UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)



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

For the Quarterly Period Ended September 30, ~~2017~~2023



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

For the Transition Period from to .

~~Commission File Number~~


Commission File Number			1-15202

W. R. BERKLEY CORPORATION

(Exact name of registrant as specified in its charter)

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)



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

(Registrant’s telephone number, including area code)


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

	~~None~~
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


5.700% Subordinated Debentures due 2058	WRB-PE	New York Stock Exchange
5.100% Subordinated Debentures due 2059	WRB-PF	New York Stock Exchange
4.250% 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~~

October 30, 2023: 257,872,034

TABLE OF CONTENTS



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 5. Other Information
			Item 6. Exhibits
SIGNATURES
~~EX-10.1~~
EX-31.1
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

Part I — FINANCIAL INFORMATION


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

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	September 30, 2017			December 31, 2016				September 30, 2023		December 31, 2022
	(Unaudited)			(Audited)				(Unaudited)		(Audited)
Assets							Assets
Investments:							Investments:
Fixed maturity securities	$	13,873,690		$	13,190,668
Fixed maturity securities (amortized cost of $20,232,773 and $18,715,483; allowance for expected credit losses of $46,412 and $37,466 at September 30, 2023 and December 31, 2022, respectively)							Fixed maturity securities (amortized cost of $20,232,773 and $18,715,483; allowance for expected credit losses of $46,412 and $37,466 at September 30, 2023 and December 31, 2022, respectively)	$	19,035,305	$	17,587,349
Investment funds	1,119,907			1,198,146			Investment funds	1,600,495		1,608,548
Real estate	1,391,274			1,184,981			Real estate	1,270,545		1,340,622
Equity securities							Equity securities	1,182,061		1,185,894
Arbitrage trading account	488,238			299,999			Arbitrage trading account	825,049		944,230
Equity securities available for sale	614,025			669,200
Loans receivable	74,229			106,798
Loans receivable (net of allowance for expected credit losses of $4,009 and $1,791 at September 30, 2023 and December 31, 2022, respectively)							Loans receivable (net of allowance for expected credit losses of $4,009 and $1,791 at September 30, 2023 and December 31, 2022, respectively)	177,750		193,002

Total investments	17,561,363			16,649,792			Total investments	24,091,205		22,859,645
Cash and cash equivalents	773,997			795,285			Cash and cash equivalents	1,646,074		1,449,346
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 $33,602 and $30,660 at September 30, 2023 and December 31, 2022, respectively)							Premiums and fees receivable (net of allowance for expected credit losses of $33,602 and $30,660 at September 30, 2023 and December 31, 2022, respectively)	3,104,609		2,779,244
Due from reinsurers (net of allowance for expected credit losses of $9,443 and $8,064 at September 30, 2023 and December 31, 2022, respectively)							Due from reinsurers (net of allowance for expected credit losses of $9,443 and $8,064 at September 30, 2023 and December 31, 2022, respectively)	3,426,196		3,187,730
Deferred policy acquisition costs	534,091			537,890			Deferred policy acquisition costs	854,374		763,486
Prepaid reinsurance premiums	473,766			413,140			Prepaid reinsurance premiums	756,236		696,468
Trading account receivables from brokers and clearing organizations	297,208			484,593			Trading account receivables from brokers and clearing organizations	401,982		233,863
Property, furniture and equipment	399,924			349,432			Property, furniture and equipment	423,279		423,232
Goodwill	173,422			144,513			Goodwill	174,597		185,509
Accrued investment income	139,864			127,047			Accrued investment income	201,206		166,784
Current and deferred federal and foreign income taxes							Current and deferred federal and foreign income taxes	291,363		333,774

Other assets	423,770			402,550			Other assets	740,227		736,022
Total assets	$	24,336,076		$	23,350,076		Total assets	$	36,111,348	$	33,815,103

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	$	18,273,310	$	17,011,223
Unearned premiums	3,409,628			3,283,300			Unearned premiums	5,899,738		5,297,654
Due to reinsurers	228,539			213,128			Due to reinsurers	626,448		523,131
Trading account securities sold but not yet purchased	44,937			51,179			Trading account securities sold but not yet purchased	7,538		—
Federal and foreign income taxes	116,608			119,597

Other liabilities	923,369			916,318			Other liabilities	1,537,449		1,377,740
Senior notes and other debt	1,759,929			1,760,595			Senior notes and other debt	1,828,046		1,828,823
Subordinated debentures	728,071			727,630			Subordinated debentures	1,008,910		1,008,371
Total liabilities	18,865,427			18,268,942			Total liabilities	29,181,439		27,046,942
Equity:							Equity:
Preferred stock, par value $.10 per share:
Preferred stock, par value $0.10 per share:							Preferred stock, par value $0.10 per share:
Authorized 5,000,000 shares; issued and outstanding - none	—			—			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
Common stock, par value $0.20 per share:							Common stock, par value $0.20 per share:
Authorized 1,250,000,000 shares; issued and outstanding, net of treasury shares, 258,043,531 and 264,546,100 shares, respectively							Authorized 1,250,000,000 shares; issued and outstanding, net of treasury shares, 258,043,531 and 264,546,100 shares, respectively	105,803		105,803
Additional paid-in capital	1,040,575			1,037,446			Additional paid-in capital	1,008,301		997,534
Retained earnings	6,880,062			6,595,987			Retained earnings	10,800,697		10,161,005
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	(1,322,819)		(1,264,581)
Treasury stock, at cost, 270,971,091 and 264,468,528 shares, respectively							Treasury stock, at cost, 270,971,091 and 264,468,528 shares, respectively	(3,676,403)		(3,251,429)
Total stockholders’ equity	5,430,536			5,047,208			Total stockholders’ equity	6,915,579		6,748,332
Noncontrolling interests	40,113			33,926			Noncontrolling interests	14,330		19,829
Total equity	5,470,649			5,081,134			Total equity	6,929,909		6,768,161
Total liabilities and equity	$	24,336,076		$	23,350,076		Total liabilities and equity	$	36,111,348	$	33,815,103

See accompanying notes to interim consolidated financial statements.

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

	2023		2022		2023		2022
REVENUES:
Net premiums written	$	2,848,459	$	2,577,274	$	8,234,799	$	7,576,163
Change in net unearned premiums	(206,545)		(135,313)		(548,726)		(527,958)
Net premiums earned	2,641,914		2,441,961		7,686,073		7,048,205
Net investment income	270,944		202,816		739,494		547,902
Net investment (losses) gains:
Net realized and unrealized (losses) gains on investments	(40,855)		(66,282)		50,403		139,664

Change in allowance for expected credit losses on investments	(1,571)		(1,128)		(11,164)		(12,365)
Net investment (losses) gains	(42,426)		(67,410)		39,239		127,299
Revenues from non-insurance businesses	137,116		119,013		375,225		345,210
Insurance service fees	22,962		27,940		81,290		82,284
Other income	128		80		235		1,797
Total revenues	3,030,638		2,724,400		8,921,556		8,152,697


OPERATING COSTS AND EXPENSES:
Losses and loss expenses	1,636,193		1,564,578		4,744,602		4,339,646
Other operating costs and expenses	808,669		725,537		2,457,925		2,139,256
Expenses from non-insurance businesses	133,939		116,240		370,244		334,062
Interest expense	31,888		31,780		95,580		98,473
Total operating costs and expenses	2,610,689		2,438,135		7,668,351		6,911,437
Income before income taxes	419,949		286,265		1,253,205		1,241,260
Income tax expense	(86,519)		(55,791)		(268,322)		(238,290)
Net income before noncontrolling interests	333,430		230,474		984,883		1,002,970
Noncontrolling interests	156		(1,595)		(863)		(4,131)
Net income to common stockholders	$	333,586	$	228,879	$	984,020	$	998,839

NET INCOME PER SHARE:
Basic	$	1.24	$	0.83	$	3.62	$	3.61
Diluted	$	1.23	$	0.82	$	3.59	$	3.57

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.

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands)


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

	2023		2022		2023		2022
Net income before noncontrolling interests	$	333,430	$	230,474	$	984,883	$	1,002,970
Other comprehensive loss:
Change in unrealized currency translation adjustments	(22,781)		(40,516)		(7,387)		(27,637)
Change in unrealized investment losses, net of taxes	(118,365)		(315,664)		(50,850)		(1,076,217)

Other comprehensive loss	(141,146)		(356,180)		(58,237)		(1,103,854)
Comprehensive income (loss)	192,284		(125,706)		926,646		(100,884)
Noncontrolling interests	156		(1,595)		(862)		(4,130)
Comprehensive income (loss) to common stockholders	$	192,440	$	(127,301)	$	925,784	$	(105,014)

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

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


	For the Nine Months							For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	Ended September 30,
	2017			2016				2023		2022		2023		2022
COMMON STOCK:							COMMON STOCK:
Beginning and end of period	$	47,024		$	47,024		Beginning and end of period	$	105,803	$	105,803	$	105,803	$	105,803
ADDITIONAL PAID-IN CAPITAL:							ADDITIONAL PAID-IN CAPITAL:
Beginning of period	$	1,037,446		$	1,005,455		Beginning of period	$	1,020,818	$	1,001,093	$	997,534	$	981,104
Restricted stock units issued	(27,047		)	(3,421		)	Restricted stock units issued	(25,226)		(28,381)		(25,228)		(30,751)
Restricted stock units expensed	30,176			25,431			Restricted stock units expensed	12,709		12,091		35,995		34,450

End of period	$	1,040,575		$	1,027,465		End of period	$	1,008,301	$	984,803	$	1,008,301	$	984,803
RETAINED EARNINGS:							RETAINED EARNINGS:
Beginning of period	$	6,595,987		$	6,178,070		Beginning of period	$	10,624,518	$	9,602,948	$	10,161,005	$	9,015,135

Net income to common stockholders	394,505			449,127			Net income to common stockholders	333,586		228,879		984,020		998,839
Dividends	(110,430		)	(107,661		)
Dividends ($0.61, $0.10, $1.32 and $0.79 per share, respectively)							Dividends ($0.61, $0.10, $1.32 and $0.79 per share, respectively)	(157,407)		(26,590)		(344,328)		(208,737)
End of period	$	6,880,062		$	6,519,536		End of period	$	10,800,697	$	9,805,237	$	10,800,697	$	9,805,237
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized investment gains:
ACCUMULATED OTHER COMPREHENSIVE LOSS:							ACCUMULATED OTHER COMPREHENSIVE LOSS:
Unrealized investment (loss) gain:							Unrealized investment (loss) gain:
Beginning of period	$	427,154		$	180,695		Beginning of period	$	(825,391)	$	(669,654)	$	(892,905)	$	90,900
Unrealized gains on securities not other-than-temporarily impaired	25,712			133,866
Unrealized gains on other-than-temporarily impaired securities	905			413

Change in unrealized (losses) gains on securities without an allowance for expected credit losses							Change in unrealized (losses) gains on securities without an allowance for expected credit losses	(108,121)		(311,659)		(47,757)		(1,055,628)
Change in unrealized (losses) gains on securities with an allowance for expected credit losses							Change in unrealized (losses) gains on securities with an allowance for expected credit losses	(10,244)		(4,005)		(3,094)		(20,590)
End of period	453,771			314,974			End of period	(943,756)		(985,318)		(943,756)		(985,318)
Currency translation adjustments:							Currency translation adjustments:
Beginning of period	(371,586		)	(247,393		)	Beginning of period	(356,282)		(359,976)		(371,676)		(372,855)
Net change in period	71,574			(77,389		)	Net change in period	(22,781)		(40,516)		(7,387)		(27,637)
End of period	(300,012		)	(324,782		)	End of period	(379,063)		(400,492)		(379,063)		(400,492)
Total accumulated other comprehensive income (loss)	$	153,759		$	(9,808	)

Total accumulated other comprehensive loss							Total accumulated other comprehensive loss	$	(1,322,819)	$	(1,385,810)	$	(1,322,819)	$	(1,385,810)
TREASURY STOCK:							TREASURY STOCK:
Beginning of period	$	(2,688,817	)	$	(2,563,605	)	Beginning of period	$	(3,682,281)	$	(3,165,729)	$	(3,251,429)	$	(3,167,076)
Stock exercised/vested	25,584			5,023			Stock exercised/vested	8,469		8,332		9,461		9,679
Stock repurchased	(28,378		)	(99,870		)	Stock repurchased	(2,917)		(6,570)		(430,536)		(6,570)
Stock incentive plans expensed	727			—
Other							Other	326		—		(3,899)		—
End of period	$	(2,690,884	)	$	(2,658,452	)	End of period	$	(3,676,403)	$	(3,163,967)	$	(3,676,403)	$	(3,163,967)
NONCONTROLLING INTERESTS:							NONCONTROLLING INTERESTS:
Beginning of period	$	33,926		$	32,962		Beginning of period	$	21,167	$	22,388	$	19,829	$	14,719
Contributions	3,646			2,474
Net income	2,560			689
(Distributions) contributions							(Distributions) contributions	(6,681)		(73)		(6,361)		5,061
Net (loss) income							Net (loss) income	(156)		1,595		863		4,131
Other comprehensive loss, net of tax	(19		)	(66		)	Other comprehensive loss, net of tax	—		—		(1)		(1)
End of period	$	40,113		$	36,059		End of period	$	14,330	$	23,910	$	14,330	$	23,910

See accompanying notes to interim consolidated financial statements.

W. R. BERKLEY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	For the Nine Months							For the Nine Months Ended September 30,
	Ended September 30,
	2017			2016				2023		2022
CASH FROM OPERATING ACTIVITIES:							CASH FROM OPERATING ACTIVITIES:
Net income to common stockholders	$	394,505		$	449,127		Net income to common stockholders	$	984,020	$	998,839
Adjustments to reconcile net income to net cash from operating activities:							Adjustments to reconcile net income to net cash from operating activities:
Net investment gains	(276,760		)	(189,394		)	Net investment gains	(39,239)		(127,299)
Depreciation and amortization	78,137			69,153			Depreciation and amortization	3,294		46,037
Noncontrolling interests	2,560			689			Noncontrolling interests	863		4,131
Investment funds	(51,907		)	(60,387		)	Investment funds	(5,444)		(121,919)
Stock incentive plans	31,883			27,033			Stock incentive plans	37,796		36,247
Change in:							Change in:
Arbitrage trading account	(2,835		)	(4,777		)	Arbitrage trading account	(41,399)		(39,389)
Premiums and fees receivable	(112,420		)	(92,372		)	Premiums and fees receivable	(340,056)		(247,782)
Reinsurance accounts	(42,319		)	(154,939		)	Reinsurance accounts	(194,610)		(187,453)
Deferred policy acquisition costs	4,483			(51,795		)	Deferred policy acquisition costs	(93,270)		(92,724)
Income taxes	(15,451		)	89,007			Income taxes	49,722		(111,231)

Reserves for losses and loss expenses	422,657			440,486			Reserves for losses and loss expenses	1,288,975		1,225,679
Unearned premiums	121,583			269,287			Unearned premiums	608,300		551,894
Other	(32,258		)	(64,608		)	Other	(27,790)		(161,727)
Net cash from operating activities	521,858			726,510			Net cash from operating activities	2,231,162		1,773,303
CASH USED IN INVESTING ACTIVITIES:							CASH USED IN INVESTING ACTIVITIES:
Proceeds from sale of fixed maturity securities	3,081,619			1,074,630			Proceeds from sale of fixed maturity securities	877,019		1,638,049
Proceeds from sale of equity securities	137,062			123,187			Proceeds from sale of equity securities	161,470		20,057
Distributions from investment funds	265,371			5,630
Distributions from (contributions to) investment funds							Distributions from (contributions to) investment funds	8,385		(72,925)
Proceeds from maturities and prepayments of fixed maturity securities	2,860,678			2,189,365			Proceeds from maturities and prepayments of fixed maturity securities	2,654,140		3,916,331
Purchase of fixed maturity securities	(6,530,466		)	(4,280,457		)	Purchase of fixed maturity securities	(5,091,866)		(7,694,663)
Purchase of equity securities	(17,049		)	(127,303		)	Purchase of equity securities	(63,815)		(340,158)
Real estate purchased	(159,006		)	(207,829		)
Real estate additions							Real estate additions	(15,158)		(18,670)

Change in loans receivable	32,574			159,128			Change in loans receivable	12,796		2,066
Net additions to property, furniture and equipment	(74,268		)	(37,895		)
Net purchases of property, furniture and equipment							Net purchases of property, furniture and equipment	(42,127)		(35,270)
Change in balances due to security brokers	39,978			102,981			Change in balances due to security brokers	8,224		177,457
Cash received in connection with business disposition	—			250,216			Cash received in connection with business disposition	94,076		906,789
Payment for business purchased net of cash aquired	(70,570		)	(53,524		)
Payment for business purchased net of cash acquired							Payment for business purchased net of cash acquired	—		(49,572)
Other							Other	320		94
Net cash used in investing activities	(434,077		)	(801,871		)	Net cash used in investing activities	(1,396,536)		(1,550,415)
CASH (USED IN) FROM FINANCING ACTIVITIES:
CASH USED IN FINANCING ACTIVITIES:							CASH USED IN FINANCING ACTIVITIES:
Repayment of senior notes and other debt	(1,788		)	(70,567		)	Repayment of senior notes and other debt	(1,954)		(426,503)

Net proceeds from issuance of debt	—			386,848			Net proceeds from issuance of debt	1,100		2,181
Cash dividends to common stockholders	(93,371		)	(30,654		)	Cash dividends to common stockholders	(186,921)		(182,147)
Purchase of common treasury shares	(28,378		)	(99,870		)	Purchase of common treasury shares	(430,536)		(6,570)
Other, net	(3,835		)	(1,376		)	Other, net	(20,545)		(21,808)
Net cash (used in) from financing activities	(127,372		)	184,381
Net cash used in financing activities							Net cash used in financing activities	(638,856)		(634,847)
Net impact on cash due to change in foreign exchange rates	18,303			413			Net impact on cash due to change in foreign exchange rates	959		(26,134)
Net change in cash and cash equivalents	(21,288		)	109,433			Net change in cash and cash equivalents	196,728		(438,093)
Cash and cash equivalents at beginning of year	795,285			763,631
Cash and cash equivalents at beginning of period							Cash and cash equivalents at beginning of period	1,449,346		1,568,843
Cash and cash equivalents at end of period	$	773,997		$	873,064		Cash and cash equivalents at end of period	$	1,646,074	$	1,130,750

See accompanying notes to interim consolidated financial statements.

W. R. Berkley Corporation and Subsidiaries

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) General

The unaudited consolidated financial statements, which include the accounts of W. R. Berkley Corporation and its subsidiaries (the “Company”), have been prepared on the basis of U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all the information and notes required by GAAP for annual financial statements. The unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which are necessary to present fairly the Company’s financial position and results of operations on a basis consistent with the prior audited consolidated financial statements. Operating results for interim periods are not necessarily indicative of the results that may be expected for the year. All significant intercompany accounts and transactions have been eliminated. Reclassifications have been made in the 2022 financial statements as originally reported to conform to the presentation of the 2023 financial statements. For the for nine months ended September 30, 2022, the Company did not correct the proceeds from sale of fixed maturity securities and purchase of fixed maturity securities lines within the consolidated statements of cash flows for an incremental inter-company elimination as the effects were not material and had no impact on the total amount of investing activities.

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.~~2022.

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%~~ ~~principally because of~~21% primarily due to tax benefits related to equity-based compensation and tax-exempt investment income, ~~as well as the new requirement in 2017 to recognize tax benefits for stock compensation in~~which was partially offset by state income ~~tax expense.~~taxes.

(2) Per Share Data

The Company presents both basic and diluted net income per share (“EPS”) amounts. Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during the period (including ~~4,087,731~~11,416,856 and 11,592,699 common shares held in a grantor trust ~~established in March 2017)~~as of September 30, 2023 and 2022, respectively). The common shares held in the grantor trust are for delivery upon settlement of vested but mandatorily deferred restricted stock units ("RSUs"). Shares held by the grantor trust do not affect diluted shares outstanding since the shares deliverable under vested RSUs were already included in diluted shares outstanding. Diluted EPS is based upon the weighted average number of basic and common equivalent shares outstanding during the period and is calculated using the treasury stock method for stock incentive plans. Common equivalent shares are excluded from the computation in periods in which they have an anti-dilutive effect.

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


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,

(In thousands)	2023	2022	2023	2022
Basic	269,191	277,192	271,656	276,928
Diluted	271,439	279,642	274,146	279,644

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

(3) Recent Accounting Pronouncements

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 effective in ~~2017~~2023 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 (Loss) Income

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


(In thousands)	Unrealized Investment (Losses) Gains			Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income
As of and for the nine months ended September 30, 2023
Changes in AOCI
Beginning of period	$	(892,905)		$	(371,676)	$	(1,264,581)


Other comprehensive loss before reclassifications	(103,087)			(7,387)		(110,474)
Amounts reclassified from AOCI	52,237			—		52,237
Other comprehensive loss	(50,850)			(7,387)		(58,237)
Unrealized investment loss related to noncontrolling interest	(1)			—		(1)
End of period	$	(943,756)		$	(379,063)	$	(1,322,819)
Amounts reclassified from AOCI
Pre-tax	$	66,123	(1)	$	—	$	66,123
Tax effect	(13,886)		(2)	—		(13,886)
After-tax amounts reclassified	$	52,237		$	—	$	52,237
Other comprehensive loss
Pre-tax	$	(62,476)		$	(7,387)	$	(69,863)
Tax effect	11,626			—		11,626
Other comprehensive loss	$	(50,850)		$	(7,387)	$	(58,237)

As of and for the three months ended September 30, 2023
Changes in AOCI
Beginning of period	$	(825,391)		$	(356,282)	$	(1,181,673)


Other comprehensive loss before reclassifications	(133,018)			(22,781)		(155,799)
Amounts reclassified from AOCI	14,653			—		14,653
Other comprehensive loss	(118,365)			(22,781)		(141,146)
Unrealized investment loss related to noncontrolling interest	—			—		—
Ending balance	$	(943,756)		$	(379,063)	$	(1,322,819)
Amounts reclassified from AOCI
Pre-tax	$	18,548	(1)	$	—	$	18,548
Tax effect	(3,895)		(2)	—		(3,895)
After-tax amounts reclassified	$	14,653		$	—	$	14,653
Other comprehensive loss
Pre-tax	$	(150,455)		$	(22,781)	$	(173,236)
Tax effect	32,090			—		32,090
Other comprehensive loss	$	(118,365)		$	(22,781)	$	(141,146)

(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
Amounts reclassified from AOCI (28,136 ) —
(28,136 )
Other comprehensive (loss) income (8,168 ) 28,592
20,424
Unrealized investment loss related to non-controlling interest 33
—
33
End of period $ 453,771
$ (300,012 ) $ 153,759
Amounts reclassified from AOCI
Pre-tax $ (43,286 ) (1) $ —
$ (43,286 )
Tax effect 15,150
(2) —
15,150
After-tax amounts reclassified $ (28,136 ) $ —
$ (28,136 )
Other comprehensive (loss) income
Pre-tax $ (8,563 ) $ 28,592
$ 20,029
Tax effect 395
—
395
Other comprehensive (loss) income $ (8,168 ) $ 28,592
$ 20,424

~~_________________________~~

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

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


(In thousands)											(In thousands)	Unrealized Investment (Losses) Gains			Currency Translation Adjustments		Accumulated Other Comprehensive (Loss) Income
As of and for the nine months ended September 30, 2022											As of and for the nine months ended September 30, 2022
Changes in AOCI											Changes in AOCI
Beginning of period											Beginning of period	$	90,900		$	(372,855)	$	(281,955)

(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		)	Other comprehensive loss before reclassifications	(1,134,657)			(27,637)		(1,162,294)
Amounts reclassified from AOCI	(26,708		)		—			(26,708		)	Amounts reclassified from AOCI	58,440			—		58,440
Other comprehensive loss	(47,676		)		(19,470		)	(67,146		)	Other comprehensive loss	(1,076,217)			(27,637)		(1,103,854)
Unrealized investment loss related to non-controlling interest	57				—			57
Unrealized investment loss related to noncontrolling interest											Unrealized investment loss related to noncontrolling interest	(1)			—		(1)
End of period	$	314,974			$	(324,782	)	$	(9,808	)	End of period	$	(985,318)		$	(400,492)	$	(1,385,810)
Amounts reclassified from AOCI											Amounts reclassified from AOCI
Pre-tax	$	(41,090	)	(1)	$	—		$	(41,090	)	Pre-tax	$	73,975	(1)	$	—	$	73,975
Tax effect	14,382			(2)	—			14,382			Tax effect	(15,535)		(2)	—		(15,535)
After-tax amounts reclassified	$	(26,708	)		$	—		$	(26,708	)	After-tax amounts reclassified	$	58,440		$	—	$	58,440
Other comprehensive loss											Other comprehensive loss
Pre-tax	$	(72,188	)		$	(19,470	)	$	(91,658	)	Pre-tax	$	(1,365,064)		$	(27,637)	$	(1,392,701)
Tax effect	24,512				—			24,512			Tax effect	288,847			—		288,847
Other comprehensive loss	$	(47,676	)		$	(19,470	)	$	(67,146	)	Other comprehensive loss	$	(1,076,217)		$	(27,637)	$	(1,103,854)

As of and for the three months ended September 30, 2022											As of and for the three months ended September 30, 2022
Changes in AOCI											Changes in AOCI
Beginning of period											Beginning of period	$	(669,654)		$	(359,976)	$	(1,029,630)

Other comprehensive loss before reclassifications											Other comprehensive loss before reclassifications	(335,034)			(40,516)		(375,550)
Amounts reclassified from AOCI											Amounts reclassified from AOCI	19,370			—		19,370
Other comprehensive loss											Other comprehensive loss	(315,664)			(40,516)		(356,180)
Unrealized investment loss related to noncontrolling interest											Unrealized investment loss related to noncontrolling interest	—					—
Ending balance											Ending balance	$	(985,318)		$	(400,492)	$	(1,385,810)
Amounts reclassified from AOCI											Amounts reclassified from AOCI
Pre-tax											Pre-tax	$	24,519	(1)	$	—	$	24,519
Tax effect											Tax effect	(5,149)		(2)	—		(5,149)
After-tax amounts reclassified											After-tax amounts reclassified	$	19,370		$	—	$	19,370
Other comprehensive loss											Other comprehensive loss
Pre-tax											Pre-tax	$	(394,832)		$	(40,516)	$	(435,348)
Tax effect											Tax effect	79,168			—		79,168
Other comprehensive loss											Other comprehensive loss	$	(315,664)		$	(40,516)	$	(356,180)

~~_______________~~____________

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

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

~~(6)~~(5) Statements of Cash ~~Flow~~Flows

Interest payments were ~~$134,291,000~~$79,336,000 and ~~$124,791,000 and income taxes paid were $182,487,000 and $99,161,000 in~~$115,756,000 for the nine months ended September 30, ~~2017~~2023 and ~~2016~~,2022, respectively. Income taxes paid were $180,000,000 and $263,971,000 for the nine months ended September 30, 2023 and 2022, respectively.

~~(7)~~(6) Investments in Fixed Maturity Securities

At September 30, ~~2017~~2023 and December 31, ~~2016~~,2022, investments in fixed maturity securities were as follows:


(In thousands)	Amortized Cost		Allowance for Expected Credit Losses (1)		Gross Unrealized				Fair Value		Carrying Value
					Gains		Losses
September 30, 2023
Held to maturity:
State and municipal	$	49,847	$	(48)	$	1,825	$	—	$	51,624	$	49,799
Residential mortgage-backed	3,029		—		19		—		3,048		3,029
Total held to maturity	52,876		(48)		1,844		—		54,672		52,828
Available for sale:
U.S. government and government agency	1,546,889		—		2,077		(81,767)		1,467,199		1,467,199
State and municipal:
Special revenue	1,771,219		—		2,287		(126,585)		1,646,921		1,646,921
State general obligation	378,650		—		1,247		(23,727)		356,170		356,170
Pre-refunded	103,219		—		202		(827)		102,594		102,594
Corporate backed	194,976		(821)		159		(14,341)		179,973		179,973
Local general obligation	401,286		—		1,767		(17,713)		385,340		385,340
Total state and municipal	2,849,350		(821)		5,662		(183,193)		2,670,998		2,670,998
Mortgage-backed:
Residential	1,660,790		(24)		399		(214,381)		1,446,784		1,446,784
Commercial	651,966		(2,076)		11		(20,389)		629,512		629,512
Total mortgage-backed	2,312,756		(2,100)		410		(234,770)		2,076,296		2,076,296
Asset-backed	4,197,235		(1,502)		750		(109,025)		4,087,458		4,087,458
Corporate:
Industrial	3,567,020		—		5,026		(227,479)		3,344,567		3,344,567
Financial	2,813,603		(5,406)		1,362		(130,312)		2,679,247		2,679,247
Utilities	683,468		(364)		164		(39,991)		643,277		643,277
Other	593,466		—		134		(11,877)		581,723		581,723
Total corporate	7,657,557		(5,770)		6,686		(409,659)		7,248,814		7,248,814
Foreign government	1,616,110		(36,171)		1,361		(149,588)		1,431,712		1,431,712
Total available for sale	20,179,897		(46,364)		16,946		(1,168,002)		18,982,477		18,982,477
Total investments in fixed maturity securities	$	20,232,773	$	(46,412)	$	18,790	$	(1,168,002)	$	19,037,149	$	19,035,305

____________

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

(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		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
December 31, 2022												December 31, 2022
Held to maturity:												Held to maturity:
State and municipal	$	72,582	$	12,453	$	—		$	85,035	$	72,582	State and municipal	$	47,802		$	(114)		$	4,239		$	—		$	51,927		$	47,688
Residential mortgage-backed	15,944		1,693		—			17,637		15,944		Residential mortgage-backed	3,608			—			38			—			3,646			3,608

Total held to maturity	88,526		14,146		—			102,672		88,526		Total held to maturity	51,410			(114)			4,277			—			55,573			51,296
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	960,479			—			937			(69,158)			892,258			892,258
State and municipal:												State and municipal:
Special revenue	2,791,211		58,559		(26,315		)	2,823,455		2,823,455		Special revenue	1,837,309			—			3,662			(119,474)			1,721,497			1,721,497
State general obligation	524,682		16,964		(5,139		)	536,507		536,507		State general obligation	387,709			—			2,651			(21,335)			369,025			369,025
Pre-refunded	356,535		19,181		(165		)	375,551		375,551		Pre-refunded	156,106			—			2,741			(7)			158,840			158,840
Corporate backed	410,933		6,172		(6,452		)	410,653		410,653		Corporate backed	210,228			—			334			(10,923)			199,639			199,639
Local general obligation	360,022		15,682		(2,367		)	373,337		373,337		Local general obligation	454,983			—			2,967			(16,853)			441,097			441,097
Total state and municipal	4,443,383		116,558		(40,438		)	4,519,503		4,519,503		Total state and municipal	3,046,335			—			12,355			(168,592)			2,890,098			2,890,098
Mortgage-backed securities:
Mortgage-backed:												Mortgage-backed:
Residential ~~(1)~~	1,034,301		15,431		(12,950		)	1,036,782		1,036,782		1,308,019			(18)			395			(171,595)			1,136,801			1,136,801
Commercial	155,540		304		(2,981		)	152,863		152,863		Commercial	547,757			—			215			(19,363)			528,609			528,609
Total mortgage-backed securities	1,189,841		15,735		(15,931		)	1,189,645		1,189,645		Total mortgage-backed securities	1,855,776			(18)			610			(190,958)			1,665,410			1,665,410
Asset-backed	1,913,830		5,971		(11,941		)	1,907,860		1,907,860		Asset-backed	4,132,365			—			2,730			(152,322)			3,982,773			3,982,773
Corporate:												Corporate:
Industrial	2,315,567		71,007		(7,174		)	2,379,400		2,379,400		Industrial	3,491,645			(1,704)			4,439			(241,381)			3,252,999			3,252,999
Financial	1,369,001		39,543		(11,270		)	1,397,274		1,397,274		Financial	2,585,247			(2,997)			5,505			(117,383)			2,470,372			2,470,372
Utilities	229,154		10,801		(2,411		)	237,544		237,544		Utilities	586,066			—			1,307			(36,325)			551,048			551,048
Other	54,073		299		(63		)	54,309		54,309		Other	441,230			—			—			(11,657)			429,573			429,573
Total corporate	3,967,795		121,650		(20,918		)	4,068,527		4,068,527		Total corporate	7,104,188			(4,701)			11,251			(406,746)			6,703,992			6,703,992
Foreign	858,773		46,794		(2,762		)	902,805		902,805
Foreign government												Foreign government	1,564,930			(32,633)			4,283			(135,058)			1,401,522			1,401,522
Total available for sale	12,869,809		326,916		(94,583		)	13,102,142		13,102,142		Total available for sale	18,664,073			(37,352)			32,166			(1,122,834)			17,536,053			17,536,053
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	$	18,715,483		$	(37,466)		$	36,443		$	(1,122,834)		$	17,591,626		$	17,587,349

____________

~~____________~~


~~(1)~~	~~Gross unrealized gains and (losses) for residential mortgage-backed securities include $85,907 and $(818,691) as of~~ ~~September 30, 2017~~ ~~and~~ ~~December 31, 2016, respectively, related to securities with the non-credit portion of other-than-temporary impairments (“OTTI”) recognized in accumulated other comprehensive income.~~

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the nine months ended September 30, 2023 and 2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	114	$	387

Provision for expected credit losses	(66)		(266)
Allowance for expected credit losses, end of period	$	48	$	121

The following table presents the rollforward of the allowance for expected credit losses for held to maturity securities for the three months ended September 30, 2023 and 2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	53	$	127

Provision for expected credit losses	(5)		(6)
Allowance for expected credit losses, end of period	$	48	$	121

The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the nine months ended September 30, 2023 and 2022:


	2023												2022
(In thousands)	Foreign Government		Corporate		Mortgage-backed		Asset-backed		State and Municipal		Total		Foreign Government		Corporate		Mortgage-backed		Total
Allowance for expected credit losses, beginning of period	$	32,633	$	4,701	$	18	$	—	$	—	$	37,352	$	22,222	$	16	$	—	$	22,238

Expected credit losses on securities for which credit losses were not previously recorded	—		942		1,766		1,444		821		4,973		1,897		1,205		21		3,123
Expected credit losses (gains) on securities for which credit losses were previously recorded	3,538		134		316		58		—		4,046		9,289		(22)		—		9,267
Reduction due to disposals	—		(7)		—		—		—		(7)		(33)		—		—		(33)
Allowance for expected credit losses, end of period	$	36,171	$	5,770	$	2,100	$	1,502	$	821	$	46,364	$	33,375	$	1,199	$	21	$	34,595

During the nine months ended September 30, 2023, the Company increased the allowance for expected credit losses for available for sale securities in part due to changes in economic assumptions utilized in its credit loss model, primarily affecting the financial services and real estate sectors, and an increase in unrealized loss related to the foreign government portfolio. During the nine months ended September 30, 2022, the Company increased the allowance for expected credit losses for available for sale securities mainly due to an increase in unrealized losses primarily associated with foreign government securities.

The following table presents the rollforward of the allowance for expected credit losses for available for sale securities for the three months ended September 30, 2023 and 2022:


	2023												2022
(In thousands)	Foreign Government		Corporate		Mortgage-backed		Asset-backed		State and Municipal		Total		Foreign Government		Corporate		Mortgage-backed		Total
Allowance for expected credit losses, beginning of period	$	33,052	$	8,867	$	885	$	1,444	$	—	$	44,248	$	33,096	$	182	$	—	$	33,278

Expected credit losses on securities for which credit losses were not previously recorded	—		756		905		—		821		2,482		—		1,023		21		1,044
Expected credit losses (gains) on securities for which credit losses were previously recorded	3,119		(3,853)		310		58		—		(366)		279		(6)		—		273

Allowance for expected credit losses, end of period	$	36,171	$	5,770	$	2,100	$	1,502	$	821	$	46,364	$	33,375	$	1,199	$	21	$	34,595

The amortized cost and fair value of fixed maturity securities at September 30, ~~2017~~,2023, 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	$	1,818,820	$	1,742,384
Due after one year through five years	9,180,726		8,704,308
Due after five years through ten years	4,308,202		4,074,956
Due after ten years	2,609,192		2,436,157
Mortgage-backed securities	2,315,785		2,079,344
Total	$	20,232,725	$	19,037,149

________________

(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 $48 thousand related to held to maturity securities.

At September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, there were no investments that exceeded 10% of common stockholders' equity, other than investments in United States government and government agency securities.

~~(8)~~(7) Investments in Equity Securities ~~Available for Sale~~

At September 30, ~~2017~~2023 and December 31, ~~2016~~,2022, investments in equity securities were as follows:


(In thousands)	Cost		Gross Unrealized				Fair Value		Carrying Value
			Gains		Losses
September 30, 2023
Common stocks	$	792,512	$	209,979	$	(41,058)	$	961,433	$	961,433
Preferred stocks	273,376		2,383		(55,131)		220,628		220,628
Total	$	1,065,888	$	212,362	$	(96,189)	$	1,182,061	$	1,182,061

December 31, 2022
Common stocks	$	855,987	$	192,165	$	(65,401)	$	982,751	$	982,751
Preferred stocks	259,341		1,053		(57,251)		203,143		203,143
Total	$	1,115,328	$	193,218	$	(122,652)	$	1,185,894	$	1,185,894

(In thousands) Cost Gross Unrealized
Fair
Value

Carrying
Value
Gains Losses
September 30, 2017
Common stocks $ 83,709
$ 339,297
$ (3,486 ) $ 419,520
$ 419,520
Preferred stocks 125,076
71,147
(1,718 ) 194,505
194,505
Total $ 208,785
$ 410,444
$ (5,204 ) $ 614,025
$ 614,025
December 31, 2016
Common stocks $ 94,998
$ 351,906
$ (1,046 ) $ 445,858
$ 445,858
Preferred stocks 125,589
101,392
(3,639 ) 223,342
223,342
Total $ 220,587
$ 453,298
$ (4,685 ) $ 669,200
$ 669,200

~~(9)~~(8) Arbitrage Trading Account

At September 30, ~~2017~~2023 and December 31, ~~2016~~,2022, the fair and carrying values of the arbitrage trading account were ~~$488~~$825 million and ~~$300~~$944 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,~~2023, the fair value of long option contracts outstanding was ~~$1 million~~$256 thousand (notional amount of ~~$33~~$50 million) and the fair value of short option contracts ~~outstanding~~ was $1$6 million (notional amount of ~~$54~~$50 million). Other than with respect to the use of these trading account securities, the Company does not make use of derivatives.

~~(10)~~(9) Net Investment Income

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

(In thousands)	2023		2022		2023		2022
Investment income (loss) earned on:
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	239,727	$	146,051	$	653,200	$	371,724
Arbitrage trading account (1)	17,876		10,694		53,168		24,008
Equity securities	12,714		14,650		41,714		38,303
Investment funds	4,450		36,045		5,444		121,919
Real estate	(1,986)		(2,297)		(7,821)		(1,702)

Gross investment income	272,781		205,143		745,705		554,252
Investment expense	(1,837)		(2,327)		(6,211)		(6,350)
Net investment income	$	270,944	$	202,816	$	739,494	$	547,902

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
(1) Net investment income includes earnings from trading account receivables from brokers and clearing organizations.

~~(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~~$353 million as of September 30, ~~2017.~~2023.

Investment funds consisted of the following:


	Carrying Value as of				Income (Loss) from Investment Funds
	September 30,		December 31,		For the Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Financial services	$	429,889	$	465,683	$	(15,606)	$	27,472
Transportation	336,020		336,753		37,894		48,249
Real Estate	191,445		204,644		(5,062)		42,708
Infrastructure	124,528		115,428		7,813		1,277
Energy	115,349		116,432		3,921		1,966
Other funds	403,264		369,608		(23,516)		247
Total	$	1,600,495	$	1,608,548	$	5,444	$	121,919

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 minority investment in Lifson Re, a Bermuda reinsurance company. Effective January 1, 2021, Lifson Re participated on a fully collateralized basis in a majority of the Company’s reinsurance placements for a 22.5% share of placed amounts. The percentage increased from 22.5% to 30% effective July 1, 2022. This pertains to all traditional reinsurance/retrocessional placements for both property and casualty business where there is more than one open market reinsurer participating. For the nine months ended September 30, 2023 and 2022, the Company ceded approximately $348 million and $308 million, respectively, of written premiums to Lifson Re.

Other funds include deferred compensation trust assets of $31 million and $30 million as of September 30, 2023 and December 31, 2022, respectively. These assets support other liabilities reflected in the balance sheet of an equal amount for employees who have elected to defer a portion of their compensation. The change in the net asset value of the trust is recorded in other funds within net investment income with an offsetting equal amount within corporate expenses.

~~(12)~~

(11) Real Estate

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


	Carrying Value
	September 30,		December 31,
(In thousands)	2023		2022
Properties in operation	$	1,043,419	$	1,114,167
Properties under development	227,126		226,455
Total	$	1,270,545	$	1,340,622

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 September 30, 2023, 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~~the completed portion of a mixed-use project in ~~West Palm Beach and Palm Beach, Florida.~~Washington D.C. Properties in operation are

net of accumulated depreciation and amortization of ~~$20,378,000~~$31,039,000 and ~~$14,996,000~~$33,206,000 as of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. Related depreciation expense was ~~$5,382,000~~$6,667,000 and ~~$4,117,000~~$9,934,000 for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. Future minimum rental income expected on operating leases relating to properties in operation is ~~$4,966,133~~$8,368,709 in ~~2017, $28,251,980~~2023, $35,249,642 in ~~2018, $30,174,146~~2024, $34,435,718 in ~~2019, $29,415,103~~2025, $32,583,382 in ~~2020, $30,054,813~~2026, $32,074,240 in ~~2021, $29,966,679~~2027, $32,823,410 in ~~2022~~2028 and ~~$467,192,215~~$505,344,609 thereafter.

The Company recognized impairments on real estate of $21 million and $72 million in the three months and nine months ended September 30, 2023, respectively.

~~Properties under development include an office building~~During the first quarter of 2022, the Company sold a real estate investment in London (proceeds from the real estate and arelated entity is presented on the business disposition line within the Consolidated Statements of Cash Flows).

A mixed-use project in Washington, D.C. had been under development in 2023 and 2022, with the completed portion reported in properties in operation as of September 30, 2023.

~~(13)~~(12) Loans Receivable

~~Loans~~

At September 30, 2023 and December 31, 2022, loans receivable ~~are~~were as follows:


(In thousands)	September 30, 2017			December 31, 2016		(In thousands)	September 30, 2023		December 31, 2022
Amortized cost (net of valuation allowance):
Amortized cost (net of allowance for expected credit losses):						Amortized cost (net of allowance for expected credit losses):
Real estate loans	$	59,487		$	92,415	Real estate loans	$	159,857	$	173,616
Commercial loans	14,742			14,383		Commercial loans	17,893		19,386
Total	$	74,229		$	106,798	Total	$	177,750	$	193,002

Fair value:						Fair value:
Real estate loans	$	60,372		$	92,415	Real estate loans	$	156,407	$	168,595
Commercial loans	16,243			15,884		Commercial loans	17,893		19,386
Total	$	76,615		$	108,299	Total	$	174,300	$	187,981

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

The real estate loans are secured by commercial and residential real estate primarily located in London and New York. These loans generally earn interest at fixed or stepped interest rates and have maturities through 2026. 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 ~~$4.5 million and $5.4 million~~none as of both September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the nine months ended September 30, 2023 and 2022:


	2023						2022
(In thousands)	Real Estate Loans		Commercial Loans		Total		Real Estate Loans		Commercial Loans		Total
Allowance for expected credit losses, beginning of period	$	1,100	$	691	$	1,791	$	1,362	$	356	$	1,718

Change in expected credit losses	2,302		(84)		2,218		(200)		474		274
Allowance for expected credit losses, end of period	$	3,402	$	607	$	4,009	$	1,162	$	830	$	1,992

During the nine months ended September 30, 2023, the Company increased the allowance for expected credit losses due to changes in economic assumptions utilized in its credit loss model. During the nine months ended September 30, 2022, the Company increased the allowance primarily due to an increase in the weighted average life of the loans receivable portfolio.

The following table presents the rollforward of the allowance for expected credit losses for loans receivable for the three months ended September 30, 2023 and 2022:


	2023						2022
(In thousands)	Real Estate Loans		Commercial Loans		Total		Real Estate Loans		Commercial Loans		Total
Allowance for expected credit losses, beginning of period	$	3,658	$	892	$	4,550	$	1,228	$	947	$	2,175

Change in expected credit losses	(256)		(285)		(541)		(66)		(117)		(183)
Allowance for expected credit losses, end of period	$	3,402	$	607	$	4,009	$	1,162	$	830	$	1,992

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. ~~Loans receivable with a potential for default are further assessed using discounted cash flow analysis and comparable cost and sales methodologies, if appropriate.~~

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.

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~~

(13) Net Investment (Losses) Gains

Net investment (losses) gains were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(In thousands)	2023		2022		2023		2022
Net investment (losses) gains:
Fixed maturity securities:
Gains	$	299	$	1,053	$	1,357	$	3,405
Losses	(2,700)		(2,309)		(24,470)		(8,752)
Equity securities (1):
Net realized gains on investment sales (2)	23,631		—		135,763		946
Change in unrealized (losses) gains	(19,059)		(50,384)		45,605		(88,701)
Investment funds	(3,329)		(1,717)		(3,417)		(6,241)
Real estate (3) (4)	(24,234)		9,026		(68,944)		295,576
Loans receivable	(1,428)		—		(1,428)		(32)
Other	(14,035)		(21,951)		(34,063)		(56,537)
Net realized and unrealized (losses) gains on investments in earnings before allowance for expected credit losses	(40,855)		(66,282)		50,403		139,664
Change in allowance for expected credit losses on investments:
Fixed maturity securities	(2,112)		(1,311)		(8,946)		(12,091)
Loans receivable	541		183		(2,218)		(274)
Change in allowance for expected credit losses on investments	(1,571)		(1,128)		(11,164)		(12,365)
Net investment (losses) gains	(42,426)		(67,410)		39,239		127,299
Income tax benefit (expense)	9,405		14,456		(8,033)		(26,466)
After-tax net investment (losses) gains	$	(33,021)	$	(52,954)	$	31,206	$	100,833


Change in unrealized investment (losses) gains on available for sale securities:
Fixed maturity securities without allowance for expected credit losses	$	(136,388)	$	(385,503)	$	(57,293)	$	(1,335,413)
Fixed maturity securities with allowance for expected credit losses	(10,244)		(4,005)		(3,094)		(20,590)

Investment funds	(3,217)		(5,031)		(818)		(7,863)
Other	(606)		(293)		(1,271)		(1,198)
Total change in unrealized investment losses	(150,455)		(394,832)		(62,476)		(1,365,064)
Income tax benefit	32,090		79,168		11,626		288,847
Noncontrolling interests	—		—		(1)		(1)
After-tax change in unrealized investment losses of available for sale securities	$	(118,365)	$	(315,664)	$	(50,851)	$	(1,076,218)

______________________

(1) The net realized gains or losses on ~~these considerations, none~~investment sales represent the total gains or losses from the purchase dates of the ~~real estate loans were considered to be impaired at September 30, 2017,~~equity securities. The change in unrealized (losses) gains consists of two components: (i) the reversal of the gain or loss recognized in previous periods on equity securities sold and ~~accordingly,~~(ii) the change in unrealized gain or loss resulting from mark-to-market adjustments on equity securities still held.

(2) In June 2023, the Company ~~determined that~~completed a ~~specific valuation allowance was not required.~~

~~(14) Realized~~sale of the property and ~~Unrealized Investment Gains (Losses)~~

~~Realized~~casualty insurance services division of Breckenridge IS, Inc. and ~~unrealized~~recognized a pre-tax net realized gain on investment ~~gains (losses) are as follows:~~

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

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~~$88 million on the sale (proceeds from the sale is presented on the business disposition line within the Consolidated Statements of ~~an investment~~Cash Flows).

(3) The Company recognized impairments on real estate of $21 million and $72 million in ~~an office building located in Washington, D.C. for~~ the three months and nine months ended September 30, ~~2017.~~2023, respectively.

~~(2) Other includes~~(4) During March 2022, the Company realized a gain ~~of $134.9 million from~~on the sale of ~~Aero Precision Industries~~a real estate investment in London, U.K. of $251 million, net of transaction expenses and ~~certain related aviation services business for~~ the ~~three and nine months ended September 30, 2016.~~foreign currency impact, including the reversal of the currency translation adjustment.

(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.

~~(15)~~(14) Fixed Maturity Securities in an Unrealized Loss Position

The following tables summarize all fixed maturity securities in an unrealized loss position at September 30, ~~2017~~2023 and December 31, ~~2016~~2022 by the length of time those securities have been continuously in an unrealized loss position:

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
September 30, 2017
U.S. government and government agency $ 118,066
$ 1,048
$ 48,880
$ 1,076
$ 166,946
$ 2,124
State and municipal 650,353
5,797
119,087
1,440
769,440
7,237
Mortgage-backed securities 527,034
5,000
221,923
5,310
748,957
10,310
Asset-backed securities 1,116,878
8,033
130,734
2,372
1,247,612
10,405
Corporate 651,373
5,395
57,557
3,118
708,930
8,513
Foreign government 220,860
2,072
1,599
16
222,459
2,088
Fixed maturity securities 3,284,564
27,345
579,780
13,332
3,864,344
40,677
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
U.S. government and government agency $ 112,709
$ 1,252
$ 35,450
$ 1,341
$ 148,159
$ 2,593
State and municipal 1,562,614
35,553
133,034
4,885
1,695,648
40,438
Mortgage-backed securities 625,903
11,103
109,066
4,828
734,969
15,931
Asset-backed securities 1,010,836
5,340
201,693
6,601
1,212,529
11,941
Corporate 1,035,245
13,448
65,147
7,470
1,100,392
20,918
Foreign government 213,246
1,985
24,820
777
238,066
2,762
Fixed maturity securities 4,560,553
68,681
569,210
25,902
5,129,763
94,583
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


	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
September 30, 2023
U.S. government and government agency	$	605,944	$	17,390	$	592,215	$	64,377	$	1,198,159	$	81,767
State and municipal	645,642		15,255		1,728,892		167,938		2,374,534		183,193
Mortgage-backed	688,848		17,058		1,296,384		217,712		1,985,232		234,770
Asset-backed	1,025,656		8,774		2,584,224		100,251		3,609,880		109,025
Corporate	2,091,830		46,758		4,695,101		362,901		6,786,931		409,659
Foreign government	563,657		15,038		779,455		134,550		1,343,112		149,588
Fixed maturity securities	$	5,621,577	$	120,273	$	11,676,271	$	1,047,729	$	17,297,848	$	1,168,002





December 31, 2022
U.S. government and government agency	$	285,391	$	10,219	$	453,520	$	58,939	$	738,911	$	69,158
State and municipal	1,720,443		89,272		598,797		79,320		2,319,240		168,592
Mortgage-backed	1,099,549		75,430		473,318		115,528		1,572,867		190,958
Asset-backed	1,569,647		48,390		2,176,638		103,932		3,746,285		152,322
Corporate	3,690,856		150,115		2,349,281		256,631		6,040,137		406,746
Foreign government	477,672		29,815		711,786		105,243		1,189,458		135,058
Fixed maturity securities	$	8,843,558	$	403,241	$	6,763,340	$	719,593	$	15,606,898	$	1,122,834

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~~2023 is presented in the table below:


($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Foreign government	44	$	88,668	$	91,468
Corporate	26	35,644		3,523
State and municipal	5	22,866		6,374
Mortgage-backed	15	4,328		214
Asset-backed	5	244		107
Total	95	$	151,750	$	101,686

($ 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.~~income (loss).

The Company has evaluated its fixed maturity securities in an unrealized loss position and believes the unrealized losses are due primarily to temporary market and sector-related factors rather than to issuer-specific factors. None of these securities are delinquent or in default under financial covenants. Based on its assessment of these issuers, the Company expects them to continue to meet their contractual payment obligations as they become ~~due 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~~2023 and December 31, ~~2016~~2022 by level:


(In thousands)	Total		Level 1		Level 2		Level 3
September 30, 2023
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency	$	1,467,199	$	—	$	1,467,199	$	—
State and municipal	2,670,998		—		2,670,998		—
Mortgage-backed	2,076,296		—		2,076,296		—
Asset-backed	4,087,458		—		4,087,458		—
Corporate	7,248,814		—		7,248,814		—
Foreign government	1,431,712		—		1,431,712		—
Total fixed maturity securities available for sale	18,982,477		—		18,982,477		—
Equity securities:
Common stocks	961,433		958,202		1,060		2,171
Preferred stocks	220,628		—		216,930		3,698
Total equity securities	1,182,061		958,202		217,990		5,869
Arbitrage trading account	825,049		614,995		206,536		3,518
Total	$	20,989,587	$	1,573,197	$	19,407,003	$	9,387
Liabilities:
Trading account securities sold but not yet purchased	$	7,538	$	7,538	$	—	$	—


December 31, 2022
Assets:
Fixed maturity securities available for sale:
U.S. government and government agency	$	892,258	$	—	$	892,258	$	—
State and municipal	2,890,098		—		2,890,098		—
Mortgage-backed	1,665,410		—		1,665,410		—
Asset-backed	3,982,773		—		3,982,773		—
Corporate	6,703,992		—		6,703,992		—
Foreign government	1,401,522		—		1,401,522		—
Total fixed maturity securities available for sale	17,536,053		—		17,536,053		—
Equity securities:
Common stocks	982,751		978,991		1,161		2,599
Preferred stocks	203,143		—		191,844		11,299
Total equity securities	1,185,894		978,991		193,005		13,898
Arbitrage trading account	944,230		822,192		118,448		3,590
Total	$	19,666,177	$	1,801,183	$	17,847,506	$	17,488
Liabilities:
Trading account securities sold but not yet purchased	$	—	$	—	$	—	$	—

(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 months ended September 30, ~~2017~~ ~~and for the year ended~~ ~~December 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~~2023 and for the year ended December 31, ~~2016,~~2022:


Gains (Losses) Included In:
(In thousands)	Beginning Balance		Earnings (Losses)		Other Comprehensive Income (Losses)		Impairments		Purchases		Sales		Paydowns / Maturities		Transfers In / (Out)		Ending Balance

Nine Months Ended September 30, 2023
Assets:




Equity securities:
Common stocks	$	2,599	$	(428)	$	—	$	—	$	—	$	—	$	—	$	—	$	2,171
Preferred stocks	11,299		—		—		(7,601)		—		—		—		—		3,698
Total	13,898		(428)		—		(7,601)		—		—		—		—		5,869
Arbitrage trading account	3,590		(72)		—		—		—		—		—		—		3,518
Total	$	17,488	$	(500)	$	—	$	(7,601)	$	—	$	—	$	—	$	—	$	9,387



Year Ended December 31, 2022
Assets:




Equity securities:
Common stocks	$	9,294	$	(6,695)	$	—	$	—	$	—	$	—	$	—	$	—	$	2,599
Preferred stocks	11,296		3		—		—		925		(925)		—		—		11,299
Total	20,590		(6,692)		—		—		925		(925)		—		—		13,898
Arbitrage trading account	—		(179)		—		—		4,686		(917)		—		—		3,590
Total	$	20,590	$	(6,871)	$	—	$	—	$	5,611	$	(1,842)	$	—	$	—	$	17,488

For the nine months ended September 30, 2023 and for the year ended December 31, 2022, there were no t~~ransfers~~securities transferred into or out of Level 3.

~~(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:


	September 30,							September 30,
(In thousands)	2017			2016			(In thousands)	2023		2022
Net reserves at beginning of year	$	9,590,265		$	9,244,872
Net reserves at beginning of period							Net reserves at beginning of period	$	14,248,879	$	12,848,362

Net provision for losses and loss expenses:							Net provision for losses and loss expenses:
Claims occurring during the current year (1)	2,998,687			2,838,777			Claims occurring during the current year (1)	4,694,554		4,260,179
Decrease in estimates for claims occurring in prior years (2) (3)	(7,648		)	(23,518		)
Increase in estimates for claims occurring in prior years (2) (3)							Increase in estimates for claims occurring in prior years (2) (3)	27,186		54,632
Loss reserve discount accretion	34,436			37,080			Loss reserve discount accretion	22,862		24,835
Total	3,025,475			2,852,339			Total	4,744,602		4,339,646
Net payments for claims:							Net payments for claims:
Current year	628,078			612,615			Current year	743,416		643,908
Prior year	1,996,977			1,931,454
Prior years							Prior years	2,915,979		2,499,319
Total	2,625,055			2,544,069			Total	3,659,395		3,143,227
Foreign currency translation	57,789			(6,266		)	Foreign currency translation	(48,162)		(193,755)
Net reserves at end of period	10,048,474			9,546,876			Net reserves at end of period	15,285,924		13,851,026
Ceded reserve at end of period	1,605,872			1,550,954
Ceded reserves at end of period							Ceded reserves at end of period	2,987,386		2,689,097
Gross reserves at end of period	$	11,654,346		$	11,097,830		Gross reserves at end of period	$	18,273,310	$	16,540,123


~~(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 $35 million and $26 million for the nine months ended September 30, 2023 and 2022, 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 2017, favorable~~(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 $12 million and increased by $20 million for the nine months ended September 30, 2023 and 2022, respectively.

(3) For certain retrospectively rated insurance policies and reinsurance agreements, reserve development is offset by additional or return premiums. Adverse development, net of additional and return premiums, was $20 million and $37 million for the nine months ended September 30, 2023 and 2022, respectively.

The COVID-19 global pandemic impacted, and may further impact, the Company’s loss costs. Accordingly, the ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of September 30, 2023, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $354 million, of which $299 million relates to the Insurance segment and $55 million relates to the Reinsurance & Monoline Excess segment. Such $354 million of COVID-19-related losses are considered reported losses. For the nine months ended September 30, 2023, the Company recognized current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $670 thousand, all of which relates to the Insurance segment.

During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of ~~$31~~$20 million included ~~$62~~$26 million of ~~favorable~~adverse development for the Insurance segment, partially offset by ~~$31~~$6 million of favorable development for the Reinsurance & Monoline Excess segment.

Such adverse development during the nine months ended September 30, 2023 was concentrated in the first quarter, with $24 million of adverse development (net of additional and return premiums) in the first quarter, partially offset by favorable development of $4 million in the second and third quarters. This overall adverse development during the first quarter in both business segments was due to property catastrophe losses related to 2022 events which were still being adjusted and settled. In particular, losses related to U.S. winter storms which occurred during the month of December were a significant driver of the development, as information gathering and evaluation of many of these losses was still ongoing into the new year.

For the Insurance segment, in addition to the property prior year adverse development discussed above, the adverse development during the nine months ended September 30, 2023 included adverse prior year development on casualty lines for the ~~Reinsurance segment.~~ 2016 through 2019 accident years, which was largely offset by favorable prior year development on casualty lines for the 2020 through 2022 accident years. The adverse development on the 2016 through 2019 accident years was concentrated in the general liability line of business, and to a lesser degree professional liability, including medical professional, and commercial auto liability. The development, which particularly impacted business attaching excess of primary policy limits, was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

The favorable prior year development on casualty lines for the 2020 through 2022 accident years in the Insurance segment was ~~primarily attributable~~concentrated in the professional liability, workers’ compensation, and general liability lines of business. Due to ~~workers'~~uncertainty regarding incurred loss frequency and severity in light of ongoing social inflation and the impacts of the COVID-19 pandemic, the Company set its initial loss ratios for the 2020 through 2022 accident years prudently, and largely maintained these estimates through the end of each respective accident year. The reported loss experience to date for these lines of business for the 2020 through 2022 accident years has been significantly better than was expected, and the Company has begun to react to this favorable emergence as the accident years mature beyond the age of 12 months. However, commercial auto liability experienced adverse prior year development for the 2020 through 2022 accident years, partially offsetting the favorable development discussed above, which was driven by a larger than expected number of large losses reported.

For the Reinsurance & Monoline Excess segment, the favorable development during the nine months ended September 30, 2023 was driven mainly by favorable development in excess workers’ compensation, ~~business (including excess workers' compensation).~~partially offset by adverse development in property (discussed above) and non-proportional reinsurance assumed liability lines of business. The favorable ~~workers'~~excess workers’ compensation development was driven by continued lower claim frequency and reported losses relative to our expectations, and to favorable claim settlements. The favorable development was spread across many prior accident years, including prior to 2008, but was most significant in accident years 2014 and 2015. The favorable workers' compensation development reflects a continuation of the benign loss cost trends experienced during 2016, particularly the favorable claim frequency trends (i.e., number of reported claims per unit of exposure). The adverse development for the Reinsurance segment was due to reserve strengthening associated with claims impacted by the change in the Ogden discount rate 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.years. The adverse development on reinsurance assumed liability was associated primarily with our U.S. ~~facultative casualty~~assumed reinsurance business, and related to ~~construction-related risks~~accounts reinsuring excess and umbrella business and construction projects. The adverse development was concentrated mainly in accident years ~~2008 and prior.~~2017 through 2020.

~~In 2016, favorable~~During the nine months ended September 30, 2022, adverse prior year development (net of additional and return premiums) of ~~$42~~$37 million included ~~$38~~$33 million for the Insurance segment and $4 million for the Reinsurance & Monoline Excess segment.

The ~~favorable~~adverse development for the Insurance segment ~~was~~primarily related to COVID-19 losses at two businesses. These businesses wrote policies providing coverage for event cancellation and film production delay which were heavily impacted by losses directly caused by the COVID-19 pandemic. Most of this COVID-19-related adverse development emerged during the third quarter as a result of settlements of claims at values higher than our expectations.

The adverse development mentioned above includes favorable prior year development for the Insurance segment primarily attributable to ~~workers' compensation~~the 2020 and 2021 accident years and adverse development on the 2015 through 2019 accident years. The favorable development on the 2020 and 2021 accident years was concentrated in the other liability lines of business, ~~partially offset~~including professional liability, products liability, commercial multi-peril liability and workers’ compensation. The Company experienced lower reported claim frequency in these lines of business during 2020 and 2021 relative to historical averages, and continues to experience lower reported incurred losses relative to our expectations for these accident years as they develop during 2022. These trends began in 2020 and we believe were caused by the impacts of the COVID-19 pandemic, including for example, lockdowns, reduced driving/traffic and increased work from home. Due to the ongoing uncertainty regarding the ultimate impacts of the pandemic on accident years 2020 and 2021 incurred losses, the Company has been cautious in reacting to these lower trends in setting and updating its loss ratio estimates for these years. As these accident years have continued to mature, the Company has continued to recognize some of the favorable reported experience in its ultimate loss estimates made during 2022.

The adverse development on the 2015 through 2019 accident years was concentrated in the other liability and professional liability, including medical professional, lines of business, as well as commercial auto liability. The development was driven by a larger than expected number of large losses reported. The Company believes social inflation is contributing to an increase in the frequency of large losses for these accident years. Social inflation can include higher settlement demands from plaintiffs, use of tactics such as litigation funding by the plaintiffs’ bar, negative public sentiment towards large businesses and corporations, and erosion of tort reforms, among others.

The overall slight adverse development for the Reinsurance & Monoline Excess segment was driven mainly by adverse development ~~for commercial auto~~in the professional liability and ~~medical~~non-proportional reinsurance assumed property and ~~other~~liability lines of business, substantially offset by favorable development in excess workers’ compensation. The adverse development was spread mainly across accident years 2015 through 2021 and was associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional ~~liability.~~liability exposures. The favorable excess workers’ compensation development ~~for workers' compensation stems from~~was mainly in 2011 and prior accident years, ~~2003 through 2015, but is concentrated in accident years 2014~~ and ~~2015; it reflects claims frequency trends (i.e., 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~~a review of the Company’s claim reporting patterns as well as a number of favorable claim settlements relative to expectations.

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, 2023				December 31, 2022
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Assets:
Fixed maturity securities	$	19,035,305	$	19,037,149	$	17,587,349	$	17,591,626
Equity securities	1,182,061		1,182,061		1,185,894		1,185,894
Arbitrage trading account	825,049		825,049		944,230		944,230
Loans receivable	177,750		174,300		193,002		187,981
Cash and cash equivalents	1,646,074		1,646,074		1,449,346		1,449,346
Trading account receivables from brokers and clearing organizations	401,982		401,982		233,863		233,863
Due from broker	—		—		3,609		3,609
Liabilities:
Due to broker	5,118		5,118		—		—

Trading account securities sold but not yet purchased	7,538		7,538		—		—
Senior notes and other debt	1,828,046		1,321,014		1,828,823		1,439,188
Subordinated debentures	1,008,910		786,798		1,008,371		805,600

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.

~~(19)~~(18) Premiums and Reinsurance Related Information

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

(In thousands)	2023		2022		2023		2022
Written premiums:
Direct	$	3,037,932	$	2,775,236	$	8,762,249	$	8,075,311
Assumed	315,273		306,702		977,047		918,864
Ceded	(504,746)		(504,664)		(1,504,497)		(1,418,012)
Total net premiums written	$	2,848,459	$	2,577,274	$	8,234,799	$	7,576,163

Earned premiums:
Direct	$	2,825,176	$	2,617,680	$	8,217,888	$	7,533,856
Assumed	316,134		318,962		913,795		903,882
Ceded	(499,396)		(494,681)		(1,445,610)		(1,389,533)
Total net premiums earned	$	2,641,914	$	2,441,961	$	7,686,073	$	7,048,205

Ceded losses and loss expenses incurred	$	320,995	$	347,439	$	970,267	$	905,667
Ceded commissions earned	$	118,207	$	121,721	$	354,148	$	356,157

The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the nine months ended September 30, 2023 and 2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	30,660	$	25,218

Change in expected credit losses	2,942		5,360
Allowance for expected credit losses, end of period	$	33,602	$	30,578

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(In thousands) 2017 2016 2017 2016
Written premiums:
Direct $ 1,679,389
$ 1,643,870
$ 5,127,465
$ 5,061,646
Assumed 194,769
224,979
570,052
702,265
Ceded (302,975 ) (261,484 ) (915,245 ) (850,255 )
Total net premiums written $ 1,571,183
$ 1,607,365
$ 4,782,272
$ 4,913,656

Earned premiums:
Direct $ 1,692,453
$ 1,647,033
$ 4,972,755
$ 4,824,768
Assumed 202,972
216,758
605,281
635,443
Ceded (313,925 ) (277,847 ) (857,792 ) (787,139 )
Total net premiums earned $ 1,581,500
$ 1,585,944
$ 4,720,244
$ 4,673,072

Ceded losses and loss expenses incurred $ 247,104
$ 213,065
$ 424,905
$ 507,258
Ceded commissions earned $ 63,222
$ 47,315
$ 177,524
$ 143,809
The following table presents the rollforward of the allowance for expected credit losses for premiums and fees receivable for the three months ended September 30, 2023 and 2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	32,770	$	30,557

Change in expected credit losses	832		21
Allowance for expected credit losses, end of period	$	33,602	$	30,578

The Company reinsures a portion of its insurance exposures in order to reduce its net liability on individual risks and catastrophe losses. The Company also cedes premiums to state assigned risk plans and captive insurance companies. Estimated

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

The following table presents the rollforward of ~~$1 million as of~~ the allowance for expected credit losses associated with due from reinsurers for the nine months ended September 30, ~~2017~~2023 and ~~December 31, 2016~~.2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	8,064	$	7,713

Change in expected credit losses	1,379		286
Allowance for expected credit losses, end of period	$	9,443	$	7,999

The following table presents the rollforward of the allowance for expected credit losses associated with due from reinsurers for the three months ended September 30, 2023 and 2022:


(In thousands)	2023		2022
Allowance for expected credit losses, beginning of period	$	9,365	$	7,744

Change in expected credit losses	78		255
Allowance for expected credit losses, end of period	$	9,443	$	7,999

~~(20)~~

(19) Restricted Stock Units

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~~$36 million and ~~$25~~$34 million for the nine months ended September 30, ~~2017~~2023 and ~~2016~~,2022, respectively. A summary of RSUs issued in the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 follows:


($ in thousands)	Units	Fair Value

2023	1,092,130	$	68,936
2022	1,023,871	$	67,345

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

~~(21)~~(20) Litigation and Contingent Liabilities

In the ordinary course of business, the Company is subject to disputes, litigation and arbitration arising from its insurance and reinsurance businesses. These matters are generally related to insurance and reinsurance claims and are considered in the establishment of loss and loss expense reserves. In addition, the Company may also become involved in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in handling of insurance claims. The Company expects its ultimate liability with respect to such matters will not be material to its financial condition. However, adverse outcomes on such matters are possible, from time to time, and could be material to the Company’s results of operations in any particular financial reporting period.

(21) Leases

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

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

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


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,

(In thousands)	2023		2022		2023		2022
Leases:
Lease cost	$	10,122	$	11,299	$	30,448	$	33,649
Cash paid for amounts included in the measurement of lease liabilities reported in operating cash flows	$	11,403	$	11,082	$	33,247	$	33,128
Right-of-use assets obtained in exchange for new lease liabilities	$	6,543	$	1,527	$	14,489	$	21,729


	As of September 30,
($ in thousands)	2023			2022
Right-of-use assets	$	155,662		$	163,940
Lease liabilities	$	188,141		$	199,889
Weighted-average remaining lease term	6.9 years			7.1 years
Weighted-average discount rate	4.55		%	4.50		%

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


(In thousands)	September 30, 2023
Contractual Maturities:
2023	$	12,171
2024	44,531
2025	36,167
2026	28,933
2027	19,144
Thereafter	74,394
Total undiscounted future minimum lease payments	215,340
Less: Discount impact	27,199
Total lease liability	$	188,141

(22) Business Segments

The Company’s reportable segments include the following two 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, ~~United Kingdom,~~as well as insurance business in Asia, Australia, Canada, Continental Europe, Mexico, Scandinavia, South America ~~Canada, Mexico, Scandinavia, Asia~~ and ~~Australia; and~~

the United Kingdom.

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

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.

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


	Revenues
(In thousands)	Earned Premiums (1)		Investment Income		Other		Total (2)		Pre-Tax Income (Loss)		Net Income (Loss) to Common Stockholders
Three months ended September 30, 2023
Insurance	$	2,319,435	$	206,792	$	9,143	$	2,535,370	$	415,279	$	329,519
Reinsurance & Monoline Excess	322,479		56,259		—		378,738		106,072		83,314
Corporate, other and eliminations (3)	—		7,893		151,063		158,956		(58,976)		(46,226)
Net investment losses	—		—		(42,426)		(42,426)		(42,426)		(33,021)
Total	$	2,641,914	$	270,944	$	117,780	$	3,030,638	$	419,949	$	333,586
Three months ended September 30, 2022
Insurance	$	2,129,014	$	134,519	$	8,341	$	2,271,874	$	322,312	$	258,521
Reinsurance & Monoline Excess	312,947		55,234		—		368,181		59,561		46,875
Corporate, other and eliminations (3)	—		13,063		138,692		151,755		(28,198)		(23,563)
Net investment losses	—		—		(67,410)		(67,410)		(67,410)		(52,954)
Total	$	2,441,961	$	202,816	$	79,623	$	2,724,400	$	286,265	$	228,879
Nine months ended September 30, 2023
Insurance	$	6,747,704	$	560,182	$	27,570	$	7,335,456	$	1,153,742	$	903,575
Reinsurance & Monoline Excess	938,369		148,525		—		1,086,894		313,290		248,279
Corporate, other and eliminations (3)	—		30,787		429,180		459,967		(253,066)		(199,040)
Net investment gains	—		—		39,239		39,239		39,239		31,206
Total	$	7,686,073	$	739,494	$	495,989	$	8,921,556	$	1,253,205	$	984,020
Nine months ended September 30, 2022
Insurance	$	6,162,005	$	386,297	$	25,354	$	6,573,656	$	1,052,185	$	850,207
Reinsurance & Monoline Excess	886,200		139,768		—		1,025,968		209,366		167,329
Corporate, other and eliminations (3)	—		21,837		403,937		425,774		(147,590)		(119,530)
Net investment gains	—		—		127,299		127,299		127,299		100,833
Total	$	7,048,205	$	547,902	$	556,590	$	8,152,697	$	1,241,260	$	998,839

_________________

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

(2) Revenues for Insurance from foreign ~~countries~~operations for the three months ended September 30, ~~2017~~2023 and ~~2016~~2022 were ~~$166~~$298 million and ~~$187~~$252 million, respectively, and for the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 were ~~$513~~$852 million and ~~$546~~$750 million, respectively. Revenues for Reinsurance & Monoline Excess from foreign ~~countries~~operations for the three months ended September 30, ~~2017~~2023 and ~~2016~~2022 were ~~$49~~$124 million and ~~$48~~$117 million, respectively, and for the nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 were ~~$150~~$333 million and ~~$153~~$307 million, respectively.

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

Identifiable Assets


(In thousands)	September 30, 2017		December 31, 2016		(In thousands)	September 30, 2023		December 31, 2022
Insurance	$	19,136,776	$	19,137,758	Insurance	$	28,862,050	$	27,012,479
Reinsurance	3,243,610		2,524,338
Reinsurance & Monoline Excess					Reinsurance & Monoline Excess	5,194,783		5,195,752
Corporate, other and eliminations	1,955,690		1,687,980		Corporate, other and eliminations	2,054,515		1,606,872
Consolidated	$	24,336,076	$	23,350,076	Consolidated	$	36,111,348	$	33,815,103

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


	For the Three Months				For the Nine Months					For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	Ended September 30,				Ended September 30,
(In thousands)	2017		2016		2017		2016		(In thousands)			2023			2022			2023			2022
Insurance:									Insurance:
Other liability	$	466,616	$	455,841	$	1,378,505	$	1,302,841	Other liability	$	918,054		$	824,595		$	2,668,831		$	2,363,349
Workers’ compensation	378,529		354,185		1,106,616		1,042,503
Short-tail lines (1)	287,860		312,865		887,791		962,435		Short-tail lines (1)	490,598			407,211			1,383,654			1,184,191
Commercial automobile	163,277		164,540		482,929		481,249		Commercial automobile	335,572			307,754			965,416			891,729
Workers' compensation									Workers' compensation	300,694			307,323			905,405			892,390
Professional liability	137,447		136,204		406,644		391,957		Professional liability	274,517			282,131			824,398			830,346
Total Insurance	1,433,729		1,423,635		4,262,485		4,180,985		Total Insurance	2,319,435			2,129,014			6,747,704			6,162,005

Reinsurance:
Casualty	94,478		97,153		282,430		301,571
Property	53,293		65,156		175,329		190,516
Total Reinsurance	147,771		162,309		457,759		492,087
Reinsurance & Monoline Excess:									Reinsurance & Monoline Excess:
Casualty reinsurance									Casualty reinsurance	192,071			193,726			574,660			568,507
Monoline excess (2)									Monoline excess (2)	60,363			54,675			177,853			161,181
Property reinsurance									Property reinsurance	70,045			64,546			185,856			156,512
Total Reinsurance & Monoline Excess									Total Reinsurance & Monoline Excess	322,479			312,947			938,369			886,200

Total	$	1,581,500	$	1,585,944	$	4,720,244	$	4,673,072	Total	$	2,641,914		$	2,441,961		$	7,686,073		$	7,048,205

______________

(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~~2023 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 effects of the COVID-19 pandemic, or other epidemics and pandemics; the impact of climate change, which may alter the frequency and increase the severity of catastrophe events; general economic and market activities, including inflation, changing interest rates, and volatility in the credit and capital markets; the impact of the conditions in the financial markets and the global economy, and the potential effect of legislative, regulatory, accounting or other initiatives taken in response, on our results and financial condition; foreign currency and political risks ~~(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~~cyber security breaches of our information technology ~~and/~~systems and the information technology systems of our vendors and other third parties, or ~~data security;~~related processes and systems; the effectiveness of our controls to ensure compliance with guidelines, policies and legal and regulatory standards; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

These risks and uncertainties could cause our actual results for the year ~~2017~~2023 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 at historically low levels.~~

The Company also invests in equity securities, merger arbitrage securities, investment funds, ~~(including energy related funds),~~ private equity, loans and real ~~estate related~~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~~In June 2023, the ~~third quarter~~Company completed a sale of ~~2017, catastrophe losses were $119~~the property and casualty insurance services division of Breckenridge IS, Inc. and recognized a pre-tax net realized gain on investment of $88 million.

On March 7, 2022, the Company sold a real estate investment consisting of an office building located in London for £718 million. The Company realized a pre-tax gain of $317 million ~~including $107 million related to Hurricanes Harvey, Irma, and Maria and two earthquakes~~ in ~~Mexico.~~

~~Commencing with~~ the first quarter of ~~2017,~~2022, before transaction expenses and the ~~Company reclassified two businesses from~~impact of foreign currency, including the ~~Insurance segment~~reversal of the currency translation adjustment. The gain was $251 million after such adjustments.

The ultimate impact of COVID-19 on the economy and the Company’s results of operations, financial position and liquidity is not within the Company’s control and remains unclear due to, ~~the Reinsurance segment. Reclassifications have been made to the Company's 2016 financial information to conform~~among other factors, its ongoing impact and uncertainty in connection with ~~this presentation.~~its claims, reserves and reinsurance recoverables.

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.

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.

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:~~2022:


(In thousands)	Frequency (+/-)
Severity (+/-)	1%		5%		10%
1%	$	116,072	$	349,370	$	640,993
5%	349,370		591,908		895,081
10%	640,993		895,081		1,212,690

(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~~$15.3 billion as of September 30, ~~2017~~2023 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~~$3.1 billion, or ~~17%~~20%, of the Company’s net loss reserves as of September 30, ~~2017~~2023 relate to the Reinsurance & Monoline Excess segment. There is a higher degree of uncertainty and greater variability regarding estimates of excess workers' compensation and assumed reinsurance loss ~~reserves 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)	September 30, 2023		December 31, 2022
Insurance	$	12,205,280	$	11,233,924
Reinsurance & Monoline Excess	3,080,644		3,014,955
Net reserves for losses and loss expenses	15,285,924		14,248,879
Ceded reserves for losses and loss expenses	2,987,386		2,762,344
Gross reserves for losses and loss expenses	$	18,273,310	$	17,011,223

(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
September 30, 2023							September 30, 2023
Other liability	$	1,243,208	$	2,162,031	$	3,405,239	Other liability	$	1,862,458	$	4,371,078	$	6,233,536
Workers’ compensation (1)	1,530,194		1,246,084		2,776,278		Workers’ compensation (1)	1,020,327		819,013		1,839,340
Professional liability	299,418		584,606		884,024		Professional liability	526,656		1,397,442		1,924,098
Commercial automobile	341,998		267,136		609,134		Commercial automobile	694,854		681,336		1,376,190
Short-tail lines (2)	309,692		307,341		617,033		Short-tail lines (2)	388,558		443,558		832,116
Total Insurance	3,724,510		4,567,198		8,291,708		Total Insurance	4,492,853		7,712,427		12,205,280
Reinsurance (1)	909,690		847,076		1,756,766
Reinsurance & Monoline Excess (1) (3)							Reinsurance & Monoline Excess (1) (3)	1,549,878		1,530,766		3,080,644
Total	$	4,634,200	$	5,414,274	$	10,048,474	Total	$	6,042,731	$	9,243,193	$	15,285,924

December 31, 2016
December 31, 2022							December 31, 2022
Other liability	$	1,159,082	$	2,061,966	$	3,221,048	Other liability	$	1,808,700	$	3,826,444	$	5,635,144
Workers’ compensation (1)	1,453,318		1,228,774		2,682,092		Workers’ compensation (1)	1,023,961		899,215		1,923,176
Professional liability	264,188		542,539		806,727		Professional liability	501,572		1,243,604		1,745,176
Commercial automobile	344,143		252,978		597,121		Commercial automobile	629,149		528,398		1,157,547
Short-tail lines (2)	322,872		283,214		606,086		Short-tail lines (2)	403,974		368,907		772,881
Total Insurance	3,543,603		4,369,471		7,913,074		Total Insurance	4,367,356		6,866,568		11,233,924
Reinsurance (1)	823,516		853,675		1,677,191
Reinsurance & Monoline Excess (1) (3)							Reinsurance & Monoline Excess (1) (3)	1,551,687		1,463,268		3,014,955
Total	$	4,367,119	$	5,223,146	$	9,590,265	Total	$	5,919,043	$	8,329,836	$	14,248,879

___________

(1) Reserves for workers’ compensation and ~~reinsurance~~Reinsurance & Monoline Excess are net of an aggregate net discount of ~~$599~~$390 million and ~~$640~~

$416 million as of September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, 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 months ended September 30, ~~2017~~2023 and ~~2016~~2022 are as follows:


(In thousands)	2023		2022
Increase in prior year loss reserves	$	(27,186)	$	(54,632)
Increase in prior year earned premiums	7,291		17,953
Net unfavorable prior year development	$	(19,895)	$	(36,679)

(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 COVID-19 global pandemic impacted, and may further impact, the Company’s loss costs. Accordingly, the ultimate net impact of COVID-19 on the Company’s reserves remains uncertain. As of September 30, 2023, the Company had recognized losses for COVID-19-related claims activity, net of reinsurance, of approximately $354 million, of which $299 million relates to the Insurance segment and $55 million relates to the Reinsurance & Monoline Excess segment. Such $354 million of COVID-19-related losses are considered reported losses. For the nine months ended September 30, 2023, the Company recognized current accident year losses for COVID-19-related claims activity, net of reinsurance, of approximately $670 thousand, all of which relates to the Insurance segment.

~~In 2017, favorable~~During the nine months ended September 30, 2023, adverse prior year development (net of additional and return premiums) of ~~$31~~$20 million included ~~$62~~$26 million of ~~favorable~~adverse development for the Insurance segment, partially offset by ~~$31~~$6 million of favorable development for the Reinsurance & Monoline Excess segment.

the Ogden discount rate 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.years. The adverse development on reinsurance assumed liability was associated primarily with our U.S. ~~facultative casualty~~assumed reinsurance business, and related to accounts reinsuring excess and umbrella business and construction projects. The adverse development was ~~due to construction-related risks~~concentrated mainly in accident years ~~2008 and prior.~~2017 through 2020.

The overall slight adverse development for the Reinsurance & Monoline Excess segment was driven mainly by adverse development ~~for commercial auto~~in the professional liability and ~~medical~~non-proportional reinsurance assumed property and ~~other~~liability lines of business, substantially offset by favorable development in excess workers’ compensation. The adverse development was spread mainly across accident years 2015 through 2021 and was associated primarily with our U.S. assumed reinsurance business and related to accounts insuring construction projects and professional ~~liability.~~liability exposures. The favorable excess workers’ compensation development ~~for workers' compensation stems from~~was mainly in 2011 and prior accident years, ~~2003 through 2015, but is concentrated in accident years 2014~~ and ~~2015; it reflects claims frequency trends (i.e., 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~~a review of the ~~unfavorable development for medical professional liability was primarily in accident years prior~~Company’s claim reporting patterns as well as a number of favorable claim settlements relative to ~~2013 and stemmed from a class of medical professional liability business that we discontinued writing in 2013.~~expectations.

Reserve Discount. The Company discounts its liabilities for certain workers’ compensation reserves. The amount of workers’ compensation reserves that were discounted was ~~$1,849~~$1,356 million and ~~$1,907~~$1,464 million at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. The aggregate net discount for those reserves, after reflecting the effects of ceded reinsurance, was ~~$599~~$390 million and ~~$640~~$416 million at September 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. At September 30, ~~2017,~~2023, discount rates by year ranged from ~~2.0%~~0.7% to 6.5%, with a weighted average discount rate of ~~3.8%~~3.4%.

Substantially all of the workers’ compensation discount (97% of total discounted reserves at September 30, ~~2017)~~2023) 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)~~2023), including reserves for quota share reinsurance and reserves related to losses regarding occupational lung disease. These reserves are discounted at statutory rates permitted by the Department of Insurance of the State of Delaware.

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~~$58 million at September 30, ~~2017~~2023 and ~~$68~~$60 million at December 31, ~~2016.~~2022. 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. 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~~2023 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


($ in thousands)	Number of Securities	Aggregate Fair Value		Gross Unrealized Loss
Foreign government	44	$	88,668	$	91,468
Corporate	26	35,644		3,523
State and municipal	5	22,866		6,374
Mortgage-backed	15	4,328		214
Asset-backed	5	244		107
Total	95	$	151,750	$	101,686

As of September 30, 2023, the Company has recorded an allowance for expected credit losses on fixed maturity securities of $46 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~~and $2 million as of September 30, ~~2017~~2023 and December 31, ~~2016.~~2022, 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:~~

2023:


($ 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	$	18,502,851	97.5	%
Syndicate manager	43,196		0.3		Syndicate manager	75,978		0.4
Directly by the Company based on:					Directly by the Company based on:
Observable data	180,467		1.3		Observable data	403,648		2.1
Cash flow model	174		—

Total	$	13,794,294	100.0	%	Total	$	18,982,477	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,~~2023, 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.

Cash flow model – If the above methodologies are not available, the Company prices securities using a discounted cash flow model based upon assumptions as to prevailing credit spreads, interest rates and interest rate volatility, time to maturity and subordination levels. Discount rates are adjusted to reflect illiquidity where appropriate. These securities were classified as Level 3.

Results of Operations for the Nine Months Ended September 30, ~~2017~~2023 and ~~2016~~

2022

Business Segment Results

Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and ~~United States Generally Accepted Accounting Principles (“GAAP”)~~GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the nine months ended September 30, ~~2017~~2023 and ~~2016.~~2022. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.


($ in thousands)	2023			2022
Insurance:
Gross premiums written	$	8,659,128		$	7,976,288
Net premiums written	7,246,773			6,637,024
Net premiums earned	6,747,704			6,162,005
Loss ratio	62.8		%	61.3		%
Expense ratio	28.4		%	27.9		%
GAAP combined ratio	91.2		%	89.2		%
Reinsurance & Monoline Excess:
Gross premiums written	$	1,080,168		$	1,017,887
Net premiums written	988,026			939,139
Net premiums earned	938,369			886,200
Loss ratio	53.7		%	63.7		%
Expense ratio	28.7		%	28.4		%
GAAP combined ratio	82.4		%	92.1		%
Consolidated:
Gross premiums written	$	9,739,296		$	8,994,175
Net premiums written	8,234,799			7,576,163
Net premiums earned	7,686,073			7,048,205
Loss ratio	61.7		%	61.6		%
Expense ratio	28.4		%	28.0		%
GAAP combined ratio	90.1		%	89.6		%

($ in thousands) 2017 2016
Insurance:
Gross premiums written $ 5,233,692
$ 5,184,033
Net premiums written 4,364,638
4,386,944
Net premiums earned 4,262,485
4,180,985
Loss ratio 61.7 % 61.1 %
Expense ratio 32.8 % 32.3 %
GAAP combined ratio 94.5 % 93.4 %
Reinsurance:
Gross premiums written $ 463,825
$ 579,878
Net premiums written 417,634
526,712
Net premiums earned 457,759
492,087
Loss ratio 86.1 % 60.5 %
Expense ratio 37.1 % 39.1 %
GAAP combined ratio 123.2 % 99.6 %
Consolidated:
Gross premiums written $ 5,697,517
$ 5,763,911
Net premiums written 4,782,272
4,913,656
Net premiums earned 4,720,244
4,673,072
Loss ratio 64.1 % 61.0 %
Expense ratio 33.2 % 33.1 %
GAAP combined ratio 97.3 % 94.1 %

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:


(In thousands, except per share data)	2023		2022
Net income to common stockholders	$	984,020	$	998,839
Weighted average diluted shares	274,146		279,644
Net income per diluted share	$	3.59	$	3.57

(In thousands, except per share data) 2017 2016
Net income to common stockholders $ 394,505
$ 449,127
Weighted average diluted shares 129,289
128,501
Net income per diluted share $ 3.05
$ 3.50

The Company reported net income to common stockholders of ~~$395~~$984 million in ~~2017~~2023 compared to ~~$449~~$999 million in ~~2016.~~2022. The ~~12% decrease~~$15 million reduction in net income was primarily due to an after-tax reduction in net investment gains of $69 million mainly due to the gain on sale of a real estate investment in 2022, an after-tax decrease in ~~underwriting income~~foreign currency gains of ~~$97~~$66 million mainly ~~driven~~due to lower strengthening of the U.S. dollar against other currencies in 2023, an increase of $27 million in tax expense due to a change in the effective tax rate, an after-tax increase in corporate expenses of $23 million primarily due to increased compensation-related costs and an after-tax decrease in profits from non-insurance businesses of $5 million, partially offset by ~~increased catastrophe losses from Hurricanes Harvey, Irma and Maria, as well as two earthquakes in Mexico,~~ an after-tax increase in net ~~foreign currency losses~~investment income of ~~$17~~$151 million primarily due to rising interest rates and a larger investment portfolio of fixed maturity securities, an after-tax increase in underwriting income of $19 million, an after-tax reduction in minority interest of $3 million and an after-tax ~~decrease~~reduction in ~~income from non-insurance businesses~~interest expense of $7$2 million ~~partially offset by an increase~~due to debt repayments in ~~after-tax net investment gains of $57 million and an after-tax increase in investment income of $14 million.~~2022. The number of weighted average diluted shares ~~remained relatively unchanged~~decreased by 5.5 million for ~~the nine months ended September 30, 2017 and 2016.~~2023 compared to 2022, mainly reflecting shares repurchased in 2023.

Premiums. Gross premiums written were ~~$5,698~~$9,739 million in ~~2017, a decrease~~2023, an increase of 1%8% from ~~$5,764~~$8,994 million in ~~2016.~~2022. The ~~decrease~~increase was due to a ~~decrease in the Reinsurance segment of $116~~$683 million ~~partially offset by an~~ increase in the Insurance segment and a $62 million increase in the Reinsurance & Monoline

Excess segment. Approximately 80% of ~~$50 million. Approximately 77.7% of policies~~premiums expiring in ~~2017~~2023 were renewed, ~~compared with a 77.8% renewal retention rate for policies~~and 82% of premiums expiring in ~~2016.~~2022 were renewed.

Average renewal premium rates for insurance and facultative reinsurance increased ~~1.0%~~7.2% in ~~2017~~2023 when adjusted for ~~change~~changes in ~~exposures.~~exposures, and increased 8.3% excluding workers' compensation.

A summary of gross premiums written in ~~2017~~2023 compared with ~~2016~~2022 by line of business within each business segment follows:

•Insurance - gross premiums increased 1%9% to ~~$5,234~~$8,659 million in ~~2017~~2023 from ~~$5,184~~$7,976 million in ~~2016.~~2022. Gross premiums increased ~~$25~~$360 million ~~(5%~~(12%) for ~~professional~~other liability, ~~$19~~$325 million ~~(4%~~(18%) for short-tail lines, $101 million (10%) for commercial ~~auto, $8 million (1%) for workers' compensation,~~automobile and $2$1 million (less than 1%) for ~~short-tail lines and decreased $4~~workers' compensation, partially offset by a reduction of $104 million ~~(less than 1%~~(8%) for ~~other~~professional liability.

•Reinsurance & Monoline Excess - gross premiums ~~decreased 20%~~increased 6% to ~~$464~~$1,080 million in ~~2017~~2023 from ~~$580~~$1,018 million in ~~2016.~~2022. Gross premiums ~~decreased $87~~increased $54 million ~~(35%~~(28%) for property ~~lines~~reinsurance and ~~$29~~$22 million ~~(9%~~(10%) for monoline excess, partially offset by a reduction of $14 million (2%) for casualty ~~lines.~~reinsurance.

Net premiums written were ~~$4,782~~$8,235 million in ~~2017, a decrease~~2023, an increase of 3%9% from ~~$4,914~~$7,576 million in ~~2016.~~2022. Ceded reinsurance premiums as a percentage of gross written premiums were 15% in 2023 and 16% in ~~2017 and 15% in 2016.~~2022.

Premiums earned increased 1%9% to ~~$4,720~~$7,686 million in ~~2017~~2023 from ~~$4,673~~$7,048 million in ~~2016.~~2022. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in ~~2017~~2023 are related to business written during both ~~2017~~2023 and ~~2016.~~2022. Audit premiums were ~~$137~~$271 million in ~~2017~~2023 compared with ~~$116~~$219 million in ~~2016.~~2022 due to an increase in exposures.

Net ~~investment~~Investment Income. Following is a summary of net investment income for the nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:


	Amount				Average Annualized Yield
($ in thousands)	2023		2022		2023		2022
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	653,200	$	371,724	4.2	%	2.6	%
Arbitrage trading account	53,168		24,008		5.9		2.8
Equity securities	41,714		38,303		5.0		4.9
Investment funds	5,444		121,919		0.5		10.1
Real estate	(7,821)		(1,702)		(0.8)		(0.2)
Gross investment income	745,705		554,252		3.8		3.1
Investment expenses	(6,211)		(6,350)		—		—
Total	$	739,494	$	547,902	3.8	%	3.0	%

Amount
Average Annualized
Yield
($ in thousands) 2017 2016 2017 2016
Fixed maturity securities, including cash and cash equivalents and loans receivable $ 347,976
$ 331,448
3.3 % 3.3 %
Investment funds 50,744
60,385
5.5
6.6
Arbitrage trading account 16,235
12,883
4.0
4.4
Real estate 14,894
4,552
1.6
0.6
Equity securities available for sale 1,845
3,217
1.2
2.2
Gross investment income 431,694
412,485
3.3
3.3
Investment expenses (5,093 ) (7,635 )
Total $ 426,601
$ 404,850
3.3 % 3.3 %

Net investment income increased 5%35% to ~~$427~~$739 million in ~~2017~~2023 from ~~$405~~$548 million in ~~2016~~2022 due primarily to ~~a $16~~an $282 million increase in income from fixed maturity securities mainly driven by rising interest rates and a ~~$10 million increase from real estate,~~larger investment portfolio, a $3$29 million increase from the arbitrage trading account (including investment income from trading account receivables from brokers and clearing organizations) and a ~~reduction of investment expenses of~~ $3 million increase from equity securities, partially offset by a ~~$10~~$117 million decrease in income from investment ~~funds.~~funds primarily due to financial services and real estate funds and a $6 million decrease in real estate. The Company maintained the shortened duration of its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. We expect investment income to increase as we reinvest our fixed maturity portfolio at the current higher rates. Average invested assets, at cost (including cash and cash equivalents), were ~~$17.4~~$26.1 billion in ~~2017 and $16.6~~2023 up 8.1% from $24.2 billion in ~~2016.~~2022.

Insurance Service Fees. The Company earns fees from an insurance distribution business (part of which was sold in June 2023), a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. ~~Service~~Insurance service fees ~~decreased to $100~~were $81 million in ~~2017 from $109~~2023 and $82 million in ~~2016.~~2022.

Net Realized and Unrealized Gains on ~~Investment Sales~~Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations

regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized gains on ~~investment sales~~investments were ~~$277~~$50 million in ~~2017~~2023 compared with ~~$208~~$140 million in ~~2016.~~2022. The ~~nine months ended September 30, 2017 include~~gains of $50 million in 2023 reflected net realized gains on investments of $5 million (primarily a pre-tax net realized gain of ~~$124~~$88 million on the sale of the property

and casualty insurance services division of Breckenridge IS, Inc., partially offset by the impairment of $72 million recognized on the real estate investments) and an increase in unrealized gains on equity securities of $45 million. The gains of $140 million in 2022 reflected net realized gains on investments of $228 million (primarily a $251 million net gain from the sale of ana real estate investment in ~~an office building located in Washington D.C. The nine months ended September 30, 2016 include a gain of $135 million from~~London after transaction expenses and the ~~sale of Aero Precision Industries and certain related aviation services business.~~

~~Other-Than-Temporary Impairments. There were no impairments in 2017. Other-than-temporary impairments of $18.1 million in 2016 related to common stocks.~~

~~Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in~~foreign currency impact, including the ~~distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that~~

provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were $225 million in 2017 and $306 million in 2016. The decrease was primarily related to the sale of Aero Precision Industries in August 2016, partially offset by revenues from the textile business purchased in March 2017.

~~Losses and Loss Expenses~~. Losses and loss expenses increased to $3,025 million in 2017 from $2,852 million in 2016. The consolidated loss ratio was 64.1% in 2017 and 61.0% in 2016. Catastrophe losses, net of reinsurance recoveries and reinstatement premiums, were $167 million in 2017 and $68 million in 2016. Hurricanes Harvey, Irma and Maria, along with two earthquakes in Mexico, resulted in catastrophe losses of $107 million. Favorable prior year reserve development (net of premium offsets) was $31 million in 2017 and $42 million in 2016. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.8 points to 61.2% in 2017 from 60.4% in 2016.

~~A summary of loss ratios in 2017 compared with 2016 by business segment follows:~~

Insurance - The loss ratio was 61.7% in 2017 and 61.1% in 2016. Catastrophe losses were $94 million in 2017 compared with $58 million in 2016. Favorable prior year reserve development was $62 million in 2017 and $38 million in 2016. The loss ratio excluding catastrophe losses and prior year reserve development increased 0.4 points to 61.0% in 2017 from 60.6% in 2016.

~~Reinsurance - The loss ratio of 86.1% in 2017 was 25.6 points~~ ~~higher~~ than the loss ratio of 60.5% in 2016. Catastrophe losses were $73 million in 2017 compared with $10 million in 2016. Adverse prior year reserve development was $31 million in 2017 largely due to the impactreversal of the change in the Ogden discount rate in the U.K. and adverse development related to the U.S. facultative casualty excess of loss business, compared with favorable prior year development of $4 million in 2016. The loss ratio excluding catastrophe losses and prior year reserve development i~~ncreased 4.1~~ ~~points to 63.3% in 2017 from 59.2% in 2016.~~

~~Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses:~~

($ in thousands) 2017 2016
Policy acquisition and operating insurance expenses $ 1,567,359
$ 1,544,792
Insurance service expenses 97,308
103,868
Net foreign currency (gains) losses 14,255
(11,547 )
Other costs and expenses 142,233
133,337
Total $ 1,821,155
$ 1,770,450

Policy acquisition and operating insurance expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and operating insurance expenses ~~increased 1~~% compared with an increase in net premiums earned of 1%. The expense ratio (underwriting expenses expressed as a percentage of premiums earned) was 33.2% and 33.1% for the nine months ended September 30, 2017 and 2016, respectively.

~~Service expenses, which represent the costs associated with the fee-based businesses, decreased to $97 million in 2017 from $104 million in 2016.~~

~~Net foreign~~ currency (gains) losses result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency losses were $14 million in 2017 compared to gains of $12 million in 2016.

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses increased to $142 million in 2017 from $133 million in 2016 primarily because of startup costs for new business ventures.

~~Expenses from Non-Insurance Businesses~~. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative expenses. Expenses from non-insurance businesses were $221 million in 2017 compared to $291 million in 2016. The decline mainly relates to the sale of Aero Precision Industries in August 2016, partially offset by the expense from the textile business purchased in March 2017.

~~Interest Expense. Interest expense was $110 million in 2017 compared with $104 million in 2016. During 2017, the~~ Company repaid $2 million of debt compared to $83 million in 2016, mainly in connection with the sale of Aero Precision Industries. In February 2016, the Company issued $110 million of 5.9% subordinated debentures maturing in 2056, and in May 2016, the Company issued $290 million of 5.75% subordinated debentures maturing in 2056.

~~Income Taxes. The effective income tax rate was 31% in 2017 and 32% in 2016. The effective income tax rate differs from the federal income tax rate of 35% primarily because of tax-exempt investment income.~~

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately $40 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. However, in the future, if such earnings were distributed to the Company, taxes of approximately $4 million, assuming all tax credits are realized, would be payable on such undistributed earnings and would be reflected in the tax provision for the year in which these earnings are no longer intended to be permanently reinvested in the foreign subsidiary.

~~Results of Operations for the Three Months Ended September 30, 2017 and 2016~~

~~Business Segment Results~~

Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of premiums earned), expense ratios (underwriting expenses expressed as a percentage of premiums earned) and United States Generally Accepted Accounting Principles (“GAAP”) combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the three months ended September 30, 2017 and 2016. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.

($ in thousands) 2017 2016
Insurance:
Gross premiums written $ 1,718,552
$ 1,688,712
Net premiums written 1,432,334
1,443,986
Net premiums earned 1,433,729
1,423,635
Loss ratio 63.2 % 60.9 %
Expense ratio 32.4 % 32.3 %
GAAP combined ratio 95.6 % 93.2 %
Reinsurance:
Gross premiums written $ 155,606
$ 180,137
Net premiums written 138,849
163,379
Net premiums earned 147,771
162,309
Loss ratio 118.7 % 61.3 %
Expense ratio 34.9 % 38.9 %
GAAP combined ratio 153.6 % 100.2 %
Consolidated:
Gross premiums written $ 1,874,158
$ 1,868,849
Net premiums written 1,571,183
1,607,365
Net premiums earned 1,581,500
1,585,944
Loss ratio 68.4 % 60.9 %
Expense ratio 32.6 % 33.0 %
GAAP combined ratio 101.0 % 93.9 %

~~Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the three months ended September 30, 2017 and 2016:~~

(in thousands, except per share data) 2017 2016
Net income to common stockholders $ 162,054
$ 220,650
Weighted average diluted shares 128,944
128,556
Net income per diluted share $ 1.26
$ 1.72

~~The Company reported net income of $162 million in 2017 compared to~~ ~~$221 million in 2016~~. The 27% decrease in net income was primarily due to an after-tax decrease in underwriting income of $73 million mainly driven by increased catastrophe losses from Hurricanes Harvey, Irma and Maria, as well as two earthquakes in Mexico,translation adjustment) partially offset by an ~~$11~~increase in unrealized losses on equity securities of $89 million.

~~million benefit~~Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to ~~stock compensation tax benefits being recognized within income tax expense starting~~the security, among other factors. The pre-tax change in ~~2017~~allowance for expected credit losses on investments increased by $11 million ($9 million after-tax) and ~~an after-tax increase~~$12 million ($10 million after-tax) in 2023 and 2022, respectively, which are both reflected in net investment gains ~~of $5 million. The number of weighted average diluted shares remained relatively unchanged for the three months ended September 30, 2017 and 2016.~~

~~Premiums~~. Gross premiums written were $1,874 million in 2017, an increase of less than 1% from $1,869 million in 2016. Approximately 77.5% of policies expiring in 2017 were renewed, compared with a 77.7% renewal retention rate for policies expiring in 2016.

~~Average renewal premium rates for insurance and facultative reinsurance increased 0.7% in 2017 when adjusted for~~(losses), primarily due to change in ~~exposures.~~estimate.

~~A summary of gross premiums written in 2017 compared with 2016 by line of business within each business segment follows:~~

Insurance - gross premiums increased 2% to $1,719 million in 2017 from $1,689 million in 2016. Gross premiums increased $13 million (3%) for short tail lines, $12 million (3%) for workers' compensation, $6 million (3%) for commercial auto and $4 million (2%) for professional liability and decreased $5 million (1%) for other liability.

Reinsurance - gross premiums decreased 14% to $156 million in 2017 from $180 million in 2016. Gross premiums decreased $26 million (34%) for property lines and increased $2 million (2%) for casualty lines.

~~Net premiums written were $1,571 million in 2017, a decrease of 2% from $1,607 million in 2016. Ceded reinsurance premiums as a percentage of gross written premiums were 16% in 2017 and 14% in 2016.~~

Premiums earned decreased less than 1% to $1,582 million in 2017 from $1,586 million in 2016. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term. Premiums earned in 2017 are related to business written during both 2017 and 2016. Audit premiums were $46 million in 2017 compared with $35 million in 2016.

~~Net Investment Income. Following is a summary of net investment income for the three months ended September 30, 2017 and 2016:~~

Amount
Average Annualized
Yield
($ in thousands) 2017 2016 2017 2016
Fixed maturity securities, including cash and cash equivalents and loans receivable $ 118,834
$ 114,271
3.4 % 3.3 %
Investment funds 15,200
25,293
5.2
8.1
Arbitrage trading account 4,418
6,441
3.5
5.6
Real estate 5,042
585
1.5
0.2
Equity securities available for sale 604
1,069
1.2
2.0
Gross investment income 144,098
147,659
3.3
3.5
Investment expenses (1,619 ) (1,991 )
Total $ 142,479
$ 145,668
3.2 % 3.4 %

Net investment income decreased 2% to $142 million in 2017 from $146 million in 2016 due primarily to a $10 million decrease from investment funds and a $2 million decrease from the arbitrage trading account, partially offset by a $4 million increase from fixed maturity securities and an increase of $4 million in income from real estate. Average invested assets, at cost (including cash and cash equivalents), were $17.6 billion in 2017 up from $17.0 billion in 2016.

~~Insurance Service Fees. The Company earns fees from an insurance distribution business and as a servicing carrier of workers' compensation assigned risk plans for certain states. Service fees increased~~ ~~to $34 million in 2017 from $32 million in 2016.~~

~~Net Realized Gains on Investment Sales~~. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized gains on investment sales were $184 million in 2017 compared with $176 million in 2016. The three months ended September 30, 2017 include a gain of $124 million from the sale of an investment in an office building located in Washington D.C. The three months ended

~~September 30, 2016 include a gain of $135 million from the sale of Aero Precision Industries and certain related aviation services business.~~

~~Other-Than-Temporary Impairments. There were no other-than-temporary impairments during the three months ended September 30, 2017 and 2016.~~

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses were ~~$90~~$375 million in ~~2017~~2023 and ~~$80~~$345 million in ~~2016.~~2022. The increase ~~was primarily related~~mainly relates to aviation-related business and the commercial and residential textile business, ~~purchased~~which we acquired in ~~March 2017.~~2022, partially offset by the decrease of promotional merchandise and existing textile business.

Losses and Loss Expenses. Losses and loss expenses increased to ~~$1,081~~$4,745 million in ~~2017~~2023 from ~~$966~~$4,340 million in ~~2016.~~2022. The consolidated loss ratio was ~~68.4%~~61.7% in ~~2017~~2023 and ~~60.9%~~61.6% in ~~2016.~~2022. Catastrophe losses, net of reinsurance recoveries, ~~and reinstatement premiums,~~ were ~~$119~~$163 million ~~in 2017 and $12 million in 2016. Hurricanes Harvey, Irma and Maria, along with two earthquakes in Mexico, resulted in catastrophe~~(including current accident year losses of ~~$107 million. Favorable~~approximately $670 thousand related to COVID-19) in 2023 and $181 million (including losses of approximately $4 million related to COVID-19) in 2022. Adverse prior year reserve development (net of premium offsets) was $7$20 million in ~~2017~~2023 and ~~$13~~$37 million in ~~2016.~~2022. The loss ratio excluding catastrophe losses and prior year reserve development i~~ncreased 0.4~~increased 0.9 points to ~~61.3%~~59.4% in ~~2017~~2023 from ~~60.9%~~58.5% in ~~2016.~~2022.

A summary of loss ratios in ~~2017~~2023 compared with ~~2016~~2022 by business segment follows:

•Insurance - The loss ratio ~~of 63.2%~~was 62.8% in ~~2017 was 2.3 points higher than the loss ratio of 60.9%~~2023 and 61.3% in ~~2016.~~2022. Catastrophe losses were ~~$47~~$139 million in ~~2017 and $9~~2023 compared with $102 million in ~~2016.~~2022. Adverse prior year reserve development was $26 million in 2023, principally from property catastrophe losses, and $33 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development increased 1.3 points to 60.4% in 2023 from 59.1% in 2022.

•Reinsurance & Monoline Excess - The loss ratio was 53.7% in 2023 and 63.7% in 2022. Catastrophe losses were $24 million in 2023 compared with $79 million in 2022. Favorable prior year reserve development was ~~$13~~$6 million in ~~both 2017~~2023, and ~~2016.~~adverse prior year reserve development was $4 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development decreased ~~0.4~~2.4 points to ~~60.8%~~51.9% in ~~2017~~2023 from ~~61.2%~~54.3% in ~~2016.~~2022.

Reinsurance - The loss ratio of 118.7% in 2017 was 57.4 points higher than the loss ratio of 61.3% in 2016. Catastrophe losses were $72 million in 2017 compared with $3 million in 2016. Adverse prior year reserve development was $6 million in 2017 compared with favorable prior year reserve development of $0.2 million in 2016. The loss ratio, excluding catastrophe losses and prior year reserve development, increased 6.9 points to 66.1% in 2017 from 59.2% in 2016 largely due to increased attritional losses.

Other Operating Costs and Expenses. Following is a summary of other operating costs and ~~expenses:~~

expenses for the nine months ended September 30, 2023 and 2022:


($ in thousands)						($ in thousands)	2023		2022
Policy acquisition and insurance operating expenses						Policy acquisition and insurance operating expenses	$	2,183,517	$	1,974,676
Insurance service expenses						Insurance service expenses	70,336		71,348
Net foreign currency gains						Net foreign currency gains	(1,777)		(85,060)

(In thousands)	2017		2016
Policy acquisition and operating insurance expenses	$	516,243	$	523,254
Insurance service expenses	32,451		32,441
Net foreign currency (gains) losses	1,779		(2,193		)
Other costs and expenses	50,349		52,846			Other costs and expenses	205,849		178,292
Total	$	600,822	$	606,348		Total	$	2,457,925	$	2,139,256

Policy acquisition and insurance operating ~~insurance~~ expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating ~~insurance~~ expenses ~~decreased 1% compared with a decrease in~~increased 11% and net premiums earned ~~of less than 1%.~~increased 9% from 2022. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) ~~decreased~~increased by 0.4 points to ~~32.6%~~28.4% in 2023 from ~~33.0%~~28.0% in ~~2016.~~2022 mainly due to lower ceding commissions, increased compensation costs and new start-up operating unit expenses.

Service expenses, which represent the costs associated with the fee-based businesses, ~~remained flat at $32~~were $70 million ~~for 2017~~in 2023 and ~~2016.~~$71 million in 2022.

Net foreign currency ~~(gains) losses~~gains result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency ~~losses~~gains were $2 million in ~~2017~~2023 compared to ~~gains of $2~~$85 million in ~~2016.~~2022, primarily due to lower strengthening of the U.S. dollar against other currencies in 2023.

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses ~~decreased~~increased to ~~$50~~$206 million in ~~2017~~2023 from ~~$53~~$178 million in ~~2016.~~2022, primarily due to the increase in compensation-related costs in 2023.

Expenses from Non-Insurance Businesses. Expenses from non-insurance businesses represent costs associated with businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that include (i) cost of goods sold related to aircraft and products sold and services provided, and (ii) general and administrative

expenses. Expenses from non-insurance businesses were ~~$86~~$370 million in ~~2017~~2023 compared to ~~$79~~$334 million in ~~2016.~~2022. The increase ~~was primarily related~~mainly relates to the aviation-related business and the residential and commercial textile business, ~~purchased~~which we acquired in ~~March 2017.~~2022, partially offset by the decrease of promotional merchandise and existing textile business.

Interest Expense. Interest expense was ~~$37~~$96 million in ~~both 2017~~2023 and ~~2016. During 2017,~~$98 million in 2022. In the first quarter of 2022, the Company repaid $2at maturity its $77 million aggregate principal amount of ~~debt compared to $83~~8.7% senior notes in January and its $350 million aggregate principal amount of 4.625% senior notes in ~~2016, mainly in connection with the sale of Aero Precision Industries.~~March.

Income ~~Taxes~~.Taxes. The effective income tax rate was ~~28% in 2017~~21.4% and ~~33% in 2016.~~19.2% for the nine months ended September 30, 2023 and 2022, respectively. The higher effective income tax rate ~~differs from~~for the ~~federal income~~nine months ended September 30, 2023, as compared to the earlier period, was primarily due to a net reduction to the Company’s valuation allowance against foreign tax ~~rate of 35% primarily because of tax-exempt investment income, as well as~~credits and foreign net operating losses in the ~~new requirement in 2017 to recognize tax benefits for stock compensation in income tax expense.~~earlier period.

The Company has not provided U.S. deferred income taxes on the undistributed earnings of approximately ~~$40~~$217 million of its non-U.S. subsidiaries since these earnings are intended to be permanently reinvested in the non-U.S. subsidiaries. ~~However, in~~In the future, if such earnings were distributed, the Company projects that the incremental tax, if any, will be immaterial.

Results of Operations for the Three Months Ended September 30, 2023 and 2022

Business Segment Results

Following is a summary of gross and net premiums written, net premiums earned, loss ratios (losses and loss expenses incurred expressed as a percentage of net premiums earned), expense ratios (underwriting expenses expressed as a percentage of net premiums earned) and GAAP combined ratios (sum of loss ratio and expense ratio) for each of our business segments for the three months ended September 30, 2023 and 2022. The GAAP combined ratio represents a measure of underwriting profitability, excluding investment income. A GAAP combined ratio in excess of 100 indicates an underwriting loss; a number below 100 indicates an underwriting profit.


($ in thousands)	2023			2022
Insurance:
Gross premiums written	$	2,990,869		$	2,719,824
Net premiums written	2,508,740			2,237,608
Net premiums earned	2,319,435			2,129,014
Loss ratio	62.6		%	63.2		%
Expense ratio	28.4		%	28.0		%
GAAP combined ratio	91.0		%	91.2		%
Reinsurance & Monoline Excess:
Gross premiums written	$	362,336		$	362,114
Net premiums written	339,719			339,666
Net premiums earned	322,479			312,947
Loss ratio	56.8		%	70.2		%
Expense ratio	27.8		%	28.4		%
GAAP combined ratio	84.6		%	98.6		%
Consolidated:
Gross premiums written	$	3,353,205		$	3,081,938
Net premiums written	2,848,459			2,577,274
Net premiums earned	2,641,914			2,441,961
Loss ratio	61.9		%	64.1		%
Expense ratio	28.3		%	28.0		%
GAAP combined ratio	90.2		%	92.1		%

Net Income to Common Stockholders. The following table presents the Company’s net income to common stockholders and net income per diluted share for the three months ended September 30, 2023 and 2022:


(In thousands, except per share data)	2023		2022
Net income to common stockholders	$	333,586	$	228,879
Weighted average diluted shares	271,439		279,642
Net income per diluted share	$	1.23	$	0.82

The Company reported net income to common stockholders of $334 million in 2023 compared to $229 million in 2022. The $105 million increase in net income was primarily due to an after-tax increase in net investment income of $54 million primarily due to rising interest rates and a larger investment portfolio of fixed maturity securities, an after-tax increase in underwriting income of $53 million mainly due to the growth in premium rates, an after-tax decrease in net investment losses of $20 million mainly due to the change in market value on equity securities, and an after-tax reduction in minority interest of $2 million, partially offset by an after-tax decrease in foreign currency gains of $15 million mainly due to lower strengthening of the U.S. dollar against other currencies in 2023, an after-tax increase in corporate expenses of $5 million due to increased compensation-related costs, an increase of $3 million in tax expense due to a change in the effective tax rate and an after-tax decrease in profits from insurance service income of $1 million. The number of weighted average diluted shares decreased by 8.2 million for 2023 compared to 2022, mainly reflecting shares repurchased in 2023.

Premiums. Gross premiums written were $3,353 million in 2023, an increase of 9% from $3,082 million in 2022. The increase was due to a $271 million increase in the Insurance segment and a $222 thousand increase in the Reinsurance & Monoline Excess segment. Approximately 80.5% of premiums expiring in 2023 were renewed, and 81% of premiums expiring in 2022 were renewed.

Average renewal premium rates for insurance and facultative reinsurance increased 7.2% in 2023 when adjusted for changes in exposures, and increased 8.5% excluding workers' compensation.

A summary of gross premiums written in 2023 compared with 2022 by line of business within each business segment follows:

•Insurance - gross premiums increased 10% to $2,991 million in 2023 from $2,720 million in 2022. Gross premiums increased $135 million (13%) for other liability, $122 million (20%) for short-tail lines, and $58 million (16%) for commercial automobile, and decreased $40 million (9%) for professional liability and $4 million (1%) for workers' compensation.

•Reinsurance & Monoline Excess - gross premiums remained flat in 2023 with 2022 at $362 million. Gross premiums increased $9 million (11%) for property reinsurance and $9 million (12%) for monoline excess, and decreased $18 million (9%) for casualty reinsurance.

Net premiums written were $2,848 million in 2023, an increase of 11% from $2,577 million in 2022. Ceded reinsurance premiums as a percentage of gross written premiums were 15% in 2023 and 16% in 2022.

Premiums earned increased 8% to $2,642 million in 2023 from $2,442 million in 2022. Insurance premiums (including the impact of rate changes) are generally earned evenly over the policy term, and accordingly, recent rate increases will be earned over the upcoming quarters. Premiums earned in 2023 are related to business written during both 2023 and 2022. Audit premiums were $88 million in 2023 compared with $77 million in 2022 due to an increase in exposures.

Net Investment Income. Following is a summary of net investment income for the three months ended September 30, 2023 and 2022:


	Amount				Average Annualized Yield
($ in thousands)	2023		2022		2023		2022
Fixed maturity securities, including cash and cash equivalents and loans receivable	$	239,727	$	146,051	4.5	%	3.0	%
Arbitrage trading account	17,876		10,694		5.9		3.7
Equity securities	12,714		14,650		4.7		5.1
Investment funds	4,450		36,045		1.1		8.5
Real estate	(1,986)		(2,297)		(0.6)		(0.7)
Gross investment income	272,781		205,143		4.1		3.3
Investment expenses	(1,837)		(2,327)		—		—
Total	$	270,944	$	202,816	4.1	%	3.3	%

Net investment income increased 34% to $271 million in 2023 from $203 million in 2022 due primarily to a $94 million increase in income from fixed maturity securities mainly driven by rising interest rates and a larger investment portfolio, a $7 million increase from arbitrage trading account (including investment income from trading account receivables from brokers and clearing organizations) and a $1 million reduction from investment expenses, partially offset by a $32 million decrease in income from investment funds primarily due to real estate funds and transportation funds and a $2 million decrease from equity securities. The Company ~~taxes~~maintained the short duration of its fixed maturity security portfolio, thereby reducing the potential impact of mark-to-market on the portfolio and positioning the Company to react quickly to changes in the current interest rate environment. We expect investment income to increase as we reinvest our fixed maturity portfolio at the current higher rates. Average invested assets, at cost (including cash and cash equivalents), were $26.7 billion in 2023 and $24.6 billion in 2022.

Insurance Service Fees. The Company earns fees from an insurance distribution business, a third-party administrator and as a servicing carrier of workers' compensation assigned risk plans for certain states. Insurance service fees were $23 million in 2023 and $28 million in 2022. The decrease in service fees resulted from the sale of the property and casualty insurance services division of Breckenridge IS, Inc.

Net Realized and Unrealized Gains (Losses) on Investments. The Company buys and sells securities and other investment assets on a regular basis in order to maximize its total return on investments. Decisions to sell securities and other investment assets are based on management’s view of the underlying fundamentals of specific investments as well as management’s expectations regarding interest rates, credit spreads, currency values and general economic conditions. Net realized and unrealized losses on investments were $41 million in 2023 and $66 million in 2022. The losses of $41 million in

2023 reflected net realized losses on investments of $22 million (primarily due to an impairment of $21 million recognized on a real estate investment) and an increase in unrealized losses on equity securities of $19 million. The losses of $66 million in 2022 reflected net realized losses on investments of $16 million (primarily due to foreign exchange losses on investments) and an increase in unrealized losses on equity securities of $50 million.

Change in Allowance for Expected Credit Losses on Investments. Based on credit factors, the allowance for expected credit losses is increased or decreased depending on the percentage of unrealized loss relative to amortized cost by security, changes in rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. The pre-tax change in allowance for expected credit losses on investments increased by $2 million ($1 million after-tax) and $1 million ($0.9 million after-tax) in 2023 and 2022, respectively, which are reflected in net investment gains (losses), primarily due to change in estimate.

Revenues from Non-Insurance Businesses. Revenues from non-insurance businesses were derived from businesses engaged in the distribution of promotional merchandise, world-wide textile solutions and aviation-related businesses that provide services to aviation markets, including (i) the distribution, manufacturing, repair and overhaul of aircraft parts and components, (ii) the sale of new and used aircraft, and (iii) avionics, fuel, maintenance, storage and charter services. Revenues from non-insurance businesses increased to $137 million in 2023 from $119 million in 2022 mainly due to the aviation-related businesses.

Losses and Loss Expenses. Losses and loss expenses increased to $1,636 million in 2023 from $1,565 million in 2022. The consolidated loss ratio was 61.9% in 2023 and 64.1% in 2022. Catastrophe losses, net of reinsurance recoveries, were $62 million (including current accident year losses of approximately $411 thousand related to COVID-19) in 2023 and $94 million (including losses of approximately $1 million related to COVID-19) in 2022. Favorable prior year reserve development (net of premium offsets) was $1 million in 2023 and adverse prior year reserve development was $39 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development increased 1.0 point to 59.6% in 2023 from 58.6% in 2022.

A summary of loss ratios in 2023 compared with 2022 by business segment follows:

•Insurance - The loss ratio was 62.6% in 2023 and 63.2% in 2022. Catastrophe losses were $46 million in 2023 compared with $51 million in 2022. Adverse prior year reserve development was $1 million in 2023 and $35 million in 2022. The loss ratio excluding catastrophe losses and prior year reserve development increased 1.5 points to 60.6% in 2023 from 59.1% in 2022.

•Reinsurance & Monoline Excess - The loss ratio was 56.8% in 2023 and 70.2% in 2022. Catastrophe losses were $16 million in 2023 compared with $43 million in 2022. Favorable prior year reserve development was $2 million in 2023 and adverse prior year reserve development was $4 million ~~assuming all~~in 2022. The loss ratio excluding catastrophe losses and prior year reserve development decreased 2.7 points to 52.6% in 2023 from 55.3% in 2022.

Other Operating Costs and Expenses. Following is a summary of other operating costs and expenses for the three months ended September 30, 2023 and 2022:


($ in thousands)	2023		2022
Policy acquisition and insurance operating expenses	$	747,007	$	685,325
Insurance service expenses	21,225		24,991
Net foreign currency gains	(22,498)		(41,065)

Other costs and expenses	62,935		56,286
Total	$	808,669	$	725,537

Policy acquisition and insurance operating expenses are comprised of commissions paid to agents and brokers, premium taxes and other assessments and internal underwriting costs. Policy acquisition and insurance operating expenses increased 9% and net premiums earned increased 8% from 2022. The expense ratio (underwriting expenses expressed as a percentage of net premiums earned) increased by 0.3% to 28.3% in 2023 from 28.0% in 2022 mainly due to lower ceding commissions, increased compensation costs and new start-up operating unit expenses.

Service expenses, which represent the costs associated with the fee-based businesses, were $21 million in 2023, down from $25 million in 2022, as a result of the sale of the property and casualty insurance services division of Breckenridge IS, Inc.

Net foreign currency gains result from transactions denominated in a currency other than a company's operating functional currency. Net foreign currency gains were $22 million in 2023 compared to $41 million in 2022, primarily due to lower strengthening of the U.S. dollar against other currencies in 2023.

Other costs and expenses represent general and administrative expenses of the parent company and other expenses not allocated to business segments, including the cost of certain long-term incentive plans and new business ventures. Other costs and expenses increased to $63 million in 2023 from $56 million in 2022, primarily due to the increase in compensation-related costs in 2023.

Interest Expense. Interest expense was $32 million in both 2023 and 2022.

Income Taxes. The effective income tax ~~credits are realized, would be payable~~rate was 20.6% and 19.5% for the three months ended September 30, 2023 and 2022, respectively. The effective income tax rate increased for the three months ended September 30, 2023, primarily due to a lower tax benefit related to equity-based compensation, as well as higher foreign and state income taxes.

The Company has not provided U.S. deferred income taxes on ~~such~~the undistributed earnings ~~and would be reflected in the tax provision for the year in which~~of approximately $217 million of its non-U.S. subsidiaries since these earnings are ~~no longer~~ intended to be permanently reinvested in the ~~foreign subsidiary.~~

non-U.S. subsidiaries. In the future, if such earnings were distributed the Company projects that the incremental tax, if any, will be immaterial.

Investments

As part of its investment strategy, the Company establishes a level of cash and highly liquid short-term and intermediate-term securities that, combined with expected cash flow, it believes is adequate to meet its payment obligations. ~~Due~~In addition to ~~the historically low~~ fixed maturity ~~investment returns,~~securities, the Company invests in equity securities, merger arbitrage securities, investment funds, private equity, loans and real estate related assets. The Company's investments in investment funds and its other alternative investments have experienced, and the Company expects to continue to experience, greater fluctuations in investment income.

The Company also attempts to maintain an appropriate relationship between the average duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The average duration of the fixed maturity portfolio, including cash and cash equivalents, was ~~2.9~~2.4 years at both September 30, ~~2017, down from 3.1 years at~~2023 and December 31, ~~2016.~~2022. The Company’s fixed maturity investment portfolio and investment-related assets as of September 30, ~~2017~~2023 were as follows:

($ in thousands)
Carrying
Value

Percent
of Total
Fixed maturity securities:
U.S. government and government agency $ 411,605
2.2 %
State and municipal:
Special revenue 2,829,795
15.4
State general obligation 537,537
2.9
Local general obligation 415,635
2.3
Corporate backed 391,627
2.1
Pre-refunded (1) 303,947
1.8
Total state and municipal 4,478,541
24.4
Mortgage-backed securities:
Agency 832,993
4.5
Commercial 251,578
1.4
Residential-Prime 226,274
1.2
Residential-Alt A 23,298
0.2
Total mortgage-backed securities 1,334,143
7.2
Asset-backed securities 2,388,618
13.0
Corporate:
Industrial 2,636,885
14.4
Financial 1,374,021
7.5
Utilities 267,331
1.5
Other 42,137
0.2
Total corporate 4,320,374
23.6
Foreign government and foreign government agencies 940,409
5.1
Total fixed maturity securities 13,873,690
75.7
Equity securities available for sale:
Common stocks 419,520
2.3
Preferred stocks 194,505
1.1
Total equity securities available for sale 614,025
3.4
Real estate 1,391,274
7.5
Investment funds 1,119,907
6.0
Cash and cash equivalents 773,997
4.2
Arbitrage trading account 488,238
2.7
Loans receivable 74,229
0.5
Total investments $ 18,335,360
100.0 %

~~________________________~~


($ in thousands)	Carrying Value		Percent of Total
Fixed maturity securities:
U.S. government and government agencies	$	1,467,199	5.6	%
State and municipal:
Special revenue	1,646,921		6.3
State general obligation	405,969		1.6
Local general obligation	385,340		1.5
Corporate backed	179,973		0.7
Pre-refunded (1)	102,594		0.3
Total state and municipal	2,720,797		10.4
Mortgage-backed:
Agency	1,250,357		4.8
Commercial	629,512		2.4
Residential-Prime	196,519		0.8
Residential-Alt A	2,937		—
Total mortgage-backed	2,079,325		8.0
Asset-backed	4,087,458		15.6
Corporate:
Industrial	3,344,567		12.8
Financial	2,679,247		10.3
Utilities	643,277		2.5
Other	581,723		2.2
Total corporate	7,248,814		27.8
Foreign government and foreign government agencies	1,431,712		5.5
Total fixed maturity securities	19,035,305		72.9
Equity securities:
Common stocks	961,433		3.7
Preferred stocks	220,628		0.8
Total equity securities	1,182,061		4.5
Cash and cash equivalents (2)	2,035,399		7.8
Investment funds	1,600,495		6.1
Real estate	1,270,545		4.9
Arbitrage trading account	825,049		3.1
Loans receivable	177,750		0.7
Total investments	$	26,126,604	100.0	%

____________________

(1) Pre-refunded securities are securities for which an escrow account has been established to fund the remaining payments of principal and interest through maturity. Such escrow accounts are funded almost exclusively with U.S. Treasury and U.S. government agency securities.

(2) Cash and cash equivalents includes trading accounts receivable from brokers and clearing organizations, trading account securities sold but not yet purchased and unsettled purchases.

Fixed Maturity Securities. The Company’s investment policy with respect to fixed maturity securities is generally to purchase instruments with the expectation of holding them to their maturity. However, management of the available for sale

portfolio is considered necessary to maintain an approximate matching of assets and liabilities as well as to adjust the portfolio as a result of changes in financial market conditions and tax considerations.

The Company’s philosophy related to holding or selling fixed maturity securities is based on its objective of maximizing total return. The key factors that management considers in its investment decisions as to whether to hold or sell fixed maturity securities are its view of the underlying fundamentals of specific securities as well as its expectations regarding interest rates, credit spreads and currency values. In a period in which management expects interest rates to rise, the Company may sell longer duration securities in order to mitigate the impact of an interest rate rise on the fair value of the portfolio. Similarly, in a period in which management expects credit spreads to widen, the Company may sell lower quality securities, and in a period in which management expects certain foreign currencies to decline in value, the Company may sell securities denominated in those foreign currencies. The sale of fixed maturity securities in order to achieve the objective of maximizing total return may result in realized ~~gains;~~gains or losses; however, there is no reason to expect these gains or losses to continue in future periods.

~~At September 30, 2017, investments in foreign government fixed maturity securities (which are generally held by the Company's foreign operations) were as follows:~~

(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

~~________~~

~~(1) Supranational represents investments in the North American Development Bank, European Investment Bank and International Bank for Reconstruction and Development.~~

Equity Securities. Equity securities primarily represent investments in common and preferred stocks in companies with potential growth opportunities in different sectors, ~~including healthcare~~mainly in the financial institutions, energy and ~~financial institutions.~~technology sectors.

Investment Funds. At September 30, ~~2017,~~2023, the carrying value of investment funds was ~~$1,120 million,~~$1.6 billion, including investments in financial services funds of $430 million, other funds of $403 million (which includes a deferred compensation trust asset of $31 million), transportation funds of $336 million, real estate funds of ~~$615~~$191 million, infrastructure funds of $125 million and energy funds of ~~$86 million, and other funds of $419~~$115 million. Investment funds are generally reported on a one-quarter lag.

Real Estate. Real estate is directly owned property held for investment. At September 30, ~~2017,~~2023, real estate 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. In addition, there are two properties under development: an office building in London and~~the completed portion of a mixed-use project in Washington D.C. In addition, part of the previously mentioned mixed-use project in Washington D.C. is under development. The Company expects to fund further development costs for ~~these projects~~the project with a combination of its own funds and external financing. The Company recognized impairments on real estate of $21 million and $72 million in the three months and nine months ended September 30, 2023, respectively. During the first quarter of 2022, the Company sold an office building in London.

Arbitrage Trading Account. The arbitrage trading account is comprised of direct investments in arbitrage securities. Merger arbitrage is the business of investing in the securities of publicly held companies that are the targets in announced tender offers and mergers.

Loans Receivable. Loans receivable, which are carried at amortized cost (net of allowance for expected credit losses), had an ~~aggregate~~amortized cost of ~~$74~~$178 million and an aggregate fair value of ~~$77~~$174 million at September 30, ~~2017.~~2023. The amortized cost of loans receivable is net of ~~a valuation~~an allowance for expected credit losses of $3$4 million as of September 30, ~~2017~~.2023. Loans receivable include real estate loans of ~~$59~~$160 million that are secured by commercial and residential real estate located primarily in London and New York. Real estate loans ~~receivable~~ generally earn interest at ~~floating LIBOR-based~~fixed or stepped interest rates and have maturities ~~(inclusive of extension options)~~ through ~~August 2025.~~2026. Loans receivable include commercial loans of ~~$15~~$18 million that are secured by business assets and have fixed interest rates with varying maturities not exceeding 10 years.

Market Risk. The fair value of the Company’s investments is subject to risks of fluctuations in credit quality and interest rates. The Company uses various models and stress test scenarios to monitor and manage interest rate risk. The Company attempts to manage its interest rate risk by maintaining an appropriate relationship between the effective duration of the investment portfolio and the approximate duration of its liabilities (i.e., policy claims and debt obligations). The effective duration for the fixed maturity portfolio (including cash and cash equivalents) was ~~2.9~~2.4 years at both September 30, ~~2017, down from 3.1 years at~~ 2023 and December 31, ~~2016~~.2022.

In addition, the fair value of the Company’s international investments is subject to currency risk. The Company attempts to manage its currency risk by matching its foreign currency assets and liabilities where considered appropriate.

Liquidity and Capital Resources

Cash Flow. Cash flow provided from operating activities ~~decreased~~increased to ~~$522~~$2,231 million in the ~~first~~ nine months ~~of 2017~~ended September 30, 2023 from ~~$727~~$1,773 million in the ~~comparable period in 2016,~~nine months ended September 30, 2022, primarily due to ~~the timing of~~increased premium receipts, partially offset by an increase in loss and loss expense ~~payments and payments to taxing authorities.~~payments.

The Company's insurance subsidiaries' principal sources of cash are premiums, investment income, service fees and proceeds from sales and maturities of portfolio investments. The principal uses of cash are payments for claims, taxes, operating expenses and dividends. The Company expects its insurance subsidiaries to fund the payment of losses with cash received from premiums, investment income and fees. The Company generally targets an average duration for its investment portfolio that is within ~~one year~~1.5 years of the average duration of its liabilities so that portions of its investment portfolio mature throughout the claim cycle and are available for the payment of claims if necessary. In the event operating cash flow and proceeds from maturities and prepayments of fixed income securities are not sufficient to fund claim payments and other cash requirements, the remainder of the Company's cash and investments is available to pay claims and other obligations as they become due. The Company's investment portfolio is highly liquid, with approximately 80% invested in cash, cash equivalents and marketable fixed maturity securities as of September 30, ~~2017.~~2023. If the sale of fixed maturity securities were to become necessary, a realized gain or loss equal to the difference between the cost and sales price of securities sold would be recognized.

Debt. At September 30, ~~2017,~~2023, the Company had senior notes, subordinated debentures and other debt outstanding with a carrying value of ~~$2,488~~$2,837 million and a face amount of ~~$2,521~~$2,865 million. In the first quarter of 2022, the Company repaid at maturity its $77 million aggregate principal amount of 8.7% senior notes in January and its $350 million aggregate principal amount of 4.625% senior notes in March. The maturities of the outstanding debt are ~~$442~~$7 million in ~~2019, $302~~2024, $3 million in ~~2020, $427 million in 2022,~~2025, $250 million in 2037, $350 million in 2044, ~~$350~~$470 million in ~~2053 and~~2050, $400 million in ~~2056.~~2052, $185 million in 2058, $300 million in 2059, $250 million in 2060, and $650 million in 2061.

~~In February 2016,~~On April 1, 2022, the Company ~~issued $110~~entered into a senior unsecured revolving credit facility that provides for revolving, unsecured borrowings up to an aggregate of $300 million ~~aggregate principal~~with a $50 million sublimit for letters of credit. The Company may increase the amount available under the facility to a maximum of ~~its 5.9% subordinated debentures due 2056,~~$500 million subject to obtaining lender commitments for the increase and ~~in May 2016,~~other customary conditions. Borrowings under the ~~Company issued $290 million aggregate principal amount~~facility may be used for working capital and other general corporate purposes. All borrowings under the facility must be repaid by April 1, 2027, except that letters of ~~its 5.75% subordinated debentures due 2056. During 2017,~~credit outstanding on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders). Our ability to utilize the ~~Company repaid $2 million~~facility is conditioned on the satisfaction of ~~debt compared to $83 million~~representations, warranties and covenants that are customary for facilities of ~~debt in 2016 mainly in connection with the sale~~this type. As of ~~Areo Precision Industries.~~

~~Equity. At~~ September 30, ~~2017~~,2023, there were no borrowings outstanding under the facility.

Equity. At September 30, 2023, total common stockholders’ equity was ~~$5.4~~$6.9 billion, common shares outstanding were ~~121,769,109~~258,043,531 and stockholders’ equity per outstanding share was ~~$44.60. The Company repurchased 441,119 common shares for $28.4 million during~~$26.80. During the ~~three~~nine months ended September 30, ~~2017.~~2023, the Company repurchased 7,146,975 shares of its common stock for $430.5 million. In the third quarter of 2023, the board of directors of the Company declared a regular quarterly cash dividend of $0.11 per share and a special cash dividend of $0.50 per share. In the second quarter of 2023, the board of directors of the Company declared a regular quarterly cash dividend of $0.11 per share. In the first quarter of 2023, the board of directors of the Company declared a regular quarterly cash dividend of $0.10 per share and a special cash dividend of $0.50 per share. The number of common shares outstanding excludes shares held in a grantor trust established by the Company for delivery upon settlement of vested but mandatorily deferred RSUs.

Total Capital.Total capitalization (equity, debt and subordinated debentures) was ~~$7.9~~$9.8 billion at September 30, ~~2017~~.2023. The percentage of the Company’s capital attributable to senior notes, subordinated debentures and other debt was ~~31%~~29% at September 30, ~~2017~~2023 and ~~33%~~30% at December 31, ~~2016.~~2022.

Item 3.3. Quantitative and Qualitative Disclosure About Market Risk

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

Item 4.Controls and Procedures

Disclosure Controls and ~~Procedures~~.Procedures. The Company’s management, including its Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-14 as of the end of the period covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company has in place effective controls and procedures designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended, and the rules thereunder, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control over Financial ~~Reporting~~.Reporting. During the quarter ended September 30, ~~2017~~,2023, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.Legal Proceedings

Please see Note 2120 to the notes to the interim consolidated financial statements.

Item 1A.Risk Factors

There have been no material changes from the risk factors previously disclosed in the ~~Company's~~Company’s annual report on ~~From~~Form 10-K for the fiscal year ended December 31, ~~2016.~~2022.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Set forth below is a summary of the shares repurchased by the Company during the three months ended September 30, ~~2017~~2023, and the number of shares remaining authorized for purchase by the Company:


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



July 2023	—	$	—	—	14,850,000
August 2023	48,016	$	60.75	48,016	14,801,984
September 2023	—	$	—	—	14,801,984

Item 5. Other Information

None of the Company's directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2023, as such terms are defined under Item 408(a) of Regulation S-K.

Total number
of shares purchased Average price
paid per share Total number of shares purchased
as part of publicly announced plans or programs Maximum number of
shares that may yet be purchased under the plans or programs
July 2017 —
—
—
6,851,086
August 2017 —
—
—

10,000,000 ⁽¹⁾

September 2017 441,119
$ 64.333
441,119
9,558,881

⁽¹⁾ ~~The Company's repurchase authorization was increased to 10,000,000 shares on August 8, 2017.~~

~~Item 6.Exhibits~~

Item 6.Exhibits


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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.



		W. R. BERKLEY CORPORATION
Date:	November ~~8, 2017~~3, 2023	/s/ W. Robert Berkley, Jr.
		W. Robert Berkley, Jr.
		President and Chief Executive Officer

Date:	November ~~8, 2017~~3, 2023	/s/ Richard M. Baio
		Richard M. Baio
		~~Senior~~Executive Vice President - Chief Financial Officer ~~and Treasurer~~



	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



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



	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



(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