584		)
Net premiums earned	1,581,500			1,585,944			4,720,244			4,673,072
Net investment income	142,479			145,668			426,601			404,850
Net realized investment gains	183,959			175,738			276,760			207,508
Other-than-temporary impairments	—			—			—			(18,114		)
Revenues from non-insurance businesses	89,786			80,242			225,033			305,787
Insurance service fees	33,612			32,135			100,475			109,437
Other income	6			—			695			—
Total revenues	2,031,342			2,019,727			5,749,808			5,682,540
OPERATING COSTS AND EXPENSES:
Losses and loss expenses	1,081,174			965,856			3,025,475			2,852,339
Other operating costs and expenses	600,822			606,348			1,821,155			1,770,450
Expenses from non-insurance businesses	86,412			78,865			221,389			291,127
Interest expense	36,821			37,043			110,419			104,019
Total operating costs and expenses	1,805,229			1,688,112			5,178,438			5,017,935
Income before income taxes	226,113			331,615			571,370			664,605
Income tax expense	(63,295		)	(110,952		)	(174,305		)	(214,789		)
Net income before noncontrolling interests	162,818			220,663			397,065			449,816
Noncontrolling interests	(764		)	(13		)	(2,560		)	(689		)
Net income to common stockholders	$	162,054		$	220,650		$	394,505		$	449,127

NET INCOME PER SHARE:
Basic	$	1.29		$	1.80		$	3.17		$	3.66
Diluted	$	1.26		$	1.72		$	3.05		$	3.50



(In thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value
			Gains		Losses
September 30, 2017
Held to maturity:
State and municipal	$	65,372	$	15,212	$	—		$	80,584	$	65,372
Residential mortgage-backed	14,024		1,452		—			15,476		14,024
Total held to maturity	79,396		16,664		—			96,060		79,396
Available for sale:
U.S. government and government agency	402,901		10,828		(2,124		)	411,605		411,605
State and municipal:
Special revenue	2,730,653		80,144		(5,469		)	2,805,328		2,805,328
State general obligation	481,070		21,377		(565		)	501,882		501,882
Pre-refunded	282,488		21,052		(173		)	303,367		303,367
Corporate backed	380,351		11,775		(499		)	391,627		391,627
Local general obligation	384,930		26,566		(531		)	410,965		410,965
Total state and municipal	4,259,492		160,914		(7,237		)	4,413,169		4,413,169
Mortgage-backed securities:
Residential (1)	1,064,705		12,696		(8,860		)	1,068,541		1,068,541
Commercial	251,387		1,641		(1,450		)	251,578		251,578
Total mortgage-backed securities	1,316,092		14,337		(10,310		)	1,320,119		1,320,119
Asset-backed	2,389,187		9,836		(10,405		)	2,388,618		2,388,618
Corporate:
Industrial	2,569,673		70,054		(2,842		)	2,636,885		2,636,885
Financial	1,335,101		43,636		(4,716		)	1,374,021		1,374,021
Utilities	255,478		12,760		(907		)	267,331		267,331
Other	42,183		2		(48		)	42,137		42,137
Total corporate	4,202,435		126,452		(8,513		)	4,320,374		4,320,374
Foreign	909,608		32,889		(2,088		)	940,409		940,409
Total available for sale	13,479,715		355,256		(40,677		)	13,794,294		13,794,294
Total investments in fixed maturity securities	$	13,559,111	$	371,920	$	(40,677	)	$	13,890,354	$	13,873,690


(In thousands)	Amortized Cost		Allowance for Expected Credit Losses (1)		Gross Unrealized				Fair Value		Carrying Value
					Gains		Losses
December 31, 2020
Held to maturity:
State and municipal	$	67,117	$	(798)	$	13,217	$	0	$	79,536	$	66,319
Residential mortgage-backed	6,455		0		1,043		0		7,498		6,455

Total held to maturity	73,572		(798)		14,260		0		87,034		72,774
Available for sale:
U.S. government and government agency	586,020		0		18,198		(347)		603,871		603,871
State and municipal:
Special revenue	2,137,162		0		96,924		(714)		2,233,372		2,233,372
State general obligation	417,397		0		33,407		0		450,804		450,804
Pre-refunded	250,081		0		21,472		(162)		271,391		271,391
Corporate backed	206,356		0		8,755		(638)		214,473		214,473
Local general obligation	410,583		0		40,596		(555)		450,624		450,624
Total state and municipal	3,421,579		0		201,154		(2,069)		3,620,664		3,620,664
Mortgage-backed securities:
Residential	813,187		0		24,664		(5,238)		832,613		832,613
Commercial	181,105		0		6,725		(113)		187,717		187,717
Total mortgage-backed securities	994,292		0		31,389		(5,351)		1,020,330		1,020,330
Asset-backed	3,218,048		0		10,035		(33,497)		3,194,586		3,194,586
Corporate:
Industrial	2,456,516		(518)		115,926		(7,449)		2,564,475		2,564,475
Financial	1,513,943		0		62,947		(987)		1,575,903		1,575,903
Utilities	389,267		0		31,931		(33)		421,165		421,165
Other	109,353		0		696		(11)		110,038		110,038
Total corporate	4,469,079		(518)		211,500		(8,480)		4,671,581		4,671,581
Foreign government	993,268		(1,264)		28,007		(44,448)		975,563		975,563
Total available for sale	13,682,286		(1,782)		500,283		(94,192)		14,086,595		14,086,595
Total investments in fixed maturity securities	$	13,755,858	$	(2,580)	$	514,543	$	(94,192)	$	14,173,629	$	14,159,369



(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	745,010	$	750,479
Due after one year through five years	5,089,768		5,210,268
Due after five years through ten years	3,248,254		3,396,461
Due after ten years	3,145,963		3,197,551
Mortgage-backed securities	1,330,116		1,335,595
Total	$	13,559,111	$	13,890,354


(In thousands)	Cost		Gross Unrealized				Fair Value		Carrying Value
			Gains		Losses
March 31, 2021
Common stocks	$	339,742	$	60,766	$	(8,345)	$	392,163	$	392,163
Preferred stocks	196,569		33,523		(626)		229,466		229,466
Total	$	536,311	$	94,289	$	(8,971)	$	621,629	$	621,629

December 31, 2020
Common stocks	$	335,617	$	28,742	$	(14,178)	$	350,181	$	350,181
Preferred stocks	180,397		95,581		(492)		275,486		275,486
Total	$	516,014	$	124,323	$	(14,670)	$	625,667	$	625,667



	Carrying Value as of				Income (Loss) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,
(In thousands)	2017		2016		2017			2016
Real estate	$	614,508	$	641,783	$	30,661		$	33,028
Energy	85,817		91,448		(12,763		)	7,174
Hedge equity	—		73,913		(1,164		)	791
Other funds	419,582		391,002		34,010			19,392
Total	$	1,119,907	$	1,198,146	$	50,744		$	60,385


	Carrying Value
	March 31,		December 31,
(In thousands)	2021		2020
Properties in operation	$	1,737,394	$	1,738,144
Properties under development	223,818		222,770
Total	$	1,961,212	$	1,960,914



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Realized investment gains (losses):
Fixed maturity securities:
Gains	$	8,763		$	33,798		$	21,795		$	66,972
Losses	(197		)	(1,150		)	(4,162		)	(5,570		)
Equity securities available for sale	34,720			8,441			109,566			13,037
Investment funds (1)	124,228			(3,788		)	125,383			(9,041		)
Real estate	1,956			687			4,892			5,247
Other (2)	14,489			137,750			19,286			136,863
Net realized gains on investments sales	183,959			175,738			276,760			207,508
Other-than-temporary impairments (3)	—			—			—			(18,114		)
Net investment gains	183,959			175,738			276,760			189,394
Income tax expense	(64,386		)	(61,508		)	(96,866		)	(66,288		)
After-tax net realized investment gains	$	119,573		$	114,230		$	179,894		$	123,106


Commission File Number			1-15202



(203)			~~(203)~~ 629-3000


(In thousands)	Amortized Cost		Gross Unrealized					Fair Value		Carrying Value		(In thousands)	Amortized Cost		Allowance for Expected Credit Losses (1)		Gross Unrealized				Fair Value		Carrying Value
			Gains		Losses												Gains		Losses
December 31, 2016
March 31, 2021												March 31, 2021
Held to maturity:												Held to maturity:
State and municipal	$	72,582	$	12,453	$	—		$	85,035	$	72,582	State and municipal	$	67,710	$	(730)	$	11,150	$	0	$	78,130	$	66,980
Residential mortgage-backed	15,944		1,693		—			17,637		15,944		Residential mortgage-backed	6,101		0		924		0		7,025		6,101
Total held to maturity	88,526		14,146		—			102,672		88,526		Total held to maturity	73,811		(730)		12,074		0		85,155		73,081
Available for sale:												Available for sale:
U.S. government and government agency	496,187		20,208		(2,593		)	513,802		513,802		U.S. government and government agency	541,180		0		15,449		(915)		555,714		555,714
State and municipal:												State and municipal:
Special revenue	2,791,211		58,559		(26,315		)	2,823,455		2,823,455		Special revenue	2,112,542		0		78,450		(3,284)		2,187,708		2,187,708
State general obligation	524,682		16,964		(5,139		)	536,507		536,507		State general obligation	399,636		0		28,156		(1,059)		426,733		426,733
Pre-refunded	356,535		19,181		(165		)	375,551		375,551		Pre-refunded	231,235		0		17,990		(465)		248,760		248,760
Corporate backed	410,933		6,172		(6,452		)	410,653		410,653		Corporate backed	164,542		0		8,585		(788)		172,339		172,339
Local general obligation	360,022		15,682		(2,367		)	373,337		373,337		Local general obligation	432,788		0		34,850		(585)		467,053		467,053
Total state and municipal	4,443,383		116,558		(40,438		)	4,519,503		4,519,503		Total state and municipal	3,340,743		0		168,031		(6,181)		3,502,593		3,502,593
Mortgage-backed securities:												Mortgage-backed securities:
Residential (1)	1,034,301		15,431		(12,950		)	1,036,782		1,036,782
Residential												Residential	889,638		0		19,315		(12,215)		896,738		896,738
Commercial	155,540		304		(2,981		)	152,863		152,863		Commercial	172,817		0		6,555		(86)		179,286		179,286
Total mortgage-backed securities	1,189,841		15,735		(15,931		)	1,189,645		1,189,645		Total mortgage-backed securities	1,062,455		0		25,870		(12,301)		1,076,024		1,076,024
Asset-backed	1,913,830		5,971		(11,941		)	1,907,860		1,907,860		Asset-backed	3,952,009		0		10,789		(18,160)		3,944,638		3,944,638
Corporate:												Corporate:
Industrial	2,315,567		71,007		(7,174		)	2,379,400		2,379,400		Industrial	2,986,688		(16)		88,810		(14,819)		3,060,663		3,060,663
Financial	1,369,001		39,543		(11,270		)	1,397,274		1,397,274		Financial	1,517,251		0		48,756		(1,638)		1,564,369		1,564,369
Utilities	229,154		10,801		(2,411		)	237,544		237,544		Utilities	426,213		0		15,476		(2,360)		439,329		439,329
Other	54,073		299		(63		)	54,309		54,309		Other	153,700		0		429		(301)		153,828		153,828
Total corporate	3,967,795		121,650		(20,918		)	4,068,527		4,068,527		Total corporate	5,083,852		(16)		153,471		(19,118)		5,218,189		5,218,189
Foreign	858,773		46,794		(2,762		)	902,805		902,805
Foreign government												Foreign government	1,072,930		(19,993)		19,361		(42,419)		1,029,879		1,029,879
Total available for sale	12,869,809		326,916		(94,583		)	13,102,142		13,102,142		Total available for sale	15,053,169		(20,009)		392,971		(99,094)		15,327,037		15,327,037
Total investments in fixed maturity securities	$	12,958,335	$	341,062	$	(94,583	)	$	13,204,814	$	13,190,668	Total investments in fixed maturity securities	$	15,126,980	$	(20,739)	$	405,045	$	(99,094)	$	15,412,192	$	15,400,118


Change in unrealized investment losses on available for sale securities:
Fixed maturity securities without allowance for expected credit losses	$	(122,568)	$	(326,416)
Fixed maturity securities with allowance for expected credit losses	10,355		1,541

Investment funds	(1,020)		(7,646)
Other	(502)		(329)
Total change in unrealized investment losses	(113,735)		(332,850)
Income tax benefit	23,605		73,869
Noncontrolling interests	0		1
After-tax change in unrealized investment losses of available for sale securities	$	(90,130)	$	(258,980)



Change in unrealized investment gains of available for sale securities:
Fixed maturity securities	$	(10,627	)	$	(45,388	)	$	84,214		$	169,933
Previously impaired fixed maturity securities	61			(1,406		)	905			413
Equity securities available for sale	(2,126		)	(28,517		)	(44,812		)	12,433
Investment funds	4,129			3,143			9,841			16,028
Total change in unrealized investment gains	(8,563		)	(72,168		)	50,148			198,807
Income tax benefit (expense)	423			24,493			(23,550		)	(64,594		)
Noncontrolling interests	5			57			19			66
After-tax change in unrealized investment gains of available for sale securities	$	(8,135	)	$	(47,618	)	$	26,617		$	134,279


	Less Than 12 Months				12 Months or Greater				Total					Less Than 12 Months				12 Months or Greater				Total
(In thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		(In thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2017
March 31, 2021													March 31, 2021
U.S. government and government agency	$	118,066	$	1,048	$	48,880	$	1,076	$	166,946	$	2,124	U.S. government and government agency	$	57,625	$	913	$	462	$	2	$	58,087	$	915
State and municipal	650,353		5,797		119,087		1,440		769,440		7,237		State and municipal	288,083		4,949		20,219		1,232		308,302		6,181
Mortgage-backed securities	527,034		5,000		221,923		5,310		748,957		10,310		Mortgage-backed securities	322,410		11,927		30,537		374		352,947		12,301
Asset-backed securities	1,116,878		8,033		130,734		2,372		1,247,612		10,405		Asset-backed securities	1,803,588		4,917		652,450		13,243		2,456,038		18,160
Corporate	651,373		5,395		57,557		3,118		708,930		8,513		Corporate	1,414,453		15,904		113,498		3,214		1,527,951		19,118
Foreign government	220,860		2,072		1,599		16		222,459		2,088		Foreign government	309,304		9,253		20,374		33,166		329,678		42,419
Fixed maturity securities	3,284,564		27,345		579,780		13,332		3,864,344		40,677		Fixed maturity securities	$	4,195,463	$	47,863	$	837,540	$	51,231	$	5,033,003	$	99,094
Common stocks	4,678		3,095		9,387		391		14,065		3,486
Preferred stocks	—		—		23,957		1,718		23,957		1,718
Equity securities available for sale	4,678		3,095		33,344		2,109		38,022		5,204
Total	$	3,289,242	$	30,440	$	613,124	$	15,441	$	3,902,366	$	45,881

December 31, 2016

December 31, 2020													December 31, 2020
U.S. government and government agency	$	112,709	$	1,252	$	35,450	$	1,341	$	148,159	$	2,593	U.S. government and government agency	$	47,649	$	347	$	17	$	0	$	47,666	$	347
State and municipal	1,562,614		35,553		133,034		4,885		1,695,648		40,438		State and municipal	147,754		1,165		20,528		904		168,282		2,069
Mortgage-backed securities	625,903		11,103		109,066		4,828		734,969		15,931		Mortgage-backed securities	212,388		5,121		23,943		230		236,331		5,351
Asset-backed securities	1,010,836		5,340		201,693		6,601		1,212,529		11,941		Asset-backed securities	1,389,133		6,563		656,877		26,934		2,046,010		33,497
Corporate	1,035,245		13,448		65,147		7,470		1,100,392		20,918		Corporate	612,177		6,721		39,985		1,759		652,162		8,480
Foreign government	213,246		1,985		24,820		777		238,066		2,762		Foreign government	143,729		22,871		6,218		21,577		149,947		44,448
Fixed maturity securities	4,560,553		68,681		569,210		25,902		5,129,763		94,583		Fixed maturity securities	$	2,552,830	$	42,788	$	747,568	$	51,404	$	3,300,398	$	94,192
Common stocks	336		22		8,755		1,024		9,091		1,046
Preferred stocks	—		—		22,034		3,639		22,034		3,639
Equity securities available for sale	336		22		30,789		4,663		31,125		4,685
Total	$	4,560,889	$	68,703	$	599,999	$	30,565	$	5,160,888	$	99,268


(In thousands)	Total		Level 1		Level 2		Level 3
March 31, 2021
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency	$	555,714	$	0	$	555,714	$	0
State and municipal	3,502,593		0		3,502,593		0
Mortgage-backed securities	1,076,024		0		1,076,024		0
Asset-backed securities	3,944,638		0		3,944,638		0
Corporate	5,218,189		0		5,218,189		0
Foreign government	1,029,879		0		1,029,879		0
Total fixed maturity securities available for sale	15,327,037		0		15,327,037		0
Equity securities:
Common stocks	392,163		382,822		0		9,341
Preferred stocks	229,466		0		220,135		9,331
Total equity securities	621,629		382,822		220,135		18,672
Arbitrage trading account	614,721		498,401		116,320		0
Total	$	16,563,387	$	881,223	$	15,663,492	$	18,672
Liabilities:
Trading account securities sold but not yet purchased	$	218	$	218	$	0	$	0


December 31, 2020
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency	$	603,871	$	0	$	603,871	$	0
State and municipal	3,620,664		0		3,620,664		0
Mortgage-backed securities	1,020,330		0		1,020,330		0
Asset-backed securities	3,194,586		0		3,194,586		0
Corporate	4,671,581		0		4,670,581		1,000
Foreign government	975,563		0		975,563		0
Total fixed maturity securities available for sale	14,086,595		0		14,085,595		1,000
Equity securities:
Common stocks	350,181		340,966		0		9,215
Preferred stocks	275,486		0		266,155		9,331
Total equity securities	625,667		340,966		266,155		18,546
Arbitrage trading account	341,473		298,359		43,114		0
Total	$	15,053,735	$	639,325	$	14,394,864	$	19,546
Liabilities:
Trading account securities sold but not yet purchased	$	10,048	$	10,048	$	0	$	0



	Gains (Losses) Included in:
(In thousands)	Beginning Balance		Earnings (Losses)			Other Comprehensive Income (Loss)		Impairments		Purchases		(Sales)			Paydowns / Maturities			Transfers		Ending Balance
																		In / (Out)
Nine months ended September 30, 2017:
Assets:
Fixed maturities securities available for sale:
Asset-backed securities	$	183	$	2		$	32	$	—	$	—	$	(43	)	$	—		$	—	$	174
Corporate	—		—			—		—		—		—			—			—		—
Total	183		2			32		—		—		(43		)	—			—		174
Equity securities available for sale:
Common stocks	8,754		—			633		—		—		—			—			—		9,387
Preferred stocks	3,662		19			—		—		175		—			—			—		3,856
Total	12,416		19			633		—		175		—			—			—		13,243
Arbitrage trading account	—		8			—		—		—		(8		)	—			—		—
Total	$	12,599	$	29		$	665	$	—	$	175	$	(51	)	$	—		$	—	$	13,417


Year ended December 31, 2016:
Assets:
Fixed maturities securities available for sale:
Asset-backed securities	$	199	$	3		$	16	$	—	$	—	$	—		$	(35	)	$	—	$	183
Corporate	154		177			—		—		��		(331		)	—			—		—
Total	353		180			16		—		—		(331		)	(35		)	—		183
Equity securities available for sale:
Common stocks	7,829		—			160		—		765		—			—			—		8,754
Preferred stocks	3,624		38			—		—		—		—			—			—		3,662
Total	11,453		38			160		—		765		—			—			—		12,416
Arbitrage trading account	176		(176		)	—		—		—		—			—			—		—
Total	$	11,982	$	42		$	176	$	—	$	765	$	(331	)	$	(35	)	$	—	$	12,599


~~(1)~~	~~Claims occurring during the current year are net of loss reserve discounts of $16,787,000 and $12,085,000 for the nine months ended September 30, 2017 and 2016,~~ (1) Claims occurring during the current year are net of loss reserve discounts of $5 million and $3 million for the three months ended March 31, 2021 and 2020, respectively.


~~(2)~~	The decrease in estimates for claims occurring in prior years is net of loss reserve discount. On an undiscounted basis, the estimates for claims occurring in prior years decreased by $30,609,000 and $45,813,000 for the nine months ended September 30, 2017 and 2016, respectively.


~~(3)~~	For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Favorable development, net of additional and return premiums, was $31 million and $42 million for the nine months ended September 30, 2017 and 2016, respectively.


(In thousands)
Allowance for expected credit losses at December 31, 2020	$	22,883

Provision for expected credit losses	1,381
Allowance for expected credit losses at March 31, 2021	$	24,264


(In thousands)
Allowance for expected credit losses at December 31, 2020	$	7,801

Provision for expected credit losses	(428)
Allowance for expected credit losses at March 31, 2021	$	7,373



($ in thousands)	Units	Fair Value
2017	855,051	$	58,712
2016	990,487	$	57,959


																Revenues
(In thousands)															(In thousands)	Earned Premiums (1)		Investment Income		Other		Total (2)		Pre-Tax Income (Loss)		Net Income (Loss) to Common Stockholders
Three months ended March 31, 2021															Three months ended March 31, 2021
Insurance															Insurance	$	1,604,979	$	105,237	$	8,279	$	1,718,495	$	257,109	$	198,708
Reinsurance & Monoline Excess															Reinsurance & Monoline Excess	244,977		37,708		0		282,685		68,649		54,471
Corporate, other and eliminations (3)															Corporate, other and eliminations (3)	0		15,632		105,218		120,850		(64,529)		(52,606)
Net investment gains															Net investment gains	0		0		34,839		34,839		34,839		28,952
Total															Total	$	1,849,956	$	158,577	$	148,336	$	2,156,869	$	296,068	$	229,525
Three months ended March 31, 2020															Three months ended March 31, 2020
Insurance															Insurance	$	1,484,955	$	123,458	$	8,473	$	1,616,886	$	175,947	$	140,117
Reinsurance & Monoline Excess															Reinsurance & Monoline Excess	206,463		37,710		0		244,173		36,514		29,187
Corporate, other and eliminations (3)															Corporate, other and eliminations (3)	0		13,595		113,130		126,725		(41,755)		(33,755)
Net investment losses															Net investment losses	0		0		(177,174)		(177,174)		(177,174)		(139,967)
Total															Total	$	1,691,418	$	174,763	$	(55,571)	$	1,810,610	$	(6,468)	$	(4,418)

	Revenues
(In thousands)	Earned Premiums		Investment Income		Other		Total (1)		Pre-Tax Income (Loss)			Net Income (Loss) to Common Stockholders
Three months ended September 30, 2017
Insurance	$	1,433,729	$	105,924	$	—	$	1,539,653	$	171,478		$	123,240
Reinsurance	147,771		21,528		—		169,299		(57,643		)	(35,074		)
Corporate, other and eliminations (2)	—		15,027		123,404		138,431		(71,681		)	(45,685		)
Net investment gains	—		—		183,959		183,959		183,959			119,573
Total	$	1,581,500	$	142,479	$	307,363	$	2,031,342	$	226,113		$	162,054
Three months ended September 30, 2016
Insurance	$	1,423,635	$	111,300	$	—	$	1,534,935	$	210,498		$	140,730
Reinsurance	162,309		27,567		—		189,876		27,321			18,725
Corporate, other and eliminations (2)	—		6,801		112,377		119,178		(81,942		)	(53,035		)
Net investment gains	—		—		175,738		175,738		175,738			114,230
Total	$	1,585,944	$	145,668	$	288,115	$	2,019,727	$	331,615		$	220,650
Nine months ended September 30, 2017:
Insurance	$	4,262,485	320,552		$	—	$	4,583,037	$	557,605		$	381,736
Reinsurance	457,759		67,798		—		525,557		(38,279		)	(20,801		)
Corporate, other and eliminations (2)	—		38,251		326,203		364,454		(224,716		)	(146,324		)
Net investment gains	—		—		276,760		276,760		276,760			179,894
Total	$	4,720,244	$	426,601	$	602,963	$	5,749,808	$	571,370		$	394,505
Nine months ended September 30, 2016:
Insurance	$	4,180,985	$	304,904	$	—	$	4,485,889	$	586,651		$	394,746
Reinsurance	492,087		77,119		—		569,206		79,215			54,885
Corporate, other and eliminations (2)	—		22,827		415,224		438,051		(190,655		)	(123,610		)
Net investment gains	—		—		189,394		189,394		189,394			123,106
Total	$	4,673,072	$	404,850	$	604,618	$	5,682,540	$	664,605		$	449,127


	Amount				Average Annualized Yield
($ in thousands)	2021		2020		2021		2020
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	94,677	$	128,018	2.2	%	3.4	%
Investment funds	38,935		40,577		11.6		13.4
Arbitrage trading account	19,074		1,138		16.1		0.9
Equity securities	6,180		1,563		4.7		1.7
Real estate	1,161		6,096		0.2		1.2
Gross investment income	160,027		177,392		3.0		3.7
Investment expenses	(1,450)		(2,629)		—		—
Total	$	158,577	$	174,763	3.0	%	3.6	%



(In thousands)	Carrying Value
Argentina	$	259,720
Australia	217,397
Canada	175,816
United Kingdom	84,894
Brazil	53,547
Germany	48,794
Supranational (1)	40,591
Singapore	25,326
Norway	9,930
Mexico	9,490
Colombia	7,696
Uruguay	7,208
Total	$	940,409


	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs



January 2021	465,063	$	63.82	465,063	6,269,659
February 2021	—	$	—	—	6,269,659
March 2021	—	$	—	—	6,269,659


Number

~~Number~~




(~~10.1~~31.1)		~~Form of 2017 Performance-Based Restricted Stock Unit Agreement Under the W. R. Berkley Corporation 2012 Stock Incentive Plan~~

(~~31.1~~)	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a).

(31.2)		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/ 15d-14(a).

(32.1)		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



		W. R. BERKLEY CORPORATION
Date:	~~November 8, 2017~~May 5, 2021	/s/ W. Robert Berkley, Jr.
		W. Robert Berkley, Jr.
		President and Chief Executive Officer

Date:	~~November 8, 2017~~May 5, 2021	/s/ Richard M. Baio
		Richard M. Baio
		~~Senior~~Executive Vice President - Chief Financial Officer ~~and Treasurer~~